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Time To Ditch Bitcoin (BTC) For “Weed”?

Cannabis Bitcoin

A few days back, while quoting a US based Wealth Advisor, CNBC took to Twitter posting, “Forget Bitcoin, cannabis is the place to go.” It drew a lot of reaction, but for the right reasons.

According to the advisor, Carol Pepper of Pepper International, “weed” provides the next best outcome for investors looking for a handsome return on investment (ROI). Apart from the medicinal value found on cannabis, Pepper is also banking on the fact that the “herb” is “controlled properly” possibly contrasting its control to that of Bitcoin which has a lot of grey areas. Confident of her stand, the wealth advisor said:

“If you want to be in something that’s very growthy, and actually legitimate as it is legalized and controlled properly, I think this is the place to go.”

Cannabis Has A Better ROI YTD

Fortunately, Pepper has statistics to support why it’s time to ditch Bitcoin for cannabis. For instance, NASDAQ, the second-largest stock exchange in the world, has listed Canadian companies – Canopy Growth and the Cronos Group – which deal in cannabis. Since they started trading on the stock exchange, Canopy Growth and Cronos Group have registered 65 and 115 percent growth respectively on their stock year-to-date (YTD).

Carol categorically said that the gains
cannabis would amass on its way up will not be diluted. This was in response to
whether “weed” will experience a pump and bust wave such as the one recorded by
Bitcoin in 2017.

She added that:

“Many burgeoning cannabis companies control the supply chain from the growth of the plant through to the final sale of derived oils, cream, and edibles…This was likely to remain an industry trend as guaranteeing a stable level of the chemical within each plant was scientifically tricky.”

But Will The Shift From Bitcoin To “Weed” Happen Any Time Soon?

Unfortunately, there is no straight answer. This is mostly because cannabis stocks have recently entered the market. And, as is always the case, exciting and new securities or stocks have an awe factor that helps in attracting investors. Additionally, as noted by investing.com, stocks pertaining to the “herb” “are still grossly overvalued when assessing their multiples.” All the same, Bitcoiners are not ready to lose it to cannabis, and they are prepared to attack:

“The government controls the marijuana market. It’s still very illegal to grow it in the back yard and sell it at the farmers market. Bitcoin, on the other hand, can’t be controlled by the government, I could mine it in a room and cash it out at the crypto ATM down the road with impunity.”

What of ROI?

Looking at the return on investment for “weed” and Bitcoin, the former may not be able to unseat Bitcoin, at least not for now. For instance, Bitcoin’s YTD performance has recorded a 135 percent increase. Since the start of the year, the price of Bitcoin has been increasing with May being its best month so far this year, at some point peaking at over $9,000. With the best performing cannabis stock recording a 115 percent increase year-to-date, and projections pointing to a possible downside, Bitcoin will continue to look more and more promising to investors.

The post Time To Ditch Bitcoin (BTC) For “Weed”? appeared first on Ethereum World News.

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Eight People Allegedly Arrested for Money Laundering Scheme Involving Crypto in Spain

Eight people have been arrested for allegedly operating a money laundering scheme involving cryptocurrencies.

In Spain, eight people have been arrested for allegedly operating a money laundering scheme involving cryptocurrencies, Europol announced in a press release on May 8.

Per the release, the group laundered money by exchanging fiat currency to crypto assets. The individuals reportedly used cryptocurrency ATMs and split funds into smaller sums to introduce them into the financial system without having the transactions reported as suspicious.

Participants reportedly carried cash, depositing it in several bank accounts and moving it around through different accounts before exchanging it for crypto. Large transfers were sent to accounts from corporate entities owned by the alleged criminals, who also wired money to cryptocurrency exchanges.

Seven houses were searched during the investigations, including a money exchange office and an indoor cannabis cultivation plant. Eleven vehicles, €16,800 ($18,800), nearly 200 cannabis plants, two crypto ATMs, jewels, relevant documents and computers were taken by the authorities. The report also claims that Spanish authorities froze four cold wallets and 20 hot wallets — to which €9 million ($10,000) was transferred — in an unspecified way.

As Cointelegraph reported at the end of April, Manhattan District Attorney Cyrus R. Vance announced that two men plead guilty for illicitly selling steroids and controlled substances and laundering millions of dollars in cryptocurrencies and Western Union payments.

In mid-April, New York state prosecutors also indicted three men for the sale of illicit drugs on the dark web and laundering $2.3 million in cryptocurrency.

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Blockchain Investor Grandshores Tech Turns to Industrial Cannabis After Crypto Market Rout

The Hong Kong-listed blockchain investor plans to enter the cannabis market to counter the adverse impact of the crypto winter.

Hong Kong-listed contractor turned blockchain investor Grandshores Technology — backed by the Hangzhou municipal government — plans to enter the medicinal and industrial cannabis market in a bid to counter the adverse impact of crypto winter. The development was revealed in a report from local English-language newspaper the South China Morning Post on May 2.

The firm’s co-chairman Yao Yongjie has reportedly stated that industrial cannabis cultivation will become the company’s new business focus, drawing on resources previously reserved for global blockchain investment.

Yao —  a founding partner of the local government-backed Hangzhou Grandshores Fund — spoke with SCMP shortly after a stock exchange filing with the Hong Kong Stock Exchange indicated that Grandshores Technology’s recently-invested Hangzhou unit had signed a cooperation agreement with a hemp research institute in the province of Heilongjiang.

The cooperation agreement determines that the parties will jointly develop a minimum of five varieties of hemp germplasm — at least two of which will be developed as medicinal cannabis products. Yao is cited by SCMP as saying that:

“Both blockchain and industrial cannabis are the future, and both are embraced by the younger generation […] we are always on the search for new business growth opportunities.”

As SCMP notes, the cooperation agreement comes even as Grandshores Technology is still in the midst of finalizing its 40% equity stake investment in the aforementioned Hangzhou unit — called Hangzhou Yupu Trading, which holds the rights to use 1,600 kilograms of particular cannabis seeds cultivated at the Heilongjiang hemp research institute.

As previously reported, Yao is also one of the founding partners of the Hangzhou government backed Grandshores Blockchain Fund, which unveiled stablecoin development plans last fall.

According to SCMP, he is also an earlier investor in Chinese crypto mining giant Canaan Technologies, which attempted to raise a Hong Kong flotation of as high as $1 billion, but failed, when the filing formally lapsed in November 2018.

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California Bill Would Legalize Crypto for Tax Payments From Cannabis-Related Businesses

California legislators have introduced a bill that would require the state to accept stablecoins from cannabis-related businesses seeking to pay their excise or cultivation taxes.

Lawmakers in the United States state of California have introduced a bill to allow cannabis-related business to pay fees and taxes in stablecoins. The bill was introduced by the California State Assembly on Feb. 21.

Assembly Bill 953 would allow the state, city and county tax offices in California to accept stablecoins — cryptocurrency pegged to a physical asset or a fiat currency — from cannabis-related companies seeking to pay their excise or cultivation taxes, with effect from Jan. 1, 2020. The bill further reads:

“The bill would authorize that city or county in determining that method to either accept stablecoins directly into a digital wallet controlled by that jurisdiction or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into an account of that jurisdiction.”

Cannabis has been legalized in several states in the U.S. However, cannabis businesses have difficulty securing simple financial services from banks, the vast majority of which are secured by the Federal Deposit Insurance Corporation (FDIC), and are thus prohibited from servicing an industry that is still deemed illegal under federal law.

Cannabis dispensaries can hold hundreds of thousands of dollars in cash at any given time. The bill is apparently an attempt to curtail the vast amounts of cash that end up in state tax offices and need to be processed. California State Treasurer Fiona Ma recently testified before the U.S. House Committee on Financial Services regarding the tax collection process for cannabis businesses. She stated:

“Duffel bags and sometimes suitcases of cash would arrive quarterly at some of our designated offices and some business owners had to drive 350 miles to pay their taxes.”

In 2017, the Dash network began implementing Dash as a payment option in the cannabis industry’s point of sale devices. In doing so, Dash reportedly aimed to save the industry 10-15 percent, as the decreased flow of paper money will stymie the need for cash boxes, safes and guards.

Other U.S. states have also introduced bills that would allow tax payments in cryptocurrency. In January, legislators in the U.S. state of New Hampshire proposed a bill to accept Bitcoin (BTC) for state payments. “This bill requires the State Treasurer […] to develop an implementation plan for the state to accept cryptocurrencies as payment for taxes and fees beginning July 1, 2020,” the document reads.

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Pot Publication High Times Now Says It Won't Accept Bitcoin in IPO

Marijuana advocacy publication High Times is walking back a previous announcement indicating that it would accept bitcoin when it launches its initial public offering (IPO).

The company said last week that it would accept bitcoin and ether – the cryptocurrency of the ethereum network – as part of its IPO, which seeks to raise as much as $50 million. At the time, according to a press release, CEO Adam Levin said the company was “taking another step into the future, not only as one of the first cannabis-related brands to go public on the Nasdaq but also as the first to allow bitcoin and ether as part of our public capital raise.”

However, on August 13, it clarified in a filing with the U.S. Securities and Exchange Commission that this announcement was a mistake, and the company would not actually be accepting bitcoin.

“On August 3, 2018, the Company published a press release relating to its Regulation A+ offering stating that it would accept bitcoin as a form of payment for subscription to the Company’s shares,” the filing said, adding:

“This press release was distributed in error as the Company will not be accepting bitcoin as payment for shares. As provided in the Company’s subscription agreement related to the offering, the Company will only be accepting check, credit card, ACH or wire transfer as payment for subscription to shares.”

The filing notably did not mention ether, the other cryptocurrency listed in the press release. High Times did not respond to a CoinDesk request for comment about the omission by press time.

The IPO will remain publicly available through a Regulation A+ exemption, allowing retail investors to purchase High Times’ common stock. The sale will close either when the company raises the target $50 million or on September 12, the planned end date.

Marijuana farm image via Shutterstock

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A 'Yelp for Weed' Startup Is Launching Its Own Ethereum Token

Cannabis social networking platform MassRoots is developing a crypto token and other blockchain-based applications for its ecosystem of more than one million users.

MassRoots outlined its vision in an annual report filed with the Securities and Exchange Commission on Tuesday, adding that it formed a subsidiary – MassRoots Blockchain Technologies – to explore applications of the technology in December. It has engaged software company MEV to work on the development of the applications.

According to the report, the company has moved to sell Simple Agreements for Future Tokens (SAFTs), collecting more than $900,000 between September and January. Of that amount, $250,000 has been invested in the development of “blockchain-powered features and utilities.”

Founded in 2013, the company’s app is somewhat akin to a cannabis-specific Yelp, allowing users to rate cannabis products and strains. The publicly-traded company has had a colorful history, having its app banned from Apple’s online store in a move that was later reversed.

MassRoots explained in the report that blockchain could improve the quality of information available to consumers on its platform, among other things.

“Currently, a number of technology companies are attempting to curate the best information available on cannabis products and strains,” the document reads. “However, the number of cannabis product reviews are low, such reviews are often biased and the most commonly reviewed products received greater exposure than the less reviewed products.”

MassRoots went on to explain that the introduction of a token based on the ERC-20 – running on the ethereum network – standard could create a better system, explaining

“To provide additional information so that cannabis consumers can make better informed purchasing decisions, we plan to utilize digital instruments as a form of reward based currency within the MassRoots platform to encourage high-quality reviews, including reviews of new products, which we believe will also incentivize user-growth and stimulate our platform’s overall activity.”

According to the filing, users will be able to earn tokens through writing reviews. Initially, users will only be able to use the tokens to purchase products and services within the MassRoots ecosystem, but the company said other businesses in the industry – such as vaporizer manufacturers –  could also use the tokens one day.

However, the annual report also disclosed that the company posted a net loss of $44 million for 2017.

As detailed by The Cannabist, a marijuana-industry news site, MassRoots’s report “provides a portrait of a negative-net-worth company that is burning through cash, missing IRS payments and SEC reporting deadlines, handing out stock-based compensation like candy, and operating with no external sources of liquidity.” Whether these issues affect MassRoot’s cryptocurrency ambitions remains to be seen.

Man smoking cannabis image via Shutterstock

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Texas Issues Cease and Desist for Crypto, Cannabis Investment Schemes

The Texas State Securities Board (SSB) executed an emergency cease-and-desist notice against a man for selling unregistered securities tied to a cryptocurrency trading platform.

On Thursday, the agency said Mark Moncher and his company, Financial Freedom Club, had paired up with another individual, Frank Dalotto (who operates 911MoneyStorey, which was also cited) to sell the shares. Though the platform wasn’t named, the SSB said that Moncher and Dalotto promised weekly investment returns as high as 8% in advertising materials circulated online to Texas residents.

The agency also alleged that the parties involved sought to conceal the nature of the investments by sending invoices for watches instead of securities, explaining in its statement:

“Dalotto, Moncher, and their companies are also encouraging investors to commit felony offenses in connection with an initial $2,000 investment in the trading program. According to the order, investors are told that after making the initial investment via a charge or debit card, they will receive an invoice for the purchase of ‘a gold Seiko watch which you’ll never get.'”

“Dalotto’s statements are encouraging investors to file a materially false or misleading written statement with a financial institution, a state criminal offense in Texas,” the SSB added.

Moncher and Financial Freedom Club were also implicated in another alleged investment scheme – this one focused on a cannabis growing operation – that involved another firm called Capital Cash. The scheme appears to be wholly separate from the cryptocurrency trading platform, according to statements.

Yet like the crypto-related investment, according to the SSB, the securities involved were not registered for sale in the state.

In an email to CoinDesk, SSB Enforcement Division director Joseph Rotunda noted that Dalotto concealed a prior criminal conviction for wire fraud from potential investors.

Rotunda said these issues “demonstrate the continued need for … protections.”

“Investors need to continue to be cautious when investing with an online investment program. Their best defense is due diligence, but they should remember that fraudsters may be attempting to thwart their efforts to obtain meaningful information,” he added.

Texas flag image via Shutterstock

Read the full filing below:

ENF-18-CDO-1761 by CoinDesk on Scribd

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Cannabis Publication to Launch on Civil's Decentralized News Platform

Cannabis Wire, a trade publication dedicated marijuana industry coverage, is to launch a newsroom on blockchain-based journalism platform Civil.

According to an announcement from Civil, Cannabis Wire’s newsroom is targeted at offering different types of content for both individual consumers and larger organizations such as farms, lawmakers and lobbyists.

“We’re promoting a more objective standard for responsibly covering the cannabis industry. Many people don’t realize the scope of it today, and the myriad ways it can affect them,” said Alyson Martin, co-founder of Cannabis Wire.

Civil touts a mechanism that can incentivize Cannabis Wire’s newsroom staff to disseminate quality journalism by distributing the content over its decentralized platform. Readers pay for content with cryptocurrency, and the system sidesteps the need for advertisers and avoids political influence.

Newsrooms are self-governed by community members using Civil’s ERC-20 “CVL” token. In addition, the platfrom also boasts that archives are tamper-proof, since content is stored on a distributed ledger.

Civil’s decentralized newsroom received $5 million in funding last October last year from blockchain development firm ConsenSys. As reported, Civil said at the time half of the funding would be used to develop its services.

While still in development and the success of the newsroom’s operation are yet to be seen, Civil has signed up at least five publications, including Cannabis Wire, according to its website.

Cannabis image via Shutterstock

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Wonders of Naming the Company ‘Blockchain’ or ‘Bitcoin’

Bitcoin and Blockchain is all the rage in more than just individual investors’ circles, and companies are trying to cash in on the craze. While some are launching their own ICOs, such as Kodak, others have merely tacked ‘Blockchain’ onto their name and seen success.

In a move that seems dangerously similar to what happened in the 90s with the dot-com boom, the ‘Blockchain revolution’  taken on by some companies requires careful scrutiny as much of it is smoke and mirrors.

Speaking of smoke, the cannabis revolution that followed its legalization in a few states also came with a similar warning from the SEC about business cashing in on that hype.

Bitcoin services

Among the host of companies trying to wrangle their way into the hyped market is the company formerly known as Tulip BioMed – now Bitcoin Services. This change in name and direction saw the company’s stock increase by a massive 43,500 percent last year.

To their credit, the name change came back in 2016 and only took off last year in November with the hype that came with the cryptocurrency market in the mainstream.

Bitcoin Services financial filings from around that time offer few clues that the company was doing anything specific to justify the hysteria. The same can be said of its website, which generally lacks press releases and other investor information, apart from contact information.

Not alone

Bitcoin Services probably takes the top spot in terms of growth thanks to its name change, but there is a host of others that have made anywhere between 309 and 20,445 percent gains thanks to the change, as shown below.

Former Name Current Name Location Trading Range 2017
Tulip Bio Med Bitcoin Servies USA 42,500%
JA Energy UBI Blockchain Internet China 20,445%
Natural Resource Holdings Blockchain Mining Israel 12,021%
Leeta Gold HIVE Blockchian Technologies Canada 6,384%
Grand Pacaraima Gold First Bitcoin Capital Canada 5,897%
Carrus Capital Global Blockchain Technologies Canada 2,900%
AgriVest Americas NXChain USA 1,700%
Bioptix Riot Blockchain USA 1,611%
AE Innovative Capital Bitcoin Group Germany 1,503%
On-Line Online Blockchain UK 1,300%
Long Blockchain Long Island Ice Tea Corp USA 458%
Transeastern Power Trust Plockchain Power Trust Unit Canda 309%

Quick buck

Another worrying trend that is reminiscent of the dot-com boom is that these gains do not last long as people quickly catch on or regulators step in.

Hong Kong-based UBI Blockchain Internet—previously known as JA Energy—soared more than 20,000 percent before regulators halted buying and selling.

Bubble signs?

Those who believe the entire cryptocurrency market is one big bubble often point to the similarities in hype between the dot-com bubble and these happen around companies taking advantage of the mania and speculation.

It remains to be seen if the cryptocurrency market can weather this mania better than other similar bubbles.