Decentralized Indexing Protocol, The Graph, Raises $5M In A SAFT From Coinbase and DCG

Ethereum-based data startup, The Graph, has revealed that it has raised $5 million after its token sale.

The San Francisco firm announced on Tuesday that the new token sale, utilizing the Simple Agreement for Future Tokens (SAFT) model, for various accredited investors.

Among the participants were highly reputable firms such as Coinbase Ventures, ParaFi Capital, Framework Venture, as well as Digital Currency Group. Previously, the company had acquired $2.5 million during the seed round, which was led by Multicoin Capital.

The Graph has developed an indexing platform that will help organize blockchain data for easy accessibility. Individuals can utilize The Graph’s open-source platform for searching specific Ethereum data just as is the case with Google search.

According to Yaniv Tal, The Graph CEO, there are thousands of developers who are already using the firm’s tools, which includes the team that came up with decentralized exchange (DEX) Uniswap as well as token-fueled Aragon project.

Hayden Adams, Uniswap’s co-founder, confirmed that they use The Graph’s tools for Uniswap.info – the company’s analytics site.

Speaking to the press, Framework Ventures’ Michael Anderson, one of the lead investors, stated that his firm was pleased to support Yaniv and his team. According to Anderson, his firm would help The Graph to grow further once it launches. Anderson also stated that The Graph’s reputation was at par with that of Chainlink as well as Ethereum.

At the moment, The Graph is a hosted service but, plans are underway to ensure it moves to a decentralized network before the end of the year.

The Graph was founded in 2018 and currently services thousands of applications. The firm claims that it processed approximately 50 million queries every day, and in May, it processed 750 million queries, which represented an increase of 45% compared with April.

SAFTs are designed to allow firms to sell the rights to future tokens that are only available once the network is launched. The format was developed to ensure that a startup isn’t operating an unregistered securities sale.

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Author: Joseph Kibe

FCA Survey Estimates 1.9 Million People Currently Own Cryptocurrencies in the UK

According to a recent survey by the Financial Conduct Authority (FCA), which is working with the Government and the Bank of England, as part of a UK Cryptoassets Taskforce, more and more people are now aware of cryptos and getting into them. The survey states,

“We estimate 3.86% of the general population currently own cryptocurrencies. This amounts to approximately 1.9 million adults with the UK population (over 18) taken to be approximately 50 million.”

It is also estimated that 5.35% (2.6 million people) hold or held cryptocurrencies, up from 3% (1.5 million people) in 2019.

In this latest survey, 73% of adults compared to 42% last year have found to be heard of cryptos. Traditional media and online news are playing a part in this awareness with 28% of adults that were aware of cryptocurrencies had seen an advert.

Meanwhile, 45% of crypto owners have also seen a related advert and 35% of them said it made the purchase more likely. But those influenced were also more likely to subsequently regret the purchase. Crypto owners also understand the risks associated with the lack of protections, but the agency still states,

“the lack of such knowledge among some presents potential consumer harm to consumers.”

Bitcoin & Libra is all we know about

The research was conducted by FCA from 13 to 21 December 2019, with a nationally representative online panel of 3,085 respondents. After screening out those who haven’t heard about crypto, the agency added 483 individuals to the sample who were crypto owners for the “longer questionnaire.”

These crypto owners have a high technical knowledge and it has been found that 75% of them hold under £1,000, roughly $1,230, and half of them hold under £260, nearly $320.

Bitcoin remains the most recognized crypto while Libra, which doesn’t exist yet, 22% had heard about this upcoming stablecoin from Facebook.

Testing the knowledge of cryptocurrency owners it was found 90% conducted some research before purchasing cryptocurrencies, compared to 84% in 2019.

Speculation, Regulation, & Coinbase Domination

The most popular reason for buying cryptos remains speculation – ‘as a gamble that could make or lose money’ rather than as an investment of money.

Those investing for speculation purposes were also more likely to hold their cryptocurrencies for more extended periods. In comparison, those displaying a lack of basic knowledge tend to hold their cryptocurrencies for shorter periods.

While 12% never monitor the value of their holdings, 15% regret having purchased.

Almost 50% of cryptocurrency owners have never used digital assets, but a good 27% did use them to purchase goods and services.

Moreover, 31% of respondents who currently own crypto currently do not intend to purchase more crypto because they consider it too risky. 29% of these will buy more if it is regulated in the future.

Interestingly, 73.2% of consumers that do not currently own but plan to purchase cryptocurrencies in the future reported that the lack of regulatory protection has impacted their decision not to buy cryptocurrencies to date.

Unlike the previous times, this survey found that 8% of respondents used borrowed money to purchase cryptos. But these borrowers were most likely to be the ones displaying a lack of knowledge surrounding the technology underpinning cryptocurrencies or the absence of regulatory protections.

The crypto purchases were made majorly (83%) using only non-UK based exchange, with Coinbase being the most popular one with 63% followed by Binance (15%), Kraken (10%), Bittrex (8%), and Bitfinex (7%).

Also, a good 46% store their crypto on the exchange where they bought it, and only 24% keep it in on offline hardware.

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Author: AnTy

US Congress Banking Committee Discusses The Development Of Digital Money and Payments Systems

  • The U.S Congress banking committee discusses the future of digital money and payments
  • Former U.S Commodities and Futures Trading Commission (CFTC) chairman is among the witnesses set to present to the committee.

With over 32 bills on digital currencies and payment systems introduced in the 116th U.S Congress, these new technologies got yet another day in the lawmakers’ chambers. According to a remote hearing earlier today, the U.S Senate Committee on Banking, Housing, and Urban Affairs discussed the “Digitization of Money and Payments.”

Details released on the hearing put forward three witnesses who vouched for digital payments, stablecoins and presented the advantages of developing a digital dollar. The witnesses are Former CFTC chairman and Senior Counsel at Willkie Farr & Gallagher LLP, Christopher. J. Giancarlo, Paxos co-founder and CEO, Charles Cascarilla, and Professor of Law at Duke University, Prof. Nakita Q. Cuttino.

In his pre-written statement to the committee, Giancarlo urges that the development of new financial systems to push America into the 21st century. He focuses on the long settlement and bank transfer times, land titles issuance, and recent delays in distribution of the $2 trillion stimulus checks – some taking a month to reflect in citizen’s accounts.

To bring new technological solutions, Giancarlo, who launched the Digital Dollar Project, a non-profit organization aiming to digitize the greenback, will be explaining the need to have a digital USD. He further wrote:

“The United States must take a leadership role in this next wave of digital innovation or be prepared to accept that the innovation will incorporate the values of America’s global competitors.”

Cascarilla looks to focus on stablecoins, and the possible creation of a Fed-controlled digital token, a CBDC. Given the current challenges in the banking system, Charles believes the integration of stablecoins is critical to the U.S’ financial infrastructure and maintaining its position in global economics.

He concluded his statement:

“Supporting growth and innovation with a US CBDC would facilitate the necessary upgrades to our financial infrastructure, reduce systemic risk, increase inclusion for all Americans and reinforce our values and the long-term position of the US dollar.”

According to Nikita’s statement, the development of digitized payment and money systems needs to focus on “the time and access frictions facing low-income Americans.” While digital payments streamline traditional banking, there are challenges still that obscure the countrywide adoption of these new technologies.

“Congress must critically review innovations like CBDCs and stablecoins to ensure novel forms do not belie true functions. In terms of financial inclusion, this means ensuring that promises of open access are achievable and ultimately achieved.”

[Also Read: ‌Bank of Canada: Zero-Knowledge Proof Are Insufficient for National Scale CBDC Integration]

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Author: Lujan Odera

Biggest Shift in Bitcoin Hashrate May Come in 2020

Bitcoin price is stuck around $9,100, but the hash rate of the network is continuing its ascent since crashing after the block reward halving.

The hashrate is yet again near the all-time high at around 130 Th/s after the jump in difficulty – the biggest since January 2018. Despite this, the bitcoin block mining time is back below 10 minutes since mid-June. Currently, a new BTC is being produced at an interval of 8 minutes 37 seconds, as per Bitinfocharts.

Amidst this, BEG reported that bitcoin mining giant Bitmain had received an order for 17,500 S19 mining machines from the US blockchain service provider, Core Scientific. The first batch of the agreement, which has a duration of four months, has already been delivered.

The latest flagship bitcoin mining machine of Bitmain currently costs 14,260 yuan, just over US$2,000.

A similar trend is seen by F2Pool, which reported receiving orders of large quantities of new-gen hardware from some of the biggest North American bitcoin mining operators.

On top of this, China’s rainy season is in full swing. The country is facing its worst flood in 70 years, with many plateaus in southwestern Sichuan Province experiencing heavy rain since mid-June. This was expected to continue in some parts of Sichuan.

Sichuan is of strategic importance for the Chinese mining ecosystem as such could play a part in the potential loss of mining hash power out of China, said Denis Vinokourov of Bequant.

All these bitcoin miner orders and “the hydro season in China coming to a close in October 2020 could see the biggest shift in hashrate,” said F2Pool.

Already capital controls in China have miners exporting their operations outside of China, and de-dollarisation of various financial systems, specifically in emerging economies are pushing them toward bitcoin mining.

These factors, combined with the institutionalization and financing of mining operations with the US, is why China has already started experiencing a sharp decline in Bitcoin mining dominance, which states the Amun Report.

Moreover, the US is seeing an increase in hashrate, now accounting for 7.2% of market share, making it the second-largest hash rate contributor after China.

Bitcoin Miners Expanding

Amidst this, Bitcoin miners are expanding their business, some even out of the mining sector.

Hut 8 has raised a total of $8.3 million from selling a 6% equity stake to investors, about $88k more than the original $7.5 million funding target. The Toronto-listed mining company is planning to invest this in new equipment that will enable them to increase their mining capacity to over a fifth.

“This financing is expected to strengthen Hut 8’s cash flows and balance sheet,” said company spokesperson Ryleigh Ebron.

Ebang International Holdings Inc. meanwhile is planning to launch an offshore cryptocurrency exchange this year, in an attempt to diversify beyond the mining sector. The company is considering applying for licenses in Singapore or the US or acquiring an existing exchange operator.

The Chinese crypto mining giant could see its total revenue grow about 40% in 2020, after expanding into the newer business of clients that manage data centers, said the company CFO, Chen Lei.

Revenue could double to $200 million this with the launch of digital asset exchange, otherwise, the mark should be hit in 2022, he said.

The Hangzhou-based maker of Bitcoin mining rigs that went live on Nasdaq under the ticker EBON last week has its shares currently trading at $4.50, down from the IPO price of $5.23 where it raised $100 million.

Ebang is planning to use the proceeds from the US share sale to develop new models of machines and expand overseas. Setting up regulatory-compliant crypto exchange outside China is part of the plan. Chen expects to initially attract 10% of the total transaction fees of digital asset trading.

Ebang is not the only one looking into expansion; its rivals Bitmain and Canaan are also betting on making chips in the field of artificial intelligence to reduce their reliance on BTC prices.

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Author: AnTy

Bank of Canada CBDC Insight: Zero-Knowledge Proof Are Insufficient for National Scale Integration

A recent analytical staff note by the Bank of Canada on CBDC’s has highlighted that higher privacy levels may come at a cost. The bank summarized possible privacy CBDC frameworks as it looks to advance research and development in this space.

Known privacy innovations such as Zero-knowledge proofs (ZKPs) have yet to prove their value when it comes to practical privacy solutions on a countrywide-scale, as per the Canadian financial watchdog.

The analytical staff note highlights that a CBDC ecosystem would fundamentally comply with KYC and AML protocols. Therefore, developing such a network for Canada’s population would inevitably dictate the levels of privacy participants enjoy. Going by the value proposition of upcoming virtual ecosystems, finding balance becomes pretty hard leaving hybrid options as the go-to infrastructure:

“A designer, however, could build a system with hybrid privacy levels. In this, unregulated holdings and transactions (offering maximum privacy to users) would be allowed within limits (e.g., a maximum amount) alongside regulated ones without limits.”

Tradeoffs for Higher Privacy

While Canada’s Central Bank has been working on CBDC research for some time, the regulator is reluctant to unlock its sunrise phase as China did with the digital Yuan. According to its note, this position may have been influenced by the underlying risk of integrating a privacy-focused CBDC.

The banknotes that have higher privacy levels come at a cost and may prevent scalability in the long-run. This is because of the enhanced control protocols that need to be integrated for data encapsulation:

“This adds complexity, which raises operational costs. It also adds computational overhead, so scaling to a population size can be challenging or impractical—whether a DLT or non-DLT platform.”

Other than resource intensity, privacy in CBDC networks is still a relatively new concept, given it has yet to prove itself even in systems like ZCash, which leverages Zero-Knowledge proof. At the moment, this tech has not been implemented on a national level. This paints a picture of an immature infrastructure that could expose deep vulnerabilities if tested as monetary policy function:

“The risk here is that their technical complexity, combined with their immaturity, could mask vulnerabilities. Further, no known deployments have scaled up to a national population.”

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Author: Edwin Munyui

Israel Govt backed Crypto Startup, Kirobo, Develops Reversible Blockchain Transactions

  • Israeli based blockchain startup, Kirobo, aims at reversing wrong address transactions to eliminate loss of funds through human error.
  • The “Retrievable Transfer” feature is currently in use on Ledger hardware wallets for Bitcoin transactions.

The Israeli startup, launched in 2018, has launched its mainnet version of its Retrievable Transfer feature protecting users from sending their digital assets to wrong addresses. The platform employs a layer two security solution (logic layer) on a blockchain that works in two levels.

First, the recipient of the funds must enter a transaction code to receive the funds. This ensures the open channel between the sender’s and recipient’s address is trusted hence directing the transaction only to the wallet selected. Next, the sender keys in the address as many times until the correct address is provided.

One of the most significant issues affecting crypto adoption is the fear of losing funds over a small error when inputting the long alphanumeric wallet codes. The volume of BTC lost differs from report to report. Several investors have lost funds through malicious attempts or human error when sending digital assets.

Addition to Ledger Hardware Wallet

Kirobo’s security layer will provide privacy enabled, retrievable transactions starting with Bitcoin users on Ledger’s hardware wallet. The platform is secured against a brute force attack and is also non-custodial, meaning users control their funds every step of the way.

Kirobo, supported by the Israeli Innovation Authority, has been testing its reverse transfer feature on the Bitcoin testnet since January. The mainnet feature will be free for any Bitcoin transactions up to $1000 on Ledger. More platforms will be added in the future, said Kirobo CEO, Asaf Naim.

On the firm’s mission, he said:

“Our aim is to make blockchain transactions as simple and as secure as online banking.”

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Author: Lujan Odera

Ethereum Active Addresses Surge to a Two-Year High But They Also Coincide with Market Tops

Currently in the green by 1.07%, Ethereum is trading at $224, up 80% YTD. ETH traders meanwhile are expecting more gains with ETHUSD longs on Bitfinex still near all-time highs.

This growth has the USD balance of ETH on the crypto exchange nearly doubling this year which is in exact opposite trend with the Bitfinex’s bitcoin balance which saw the biggest outlaw among all the exchanges.

What’s bullish is the active addresses on Ethereum that are currently at a level that was last seen in June 2018. These addresses interacting with ETH have spiked to a two-year high of 486,000.

glassnode-studio_ethereum-active-addresses-7-d-moving-average
Source: Glassnode – Ethereum: Active Addresses (7d Moving Average)

However, this indicator is also a cause of concern because “peaks of the daily active addresses line up with market tops.”

Ethereum Usage on New Highs

The network usage is already at new highs with the total ETH gas used on the Ethereum blockchain reaching a new all-time high. This surge is coinciding with the ETH miners voting to increase the block gas limit by 25%.

Although it will increase the network’s capacity to handle the transactions from 35 to 44, it will make it harder and costlier to sync a node. Also, it would increase the risk of DoS attacks.

Ether, the native token of Ethereum, is required as payment to complete the transactions across the network. And as the demand for transaction activity rises on the platform, so does the demand for ether.

As such, the median daily fee on the Ethereum network continues to go higher as the number of ERC-20 transactions pushes into an all-time high territory. Ethereum fees are also exceeding Bitcoin fees for the third time in a row.

Eth fees have been higher than the leading cryptocurrency network on more consecutive days now, which was last seen only once in May 2018.

BTC vs ETH Network Fees
Source: Glassnode

The transaction count is also going parabolic because of the growth of stablecoins and DeFi. The 7-day average of ETH transaction count is now approaching all-time highs set in January 2018.

Source: Coin Metrics

The DeFi Effect

While major fiat-pegged digital assets have surpassed $11 billion, Tether (USDT) has pushed past $10 billion, as per Messari.

Similarly, the amount of ether collateral deposit in DeFi applications has also reached a recent high of 3 million ETH. This figure is shy of the all-time high of nearly 3.3 million deposits in DeFi earlier this year.

Tradeblock Ether Deposited into DeFi
Source: TradeBlock

DeFi tokens are currently the hot commodity in the market with on-chain liquidity protocol Kyber rallying today. The crypto jumped after an upgrade that includes changes to its KNC model to attract more participants to the protocol’s development.

Moreover, now more and more bitcoins are getting on the second-largest network. According to Dune Analytics, “over 11k BTC, which is over 0.05% of BTC supply, is now on Ethereum.”

“Assuming the “hype” is real and that this is another, much more extended growth cycle that the DeFi is about to undergo, the big question is where will the new capital come from,” wrote Denis Vinokourov of Beqaunt.

According to him, aside from collateralized loans and securitized Bitcoin currently in progress, another prime suspect for capital rotation is centralized exchange tokens, he said.

“With the IEO market in hiatus and spot market activity somewhat suppressed especially given the seasonal effects in play at the moment,” it may lead to at least 10% of capital out of CEX to DEXes.

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Author: AnTy

Binance Exchange to Acquire Major Stake In Crypto Payments Provider, Swipe.io: Report

A report from TheBlock reveals that top crypto exchange, Binance is in talks to acquire a majority of the stake in Swipe.io – a crypto payments startup.

While the agreement has yet to be made official, the exchange looks to push through the deal, intending to launch the main version of its Binance Card, a crypto payments debit card.

Back in April, Binance announced the launch of a Beta version of the Binance Card, which allowed users to spend crypto with over 46 million VISA accepted merchants across the world. The card costs $15 for pre-orders with no hidden or additional costs attached.

To begin, the card will start with support for Bitcoin (BTC) and Binance Coin (BNB), but the acquisition of Swipe.io, which allows multiple currencies, could open up the card to allowing more digital assets to be used.

Swipe.io, on its part, will produce the Binance Cards as a white-label product allowing Binance users to spend crypto instantly, with enhanced security features such as a card tracking feature. The official announcement on the acquisition may come later in the week.

The crypto payments platform recently announced a partnership with Samsung Pay to add its Visa debit card option. The addition of Samsung Pay saw the company become the inaugural company to provide this service to both Samsung Pay and Google Pay.

We have reached out to Binance, but as of press time, we have not heard back. We will update this article when they respond.

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Author: Lujan Odera

Bitcoin Recording Third Best Quarterly Close; Strong Q2, But Q3 Paints A ‘Challenging’ Picture

Bitcoin is currently trading above $9,100 in green with just $1.1 billion in ‘real’ trading volume. The leading digital currency has recovered 140% since the March crash but is up only 27% YTD.

Despite the minimal yearly gains and ending the first quarter of 2020 on a red note of 10.58%, the second quarter has turned out to be surprisingly good despite the coronavirus pandemic triggering a sell-off in the global markets.

Today, on the last day of June and the second quarter, we are close to ending this month and quarter at about $9,150.

This makes the third-best quarterly close for bitcoin in its young history. The best quarter close was Q4 of 2017 at 13,660, followed by 2019’s quarter 2nd when bitcoin ended it at $10,590.

After Q2 of 2020, comes Q4 of 2019 when bitcoin was at $7,180.

Around the current price level, bitcoin would mark a gain of more than 42%, which also makes it the fourth-best second quarter since 2014.

After 157.5% gains in 2019, 125.3% in 2017, and 61.8% in 2016, 2020’s 42.2% gains is the best second quarter.

Interestingly, the second user has been a green quarter for bitcoin for the majority of the past seven years except for the 2018 bear market. And bitcoin continued this historical trend this year.

However, this positive development means bad news might be ahead. In contrast with Q2, Q3 heavily tilts towards losses, much like Q1. And we did end up in red in Q1 of 2020. Now, it needs to be seen if Bitcoin will continue ranging, or we will encounter a drop in price.

“Excluding the exceptional 2017 vintage, Q3 has been historically more challenging,” noted Skew Markets.

As we reported, analyst Rekt Capital has said it is nothing out of the ordinary because, after the reward halving of 2016, bitcoin recorded losses before going on a bull rally.

What about USDT?

Stablecoins have been seeing strong growth throughout the coronavirus pandemic only to slow down in the past few weeks. Amidst bitcoin’s lackluster performance, popular stablecoin (USDT) has surpassed $10 billion market cap, as per Messari. This has many expecting a run-up in BTC.

But this demand for USDT is not reflected in Bitcoin price.

This is because “Tether has historically printed USDT in large batches in anticipation of future demand and distributions,” said Coin Metrics in its latest report.

According to the report, on-chain supply doesn’t mean new supply in public markets, and USDT held by the Tether Treasury, which is currently at $9.79 billion, is a more accurate indicator of the supply in public markets.

The correlation between free float USDT and Bitcoin’s price was clearer in early 2019 when BTC rose from $4,000 to $12,000.

A bullish picture meanwhile was painted by Bitcoin hodlers as those holding BTC for a year or more made a new all-time high of 62%.

Pointing to this, Alistair Milne noted, “Similar levels of HODL last seen during a 3-month consolidation at around $400 before starting a two-year bull run,” and guesses the cycle peak to be around 70%.

Also, from the mining perspective, Matt D’Souza, CEO of Blockware Mining, says just like the bitcoin mining market bottomed in late Q4, 2018/early 2019, “we are in a similar environment today.”

They also believe the “Bitcoin spot market is starting a bull market,” which “will pull the mining market out of this winter.”

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Author: AnTy

Blockchain Monitor, Elliptic, Adds Support for Zcash (ZEC) and Horizen (ZEN) Privacy Tokens

Elliptic, a blockchain analysis firm, announced the addition of Zcash (ZEC) and Horizen (ZEN) privacy tokens to its tracking platform. The analysis firm, however, supports the ‘unshielded’ transactions from the blockchain only, keeping away from the built-in privacy tokens such as Monero (XMR), Elliptic co-founder and chief scientist Tom Robinson said.

Following the successful support of ZEC and DASH privacy tokens on Chainalysis, Elliptic has become the latest blockchain monitoring firm to dip its feet into the privacy crypto space.

In a statement on the support of ZEC and ZEN, Robinson believes that monitoring these coins will improve the field by providing the regulated financial entities with a trail on the source and destination of crypto assets. This ensures these companies remain KYC/AML compliant through their operations.

The screening tool only focuses on unshielded addresses on the ZEC and ZEN platforms but alerts compliance departments on shielded transactions as a risk management solution. This is quite different from Chainalysis screening, which involves shining a light on both shielded and unshielded transactions on private networks. Robinson said:

“We provide transaction screening tools for exchanges and don’t plan to offer our functionality on something like Monero, where everything is private by default.”

Adoption is the Main key

Regulators and financial authorities fear privacy coins due to their financial crime risks and possible utility for use in purchasing illicit goods and services. This is contrary to research from the Elliptic intelligence analysts, which claims to “have observed minimal adoption of Zcash or ZEN by illicit entities.” In contrast, Bitcoin, the public blockchain, is still the go-to asset for criminals due to its highly liquid state.

Robinson believes that by supporting the screening of ZEC and ZEN, the fear of risks that the two privacy coins possess will be lower than public blockchain such as BTC.

Genesis Exchange Adds Elliptic

The two crypto assets, ZEC and ZEN, have been added to both the Elliptic Navigator – transaction screening pool – and Elliptic Lens – the firm’s wallet screening tool. Digital asset exchange and trading services, Genesis, will be the first to onboard the ZEC and ZEN monitoring features on its platform.

Genesis CEO Michael Moro said:

“Elliptic’s addition of these new assets enables us to further grow our business by providing the ability to assess risk on transactions and meet regulators’ expectations.”

So far, the Elliptic screening platform boasts screening over 97% of all the crypto assets in trading volume following the widespread addition of over 85 digital assets in May.

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Author: Lujan Odera