Tezos Foundation to Pay XTZ Token Sale Investors $25M to Settle Class Action Lawsuit

After three years, a long-running class-action lawsuit against Tezos Foundation has come to a close. A U.S. District Judge Richard Seeborg from the Northern District of California approved a $25 million payment by Tezos Foundation to aggrieved investors.

The class-action lawsuit alleged that Tezos Foundation conducted an unregistered initial coin offering (ICO) in 2017.

According to the court documents filed last week, Tezos, as well as its founders Arthur and Kathleen Breitman, will part with $25 million to the aggrieved investors. The settlement was first put on the table in March earlier this year but was settled last week.

According to the settlement agreement, the attorneys will be paid about $8.5 million of the total sum. The investors who underwent a loss after taking part in the Tezos ICO will share the remaining $16.5 million. However, the investors who gained after participating in the ICO will not be included in the sharing of the funds.

Tezos Foundation, in March, resolved to settle the class action lawsuit since it was expensive as well as time-consuming. However, the firm maintained that the case lacked merit.

In 2017, Tezos conducted one of the most successful ICOs of the year, raising more than $232 million through the sale of its XTZ governance token. However, before the firm could celebrate the success, a California based law firm filed a class-action lawsuit alleging that Tezos sold unregistered security to US-based investors.

According to the Federal Securities Law, a company should not sell security tokens before registering with the Securities and Exchange Commission (SEC). These types of tokens must pass the Howey Test, and XTZ failed.

Following the filing of a class-action lawsuit, Tezos asked the court to dismiss the case as it lacked merit, but Judge Seeborg dismissed the lawsuit filed by Tezos attorneys.

Judge Seeborg’s order also states that the plaintiffs cannot make a future claim against Tezos as well as other defendants.

Although the class lawsuit has been settled, the issue of whether XTZ is a security or not remains unresolved.

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Author: Joseph Kibe

Filecoin Is Currently Testing EIP 1559, A Proposal to Restructure Ethereum’s Gas Fees

The issue of rising gas costs on Ethereum might soon come to an end, should an Ethereum Improvement Proposal (EIP) currently being tested on the Filecoin network go through. Dubbed ‘EIP 1559’, this proposal is among those that have been suggested to reduce Ethereum’s network fees.

Announcing the development on Twitter, Ethereum’s founder Vitalik Buterin, highlighted that the solution seems to be working well on Filecoin,

“In case you missed it: recent writing on fee market reform (EIP 1559) …. Oh and it seems to be working great on Filecoin:”

Notably, Filecoin, which is a decentralized storage network, shares fundamentals with Ethereum hence the compatibility of innovations within both ecosystems. The project is, however, still in its early stages and is set to launch a Mainnet in September as per the latest Filecoin progress update.

The EIP 1559 Proposed Network Fee Solution

With activity rising in DeFi, Ethereum’s network continues to suffer congestion problems to an extent where profits end up being eaten up by transaction costs. The suggestions to work on these shortcomings gained momentum back in 2019 but have now become more critical than ever for Ethereum’s survival in the blockchain space.

Well, ETH-oriented developers seem to be catching up and could soon solve the rising gas cost problem. The EIP 1559 proposal, in particular, suggests the use of a ‘base fee’ for dynamic fee adjustments on Ethereum’s network. Ideally, this approach will constrain gas fee increments by altering the current calculation of gas fee on Ethereum.

The proposal introduces an automatically increasing base fee if the network is more than 50% utilized while decreasing the same if it is below 50%. In doing so, ETH users still have an option to get ahead of the queue by paying a tip in addition to the base fee. These funds will then be delivered to miners while the ETH used for paying the base fee is burnt.

Filecoin Marking Milestones!

As EIP 1159 makes progress, the Filecoin testnet in totality is also marking milestones as its native ‘FIL’ token launch approaches. The project recently incentivized developers to stress test its network under the ‘Filecoin Space Race’ program,

“Compete and collaborate at the same time. The top 50 miners in each region and the top 100 globally are eligible for rewards. The greater the total storage power, the bigger the total prize pool.”

This incentivized testnet has since recorded around 22 petabytes in total raw byte storage power with contribution from 295 miners. Going by the International Electrotechnical Commission 1998 metrics, this data can roughly be compared to 12,500 two-hour-long films.

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Author: Edwin Munyui

Lending and Interest Income Could Be the Path to Boost Crypto Adoption

Bitcoin and cryptocurrencies, in general, have come a long way from the early days when they were regarded as an internet bubble waiting to burst.

However, even after a decade, one constant criticism is that digital assets haven’t found a niche, and cannot be spent as easily as it has been advertised for long.

The one feather that these digital assets can borrow from the traditional financial world is lending and borrowing, which is the backbone of the majority of the financial ecosystem and banks. This interest-based income, lending and borrowing have already gripped the digital asset world which is evident from a report from Credmark.

The Credmark report suggests that the crypto lending market has already peaked $8 billion in loan amount by the end of the fourth quarter of 2020.

At present, the market size has grown to $10 billion and expected to grow exponentially as the popularity rises overtime. Not only that the global peer-to-peer lending marketplace has also registered annual transaction volumes in upwards of $85 billion.

Lending and Credit Gaining Popularity in Crypto Verse

Genesis Capital, one of the leaders in the crypto credit market, registered its best quarterly performance in the first quarter of 2020, registering $2 billion in the new loan organizations. The firm doubled on its previous quarterly performance and also registered a 20% spike in active loans from the previous quarter.

Celsius Network, the retail-focused crypto lending platform, registered similar growth and currently boasts of 100,000 retail clients and 260 institutional clients spread across 160 countries. The firm has registered $8.2 billion in coin loans to institutional clients since its inception in 2018.

Crypto lending is mostly based on the underlying assets, which makes an easier process as debt is collateralized with the crypto asset. Apart from these asset-backed crypto lending, another form of a lending ecosystem has risen in popularity over the last year in the crypto space i.e decentralized finance (defi).

Defi is an Ethereum based ecosystem which offers decentralized credit system to users based on the collateralized asset.

Users can lock their Ether, Wrapped Bitcoin and other ERC-20 based tokens in smart contracts and withdraw a loan in non-asset backed stablecoin like Dai and USDC. The defi ecosystem has gained massive popularity in the past year, and the value of assets locked as collateral has already crossed the $1 billion mark.

Thus, looking at the popularity, demand and success of lending and borrowing ecosystems in the decentralized space, it could pave the path for mass adoption of crypto in the long-term.

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Author: James W

Bitcoin backed Crytpo-Dollar To Help Venezuelans Counter Hyperinflation and Boost Remittance

Valiu, a Colombian startup with expertise in remittance services has come up with a Bitcoin backed crypto-dollar to help Venezuela get past these troubled times. The new synthetic dollar would help the country to get past its hyperinflation woes and make a cross-border transaction without worrying about the declining value of their national fiat.

Venezuela used to be among the richest nations thanks to its oil and mineral reserves, however continuous power struggle along with corruption in the government led to one of the worst hyper-inflations in the recorded history. The hyperinflation made the national fiat, bolivar almost worthless as its value kept declining every minute.

As a result, citizens stopped using the currency and started to look for alternatives in the form of universal fiats like US Dollar and decentralized currencies such as Bitcoin.

The government also came up with its national digital currency in the form of Petro which was backed by oil, however, the digital currency has been marred into controversy from the beginning. It was reported that the government was forcing merchants to accept Petro at a highly discounted rate which incurred them heavy losses. And now that the oil prices have plumbers across the globe, even Petro looks like a failed attempt.

Can Valiu’s Synthetic Dollar Prove To Be the Alternative Venezuelans Have Been Looking For?

Valiu is now in the testing phase of Bitcoin backed synthetic dollar and the Colombian startup has partnered with Latin America food delivery app Rappi and hoping that when it launched the digital crypto dollar for masses, the partnership would help in expanding the adoption.

Simon Chamorro tweeted about the launch of the testing phase of the cryptodollar and said,

“After 4 months of 80+ hour work weeks, 500k+ lines of clean code written across 4 engineers, shifting the company fully remote due to COVID, and completing a rigorous regulatory analysis … I’m proud to say that Valiu’s crypto-dollar is now live and running in Alpha.”

Last year the startup has also created a remittance service using which people can send money directly into the bank accounts of Venezuelans. The remittance service has helped 38,000 households up until now to get access to basic amenities such as food and daily supplies. The firm noted that the primary reason for devising a remittance service arose due to the black market that was created amid rising hyperinflation. The informal sector led to a ton of cases of cheating and fraud.

The new Bitcoin backed synthetic dollar is expected to be launched by the end of this year. The cryptodollar has been designed in a way that even people who have no knowledge about the working of the digital assets or Bitcoin can simply deposit cash in one of the thousands of remittance partners of Valiu and receive synthetic dollar in return to their savings account.

The main reason behind creating the synthetic dollar is a continuous loss of value of Bolivar, which made the remittance service launched by Valiu last year of little use as most of the transactions in the country (over 95%) is done in the national fiat, and the first thing that people look to do with the Bolivar is to exchange it against either any foreign currency or goods. However, it is quite difficult to get ones to hand on international currency or Bitcoin in a country which has been plagued by corruption. Thus, the idea of the synthetic dollar came along.

Alejandro Machado, Valiu’s head of research explained why the country needs a synthetic dollar,

“99% of remittances still arrive in bolivars,.Dollars cash hardly makes it across borders, especially in the middle of #COVIDー19 lockdowns.”

Decentralization has Become More Necessity Than Need

After failed attempts at creating their own national digital currency in the form of petro, there were several reports of increased trading activity in Bitcoin. However, the ground reality was far from what the media portrayed. People in Venezuela are not pro decentralization, but more pro-survival. Thus they used Bitcoin and other foreign currency as a bridge currency to exchange against value less Bolivar and survive another day.

Chamorro believes the synthetic dollar could also prove beneficial to the Colombians whose national fiat is also seeing high inflation rates. He also noted that the synthetic dollar would act as a hedge against the hyperinflation and would ensure to keep the value of their earned money intact. The app through which the bitcoin-backed dollar would be light in nature and would only take 14 MB space meaning even the lower end devices can run it.

He also noted that they are fully compliant with the regulators in Columbia and is looking forward to spreading its reach across Latin America. Sid Ramesh, one of the advisors at Valiu said,

“We fundamentally believe the user experience, and the institution around it, should not confuse users or have to go through the norm of having a set of private keys, or having to sync a blockchain node, or doing any of the kind of things you would expect to on traditional crypto applications.”

Latest Bitcoin Price News and Crypto Market Updates

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Author: Rebecca Asseh

Swiss Crypto Association Rolls Out A 1:1 Bitcoin-Backed ‘tzBTC’ Token on Tezos For DApps

A consortium of Swiss based crypto firms have come together to launch “tzBTC”, a bitcoin-backed token on Tezos blockchain in a bid to kick-start decentralized finance (DeFi) on its programme.

This recent move to incorporate bitcoin onto Tezos blockchain is a step closer in rivaling Ethereum blockchain which introduced bitcoin applications more than a year ago. DeFi evidently grew rapidly on Ethereum in 2019. Tezos blockchain was launched back in 2018 with an aim of playing host to a new generation of decentralized finance (DeFi), social and business projects.

The Tezos Foundation has teamed up with Bitcoin Association Switzerland along with a number of Swiss digital asset service providers among them including Sygnum, Inacta, Swiss crypto token and Bitcoin Suisse to create the TZBTC digital token. The token gives its holders the ability to interact with Tezos smart contracts while attaching on the value of the Bitcoin. Tezos foundation operational head Roman Schnider told swissinfo.ch that the collaboration openly demonstrated that Switzerland is a leader in financial innovation.

Lucas Betschart the president of Bitcoin Association Switzerland said in a press statement that the new token brings the brand and the liquidity of the blockchain. Furthermore, it gains the potential for rich functionality made possible by Tezos smart contracts. The head of operations at the Tezos Foundation Roman Schnider said that atomic swaps are for building out DeFi exchanges and perhaps a wrapped Ethereum (ETH) token. He more so insisted that this partnership was the first in kind but was a roadmap to a better future on the same front.

The main consideration under the recent integration was that intermediaries such as banks and lawyers were not paramount during exchange of items of value. This promises to ease full operations while promoting accessibility and flexibility. This new system all but ensures that privacy will be preserved, as well as bring efficiency and transparency to established digital systems.

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Author: Lujan Odera

BitMex Research Suggest Bitcoin Ecosystem is Thriving With Diverse Development Work

In the wake of the coronavirus outbreak, the financial institutions have come to a standstill and governments around the globe are pumping and printing fiats at their will to keep it going. Bitcoin, the decentralized digital currency which was created in the wake of the 2008 financial crisis also registered a massive drop of almost 50% leading to panic selling.

Apart from the price drop, the Bitcoin network has also seen falling hashrate input, decreased mining difficulty which created a sense of uncertainty among many. However, a recent report from BitMex Research suggests that Bitcoin is going strong and the network is healthier than that of 2014.

The research report suggests that the development of the Bitcoin network is getting stronger not just from the Bitcoin core community, but the contribution has poured in from different walks of the crypto ecosystem who are continuously working to make the network more scalable.

Lightning Lab and Blockstream Biggest Contributors

Source: BitMEX Research

The BitMex report revealed that Lightning Lab and Blockstream are the biggest contributors to the Bitcoin network. Both these platforms have continuously worked on scaling the sidechain solutions. Bitcoin’s scalability has been one of the biggest talking points in recent times and layer 2 solutions in the form of lightning network and liquid are being actively developed as a sidechain to contain the congestion on the main network.

Twitter CEO Jack Dorsey’s Square app comes in the third position in terms of their contribution to the Bitcoin network. Square is well-known for its belief in the lightning network and has worked in accordance with them to make it more reliable and user friendly.

The research also makes note of independent developers contributing to the network and believe there are at least 33 core developers working on the platform, but there are many other anonymous contributors as well which cannot be easily tracked.

Altcoins Do Not Enjoy Same Diversity in Development

While it’s very evident from the research that the Bitcoin network still attracts a lot of developers both known and unknown to its platform, the same does not hold true in the case of altcoins. The research report revealed that the development community for the majority of the altcoins is quite centralized.

Ethereum and IOTA top the list with over 100 developers working on the foundation tram. While centralization in the developer team has its drawback, it also ensures a clear vision for the platform which streamlines the flow of development and subsequent progress of the network.

As for the financial aspect of the development, the exact details of the funding is obscure as contributions pour in from many non-profit organizations like Chaincode Labs and MIT DCI, while the likes of Square and Blockstream has raised significant amount as well.

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Author: James W

Ukraine’s Ministry of Digital Transformation: Crypto Mining Doesn’t Need Govt. Regulation

The Ministry of Digital transformation in Ukraine has stated that it has no intention to come up with measures to regulate crypto mining in the country, CoinDesk reports.

On Feb 7, the ministry released a document on digital assets outlining Ukraine’s approach on crypto assets. According to the document, the major aim for the government when it comes to crypto assets should be creation as well as implementation of a government policy which enhances innovation as well as assuring the creation of digital assets and tokenization.

Notably, the ministry stated that there are no intentions of regulating the crypto mining sector since the sector is self-governed through blockchain consensus rules as well as network members. The manifesto stated:

“Mining does not require regulatory activity from governmental oversight bodies or other third-party regulations, this activity is regulated by the protocol itself and network members.”

The ministry also expressed its willingness to support the development as well as implementation of blockchain-based technologies and solutions. To this effect, the ministry will start sandboxes which will help to analyze, verify as well as assess the potential risks when the technology is introduced in the market.

The ministry also stated that it will act as a bridge between the digital assets developers and the financial market. The report also says that the government will strive to come up with the best procedures when it comes to digital assets taxation.

Ukraine has been actively exploring on how it can enhance innovation in the blockchain and crypto space. Last month, the country’s minister in charge of finance revealed that the nation’s State Financial Monitoring Service of Ukraine (SFMS) had been mandated to monitor Ukrainian’s crypto wallet to establish the source of crypo and how it has been used.

Late last year, Ukraine passed a new anti-money laundering law which is in tandem with FATF guidelines. As developed, the new AML law also gives guidelines on how to handle digital asset service offerers. The law also provides guidelines regarding how the government will monitor as well as regulate crypto trading.

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Author: Joseph Kibe

China’s Digital Yuan will “Certainly Erode the Dollar’s Primacy in the Global Financial Market” – Deutsche Bank Report

  • Cash to remain part of the economy for decades to come but digital payments will grow at “light speed”
  • Mobile payments to quadruple in the next five years while blockchain wallets by decade end
  • Cryptocurrencies have the potential to revolutionize payment standard

The latest research on “The Future of Payments,” by Deutsche Bank titled “Part I. Cash: the Dinosaur Will Survive … For Now,” talks about the existence of cash even though there would be a transition to the digital payments.

The first in a three-part series where the bank forecasts trends in cash, online, mobile, cryptos, and blockchain, it predicts that cash will be part of the economy for decades to come because people have developed a deep-rooted trust in the paper during uncertain times.

Factors contributing to Cash‘s long-term existence involves the paper money being easier to monitor the spending, faster to pay, really convenient, accepted almost everywhere, a secure method of paying, and keeping the purchases anonymous. Cash is also easier to tip and to avoid cyber-attacks on users’ money, said the 3,600 customers surveyed across the US, UK, China, Germany, France, and Italy by the bank.

Digital Payments to Grow at “Light Speed”

While cash will exist, this period will also see digital payments growing at “light speed,” which it says would lead to the extinction of the plastic cards.

Despite encountering regulatory hurdles, blockchain wallet users continue to “mirror” the Internet users which the bank expects to hit 200 million, quadruple, by the end of the decade.

Over the next five years, the German multinational investment bank says mobile payments are expected to quadruple, the effects of which are expected to arrive sooner in emerging markets.

“As China (and India) develop electronic, crypto, and peer-to-peer strategies, the epicentre of global economic power could shift,” it says.

The bank points out how China is already working on a central bank-backed digital currency that could be used as “a soft- or hard-power tool.” Companies in the country are, in fact, forced to adopt a digital yuan which Deutsche Bank says “will certainly erode the dollar’s primacy in the global financial market.”

Further experimentation expected in a post-financial-crisis environment

While providing a detailed explanation of the most famous cryptocurrency Bitcoin, it notices that BTC is a highly volatile currency. To minimize the fluctuations, fiat-backed stablecoins have been embraced whose “price stabilisation usually requires some kind of trusted intermediation or centralised infrastructure.”

Cryptocurrencies, the banks says is still in the early adoption stage but “we should expect further experimentation to take place in the context of a rapidly digitising society and a post-financial-crisis environment.”

As for the crypto adoption, though stores have started accepting cryptos as a payment method, the number is small but the growth trend is noticeable among online travel booking platforms and through retailers like AT&T and Newegg.

Payments made by Bitcoin have also taken off but they still represent a “tiny fraction” of global payments.

“Nevertheless, cryptocurrencies have the potential to revolutionise payment standards,” said Deutsche.

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Author: AnTy

Lawmaker Proposes Bill For State-Chartered Institution For Blockchain & Crypto Innovations

An Oklahoma lawmaker has come forward with the proposition of creating a financial institution chartered by the state and that functions as a central crypto depository for government agencies in the state.

Senator Nathan Dahm wants to provide an infrastructure backed by the government, for cryptocurrencies and blockchain-related technology. As reported by LegiScan, the bill should be introduced on February 3, meaning now it’s only in development. This is what the bill notes:

“This new financial institution shall be fully supported by blockchain technology and innovations. The new financial institution shall have the highest level of expertise with customer identification, anti-money laundering and beneficial ownership components. “The new financial institution shall be designed to seamlessly integrate into existing banking and financial institution regulations that protect consumers while limiting regulations that restrict innovation and technological advances for new financial products, data transmissions and recordkeeping.”

It Will Take Time for the Depository to Be Created

Even if it passes, the bill proposed by Dahm won’t have a depository being created to soon, as it would have to bring together the Department of Commerce and Oklahoma’s State Banking Department to coordinate their efforts and to make plans so that the strategy developed for it respects the law and meets the state’s requirements. Having this in mind, a report regarding the initiative has been scheduled to be released on July 1st, next year.

The State to Welcome Businesses That Work with Crypto

The bill is seeking to make the state as more welcoming for retail and other business’ to work with cryptocurrency and employ blockchain technologies, stating that:

“Oklahoma is committing to partner with innovative technology, help develop next generation financial products, and safely grow unique technical and financial sectors in this state.”

Senator Nathan Dham had filed a bill in February 2019, the bill will show when a digital token is a security. He also sponsored a piece of legislation that became a law in April 2019. This law establishes when a blockchain-secured contract or a record is in electronic form and should be an electronic record.

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Author: Oana Ularu

Nearly 70% Of BCH Hashrate is Controlled by Unknown Mining Pools, Is A 51% Attack At Risk?

  • BTC.top formerly controlled 15% of the hashrate, which has dwindled to almost nothing.
  • No information has come from Bitcoin Cash on how this user gained such substantial control.

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One of the biggest threats to the cryptocurrency industry is that of a 51% attack, which is the possibility that holding over half of the control of the blockchain. According to recent reports from CCN and data from Coin Dance, it looks like this threat is heavily present on the Bitcoin Cash network, as an unknown miner presently has 69.44% control of the hashrate.

Surprisingly, the miner has managed to take over the hashrate, despite the presence of more significant mining pools, like BTC.top and Antpool. Though BTC.top accounted for close to 15% of the total hashrate on the network last week, that percentage has essentially disappeared. Antpool’s mining presence dropped by 50%.

The takeover got the attention of a supporter of Bitcoin Cash, who posted the current circumstances to Reddit. The post showed followers that the last 24 hours have significantly changed Bitcoin Cash’s network, remarking, “They can’t be up to much good.”

Right now, there still has yet to be a lead on exactly what is going on within the network. However, there is clearly a chance that some major changes will happen that could change the course of the network, if this mysterious miner uses the power for evil, rather than for good.

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Author: Krystle M