Tezos (XTZ) Class-Action Securities Lawsuit for the $232M ICO Sees $25M Settlement Pending

A class-action lawsuit against Tezos during its 2017 ICO may end in a $25 million settlement. The lawsuit was filed against Tezos for the illegal raising of over $232 million worth of Ether during its ICO.

Filed back in November 2017, the lawsuit by Block & Leviton on behalf of investors that participated in the ICO, claimed that Tezos violated several security laws. The Tezos Foundation also announced its settlement proposal on Mar 20th and stands strong on the belief that the lawsuit itself is baseless.

Block & Leviton informed all investors that participated in the Tezos ICO between July 1, 2017, and July 13, 2017, that they might be eligible for a share of the $25 million settlement offer.

ICO investors were asked to submit the claim of their settlement via [www.TezosFoundationSettlement.com]. Investors have until Aug 6th to object to the settlement offer and until October 16th to submit their claims.

The lawsuit accuses Tezos of being an unregistered security offering and might be the reason why Tezos has decided to settle rather than prolong the case. If Tezos is found to be an unregistered security, it may cost them up to $150 million in direct fines.

United States District Judge Richard Seeborg approved the settlement offer proposed by Tezos on April 30th. In addition, during the final hearing – scheduled for Aug 27th – will determine the legal procedure for initiating the settlement to investors. The court statement approving the settlement offer read:

“The court will likely be able to approve the settlement, subject to further consideration at the Settlement Hearing.”

Looking at recent cases like Telegram and Kik ICO’s, which were deemed as unregistered security offerings. Telegram, which conducted one of the biggest ICOs back in 2017, raising billions of dollars in the process, are now unsure if they will ever be able to launch their blockchain Gram token.

Tezos, meanwhile, wants to try and avoid falling into that same legal quagmire and appears to be considering the settlement offer.

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Author: Rebecca Asseh

Libra Would Help Usher In ‘Higher Prices’ for Facebook Ads, Says CEO Mark Zuckerberg

During Facebook’s annual shareholder meeting on May 27, 2020, the founder, Chairman, and CEO of the social media giant, Mark Zuckerberg talked about how Libra benefits the company financially. Zuckerberg said,

“Not just Libra, but all of the commerce work that we’re doing is that you should really think about it in terms of our ads business.”

He explained how the auction is an important property of the ads business which means, they don’t set a price, rather every business can just bid for themselves what an ad is worth to them.

This means they can offer the lowest possible price.

It also means those businesses will be interested in bidding more because they will get more and the idea behind offering additional tools, whether it’s around commerce like Facebook Shops or around payments like Libra or Facebook Pay, is to make commerce be more effective for businesses. Zuckerberg said,

“When they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file, then it basically becomes worth it more for the businesses to bid higher in the ads than what we see are higher prices for the ads overall.

So that’s broadly the strategy around going deeper on commerce and payments.”

Updating the core infrastructure of payment

During the call, he also shared that the payment is an area where the core infrastructure hasn’t been updated in a very long time.

Transferring money or paying for things between countries is still often very difficult as such,

“there are a lot of opportunities with Libra to make the process of commerce and payments helpful — a lot easier.”

This, he believes, isn’t good for people around the world but also the economy overall. He said,

“And we will be able to participate in some amount to that value creation ourselves through higher prices in ads if businesses are succeeding using these tools.”

Just this week, Facebook renamed the wallet Calibra to Novi — a combination of two Latin words: Novus which means “new” and Via meaning “way,” to distance it from the Libra digital currency.

“People were confusing Libra and Calibra all the time,” said David Marcus, Facebook’s head of blockchain. “In hindsight, it’s hard to blame them.”

Libra digital currency was first announced in June 2019 as a global currency that would be nearly free to send across borders. However, since then the project has faced many hurdles.

The fiat-backed digital currency would be governed by the Libra Association made up of 27 companies and nonprofit organizations. Its first chief executive officer, Stuart Levey, was also named earlier this month.

The Association hopes to launch the Libra currency by the end of this year.

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Author: AnTy

BitMEX Aims to Achieve ‘Near-Zero Downtime’ with ‘Aggressive’ Hiring After Major Outage

BitMEX has released the postmortem of the downtime it suffered on May 19 ensuring that “at no point during this event were any customer funds at risk,” and that no liquidations occurred while the exchange was offline.

The event resulted in 38,437 cancel-order instructions just 17 minutes before the resuming full functionality of the platform. Also, all the pending and new customer withdrawals were processed within 90 minutes of coming back online.

Working on improvements

As per its report, the exchange’s trading engine server “unexpectedly restarted” because of underlying hardware issues, which took the platform offline. After being recovered partially, it restarted a second time prompting the team to trigger a recovery procedure that utilized a new failover mechanism introduced earlier this year.

The whole ordeal took less than 2 hours while withdrawal wasn’t processed until an hour and a half after the trading resume successfully.

The crypto derivatives platform says it is taking steps to minimize the risk of any downtime which involves making architectural improvements so that the impact of hardware/software failures on the platform is reduced.

They have already replaced the technology behind its primary database that improves recovery times 4x and opens opportunities to scale it 15x over the next few months.

BitMEX is also growing its teams “aggressively” with most of its positions that involve data engineer, developer, analysts, and AML operations managers among others for primarily Hong Kong, Singapore, and San Francisco locations.

Trying to live up to the expectations

BitMEX’s market share has been declining ever since the March sell-off when the crypto derivatives platform reportedly suffered two DoS attacks and the price of bitcoin went down to $3,600 on it and could have crashed to zero, compared to $3,800 on other exchanges.

But still when BitMEX that offers 100x leverage went down, the market felt the effects as Crypto Twitter came alive.

“The burden of being on top. And no guarantee it lasts forever. This is just complacency,” said trader Ledger Status.

While Binance has been capturing its market share, BitMEX’s BTC balance also took a hit and diminished by 32% since then, although exchanges’ bitcoin balance has been on a downtrend on almost all the exchanges.

“The cryptocurrency industry has come a long way in a short amount of time. We know that the expectations on us have risen and we’re working 24/7 to further improve the resiliency of our platform,” said the company which aims to achieve “near zero down-time.”

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Author: AnTy

Bitcoin Stolen in 2016 $72 Million Bitfinex Hack Moving

Some of the stolen BTC during the $72 million hack of crypto exchange Bitfinex in 2016 has been just moved.

Whale Alert that tracks large movements of top cryptocurrencies reported that 28.3 BTC worth more than $255k has been moved to an unknown wallet.

Four years back, Bitfinex lost 120,000 BTC worth $72 million, when the price of bitcoin was about $600. Today, with each BTC at $9,160, this stash is now worth more than $1 billion.

This isn’t the first time that these hackers are moving their funds. Back in June, last year about 185 BTC were transferred to unknown addresses, at that time BTC price was up over 60% YTD at around $10,000. Then in August, 30 BTC were also moved.

Now, just as happens with large transfers, the crypto community fears the worst.

One twitter user said, “If btc does not crash to sub 4k in 1 month, I’ll delete my twitter.”

Large amounts of Bitcoin on the move surely affects the price as happened on May 10. The BTC price fell about 16% that day after a large deposit took place on Gemini; but that deposit was “abnormally” large at 2,500 BTC unlike just over 28 BTC.

Such kind of big deposits result in heightened activity on the exchange where they were made but also triggers market sell on other exchanges as well. This causes a significant increase in trade volume across all exchanges, resulting in a drop in Bitcoin’s price.

However, at times, relatively small and few orders can also have a significant impact on liquidity across many major exchanges.

Just this week, there was speculation led sell-off that resulted in a brief decline of about 7% in BTC price.

It was after Whale Alert reported that 50 Bitcoin had been moved from a wallet dormant since February 2009. Whale Alert suggested it might have been bitcoin’s pseudo-anonymous creator Satoshi Nakamoto who moved the coins, triggering the panic among the market, but as we reported it was very unlikely.

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Author: AnTy

New Institutional Money in CME Bitcoin Futures Hits Peak Since Launch

The open interest on Bitcoin futures has hit an all-time since they were launched during the peak of the 2017 bull run.

On May 14th, OI jumped to 10,792, coming at a total of 53,960 BTC, a new peak. This OI is more than double the 2019 high of 26,260 BTC in July.

According to Investopedia, open interest is the total number of outstanding derivatives contracts, not settled. Increasing open interest meanwhile represents new money coming into the market.

The open interest on CME bitcoin futures has been increasing for over the past month and made a new ATH on May 19 at $532 million.

Trading volume has also jumped in May, the average daily volume is keeping around $500 million, hitting $914 million on May 11, the day of halving.

A year back, in May 2019, the average trading volume climbed to 68020 BTC contracts and jumped $1 billion in notional volume as well, the month that saw the price of bitcoin jumping over 45%.

“Bitcoin adoption continues,” tweeted Gabor Gurbaccs, digital asset strategist at VanEck. “More regulated ways to go long for institutions that otherwise can’t get exposure.”

May is expected to be a record month because of the ongoing surge in activity the regulated platform is seeing after macro investor Paul Tudor Jones bought bitcoin via CME.

The billionaire hedge fund investor called bitcoin the “fastest horse” and the best bet to win “The Great Monetary Inflation.” Tudor Jones also revealed that 1 to 2% of his assets are in the “inflation hedge.”

CME’s “Exchange for Physical” BTC options

Recently, CME global head of index and alternative investment products, Tim McCourt shared that traders prefer cash-settled bitcoin products over physical-settled ones.

“So far, clients have expressed a clear preference and priority for a cash-settled product,” McCourt told Cointelegraph.

The introduction of CME bitcoin futures just about a year and a half ago helped investors better manage the price risk. Currently, the platform is seeing an average of 42,500 BTC traded per day, he said.

However, options that allow one to settle long positions with actual bitcoin is also gaining interest from traders, highlighted Jeff Dorman, CIO at Arca.

CME’s little known “Exchange for Physical” option makes it possible to settle in actual bitcoin and ahead of the April 2020 expiry, 284 bitcoin contracts were interested in this trade type.

Interestingly, the OI on CME’s bitcoin options is also making records, hitting $174 million on May 19, as per Skew Markets. But it is nowhere near Deribit, the leader in the options market whose open interest touched $1bln for the first time.

CME launched its bitcoin options product in January this year and since then it has traded 5,000 of these contracts, 25,000 BTC in total.

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Author: AnTy

Bitcoin Halving Effect: Miner Revenue Tanks 60% But Fees Compensating with 168% Spike

Bitcoin halving is past us and during this time there have been some changes in the network.

As expected, the hash rate of the network crashed 40% from the all-time high put on the halving day as smaller and less profitable miners turned off their machines after being unprofitable.

A decline in hash rate means reduced network security as well. But the long term trend is intact and we have started seeing recovery with the hash rate currently at 99.6 Eh/s.

Actually, bitcoin is still three times more secure than the Ethereum network, its closest runner up. Also, this falling hash rate is expected to be temporary.

Miner revenue takes a hit

In line with the 50% reduction in the bitcoin block reward, total miner revenue has also fallen.

According to the data provided by Blockchain, miners’ revenue crashed nearly 60% to just $7.63 million on the halving day, from two days back.

The violent sell-off in March caused the miner revenue to tank at $6.9 million which peaked on May 6th to $20.6 million only to be hit by halving.

As such, now the percentage of revenue from fees has hit a high of 17.25% that is not seen since January 2018, as per Medio Demarco, co-Founder of Delphi Digital.

Source: Coin Metrics

With block rewards set to halve every four years or 210,000 blocks, “PoW chains will be increasingly at the mercy of transaction fee revenue as the dominant source of funds for the SB (Security Budget).”

The recent reduction in miner reward pushed the BTC fees to revenue percentage higher, which instead of more transactions has been the result of a jump in the average cost of a transaction fee.

The average bitcoin transaction fee has climbed to $5.16, a spike of 1223% in the past month, which was last seen in June 2019, as per Bitinfocharts.

Mining bitcoin getting difficult

Meanwhile, the current average block time is 80% above the target level. This combination of high fees, reduction in mining power has led to longer wait times in between blocks, as such causing mempool to be more backed up.

As the waiting for the transactions to be confirmed by miners continues to add up, people pay higher fees to get their transaction confirmed faster.

Source: Mempool Transaction Count

But difficulty adjustment is there to make it all balance which takes place about every two weeks.

Early in the next week, the estimated negative difficulty adjustment of just under 1% will make it easier to mine bitcoin and bring back its current average time of 18 minutes to back at the target 10 minutes.

This would also result in more mining power coming back online.

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Author: AnTy

Stablecoin Printer Goes Brrr… Signaling an Early Bull Run in the Crypto Market?

During the past few months, stablecoins have seen immense growth which has led the total issued stablecoins surpassing $10 billion last week and their free float supply exceeded this figure this week.

According to analyst Permabull Niño, this surge in stablecoin supply might be giving off some signals.

He points out how during the 2017 bull run, there was “extremely active printing” of stablecoins. During the bear market of 2018, this printing “flatlined” only to have semi-regular new supply during the chopping of 2019.

Now, in 2020, USD-pegged stablecoins’ printing is “picking up steam” which could signal that we are in an “early bull” market.

Total Stablecoin Supply 7-day % Change, BTC market cap

Tether accounts for 90% of total stablecoin supply

Most of this stablecoin growth comes from Tether (USDT), the popular USD-pegged coin accounts for about 90% of the total stablecoin supply.

As per Tether’s transparency page, more than $9 billion worth of USDT is currently in supply, out of which $5.7 billion are on Ethereum blockchain, $2.1 on Tron blockchain, $1.3 billion on Omni blockchain, and the rest on others like EOS, Liquid, and Algorand.

Tether’s largest markets by traded volume are Asia-based Binance and Huobi. According to a recent Coin Metrics report, USDT-ETH transfers are concentrated during Asian and European market hours.

“Stablecoins are a crucial part of the crypto ecosystem, and will only keep growing in prominence,” states the report.

Since the Black Thursday crash, while most non-stablecoin assets saw a drop in their market capitalization, stablecoins have experienced a surge in demand.

This demand could be from the increase in the number of investors holding stablecoins as “dry powder” in anticipation of a new bull run or Asian OTC traders pouring money into stablecoins, as an onramp to crypto markets or a general rush to safety.

It is also speculated this surge in demand could be a reaction to the shortage of US dollars.

US Dollar shortage

In a 2019 Asian Development trade finance curve, banks from about 50 different countries when asked about the largest barriers to expanding trade financing operations, 30% identified US dollar liquidity as the obstacle.

The global reserve currency US dollar is the lifeblood of international trade as “a lot of borrowing and commerce and investing is done in dollars.” And they have been running in shortage amidst the coronavirus pandemic that has wrecked the businesses and economies.

The US Federal Reserve expanded its balance sheet by more than $2 trillion since the February end. But this is tackling America’s shortage of the US dollar, not the world’s.

Out of this $2 trillion, only about $600 billion was for new emergency loans to address the global shortage of dollars.

Foreign central banks also borrowed over $200 billion from the Fed via swap lines by the end of March. At that time, the Fed allowed them to swap any Treasury securities they held in exchange for cash.

The Importance of the US dollar can be understood from the fact that “when you have a dollar crunch, it can turn a recession or contraction in activity into a financial crisis very quickly because the dollar shortage can trigger defaults and deleveraging,” Julia Coronado, a former Fed economist told Bloomberg.

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Author: AnTy

Geopolitical Risk Is Back & It’s Bullish for BTC; Bulls Going Parabolic Now Is Not Healthy

For now, Bitcoin is keeping just under $9,000 after jumping to nearly $9,500 during this recent rally.

These gains also have the world’s leading cryptocurrency outperforming other assets in 2020. While bitcoin is up 20% YTD and gold about 12%, equities are down -9% YTD with oil in the lead with -80%.

As the crypto community repeatedly points out, all of this has been without the Fed bailout or stimulus support of any kind. Trader Cantering Clark said,

“Even with this recent correlation, Bitcoin is still making quite a case for itself as a higher beta gold 2.0. All it needs to do is capture a bit more market-share,”

“I think over the next 10 year period it is one of the best performing assets.”

Source: CanteringClark

April Rocking the Gains but Consolidation Needed

Interestingly, April has been a month of bulls for the past many years. In 2016, bitcoin recorded 8% gains then 28% in 2017, 33.5% in 2018, 30.7% in 2019, and this time yet again we continued the cycle of much higher returns at 34.6%.

“Q2 has been strong in 3/4 past years,” noted analyst Ceteris Paribus.

Some like trader Crypto Yoda however, are still not trusting this BTC rally fully yet because of its significant correlation to the traditional markets in the past months.

According to him, a consolidation period will be healthy for the long-term trend to build as continued push through the current level would force bulls to go parabolic and make the market more unstable and increase the “risk of a violent breakdown.”

Although the correlation between bitcoin and the S&P 500 remains at unprecedented levels, it is unlikely to persist in the medium-term.

But “heightened geopolitical risk would be a good trigger for BTC and stocks to finally decouple,” said economist and trader Alex Kruger.

And this geopolitical risk is already back on as US President Donald Trump said on Thursday that he was confident the coronavirus originated in a Chinese lab.

Earlier in 2020, when the US airstrike killed Iran’s general Qassem Soleimani, gold and bitcoin surged. Now as the countries make plans to reopen the economies, the geopolitical risk might get back in focus and this could help strengthen bitcoin’s role as a safe-haven asset.

Bullish Tailwinds

For now, bitcoin is following the stock market, and this means macro events might continue to affect the digital currency. But the stock market is divided if it is going to revisit new lows or the bottom is in.

The good thing for bitcoin is that central bankers remain committed to liquidity growth and bitcoin will benefit from this tailwind along with “increasing inflationary/debasement risks within traditional monetary systems,” said Richard Galvin CEO of Digital Asset Capital Management.

Also, the tech sector is leading the recovery in global markets and because “crypto provides pure, super-high-growth tech exposure so it should outperform,” he added.

The upcoming halving is another bullish tailwind but as we reported it could turn into a “buy the rumor, sell the news” event.

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Author: AnTy

Tether & Other Stablecoins Do Not Affect BTC Price Rather Act As A Safe-Haven: Report

Tether (USDT) has long been accused of manipulating the price of bitcoin, especially during the bull rally of 2017. Tether and its sister company crypto exchange Bitfinex are actually fighting a suit alleging such claims.

Now, as per the latest column, there is “no systematic evidence that stable coin issuance affects cryptocurrency prices.”

The writers of the article, Richard K Lyons, Chief Innovation & Entrepreneurship Officer at UC Berkeley and Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School, points out how the evidence states stablecoins “consistently perform a safe-haven role in the digital economy.”

As per the significant premiums recorded during the COVID-19 panic in March, it was seen that stablecoin issuance “endogenously responds to deviations of the secondary market rate from the pegged rate.”

Better store-of-value?

Over the last two years, stablecoins have risen dramatically, the total trading volume of BTC/USDT actually exceeded the volume of BTC/USD in 2019.

In 2020 especially, the growth has been off the chart, with the total market cap of stablecoins surpassing $9 billion. A vast majority, about $7.5 billion of this is from the popular stablecoin Tether (USDT).

“That stable coin use should be growing so rapidly is consistent with their ‘raison d’etre’ – to solve the store-of-value problem by pegging their value to the US dollar,” reads the article.

To talk about that creation of Tether, the authors explain that every Tether is issued “in principle” 100% backed by a dollar deposit. It is created when an investor deposits dollars into Tether’s account, creating an equivalent supply of USDT introduced in circulation.

Before 2018, nearly all the Tether was immediately distributed to Bitfinex and other exchanges. But after that, Tether Treasury started retaining a fraction of total Tether in circulation, having the capacity to sell Tether for dollars if the stablecoin’s price is above parity in the secondary market.

The authors found “no significant effect” of Tether flow to the secondary market on major non-stable crypto prices. Although results do not preclude the possibility that price manipulation occurred there has been no systematic effect either.

The paper further argues that stablecoins are used as a vehicle currency and dependent on other factors such as an incentive to arbitrage deviations of Tether’s market price from the peg. The analysis found “strong evidence that one cent increase in the dollar price of Tether results in $0.3 billion to the market.

Another support factoring to Tether flows is the role of the stablecoin as a vehicle currency is that “in periods of risk, some investors will choose to exchange into a better store of value.”

Lyons and Natraj point out that portfolio rebalancing toward Tether has minimal intermediate costs. It has been seen during the period of collapse in the bitcoin market in Jan-Feb 2018 and recently in 2020 during the COVID-19 panic that there have been premiums in Tether and other stablecoins and “a significant rebalancing of portfolios away from Bitcoin and towards Tether.”

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Author: AnTy

After Falling From The Third Spot During Black Thursday; Time to Start Accumulating XRP?

  • XRP/BTC showing monthly support and held up during the crash
  • Ripple leading C++ software engineer Nik Bougalis advises people to work from home
  • Its partner MoneyGram selling all the XRP “as soon as” it receives

XRP is currently recording gains of 3.90% in the past 24 hours while trading at $0.149 but still at fourth place, as per Messari.

The digital lost the third place to Tether (USDT) following the violent sell-off last week that saw XRP falling to $0.11, a level was last seen in May 2017. Meanwhile, the market cap of most of the stablecoin increased, potentially signaling investors piling into cash. But the pain for the digital asset might not be over.

According to a trader with pseudonym Calmly it is time to accumulate XRP as the BTC chart is showing strength. “Begrudgingly, I think it’s time to start accumulating Ripple. The XRP / BTC chart looks like an accumulation of monthly support. The bitcoin pair held up during the crash,” said the trader.

XRP Bull Accumulating

XRP enthusiast Rober Art who has 12.9k followers on Twitter believes $0.10 is coming which according to him is a buy the dip opportunity.

Robert Art is all about XRP and Bitcoin as per his bio reads, and he sees XRP at $200 XRP and BTC at 1 million.

The fourth-largest digital asset by market cap of $4.34 billion is down by 96% from its all-time high of $3.92. But according to the XRP bull, it isn’t a bear market rather the “start of the accumulation zone” which he has been waiting to buy some dips. His latest buying target has projected the XRP even lower at $0.05.

Work remotely amidst coronavirus scare

The losses in XRP along with the crypto market and stock market and other assets have been due to the rising concerns over the economic impact of the coronavirus (Covid-19) pandemic.

As coronavirus spreads rapidly, cryptographer and leading C++ software engineer at Ripple, Nik Bougalis advised people to work from home.

In a tweet on Monday, Bougalis shared that he has been working remotely for 20 years and is currently leading the team at Ripple.

In another news, Ripple partner MoneyGram is selling all the XRP “as soon as” it receives from the San Francisco-based tech company, reported TheBlock. It was recently revealed that MoneyGram received $11.3 million worth of XRP from Ripple and its other major clients like NB Bank and goLance are also receiving incentives from the company.

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Author: AnTy