(03/16/18) A Whirl Around the Crypto World: 10 News Developments This Week

Nell Sloane of Capital Trading Group summarizes 10 developments in cryptocurrency, from blockchain and bitcoin to tether fraud probes, the Tokyo Whale and Peter Thiel’s Paypal making a crypto patent application.

Cryptocurrency news in regulation land: Reuters reporting recently that U.S. District Judge Jack Weinstein in Brooklyn reaffirmed that virtual currencies like bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission.

The state of Illinois is weighing the proposal of House Bill 5335 which states, “In addition to any other method of payment provided for by law, the Department shall accept payment for any tax imposed by the State and administered by the Department by cryptocurrency.”

It now sits in the IHR for deliberation.

Grayscale Investments, the creator of the Bitcoin Investment Trust, is launching four new trusts utilizing ethereum, litecoin, Ripple and bitcoin cash. Michael Sonnenshein, the managing director of Grayscale Investments, said the new products are part of an expanding suite. Grayscale Investments is a subsidiary of Digital Currency Group.

The Financial Crimes Enforcement Network (FinCEN) published a letter recently indicating the U.S. agency will apply its regulations to those who conduct initial coin offerings. (ICOs)

Under this interpretation of the law, a group that conducts an ICO that involves U.S. residents but hadn't registered with FinCEN as a money transmitter and adhere to regulations may be charged with a felony under federal law. Now we aren’t going to opine on this at this juncture, but we are partial to the ruling as we are huge fans of legitimacy and investor protections. However, we do feel that greater cooperation and coordination between regulators, stakeholders and investors should be made a priority.

Tether: Word continues floating around the street of possible fraud with tether (USDT). We all know the stories about the amount of outstanding tether and whether or not the other side of the balance sheet exists to cover it.

Tether comes with counterparty risk, something that decentralized blockchain is not accustomed to, so you can imagine the concern here from the crypto legion. It is also a bit unsettling the fact that the audit firm Friedman LLP who was in charge of auditing the fully U.S. dollar backed tether has ended its relationship with them.

So, we will monitor ongoing developments. And if manipulation in the space is indeed discovered through the use of tether, this will have reverberations, that we are certain.

Peter Thiel’s Paypal has filed patents in regards to an “Expedited Virtual Currency Transaction System” published on March 1 by the U.S. Patent and Trademark Office. This makes perfect sense considering Paypal’s business model and their background. We often wonder what influence Elon Musk still has, if any, or maybe he is too busy now playing with rockets?

Tokyo Whale: There wasn’t any shortage of news on the Mt. Gox whale last week as Bloomberg reported and confirmed wide spread rumors that the “Tokyo Whale,” was responsible for some large block selling in bitcoin (BTCUSD) over the last few months. Nobuaki Kobayashi, bankruptcy trustee for Mt. Gox, has reported that he has begun selling off thousands of bitcoin since last September.

Word is they have around $2 billion worth to monetize and we are quite sure lawsuit holders will be happy with the progress. What is crazy to think about is at the time Mt. Gox failed bitcoin rose to $1k and got cut in half to around $500 when they collapsed.

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Now with BTCUSD worth around $9k, that is a tremendous return and it will be interesting who actually collects the money, in fact, what should be done is that those involved should get BTC back and not the nominal value of their account at the time…yeah right!

Last week the European Commission has confirmed that it is monitoring electricity consumption from cryptocurrency mining but states that as of now there is no legal basis to ban or limit bitcoin mining in the EU.

The governor of Thailand’s central bank has confirmed an upcoming law to comprehensively regulate cryptocurrency. SEC secretary-general Rapee Sucharitakul has revealed that a royal decree is commonly seen as the path to empower the SEC to regulate all aspects of the crypto sector including cryptocurrency exchanges, ICO fundraising.

At least the SEC in Thailand is open-minded and stated that “realizes the potential of ICO” in bringing new forms of funding for businesses and startups.

Google limits crypto ads: Moving back to America, this week none other than deep state-controlled Google said it’s going to change its financial product policy in June this year to effectively ban any advertisements related to cryptocurrency.

Reported from Google, “the firm indicated that it will change its existing financial product restriction list in June this year, blacklisting ad content including but not limited to initial coin offerings (ICO), cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice. Such ads will no longer be allowed. The restriction will apply both to Google's proprietary and affiliated advertisement platforms.”

This isn’t a shock as the majority of U.S. social media outlets are turning to censor anything that disagrees with their associated political bias. No, that is not our opinion, it is a widely known fact and one that increasingly worries us free speech constitutionalist types.

Then again, if you look at it from the flipside, crypto and blockchain are and continue to be a very viable threat to the establishment and their reactions are becoming obvious.

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