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Roger Ver Makes $4 Million Bet Over SegWit2x Hard Fork and Bitcoin’s Future

Bitcoiners who only recently joined the cryptocurrency ecosystem are likely overwhelmed by the amount of noise coming in from each side of bitcoin’s scaling debate. The debate recently had an interesting turn, as angel investor and CEO Roger Ver made a $4.3 million bet that the SegWit2x coins will ultimately be worth more than the bitcoins from the original blockchain, following the potential November hard fork.

The scaling debate has taken numerous turns, and even led to a hard fork on August 1, inwhich Bitcoin Cash was “created.” According to the New York Agreement, a 2 MB hard fork is
scheduled for November, but various community members recently started opposing it, forvarious reasons.

One of SegWit2x’s most vocal opponents if Litecoin creator Charlie Lee, as per his own wordsthe whole point of the New York Agreement was to prevent a hard fork on the bitcoin network, which already happened.

Recently, he added “NO2X” to his Twitter handle to show where he stands, and this weekdecided to put his money where his mouth is, and challenged three SegWit2x supporters,ShapeShift CEO Erik Voorhees, SegWit2x developer Jeff Garzik, and Digital Currency Group CEOBarry Silbert, to a bet. The bet was to trade 250 BTC from the original bitcoin blockchain, for 250 SegWit2x blockchain tokens following the hard fork. At current rates, this equals over $1 million.

At press time, despite being active on Twitter, none of the SegWit2x proponents answered Charlie Lee. However, in an unexpected turn, New York Agreement signatory Roger Ver, who embraced Bitcoin Cash, entered the challenge stating that he would “gladly accept” the offer. Charlie Lee swiftly replied with “Deal!”

Roger Ver’s words unleashed various similar offers, three of which he accepted, making it a 1,000 BTC ($4.3 million) bet for him, against four people who bet 250 BTC ($1.08 million) each, as the angel investor clarified on Reddit:

“It looks like the bet will be:

Me (Roger Ver) 1,000

Charlie Lee 250
Ben Davenport 250
Alex Morcos 250
Tuur Demeester 250”

Roger Ver later on revealed that he is still more bullish on Bitcoin Cash than bitcoin from the original blockchain, or the one created in the potential November hard fork. Either way, he pointed out that altcoins have been gaining a lot of value due to bitcoin’s scaling debate.

Be that as it may, the bets were made and, as Charlie Lee put it, as they’re public figures, their word is their bond. Only time will tell who wins, and who regrets making the bet.

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The Dawn of Bitcoin and Cryptocurrencies on Wall Street

In the Era of digital economy and the fourth industrial revolution, in a dawn of completely new monetary system, in the age of globalized internet economy, people yet don’t have a real appreciation for how important and huge the idea and reality of crypto assets really is.

Unbelievably the similar situation is also on Wall Street with it’s very slow, traditional respond to such a fast and massive changing in business environment which will have impact on every kind of industry and every aspect of human life.

Lately the trace of actions in the right direction we are seeing in a couple of companies on Wall Street who have embraced digital currencies and as a result of that their share price surged.

According to Blomberg these kind of companies which became aware of the chances on embracing “digital technologies” or Bitcoin are the newest Wall Street fad.

Share price rise of 15 percent on GOLDMONEY who offered to it’s clients trading and storing of several cryptocurrencies in insured wallets was direct result of such digital money policy.

OVERSTOCK, who is managed by a crypto enthusiast Patrick Byrne also shows a rise in share price and market cap after announcing a digital currency trading platform.


As cryptocurrencies become more and more spendable, anytime and anywhere,

as blockchain based cryptocurrencies will become central to global financial system,

as Bitcoin and other cryptocurrencies multi million dollar industry volumes, are soaring in almost every nation-state,

as they are seen particularly suited for the demands of an ever-changing world with massive popularity and availability across all continents.

There is no question “if” but “when” the digital revolution will hit with a full swing to the Wall Street, and sooner than later we will witness as more and more companies will join this wild and excitement ride of digital revolution to the benefits of investors.

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Ethereum Taking Over: South Korea Running the Show

The growing number of active development, domestic projects and communities, the second largest Ethereum market – South Korea is turning into a supportive power-backbone for the complete network.

Going in a timeline row, first on Sep 21 South Korea took the second place in Bitcoin trading volume replacing (as expected) China.

This week, the largest in history Ethereum meetup ever held was taking event in Seoul with speakers from Casper, Plasma and OmiseGo. It sold 1,000 reservations and 800 on the waiting list, which resulted with the first Ethereum gathering including over a thousand attendees. Very respected and well-known figures like Vitalik Buterin, Ethereum Foundation researcher Karl Floersch and OmiseGO managing director Vansa Chatikavanj attended the event as speakers.

Potential ICO Ban

Yesterday, South Korean officials and regulators of the Financial Services Commission declared out plans to band domestic ICOs (Initial Coin Offerings). Keeping in mind that the particular branch of the ‘ethereum industry’ is a majority in the market, from panic many sold Ether which put pressure on the value and it started declining.

However, on a quick note the recovery on the second session brought the pair ETH/USD above $300 as per today with 3.00% gain on the last 24-hours. Even that the SK part of the global-scale market dropped from 33 to 32 percent, the South Korean still had the second place safe for them.

The majority of traders in the South Korean Ethereum market are speculative investors and tend to be largely influenced by any movement in the industry that could lead to a decline in Ethereum price. However, a fairly large portion of investors are avid supporters of Ethereum as a technology and an infrastructure for decentralized applications.

One significant factor that will play a role on the market capitalization and price of Ethereum and its technology, is the performance of decentralized applications that will be evolving in the upcoming years. This was supported by the co-founder Vitalik Buterin in an interview with JoongAng – finance news outlet in South Korea. Buterin did note out that it might take 2-5 years for the Network (ethereums) to scale to a point in which the above mentioned applications could be sustained and launched with millions of users.

There are many multi-billion dollar conglomerates and financial institutions in the Ethereum industry developing decentralized applications and platforms on top of the Ethereum protocol. The emergence of efficient and innovative scaling solutions will create a better environment for decentralized applications and will allow highly anticipated projects such as decentralized cryptocurrency exchanges and marketplaces to evolve.

This kind of mindset and support (community enthusiasm) about Ethereum in South Korea, could lead the country to become a major factor on the impact the blockchain could have. As Buterin noted in the interview with JoongAng in the upcoming years, applications of Ethereum in a variety of industries will be tested and implemented.

“I would say that Ethereum’s main benefits are in its generality and in its utility to many kinds of industries. There are applications in finance, identity, supply chain tracking, health care, energy and many other areas. This is a result of Ethereum deliberately being designed as a general-purpose programming platform.”

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Japan Issues Cryptocurrency Exchange Licenses

In stark contrast to its neighbors China and South Korea, who are increasing efforts to ban ICO’s and the trade in digital currencies, The Financial Services Agency (FSA) in Japan approved 11 companies to operate cryptocurrency exchanges in the country.

Exchanges are now allowed to operate without a license up until this point but regulating the industry will aid in the fight to combat fraud, while still keeping innovation alive.

FSA officials say:

“With the new regulation, Tokyo aims to balance the need to protect investors with the need to support fintech innovations.”

To obtain a license, companies have to adhere to a number of strict requirements, including segregation of customer accounts and building strong computer systems.

Industry officials believe that this move will further strengthen Japan’s position as the top Bitcoin trading hub, along with the government’s recognition of Bitcoin as official legal tender back in April this year.

It can also be seen as an effort to avoid another Mt.Gox scandal. The Tokyo based Bitcoin exchange was the biggest in the world until $480 mln went missing and founder Mark Karpeles decided to cease operations back in 2014. He stood on trial for embezzlement and data manipulation.

The FSA said it is reviewing a further 17 license applications from hopeful exchange operators seeking approval.

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Why Europe is Fertile Ground for Blockchain New Industrial Revolution

The first industrial revolution, the transition to new manufacturing processes, and the second industrial revolution, the technological revolution, both started in Great Britain and then spread through Europe before reaching the US and beyond.

Both changed the world deeply, at its roots. The next industrial revolution is happening now, in the cradle of Europe, and it will change our world more than we can imagine.

End of centralization

The world of financial technology is changing. The world itself is changing. The unnatural centralization of technological knowledge and capital in limited geographic areas is coming to an end. Knowledge, technology and money are being decentralized.

The crypto-economy is allowing for the emergence of new, decentralized business models and Europe is poised to take a leading role in the emerging distributed revolution. European companies have become creators of this exciting new era of the crypto-economy, the first organizations building bridges between the old and new economies.

The European regulatory framework, a pillar of the Old World, is fertile and ideal for fostering this new paradigm of distributed innovation. The EU’s passport system allows international cooperation and trade between EU financial companies with a minimum of regulatory burden. This is especially important for the growth of a technology in its infancy, where the key formula for success is “innovate first, regulate second.”

Europe gets ahead

Within Europe, there are stand-out examples of governments actively supporting and accelerating the use of Blockchain technology.

Estonia, for example, is using Blockchain to secure its citizens’ medical records, create an e-residency program and implement an e-voting system.

Switzerland is firmly establishing itself as a major Blockchain hub, with four of the five largest token sales having taken place there.

Slovenia also stands out in the EU Blockchain world, hosting successful Blockchain companies such as and Viberate, which is working closely with the Slovenian government to develop a sound regulatory framework.

US lagging

For several reasons, the US is noticeably lagging behind the EU in the Blockchain space.

SEC regulation is outdated and overly broad. Unlike the EU passport system, US fintech companies have the added compliance burden of being forced to apply for licenses in every state in which they plan to conduct business.

Local legislation also stifles innovation and blocks new companies from entering the space. In 2015—when the Blockchain industry was much smaller—at least ten Bitcoin companies stopped conducting business in New York State when regulators introduced the costly and restrictive “BitLicense.”

These models are outdated; a new system of rules and legislation is needed for the digital age.

VC and Europe

The traditional venture capital funding structure has never worked well in the EU.

Because Blockchain companies in the EU do not have the VC world as competition, the path is clear for a new, distributed form of funding to take root.

Smart, responsible legislation that increases investor confidence will only strengthen Europe’s Blockchain industry, but care must be taken not to stifle innovation or create unnecessarily high barriers to entry for new blockchain companies to emerge.


The Blockchain industry is young, but a robust framework for the self-regulation of serious Blockchain businesses is already being cemented.

Best practices are being standardized. KYC/AML compliance is a major hurdle for decentralized technology, but identification and compliance technology is improving at a rapid pace. Blockchain analysis tools such as Chainalysis are maturing, allowing companies and regulators to more easily monitor token value sources and flows.

Most serious Blockchain companies are already using these tools to go above and beyond the standard KYC/AML legislation already in place in most jurisdictions.

Thanks to policy foresight and initial regulatory restraint, the internet has revolutionized nearly every aspect of human life.

Policymakers today must show that same wisdom.

Governments and regulators should avoid undue restrictions, support a predictable, consistent and simple legal environment and respect the “bottom-up” nature of the technology and its development in a global marketplace.

Taking the lead

As the US-led the Internet revolution, Europe will lead the Blockchain revolution.

The EU will recognize the unique potential of Blockchain technology.

The Internet enabled the near-instant transmission of digital copies. Bitcoin demonstrated that unique representations of value—not digital copies, but digital originals—could be transferred quickly and cheaply around the world. The ability to create and transfer digital originals (not just currency, but anything that can be represented digitally) is the true value of Blockchain technology.

The first step toward effective regulation will be identifying new token-based asset classes. Once these new asset classes are underway and defined, regulation will follow, but it must be designed in a way that does not kill innovation.

Models for responsible regulation include capped ICOs and regulatory sandboxes, which are already in place in some jurisdictions.

With sensible regulations and oversight, Europe’s Blockchain industry will only continue to grow. Focusing on innovation first will be key to avoiding the stifling of innovation that can accompany the regulation of a burgeoning field.

With its passporting system and vibrant Blockchain community, the EU is uniquely positioned to spearhead—and profit from—the decentralization movement. As David Suzuki said:

“Powerful technologies have grave consequences that we may not know about, until later. Always surprises.”

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NEO Economy and Unique Price Development – Recovery on Its way: Sep 30 Analysis

NEO (“Antshares” or even known as China’s Ethereum) is the most successful virtual currency based in China and the first open source blockchain there.

Very alike to Ethereum’s network – NEO uses a general idea of the blockchain and runs smart contracts on it. Smart contracts – Self-automaticaly executable terms of a specific contract.

“Blockchain technology provides us with a decentralized, tamper-resistant, highly reliable system in which smart contracts are very useful,” NEO’s founder Da Hongfei told TechNode.

To begin with, NEO creates a unique digital economy around it’s token. NEO is a full integration of digital assets, digital identity, and smart contracts, creating a fully digitized economy that will be transparent and safe, and make money laundering and underground dealings difficult or impossible. Because of the ability of the new NEO blockchain system, companies and developers will be seeking to use NEO for various applications. The proliferation of smart contracts will make investment on the NEO platform simple and safe.

Unlike Bitcoin, which only allows for the cryptocurrencies and no programming, NEO is very simple to learn and understand (unlike Ethereum), and has the ability to work with nearly every (90%) programming language available. NEO uses compilers compatible with Java, C#, and .NET, and will support Python, Go, and others in the near future.

When it comes to the price development that have taken place now, NEO is on a positive surge reaching for recovery. It has been two weeks since the price dropped to $13.42 while now it is trading at around $32.16 with 10.49% increase in the last 24-hours.

neo prediction

The NEO price surged on Monday after Dutch financial news outlet Het Financieele Dagblad published an interview with NEO founder Da Hongfei. He speculated that a future collaboration between NEO a Gov.

On top of that, the decision that Bitfinex did take for adding NEO on its platform and being able to pair with USD, BTC, and ETH did put a surge of 50% at the beginning of the month rolling. The event would add liquidity for NEO and open the gates for exposure to the major USD market.

NEO now has passed Monero by market capital taking the 9th position with $1.59 bln and a trading volume of $55 mln in the last 24-hours.

Of great importance and note taking before taking any NEO-trading action, is to see if the price creates stable trading ground above the $32.00 level to continue increasing.

The specific level did before act as a support and now as a resisting barrier which needs a successful close above for upward continuation. A change in the price development is at the ‘door-step’ as the closing-triangle pattern is near the above mentioned mark.

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Why Blockchain Technology is Perfect for Fighting DDoS Attacks

Technological innovations with Blockchain technology are popping up all the time. From real estate to data services, these applications are excellent use cases for how Blockchain technology will reshape the face of digital information.

A recent development in the Blockchain technology space may be used to put an end to DDoS (Distributed Denial of Service) attacks, according to These attacks use mass requests to render a website useless to its intended users, and cause affected sites to be knocked offline.

Centralized vs. decentralized

Current systems use centralized servers to try to absorb the large volume of spam information that can result in DDoS. However, the nature of DDoS attacks makes the bandwidth required to process this much data almost insurmountable.

A decentralized platform allows users to rent out their bandwidth, which can then be pooled to allow for substantially greater amounts of data processing, greatly reducing the risk of DDoS success. According to

“By using Blockchain, Maryland-based Gladius is creating a system that would allow people to rent out their unused bandwidth, so that it can be used to absorb malicious DDoS traffic and mitigate attacks.”

The decentralized platform provides a system whereby pooled bandwidth can be accessed and utilized in ways far superior to single-server centralized models, where bandwidth is limited.

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Zk-Starks? New Take on Zcash Tech Could Power Truly Private Blockchains

“A myth,” that’s what one developer called it.

At a meeting of the team behind the monero cryptocurrency last week, suspicion was high about a new item on the roadmap – so-called “zk-starks.” Described as a “trustless” solution to a problem that’s long prevented anonymous blockchains, to some of the developers assembled it sounded like fantasy.

But while the blockchain industry is certainly no stranger to outlandish claims, the cryptographic technique is perhaps setting records in the levels of eyebrow-raising it has triggered. Heralded as a more secure version of zk-snarks, the creators of zk-starks claim their cryptography can remove the need for the contentious “trusted setup” necessary with the previous iteration of the idea.

Stepping back, zk-snarks are an evolution of a cryptographic technique first described in the 1980s. While seemingly complex, the idea is simple at heart – zero-knowledge proofs enable parties to verify if a statement is correct without receiving anything more than a true-or-false statement. In the blockchain world, the idea has become most often associated with zcash, the first large-scale blockchain that baked the cryptographic tool into its protocol layer.

But, while heralded at the time as a breakthrough, the platform’s use of zk-snarks left room for improvement. For one, there’s the fact that there’s no way to tell with any real certainty that the elaborate procedure used to set up the cryptocurrency wasn’t in some way compromised.

A year after the launch, the zcash team is still putting out audits on the matter. Yet as critics point out, their results, while helpful in mitigating doubts, can’t ever be conclusive.

Should zk-starks be able to remove this roadblock – the impact could be felt far and wide. While there may be little that seems to unite the diverse developers working on private and public cryptocurrencies, privacy has emerged as perhaps a universal touchpoint.

Groups as diverse as banking consortium R3 and ethereum have had zk-snarks on their list for exploration, despite their different needs and technologies.

And zk-starks could find a similarly broad reception – the new technology promises to be cheaper, faster, more scalable and more secure than zk-snarks.

Slowing emerging

But despite the possibilities, little information about zk-starks has been published to date.

First presented at an ethereum meetup back in January, the team behind the tech – comprised of researchers associated with zcash – are still working to complete the code. To date, just one aspect, called the FSA algorithm, is available online.

One of the team’s more public figures is Eli Ben-Sasson, a professor at the Technion Institute of Technology in Israel, who helped pioneer zk-snarks back in 2015 and whose work draws on a long lineage of computer scientists dealing with zero-knowledge proofs.

Speaking to CoinDesk, Ben-Sasson said he was “a big believer in transparent proofs,” and has been “passionately researching” the topic for 15 years. Still, he summarises the challenge he faces in building zero-knowledge designs as one that’s core to cryptography.

As he explains:

“Hiding information is very easy using encryption. The hard part is proving and maintaining integrity under the veil of encryption.”

Perhaps because of this, Ben-Sasson admits the issues inherent in the zk-snarks used to establish the zcash blockchain, believing the technology is too risky for valuable or business-sensitive information.

With zk-starks, however, he sees room for big improvements.

The stakes

One of the key problems zk-starks can solve relates to the need for zero-knowledge blockchains to create a “master key,” according to Ben-Sasson.

In the case of zcash, it’s believed the key was destroyed, but the implications that it could be out there are chilling. For one, this key would allow a bad actor to forge false payments and completely ruin the integrity of the blockchain. Further, in order to destroy the key, a coordinated effort is required in what is known as the trusted setup.

But this setup is complicated to perform securely. For one, it’s difficult to verify it really happened, because it can’t have any witnesses (anyone viewing the ceremony could reversibly generate the key).

When zcash performed its ceremony, the team went to great lengths to ensure it wasn’t compromised, but it’s next to impossible to completely secure. And for a high-profile entity like a bank, there’d simply be too much interest in trying to sabotage it.

Ben-Sasson said:

“There’s going to be a huge incentive for governments and central organizations to try a put their hands on this key that will allow them to write a cheque for any amount … with increased value there is increased incentive to attack.”

Zk-starks seek to remove this risk, and in the process, take a lot of the heavy machinery associated with zk-snarks with it. Unlike zk-snarks, zk-starks don’t rely on public key cryptography at all.

Actually, all zk-starks need to function is one algorithm similar to that performed by computers when mining the bitcoin blockchain.

However, while mining involves the same encryption pattern repeatedly, zk-starks use random numbers so the steps involved cannot be predicted.

The use of a single algorithm is minimal compared to zk-snarks, which by contrast relies on a cluster of the tools. The impact of is that while a zk-snark takes about 28 minutes and 18.9GB to compute, a zk-stark promises to reduce calculation time down to a fraction of a second, and storage down to 1.2MB.

Monero’s motives

And monero’s interest in the scheme, while early, is perhaps proof that there might be further development of the concept across blockchain communities.

One of the more innovative privacy-focused blockchains, monero uses entirely different cryptography than zcash based on a combination of stealth addresses and ring signatures. Rather than use zero-knowledge systems, the cryptocurrency offers privacy by heavily distorting information.

Because its system is well-functioning today, it arguably hasn’t had a need for zero-knowledge proofs, but the idea that the network could further toughen privacy measures is leading the developer team to consider it.

Currently, zk-snarks are being considered for sidechains which would increase privacy by allowing payments to occur from separate blockchains –and which would then self-destruct following the transaction.

But to implement the idea, monero would have to face the problem of the trusted set up – making the zk-starks concept an enticing one.

So enticing, in fact, that lead developer Riccardo Spagni, who has called zcash “a complete security farce” – seems willing to look past the rivalry toward a common goal. He describes zk-starks as “preferable” and told CoinDesk that monero will be looking to integrate the tech if and when it’s usable.

And they’re not the only ones who have problems will the trusted setup. If ethereum is to implement zk-snarks as formerly planned, it’ll have to run an equivalent of the zcash security ceremony – but one that can scale to thousands of participants.

Such complications show that the concept is one that meets a compelling need – one likely to be further developed in a new white paper published in the next year.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Zcash Company, the for-profit entity that develops the Zcash protocol.

Boy with jetpack image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

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South Korea is Evolving into an Ethereum Powerhouse

As the world’s second largest Ethereum exchange market, South Korea is evolving into an Ethereum powerhouse with a rapidly growing number of active developments, domestic projects and communities.

In a move that wasn’t surprising, on Sep. 21 South Korea has passed China in total Bitcoin trading volume.  

Earlier this week, the biggest Ethereum meetup in history was hosted in Seoul, with representatives and speakers from Casper, Plasma and OmiseGO.

Influential figures in the industry including Ethereum co-founder Vitalik Buterin, Ethereum Foundation researcher Karl Floersch and OmiseGO managing director Vansa Chatikavanj attended the event as speakers, introducing new developments and solutions in Ethereum such as Plasma.

The meetup was sold out with 1,000 reservations and 800 individuals on the waiting list. It was the first Ethereum meetup to host over a thousand attendees.

Ban on domestic ICOs by South Korean government, a minimal factor

On Sep. 29, the South Korean government and its financial regulator the Financial Services Commission (FSC) revealed its plans to ban domestic initial coin offerings (ICOs). Since the ICO industry is a major market for Ethereum, many traders panic sold Ether, which eventually led Ether price to decline by over eight percent.

But, Ethereum price swiftly recovered, increasing back to around $300 within seven hours since the announcement of the South Korean government was released. Although the market share of the South Korean Ethereum exchange market fell from 33 percent to 23 percent, South Korea still secured its position as the second largest market for Ethereum.

Speculative investors

The majority of traders in the South Korean Ethereum market are speculative investors and tend to be largely influenced by any movement in the industry that could lead to a decline in Ethereum price. However, a fairly large portion of investors are avid supporters of Ethereum as a technology and an infrastructure for decentralized applications.

At the moment, ICOs seem like the largest market for Ethereum. In the upcoming years, it is likely that the performance of decentralized applications will evolve as a major factor for the market cap of Ethereum. In an interview with JoongAng, a leading finance news publication in South Korea, Buterin emphasized that it could take two to five years for Ethereum to scale to a point in which decentralized applications with millions of users can be launched and sustained.

There are many multi-billion dollar conglomerates and financial institutions in the Ethereum industry developing decentralized applications and platforms on top of the Ethereum protocol. The emergence of efficient and innovative scaling solutions will create a better environment for decentralized applications and will allow highly anticipated projects such as decentralized cryptocurrency exchanges and marketplaces to evolve.

Ethereum powerhouse

If support and enthusiasm toward Ethereum in South Korea are sustained in the mid-term, it is highly likely that the South Korean Ethereum exchange market could evolve into an Ethereum powerhouse. As Buterin noted in the interview with JoongAng in the upcoming years, applications of Ethereum in a variety of industries will be tested and implemented.

Buterin explains:

“I would say that Ethereum’s main benefits are in its generality and in its utility to many kinds of industries. There are applications in finance, identity, supply chain tracking, health care, energy and many other areas. This is a result of Ethereum deliberately being designed as a general-purpose programming platform.”

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SEC Files Charges Against Two ICOs

The SEC has made good on its warning to ICOs regarding tokenization schemes as unregistered securities. The charges were leveled at REcoin and DRC (Diamond Reserve Club), both ICOs founded by Maksim Zaslavskiy.

Real estate coin scam

REcoin was initially touted as a coin offered with backing in real estate assets purchased with proceeds from the ICO. Zaslavskiy told investors that the company had a ‘team of lawyers, professionals, brokers and accountants’ that would complete the purchases, when in fact, no one had been hired.

He also indicated to investors that he had raised between $2 and $4 mln, when the actual figure was closer to $300,000.

Diamond backs

Zaslavskiy also sold coins within the DRC ICO scheme, telling investors that the company had relationships with diamond wholesalers who would sell to him at a discount. Investors were promised sizable gains from the diamond arbitrage process.

However, as with REcoin, the DRC scheme was simply a shell for taking funds from unsuspecting investors. Zaslavskiy had actually never done any business dealings with diamond sellers, nor was there any company business being transacted.

Proving the warning true

The SEC reiterated their warnings, both to investors and potential ICOs. To the public, the Commission made it clear that investors should beware, saying:

“Investors should be wary of companies touting ICOs as a way to generate outsized returns. As alleged in our complaint, Zaslavskiy lured investors with false promises of sizeable returns from novel technology.”

At the same time, the charges serve as a warning to other ICOs who seek to lure in investors with promises of returns. The SEC’s recent actions should serve as a strong warning that ICOs will be researched and targeted for prosecution unless they are careful about regulatory honesty.

The SEC has obtained a court order to freeze Zaslavskiy’s assets and is seeking repayment to investors as well as penalties, interest, and an order barring him from an officer or director position in the future.