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Japanese Unicorn Liquid Enters Joint Venture as It Eyes US Expansion

The Japanese company achieved unicorn status last month after funding put its valuation at more than $1 billion.

Crypto trading platform Liquid has established a joint venture with Virtual Currency Partners in order to enter the United States market, Cointelegraph Japan reported on May 15.

The Japanese company, which achieved unicorn status after funding put its valuation at more than $1 billion last month, says the new venture will be known as Liquid Financial USA.

In a news release, Liquid added that it hopes to enable U.S. customers to use and trade qash, its native token, subject to approval from regulators.

The new venture has already acquired IQX, a company which is registered with the Financial Crimes Enforcement Network.

Kariya Kashimori, the co-founder and CEO of Liquid Group, said: 

“The United States is one of the world’s largest markets for the virtual currency industry, and our community and clients and institutional investors are widely interested in providing services in the U.S. market.”

Liquid says it is now building a team in the U.S. with a view to serving customers there by the start of 2020.

Its parent company, Quoine, is a fintech company licensed by Japan’s Financial Services Agency. One of Quoine’s directors, Katsuya Konno, told Cointelegraph last month that Liquid plans to use its newly unlocked funding to fuel global expansion, enter the security token market and develop its core trading exchange business.

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Japan’s GMO Internet Sees 45% Cryptocurrency Profit Dip for Q1 2019

The company has weathered the crypto winter despite its mining and exchange operations taking a hit.

Japanese internet giant GMO Internet Group saw its cryptocurrency profits drop in Q1 2019 amid market weakness, Cointelegraph Japan reported, quoting a new statement on May 10.

GMO, which in December 2018 withdrew from bitcoin miner production due to the fall in bitcoin (BTC) prices, saw revenues of 12.9 billion yen ($117.4 million) in Q1, compared to 23.3 billion ($212.1 million) in Q4 2018.

Driving the decrease was continued suboptimal performance of bitcoin mining, along with reduced volumes for GMO’s cryptocurrency exchange as traders held off buying and selling.

The company has remained committed to the cryptocurrency space throughout its recent hardships, which accelerated in November last year after bitcoin fell to 18-month lows of $3,130.

In February, in line with various other entities in the industry, GMO said it would be launching a stablecoin, in its case pegged to the yen.

As Cointelegraph Japan notes, executives will be looking for conditions on the market to now improve, along with profitability of GMO’s various offerings.

Beginning April 1, bitcoin saw a renaissance which has continued, the largest cryptocurrency this week passing $6,000 for the first time since its November plunge.

GMO also noted that reduced production costs contributed to the upside of its Q1 performance.

This week also saw annual results for Canadian mining giant Hut 8, executives similarly buoyant on the future despite figures revealing 2018 losses of nearly $140 million.

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Japanese Unicorn Crypto Exchange Liquid Reveals Plans to Expand to US Market

Japanese crypto exchange Liquid has partnered with VC consortium Virtual Currency Partners.

Japanese crypto trading platform Liquid has partnered with venture capital consortium Virtual Currency Partners (VCP) to create a jointly-owned entity that will pave the way for Liquid’s expansion to the United States. The news was revealed in an official announcement on April 29.

As recently reported, Liquid hit unicorn status earlier this month with the first close of an ongoing Series C funding that put the company’s valuation at over $1 billion.

According to today’s announcement, Liquid and VCP’s joint entity, Liquid Financial USA Inc. (Liquid USA), will support the expansion of Liquid’s crypto trading services to the U.S., subject to regulatory approvals. Liquid formally plans to enter the U.S. market via its holding company, Liquid Group Inc., which was created in March 2019, the announcement adds.

In addition, Liquid USA has reportedly acquired a FinCEN-registered money service business to ensure that it can launch the full range of its offerings in the U.S., including making Liquid’s native token, qash, available for utility and trading to U.S. residents.

According to the announcement, VCP is a consortium of investors and entrepreneurs that are investing in the fintech and crypto sectors, and is headed by chairman Barry Schiffman.

Schiffman reportedly served as executive managing director of JACFO Ventures, the U.S. arm of Japanese venture capital (VC) fund JAFCO, followed by the same role at U.S. VC and private equity firm Globespan Capital Partners. The VCP chairman’s extensive experience in Japanese-U.S. investments at JAFCO is cited as being an asset to Tokyo-headquartered Liquid’s U.S. expansion strategy.

Liquid USA is reportedly currently working to secure regulatory approvals U.S.-wide and is growing its team with the hope of onboarding U.S. clients by January 2020.

As previously reported, Liquid’s parent company is Quoine, a global fintech company licensed by Japan’s Financial Services Agency. The first close of Liquid’s recent Series C was reportedly led by American investment firm IDG Capital, with participation from major Chinese crypto mining manufacturer Bitmain Technologies.

In August 2017, major American crypto exchange Coinbase had become the industry’s first unicorn after it raised $100 million in August 2017, implying an enterprise valuation of $1.6 billion.

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Research Shows US Users Visit Cryptocurrency Exchanges 22 Million Times Each Month

Japan and South Korea took the remaining spots in the top three countries, still far behind the U.S.

The United States, Japan and South Korea are the world’s biggest fans of cryptocurrency exchanges, new research from software firm DataLight reported April 29.

After investigating the origin of traders who use well-known exchanges, DataLight — which continues to publish various insights into the industry — said that the U.S. has the highest share of visits, more than triple the next runner up.

The firm analyzed monthly visits to 100 platforms, which yielded around 22.2 million from U.S.-based users.

Second was Japan with 6.1 million visits, while South Korea had 5.7 million. The United Kingdom and Russia took fourth and fifth place, with 3.8 million and 3.1 million monthly visits respectively.

“Perhaps the most obvious and remarkable feature from the infographic is simply how much of the world is actually trading in cryptoassets: nearly every country on the globe is seeing some trading traffic, with the exception of Greenland and parts of central Africa,” DataLight summarized.

As Cointelegraph reported, the bitcoin (BTC) price surge earlier in April sparked a period of increased cryptocurrency trading worldwide.

Associated phenomena, such as South Korea’s Kimchi Premium surcharge, also reappeared, with DataLight proposing the events contributed to the exchange visit rates.

The research found that India had an eleventh-place rating, which comes despite an almost year-long ban on exchange financing by the country’s central bank. Local exchanges have since been forced to close or severely limit their activities.

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Hodler’s Digest, April 22–28: Top Stories, Price Movements, Quotes and FUD of the Week

Bitfinex and Tether deny the New York attorney general’s claims of a lost $850 million, and Samsung considers a Samsung Coin.

Top stories this week

Bitfinex Allegedly Covers $850 Million Loss With Tether Funds

The New York attorney general’s office alleged this week that crypto exchange Bitfinex lost $850 million and subsequently used funds from affiliated stablecoin operator Tether to secretly cover the shortfall. The attorney general’s office has obtained a court filing that alleged that Bitfinex’s operator, Tether Limited and its associated entities were in violation of New York law with activities that may have defrauded New York-based crypto investors. Bitfinex has already publicly renounced the accusations, repeating in a blog post that both its platform and Tether are financially sound and claiming the court filings are “riddled with false assertions.” Amid the allegations, Bitfinex withdrew funds worth almost $90 million from its cold wallet.

WSJ: Japanese Billionaire SoftBank Founder Lost $130 Million on Bitcoin Investment

Masayoshi Son, a Japanese billionaire and the founder of multinational conglomerate SoftBank Group, reportedly lost over $130 million with his bitcoin (BTC) investment. According to unnamed sources speaking to the Wall Street Journal, Son invested at the recommendation of Peter Briger, the co-chairman of asset management company Fortress Investment Group. However, Son allegedly invested in bitcoin when it was near its $20,000 all-time-high in late 2017 and sold during the 2018 bear market, losing $130 million. According to Bloomberg, Son’s net worth is $18.8 billion and has grown by more than 54% over the last year.

Report: Samsung Planning New Blockchain Mainnet Featuring Samsung Coin

According to unnamed sources speaking to a crypto industry publication, South Korean electronics giant Samsung is possibly developing a public-private blockchain with its own cryptocurrency, the Samsung Coin. The sources note that the alleged project would be developed by the company’s dedicated blockchain division, and that it would take the form of a blockchain mainnet based on Ethereum. The Ethereum-based offering, according to the reports, would probably incorporate elements of both public and private details, noting that he or she thinks “it will be hybrid — that is, a combination of public and private blockchains.”

Unconfirmed: Disney Considers $13.2 Billion Equity Deal With Stake in Korbit, Bitstamp

If a $13.2 billion equity deal goes through, cryptocurrency exchanges Korbit and Bitstamp could soon have Walt Disney Corp. as their owner. According to a Korean news outlet, the chairman of online gaming giant NXC Corporation, Jung-ju Kim, plans to sell his 98.6% stake in the company. Since NXC owns 47% of Nexon, South Korea’s largest game developer — which has stakes in the aforementioned cryptocurrency exchange — Disney would become a coincidental player in the cryptocurrency, pending the deal’s closure. To date, Disney’s only foray into the cryptocurrency sphere has been its Dragonchain blockchain, which has remained a fringe project despite a 2017 initial coin offering (ICO) raising around $13 million.

‘Blockchain Bandit’ Has Stolen 45,000 ETH by Guessing Weak Private Keys, Report Claims

According to a report released by Independent Security Evaluators, a so-called “blockchain bandit” has amassed almost 45,000 ethers (ETH) by successfully guessing weak private keys. Adrian Bednarek, a senior security analyst, discovered the hacker accidentally after uncovering 732 private keys through his research, using a combination of looking for faulty code and faulty random number generators rather than a brute force search. Looking at the findings, Bednarek realized that some of the wallets associated with the private keys he had found had a high volume of transactions going to a single address, with no money coming back out. At the end of ETH’s value, the total amount of ether allegedly stolen was equal to around $50 million.

Winners and losers

Bitcoin is a bit down at the end of the week, trading at around $5,300. Ether is trading at about $159, XRP at $0.29 and total market cap is at around $172 billion.

The top three altcoin gainers of the week are speedcash, commerce data connection and ACRE. The top three altcoin losers of the week are spectrum network, womencoin and icechain.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most memorable quotations

“We have been investing for the last year to re-architect our entire platform to support multiple blockchains in the face of global regulation. Global regulation of the cryptocurrency industry is inevitable for this truly borderless financial system to achieve mainstream adoption.”

Jonathan Levin, Chainalysis co-founder and chief operating officer

“My entire life I’ve been tracking people who are the best in the world, and hiding their identity. Finding Satoshi was a piece of cake for me.”

John McAfee, American entrepreneur and stalwart crypto advocate

 

“What is preventing the banking industry from rushing into it? I think it’s mostly culture. I think the tipping point is about having an entrepreneurial culture, a willingness to push people to keep asking why.”

Emmanuel Aidoo, head of digital market assets at Credit Suisse

FUD of the week

Research: White Paper Writers Can Earn $50K, but Say Startups Often Mislead Investors

According to a Decrypt investigation, white paper writers are earning between $1,000 and $50,000 per job. However, a number of them have accused some startups of asking them to mislead investors. As part of the investigation, freelancers that were interviewed said that they were “constantly required to fabricate and exaggerate facts,” including the addition of fake numbers and inventing entire business models for their clients. One anonymous United States-based white paper writer noted that copyright infringement often occurs, as startup executives ask writers to include details of patented technology belonging to rival companies. Notably, those interviewed said they have reported a recent uptick in demand for white paper writing.

Coinbase Files to Close Its Political Action Committee

Major U.S.-based cryptocurrency exchange Coinbase has filed to close its political action committee (PAC) this week. According to the filing, Coinbase’s PAC received no funds nor make any disbursements, and is now seeking to terminate the PAC. According to the regulations, a PAC must file a termination report in order to cease operations once it no longer intends to make or receive contributions or expenditures. Coinbase had formed the PAC in July of last year, becoming a founding member of the Blockchain Association in September — Washington D.C.’s first lobby group to exclusively represent the interests of the blockchain industry.

Report: India Considers Complete Ban on Digital Currencies

According to an unnamed official familiar with the matter, a draft bill that would ban cryptocurrency is allegedly circulating among various departments of the Indian government. The draft bill, dubbed the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019,” is reportedly part of inter-ministerial consultations. A committee made up of various economic and investor protection departments of the Indian government has allegedly supported the idea to completely ban the “sale, purchase and issuance of all types of cryptocurrency.” According to the source, this committee is reportedly considering an option to ban digital currency under the Prevention of Money Laundering Act, as it can be used for money laundering.

Best Cointelegraph features

IMF Spring Meetings: Digital Money Is Imminent, but No Decentralization in Sight

In some small but important steps for adoption, the IMF’s Spring Meetings touched on the positive disruption that blockchain can bring, as well as the possibilities opened by a central bank digital currency.

The Burst of the Bitcoin Bubble: An Autopsy

Marcello Minnena of the quantitative analysis and financial innovation unit in Consob gives an analysis of what’s been going on with the top crypto’s behavior and where a floor may possibly be.

Mutual Owners, Mutual Funds: What We Know About the Bitfinex/Tether Scandal

After this week’s ongoing scandal involving Bitfinex, Tether and the U.S. Attorney General, Cointelegraph gives an overview of all of the events of this relatively confusing situation.

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SBI’s Crypto Exchange SBIVC Achieves Profits in First Fiscal Year, Considers STO

In the full fiscal year ending on March 31, 2019, SBI Virtual Currencies recorded a profit before tax of around $3.2 million.

New Japanese crypto exchange SBI Virtual Currencies (SBIVC) achieved profitability in the first year of its launch, Cointelegraph Japan reports on April 26.

SBIVC exchange, launched by Tokyo-based financial services giant SBI Holdings, reportedly recorded a profit before tax of almost 360 million Japanese yen ($3.2 million) for the full fiscal year from April 2018 to March 31, 2019.

SBI also made a number of major announcements in its new financial report. As such, SBI revealed that it is considering the launch of a security token offering (STO) later this year, adding that the firm is awaiting the revision of the Financial Instruments and Exchange Act, which is scheduled for June 2019.

As well, SBI said it is planning to continue to expand its recently established crypto mining arm SBI Mining Chip (SBIMC), expecting to see an increase of the mining hash rate.

In addition, SBI said it will continue to strengthen its relationship with its major crypto partner Ripple, the firm behind the third-largest crypto by market cap XRP. Particularly, Yoshitaka Kitao, CEO and representative director SBI, has been recently appointed as an executive of Ripple Labs and noted his desire for the two entities to work together.

First announced in April 2018, SBI Virtual Currencies was registered as a business in late 2017, according to data from SBI’s new financial report. As the report notes, SBI Virtual Currencies went live in June 2018 with a limited amount of orders, while account registration started in July 2018.

As previously reported, SBI Virtual Currencies initially supported major cryptocurrencies such as bitcoin (BTC), ether (ETH), XRP and bitcoin cash (BCH). In mid-April, the exchange officially announced its plans to delist bitcoin cash. Subsequently, SBI executives clarified that the removal of BCH from the exchange was not a result of other deslistings involving bitcoin SV (BSV) — a controversial hard fork of BCH — by a number of non-Japanese exchanges.

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CEO of Japanese Finance Giant SBI Appointed as Ripple Labs Executive

Yoshitaka Kitao has been appointed as an executive of Ripple Labs Inc.

Yoshitaka Kitao, CEO and representative director of Japanese financial services giant SBI Holdings, has been appointed as an executive of Ripple Labs Inc., Cointelegraph Japan reports on April 26.

As previously reported, SBI Holdings is an active partner of Ripple via their joint venture, “SBI Ripple Asia,” which was established to promote the use of XRP in Asian financial markets back in 2016.

SBI’s official announcement states that Kitao’s appointment to his new executive role at Ripple Labs will aim to “further promote blockchain and digital asset utilization at financial institutions in Japan and Asia, and strive to develop financial services with high customer benefit.”

In October 2018, SBI and Ripple launched a consumer-focused XRP–powered payments app MoneyTap, which uses Ripple’s blockchain solution xCurrent to enable domestic bank-to-bank transfers in real time.

MoneyTap aspires to eventually see a consortium of 61 Japanese banks — representative of more than 80% of all of Japan’s banking assets — participate in the service, and received investments from 13 local banks this March.

As Cointelegraph Japan today notes, Kitao’s appointment ostensibly aligns with a bid to move forward with a closer rapprochement between Ripple and enterprise blockchain consortium R3.

As previously reported, Kitao has publicly advocated for the merits of both Ripple and R3, the latter of which counts SBI as a member and reportedly largest outside shareholder.

After erstwhile legal disputes between R3 and Ripple had been resolved in fall 2018, Kitao claimed this February that he had encouraged the two former ostensible rivals to cooperate on a joint venture, and that he was bullish on the potential impact of “Corda Settler” — R3’s universal payment settlement platform, which unveiled XRP as its first supported crypto in December.  

This January, SBI published its nine-month financial report, which identified the implementation of R3 and Ripple technologies as a major part of its strategy.

The past couple of years have seen SBI pursue multiple ventures in the crypto sector, including its own exchange — Vctrade — alongside a series of investments in businesses developing crypto infrastructure and services.

Earlier this month, Japanese crypto startup FXCoin revealed it had completed a third-party allotment of shares with SBI Holdings, contributing to the startup’s aims of launching a crypto exchange business in the country.

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Mt. Gox Trustee Extends Deadline for Rehabilitation Plan Submission

Now-defunct Japanese cryptocurrency exchange Mt. Gox’s trustee has extended the deadline for submission of the rehabilitation plan.

The trustee of now-defunct Japanese cryptocurrency exchange Mt. Gox has extended the deadline for submission of rehabilitation plans, according to an official announcement published on the company’s website on April 25.

Per the announcement, the exchange’s Rehabilitation Trustee Nobuaki Kobayashi filed a motion in a bid to extend the submission deadline of a rehabilitation plan at the Tokyo District Court. On April 24, 2019, the court released an order to extend the deadline to October 28, 2019. The announcement reads:

“A large amount of rehabilitation claims that the Rehabilitation Trustee fully or partially disapproved remains undetermined for being subject to claim assessment procedures. Accordingly, it is not possible at this moment to make appropriate provisions in a rehabilitation plan on modifications of the rights of the rehabilitation claims, repayment methods, and appropriate measures for the undetermined rehabilitation claims and therefore to submit a rehabilitation plan by April 26, 2019.”

As previously reported, roughly 24,000 creditors were purportedly affected by Mt. Gox’s 2011 hack and subsequent collapse in early 2014, which resulted in the loss of 850,000 BTC (valued at roughly $460 million at the time). In June 2018, Japanese court approved a petition for the exchange to begin civil rehabilitation, which had the knock-on effect of repaying creditors in BTC and ending the bitcoin sell-offs.

In fall 2018, Kobayashi published a statement disclosing that he had liquidated almost 26 billion yen (about $230 million) in BTC and bitcoin cash (BCH) over four months as of early March 2018.

On March 19, Kobayashi announced that he had concluded processing creditors’ rehabilitation claims and that they will be notified of the results within days. Later in April, the trustee said that all creditors who filed rehabilitation claims had received a decision, but warned the timing and method of repayment had not been determined.

In early April, Andy Pag, the founder and coordinator of Mt. Gox Legal (MGL) — the largest group of creditors of Mt. Gox — quit his post and decided to sell his claim.

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Monex Reveals July Start Date for US Exchange as Coincheck Reports $15 Mln Loss in 2018

The broker’s acquisition of Coincheck and the crypto bear market appeared to weigh on overall performance.

Japanese online broker Monex Group is planning to start trading in their United States cryptocurrency exchange in July, CEO Oki Matsumoto said on April 25, according to Cointelegraph Japan.

The spin-off, currently dubbed TradeStation Crypto, would serve semi-professional traders and seeks to shore up profitability for Monex’s cryptocurrency offerings.

Reuters also noted today that Monex had a loss of over $15 million on its crypto operations in 2018. The figure, part of financial performance data released this week, stems from the loss-making Coincheck exchange thatMonex acquired last April.

Despite restructuring the platform and returning it to full regulated service, the operator saw total losses of 1.7 billion yen ($15.2 million) for the 12 months to March 2019.

Overall, Monex’s annual revenues dipped slightly compared to 2017, from $440 million to $420 million.

The report caps a difficult year for cryptocurrency businesses, with bitcoin (BTC) and altcoins spending much of the period in a phase of significant decline from previous highs.

In November, BTC/USD almost halved to hit recent lows of $3,100, a move which accompanied a drop in mining activity and cost-cutting exercises by exposed companies such as mining giant Bitmain and exchange Huobi.

However, as Cointelegraph reported, last week saw one investment deal alone contribute $200 million to the operator of South Korean exchange Bithumb by a Japan-based blockchain fund.

Monex also signalled changes could be afoot this month, with a plan to integrate crypto into its retail client offerings.

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Japan’s 3rd Largest Bank by Assets Joins R3 Marco Polo Blockchain Network

SMBC becomes the network’s latest major member, following BNP Paribas and ING.

Major Japanese bank, Sumitomo Mitsui Banking Corporation (SMBC), will leverage R3’s Marco Polo blockchain network for trade finance, local cryptocurrency news outlet CoinDesk Japan reported on April 25.

SMBC, which is Japan’s third-largest bank by assets, plans to roll out blockchain services in the second half of 2019.

Other currency members of Marco Polo, which is powered by R3’s Corda enterprise blockchain platform, include banks such as BNP Paribas and ING.

The product successfully conducted its first trade finance operations in March, an operation involving two German firms and local bank Commerzbank.

“Trade finance […] is very complicated, and many of the documents necessary for trade transactions are paper-based and complex,” SMBC’s vice chairman, Yasuyuki Kawasaki, said while announcing the news at a Tokyo fintech seminar.

“This time-consuming process has been going on for 100 years. Sumitomo Mitsui Banking Corporation has joined Marco Polo to build a global platform, and is preparing to provide new services later this year.”

Various trade finance schemes are under development worldwide, with China this week announcing a partnership of its own involving a subsidiary of its central bank, the People’s Bank of China.

French lender Societe Generale, meanwhile, used the Ethereum (ETH) blockchain to issue bonds worth 100 million euros this month.