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Smell Something Fishy? The CFTC Will Pay You to Report Crypto Scams

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Nestled in the exhibition room at this year’s Consensus conference, the U.S. Commodity Futures Trading Commission (CFTC) had a message for conference goers as they weaved in and out of booths representing various projects and startups in the space: “Be on the lookout for virtual currency fraud” and if you see it, let us know.

CFTC Booth at Consensus 2019

“The Whistleblower Office of the Commodity Futures Trading Commission (CFTC) is issuing this alert to inform members of the public about how they may make themselves eligible for both financial awards and certain protections while helping stop [sic] fraud and manipulation relating to virtual currencies,” a handout from the booth reads.

The CFTC has long classified bitcoin as a commodity, and the document states that the CFTC considers all “virtual currencies [as] commodities under the Commodity Exchange Act (CEA).”

This same act gives the agency regulatory power to prosecute virtual currency fraudsters. Since the 2017 price run-up, crypto scams have been on the agency’s radar and it’s been keen to keep investors privy to project warning signs. In cooperation with the U.S. Securities and Exchange Commission, the CFTC has cracked down on illegal bitcoin brokers and dealers, as well as fraudulent crypto consultants and token rackets like My Big Coin.

In the whistleblowing briefing document, the CFTC uses My Big Coin and CabbageTech as textbook examples of scammy behavior. Among other red flags it warns potential whistleblowers against pump-and-dump schemes, wash/insider trading, unregistered derivatives platforms and “supervision failures or fraudulent conduct (e.g., creating or reporting fictitious trading) by virtual currency exchanges.”

If you notice any of these behaviors in practice, “you don’t have to be an ‘insider’ … to be a whistleblower,” the document reads. It continues to tell readers that they can tip off bad actors through the agency’s website, asking that they provide as much information on the alleged scams and orchestrators as possible (this includes “identifying information” like social media profiles, screenshots, bitcoin addresses, email addresses, etc.).

Anyone whose whistleblow ends in more than $1 million in sanctions against such companies are entitled to 10 to 30 percent of the monetary penalty.

A CFTC representative declined an interview, telling Bitcoin Magazine that each employee must be cleared by the agency to go on record. Bitcoin Magazine did learn that this was the CFTC’s first year at Consensus and that the agency has been making its rounds through the crypto conference circuit over the past year.

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Founder of Defunct Cryptopia Launches New Crypto Exchange

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The founder of defunct cryptocurrency exchange Cryptopia, which entered liquidation following a hack in January 2019, has launched a new exchange called Assetylene.

The LinkedIn employment history for the founder of the failed New Zealand exchange, Adam Clark, indicates that he’s been working on Assetylene since September 2018, which is also when the exchange’s Twitter account went live. With fewer than 100 followers, the account is billed as representing “New Zealand’s most advanced crypto-currency exchange [sic].”

Once a highly prominent exchange in New Zealand, Cryptopia lost nearly 10 percent of its entire liquidity in a hack earlier this year. Attempts to salvage the business ultimately failed. On May 15, 2019, its liquidators formally announced that the company was defunct. At the time of this writing, hundreds of thousands of dollars worth of Cryptopia’s assets are still circulating in an easily tracked manner.

Seeing as Cryptopia did not fully close until May 2019, and Assetylene’s date of founding is listed in the preceding September, it may be that Clark had moved on to this new business well before Cryptopia’s collapse began. However, there’s also reason to believe that Clark set up the new exchange quickly, after Cryptopia’s hack had already occurred.

For one, an archived copy of the Assetylene site shows that it is based on the TradeSatoshi platform, which can set up exchanges within minutes. Furthermore, Clark’s own LinkedIn shows that he was TradeSatoshi’s senior software development engineer when Assetylene was first set up. More damningly, Assetylene has zero liquidity, is not listed on CoinMarketCap and its about page is empty with no trading data found on the site.

Assetylene may very well become a full-fledged exchange with time. However, given the time period that it has apparently remained inactive while Cryptopia was still viable and its current insufficiency, the jury’s still out.

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Robinhood Zero-Fee Trading App Officially Launches in New York

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American stock brokerage Robinhood Crypto has officially launched its zero-fee crypto trading app in New York, the company announced in a blog post on May 23.

Following the acquisition of a BitLicense by the New York State Department of Financial Services (DFS) in January 2019, Robinhood now allows New York citizens to trade in seven major cryptos with no commission fee using its Robinhood Crypto platform.

From now, the Robinhood Crypto service is available in 39 states in the United States, including California, Washington and Florida, among others.

The Robinhood trading app allows for the trading of bitcoin (BTC), ethereum (ETH), bitcoin cash (BCH), litecoin (LTC), bitcoin SV (BSV), ethereum classic (ETC) and dogecoin (DOGE). Robinhood users can also track price alterations and updates for those cryptos and 10 additional coins, the blog post notes.

Earlier in April, Robinhood applied for a bank charter with regulators in the U.S. in order to offer traditional banking products and services.

Previously, the DFS granted a BitLicense to a institutional-grade crypto trading platform Tagomi Trading, enabling the company to offer trade routing and order execution services for non-security cryptos including bitcoin, ethereum, litecoin and bitcoin cash.

Recently, on April 18, Bloomberg reported that the ICE was considering acquiring a New York BitLicense to launch bitcoin futures, citing anonymous sources familiar with the matter.

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Here’s Why Bitcoin, Ethereum and Litecoin is undervalued at Spot Rates

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Heres-Why-Bitcoin-Ethereum-and-Litecoin-is-undervalued-at-Spot-Rates

Bitcoin, Ethereum and Litecoin are still incredibly undervalued as present valuations stand. This is on account of the potential of these coins and planned upgrades to make them better according to a crypto trader and enthusiast.

Yes, Bitcoin may have rallied back to possible bull territory. However, it is still fair to say that the coin sits below its true and projected position as a currency and security. Bitcoin came about as an alternative currency with decentralization as a catch for investors and enthusiasts alike.

Bitcoin is resilient and has shrugged off legitimacy questions from naysayers time and time again. The price volatility is just a consequence of intense speculation and uncertainty common with new inventions. Nonetheless, Bitcoin’s transcendent ability to transform the financial world remains effectively eliminating borders and regulatory overreach.

Bitcoin as Digital Gold

Bitcoin is a finite currency. Notably, every fiat currency will return to its inherent value of zero at times of hyperinflation. This is clear from the Venezuelan Bolivar which is worth less than its printing paper at the moment. In this light Bitcoin can become an alternative to collapsed currencies especially in failed states.

It’s become a trusted alternative when fiat money’s value is corrupted by politics”

-John McGinnis and Kyle Roche of Wall Street Journal.

The limited availability means Bitcoin can efficiently store value at times of financial crises. This is eerily similar to gold which is also a great commodity to store value that rises in value in hard times for fiat. This has led to some proponents calling Bitcoin digital Gold and rightfully so. As such, the value of $8,000 is momentary as the developed world economy is still doing well.

Ethereum And Litecoin As Alternatives

Ethereum is a great alternative for Bitcoin. That said, the price of $270 is still on the low because of the incredible potential given the possibilities of Smart contracts. More significant is the upcoming Serenity or Ethereum 2.0 upgrade. This upgrade will significantly improve the coin by incorporating technical improvements that improve scalability and performance. At the premier Ethereum Supermeetup, hosted at Token2049, Vitalik Buterin explained the update as follows;

“(It is) a way to bring technical improvements, like PoS and sharding, together to improve the Virtual Machine, Merkle Trees, the efficiency of the protocol, and a whole bunch of small technical things that you have never heard of.”

Ethereum is in this regard still on the downside price-wise. The upgrades are necessary and timely to keep the protocol efficient.

Litecoin, on the other hand, is essentially a better version of Bitcoin. This is because the coin, while having essentially the same possibilities as Bitcoin, is more adaptable to change such as the introduction of smart contracts.

Charlie Lee, a former Google employee, who founded Litecoin, has also given financial support to the Lightning Network.  There are also possibilities of incorporating Mimble Wimble that will inherently scale the network while introducing better security and privacy for the end user. When we add the halving mix in the equation, investors and traders are convinced that we are in the early stages of a mega bull run that will propel asset prices, valuing them fairly.

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Generation Bitcoin: 90% of Millennials Prefer Crypto to Gold: ETF Expert

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By CCN: The US investing industry stands on the precipice of a dramatic upheaval that could see bitcoin and other cryptocurrency assets replace gold in investor portfolios.

That’s according to Nate Geraci, president of the ETF Store, an independent investment advisor. He revealed in a Bloomberg TV interview that his millennial clients are clamoring to hold bitcoin in their portfolios – if only the SEC would let them.

Crypto in a Landslide: ETF Expert Says Millennials Plan to Kick Gold to the Curb

Responding to a question from Bloomberg analyst Eric Balchunas about whether he would ever invest client funds in a bitcoin ETF, Geraci stunned his fellow panel members when he said that millennial investors overwhelmingly desire to hold bitcoin instead of traditional hedge assets like gold.

How overwhelming? Ninety percent.

“When we talk to our younger clients – we have a core gold allocation in our portfolios, and they’ll ask about that and say, ‘What about crypto?’ And if you talk to, primarily millennials, and ask them which they prefer, bitcoin or gold, it’s a landslide. It’s not even close, it’s like 90% prefer bitcoin.”

Geraci’s bold claim was more anecdotal than scientific, but there’s plenty of hard data that demonstrates that younger investors are vastly more comfortable with holding cryptocurrency in their portfolios than investors who grew up in the pre-digital era.

In April, a Harris Poll survey found that 18 to 34-year-olds are “very” or “somewhat” likely to purchase bitcoin within the next five years. That might not seem overwhelming, but consider that only 37% of Americans in that demographic currently own stocks.

Similarly, a February eToro survey found that 43% of millennials trust crypto exchanges more than stock exchanges, even though crypto trading platform hacks dominate the mainstream news cycle.

ETF Would Reduce Crypto Investing Risks

bitcoin etf vaneck bitcoin price

ETF Store President Nate Geraci said that there is rabid demand for a bitcoin ETF, especially among millennials. | Source: Shutterstock

Nate Geraci further pointed to the success of the $1.5 billion Bitcoin Investment Trust (OTC: GBTC) as proof that there is sufficient market demand for a crypto ETF.

He noted that the over-the-counter product regularly trades at a staggering premium to the underlying value of its BTC assets. That’s because GBTC shares fluctuate based on supply and demand, not just the price of bitcoin. An ETF, he said, would flatten that premium and thus reduce investor risk.

“It seems a bit incongruent to me that we have that product out there trading, where investors really could get hurt if they don’t understand that premium, but we don’t have a bitcoin ETF.”

“The demand is there,” he concluded.

SEC Kicks the Bitcoin ETF Can Down the Road

Unfortunately for crypto bulls, millennials aren’t the ones manipulating the levers of the Securities and Exchange Commission (SEC), which holds unilateral authority to approve or deny bitcoin ETF applications.

The SEC, as CCN reported, continues to punt on the issue. Last week, the regulatory agency extended its long trend of delaying ruling on cryptocurrency products when it postponed its decision on the VanEck/SolidX Bitcoin ETF to August 19. Most industry insiders expect the SEC to delay the VanEck/SolidX product again, pushing its final ruling until October 18.

Dave Nadig, the managing director of ETF.com, said that he believes the SEC is still in “information gathering mode” but that there is a “reasonable chance” regulators approve the first bitcoin ETF before the end of 2019.

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Ripple Price Analysis: XRP Lost Critical 5000 SAT Support Area – What’s Next?

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Ripple’s XRP has seen a price decline totaling 6% over the past 24 hours of trading, bringing the current price for the coin down to around $0.3754 at press time. The cryptocurrency has lost a further 16% over the past 7 trading days.

This price drop largely is due to the retracement seen in Bitcoin, although XRP also has seen difficulty when priced against Bitcoin.

XRP currently is ranked in 3d place amongst the top cryptocurrency projects by market cap value, holding a $15.89 billion market cap, according to CoinMarketCap at time of publication. 

Looking at the XRP/USD 1-Day Chart:

  • Since our previous XRP/USD analysis, we can see that XRP/USD has fallen further from the $0.39 level, to where it currently is trading at around $0.375. XRP has strong resistance beneath it provided by the 200-day moving average around the $0.3615 level.
  • From above: The nearest levels of resistance lie at $0.3790 and $0.3943. If the bulls can continue further above $0.40, higher resistance can be located at $0.4235, $0.4376 and $0.4617. Above this, further resistance lies at $0.48 and $0.50.
  • From below: The nearest level of support now sits between $0.36 and $0.35. Beneath $0.35, further support is located at $0.34, $0.32 and $0.30.
  • Trading volume has dropped significantly from the average level seen during May 2019.
  • The RSI is in a precarious position as it hovers around the 50 level which indicates indecision within the market. If the RSI drops beneath 50, we can expect XRP/USD to head lower.

xrpusd_may23-min

Looking at the XRP/BTC 1-Day Chart:

  • Against Bitcoin, we can see XRP/BTC has now dropped further beneath the support at 5000 SAT to where it currently trades at press time, around 4850 SAT.
  • From above: The nearest level of resistance now sits at 4910 SAT, 5000 SAT and 5090 SAT. Above 5100 SAT, further resistance exists at 5571 SAT, 5962 SAT and 6000 SAT.
  • From below: The nearest level of support lies at 4731 SAT. Beneath this, further support is expected at 4500 SAT, 4323 SAT and 4000 SAT.
  • Trading volume has also significantly declined toward the second half of May 2019.
  • The Stochastic RSI suggests that price action will head further lower due to a bearish crossover in overbought conditions.

xrpbtc_may23-min

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