CFTC Chair Says Other Cryptos May Qualify as Commodities, Ether Futures Might Launch in 2020

Heath Tarbert, chairman of the Commodity Futures Trading Commission (CFTC), has reiterated the statement that  Ether (ETH) futures contracts might be introduced next year. Earlier this month, Tarbert broke the news on the possibility of ETH futures during the Yahoo Markets All Finance conference.

Tarbert newest comments came during a fireside chat at Georgetown University on the first day of DC Fintech Week, where he said that he “absolutely” believes ETH futures will trade within the next 12 months.

Tarbert stated:

“I’d say it is likely that you would see a futures contract in the next six months to a year. The volume to which it’ll trade, no idea, that’s where the markets decide, but my guess is now that we’ve provided at least … a little bit more clarity on [ether’s eligibility for futures contracts], my guess is market participants will consider that.”

Currently, it’s unclear which company might offer ETH futures in the US. Tarbert stated that he doesn’t know of any company that has applied to launch such a product,

He remarked:

“None that I know of. My guess is that it will come soon but I don’t know where they’re coming from.”

A Chicago Mercantile Exchange (CME) representative said that the trading platform “has no plans to introduce additional cryptocurrency futures.”

The representative stated:

“Right now, we are focused on bringing options on CME bitcoin futures to market in Q1 2020 and continuing to grow our CME CF Reference Rates and Real-Time Indices.”

Approving an ETH futures application will depend on the type of product a company is planning to launch, Tarbert explained. Firms interested in listing such contracts may apply to self-certify or request that the CFTC review their product and decide whether it should be approved. The application process would be similar to how Bitcoin futures contracts are reviewed.

The CME representative also said that exchanges “could start it on their own or they could come to us with an application and ask us to grant it to be able to [offer the product].”

The representative added:

“Now in the past most people have not been self-certifying, they’ve been coming to us particularly if they’re creating an entirely new exchange and DCO [derivatives clearing organization] so it’ll depend I think in large part on who wants to have it on their trading platform. Is it one of our existing exchanges that’s been working with the CFTC for years or is it an entirely new platform that wants to specialize in it?”

Tarbert said that using a CFTC-licensed exchange would ensure that there will be no market manipulation.

He noted:

“What our markets do, and [have been] doing for 150 years is ensure there’s sufficient price transparency. You know that there’s the buyers and the sellers and that price actually represents real aggregate demand.”

Notably, Tarbert said the CFTC might qualify other cryptocurrencies as commodities.

He went on to add:

“There will be other derivatives coming soon to a market near you for crypto assets. As the the SEC sort of works through its process [and] we work through ours and other regulators, it’s likely we’ll see more but I can’t tell this audience that it’s necessarily coming soon because even the two that we thought about – bitcoin and ether – it took us quite some time to work through those.”

Grayscale Posts Record-Breaking Quarter, Attracts Over $250 Million into its Investment Products

Digital Currency Group (DCG) subsidiary Grayscale Investments, the largest institutional holder of Bitcoin (BTC), has published its Digital Asset Investment Report for third quarter 2019. The firm’s report highlights its record-breaking quarter.

During Q3 2019, Grayscale attracted $254.9 million into its investment products, which is notably triple what was raised in Q2 of this year ($84.8 million).

The Grayscale Bitcoin Trust attracted the most capital with $171.7 million in inflows, which is reportedly the largest quarterly inflows to the firm’s Bitcoin Trust in the product’s six-year history.

Combined year-to-date inflows to the company’s Ethereum Trust and Ethereum Classic Trust have surpassed $100 million, indicating the rising demand for non-Bitcoin products, the company noted.

Almost 80% of quarterly inflows were due to investors converting crypto tokens into shares of various Grayscale products, also referred to as “in-kind” share creations.

Most of the investment capital was contributed by institutions with 84% of inflows coming mainly from hedge funds. Grayscale said this has been a steady long-term trend, which remained consistent this year.

Grayscale currently has around $2.1 billion of assets under management.

Average weekly investment during Q3 was $19.6 million, with most of the capital ($13.2 million) being allocated toward the Grayscale Bitcoin Trust. The Grayscale Products ex Bitcoin Trust received $6.4 million.

Total investment into Grayscale products year-to-date was $382.3 million, with average weekly investment YTD across all products at $9.8 million.

Total investment into Grayscale products for the trailing 12 months stands at $412.3 million, with average weekly investment for the same period at $7.9 million.

You can view the full report here

Digital Banking Platform 2gether Announces Integration With Ethereum Token Basic Attention Token

Digital banking platform 2gether announced on Tuesday its support for Brave and the addition of Basic Attention Token (BAT) to its list of existing tokens. 2gether reported that BAT is a utility token based on the Ethereum blockchain and acts as a medium of exchange between advertisers, publishers, and users. Users may now spend their BAT with the 2gether card.

“BAT is an Ethereum token that powers Brave’s blockchain-based digital advertising platform, where users can consent to viewing privacy-preserving ads on Brave’s ad platform. Users then receive 70% of the shared ad revenue in BAT as compensation for their engagement.”

With the addition of BAT into the 2gether ecosystem, users may also do the following:

  • Buy and Sell BAT in the 2gether app with zero fees
  • Swipe their 2gether Visa card against their BAT holdings anywhere, anytime
  • Withdraw cash from any Visa-accepted ATM against their BAT holdings
  • Transfer BAT peer to peer

Speaking about the integration, Ramon Ferraz, CEO of 2gether, stated:

“We are thrilled to be supporting BAT, a unique solution developed to address the broken market of digital advertising, which also radically improves the efficiency of digital advertising by giving users the ability to view the ads they prefer. Adding BAT to our collection of existing tokens opens us up to fresh markets in order to expand our reach and visibility.”

BAT is now available on the 2gether iOS and Android app. EU citizens can now download the app on Google Play and the App Store, pass the KYC process, and enjoy all of 2gether’s services.

UNICEF Launches Crypto Asset Fund to Receive, Hold, Distribute Bitcoin, Ether Donations

The United Nations Children’s Fund (UNICEF) has created a crypto asset fund in order to receive, hold and distribute donations in Bitcoin (BTC) and Ether (ETH). 

The aim of the crypto project is to promote the development of open-source protocols for children throughout the world, according to an October 9 press release on UNICEF’s official website.

UNICEF noted that its digital asset fund will accept and distribute contributions in cryptocurrency. This is reportedly the first time that a United Nations organization has launched this type of crypto fund.  

The organization said that it has already added the first contributions from the Ethereum Foundation to its UNICEF crypto fund. As noted in the release, the donation “will benefit three grantees of the UNICEF Innovation Fund.”

UNICEF stated that the three grantees that will receive the donations are Atix Labs, Prescrypto,  and Utopixar. According to the release, these companies are working in the areas of “prescription tracking, matching investors and those needing funding, and community tokens and engagement.”

Executive director at the Ethereum Foundation Aya Miyaguchi stated during a keynote presentation at the DevCon event that 100 Ether (appr. $18,000 at current market prices) was sent to UNICEF through the new partnership.

UNICEF executive director Henrietta Fore said:

“This is a new and exciting venture for UNICEF. If digital economies and currencies have the potential to shape the lives of coming generations, it is important that we explore the opportunities they offer. ”

Miyaguchi added:

“Together with UNICEF, we’re taking action with the crypto fund to improve access to basic needs, rights, and resources.”

The UNICEF cryptocurrency fund is the UN children agency’s latest effort to adopt distributed ledger technology for its wider goals and objectives. The UNICEF has held discussions with Kyrgyzstan’s government about using blockchain technology to provide internet access to the nation’s schools through the Project Connect initiative.

Microsoft and Intel Are Backing a Token Rewards System Developed By Enterprise Ethereum Alliance

Microsoft (NASDAQ: MSFT) and Intel (NASDAQ: INTC) are supporting a new token reward system developed by the Enterprise Ethereum Alliance (EEA), a standards organization that creates open, blockchain specifications that enhance interoperability for businesses.

The EEA is one of the world’s largest blockchain consortiums with more than 450 enterprise business members including Accenture, Cisco, JPMorgan Chase, ING, Intel, Microsoft, and Santander.

EEA’s newly developed token will incentivize and reward businesses that are actively involved in a consortium. 

Michael Reed, Intel’s blockchain program manager, told Coindesk that the incentivization system uses three types of tokens: a reward token, a reputation token and a penalty token.

Reed noted:

“It really can be applied to any consortium to incentivize teamwork. The example we are using is a software development consortium like EEA, where we are trying to motivate activities like editing and contributing to specifications, developing and adding code. Then, of course, you could apply penalties for negatives, such as lack of contribution, lack of review, missing deadlines and so on.”

There are many other token projects that have been launched in order to incentivize certain types of activities. Earlier this year, Austria’s capital, Vienna, revealed it’s developing a blockchain-enabled token as part of a local incentive program..

The Vienna token can be earned by providing feedback about the European city. The token is part of a rewards program that allows people to pay for parking (with the token) or for rewarding those who ride their bikes. The tokens can also be exchanged for valuable items or services, such as theater tickets.

In August 2019, the EEA published a document that outlined several potential use cases for blockchain technology in telecommunications.

The organization’s document explained how blockchain technology could improve standard business processes and internal operations in the telecommunications sector.

Use cases mentioned in EEA’s list included blockchain-enabled telecom call roaming user authentication, blockchain-powered telecom call roaming reconciliation, and data privacy and monetization.

Decentralized Applications’ Transaction Volume and User Activity Down Considerably in Q3, Dapp.com’s Report Reveals

Decentralized applications’ (dApps) overall transaction volume and user activity dropped significantly during the third quarter of this year, according to a Dapp.com report shared with CrowdFund Insider.

Dapp.com, an analytics platform for dApps created on Ethereum (ETH), EOS, Tron, Steem, TomoChain, IOST, and Blockstack, published its full report on October 7 on its official website.

An overall market assessment indicates that dApps deployed on the six aforementioned blockchains recorded a total transaction volume of $2.03 billion during the third quarter of this year, down by 40% when compared to the previous quarter. 

As mentioned in Dapp.com’s report, only 36% of dApp users from the second quarter used dApps at least once during the third quarter.

While Ethereum dApps’ performance remained steady when compared with other major blockchain development platforms, most of Ethereum’s active users in Q2 did not use ETH-based dApps in Q3. Approximately 80,000 Ether holders used Ethereum dApps during Q2 and Q3.

EOS had the “highest user retention” out of all major blockchains, with around 40% of EOS dApp users from previous quarters being active in Q3. Meanwhile, Ethereum and Tron managed to retain 5% and 15% of users from previous quarters. The total number of EOS mainnet accounts and new dApp users showed the slowest growth during the third quarter, when compared with Ethereum and Tron.

Tron has maintained its position as the second-most actively used blockchain for creating dApps, following Ethereum, according to Dapp.com’s report. Tron is the largest dApp development platform launched after 2017, the report revealed. More than 500,000 users opened Tron mainnet accounts in Q3.

Dapp.com’s study revealed that decentralized finance (DeFi) apps reported more than $525 million in overall market capitalization in Q3, with Ethereum-powered DeFi apps contributing over 88%, or 132,000 users, of the total volume.

The report stated:

“500,000+ new users access[ed] dApps in Q3. Over 138,000 (27.6%) of them started picking up dApps for Finance services and over 170,000 (34%) of them were bought into space by gambling dapps.”

Outcry as Alleged Crypto Ponzi Fairwin Eats Up Bandwidth on Ethereum

Trading of an Ethereum-based crypto token called FWIN (Fairwin) is consuming over 50% of the “gas” (used to set transaction fees) on the Ethereum network.

Basically, the company responsible for FWIN, Fairwin, based in China, has a very busy token.

But according to Cointelgraph, Fairwin may not be a legitimate entity. Social media pundits are now claiming that Fairwin is a Ponzi scheme that may be, “one of the biggest scams ever seen in Ethereum.”

Fairwin reportedly controls “the biggest smart contract on Ethereum,” a contract that holds, “a significant amount of ETH.”

Not only can Fairwin owners drain that pool of ethers any time they want, but the contract’s wallet also features, “a separate attack black hats can do if the owners don’t stop it (by draining it themselves).”

All told, critics are warning that Fairwin investors’ funds are at risk. Participants have been asked to stop sending funds to Fairwin.

A Redditor called chutiyabehenchod claims FairWin is proliferated via Chinese social media and blogs. The scheme’s promoters tout a 5-day high-yield investment program where users deposit 1-15 ETH for a return of 0.5-1% after 5 days.

But not everyone sees the promised returns, chutiyabehenchod writes:

“It’s decentralized, however only 70% of the amounts deposited actually go back to pay the commissions of the older deposits. […] 30% is always taken! Once the account is dried out those that entered last will be punished by losing absolutely everything… likely some of them will be reinvestments. Currently with 40k ETH, 12k are already for the unknown scammers.”

Ethereum developers are reportedly working now to increase blocksize on Ethereum in order to help relieve congestion on the network. Ethereum has also been crowded lately by the processing large numbers of Tether transactions. Tether is the world’s most used proxy-USD stablecoin.

A website called Fairwin.me says Fairwin “rewards” payments have been delayed by congestion on Ethereum:

“Because of the popularity of FairWin dividend-sharing game, most of the GAS of the Ether block is occupied by FairWin, which leads to the block becoming slowly. There is no better solution before the upgrade of Ether, but our FairWin team will try to solve this problem. Although awards are slow, it is fair to everyone and will never be given less (emphasis added).”

The company also dismissed the allegations against it (“FairWin is absolutely fair and just, there is no fraud”), and says, “This risk (of stolen ETH) does not exist. Smart contract code has been securely authenticated.”

As in Bitcoin, blocks of data on Ethereum are “hashed” (knitted) together using an encryption algorithm. Encrypted blocks of data form the basis of the Ethereum blockchain.

Parties can access data on the blocks by sending “private keys” (alphanumeric strings) to one another using a cryptocurrency wallet app.

Private keys are used to decode encryption and “release” code representing cryptocurrency to recipients’ wallets.

BitPay Set to Support Payments From Ethereum Blockchain

Global blockchain payments provider BitPay announced last week it is set to support payments from the Ethereum Blockchain. Through this support, BitPay users will be able to use their ether to do the following:

  • Buy gift cards on the BitPay app
  • Top up BitPay cards
  • Shop with BitPay merchants

Vitalik Buterin, Ethereum creator, revealed his thoughts about BitPay’s support by stating the following:

“It is exciting to see BitPay leading the way in integrating Ethereum into global payment systems. This truly opens up a new world of possibilities for the Ethereum ecosystem, and together we can continue to be a leading innovator for real world use cases for cryptocurrencies.”

BitPay further explained by it is chosing to support blockchain payments on the Ethereum network:

“First and foremost, many of our merchants, cardholders, and wallet users have been asking for this. Second, Ethereum has the second highest market share behind Bitcoin. Third, by supporting payments on the Ethereum network, BitPay will be soon able to support ERC-20 tokens, namely, stablecoins.”

BitPay went on to add that it is already in talks about the benefits it will see with stablecoins when it began to allow its merchants to settle in GUSD, USDC, and PAX.

SoFi CEO Anthony Noto: We Now Offer Crypto Investing, Adds Trading in Bitcoin, Litecoin and Ethereum

SoFi CEO Anthony Noto visited the studios of CNBC today and during his interview he announced that SoFi will now allow its users to purchase and trade cryptocurrencies. Specifically, Bitcoin, Litecoin and Ethereum – three of the most popular virtual currencies.

Noto stated, “cryptocurrency was the number one, incremental product, investors wanted on the platform,” while noting that cryptocurrencies are a very volatile asset class. Noto admitted being an investor in Bitcoin sharing he started to purchase BTC in 2016.

SoFi currently offers a broad portfolio of Fintech services including online lending, such as student loans and mortgages. SoFi also facilitates investing in other securities such as ETFs and stocks. Robo-investing is available too. The company begin its existence as a student loan refi platform.

In a blog post, SoFi stated:

“… we’ve added crypto trading to our fast-growing SoFi Invest platform, as a response to demand from you! SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app. You can easily buy and sell several cryptocurrencies with straightforward, competitive commissions and no account minimums, as well as track the price movements of the world’s most widely-traded digital assets, with more cryptocurrencies to be added in the coming months. And rest assured, we secure all crypto holdings from fraud and theft.”

Noto said SoFi is very pleased to be adding the new product to SoFi.

“… access, education, and keeping costs low for our members is at the heart of what we do.”

A promotional offer is available today where SoFi will give you $25 in Bitcoin on your first $10 trade.

SoFi is one of the most successful Fintechs in the US. The platform has emerged as a viable stealth bank providing many services that traditional banks offer while not becoming a federally chartered bank.

US Army Solicited Blockchain-Forensics Cloud-Service Contractors This Summer

The US Army’s Contracting Command (ACC) division in New Jersey took proposals this summer from providers of cloud-based blockchain forensics services.

Blockchain forensics is a relatively new field that involves creating tools for the monitoring, tracing, and scraping of data from cryptocurrency networks like Bitcoin and Ethereum.

The industry received a boost this year when directives issued by the FATF (Financial Action Task Force) were adopted by representatives of the FATF’s 38 member jurisdictions and “regional bodies” convening at G20 meetings in Japan in June.

The FATF sets global anti-money laundering and anti-terrorist finance standards.

Standards are voluntarily adopted by member countries. Members that do not observe the standards, however, risk being sanctioned by trading partners.

According to the solicitation document regarding the US army’s request for proposals, contractors’ proposed solutions had to be web-based (no hardware or software to install):

“The contractor must provide worldwide web-based access to a reliable cryptocurrency investigation service required for use in criminal investigations and the other missions conducted by the US Army Criminal Investigation Command (USACIDC). Users will be located throughout the US and overseas where there is a CCIU (Cyber Crime Invstigative Unit) presence.”

As well:

“There should be the capability to set up unlimited individual user accounts with unlimited queries available.”

The system has to be “blockchain agnostic,” meaning it can read and analyze data on a number of differently-programmed cryptocurrency networks:

“(The) Web-based service must be able to assist law enforcement to identify and stop actors who are using cryptocurrencies for illicit activity such as fraud, extortion, and money laundering. (The system) shall (also) provide the source of cryptocurrency transactions and provide multi-currency analysis from Bitcoin to other top cryptocurrencies.”

Other specs include components for the visualization of data:

“(The system) must be able to spot transaction patterns and interactions with other entities; must have some type of visualization and/or link analysis tool to facilitate analysis of data; must be capable of exporting graphs and generate reports as a csv, pdf, or image file.”

“Capability must (also) contain training materials…(and) technical helpdesk support…to Government users during business hours Monday – Friday,” the solicitation reads.

Successful applicants had to guarantee 24-7 access and, “System uptime of 99.7%.”

Two-weeks’ written notice would also be required, “…prior to any scheduled maintenance or planned outages that may degrade or interrupt service.”

Blockchain forensics firms Ciphertrace, Crystal, Chainalysis and Elliptic have all been busy in recent years.

Harbor Tokenizes $100 Million Worth of Shares in Real Estate on Ethereum Blockchain

San Francisco-based firm Harbor has decided to help companies tokenize existing securities, instead of assisting them in issuing security tokens.

On September 16, Harbor’s management announced that it has issued Ethereum-based tokens that represent $100 million worth of shares in four real estate funds.  

The shares were tokenized in order to make it easier to trade private securities, which are held by 1,100 investors, and 17 placement agents and broker-dealers that work with iCap Equity.

CEO of Washington-headquartered iCap Chris Christensen noted:

“For years, we’ve been looking for ways to create the best investment experience we can and for us that means providing liquidity for them.”

Harbor’s business model has shifted from helping clients raise capital through security token sales to developing infrastructure for tokenized assets.

CEO of Harbor Joshua Stein explained that the company has “evolved from crowdfunding and tokens to being the Salesforce.com.” 

Founded in 2017, Harbor’s management initially developed tokens representing real-world assets. 

According to Stein, if people were willing to invest in initial coin offerings (ICOs) that only came with a “promise” from their issuers, then they might “be excited” to find opportunities that allow them to purchase tokens backed by real-world assets.

Stein noted:

“The overlap between investors demanding tokens and investors interested in security tokens was zero. People were buying tokens but they weren’t buying it to invest, they were buying it to speculate.”

In November 2018, Harbor teamed up with DRW Holdings’ real estate division, in order to conduct a sale involving approximately 1,000 tokenized shares in an apartment building. However, the deal collapsed earlier this year due to failed negotiations between the issuer and mortgage lender.

Harbor’s platform provides a private marketplace for where investors, advisors, and broker-dealers can trade securities.

Christensen noted that the funds are “high-yield, [which] usually requires a lockup” under which investors are not allowed to sell their shares for up to five years.

Christensen stated:

“We just knew if we can provide measured liquidity for them and allow us to continue our business model [but] allow them to … exit as needed, that would be cutting-edge.”

iCap investors normally purchase securities that cannot be sold for several years. 

However, there are cases where investors might need their funds before the multi-year lockup period ends, Christensen said. 

Under the company’s traditional system, these investors would have to work with another investor who would buy the securities and commit to the terms and conditions of the lockup period.

Christensen revealed that his firm has helped close $2 million in trades for these types of deals. This, despite the process being expensive and time-consuming, as it can be challenging to find an investor interested in acquiring securities from another party.

As a company that automates regulatory compliance, Harbor makes it easier for “those who want to come in [to] come in, [and for] those who want to exit [to be able to easily] do that.”

Investment advisor Bradley Wealth is reportedly among the 17 broker-dealers that have access to Harbor’s platform.

Acknowledging that the platform will never be like a public market, Stein noted that it’s possible to “take something that’s illiquid or semi-liquid and make it more liquid.”

iCap’s business operations comply with Rule 144 of the Securities Act of 1933, which requires that investors commit to a one-year lockup period for any securities sold. This requirement is separate from the terms and conditions the firm imposes on contracts, Christensen explained.

He added:

“Once you’ve held a security for one year, it can be freely tradeable.”

After the one-year lockup period ends, non-accredited investors can trade the securities, however, iCap must first approve all transactions.

Christensen further noted that unlike ICOs and other types of crowdfunding campaigns, these fund shares, represented by ERC-20 compliant tokens, are like passive investments.

He also mentioned:

“What we’re hoping to do is increase access … in real estate and other [sectors], which was kind of the promise of security tokens to begin with. We’re just going about it a different way.”

Deutsche Bank Joins JPMorgan’s Blockchain-based Interbank Information Network

Germany’s largest financial institution, Deutsche Bank, is reportedly joining the Interbank Information Network (IIN), a blockchain-powered platform developed by JPMorgan, the world’s sixth-largest bank.

IIN’s pilot was released in 2017, with the goal of reducing the number of international payments rejected due to errors.

According to the Financial Times, JPMorgan’s blockchain-enabled project now includes a network of 320 international banks that are using the platform to exchange payments information via the Ethereum network.

Head of payments at JPMorgan Takis Georgakopoulos is hoping that Deutsche Bank will be the first of many other large financial institutions that join IIN. 

Deutsche Bank is the world’s largest clearer of payments made in Euros, according to the report.

The bank’s global head of cash management Ole Matthiessen said that IIN will allow the financial institution to provide better services to its customers. He explained that the financial giant expects IIN to significantly reduce the costs associated with settling difficult transactions.

Developed on JPMorgan’s Quorum platform, the IIN network is being used to address the main challenges associated with sharing information between different institutions. 

The developers of IIN also aim to speed up transaction processing times.

Georgakopoulos noted that JPMorgan is planning to finalize 400 agreements with various international banks by the end of 2019. 

Earlier this year, JPMorgan’s management announced plans to launch a pilot of the bank’s own cryptocurrency, JPM Coin. It’s expected to be released by the end of 2019. 

JPMorgan CEO Jamie Dimon recently noted that he supports Facebook’s controversial stablecoin project, Libra. He believes that Libra does not pose any short-term threats to the traditional banking system. 

Notably, Deutsche Bank will be joining 26 other global central banks that are planning to attend meetings with Libra’s developers in Switzerland, in order to discuss potential financial stability risks.

Blockchain Scalability Solution Developer hubii Joins Ethereum Enterprise Alliance

hubii, the company behind the development of the nahmii scaling solution for Ethereum, has joined the Enterprise Ethereum Alliance (EEA), according to a press release shared with CrowdFund Insider.

CEO of hubii Jacobo Toll-Messia remarked:

“We are excited to join the EEA. [It] offers hubii the resources needed to help us develop nahmii into a world-class scaling solution for the Ethereum network, and to bring the benefits of the technology to [everyone].”

Backed by one of the world’s largest developer communities, the EEA is a member-driven standards organization that develops open, blockchain specifications to enhance interoperability for businesses and consumers.

As an EEA member, hubii is planning to work with various blockchain industry participants in order to develop Ethereum-based enterprise applications which adhere to best practices, open standards, and open-source reference architectures.

Hubii’s flagship product nahmii is notably the first commercially-focused Ethereum scaling solutions. It aims to enhance the interoperability and scalability of DLT-based applications by using “sufficiently advanced scripting.”

Developed initially on the Ethereum blockchain, nahmii has been built from the ground up for commercial use and takes advantage of the security of the Ethereum protocol’s base-layer. In order to create scalable infrastructure, DLT platforms need to have low and predictable transaction fees, low latency, and instant settlement times, the release noted.

EEA’s members include hundreds of firms from nearly every major world region. The companies are involved in a wide variety of businesses, including banking, government, legal, technology, energy, healthcare, pharmaceuticals, insurance, and marketing. 

The EEA’s Special Interest and Technical Working Groups are tasked with defining market requirements for contributing to new versions of the EEA specification documents, which help in expanding the market categories that can be covered by the specification. 

The organization’s specifications and related materials can be downloaded from the EEA website (entethalliance.org).

Hubii’s management will officially announce the launch of nahmii (which is powered by Microsoft Azure) at a blockchain event held at Microsoft’s Norway headquarters in Oslo.

CEO of hubii Jacobo Toll-Messia noted:

‘‘Working closely with Microsoft will give nahmii the platform and exposure it needs to become the premier blockchain scaling and interoperability solution.

Our upcoming event, along with NBX and StartupLab, is a fantastic opportunity to demonstrate the power of nahmii to Microsoft’s existing customer base. This announcement is a major coup for hubii.”

Tethers Cause Traffic Jam on Ethereum

The unexplained recent migration of almost a billion USD-pegged tether cryptocoins to the Ethereum network has caused 100 000 transactions to get “stuck” in processing there, Trustnodes reports.

(Graphic courtesy of Trustnodes)

The controversial tether coins have been moving from their native OMNI network and other crypto networks to Ethereum, and no one but the parties responsible can say for sure why.

“The Ethereum network has become congested with users complaining transactions are taking hours or in some rare instances, even days,” Trustnodes writes:

“The culprit appears to be Tether. They’re now taking about 50% of the entire network capacity, with USDT handling $18 billion in unfiltered trading volumes, far more than eth’s $6 billion.”

According to the outlet, tethers (USDTs), “…(are) used for arbitrage between global and local exchanges as well as to bypass national or international restrictions…on crypto trading, capital controls, and so on.”

Tethers are generated by a company called Tether.

Critics have long questioned Tether’s claims that each tether token it produces is 100% backed by equivalent real-world US dollars held by the company in reserve.

Tether, meanwhile, has attempted to pass off declarations from lawyers as legitimate audits.

Tether coins have also been linked by finance professor John Griffin and others to market manipulation of bitcoin and smaller cap cryptos.

According to the abstract of an oft-cited June 2018 paper by Griffin and grad student Amin Shams:

“Using algorithms to analyze the blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. The flow clusters below round prices, induces asymmetric auto-correlations in Bitcoin, and suggests incomplete Tether backing before month-ends. These patterns cannot be explained by investor demand proxies but are most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.”

Tether, associated exchange Bitfinex and their parent company iFinex are all being investigated for fraud now by the Attorney General of New York.

Despite all this, tethers have remained popular in cryptomarkets, and the coins have reportedly supplanted bitcoins as the remittance currency of choice used by Chinese merchants selling wares to retail outlets in Moscow.

Tether’s creators may be migrating tethers off of OMNI, the network controlled by iFinex et al., in order to ensure they remain circulating no matter what happens at iFinex.

As well, for some unknown reason, in July, the world’s 7th largest and most-known crypto exchange, Binance, decided to stop supporting OMNI-based tethers in favour of tethers hosted on Ethereum.

USD tethers have been spreading onto other networks, including Liquid, for some time, but recent moves, particularly onto Ethereum, have been substantial.

According to another article at Trustnodes in July, “The number of Ethereum based USDT tokens has doubled in about a month from $600 million in June to now $1.2 billion ERC20 Tethers.”

As well:

USDT (on Ethereum) has increased by $1 billion to above $3.6 billion from the previous all time high of $2.8 billion in October.”

Tether et al. likely believe that Ethereum is a more “decentralized” network (one with more globally dispersed nodes that cannot be shut down by authorities in a single jurisdiction).

“In light of India potentially outright banning bitcoin and other cryptos,” Trustnodes writes, “code-based exchanges that automatically run on an unstoppable network might be the only somewhat convenient way of accessing crypto in the country.”

Trustnodes describes that process of trading crypto in jurisdictions under a ban as follows:

“The process here would start Over the Counter (OTC) by buying ERC20 USDT that can then easily be exchanged on dexes (decentralized exchanges) for any crypto, including Bitcoin which has been tokenized.”

Banking Giant Santander Conducts One of the Most Advanced Blockchain-based Bond Transactions

Spanish multinational commercial bank Santander has reportedly become the first financial institution to handle all aspects of a bond issuance process on a blockchain-based platform.

The world’s ninth-largest financial services company used an ERC-20 compliant token to represent $20 million in issued debt, and settled the transaction with another set of Ethereum-based tokens that represented funds in a custody account.

Last month, the World Bank issued a similar blockchain bond but used a private (permissioned) Ethereum protocol-based network to conduct the transaction. A year ago, the World Bank issued the very first blockchain-based bond.

French multinational investment bank Societe Generale has also issued a bond on the public Ethereum network, however, the institution did not disclose details regarding on-ledger cash transfers.

Santander’s recent bond issuance process might have been the most advanced blockchain-based transaction, as every part of it was automated, digitized, and handled on-chain. Santander Security Services also managed the cryptographic keys for the tokenized cash and security.

However, Santander’s blockchain bond was issued to the company itself, without the involvement of any third parties.

Referring to the transaction as an “evolutionary step,” head of digital investment banking at Santander John Whelan told Coindesk:

“There are no secondary markets yet, but we are on that path.”

Meanwhile, head of funding at Santander Antonio Torío said the DLT-based transaction was a “real-money pilot.” Specifically, it was a plain-vanilla bond with a one-year maturity, four quarterly coupons, issued at a rate of 1.98%.

Torío explained that the transaction was a learning experience for the bank. 

“For Santander, this is really much more of a technology innovation issue than a pure financial issue. We regard this an important first step that will be followed by more complex transactions.”

Whelan noted that the tokenized cash was kept in escrow, and managed by an Ethereum-based smart contract. The cash was released after the issuer had underwritten the transaction and “instructed the blockchain to perform the delivery versus payment.” At this point, the cash and bonds were exchanged “simultaneously and irrevocably.” 

The transaction reportedly began on September 6 and concluded on September 10.

UK-based technology firm Nivaura assisted Santander with the digitized bond issuance process.

Nivaura CEO Avtar Sehra said that creating a blockchain bond is simple, because you are basically issuing a notarized, digital document via a smart contract.

Sehra explained:

“This is not really digitizing a bond. All you are really doing is digitizing the process for registration and settlement – and even for the settlement part you are only addressing half the problem because you haven’t got cash on the blockchain.”

Microsoft and hubii to Officially Announce Ethereum Scaling Solution nahmii

Nahmii, a new scaling solution focused on making Ethereum ready for enterprise-level application development, will be revealed at an upcoming blockchain event co-hosted by hubii and Microsoft.

Jacobo Toll-Messia, the CEO of hubii, the developer of nahmii, says:

‘Working closely with Microsoft will give nahmii the platform and exposure it needs to become the premier blockchain scaling and interoperability solution.

Our upcoming event, along with NBX and StartupLab, is a fantastic opportunity to demonstrate the power of nahmii to Microsoft’s existing customer base. This announcement is a major coup for hubii.”

Meanwhile, Microsoft’s director for Cloud and artificial intelligence Christopher Frenning states:

“The nahmii solution addresses a variety of issues related to the blockchain industry.  We are excited to see protocols like nahmii add value by integrating their solutions with Microsoft Azure.

The deep product integration with nahmii is the type of technological solution that ensures our sales reps are in the best position to succeed in every interaction.”

The event, titled “Microsoft and hubii – Blockchain in Practice,” is scheduled to take place on September 12 at Microsoft’s Norway headquarters in Oslo, according to a press release shared with Crowdfund Insider

Event participants will have the opportunity to learn about distributed ledger technology (DLT) platforms being developed by Microsoft, hubii, and various other companies. 

Hubii will be officially announcing the launch of nahmii, which is powered by Microsoft Azure.

The nahmii protocol will serve as an interoperability and scaling solution that may enhance the performance and utility of DLT networks, according to the release.

Based on the Ethereum blockchain, Nahmii is reportedly compatible with smart contract-enabled DLT platforms. The protocol’s developers are planning to deploy Nahmii to the Bitcoin blockchain through RSK, a smart contract platform secured by the BTC network.

Nahmii has been designed to increase throughput, provide “near-zero” latency, maintain “near-instant” transaction finality while offering consistently low transaction fees. Some of the main use cases for Nahmii include enhancing gaming applications, internet of things devices, trading, and content distribution.

Toll-Messia is expected to go over hubii’s origins during the event. He will also provide more details regarding nahmii’s features, potential applications, roadmap, and the nahmii Foundation.

In 2014, Microsoft became one of the world’s first major adopters of cryptocurrency when the tech giant began taking Bitcoin payments for certain apps and digital content.

Microsoft has also been working on enterprise blockchain tools and applications. The multinational tech firm has released several open-source DLT products, in order to improve the capabilities of its cloud computing platform Azure. 

In recent years, Microsoft has launched Azure Blockchain Workbench and the Azure Blockchain Services, which simplify the process of building applications on DLT platforms. 

Azure-based Nahmii will allow Microsoft’s partners and clients to develop software solutions that make blockchain-based systems accessible to businesses throughout the world.

Tether Launches Offshore Chinese Yuan Proxy

Controversial stablecoin issuer Tether has launched its promised “CNHt” coin, which is designed to act as a cryptographic proxy of offshore Chinese yuan (CNH).

The coin will run as an ERC-20 token on the Ethereum network.

CNHt was first announced in Chinese media by Zhao Dong, a Chinese crypto investor and Bitfinex shareholder who promised in August that the coin would go live via his China-based cryptocurrency trading platform, RenrenBit.

Bitfinex is the sister exchange of Tether. The two company’s parent company, iFinex, is now being investigated by the NYAG for alleged fraud for allowing Tether to lend Bitfinex $650 million USD from its reserves.

The loan was made after authorities in Panama seized of $850 million USD in Bitfinex funds from an alleged “shadow banking” partner, CryptoCapital.

That seizure reportedly led to a crunch on operating funds at Bitfinex, but the NYAG alleges that the loan was not disclosed to investors in a timely way.

Crypto Capital boss Reginald Fowler was arrested in Arizona April 30th and charged with bank fraud, operation of an unlicensed money transmitting business and conspiracy for allegedly providing “shadow banking” to several cryptocurrency exchanges.

iFinex et al have been plagued by rumours of malfeasance for years, but Tether has nonetheless maintained overwhelming market share in USD proxy coins.

Scott Purcell, CEO and founder of PrimeTrust, has explained Tether’s resilience as a matter of crypto trading markets having no alternative.

Regarding CNHt synthetic yuan, Purcell commented:

“I am extremely skeptical of this new issuance by Tether. Unless the stablecoin is fully-reserved, with assets held in trust by a qualified custodian and subject to third-party audit by an independent and respected accounting firm, then the risk of fraud is almost certain.”

There may nonetheless be a market for Tether’s synthetic offshore yuan.

A recent story in Coindesk claims that tethers have supplanted Bitcoins as the remittance cryptocurrency of choice for Chinese merchants doing business in Moscow.

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Globex Announces Addition of Ethereum Wallet Forensics to AML Screening Solution

Blockchain software solutions company GlobexUS Holdings, Corp. (Globex) announced on Wednesday the launch of its new Ethereum wallet forensics feature, which has been added to AMLCop, its proprietary AML software solution.

According to Globex, the new feature allows AMLCop to continually screen Ethereum wallets against a database of wallet addresses directly or indirectly involved in phishing, hacks, or scams.

“AMLCop offers ERC-20 issuers and all companies accepting the Ether cryptocurrency an enhanced AML compliance solution to protect against money laundering and other illicit transactions.”

While sharing more details about the feature, Globex CEO, Brian Collins, stated:

“With regulatory pressure in the U.S. and a new global standard for AML presented by the FATF, compliance can no longer take a backseat. We are thrilled to provide our clients with new and relevant search criteria to enhance AML efforts and protect market participants from bad actors.”

Globex President, Mark Elenowitz, went on to add:

“Through AMLCop’s hosted web portal, companies can run unlimited checks, and re-checks, against the database, manage flagged individuals, and maintain timestamped reports of all AML verifications on the Ethereum public blockchain. Adding Ethereum wallet monitoring continues our vision of providing the blockchain and financial community with a true one-stop solution for blockchain compliance.”

As previously reported, Globex offers integrated blockchain software applications for the compliant issuance and secondary trading of digital securities. Current tools include tokenization, AML/KYC, custody and more. The company notably explained that it has developed a dollarized secondary trading solution to provide greater liquidity assurance to investors and offer investors the ability to take part in the secondary market.

Ethereum Blockchain Running Out of Room Again

The world’s second-largest cryptocurrency network after Bitcoin, Ethereum, is close to capacity as scaling solutions remain unrealized and other coins rent space on the chain.

Ethereum came close to capacity once before, in 2017, when there was a brief craze for the “digital collectible” KryptoKitties.

Ethereum distinguished itself and gained market share by promising a way to amplify the “autonomous” features of Bitcoin. Where Bitcoin has basically one function, peer-to-peer “uncensorable” transacting, the team behind Ethereum envisioned the same function enhanced by “smart-contracts,” little programs sitting on top of transaction channels that could mete out or regulate funds according to specifications.

A smart contract could, for example, be programmed to release funds if one party did or did not meet certain terms.

Since it was released as an experimental technology in 2015, however, even writing fool-proof smart contracts for blockchains has proven very challenging.

Ethereum also created a portal for anyone to create and circulate a crypto token, and thousands did. Ethereum directly enabled the ICO craze of 2016 and 2017, with more than 90% of those projects either failed now or trading well below ICO price.

But as a promised scaling solution called “sharding” (transaction processing broken into batches processed by some but not all nodes) remains elusive, surviving ICO coins, and another coins roving on the network, tether, Bloomberg claims, are now crowding Ethereum once again.

When there is much demand for processing on Bitcoin or Ethereum, customers can expedite transactions by paying higher fees to miners for making their transactions a priority. Low-fee transactions wait, sometimes for hours.

Ethereum’s inventor, Vitalik Buterin, admitted the crowding problem last week in an interview with The Toronto Star.

During the interview, Buterin said crowding could be deterring business on the network:

“Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us. There is pressure keeping people from joining, but improvements in scalability can do a lot in improving that.”

Buterin did not single out Tethers, but according to crypto data firm CoinMetrics:

“Current (Tether) supply stands at 4.1 billion units (some units have recently been burned by the Tether Treasury), consisting of 2.54 billion issued on the Omni blockchain and 1.56 billion issued on the Ethereum blockchain. Although Tether issued on Ethereum has existed since late 2017, the number of Tether issued on it was low and was seldom used. This changed earlier this year, and the strong growth in Tether total supply can be almost all attributed to Ethereum.”

Tethers are a synthetic proxy of USD and other real-world currencies issued by a company called Tether Limited.

The coins were created to “add liquidity” to crypto trading systems and to permit arbitrage between exchanges in different parts of the world.

Tether Limited claimed until recently that every “USDT” issued was backed 1-t0-1 by equivalent US dollars held in reserve, but the company has raised suspicions and has never provided a credible audit.

The company and its sister firm, the crypto exchange Bitfinex, are now in hot water in New York for alleged commingling of funds and failure to disclose events material to investors.

According to Bloomberg:

“Tether’s use has been growing, as more of the coin has been issued. Its market capitalization recently passed $4 billion, up from $2.7 billion a year ago.”

Professor John Griffin, who teaches Finance at the University of Texas and is also a consultant with law enforcement, has correlated the issuance of tethers with market manipulation and claims 40% of all tethers circulate on Ethereum.

CoinMetrics also notes that Tether is used in 40% of transactions on Binance and 80% transactions on Huobi, two of the world’s biggest crypto trading platforms.

Perspective: Ethereum (ETH), the World’s Second Largest Cryptocurrency, Shows No Signs of Slowing Down

thought-catalog unsplash Bitcoin Ethereum Cryptocurrency

Ethereum (ETH) is currently the second largest cryptocurrency by market cap, and while it doesn’t benefit from Bitcoin’s ‘first starter’ advantage, in many ways, it’s actually a far more superior blockchain technology. The Ethereum network has a more complex and detailed developmental structure that allows for greater flexibility and adoption amongst a broader range of users and business entities.

While Bitcoin (BTC) is utilized almost solely as a speculative investment tool, Ethereum’s true worth derives from the various ways in which it can be leveraged to facilitate the creation of decentralized applications (dApps). Its groundbreaking use of smart contracts and provision of an open-source blockchain development platform has quickly made Ethereum the network of choice by any serious blockchain developers.

Since its inception in 2017, Ethereum has enjoyed unprecedented growth, continuously maintaining its place as second in the crypto hierarchy. So much so that last year, none other than the world’s largest tech giant Google invited Ethereum co-founder Vitalik Buterin to come work at the firm.

Buterin publically revealed the invitation in a tongue-in-cheek tweet asking his followers: ‘Should I drop ethereum and work for Google?’ The vote ended with a close 59 to 41 percent in favor of Buterin continuing at Ethereum, although it’s unlikely that he ever had any intentions of leaving.

Ethereum in daily life

While the Ethereum blockchain exists primarily for the creation of dApps, its existence is powered by (and also drives the price of) the cryptocurrency token Ether (ETH). This means that ETH in itself has the potential to operate as a stand-alone currency in its own right and is already traded in large quantities daily. Currently, ETH enjoys an average 24-hour trading volume or $8.6 billion and is accepted as a means of payment at hundreds of retailers online and around the world.

Businesses and retailers can easily adopt Ether as a form of settlement via a variety of payment gateways, such as Coingate, Coinpayments, and B2BinPay. Integration is often as simple as downloading and registering the application on a mobile device which creates a virtual point-of-sale (PoS) system. With some payment gateways such as Coinpayments offering fees as low as 0.5 percent, the implementation can be cost-saving for both the consumer and retailer.

Ethereum in the markets

Ethereum’s ether token (ETH) is up 6 percent against the U.S dollar (USD), having recently broken through the significant resistance level of $260 (now over $300). Analysts believe the coin is in a good position for further growth, with the majority of technicals showing space for continued upside momentum.

Investors have likely been motivated to increase their ETH positions due to the ongoing developments from the highly productive Ethereum Foundation – the non-profit group tasked with improving the network.

Last month at the annual ConsenSys blockchain summit, the Ethereum Foundation released a blog post detailing its plans for allocating a $30 million investment into the project. Amongst the three-tiered approach were plans to attract further academic interest from top-level researchers and developers in the blockchain space.


Aubrey Hansen is a freelance writer, a graduate of Aarhus University and crypto enthusiast. She writes about blockchain technology, Fintech, and cryptocurrencies.  She’s been researching major developments in the crypto world in past couple of years.