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Digital Asset Security Startup Fireblocks Leaves Stealth Mode With $16 Million in Funding

Digital asset cybersecurity startup Fireblocks announced its launch out of stealth mode with $16 million in funding.

Digital asset cybersecurity startup Fireblocks announced its launch out of stealth mode with $16 million in funding, according to a press release shared with Cointelegraph on June 11.

Per the release, Fireblocks obtained the capital during its Series A funding round from Cyberstarts, Tenaya Capital, EightRoads (Fidelity INTL), Swisscom Ventures and MState. The startup reportedly counts crypto merchant bank Galaxy Digital, over-the-counter digital trading platform Genesis Global Trading and others among its customers, with the company declaring:

“Currently, Fireblocks is integrated with 15 digital asset exchanges and offers support for over 180 cryptocurrencies, tokens, and stablecoins.”

The author of the release claims that over $3 billion in digital assets have been stolen by hackers in the past 18 months and cites the 7,000 bitcoins (BTC) stolen from major crypto exchange Binance (worth $40,705,000 at the time). Michael Shaulov, CEO and co-founder of Fireblocks, is quoted in the announcement as saying:

“While Blockchain based assets by themselves are cryptographically secure, moving digital assets is a nightmare. After interviewing over 100 institutional customers, including hedge funds, broker-dealers, exchanges, and banks, we concluded that the current process is slow and highly susceptible to cyber attacks and human errors.”

Lastly, Shaulov claims that his startup created a platform which “secures the process and simplifies the movement of funds into one or two steps.”

As Cointelegraph reported yesterday, cryptocurrency wallet provider Komodo effectively hacked itself to prevent fraudsters from accessing its users’ funds.

In May, Sean Coonce, engineering manager at cryptocurrency custodian BitGo, announced that he had fallen victim to a SIM swapping hack.

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Ernst & Young Exec: Most Ethereum Decentralized Apps Not Used Productively

The head of innovation at Big Four audit firm Ernst & Young argued that blockchain disruptors should “go back to first principles.”

83% of decentralized applications (DApps) on the Ethereum network are “not in the most productive uses,” according to Ernst & Young’s (EY) head of innovation.

Paul Brody, Global Innovation Leader for blockchain at Big Four audit firm EY, spoke about developments in the blockchain and digital asset industries during a Fintech Forum hosted by the United States’ Securities and Exchange Commission’s (SEC) on May 31.

The event was organized by the SEC’s Strategic Hub for Innovation and Financial Technology (Finhub, which) launched in October 2018 to facilitate the commission’s engagement in the fintech space, including distributed ledger technology (DLT) and digital assets, among others.

During the first panel of the forum, called “Capital Formation Considerations,” Brody outlined a major issue regarding the implementation of blockchain technology.

Brody said that, in order to make blockchain technology successful, global crypto disruptors should “go back to first principles,” to understand how this technology should be applied to bring solutions, as opposed to just “money chasing” in the digital environment.

As such, Brody pointed out that the purpose of capital markets is to take money from investors and to put it into productive use. Brody hinted that crypto space is “not doing very well” in this regard, claiming that the most part of DApps on the Ethereum blockchain are “maybe not in the most productive uses.”

Brody cited data from the Q1 2019 report by blockchain analytics firm The expert noted that 14% of Ethereum-based DApps are used at crypto exchanges, while most of them are used for gambling and gaming, accounting for 44% and 13% of DApps, respectively.

Brody argued that the technology implementations should focus on more productive applications like distributed computing, fractional real estate, new business models, and fractional infrastructure instead. According to the expert, such a strategy will contribute to a “tremendous lasting legacy that is positive.”

In late 2018, Brody compared the initial coin offering industry with late 1990s’ internet startups, claiming that the space looked “worse than we thought.” Earlier today, Ernst & Young open sourced the code for its Ethereum private transactions solution called Nightfall.

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Amazon-Backed Crypto On A Horizon? Tech Giant Files Suspicious Patent


Amazon Files Proof Of Work Patent

A patent that has begun to circulate, published Tuesday, reveals that Amazon may be looking into crypto-related systems, like Proof of Work and Merkle Trees. The document, filed under the jurisdiction describes a system that has a “first party” complete computational work to gain access to a computing resource. The document’s abstract also mentions hash trees, which are also referred to as Merkle Trees

Sound familiar? Well, that’s because Bitcoin, Ethereum, and other blockchains use a very similar system. Funnily enough, however, the patent did not mention “cryptocurrency”, “blockchain”, or “Bitcoin” at all, and instead described the Proof of Work system in immense detail, specifically touching on how it could be used to mitigate DOS (denial of service) attacks from bad actors. Indeed, Proof of Work was once proposed as a way to ensure emails aren’t spam.

Despite the lack of cryptocurrency or digital asset-related discussion, the patent mentioned SHA-256, which, as you well know, is the hashing algorithm that Bitcoin and related crypto assets use.

Some have interestingly taken this news as a sign that Amazon, which is valued at a cool $940 billion on the open stock market, is joining the cryptocurrency revolution. As Morgan Creek’s Anthony Pomp wrote on Twitter, “there’s not a large company in the world who isn’t going to join the revolution.”

An Amazon representative might confirm, or at least not deny, the hearsay that their firm may get into cryptocurrency or blockchain. According to Decrypt Media, Amazon Web Services General Manager Rahul Pathak told reporters at Consensus that if digital assets are something that “matters to customers”, his firm would try to get a “point of view of it” that makes sense to them. Of course, that statement is very nebulous in and of itself, but at least Pathak didn’t deny the potential of an AmazonCoin or something of a similar nature.

Big Corps Launching Crypto Assets

While it is still unclear whether or not Amazon will launch its own cryptocurrency, other reports indicate that other technology giants have concrete plans in the same vein, making it not out of the realm of possibility that AmazonCoin will become a reality.

As Ethereum World News has reported previously on multiple occasions, Facebook is currently working on securing up to $1 billion in funding from financial services giants, namely Visa and Mastercard, and crypto pundits and funds. Just the other day, Digital Currency Group’s Barry Silbert just divulged he signed an NDA with Facebook for… something. The financing is purportedly for a cryptocurrency and a broader payment network — dubbed “Project Libra.”

The digital asset is purported to be a stablecoin tied to the U.S. dollar and will act as the backbone of the payments system, which is said to be focused on eliminating credit card fees, thus aiding merchants and consumers alike. Interestingly, the cryptocurrency may also become an integral part of an upcoming upgrade to Facebook’s ad system, which may reward users for viewing ads and purchasing goods. This contradicts previous reports stating that Facebook’s project was going to be centered around providing remittances for WhatsApp users in nations like India.

In a similar string of news, Samsung, one of the largest technology firms on Planet Earth, is building an Ethereum-based blockchain. The blockchain, which is still in an “internal experimental” stage, may host its own cryptocurrency, the fittingly named “Samsung Coin.” It isn’t clear what use this asset would hold, but the source suggests that blockchain could be brought to Samsung Pay, the tech giant’s fintech application. After this news propagated, Ledger was revealed to have received a $2.9 million cheque from the South Korean corporation.

Photo by Christian Wiediger on Unsplash

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US: SEC and CFTC Aim for Literacy in Digital Assets, Blockchain Analysis

U.S. financial regulators noted institutional literacy in digital assets and blockchain data analysis in today’s budget proposals.

The chairmen of two United States financial regulators, the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) testified before Congress today, May 8.

The hearings before the Senate Committee on Appropriations served to inform the Senate on the agencies’ budgetary needs while outlining various objectives and initiatives.

In their respective testimonies, SEC Chairman Jay Clayton and CFTC Chairman J. Christopher Giancarlo noted the importance of the agencies becoming literate in digital assets and blockchain technology.

As per the Clayton, the Office of Compliance Inspections and Examinations at the SEC has named “digital assets, including cryptocurrencies, coins and tokens” as high-risk investments.

Further, the SEC has requested the addition of four new positions in the Division of Trading and Markets — which is responsible for the regulation of “major securities market participants” — partially in order to increase their expertise regarding digital asset markets.

In the CFTC budget hearing, Giancarlo recalls that he has previously listed “the extraordinary pace of exponential technological change, the disintermediation of traditional actors and business models, and the need for technological literacy and big data capability” as areas that are currently challenging for regulators.

Giancarlo went on to say that CFTC is striving to adapt to this environment and become a “quantitative regulator.” He added that the CFTC should “be able to conduct independent market data analysis across different data sources, including decentralized blockchains and networks, without being reliant on self-regulatory organizations and market intermediaries.”

The CFTC chairman went on to say that the commission’s budget proposal would allow it to “expand its core economic expertise in order to conduct in-depth analytical and empirical studies” in areas it deems important.

As previously reported on Cointelegraph, there is no single federal classification for cryptocurrencies. One consequence of this is that the SEC and CFTC do not have the same regulations, although both agencies’ standards are legally valid and enforceable.

Earlier this year, U.S. regulators reintroduced the Token Taxonomy Act, which seeks to exclude digital assets from securities laws and provide a uniform regulatory framework for the assets.

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50% Of Institutions Crypto-Friendly, Fidelity Survey Reveals

Fidelity Reveals Abounding Crypto Interest

All things considered, many common Joes and Jills would think that it is irrational for institutions to be delving into digital assets. According to a recent survey conducted by Fidelity Investments’ Digital Asset division, however, such investors are clamoring for crypto and blockchain, Bitcoin (BTC) included.

In a recent Medium post and accompanying document, the Boston-based firm revealed that more than 22% of institutional investors that they surveyed, which includes endowments, family offices, industry funds, traditional hedge funds, and so on and so forth, already have “some exposure” to digital assets, with many of said investments occurring within the past 36 months. What’s more is that 40% of the “more than 400” surveyed, which are all U.S.-based, intend to look into crypto-related investments over the next five years.

And even more notably, 47% of those surveyed were amicable towards the idea of having cryptocurrencies or related vehicles in their current portfolio structures. Interestingly, out of the institutions that fell into the category, most preferred the idea of purchasing a crypto-backed investment vehicle. This, of course, signifies the importance of a vehicle like a Bitcoin ETF.

Speaking on the importance of data, Tom Jessop, the resident crypto exec of Fidelity, explained:

We’ve seen a maturation of interest in digital assets from early adopters… More institutional investors are engaging with digital assets, either directly or through service providers, as the potential impact of blockchain technology on financial markets – new and old – becomes more readily apparent.

The reason why such demand has been seen is, according to the poll, a result of institutional interest in innovative technologies, of which crypto is a key facet of, a need for non-correlated assets, like Bitcoin, and a demand for the characteristics that digital assets sport, which likely include decentralization, censorship-resistant, low-fee, rapid transfer finality times, and so on.

All this comes as Bitcoin and the space at large have commenced a notable recovery. The value of BTC, for instance, is up 43% since January 1st, and volumes, both on spot markets and on the CME’s futures contract, are up even more. Money from venture capital firms and capital from traditional industries have continued to flood into the ecosystem, as made evident by multi-million dollar deals that Bakkt, ErisX, among others have closed.

Retail Investors May Soon Be Joining Institutions

Retail investors may soon be joining institutions though. Over recent weeks and months, renowned corporations across the globe have announced plans to establish cryptocurrency products and services, which should catalyze the mainstream acceptance of this asset class. Most notably, reports claimed that ErisX, an up-and-coming, Chicago-based cryptocurrency initiative will soon launch its own exchange platform. This is notable, as TD Ameritrade, a large American retail-centric institution, is expected to support in-house Bitcoin and other cryptocurrency purchases and sales through ErisX, opening the door for eleven million consumers to finally down the blockchain pill. And E*Trade is expected to make a similar move. But will they bite?

Photo by Chris Li on Unsplash

The post 50% Of Institutions Crypto-Friendly, Fidelity Survey Reveals appeared first on Ethereum World News.

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Cambridge Study: Lack Of Standard Terms for Crypto Hampers Global Regulatory Response

A new report states that a variety of terms in the crypto industry are often used interchangeably and without a clear definition, which hampers regulatory response.

The lack of standard global terminology for crypto assets is a major impediment for the adoption of clear regulatory policies in the industry, according to a study by the Cambridge Centre for Alternative Finance (CCAF) released on April 16.

According to the report, a variety of major terms in the crypto industry is often used interchangeably and without a clear definition, which hampers global regulatory response.

Conducted with support from the Nomura Research Institute (NRI), the research provides a detailed analysis of the regulatory landscape on crypto asset activities in 23 jurisdictions. The research data was collected mainly through desktop research from November 2018 to early February 2019, the report notes.

According to the study, the term “cryptoasset” itself lacks a specific definition and is widely used as an umbrella term to refer to digital tokens that are issued and transferred on distributed ledger technology (DLT), specifically blockchain, systems. The research argues that the terms crypto asset and token have different meanings depending on the context.

As such, the report provides three major contexts for the definition of crypto assets. In a broad sense, the term encompasses all types of digital tokens issued and distributed on a blockchain. From an intermediate perspective, a crypto asset includes all types of digital tokens on a blockchain with open access, which do not necessarily need to perform a function. In a narrow view, crypto assets exclusively refer to digital tokens on open DLT systems that play an essential role in functioning, the report reads.

The researchers further outlined three major challenges that are faced by global regulators of crypto. Prior to the adoption of clearly defined, standardized terminology, regulatory jurisdictions should first understand the nuances of the different terms and identify the terminology that is most suitable to their regulatory objectives.

In addition, the CCAF research says that the 82% of analyzed jurisdictions have distinguished crypto assets that have characteristics of a security from other types of cryptos. Based on that, activities relating to crypto assets that are considered securities are automatically brought under the authority of local securities laws, the report says.

Recently, Cointelegraph reported that the French government is planning to convince other European Union member states to adopt cryptocurrency regulations similar to its own.

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Short-Term Crypto Losses Surged Fivefold in 1st Month of 2019: Credit Karma Tax

The Number of Credit Karma Tax filers that reported short-term crypto losses in the first month of 2019 surged 521 percent over the same period in 2018.

The amount of Credit Karma Tax filers that reported short-term crypto losses in the first month of 2019 surged more than fivefold over the same period in 2018, the firm revealed on April 3.

Credit Karma Tax, a tool launched by San Franciscobased personal finance firm Credit Karma back in 2016, offers a free tax filing service that can be used to report gains or losses from trading cryptocurrency.

Today, Credit Karma released a comparative report of capital crypto gains and losses on federal taxes between Jan. 28 and Feb. 22, 2019, compared to those who filed their 2017 federal income taxes with Credit Karma Tax between Jan. 29 and Feb. 23, 2018.

According to the report, the number of Credit Karma Tax filers who reported short-term capital crypto losses in the first month of the 2019 filing season soared by 521%.

A short-term gain or loss takes place when an investor sells an asset that was held within one year, while a long-term gain or loss envisions an asset that was held for more than one year, Credit Karma explains.

Crypto investors reporting long-term gains in the same period increased by 35 percent year over year, with early Credit Karma Tax filers reporting an average gain of $15,352 during the first month of the 2019 filing season.

The average reported short-term crypto losses amounted to $3,405, which represented a 322 percent increase in the average short-term loss from the first month of last year’s filing season.

In mid-January, Credit Karma released a survey showing that 53 percent of Americans planned to report their gains and losses for taxes from crypto, while 35 percent of respondents said that they sold their crypto at a loss and will not report on their tax returns.

Recently, Big Four auditing and professional services firm Ernst & Young launched a tool for accounting and preparing taxes on cryptocurrency holdings. The new tool dubbed EY Crypto-Asset Accounting and Tax is designed to facilitate accounting and tax calculations for digital currency transactions.

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Jamaica Stock Exchange to Launch Live Trading Pilot for Bitcoin and Ethereum

Following a successful pilot in January, the Jamaica Stock Exchange will launch a limited live-trading pilot with BTC and ETH.

The Jamaica Stock Exchange (JSE) will soon carry out a limited pilot to trade Bitcoin (BTC) and Ethereum (ETH), according to a press release on Apr. 3.

The JSE has signed a master agreement with Canadian fintech firm Blockstation to continue developing tools for the trading of digital assets and security tokens.

Following a successful live-trading pilot in late January 2019, the JSE and Blockstation will continue building a safe and regulated ecosystem for trading digital assets and cryptocurrencies.

According to the announcement, a limited pilot to trade Bitcoin and Ethereum through the JSE and participating broker-dealers will be launched soon.

The JSE first announced that they chose Blockstation as a partner to introduce trading of digital currencies and tokens on the stock exchange in August 2018.

Yesterday, Cointelegraph reported that Switzerland’s principal stock exchange, SIX listed a Ripple (XRP)-based exchange-traded product.

In late March, decentralized financial contracts platform UMA partnered with Decentralized Autonomous Organization (DAO) MakerDAO in order to release a token linked to the United States stock market.