Lithuania’s LBCOIN, The World’s First Collectible Digital Coin, is Sent to the ECB Council

The world’s first collectible digital coin called LBCOIN was sent to the email inbox of European Central Bank policy makers on Monday from one of their colleagues.

The coin came to Governing Council members as a link to an e-wallet with six digital tokens. These tokens feature a portrait of one of the 20 signatories of Liithunai’s 1918 declaration of independence.

“I’m curious how popular this is going to be among Governing Council members,” said Vitas Vasiliauskas, Lithuania’s central bank governor. “I’ve asked for feedback,” he added.

Just last week, ECB President Christine Lagarde said that they would soon discuss whether or not the eurozone should create its very own digital currency.

Currently, finance chiefs of the euro region are working on devising a regime to regulate fiat-backed stablecoins.

Call for a Digital Euro

Before being sent to the colleagues, the LBCOIN was demonstrated at last week’s Governing Council meeting about how it works.

Based on blockchain technology, the project took three years to complete, Vasiliauskas said.

“We’re the first to issue” such a coin, he said. “The whole experience gave us ample possibilities to comprehend the technology.”

The users of the tokens can also trade them among themselves after activating the tokens. The specific set of them can also be exchanged for a credit card-sized physical coin that has a nominal value of 19.18 euros.

The central bank governor believes the LBCOIN experience will help ECB in reaching the decision on a digital euro. According to him, it was the social media giant Facebook’s stablecoin Libra that helped euro-area central banks in recognizing that digitization can revolutionize the financial system.

“We absolutely need to move forward, we see the Chinese are already testing it in practice, launching the CBDC in certain regions,” he said. “Europe shouldn’t sleep through this again.”

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Author: AnTy

Cellebrite Launches Crypto Tracer Solution Powered by CipherTrace for Tracking Illicit Activities

Cellebrite, a digital intelligence firm has released a cryptocurrency transaction tracing tool called “Cellebrite Crypto Tracer,” which would help law enforcement agencies, businesses, and analysts to trace crypto transactions being used for any illicit activity such as money laundering, terrorism, drugs, human trafficking, weapon sales, and ransomware schemes.

The firm has promised to offer its crypto transaction tracing toolkit to investigators, along with analysts and even those who want to lawfully use the toolkit to obtain evidence of any kind of criminal activity being carried out using cryptocurrencies.

As per a study conducted by Oxford University, over $76 billion in Bitcoin is being used to facilitate illegal activities. The use of digital assets, especially Bitcoin and privacy-centric coins, has been a significant hurdle for law enforcement agencies and remains one of the prominent reasons governments have a passive stance towards regulating cryptocurrencies.

How Does Cellebrite’s Crypto Tracer Solution Work?

The Cellebrite crypto tracer solution creates an array of data sets with attributable points. The toolkit collects data from open-source and private references, deception data, and human intelligence, which results in a data set of 522 million attributable points.

Leeor Ben-Peretz, chief strategy officer of Cellebrite, sheds some light on how the tracing solution aggregates and intelligently uses data to help users trace illicit activity. The firm claims that its solution, with millions of data sets, can pinpoint the origin of funds as well as where the fund is headed to and can determine if the destination is an exchange or a wallet. Peretz explained:

“Some of the major features of the solution include the ability to conduct risk scoring and profile hundreds of global exchanges, ATMs, mixers, money laundering systems, gambling services, and known criminal addresses and assign risk levels to transactions.”

The launch of the crypto tracing tool could not have been timed better. Just last week, Twitter experienced one of the worst cyberattacks in recent history, where the accounts of hundreds of prominent personalities like Elon Musk, Kanye West, Jay-Z, and many more were taken over by hackers.

All the accounts tweeted a fake bitcoin scam promising people to double the amount they send to the mentioned bitcoin address. While the scams look apparent to many, and Twitter managed to gain control within a few minutes, hackers still managed to get over $100,000.

With other blockchain tracing providers such as Chainalysis also tracking the transactions of the wallets that received these funds. Now, with CypherTrace powered, Cellebrite’s tracing solution can help in locating the accused behind these hacks. However, cybercriminals have adapted to the evolving landscape of technology, and have become more sophisticated in their hacks and scams.

John Jefferies, a chief financial analyst of CypherTrace, believes as the cryptocurrency gains more mainstream adoption, the crimes associated with it will also see a rise. He said:

“As the market capitalization of crypto grows, larger financial crimes and nation-state scale. Regulatory reform, driven by the updated FATF guidelines, will force jurisdiction arbitrage as new laws are enacted, globally on unsynchronized timelines.”

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Author: Rebecca Asseh

Coin Metrics’ Trusted Volume Framework Reveals Only 14 Exchanges Are Reporting Real Trading Data

Coin Metrics, a crypto analyst firm, has released a new framework called ‘Trusted Volume Framework’ to evaluate how trustworthy is the trading volume clams made by various exchanges every year.

The analysts at Coin Metrics found that only a handful of exchanges, among hundreds, managed to cut when it comes to offering trading volume data. The study also found that a majority of the exchanges have been showing 10x the actual volume. Exchanges dwell into wash trading, and many other unethical means to show an inflated number to attract more customers.

Key Takeaways of the study revealed:

  • Fake trading volumes have been a black mark on the industry – it is difficult to find a single metric to easily sift through the reported numbers.
  • We’ve taken a data-driven approach to the problem and are excited to introduce a “trusted volume” metric to help identify the legitimate trading volume.
  • Our framework for measuring the reporting quality of exchange is broken down into three broad categories: volume correlation, web traffic analytics, and qualitative features.

As of June 2020, the passing exchanges for ‘trusted’ spot volume include Binance (and Binance US), Bitbank, Bitfinex, bitFlyer, Bitstamp, Bittrex, CEX.IO, Coinbase, Gate.io, Gemini, itBit, Kraken, and Poloniex.

Jon Geenty, a data scientist at Coin Metrics, commented on the growing trend of showing inflated numbers and said:

“Exchanges are especially notorious for boosting volume numbers to game ranking sites or other nefarious reasons. The industry is full of technical information that can be difficult to understand and, at times, misleading. We are working to create a more transparent environment for those within it and a safer, more trustworthy source for those hoping to learn more.”

How did Coin Metrics Evaluate Fake Volume?

Coin Metrics’ Trusted Volume Framework
Source: Coin Metrics

Analysts at Coin metrics did not collect data from top exchanges; instead, they collected trading volume data from trusted spot exchanges which included:

The Coin Metrics subjected these exchanges to three litmus tests, which included comparing the price feed for the exchange against the trusted exchanges. Any exchange with a 60% correlation with the trusted exchange ‘passed’ the test.

The second test assesses the exchange’s volume against the web traffic of the platform, so if an exchange is inflating its volume, then the ratio will be higher as well.

And for the third test, Coin Metrics checks qualitative measures taken by the exchange, like whether the exchange is un/regulated, whether the platform boasts KYC features and others.

Among the most popular exchanges which could not pass the test had only one contender in OKEx, which failed on all the tests.

It was revealed that, in the last 24 hours, the overall volume of the crypto market was $13.25 billion, while the exchanges combined showed a total trading volume of $113 billion.

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Author: James W

Department of Homeland Security Seeks Blockchain Start-Ups to Mitigate Real Life Challenges

  • The U.S. Department of Homeland Security has called on Blockchain start-ups yet again to create real-life solutions that could solve problems they face.
  • Through their tech scouting wing, the Silicon Valley Innovation Program (SVIP), they have issued a set of potential use cases they would like solutions for.

Among the array of use cases, the SVIP has included traceability of supply chains revolving on the e-commerce, food and natural gas industry, essential personnel license compelled by Covid-19 travel restrictions, and a potential stand into their Social Security Number system.

SVIP’s technical director, Anil John, highlighted this during a virtual day event on Tuesday, insisting that they were seeking solutions to solve local shortcomings.

In a previous similar Blockchain start-up, the initiative by the DHS and SVIP, where they dangled an $800k grant incentive for start-ups with solutions whose purview could help supplement their anti-counterfeiting and anti-forgery measures. The U.S. Customs and Border Protection (CBP), U.S. Citizenship and Immigration Services (USCIS), and Transportation Security Administration (TSA) were all set to gain from the initiative.

Uses Cases That Blockchain May Optimize:

Social Security Number Alternative

Even though the SVIP often been commissioned with finding mitigations to unique problems facing the DHS on numerous occasions. They have called on the Blockchain start-ups to generate a unique identifier system to serve as an option to their SSN program for the DHS privacy office.

Senior director for Privacy Policy and Oversight at DHS, David Linder, has clarified that the system wouldn’t be a replacement to SSN rather a unique identifier that could be shared while averting the risk of revealing personal information.

Essential Personnel Verification

There has also been mention of a digital essential person verification system for U.S. Citizen Immigration Services. To lessen the spread of the Covid-19 virus, travel restrictions in the U.S. were imposed.

To curb the spread of Covid-19 in the U.S., they want to make verification for essential staff easier as core government functions have to carry on. Citing a border control analogy, John illustrated how such a system would come in handy in attestation of essential staff seeking to move across the border to and from Canada.

They have, however, confirmed that this would not be a version of the Covid-19 immunity certificate with John unsatisfied with the logic and science behind the issuance of immunity passports and certificates.

Streamline Supply Chain Traceability

Pitches for Supply chain tracing solutions are also welcome with a keen focus on e-commerce, food, and natural gas sectors.

Director of CBP’s business transformation division, Vincent Annunziato, disclosed that his agency is seeking to do away with paper-based systems in favor of a fully digitized system that has been greenlighted by auditors. He cited Walmart’s leafy greens and FDA’s projects that are all leveraging Blockchain Tech.

Blockchain Interoperability

The SVIP top brass, John, deems the exchange of information across the various Blockchain crucial. He has reiterated on the importance of operating standards that will allow the platforms to overlap hence facilitating information sharing across the Blockchains.

There will be accepting solutions from across the globe and not limit their search to local talents.

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Author: Lujan Odera

#DeleteCoinbase Trending After the Coinbase Exchange’s Deal with DEA & IRS Becomes Public

Cryptocurrency exchange Coinbase intends to sell its blockchain analytics software called Coinbase Analytics to two US government agencies.

As per the public records, the Internal Revenue Service (IRS) and the US Drug Enforcement Administration (DEA) are planning to buy the license from Coinbase. The software will provide “identity attribution” for cryptocurrency addresses both domestically and internationally, as per the documents issued in April and May, as per The Block.

Coinbase maintains that the tool only offers the agencies access to publicly-available data and not any internal or customer data. The company uses the product internally for compliance and global investigations.

Coinbase Analytics was developed with the help of Neutrino, a blockchain startup the exchange bought for $13.5 million last year. The acquisition was criticized due to Neutrino founders’ involvement in Italian spyware Hacking Team.

A month after that, Coinbase CEO Brian Armstrong said it would part ways with those associated with the Hacking Team. But then its sales chief announced Coinbase’s previous analytics partner Elliptic sold the customer data which Elliptic denied.

The Details

Coinbase’s contract with DEA involves the “period of performance” from April 3, 2020, to April 2, 2021.

“The least expensive tool on the market and has the most features for the money,” and could help Coinbase make from $10,000 to $250,000. According to the DEA contract, Coinbase Analytics,

“provides investigators with identity attribution and de-anonymities virtual currency addresses domestically and internationally. CA is known for its accuracy of attribution which includes some of the most conservative heuristics used in commercial blockchain tracing tools. This is critical in avoiding false positive during target identification.”

Meanwhile, the IRS contract states this tool can assist in tracking not just bitcoin but various types of cryptos.

Specifically mentioning Neutrino, it says the tool will allow the agency in analysing and,

“tracking crypto flows across multiple blockchains that criminals are currently using.”

“Coinbase Analytics also provides some enhanced law enforcement sensitive capabilities that are not currently found in other tools on the market.”

Its period of performance is one base year from the date of award with 12-month option.

Backlash from Crypto Community

“This is no surprise, our distrust in you is strengthened, we will make your analytics software obsolete,” tweeted Jameson Lopp, co-founder, and CTO of Casa.

Blockstream CSO said, “If there was ever an executive order to confiscate your Bitcoin, I’d wager Coinbase would be first in line to comply.”

The news had the crypto community angered at Coinbase yet again. After the news broke out, Bitcoin has started moving out from Coinbase.

The ‘DeleteCoinbase’ hashtag is also picking up and is gaining strength.

This, however, isn’t the first time that Coinbase is facing criticism. Back in 2018, the exchange suspended WikiLeaks’ Coinbase account which was when the #DeleteCoinbase movement started.

Already, the exchange has been having outage issues, it has been constantly going down whenever bitcoin rallies, even as small as 5% BTC moves.

Most recently Black Swan author also closed his Coinbase account after the exchange didn’t provide customer support.

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Author: AnTy

WEF’s ‘Blockchain Bill of Rights’ Gets Support From Governments and DLT Firms

The World Economic Forum has finally revealed Presidio Principles called the ‘Blockchain Bill of Rights’ on Friday after teasing about it for quite some time.

These new principles, which would focus on forming international partnerships and fostering diplomacy across countries for creating Digital Economy 2.0.

The document found support from 15 signatories until now, which involves the government of Colombia, blockchain firms like ConsenSys, CoinShares, Electric Coin Company, along with the United Nations’ World Food Program.

The Presidio Principles described 16 essential rights of users for blockchain networks and applications. Some of the key principles of the Blockchain bill of rights include:

  • User’s right to manage consent of data stored with third-party service providers.
  • Porting of data between interoperable networks
  • Revoke consent for data collection at any given time in future.

Victor Munoz, the advisor to the President of Columbia on the matters of economy and digital transformation revealed the reason behind their support for the Presidio Principles and said:

“We supported the creation of the Presidio Principles – as well as guidelines and design principles for public institutions – because we wanted to ensure that progress can continue rapidly and responsibly, ensuring that basic characteristics like security and data privacy are secured for our citizens,”

Apart from the few mentioned signatories, many blockchain and crypto firms are advocating for others to join WEF’s open dialogue, one of them being Ethereum co-founder Joe Lubin. Lubin believes this would show the users in the community their commitment to standing for the rights of the users in the decentralized space.

The global blockchain council has been involved in the development of the framework behind the Presidio Principle since last year when it first convened in 2019. The first draft of the Blockchain Bill of Rights was made public on April 10th on Github and was open for public comments and it was available for comments until May 5.

The final version of the bill was released on May 23rd. The next step to ensure its correct implementation would be to issue different guidelines for different industries and how it can be incorporated in their current ecosystem.

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Author: James W

Bitcoin Rally is “Just Starting,” Says Mike Novogratz Predicting $20,000 by Year-End

Bitcoin bull Mike Novogratz has yet again called for a big price target for the leading cryptocurrency.

Novogratz’s price prediction for bitcoin by the end of 2020 is $20,000, the all-time high hit by the world’s leading currency during the 2017 bull rally.

However, he expects the halving event to be a ‘buy the rumor sell the news’ for a few days adding, “I think we’re starting a four or five-year bull market.”

Novogratz price prediction came after the flagship cryptocurrency jumped above $10,000, recovering to mid-February levels.

This time he is also a “hodler” because “the macro tailwind and new adoption are game changers.”

“Something really significant is happening” noted Novogratz while pointing out the on-ramps of bitcoin and new buyers pouring into the market, just yesterday came the news of macro investor Paul Tudor Jones buying BTC in the fund and calling it a hedge from inflation.

The single greatest economic collapse in history

The ex-hedge fund manager recently joined Jeremy Allaire, co-founder, and CEO of Circle on his first episode of the podcast, The Money Movement where he also talked about how before the coronavirus ridden economy with a full employment rate, the US was running a 5% fiscal deficit.

But now that we have hit the “single greatest economic collapse in history literally,” the Federal Reserve has to throw a lot of ammunition at this fire which means, “we are gonna run 20 to 25 percent,” which is unheard of.

Already the US national debt has reached $25 trillion, adding $35 billion new dollars to this debt every day since April 9th.

But still, the disposable income is higher than it was last year which is because of the central bank printing money like crazy.

“We’ve got a lot of income still because the government is giving it away but that ends in July and all of a sudden purchasing power goes down and we’ll have a deflation,” explained Novogratz.

So much opportunity in the stablecoin space

This year, besides bitcoin, fiat-pegged stablecoins also registered considerable growth which was the result of a shortage of USD globally.

According to Novogratz, Tether has been “explosive” because it is standing the test of time. Tether is an Asian phenomenon which was used by those Chinese who were not willing to pay taxes and to move money around.

This behavior accelerates during uncertainty and chaos and that’s an environment we are in currently.

Also, the fear of germs on paper money due to coronavirus will shift the trend towards digitization.

Talking about the advantage of stablecoins, Kyle Samani, co-founder of Multichain Capital said, transferring stablecoin on the blockchain is a just a “magical experience” which is instant with low fees makes it a better experience than transferring fiat currency.

“There’s so much opportunity in the space and I think we’re only just starting to scratch the surface,” said Samani referring to tons of anecdotal stories among people in Venezuela, Argentina, Turkey, and all kinds of jurisdictions around the world where they’re trying to escape their local fiat currencies and they want digital dollars.

See the full podast here:

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Author: AnTy

Congresswoman Addresses Libra’s Latest Whitepaper: ‘Too Many Questions Unanswered’

A U.S Congress lawmaker, Rep. Sylvia Garcia, called out Libra following the latest changes implemented in its new updated whitepaper claiming the changes do not address the concerns raised during the hearing.

According to Garcia’s statement, Libra’s plan to offer single-backed digital currencies or improve their compliance systems do not pass the mark for the Rep, who has vowed to push for Libra’s classification as a “security”.

U.S Representative: “Libra hasn’t addressed the issues by FSC”

Regulators across the world are taking a closer look at Libra, Facebook’s crypto, setting tough regulations on stablecoins and other digital assets backed by fiat. Sylvia Garcia, who also serves on the House Financial Service Committee, questions why Facebook is offering cryptocurrencies in a Twitter thread sent out on Apr. 17.

Libra, which is a Swiss-based digital payments platform, released its whitepaper on Thursday proposing the introduction of compliance and single fiat-backed stablecoins. Though the concept of a multiple fiat-backed digital currencies, LBR, is still in the plan.

As per the recent whitepaper updates, this step was taken in a bid to combat the threats posed by the stablecoin to current monetary systems as well as align themselves to regulators.

Lawmaker Sylvia Garcia, however, isn’t convinced and came to point out that the most recent whitepaper, issued by Libra, did not necessarily address concerns raised by her and Facebook CEO Mr. Zuckerberg. A Libra coin backed by a basket of assets is not what they had recently envisioned.

Representative Garcia further stated that the changes introduced in the new whitepaper don’t follow the guidelines the Financial Service Committee offered during Mark Zuckerburg’s hearing last year. She wrote:

“As such, this doesn’t address the concerns I raised when Mr. Zuckerberg testified before FSC, and for which I introduced a bill to address said concerns.”

“Libra is a Security”

Notwithstanding, Garcia plans to continue the relentless push for Libra to follow the securities act claiming that it qualifies as one. The congresswoman wrote:

“I will continue to work to make sure that the SEC regulates any such asset as the security that it is under current securities laws.”

With growing regulatory scrutiny, a number of Libra members have dropped out of the project due to the rising uncertainty clouding the new project. These members include PayPal, eBay, MasterCard, Visa, Stripe, and Vodafone. Only a few members have joined the Libra Association recently; Shopify and Tagomi.

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Author: Lujan Odera

PwC Report Reveals 2019’s Crypto M&A’s Dropped Sharply; Total Value Decreased By 76%

The 2017 market boom led to the new era of funding in the decentralized space called ICO, however as we entered the bear market not only ICOs dropped off the fundraising radar, it also turned out that a majority of them were scams. However, despite that, the funds kept flowing in the crypto market despite the large bearish sentiment.

2019 on the contrast, which was believed to be the year of bulls by many did not see such significant investment. A recent report from PwC suggests that in 2019 most of the crypto firms kept buying each other and despite that M&A as well as funding flow in the market was at its lowest when compared to the past couple of years.

The report suggested that even though crypto native acquirers took 56% of the fund flow in 2019, the total number of such deals fell to 114 from 189 in 2018. And if we look at the overall valuation of thee deals then there was a massive drop of 76% falling from $1.9 billion in 2018 to $451 million in 2019. The report also noted an emerging trend where the market leaders who went on an accusation spree did not bother to buy out their competitors and rather focused on small firms which were mostly service providers and instead of trying to grow vertically, most of these big players are trying to expand horizontally.

Overall Fundraising Dropped by 40%

The overall fundraising in the crypto space declined by a massive 40%, although equity fundraising in comparison saw a smaller decline of just 18 percent. Even though Bitcoin price picked some pace in the last two quarters the downturn in the traditional market took a toll on crypto funding as well.

The evolving regulations around the globe did help in increasing the corporate Venture Funding in the space which contributed 6 percent of the overall funding in the crypto market. 2019 also saw a change in investment trend, where a majority of the VC funding in 2018 went towards various blockchain infrastructure providers while a majority of VC funding in 2019 went towards crypto compliance and regulatory companies.

Another pattern observed from the PwC report shows that while a majority of these funding deals were concentrated in the USA, 2019 saw these funding deals mostly moving towards the Asian and European markets. Hong Kong has become a hotspot for companies looking for retail clients which are understandable given Singapore’s newly introduced regulatory framework.

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Author: James W

New Bitcoin Bank App Launched By Twitter, Medium Co-Founder Backed Fintech Firm Mode

Biz Stone, the Medium & Twitter co-founder has invested in a financial services company called Mode. The company has just released a BTC (Bitcoin) banking application for use in iOS gadgets.

The UK-based firm said that the application will be available globally, but users in the United States would not have access to it yet. This is according to a statement the firm sent to Finextra, a media outlet that is focused on fintech companies on 4th February.

Clients will be able to start using the application with as little as $65 or £50. They will also be able to purchase bitcoins through bank transfer or using their bank cards. All funds uploaded to the application will be processed by BitGo, the custodian of the digital asset.

Mode Set to Address Security and Speed Issues

The application from Mode supposedly enables clients to upload funds to their accounts instantaneously through the use of a Faster Payments process. Mode’s head of communications and marketing, Ariane Murphy stated that:

“The Mode app addresses transaction restrictions issues, low speed/high cost, lack of security and most importantly, tackles the poor user experience typically associated with Bitcoin apps.”

Before one can start using this application, all clients will be required to undergo a detailed KYC (Know Your Customer) process. This particular procedure will be implemented through the use of verification technology powered by artificial intelligence.

Mode was founded in 2018, and its parent company is the R8 Group, a fintech company based in the United Kingdom. A waiting list for users who would like to use the Mode application was started in October 2019. At the time, applicants were only able to get on to the waiting list by invitation only from others.

Bitcoin Blockchain Still Plagued by Speed Issues

Players in the industry have for a while now been looking into ways that they can speed up BTC transactions. The Lightning Network includes an extra layer to the existing BTC blockchain making it possible for clients to produce compensation channels among any 2 participants on an additional level.

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Author: Daniel W