Numerai, a hedge fund and information marketplace, has closed its second native token NMR fundraising round at $3 million.
The fundraising round saw participation from CoinFund, Union Square, Placeholder, Ventures, and Dragonfly Capital.
The first token sale was conducted in March last year, raising $11 million with its fundraising round being led by Paradigm and Placeholder. A majority of the funds raised in the first round were utilized to build the hedge fund.
Numerai is also known for hosting tournaments for data scientists who help the firm find the best trading strategies for the hedge fund. The firm stated that a portion of the raised funds would be utilized to develop their other venture Erasure which is a popular defi information staking protocol and 17th largest Dapp.
Currently, $2.1 million worth of tokens are locked in the information staking protocol which is primarily used for its data scientist tournaments along with its marketplaces Erasure Quant and Erasure Bay.
Erasure Bay is Numerai’s latest initiative, which launched back in March this year to make the interaction between the user and the platform simpler. This new marketplace makes it easier to exchange information before people could only submit predictions related to the equity market, but with Erasure Bay now they can do so.
Richard Craib, the founder of Numerai who was also one of the investors in the fundraising round commented on the success of the token sale and said:
“[This fundraising] gives us a lot more money that goes directly to developing Erasure and increasing the number of stakes, increase the users, and letting the protocol be used all over the Internet,”
Talking about the Erasure Bay, he said:
“Erasure Bay is demonstrating that you can trust other people online if they’re willing to put some cryptocurrency at stake and let you burn it if they misbehave. We did not expect all these weird use cases but we’re into it.”
In a local report from Korea, LG’s information wing, LG CNS signed a memorandum of understanding (MoU) with the blockchain-based firm, Evernym.
Will introduce decentralized identification (DID) on international passports and driving licenses.
A post from Aju Daily further explains that the partnership with LG CNS will push the software company that develops decentralized, self-sovereign identity applications, into building global blockchain-based identification systems.
The Evernym system aims at replacing the physical international drivers’ licenses and passports by allowing governments to “issue, accept, and verify credentials that operate like a digital passport.”
The implementation of a new blockchain-based authentication system is the start of a partnership between LG CNS and Evernym. On the statement, LG CNS will actively work with Evernym to contribute to the Worldwide Web (W3C) Consortium.
The Chief Technology Officer at LG CNS, Kim Hong-Geun, is aiming at a global market to offer an instant and secure identifier to governments and firms. Kim spoke on the latest signed MOU stating,
“Through cooperation with Evernym, we will create DID solutions and service models that can be used globally. We will also actively participate in related public projects so that South Korea can lead the global standardization of decentralized identification (DID).”
Blockchain Developments in Digital Identification
In February, the LG and Samsung backed consortium, SK Telecom, announced the first-ever mobile-based id system built on blockchain, in partnership with local bank, NongHyup (NH) bank. The new DID system by Evernym will also feature on smartphones allowing users to transfer and retrieve identity information at any moment from the blockchain.
Following IBM’S and Evernym’s partnership in early 2019, a number of venture capital firms started knocking on its doors with Overstock’s Medici Venture’s closing a $2 million investment round in the blockchain-based ID firm.
LG CNS is also engaging in other areas of the fourth technology revolution recently saying it will increase its efforts in R&D in the artificial intelligence, cloud computing and blockchain industries.
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.
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.
The open-source coding is available through GitHub with more elaborate information available on the Binance Library.
Changpeng Zhao claims that the TSS technology is “far superior” to the present multi-signature security that most other custodians offer.
Changpeng Zhao, the CEO of Binance, is known for making big strides in the cryptocurrency industry, and he seems to have a lot of faith in their new solution available to wallet providers and custodians. In fact, CZ states that the open-sourced option is “far superior” to the multi-sig security presently offered by many custodians, and he believes that its introduction will reshape the entire industry.
I believe TSS (threshold signatures scheme) will reshape the landscape for wallets and custodian services. It is far superior to multi-sig.
The Threshold Signature Scheme (TSS) library for Elliptic Curve Digital Signature Algorithm (ECDSA), which was just released today, is openly-sourced. Basically, this cryptographic protocol is used for distributed key generation and signing, providing a way to avoid single points of failure in private keys for wallet providers and custodians.
The exchange explained the process a little more clearly, stating, “TSS allows users to define a flexible threshold policy. TSS technology allows us to replace all signing commands with distributed computations so that the private key is no longer a single point of failure. For example, each of three users could receive a share of the private signing key, and in order to sign a transaction, at least two of the three users will need to join to construct the signature.”
To use less resources and reduce the possible attack opportunities, TSS is used off-chain. Multi-signature protection is the opposite. With the threshold signatures, Binance states that a user’s assets won’t be at risk, even with a compromised device. The protocol helps with access control policies for business operators, protecting their corporate funds from being stolen by either insiders or outsiders. The Binance Academy has more information about TSS technology, and the open-source code can be found at GitHub.
To ensure that the coding is secure, Binance procured Kudelski Security for a third-party audit. The cybersecurity solutions provider discovered “none of the issues found in the frame of this audit could be exploited” to “completely break the security of the scheme or recover secret data.”
Earlier this year, Kudelski partnered with Hosho, a smart contract auditing firm, allowing the two companies to combine their own skill sets to meet the needs of the blockchain industry.
For more information like this, make sure to subscribe to ZeroNoncense’s Telegram and follow them on Twitter.
As noted in their previous post outlining the fundamentals of the press release by the SEC, the actual pdf for the order, which was submitted by the SEC to the Manhattan Supreme Court today can be found here:
In this follow-up to the original story detailing the order against Telegram, we’re going to conduct a thorough analysis of all information contained within the SEC’s order against Telegram.
Reason for the Emergency Action
According to the filing by the SEC, they have credible reason to believe that Telegram will be launching their token (i.e., distributing it to the initial buyers of their token sale), relatively soon — citing October 31st, 2019, as the date given by Telegram for when investors in the token sale would receive their tokens.
This seems to be corroborated by articles that were published this month by numerous outlets, such as CoinDesk:
Of course, the post referenced in the excerpt above, also makes it clear that TON was planning on launching in October.
A screenshot of the post is provided below:
Thus, there appears to be more than enough credence to the SEC’s claim that the token was going to be launched imminently.
The Issue the SEC Has With Telegram Moving Forward
In the ‘Summary’ portion of the filing, the SEC states:
“Unless enjoined, Defendants will go forward without filing a registration statement for the Grams as they are required to do under the Securities Act of 1933 (‘Securities Act’). In other words, Defendants plan to sell billions of securities that will quickly come to rest in the hands of U.S. investors without providing those investors important information about their business operations, financial condition, risk factors, and management.”
In relation to the last part of the SEC’s statement, even that seems to be corroborated by public statements about the TON token offering that have been made by various individuals and entities in the cryptosphere.
Below is an example from the most popular and well-respected authority on ICO/IEOs on Telegram:
As noted in that post, there truly are many unanswered questions that prospective investors and spectators have about the overall plan for the TON token.
Which is not to say that there hasn’t been a wealth of information posted in regards to the token (specifically on https://test.ton.org)
Further Claims by the SEC
Moving forward in the court filing, the SEC goes on to state that:
“As of October 11, 2019, Telegram has not filed a registration statement with the SEC for this planned offering of securities.”
“Once Telegram delivers the Grams to the Initial Purchasers, they will be able to resell billions of Grams on the open market to the investing public. Telegram and/or its affiliates will facilitate these sales on digital-asset trading platforms. Once these resales occur, Telegram will have completed its unregistered offering with billions of Grams trading on multiple platforms to a dispersed group of investors.”
The filing goes on to cite Section 5(a) and 5(c) of the Securities Act, which we found, extracted, and posted below for your review:
Request for Telegram to be Permanently Barred From Selling Securities
This part of the filing has the most far-reaching consequences for Telegram (shown below): ‘
As one can see the SEC is asking for Telegram to be permanently restrained and enjoined.
So, despite the temporary and immediate nature of the restraining order, the SEC is using this as a placeholder until they’re able to get a more permanent order against Telegram sustained.
This is made clear in section 12 (1), where the Commission states that they are seeking, “A temporary restraining order and a preliminary injunction against Defendants prohibiting them from participating in any offerings of unregistered securities…including but, not limited to, by distributing Grams to any persons.”
However, as noted in the statement above, these are just the temporary injunctions that the SEC is seeking.
Ultimately, the SEC is seeking a ‘final judgment’:
A) “Permanently enjoining the Defendants from engaging in the acts, practices, and courses of business alleged herein” [herein = the court filing]
B) “Order Defendants to disgorge their ill-gotten gains and to pay prejudgment interest thereon”
C) “Prohibiting Defendants, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78(d)(5)], from participating in an offering of digital securities; and (d) imposing civil money penalties on Defendants pursuant to Section 20(d) of the Securities Act [15 U.S.C § 77t(d)].”
Translating the Above
As you probably got the gist from what’s written above, Telegram may be in some hot shit, but just to summarize:
This order that you’re seeing today by the SEC is the ‘temporary restraining order and preliminary injunction against Defendants’ (Defendants = Telegram, obviously)
The purpose of the restraining order is to pretty much stop Telegram in its tracks while the SEC continues their investigation
Ultimately, the SEC is looking for a permanent injunction against Telegram, which means that:
They want to bar Telegram from any future token sales
Force Telegram to “disgorge their ill-gotten gains” ; that means forfeit ALL $1.7 BILLION (that’s what they reference earlier in the filing as ‘ill-gotten’, specifically)
impose civil money penalties on top of the forfeiture of said gains
The Court Filing Names Pavel Durov, Nikolai Durov, and the TON Foundation
The filing specifically names Pavel Durov, Nikolai Durov, and the TON Foundation.
Both Pavel Durov and Dr. Nikolai Durov (both Russian citizens), are the co-founders, CEOs, and figureheads at the top of the messenger app, Telegram.
As noted by the SEC in the court filing, Telegram is, by far, the most popular messaging application for the cryptocurrency/blockchain community.
Below are some screenshots from the court filing in reference to the information provided above:
Skipping Through a Few Parts
From this point, there are a few parts in the intermediate that do not necessarily need to be included in this write-up.
For the most part, we’re just going to skip past:
Background information about Telegram (who created it, when, why & what communities it serves)
What a ‘digital asset’ is
How ‘ICOs’ work
The framework of the Securities laws that the SEC alleges Telegram breached with the TON token
Let’s move forward to #45 on the court filing, where the SEC provides more information about the offering as well as some of the deficiencies that led them to summarily declare the entire token sale, illegal.
Qualms that the SEC Had with TON (and Other Relevant Information)
Details of the Token Sale
Round One purchasers paid $0.37 / Gram
Round Two purchasers paid $1.33 / Gram
‘Reference Price of Grams at launch was supposed to be $3.62
The token sale began in early 2018 (January, specifically)
Telegram sold approximately 2.3 billion Grams in the first phase
From the 2.3 billion Grams sold in ‘Round One’, Telegram raised $850 million
Telegram sold another 639 million Grams in the second phase
From the 639 million Grams sold in ‘Round Two’, Telegram raised another $850 million
In total, 2.9 billion Grams were sold
According to the SEC, more than 1 billion of the 2.9 billion Grams sold (total) were to U.S. investors, totaling $424.5 million / $1.7 billion total that Telegram raised
Qualms That the SEC Had With Telegram Regarding Their Disclosures
In paragraph #46–48, the SEC alleges that:
Telegram did not prepare or file any registration statement for the Grams that it offered or sold, “intends to offer or sell in the Offering”
Telegram’s Gram Purchase Agreements, ‘did not contain information about Telegram’s financial history or ability to generate profits’
“Purchasers who may buy or receive Grams will not receive any document containing information about Defendants’ [Telegram] operations, financial condition, or other factors relevant in considering whether to invest in Grams.”
“Nor will they receive information about how the Durovs are being compensated as a result of the Offering.”
“Because Telegram did not register the Offering, investors in Grams will be deprived of material information relating to their investment. “
“Defendants essentially seek to obtain the benefits of a registered public offering without assuming the disclosure responsibilities and legal structures designed to protect the investing public.”
“Telegram has taken the position that the Gram Purchase Agreements were investment contracts, i.e., securities, and placed a restrictive legend on the Gram Purchase Agreements.”
“The legend warned United States residents that ‘the offer and sale of this security has not been registered under the U.S. Securities Act of 1933’ and ‘may not be offered, sold or otherwise transferred…except pursuant to an effective registration statements.’”
“Telegram, however, claimed that Grams, the heart of the Gram Purchase Agreements, without which the agreements have no value or purpose, were not securities but rather currency.”
“Telegram thus placed no restrictive legends on any Grams, nor were purchasers advised that they may not sell Grams in the United States absent a registration statement.”
“Purchasers of Grams are not restricted from selling them to others, other than as provided for by certain contractual lockups placed on some Grams sold to Initial Purchasers.”
The SEC goes on to claims that Grams, by themselves, constitute ‘investment contracts’.
The SEC also notes that the Round One purchasers were subject to a smart contract enforced ‘lock-up period’ that limited the amount of Gram tokens that could be sold to ‘tranches’, which subsequent Round Two purchasers were not subject to.
This was followed up by the denial of the idea that Grams were a currency with the SEC’s statement that, “Grams are not a currency because they have no realistic currency uses at this time.”
SEC Alleges That Funds Raised by Telegram Exceed What They Will Need to Develop the TON Blockchain
In paragraph #55, the SEC states that Telegram stated in their offering documents that the funds raised in their TON token offering would not only be used for the development of the TON Blockchain, but for the Telegram Messenger as well.
Specifically, it is states that Telegram estimated they would spend approximately $520 million of the $1.7 billion raised from the token sale on the Messenger alone “between 2019 and 2021”.
SEC Claims That Some of the Funds Have Been Used Already
According to the SEC in paragraph #56 of the filing:
“As of January 31st, 2019, Defendants had used approximately $218 million of the $1.7 billion raised to support the development of Messenger and the TON Blockchain.”
The filing is careful to note that investors have zero ‘say’ over how the funds raised by Telegram would be spent and that Telegram also possesses ultimate and sole control over decision making as it pertains to the spending of said funds.
SEC Further Claims That Telegram Has Led Investors to Believe That They Will Profit Based on Telegram’s Efforts
In Section ‘C’ of the court filing by the SEC, they elaborate on Telegram’s marketing to prospective investors and how certain statements by the company were designed to entice investors based on the perceived profitability of the token offering.
Below is an excerpt from the court filing, outlining some of the statements that the SEC outlined:
SEC Alleges That Telegram ‘Intentionally Leaked’ Information About the Token Sale
Under the same section (‘C’), as the one covered above, in paragraph #59, the SEC alleges that:
“The Whitepaper, Primers, and Teasers subequently were intentionally leaked as a part of the Offering and currently be found on the Internet.”
The SEC also mentions that they have evidence that Pavel Durov, specifically, had sent information about the token sale to individuals in the United States in both California and New York, specifically (among others).
They also state that Pavel, “marketed the sale of Grams himself, using business and other contacts to solicit investments and spread the word about the impending Offering.”
SEC Knew About Telegram’s Conversations With Exchanges As Well
In paragraph #79, the SEC states that, “Telegram itself is currently in conversations with at least four digital-asset trading platforms, some of which are U.S.-based, to discuss listing Grams on their platforms.”
This seems to be corroborated by Coinbase’s recent announcement that it would be providing custody for Telegram’s token in anticipation of the token’s release this month (October 2019):
Today we’re announcing support for the secure storage of GRM, SOL & OXT from each network’s respective launch. We have a track record of providing seamless custody solutions at launch as both the first & largest custodian for both Blockstack & Algorand.https://t.co/LwNzh5NVl4
Before the tweet above (which came just two days before the SEC’s emergency order), Coinbase had indicated interest in adding Telegram’s token to their exchange (curiously, well before the announced launch of said token), back on September 19th, 2019:
SEC Claims That Telegram Had a Pump and Dump Planned
In paragraph #87 of the filing, the SEC states:
“Under Telegram’s Formula, Defendants would price the first Gram at $0.10, and every subsequent Gram at an amount one-billionth higher than the prior sales price. As such, Telegram designed the price of Grams to increase ‘exponential[ly].’ Indeed, Telegram sold Grams to Initial Purchasers at a deep discount to an expected market price of $3.62 at launch.”
The figure shown in paragraph #89 drills the point home on this as well:
SEC Outlines How Telegram Would Have Held Unilateral Control of the Telegram Token’s Development
In paragraph #92, the SEC notes that the, “Telegram development team is also needed to complete the TON Blockchain to allow Grams to achieve the value Telegram touted in the Offering Documents.”
It is alleged that the ‘Whitepaper’ also made it clear that the Defendants would “remain in control of the development of the TON Blockchain”, also noting that the TON Blockchain team would have enough votes to ensure that decisions (particularly development ones) would have to go in the direction of Telegram’s choosing.
Why This Part is Important
This is essentially the SEC subtly claiming that Telegram is a largely centralized blockchain, given the fact that its development would be (and was planned to be) entirely contingent on the Telegram Blockchain dev team.
Obviously, with such unilateral control, it is hard to argue that a blockchain structure is anywhere near decentralized or distributed — and it certainly is not trustless.
SEC Claims the Tokens Had ‘No Significant Use’ Other Than ‘Uses Calculated to Increase Investor Profit’
In paragraphs #96 and #97, the SEC makes it clear that there was no apparent use for Telegram’s token beyond ensuring that investors in said token would achieve a profit.
Thus, in that way, the SEC essentially defines Telegram’s token as a ponzi of sorts.
The SEC does acknowledge that Telegram listed a number of future plans and potential implementations for the token, but also that none of these solutions were in place at the time that Telegram was soliciting investment.
Specifically, in paragraph #98, the SEC states:
“The TON ‘ecosystem’ did not exist and does not exist today. There are not now and have never been any products or services that can be purchased with Grams. The TON functionalities as pitched by Telegram were (and remain) entirely dependent on the funds provided by investors. Meanwhile, the principal means by which investors would reasonably expect to profit is through their resale of Grams.”
SEC Continues to Pick Away at the Concept That Telegram’s Blockchain Idea Was Decentralized at All
From paragraph #104 and onward, the SEC makes some cogent points about why the blockchain was far from decentralized, even going as far as to state that, “Telegram engaged in a coordinated, centralized effort to create the Durovs’ vision of a new, scalable blockchain.”
The filing goes on to state that:
Defendants [Telegram] knew in order to deploy their blockchain, they would have to create some sort of sense of decentralization
The filing goes on to state that, “The TON Blockchain can only become truly decentralized if Grams holders other than the original Grams purchasers actually stake Grams and, thereby, act as ‘validators’ of transactions on the TON Blockchain.”
The filing goes further to explicitly state that, “If the original Grams purchasers alone all immediately staked their holdings, the TON Blockchain would be centralized rather than decentralized and, therefore, subject to misuse and majority attacks.”
The SEC uses the facts above to conclude that, “This fundamental need for additional Grams holders demonstrates that the TON Blockchain was designed fron inception to require the Initial Purchasers to immediately distribute their holdings to the public.”
TON Foundation Would Be Centralized as Well
As noted in paragraph #109, the ‘TON Foundation’ was (or is) to be created by the Durovs, directly. Thus, in addition to holding unilateral control over the blockchain (via majority ‘votes’), they would also hold complete control over the actions of the Foundation as well.
Conclusion (Penalties Sought)
“An Order temporarily and preliminary, and a Final Judgment permanently, restraining and enjoining Defendants, and each of their respective agents, servants, employees, attorneys and other persons in active concert or participation with each of them who receive actual notice of the injunction by personal service or otherwise, from any ongoing and future violations of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. § 77e(a), 77e(c)], including, but not limited to, by delivering Grams to any persons, or taking any other steps to effect any unregistered offer or sale of Grams.”
“An Order temporarily and preliminarily enjoining and restraining Defendants, and any person or entity acting at their direction or on their behalf, from destroying, altering, concealing or otherwise interfering with the acess of the Commission to relevant documents.”
“An Order providing that the Commission may take expedited discovery; and may effect service of the Complaint and the Order to Show Cause moving papers by alternative means, namely by email service on Defendants’ U.S.-based legal counsel.”
“A Final Judgment directing each of the Defendants to disgorge all ill-gotten gains, including prejudgment interest thereon”
“A Final Judgment prohibiting Defendants from participating in any offering of digital asset securities pursuant to Section 21 (d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)]”
“A Final Judgment directing the Defendants to pay civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]”
“Such other and further relief as the Court deems appropriate and necessary for the benefit of investors.”
This was a massive piece put together by ZeroNoncense and we felt it needed to be shared in full to the entire crypto audience and world!
Amazon has recently provided some more information about two of its blockchain-related projects. They are the Amazon Managed Blockchain and the Amazon Quantum Ledger Database.
The preview of these new products points out that they are still in a very early phase, but that Amazon is getting consistently more interested in the blockchain technology and that it plans on using it more and more in the near future.
During the presentation, two aspects were especially showcased: the immutability and the verifiability of the blockchain technology. People can use it to enter immutable records and easily verify them in a decentralized manner. This trust aspect is why the company is so interested. Several other companies can use this technology for many purposes.
One caveat of the presentation is that Amazon keeps using the term “quantum ledger” while quantum technology is still not here, which means that it is more of a buzzword than anything else.
The so-called quantum product (see here) was created for cases in which a complete blockchain is not needed, only parts of it. In this case, some of the immutable technology can be used, but in a more centralized way, so that a single entity controls the data. What there is of something really new here is that the database allows for inserts, but not for deleting information.
Amazon Managed Blockchain, (see here) on the other hand, is the real thing. A complete core blockchain product that can be used by companies that are interested in private blockchains. This platform is set to initially have support for Ethereum and the Hyperledger Fabric technology. While Hyperledger is for companies that want to create a private network, Ethereum is better for creating open ones.
The United Kingdom’s Information Commissioner’s Office has recently decided to request that the Libra Association should provide more details on how the group will protect the data that will be gathered by the users of the upcoming FacebookLibra stablecoin.
According to this latest report, all the 28 organizations that form the association should explain how the data will be taken from the users will be protected in order to be on par with the current standards of data protection.
The letter, which is signed by many authorities of the country, highlights that some concerns are raised especially because Facebook has already been known to collect data from people and to fail to properly secure it.
Taking this into account, the agency is fairly concerned about what may happen if the citizens of the U. K. are subject to a leak of their financial information because they used Libra.
The document states that the agency is already aware that the Libra Association has opened a dialogue with several relevant financial actors, but what concerns the regulatory watchdog the most is that many important details are still lacking right now, as they were not made public yet.
This is especially concerning when considered that despite the Libra Association not revealing enough information, there is no shortage of people actually asking for it.
David Marcus, a representant of Facebook, was recently called to a Senate hearing in order to talk with U. S. lawmakers to determine the risks of the project. At the time, not all the questions were properly answered, so it remains to be seen whether they will be now.
[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.
The Swiss Federal Data Protection and Information Commissioner (FDPIC) said it is still waiting to hear from Facebook regarding its supposed oversight of Libra, the social media giant’s proposed cryptocurrency.
The FDPIC said it is still waiting to hear back after it wrote a letter on July 17 asking for more details about the project, Reuters is reporting.
This comes after David Marcus, who oversees Facebook’s currency project, said at a U.S. Senate hearing earlier this month he expected the Swiss Federal Data Protection and Information Commissioner to be Libra’s privacy regulator. This is because the nonprofit Libra Association, which Facebook had set up to oversee the currency, is based in Geneva.
In a statement, the FDPIC said it sent a letter to the association on July 17 because it had not yet heard from the group about the project.
The FDPIC said soon after the Senate hearing that the lack of contact from the social media giant about Libra had prompted it to send the letter. In an official statement the agency stated:
“The FDPIC is currently waiting for the Libra Association to respond to [its] letter of 17 July 2019 and set out their official position.”
Among other things, the Swiss data privacy authority said it was expecting Libra to conduct an impact assessment of data protection risks associated with the cryptocurrency, evaluate risks and propose measures to minimize them. The watchog explained:
“The FDPIC stated in its letter that as it had not received any indication on what personal data may be processed, the Libra Association should inform it of the current status of the project so that the FDPIC could assess the extent to which its advisory competences and supervisory powers would apply.”
Cointelegraph reports that the news about Facebook’s unresponsiveness comes amid continuing concerns on the choice to establish Libra in Geneva which was a major concern during Congressional hearing earlier this month.
During the hearing, Marcus insisted that the Libra Association was going to be headquartered in Switzerland “not to evade any responsibilities of oversight,” but because that’s where other international financial groups are headquartered, like the Bank for International Settlements, making Geneva a conducive business place.
Members of the congress were concerned that Switzerland has long been viewed as hub for criminals and shady corporations. In his defense, Marcus said the FDPIC would handle privacy concerns, and that the Swiss Financial Markets Supervisory Authority (FINMA) would regulate it financially. FINMA has previously indicated that it had been in contact with people from the Libra project.
Facebook’s cryptocurrency project has already been met with skepticism from policymakers around the world. US Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both said they have “serious concerns” about Libra related to money laundering, financial stability and regulation. Many of the senators who questioned Marcus also brought up data privacy concerns tied to Libra.
The FDPIC is not alone in wanting to know more about Facebook’s plans for Libra and its potential risks. Numerous regulators worldwide and the finance chiefs of the G7 nations have called for further information to be released.
Should Libra provide more details to the public about the project to avoid the speculations? Let us know in the comments section.
Kik might have presented wrong information about its Kin network
Coin Metrics compared the data provided by Kik with other blockchain networks such as ETH and BTC
Kik has recently provided information about activity on its blockchain network to the U.S. Securities and Exchange Commission (SEC). However, Coin Metrics reported that these claims made by Kik are inaccurate.
Kik’s Inaccurate Claims About Kin
Back in 2018, Kik claimed that their network exceeded Ether (ETH) and Bitcoin (BTC) in daily blockchain activity. This demonstrated that Kin was adopted and used by many individuals around the world. However, Coi Metrics claims that the daily operations included a large number of account creations.
Indeed, some of these accounts seem to be empty after a single transaction processed. Although Kin had a very interesting number of daily transactions, it was far from reaching a similar level as top tier blockchain networks.
In addition to it, Kik has also questioned the SEC regarding the token as a security. They said that there were over 300,000 individuals that earned and spent kin as a currency. Coin Metrics explained that there have been just 35,000 addresses that held more than 10,000 kin worth around $0.23.
On the matter, the report commented:
“This is orders of magnitude less than other blockchains in our sample, which each have at least 1,000,000 addresses that hold at least $1.”
Coin Metrics explained that multiple metrics showed that the Kin digital asset was not used more than other chains such as Bitcoin or Ethereum. Just last month, Kik has launched a $5 million crypto campaign in order to deal with the SEC and improve its regulatory clarity.
Back in September 2017, Kik was able to gather almost $100 million during a token distribution event. However, the US regulator claimed that Kik may have violated securities laws in the country. Since that moment, Kik is working in order to prove it has been operating in the market as it should.