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‘The Drug Is Gone’: Mike Novogratz Compares Current Bitcoin Markets to ‘Methadone Clinic’

Mike Novogratz has said that the ICO market is “dead right now” during an interview on the current state of the crypto industry.

Mike Novogratz compared current cryptocurrency  market performance to a “methadone clinic” in an interview with Bloomberg Dec. 11.

During the interview, Bloomberg asked Novogratz how coming from Wall Street made him different from most of the cryptocurrency community, which seem to treat cryptocurrency “almost like a religion.” Novogratz answered that, while he believes in the underlying technology, “when prices get stupid,” he sells.

Novogratz also characterized Bitcoin’s (BTC) enormous growth in late 2017 –– which peaked at $20,000 per coin –– “a drug.” He called the period a “speculative mania,” adding that the “audience is more sober now — the drug is gone.”

According to the hedge fund manager, the current market is characterized by “pessimism” and “fear,” with people expecting the leading cryptocurrency will go “to zero.” Novogratz, however, remains confident, concluding:

“But it’s not going to zero. We’re at the methadone clinic.”

During the interview, the former Goldman Sachs partner and hedge fund manager admitted that he thought Bitcoin “was going to hold at $6,200 […] but then Bitcoin Cash decided to fork again.” The idea that the contentious Bitcoin Cash hard fork has been a major factor that instigated the current sell-off is widespread among analysts.

Further explaining market fear and uncertainty that could have led to the most recent sell-off, Novogratz told Bloomberg:

“At the same time [as the BCH hard fork] the SEC came out and sanctioned a few ICOs and said, ‘Oh, by the way, your investors can sue for damages.’ That scared the heck out of a lot of people.”

When asked if Initial Coin Offerings (ICO) will “ever come back,” Novogratz stated that “the ICO market is pretty much dead right now.” He added however that “the SEC doesn’t want to kill this innovation” and that he expects a market for regulated security tokens in the United States.

He explained that security tokens “aren’t things that go from $1 to $1,000” but instead they are “things that yield 14 percent” that will be sold to qualified buyers. He concluded, “that sounds a heck of a lot less sexy, but you’re going to see that business grow.”

The Galaxy Digital founder also reiterated the popular idea that “Bitcoin is going to be digital gold, explaining:

“That means [Bitcoin is] the only one of the coins out there that gets to be a legal pyramid scheme. Just like gold is. All the gold ever mined in the history of the world fits in an Olympic-size swimming pool. You’re out of your mind to think that pool’s worth $8 trillion. But it is because we say it is.”

As Cointelegraph reported last month, Galaxy Digital lost $136 million in the first three quarters of this year, but Novogratz remains confident that crypto will “flip next year.”

Last week, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton said that ICOs “can be effective” but that “securities law must be followed.”

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US SEC Chairman Jay Clayton: ICOs Can Be Effective, But ‘Securities Laws Must Be Followed’

SEC chairman Jay Clayton declared that ICOs are effective, but also pointed out that “securities laws must be followed.”

United States Securities and Exchange Commission (SEC) Chairman Jay Clayton has said that Initial Coin Offerings (ICOs) “can be effective” but that “securities law must be followed.” Clayton spoke on the subject during a speech about the SEC’s activity this year at the BLANK.

In regards distributed ledger technology (DLT), digital assets and ICOs, Clayton stated that this is an “area where the Commission and staff have spent a significant amount of time.” He then further added that he expects “that this trend will continue in 2019.”

Clayton underlined that there are “a number of concerns” relative to ICOs. More precisely, he pointed out the fact that, according to him, ICOs are currently operating in a way that grants substantially less investor protection than that of traditional equities and fixed income markets.

Clayton then concluded that the consequences of this are “greater opportunities for fraud and manipulation.” In the past, Clayton has noted that most ICOs should likely be considered securities.

However, in the Dec. 6 speech, Clayton admitted that he sees potential in ICOs, but that regulation must be respected:

“I believe that ICOs can be effective ways for entrepreneurs and others to raise capital. However, the novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed.”

At this point, the chairman switched focus to the recent creation of the Strategic Hub for Innovation and Financial Technology (FinHub). As Cointelegraph reported in October, the FinHub had been launched by the SEC to facilitate the agency’s involvement in fintech.

Mainly, the newly created hub attempts to help fintech startups (including ICOs) in complying with the existing laws by the means of communication.

According to Clayton, the creation of the FinHub and other SEC activities demonstrate that their “door remains open to those who seek to innovate and raise capital in accordance with the law.”

Just two days ago, the U.S. SEC issued a cease and desist order and a $50,000 fine against CoinAlpha Advisors, a digital asset fund. The company immediately halted the offering and took additional actions after being contacted by the commission.

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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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South Korean Startup Presto to File Constitutional Appeal Against Local ICO Ban

A South Korean blockchain startup has announced its intention to file a constitutional appeal against the country’s ICO ban.

A South Korean blockchain startup, Presto, will reportedly file a constitutional appeal over the county’s ban on Initial Coin Offerings (ICOs), South Korean economic media outlet Sedaily reports Dec. 6.

Presto claims on its website that it provides a “total solution to development teams from website building to token issuing.” The startup was reportedly trying to run a Decentralized Autonomous Organization-based Initial Coin Offering (DAICO) in South Korea for the first time.

As Cointelegraph explained in a dedicated guide, DAICOs aim to improve the ICO fundraising method by integrating some features of Decentralized Autonomous Organizations (DAOs).

This fundraising method enables users to use smart contracts to vote for a refund of the funds if they stop trusting the developers or lose faith in the project, Sedaily notes.

As Cointelegraph reported, South Korea banned all ICOs in September last year. Sedaily reports that Presto’s CEO and founder, Kang Kyung-Won declared that the startup has “been hitting a snag as the government and the National Assembly have done nothing over the last one year since the government’s blanket ban on ICOs.”

He then announced their intention to file a constitutional appeal:

“We will ask the court to rule on the ICO ban and the legislature’s nonfeasance.”

Sedaily explains that according to Presto, the ban infringes on “people’s freedom of occupation and property and equal rights and scientist’s basic rights.” Kyung-Won said that given the fast pace of technological development that came with the fourth industrial revolution, “such unconstitutional and pre-modern measures as the ICO ban should not exist any longer.”

South Korea’s stance to crypto regulation stands in clear contrast with other countries like Malta. As Cointelegraph reported in July, Malta has been acclaimed as “the blockchain island” after the local parliament approved three bills that gave the crypto industry unprecedented legal clarity.

The Maltese government is also reportedly working on an artificial intelligence (AI) strategy of which the ultimate objective is to “explore a citizenship test for robots in the process of drafting new regulation for AI.”

That being said, South Korea recently overtook the Maltese crypto exchanges daily trading volume in November according to a CryptoCompare report. In the document, analysts suggest that the reason behind this shift are “competitions, trans-fee mining and rebate programs.”

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Malaysia: Finance Regulator, Central Bank Say Cryptocurrency Regulation ‘Being Put in Place’

Authorities are in the process of developing cryptocurrency and ICO rules, which could become law in Q1 2019.

Malaysia’s finance regulator and central bank issued a joint press statement Dec. 6 in which they confirmed they were “putting in place” legislation on cryptocurrency and Initial Coin Offering (ICO) assets.

The statement from the Malaysia’s Securities Commission (SC) and Bank Negara Malaysia (BNM), which follows comments from senior government official that regulation of the sector could appear in Q1 2019, also reiterates the need comply with securities laws where appropriate.

“The SC will regulate issuances of digital assets via initial coin offerings (ICO) and the trading of digital assets at digital asset exchanges in Malaysia,” it confirmed.

“Regulations are currently being put in place to bring digital assets within the remit of securities laws to promote fair and orderly trading and ensure investor protection.”

Malaysia has slowly enacted a formalized stance on cryptocurrency activities this year. Last month, in addition to revealing the potential deadline, the country’s finance minister Lim Guan Eng also stated that anyone wishing to issue a new asset could only do so with BNM’s blessing.

“I advise all parties wishing to introduce Bitcoin (style) cryptocurrency to refer first to Bank Negara Malaysia as it is the authority that will issue the decision on financial mechanism,” he said.

Among those eyeing the developments is a local initiative dubbed “Hope Coin,” the creators of which may have to wait for the process to complete before launching.

The moves come hot on the heels of Thailand, which is around six months into the introductory phase of its own regulation.

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‘Hope Coin’: The Story of Malaysia’s Crypto Political Fundraising Platform

Crypto fundraising might be a great tool to fight corrupt regimes, but what happens when freedom fighters seize power?

The ongoing controversy surrounding Malaysia’s proposed political cryptocurrency, Harapan Coin, is far from letting up. On Nov. 26, the country’s finance minister, Lim Guan Eng, weighed in on the issue by reiterating that any entity looking to issue a cryptocurrency should first refer to Bank Negara Malaysia (BNM) and the Securities Commission:

“Don’t do it without Bank Negara’s guidelines or directive on the matter to avoid doing something wrong and against the law.”

During the same press conference, Lim Guan Eng also said that he had asked a government official — who has recently made a series of statements in support of the project — to tone down the promotional campaign until the financial authorities comes up with a coherent regulatory framework. The turbulence around the proposed asset, which is touted by its creators as “the world’s first political fundraising platform,” has been heightening throughout the last few weeks, as many of Malaysia’s prominent political actors voiced their doubts and concerns with regard to the project. Meanwhile, many aspects of Harapan Coin’s provenance and functionality remain opaque to the public.


Since the proclamation of Malaya’s independence in 1957 and until May 2018, a single political power — a coalition called Barisan Nasional (BN) — has been at the helm of the country’s government. Its three major member organizations represent Malaysia’s dominant ethnic groups: UMNO (United Malays National Organisation) is a party of the Malay majority, while Malaysian Indian Congress (MIC) and Malaysian Chinese Association (MCA) are the political bodies of the country’s Indian and Chinese communities, respectively.

The last decade saw BN’s political dominance erode, due in no small way to a series of devastating financial and political scandals that shook the highest tiers of the government.

Perhaps the most notorious of those is the still ongoing 1Malaysia Development Berhad (1MDB) scandal. In 2015, it was revealed that, as a result of a large-scale, multi-year embezzlement scheme, hundreds of millions of dollars have been siphoned off from the state-owned investment fund 1MBD into bank accounts associated with Prime Minister Najib Razak of Barisan Nasional.

Egregious as it is, this embarrassing episode of high-ranking officials abusing public funds is anything but unusual for Malaysia’s recent history. Before 1MDB, there was the Bank Negara Malaysia (BNM) forex scandal, in which the lack of oversight over the central bank’s adventurous trading activities resulted in the nation’s loss of billions of dollars.

Before the BNM forex wreck, there was the Bumiputera Malaysia Finance (BMF) flop, which involved a Hong Kong subsidiary of a Malaysian state-owned bank generously handing out impressive amounts of money in bad credits to Hong Kong-based property speculators. Long story short, there appears to be pattern indicating a persistent problem with the way Malaysian officials handle public funds — a problem big enough for blockchain-minded people to start thinking of a solution.

Taking on the unjust power of ill-gotten money in Malaysian politics has become the central idea behind the new Harapan Coin (literally, “Hope Coin”), conceived sometime in early 2017. Setting their sights on the 14th Malaysian General Election, scheduled for May 2018, the coin’s creators proclaimed it “The World’s First Crypto-Politic ICO” and marketed it as a means of funding the united opposition to Barisan Nasional.

The manifesto — found on the coin’s website — presented the group behind the project as “patriotic and concerned Malaysian citizens, within and outside of Malaysia.” Several personal accounts by backers from outside of the country featured stories of them not being able to contribute to previous campaigns due to the obstacles created by the allegedly BN-controlled Malaysian financial authorities.

The identities of the people working on Harapan Coin have been concealed all along, citing “the Draconian laws of limiting and non-respecting [sic] individual rights to freedom of expression of the current BN government,” the website contains only their first names, blurred pictures and locations in countries outside Malaysia.

The project’s website offers a mix of inspirational language, suggesting its role in advancing a much-needed political change — “a beacon of hope to supporters seeking a better future” — with some more pragmatic and profit-minded considerations — “Coin[s] collected are expected to rise in price. […] Buy into a new change, invest in a new era of democracy.” The website also explicitly stated that the coin had the “potential to become an official currency if Harapan wins [the] election.”


May 9, 2018, marked the first regime change in Malaysian history: Following the general election, the Pakatan Harapan (PH) coalition managed to secure 121 out of 222 seats in the Dewan Rakyat — the lower house of the nation’s parliament — keeping Barisan Nasional down to just 79 seats. It is unclear how much of this triumph was due to successful crypto fundraising.

Harapan Coin’s roadmap stated the ambitious goal of collecting $257 million in two rounds of an ICO before the election. While some reports suggest that coin sellers claim to have raised as much as $123 million in the presale and first round, this information is nowhere to be found in the project’s public-facing communications. The only figure available on the website as of late November appears to indicate that the amount of funds raised so far barely exceeds $800.

Harapan Coin was designed to provide the infrastructure to financially support the united opposition to BN in the May 2018 general election. Months after the electoral victory, the project’s website still features headshots of the Pakatan Harapan (PH) coalition’s politicians, accompanied by their campaign statements. It also mentions that the new digital currency is co-founded and supported by Khalid Samad, the Malaysian Minister of Federal Territories. Samad — who has been an MP since 2008 but became minister only with the advent of the new Pakatan Harapan government in July 2018 — is now the main driving force in promoting Harapan Coin post-election.

Now that the anti-BN coalition has prevailed, it looks like Samad is working to repurpose the Harapan Coin infrastructure to serve the fundraising needs of his coalition in the new political environment, where they are the incumbent political power rather than the opposition aspiring to topple a longstanding regime.

While the project’s objectives prior to the election were straightforward, they are now much murkier. Is it now going to be a single political party’s own coin? What about the vague promises of the possibility for the coin to become legal tender if the election was won? The fact that both the white paper and website haven’t been updated since before the May election doesn’t help to illuminate the matter.

Nevertheless, Khalid Samad keeps pushing for the coin to be officially recognized. On Nov. 13, he announced that paperwork for Harapan Coin’s presentation before Bank Negara Malaysia (BNM) and Prime Minister Tun Dr Mahathir Mohamad. A week later, Samad mentioned that the project was under review by a Bank Negara Malaysia taskforce. The minister’s advocacy campaign, however, was met with criticism from all across the Malaysian political landscape.


It should come as little surprise that one of the biggest issues that critics take in regard to the design of Harapan Coin is the proposed distribution of the funds raised. The current breakdown stipulates that as much as 30 percent of the money will go to the system’s administrators — who, as mentioned above, remain effectively anonymous. Another 30 percent is meant for Amanah, Khalid Samad’s own political party. Given that the coin is proposed to be state-backed — and possibly even used for paying state fees and fines — this would clearly grant one of the political groups an upper hand over all others at the expense of the government.

This was just one of the concerns raised by the nonprofit Centre for a Better Tomorrow (Cenbet) in a recent statement that warned all the parties involved of the project going “against the principles of good governance.” The group’s representative also stressed that the way the coin’s design facilitates political donations from overseas may open up the Malaysian political system to influence from abroad.

While it is hardly unexpected that recently deposed Prime Minister Najib Razak has spoken out against Harapan Coin, the sources of criticism are not confined to Samad’s political opponents. Fahmi Fadzil, a member of parliament who represents one of the parties that constitute the Pakatan Harapan coalition was among those politicians who admitted to having reservations with regard to a lack of mature regulation of cryptocurrencies, as well as potential issues associated with anonymity.  

One more blow to Harapan Coin’s prospects came from a somewhat unexpected direction. Dr. Zulkifli Mohamad Al-Bakri, mufti of the federal territories and one of Malaysia’s most authoritative experts on Islamic law, has recently stated that Bitcoin (and, by extension, other cryptocurrencies) should be considered haram, or forbidden. This could mean a lot in a country where over 60 percent of population practices Islam. Minister Samad hopes to address the mufti’s concerns by establishing a governing body to oversee Harapan Coin’s operations and ensuring its compliance with the religious authority’s vision.

Dim prospects

Overall, Harapan Coin in its current shape does not particularly look like an endeavor that is bound to succeed in the near future. Although it is aggressively promoted by a resourceful co-founder who happened to find himself in a high office, it is decried by civil society groups and religious authorities, while the financial arm of the government examines it with great caution. Neither does it enjoy political support from the national leader or members of the governing coalition outside of Khalid Samad’s own party.

Whereas the idea looked appealing at the time when the unified opposition forces were bracing themselves to overturn the incumbent regime, the subsequent victory has made the divides within the triumphant Pakatan Harapan coalition even more pronounced, and at the same time obscuring the need for an alternative political fundraising infrastructure.

It would help if Harapan Coin’s backers could clearly articulate their renewed plans and objectives, yet no such information seems to be publicly available. From what could be inferred about the project now, it is designed to blur the boundaries between the state and political parties, while lacking a clear definition of the mechanics of the proposed system, information about its developers and any particular checks on power abuse embedded into its design. For a country with a long history of financial wrongdoings at the hands of the powerful, this combination hardly makes for a strong pitch.

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Report: US Congressman Announces Plans for Federal Cryptocurrency and ICO Regulation

U.S. Rep. Warren Davidson of Ohio announced plans to introduce a bill in the House of Representatives that would regulate ICOs and cryptocurrencies.

U.S. Rep. Warren Davidson (R) has announced plans to introduce legislation that would clearly regulate cryptocurrencies and Initial Coin Offerings (ICOs), local Ohio news agency reports Dec. 3.

According to, Davidson announced his intention to introduce new legislation at the Blockchain Solutions conference. The bill would create an “asset class” for cryptocurrencies and digital assets, which “would prevent them from being classified as securities, but would also allow the federal government to regulate initial coin offerings more effectively.”

This development would bring clarity to U.S. crypto regulation. Currently, state regulatory agencies classify tokens differently in ways that place them under their jurisdiction.

The Securities and Exchanges Commission (SEC) stance is that most cryptocurrencies are securities. The Commodity Futures Trading Commission (CFTC), on the other hand, treats cryptocurrencies as commodities.

In other words, the CFTC states that Bitcoin (BTC) has more in common with gold than with currencies or securities since it is not backed by a government and does not have liabilities attached to it. The Financial Crimes Enforcement Network (FINCEN), the agency managing anti-money laundering (AML) and know your client (KYC) standards, views crypto as money.

The U.S. Office of Foreign Assets Control (OFAC), which enforces economic sanctions, views crypto as money and blacklists wallets of sanctioned persons. Lastly, the Internal Revenue Service (IRS) treats cryptocurrencies as property, meaning that profits from selling them are subject to capital gains tax.

A group of U.S. Congressional representatives sent a letter in September to the SEC Chairman Jay Clayton calling for “clearer guidelines between those digital tokens that are securities.”

The same month, over 45 representatives of major crypto companies and Wall Street firms attended a Congressional roundtable discussion on cryptocurrency and ICO regulation. During meeting, which was hosted by Davidson, experts expressed concerns about a lack of regulatory clarity in the industry and discussed “token taxonomy.”

Davidson has previously demonstrated his support for the crypto industry, suggesting that the ICO market needs “light touch” regulation. A spokesman for the U.S. representative said in November that Davidson is working on a bill that, once law, would treat ICOs as products rather than securities at the federal and state level, effectively “sidestepping” security laws.

As Cointelegraph reported yesterday, seven Ohio funds will hand over $300 million to blockchain startups by the end of 2021. Of this funds, $100 million will be invested by nonprofit JumpStart.

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Binance to Launch Its Own Blockchain ‘Binance Chain’ in ‘Coming Months’

Binance’s CEO has revealed the company’s plans to launch its own blockchain, “Binance Chain,” in the near future.

Binance, the world’s largest crypto exchange by trading volumes, will launch its own blockchain “Binance Chain” in the “coming months,” as the company revealed in a tweet on Dec. 4.

The new Binance-backed blockchain aims to provide a basis for creating new cryptocurrencies and Initial Coin Offering (ICO) tokens, as the company said in the tweet:

“Binance is pushing for blockchain adoption and doing many things to help advancement of the industry. E.g. we will have the Binance chain ready in the coming months, on which millions of projects can easily issue tokens.”

According to Forbes, Binance announced their plans during a recent private event in Singapore hosted by Forbes Asia. Speaking at the “Decrypting Blockchain for Business” event, Binance CEO Changpeng Zhao (CZ) stated that the new plans actually indicate an old vision of crypto, which will expectedly lead to increasing its adoption on a global scale.

In order to reach a fundamental “payment adoption increase,” CZ said that the company will be “pushing really hard into that space,” since their “original intent” hasn’t taken off “for some reason.”

Forbes’ author Michael del Castillo, who unveiled the recent news, commented on Twitter that the he expects that there will be “millions of coins and thousands of blockchains.”

On Nov. 8, CZ revealed that Binance’s business was still “very stable,” despite the recent exchange volume drop of around 50 percent, as well as the significant slump of crypto markets this year. The Binance CEO stated that while Binance possessed just 10 percent of the trading volumes they had in January 2018, the volumes are still higher than those of “two or three years ago,” and the business is “still profitable.”

Recently,  Binance has launched its fiat-to-crypto exchange in Uganda, enabling its customers to purchase two major cryptocurrencies  — Bitcoin (BTC) and Ethereum (ETH) — with local fiat currency Ugandan shillings (UGX).

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Celebs and ICOs: The Makings of a Dangerous Duo

The U.S. SEC’s move to fine celebrities for fraudulent ICO advertising tells a cautionary tale to investors and would-be advertisers.

Like many different industries, Hollywood’s involvement with cryptocurrencies and Initial Coin Offerings (ICO) has become a reality and a number of celebrities have looked to capitalize on the surge in interest and potential money to be made.

As Cointelegraph has previously explored, some celebrities have gone on to achieve success in their crypto-related ventures, while others have been embroiled in the ensuing mess of failed and fraudulent projects.

Caught up in Centra Tech

Two major names in the entertainment industry fell victim to the fallout associated with a fraudulent ICO of crypto financial services startup Centra Tech.

In 2018, the three co-founders of the project were indicted and charged with securities and wire fraud by the United States Securities and Exchange Commission (SEC). Centra Tech had raised $32 million during its ICO.

Centra Card was advertised as a debit card reportedly backed by Visa and Mastercard, which allowed users to convert crypto into fiat currencies. Investigations revealed no actual partnership existed.

Before any of this came to light, the founders of the project managed to get the backing of none other than boxing superstar Floyd ‘Money’ Mayweather. The boxer had posted a photo on Twitter with a Centra debit card in hand in September last year.

Mayweather wasn’t the only high-profile celebrity to be tainted by association to the fraudulent project.

American music producer DJ Khaled had also endorsed the project on social media, touting the Centra debit card on Instagram. Nevertheless, the post has since been deleted from his social media profiles.

Last week, both celebrities had to face the music for their involvement with Centra Tech. The SEC formally charged both Mayweather and Khaled for unlawfully advertising the fraudulent ICO.

Mayweather copped a heavy judgement from the regulator for not disclosing promotional payments from three ICO issuers, including $100,000 from Centra Tech. Khaled also failed to disclose a $50,000 payment from Centra Tech.

Both celebrities refrained from admitting or denying the charges against them and agreed to pay penalties and restrictions to the SEC. Mayweather will pay $300,000 in disgorgement, a $300,000 penalty, as well as $14,775 in prejudgement interest.

Khaled is set to pay $50,000 in disgorgement, $100,000 as a penalty, and $2,725 in prejudgement interest.

The ramifications of their involvement goes further than financial penalties. Mayweather has agreed to collaborate with the ongoing investigation into Centra Tech and has been barred from promoting securities for three years. Khaled cannot promote any securities for two years.

Pyramid schemes and dodgy CEOs

During the past 10 years since Bitcoin’s inception in Satoshi Nakamoto’s white paper, we’ve seen more than a few spin-offs and hard forks riding on the name of the preeminent cryptocurrency.

In January 2018, a project named Bitcoiin2Gen was launched and was widely labelled as a pyramid scheme and MLM company. Its dodgy project prompted a warning  to consumers from the Tennessee Department of Commerce & Insurance (TDCI) Securities Division.

What made things even more perplexing was that American actor Steven Seagal was revealed as the brand ambassador for the project’s ICO. The project claimed to be a peer-to-peer (p2p) payment system in the mould of Bitcoin, running on the Ethereum blockchain.

Seagal’s involvement with the ICO didn’t go unnoticed by the SEC, which issued a statement directed at celebrities that warned of possible legal ramifications should they not be abiding by securities regulations:

“Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”

Just two months after its launch, the founders — along with Seagal — announced their departure from the project after the completion of its ICO in March.

American actress, businesswoman, and socialite Paris Hilton also fell prey to a not-so-innocent ICO in 2017.

Hilton had expressed her interest in the LydianCoin ICO in a series of now-deleted Tweets on Twitter. A few months laters, when the CEO of LudianCoin’s parent company was embroiled in serious legal trouble, Hilton publically distanced herself from the project.

American rapper The Game also got involved in the world of ICOs in August 2017, posting a video on Twitter in which he promoted a blockchain-based platform focused on the marijuana industry.

According to reports, the founders of the project did not register the ICO with the relevant regulators, which led to legal battles with initial investors.

U.S. rapper T.I. faced a lawsuit from investors after his FLiK token seemingly failed in November. A group of 25 investors are reportedly suing the rapper and his business partner, Ryan Felton.

The group had invested over $1,3 million in the token sale. It is claimed that T.I. and Felton used the money raised during the token sale to pump the price of the coin before dumping their FLiK tokens. The plaintiffs are looking for $5 million in damages from the duo.

In Russia, TV personality and singer Olga Buzova went as far as launching her own ICO in June 2018 for a multipurpose platform that is touting a messaging app and online store for starters.

SEC setting a precedent

The SEC’s decision to charge both Mayweather and Khaled has made the consequences of unlawful promotions of ICOs clear for all to see.

As the SEC enforcement division co-director, Stephanie Avakian, explained in the aftermath of the Mayweather and Khaled settlements, celebrity endorsements of ICOs can have far-reaching consequences for unassuming investors:

“These cases highlight the importance of full disclosure to investors. With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

The SEC enforcement division co-director, Steven Peikin, urged investors to be wary of so-called investment advice on social media platforms:

“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements. Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”

The SEC’s stance has been given a significant clout by the sheer sum of money both Mayweather and Khaled have had to pay for their indiscretions. If anything, it sends a strong message to other celebrities that are being paid to tout projects.

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CZ Gets a Tattoo of the Binance Logo as a Symbol of His Lifelong Commitment to the Platform

Tattoos are a lifelong commitment and those willing to get one are usually advised to think deep and about the design they want to get. Every person has a reason for getting their first tattoo. Some want to mark a memorable event in their lives. Others do it for the art for they consider the skin as a special type of canvas. The reasons for getting tattoos and their designs are as unique as the individuals who have them permanently on their bodies.

Changpeng Zhao Hints of a Tattoo of the Binance Logo

On the 1st of December, the CEO of Binance tweeted a link to an instagram video showing an arm being tattooed the Binance logo. Although his tweet suggested it was his arm, no one could confirm that it was CZ up until now. The tweet can be found below.

Confirmation of His New Tat

Confirmation of the tattoo on CZ’s arm came today via a medium post on the Binance page. The post was written by CZ himself explaining how it all begun with a simple dinner in Singapore with Coinmarketcap’s Luke Wagman and Gareth.

CZ goes on to give a preamble of the night as follows:

All was normal at a casual dinner with Luke and Gareth in Singapore, until the very end, when we noticed the Bitcoin logo tattooed on Luke’s arm. And he was ready to add tattoos of the CoinMarketCap and Binance logos to his arm, which would soon be a “crypto-arm.”

From there, all hell broke loose…

Origins of the Binance Logo

In the very elaborate post that can easily be classified as a short story by CZ, he explained the origins of the Binance logo.

Sixteen months ago, when we were designing the Binance logo, we tried many different variations. We wanted to represent the bids and asks on the exchange with two squares, while also echoing the “binary” word in our name (Binance = Binary Finance).

So, we had two squares on top of each other. It looked too much like a digital 8, and while the number is lucky in Chinese culture, it just didn’t feel right. Our designer, Tang, made a few different variations, and I noticed the two diagonal squares on top of each other, with a slight overlap.

Now this made sense; if there is an overlap between the bids and asks, it would result in a trade. I liked it. But the “logo” still didn’t feel like a “logo”. Another idea came up: we would put a bigger square, like a board where the first two squares sit on. The board would be the “playground” or place where things happened, which is what an exchange platform is, after all. The logo still looked weak. So the brilliant designers made the lines thicker (our current logo).

CZ’s Commitment to Binance and His Challenge to Crypto Projects

After getting the tattoo, Changpeng Zhao went on to reflect on how the team at Binance and himself have been committed to making the platform better by constantly improving it. He also explained that the Binance platform is here to stay and will become a lasting brand. The tattoo is a symbol of his commitment to the project.

CZ also went on to ask the founders of ICOs if they were dedicated to the point of getting a tattoo of their project’s logo. From CZ’s tattoo experience, a founder has to be committed enough to do a crazy thing such as tattooing a logo on his arm.

What are your thoughts on CZ getting a tattoo of the Binance logo on his arm? Please let us know in the comment section below. 

[Feature image courtesy of Binance on]

Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.

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