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Chinese Central Bank Governor Defines STOs as ‘Illegal Financial Activity in China’

The governor of the Chinese central bank has stated during a summit that STOs are an “illegal financial activity in China.”

The People’s Bank of China (PBoC), the country’s central bank, highlighted the illegality of Security Token Offerings (STOs) in the country, English-language local news outlet South China Morning Post (SCMP) reports Dec. 9.

A deputy governor of China’s central bank, Pan Gongsheng, reportedly told a summit in Beijing “that ‘illegal’ financing activities through STOs and ICOs [Initial Coin Offerings]  were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.”

Gongsheng also said that if the government had not stepped in, the chaotic crypto market could have hurt the overall financial stability in China.

The central bank official pointed out that “the STO business that has surfaced recently is still essentially an illegal financial activity in China.” Gongsheng also reiterated the stance that cryptocurrencies are associated with crime:

“Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

According to the article, Gongsheng noted that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.”

The article also mentions that the chief of the Bureau of Financial Work, Huo Xuewen, warned against STOs about a week ago. He said:

“I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.”

On the other hand, blockchain adoption — the tech behind most cryptocurrencies — has been relatively embraced in China. As Cointelegraph recently reported, a Chinese Internet Court has started using blockchain to protect the intellectual property of online writers.

The legal basis of this development can be assumed to be the Chinese Supreme Court’s ruling from September, which established that blockchain can legally authenticate evidence.

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Infinity's End? $31 Million NEX Project Could Be Biggest Casualty of DLT Cuts

Project Infinity, launched in May 2017 by NEX Group (formerly ICAP), could be the biggest bloodletting the distributed ledger sector has seen to date, having cost roughly $31.7 million and hemorrhaged dozens of jobs, former employees say.

Spearheaded by Jenny Knott, former head of NEX Optimisation, the project had a grand vision of bringing the company’s entire post-trade services portfolio onto one interoperable blockchain architecture. However, NEX issued a profit warning in October 2017 and just two weeks later Knott left the company.

In a blow for the nascent project, the results statement specifically said the investment in blockchain had reduced margins by 4 percentage points.

Sources say a deal to sell the business to CME for $5.5 billion, announced by NEX boss Michael Spencer in March 2018, was a driver in the cost cutting at the firm.

A former NEX executive, who spoke on condition of anonymity, told CoinDesk: “They scaled it back significantly. [Spencer] was not going to invest another penny that wasn’t going to get him short-term revenue.”

A blockchain industry source who said his company had been hiring former staff from Infinity, went further, alleging the project had not just been scaled back but had actually been “canned.”

“They got rid of Knott and then they quietly canned the project about two months ago; 47 out of 50 staff were fired,” said the source.

CoinDesk spoke to five former NEX employees, who all confirmed the extent of severe staffing cuts, if not the specific figures. One reported that, in his particular division, nine out of 10 jobs were lost, adding that there were a few divisions like his; another affirmed the figure.

“The people doing the strategic work mostly all disappeared,” he said.

In terms of the spiralling cost of the project, one former employee said NEX made a mistake when it decided to make Infinity a “program,” which brought added costs and expectations.

“When you make something into a ‘program’ it means hiring all these people who plan things and do tons of spreadsheets and so on,” said the former employee.

“There was an enormous group of people doing business requirements, managing user groups for opinions. Some of that stuff is necessary, but not at the scale it was done,” he continued.

Another cost factor related to Traiana, the division of NEX most closely linked to the project, they said, which was doing a upgrade of its infrastructure that ended up on the project’s books, thus increasing perceived costs.

It’s alive

Still, NEX itself is disputing the claims of former staffers.

Andres Choussy, CEO of Traiana, said Project Infinity had absolutely not been shelved. On the contrary, he said it has entered the execution stage in a live environment with blockchain builder Axoni. However, he admitted the project had been scaled back.

“[Infinity] had a vision; the vision is a sound vision which we still would love to try and get to one day. But we are being realistic,” said Choussy.

“You see this from a lot of the DLT initiatives, moving the market into something completely new is not an easy task, so what we have done is focused our efforts into specific applications, specific use cases that really are plan-driven,” he said.

NEX could not comment on the number of jobs shed at the project, but confirmed the number of staff involved had been reduced. No specific numbers were provided by the company.

Choussy said the DLT part of the project had been narrowed down to focus on post-trade FX.

Indeed, NEX was a returning investor in the recently announced Series A funding round in Axoni, which is said to be building “a massive FX post-trade data network.”

NEX is also an investor in DLT provider Digital Asset and was one of the early members of the Utility Settlement Coin (USC) project, although a source involved in USC said they have fallen out of communication with the group.

Blockchain blues

A former engineer on the project painted a picture of the tough challenge to meet the use case requirements with DLT, followed by a missed opportunity to get a product out the door.

Axoni was selected at the outset because it provided a unique partitioning capability that few of the other vendors out of the box did, said the former NEX engineer. Throughput had been an issue to begin with but transaction processing speeded up as the project evolved, he said.

In addition to the work done with Axoni, the engineer said a Hyperledger implementation was built which achieved privacy partitioning by creating different networks, as well as an internally constructed ledger, “basically a glorified replication scheme, but with cryptographic proofs and enforced privacy controls” which could handle very high throughputs.

“We were really right at the razor’s edge of getting this stuff out the door when there was a just a massive set of layoffs and the entire team in London was let go,” he said, adding:

“The politics around the situation changed, also the company was preparing to try to make things look good for the CME acquisition.”

Machine learning

Infinity’s DLT architecture was to anchor and immortalize an extremely rich data set coming from multiple parties – brokers, banks, buy-side – which would serve as a backbone for a one-stop financial cloud offering machine learning and AI as a service on top.

In the end, this became a stinging irony. An anecdote recounted by one former employee told how the day after the entire machine learning team was laid off, Spencer returned from Davos enthused about machine learning and AI and asking what NEX was doing in that area.

A proposal for a firm-wide AI strategy was even put together, said the ex-staffer.

Opinion seems to be divided about how well the remains of Project Infinity’s blockchain might fair once NEX becomes the property of U.S. exchange giant CME. The former NEX technology team member said the original vision of an all-purpose post-trade ledger with data analytics platform still has great value and may even be the “crown jewels” in CME’s eyes.

However, the former executive was doubtful about Infinity’s progress, saying, “CME have got their own distributed ledger strategy.”

CME Group declined to comment when reached.

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The Trick to Selling Blockchain Solutions? Don't Say 'Blockchain'

When Adrian Patten, co-founder of FX blockchain project Cobalt, pitches to banks these days, he chooses his words carefully.

In a move that may do much to validate Gartner’s finding this week that blockchain hype cycle is entering the so-called “trough of disillusionment,” Patten admitted he rarely brings up the technology, choosing instead to focus on the cost savings Cobalt can bring without the benefit of some of the most popular buzzwords of the last few years.

“We try not to mention blockchain or DLT too much in case it complicates matters,” he said.

In Patten’s view, many financial firms have taken a “me too” approach with blockchain, exemplified by things like the herd of banks joining the R3 consortium. In addition, most are probably invested in too many proofs-of-concept, he said.

“They tend to think, if everybody else is in it, they ought to be in it, just in case a board member asks them what they are doing in blockchain,” he continued.

The result is that people have rushed into DLT looking to use the technology rather than considering its process requirements, message requirements and whether it actually works, added Patten. But Cobalt, which created custom distributed ledger tech for its particular post-trade use case, is not alone.

There are other companies out there with live systems that are actually doing stuff, such as Baton Systems, also in the FX space with DLT, but who are using it less publicly, or at least not letting the technology dominate their messaging.

Seeing successful firms without blockchain front and center could be viewed as refreshing, or perhaps a source of misgiving. Forrester Research projects there will be a pruning, with 90 percent of blockchain projects with a flabby business focus ultimately shutting down in the coming years.

As such, Martha Bennett, principal analyst at Forrester, went so far as to say that those who persevere will likely come to understand that succeeding “isn’t really about technology, but about business.”

After the gold rush

Ready to embrace the disillusionment, some firms don’t mind even admitting they used the term “blockchain” when in fact they were using some of its key elements, without the hype mantle, for quite some time.

Back before the bitcoin white paper was released, Guardtime was developing its Keyless Signatures Infrastructure (KSI) which uses concepts like linked time-stamping (integral to bitcoin) to eliminate the need for trusted third parties or cryptographic keys to verify data.

As the blockchain gold rush gathered pace around him, Guardtime CEO Mike Gault said he got caught up with the perceived benefits of aligning his company with the blockchain movement.

“We called ourselves a blockchain company unashamedly. We were sitting in conferences listening to all this blockchain mania starting to happen and we looked at each other and said, ‘Wait a minute, isn’t this what we do?'”

Guardtime, which boasts a broad range of users from shipping giant Maersk to the U.K.’s NHS (National Health Service), is very different from ethereum, noted Gault, but the end result is the same: a single source of truth and immutability.

Gault also derided “crypto zealots who think everything has to be decentralized,” a view which he says is “totally irrelevant for enterprise.” “We will have no problem doing a quick marketing switch when ‘blockchain’ becomes a negative, in order to return focus to our own category of KSI technology,” Gault continued.

“There will be a turning point, especially in enterprise where there are zero production use cases. People are going to see the emperor has no clothes,” he said.

Cobalt’s Patten also thinks the space is being driven in a wrong-headed fashion by “evangelists and fundamentalists.”

“The idea that every message and every part of a life cycle is going to be encrypted and decrypted when it already exists in hundreds of databases in clear text format is somewhat naive,” he said.

Taking a hard-headed business approach, he called Cobalt a product rather than a project and said, “Unless we are cutting costs by 80 percent, people are not going to move away from incumbents. We have to be much cheaper and better.”

A bank’s perspective

So how does the idea of side-stepping the blockchain evangelists resonate with a bank’s blockchain department? Turns out, the sentiment appears to be trending.

“That is exactly what we would like to see,” said Ville Sointu, head of emerging technologies at Nordea Bank. “It should be business first. We have now moved to a phase where indeed we should see more companies coming up with a clear business case and having the fact that it’s a blockchain or a DLT network in the background.”

Sointu is perhaps not a typical blockchain evangelist, however.

After being brought in at Nordea midway through last year, he gathered the blockchain team under one roof and shut down almost all the prototyping. Nordea has narrowed its efforts down to We.Trade, plus a real estate pilot with the Finnish government, and a corporate identity blockchain, which has now passed the proof-of-concept stage.

“I don’t think we need another proof-of-concept for something like KYC,” said Sointu. “We don’t need another international payments PoC; we don’t need another FX PoC. These things have been proven.”

Asked if he has started to see a trend where fintech vendors mention the business case first and blockchain second, Sointu said, “Maybe this is a call to action. But right now we don’t see too many of those.”

“Ninety-nine percent of the companies that come to talk to us say, ‘We have the world’s most scalable blockchain network and here are 100 use cases that we can use the technology for,'” he said, concluding:

“Those are not helpful at all for us.”

Silent businessman image via Shutterstock

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Bittrex and Invest.com Partner on New Crypto Trading Platform

Bittrex, a U.S.-based cryptocurrency exchange platform, and invest.com, a fintech startup based in London, are set to launch a new EU-focused crypto trading platform.

The collaboration, announced Thursday, aims to provide cryptocurrency investors with “the ultimate platform to trade cryptocurrency in a safe and secure environment,” according to a press release.

The firms will leverage Bittrex’s exchange technology and invest.com’s portfolio management experience to develop the new platform, the two companies said.

Bittrex CEO Bill Shihara said in a statement that the companies hope to “increase customers’ access to some of the world’s most innovative blockchain projects and further drive adoption of this revolutionary technology.”

Shihara added that the establishment of the exchange platform is only one part of the partnership as it will soon expand globally “through new services and strategic partnerships.”

While the platform will initially serve customers in the EU only, it also plans to offer services to other regions and countries with qualifications in future.

Itai Avneri, a spokesperson from invest.com, said:

“Our goal is to become the most reputable platform in the EU and later in numerous countries across the globe.”

Bittrex website image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Court Says India's Crypto Exchange Bank Account Ban Will Continue

India’s highest court has declined to end a ban enacted by the national central bank that bars the country’s crypto exchanges from doing business with regulated financial firms.

Bloomberg reported Tuesday that the Indian Supreme Court, led by Chief Justice Dipak Misra, said that the Reserve Bank of India’s (RBI) prohibition on providing services to crypto-related businesses will “remain implemented.”

The decision continues the ban, announced in April 2018, when the RBI said that financial institutions would not be allowed to work with exchanges or related firms. It gave the banks three months to exit that market, making July 6 as the official start date for the ban, as previously reported by CoinDesk.

The policy shift prompted moves by members of India’s cryptocurrency ecosystem to launch a series of legal challenges. But, as CoinDesk reported on May 22, the Indian Supreme Court barred all other courts from accepting petitions, after five similar petitions were filed against the RBI. At the time, the Supreme Court said it would hold a hearing on July 20.

According to Quartz, the hearing was held on July 3 instead of July 20 after the Internet and Mobile Association of India (IAMAI), which counts bitcoin exchanges as its members, requested an early hearing.

The RBI claimed during the hearing that cryptocurrencies, including bitcoin, cannot be treated as currency in India as the country’s law requires coins “to be made of metal or existing in physical form and stamped by the government.’

The Supreme Court fight isn’t over yet, as the July 20 hearing is still set to take place.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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‘Coinbase Custody’ Targeting Institutional Investors Now 'Officially Open for Business'

Major U.S. crypto exchange and wallet provider Coinbase has announced that its digital assets custodian solution for institutional investors is now launched, in an official blog post July 2.

Coinbase first revealed its plans for its ‘Coinbase Custody’ venture in late 2017, saying at the time that it was seeking to address what it considers to be the “number one” concern of institutional investors, namely, security.

As per today’s post, Coinbase has already been storing over $20 billion worth of clients’ crypto over the past six years, but its new custody offering will notably be secured through an SEC-compliant and FINRA-member independent broker-dealer, Electronic Transaction Clearing (ETC).

The move thus explicitly targets institutions’ concerns to abide by terms set by U.S. regulator, the Securities and Exchange Commission (SEC), as well as Wall Street’s Financial Industry Regulatory Authority (FINRA).

Today’s launch means that institutions from both the US and Europe can now store their crypto assets with Coinbase Custody, which currently supports Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). Coinbase says it plans to continue adding support for more assets, as well as to open its service to Asian institutions, “by the end of the year.”

The company says that Coinbase Custody will employ a range of security measures, including “on-chain segregation of crypto assets,” “offline, multi-sig and geographically distributed transaction protection” as well as “robust cold storage auditing and reporting.”

Alongside cold storage, reportedly pending regulatory notifications, the company plans to add “secure, segregated hot wallets” and scheduled withdrawals to increase flexibility.

Notably, today’s post suggests that Coinbase is planning to enable its new institutional clients to “to participate in the crypto ecosystem through proof of stake and distributed governance,” although further details of these plans are not outlined.

Coinbase Custody is the first to launch out of a suite of new products revealed by Coinbase in May, which it has said could “unlock $10 billion of institutional investor money sitting on the sideline.”  

The exchange is in fact attempting to become a fully SEC-regulated broker dealer itself via its recent acquisition of a financial services firm, as well as pursuing its own federal banking license.

In mid-June, Coinbase’s Index Fund opened to large-scale, U.S. resident “accredited” investors, for investments of between $250,000 and $20 million.

Coinbase has also recently revealed plans to widen its user base to the Japanese crypto market. Amid this flurry of activity, a recent inquiry by Mashable uncovered 134 pages of complaints filed by Coinbase users and leveled harsh criticisms at the company for allegedly being underprepared and overwhelmed by the pace of its growth.

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VeChain Arrives: What to Know About the $1.5 Billion Blockchain for Business

Yet another top-20 cryptocurrency has officially released live software.

As of 0:00 UTC Saturday, the first block on the VeChain blockchain, whose token supply is valued at $1.46 billion at writing, has been mined, marking a milestone for a project that aims to be among the first to convince enterprise businesses to adopt code tied to a crypto asset traded on a public market.

Seeking to address obstacles with public blockchains like ethereum and bitcoin (namely alleged governance inefficiencies, economic model issues and application design difficulties), the project also hopes to eclipse solutions like Hyperledger that have so far been the go-to platforms for business.

In short, founded by former CIO of Louis Vuitton China, Sunny Lu, VeChain hopes to be the first to put “real business” applications on a public blockchain.

“Right now, if we look at all the existing public blockchains, there is a common economic model which is from bitcoin that tries to motivate more people to join the network,” Lu explained.”The cost to use public blockchains is linked to the token valuation on the blockchain directly.

For the execution of more exotic blockchain features like smart contracts and decentralized applications, Lu argues this is a problem.

He told CoinDesk:

“It kind of generates a typical paradox which is, the more utility, the more use cases, the higher valuation of the token. It also means a higher cost to use the blockchain, and that means no one will use it anymore if the cost is too high.”

To solve this, VeChain uses a twin token system in which its VET asset functions as a store of value, and the VeThor token represents the underlying cost of using the blockchain. (The project is not alone in using such a system. Both Neo and Ontology also support twin tokens that seek to break up user behaviors.)

Still, another means by which VeChain has sought to differentiate is by emphasizing what Lu calls “ready to wear” software that reduces development time and costs.

“All of the public blockchains running in total decentralization mode are like naked blockchains to most enterprises,” Lu said. “Because it’s just open source for the core codes, if you want to build up an application, you’ve got to do everything by yourself starting from scratch.”

Early backing

But perhaps what distinguishes VeChain from its competitors is the extent to which enterprises are already said to be involved in that process. VeChain boasts partnerships with automobile manufacturers BMW and Groupe Renault, and global quality assurance and risk management company DNV GL.

Some partners, like DNV GL, have even taken on a more technical role in the project’s execution – specifically within its governance system, a key part of VeChain’s pitch to businesses.

Notably, the project uses a system called “proof-of-authority” (PoA) to govern how its blockchain rules can be altered, which Lu says offers enterprises “a balance between decentralization and centralization.”

VeChain is not the first project to attempt to walk this line.

EOS and Tron have also experimented with new governance models in which software users are positioned as “community members” that can use their tokens to elect delegates (nodes) to validate blocks.

In this way, VeChain’s consensus system has two components. The first, what Lu refers to as the “decentralized part,’ is that token holders have the ability to vote, and that the weight of their vote corresponds to the number of VET tokens they hold and whether or not they complete a KYC process.

Some token holders, like DNV GL, also run nodes, and to do so, must meet certain requirements.

“Every node will have specifications, not only about hardware, but about the security level and process, how to manage your nodes and your contribution to the VeChain community,” Lu told CoinDesk.

All voters use their “voting authority” to have a voice in decisions about technical modifications to the blockchain and to elect VeChain’s “Steering Committee.” This is what Lu calls “the centralized part,” which is the seven seat governing body of the VeChain foundation and its blockchain.

“Those seven seats of the committee, we will execute any decisions coming from the voting process, even including who should be next in the Steering Committee,” Lu said. “By doing that, you maintain the publicity or transparency of a decentralized part and also maintain the efficiency of a centralized part.”

Finding a sweet spot

So, while decentralization maximalists have been critical of the DPoS and PoA systems, businesses don’t seem to share their concerns.

Renato Grottola, senior vice president of digital transformation and M&A at DNV GL, told CoinDesk that he believes VeChain’s governance model represents “an optimal balance between centralization and decentralization, reducing uncertainty related to future developments.”

Likewise, Danny van de Griend, CEO of MustangChain, a startup which intends to use VeChain’s technology to create a more transparent equine industry with better data accessibility agrees.

“If you want to have it fully decentralized, it can become a mess,” he told CoinDesk. “You need a good balance between centralized and decentralized.”

De Griend continued:

You don’t have to think about the basics anymore. Those basic protocols are ready to be used, so you can think more now about, ‘What can I develop now for the stakeholders?'”

Grottola added that this makes it easy for DNV GL to develop supply chain-specific solutions,

“VeChain has been conceived as a platform; it combines blockchain technology with IoT and AI thus offering the possibility to develop supply chain solutions both at product/asset and enterprise level.”

More to build

But the launch Saturday won’t mark the end of VeChain’s development.

While Saturday marks the creation of the genesis block and the start of the generation of VeThor tokens, the blockchain won’t be fully functional for some time. Before the technology can be truly live, VeChain must migrate its tokens from the ethereum blockchain to its mainnet, a process scheduled for July.

Likewise, Lu acknowledges that mainnet launches, in which large sums of cryptocurrency are handled and transferred by developer teams, always come with risk.

“We have some enemies for sure,” Lu said. “People will try to attack.”

For this reason, he added that VeChain has enlisted several cybersecurity firms to conduct testing on its code prior to the launch. Likewise, the project has an “emergency response team” (ERT), which will “monitor the entire mainnet launch” to respond to issues.

According to Grottola, DNV GL is confident that VeChain’s measures will be sufficient to ensure a smooth launch.

“This is a normal practice in business, [but] not so common for crypto startups. That kind of structured approach has been one of the key criteria for choosing the VeChain initiative among other concurrent platforms,” he said.

Yet, partners are optimistic. Kurt Connolly, senior vice president of business development at sports and gambling platform Decent.Bet, which plans to use VeChain’s technology, said the company thinks the odds of a successful launch are in VeChain’s favor.

He told CoinDesk:

“We’re realists. We know that the next ‘perfect’ product launch will be the first ever ‘perfect’ product launch. There are always bugs to fix here or there.”

Sunny Lu image via VeChain

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Japan's Finance Minister Balks at Changing Crypto Tax Rules

Japan’s top financial official is cautious about the idea of his nation changing how it taxes gains from cryptocurrencies.

During a meeting with the budget committee of the Upper House on June 25, Senator Kenji Fukimaki asked whether Japan’s tax policy on cryptocurrency profits could be changed from its current “miscellaneous income” classification to “separate declared taxation,” Reuters reported. Taro Aso, the deputy prime minister and minister of finance, said he was cautious about making such a change.

Aso explained that, in his view, it was “doubtful” that the general public would understand such a change. He cited the “international nature” of cryptocurrency as one reason why Japanese residents might dislike a change in tax classification. The finance minister also said he was unsure about the “tax fairness” of implementing such a change.

At present, profits earned by investors in cryptocurrency can be taxed between 15 and 55 percent, due to the miscellaneous income rules, according to Bloomberg. Stock profits, which are treated more like separate declared taxes, are taxed at roughly 20 percent in the country.

While the finance official has doubts about cryptocurrency taxation, he still expressed support for blockchain technology in general, saying they have uses apart from cryptocurrencies.

Editor’s note: Statements in this article have been translated from Japanese.

Taro Aso image via Shutterstock

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Crypto Tourism Is Growing – For Better or Worse

Cryptonation. Blockchain Cruise. CryptoCribs.

These are just several of the names of tourism programs focused on the blockchain industry, from luxury cruises to Middle East startup tours, that are part of a growing trend targeting crypto-curious travelers.

The Blockchain Cruises, organized by the tourism arm of Edinburgh, Scotland-based crypto wallet provider CoinsBank, have garnered a significant amount of attention. Already, the company has hosted two, where crypto millionaires partied hard on the sea, and now they’re gearing up for their third cruise through the Mediterranean in September.

During the cruise, headline speakers include BTCC exchange founder Bobby Lee, infamous token promoter John McAfee, plus investor and bitcoin cash advocate Roger Ver.

While CoinsBank expects 2,300 people to attend the luxury cruise, half the tickets are already reserved and the others go for between $1,000 and $3,000.

A representative from CoinsBank told CoinDesk:

“It’s not just tourism but a lifestyle that we promote.”

Sure enough, it’s the lifestyle of the newly crypto rich and famous – one that many others, including those that didn’t get in early on bitcoin (what are referred to as newbs), want a piece of.

“We’ve also planned several more workshops, the hackathon and even Miss Blockchain contest to support diversity in the industry,” the CoinsBank representative said.

CoinsBank is hardly the only company capitalizing on demand for travel geared towards the crypto-curious.

And although these programs are still relatively small compared to the tourism industry at large, these efforts – including the rash of blockchain activity in (and relocation to) Puerto Rico – are increasing.

For many, the question becomes: Is this community building or problematic propaganda?

Education or solicitation?

But first, it’s important to note that not all crypto experiences are created equal.

So far there appears to be a spectrum of opportunities and goals emerging – some more likely to raise red flags than others.

For instance, as the number of blockchain projects funded and hinging on a separate crypto token (typically created out of an initial coin offering, or ICO) increases, a number of tours have launched focused on introducing people to those businesses and their tokens.

While Switzerland’s Crypto Valley tours don’t specifically focus on ICO projects, the country (with its business-friendly regulations) has become home to many of the entrepreneurs and companies working in the space.

Yet another tourism company getting into crypto, Innovation Experience, sees ICO promotion as part of the company’s mission. According to co-founder Ryan Fain, Innovation Experience is not only about highlighting the unique approaches taken by Israeli technologists in the blockchain ecosystem, including members of the Israeli Bitcoin Association, but also promoting local ICOs.

What rattles some people in the space about these ICO-focused tours is the balance between education and solicitation – which isn’t easy given the opaqueness in the space in terms of investor relationships to such projects.

“The [ICO] tours … in Europe, we have these coffee tours where you get senior citizens on a bus and then try to sell them some shady product, it sounds a little like this,” said Erasmus Elsner, co-founder of crypto-focused home-sharing platform CryptoCribs.

That said, Elsner does believe there’s no better way to experience the crypto community’s camaraderie than traveling together.

And because of that, CryptoCribs, an Airbnb-like application for connecting traveling crypto-enthusiasts with crypto-friendly accommodations throughout the world, was born. Since launching in September CryptoCribs has facilitated 170 trips across dozens of countries.

“You have the experienced hosts who want to host crypto-enthusiasts from around the world and you also have people who are new to space and want to learn more about it,” Elsner said of CryptoCribs, adding:

“They feel like this is a great way to get some of their first bitcoin or litecoin, or whatever, and to use it.”

Building the community

Elsner’s comments speak to the broad objective of many of these activities – that of seeing the nascent crypto community grow and flourish.

These programs offer unique opportunities for in-person community building. Novices meet experts. People from different sides of the world swap ideas.

Because of this focus on bringing newbies together with experts, CryptoCribs allows guests to pay in both cryptocurrency (bitcoin, bitcoin cash, litecoin ether) and fiat – the latter for those that don’t own cryptocurrency yet). Yet, Elsner does encourage people to discuss cryptocurrency and try to promote its use as a payment mechanism.

This is another reason many think these experiences could advance the crypto community. While the narrative of cryptocurrency as a payment method has been pushed to the backburner as of late, its use as a transactional currency could bolster a sense of community among enthusiasts.

Not only could these experiences encourage adoption of cryptocurrency, but they’ve also brought developers together as well.

For instance, CryptoCribs developers have been collaborating with the Ethereum Foundation to develop smart contracts for peer-to-peer transactions between hosts and guests using the ethereum token standard, ERC-725.

“It’s a new token, the ERC-725, it’s still under development,” Elsner said, adding:

“We’re trying to contribute to make it in such a way that it is really usable for the sharing economy.”

Welcome to utopia?

Even with these instances of community spirit for the crypto industry, the broader community in the location these experiences are held aren’t always as happy go lucky about the incursion.

Take the community surrounding the tech central Silicon Wadi (valley in Arabic) in Israel.

Several tours, including Innovation Experience, look to bring tourists to the country who aren’t already familiar with the booming technology sector in Israel. This type of advocacy, in an effort to improve Israel’s image among foreigners, is referred to by locals as part of “hasbara.”

While these portrayals of Israel as a tech utopia in the Middle East receive support from some of the Jewish country’s nationalist agencies, critics of hasbara say its propaganda, whitewashing the way the Israeli occupation cripples Palestinians’ fintech infrastructure and ignores how Palestinians are exploring blockchain technologies too.

Yet, advocates argue Israeli technologists aren’t responsible for broader politics.

On the other hand, Fain is trying to smooth any misconceptions about supposedly rival ethnic groups that live in the region. The truth is there are roughly 1.4 million Palestinian citizens of Israel (compared to 4.4 million beyond Israeli borders in the West Bank and Gaza), who often work and live alongside Jewish technologists. During the next Cryptonation tour in Israel, he’s brought in speakers that represent both Jewish and Palestinian citizens of Israel.

“We like to show [tourists] that collaboration [between Arabs and Jews] is possible,” he said.

As such, it’s clear crypto tourism inherently involves nuanced questions regarding privilege and responsibility.

“In the end, [crypto] is still a small community,” CryptoCribs Elsner said, adding he prefers opportunities to learn about diverse perspectives from crypto enthusiasts around the world, rather than seeking business opportunities during his travels.

Continuing, he concluded:

“For me, it’s still a community project about bringing people together.”

Cruise ship image via CoinsBank

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Dash (DASH) Crypto-Adoption in Venezuela Rockets Away: 1# Place

Top destination for Dash commerce and adoption is concluded to be Venezuela as it has experienced a strong rise even flying past the US.

DASH Being Accepted

Over 1,250 firms in a global range are listed on DiscoverDash that are open for Dash payments. Out of which over 20% of the global trading or 273 are based in Venezuela. That brings Venezuela to the first place of choice by business that are accepting DASH, even passing the United States. The US counts 255 per time of writing. Very specific but quite impacting, New Hampshire lists 69 right now, which is to be noticed keeping in mind its low population.

However, the highest concentration if compared to the number of population – the capital of Caracas is standing out with one Dash accepting merchant per 11k people. 165 are currently based in the city.

The rocketing rise of adoption in Venezuela particularly as it seems does not come only by the interest in the coin. There is a project or initiative called the Dash Merchant Venezuela which brings a merchant onboarding program. On top of the cake, it includes also a help desk where could-be users can call for support.

Alejandro Echeverría – Business Development head at Dash Merchant Venezuela added:

“We are very excited about our results. In the first month we tested our strategies and we made a lot of improvements, right now we are in our 2nd month and we are affiliating approximately 100 merchants per week. We are aiming to get approximately 200 per week by the next month. We are also in negotiations with big companies and franchises, we hope they get on board very soon since everyday there are more and more merchants, it is also a matter of trust and we take that very seriously. We believe this is the right path to follow towards a real mass adoption of Dash in Venezuela and we are showing that it is possible.”

Professional operations such as this are enabled by Dash’s treasury, which allows a portion of the coin’s supply created every month to be used for development.

DASH/USD

Per time of writing it is one of leading digital currencies in recovery against the US Dollar as it has gained 3.02% in the last 24-hours. If all works well for the market after all, a return above $300.00 could ensure a well position token price for a longer time.

Price Coin

Source: coinmarketcap