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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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Hodler’s Digest, Dec. 3-Dec.9: US SEC Delays BTC ETF Decision Again, While Nasdaq Confirms 2019 BTC Futures Launch

The United States SEC has delayed their Bitcoin ETF decision yet again, and Venezuela’s Petro is raised 150 percent in value.

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Top Stories This Week

US SEC Delays Bitcoin ETF Decisions, Changes Deadline to Late February

The United States Securities and Exchange Commission (SEC) has again postponed its decision regarding approval for a Bitcoin (BTC) exchange-traded fund (ETF) this week.

According to a document released by the SEC, the new deadline is Feb. 27, 2019, and they will take the extension to further review the rule change proposals needed to list the BTC ETF.

The financial instrument was proposed by investment firm VanEck and blockchain company SolidX, with plans to list it on the Chicago Board Options Exchange (CBOE). Legally, as the proposed rule change was first published in the Federal Register on July 2, 2018, the maximum period of consideration falls 240 days later, on Feb. 27, 2019.

Venezuelan President Maduro Raises Petro’s Value by 150 Percent

Nicolas Maduro, the president of Venezuela, has raised the reference value of the national cryptocurrency, Petro, from 3,6000 to 9,000 sovereign bolivars. Speaking in Caracas this week, Maduro also ordered an increase in the monthly minimum wage by 150 percent, the sixth increase in 2018 and 25th in total during Maduro’s presidency.

At the same time, Venezuela also devalued Dicom, the official exchange rate in the country, bringing the national fiat down around 40 percent from 96.84 sovereign bolivars per dollar on Nov. 30 to 171.67 the following day.

Nasdaq Confirms Bitcoin Futures Launch for First Half of 2019

Nasdaq, the world’s second-largest stock exchange, has confirmed plans to launch Bitcoin futures in the first half of 2019. VanEck Director of Digital Asset Strategies Gabor Gurbacs told Cointelegraph that the firm has been discussing futures with Nasdaq, MVIS Indices, and other market participants for “about 18 months.”

According to Gurbacs, the new offering will differ from those trading on the on the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) with its transparency and resiliency.

Major Crypto Exchange Binance to Launch ‘Binance Blockchain’ Soon

Binance, the world’s largest crypto exchange by trading volumes, will launch its own blockchain “Binance Chain” in the “coming months,” according to a tweet this week. The upcoming blockchain will allow persons to create new cryptocurrencies and Initial Coin Offering (ICO) tokens. Binance CEO Changpeng Zhao (CZ) noted that the new plans are actually a response to the “old vision” of crypto, which will then lead to increasing adoption on a global scale.

Crypto Exchange ErisX Raises $27.5 Mln in Funding from Fidelity, Nasdaq, Others

Crypto exchange ErisX has raised $27.5 million from stock exchange Nasdaq and Fidelity, which administers over $7.2 trillion in client assets, among other clients. According to media reports, ErisX will offer both spot trading in Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC), as well as futures markets in the following year, pending regulatory approval.

Previous reports had noted that ErisX could include Bitcoin Cash (BCH) support, but this week’s news did not include the altcoin. According to ErisX CEO Thomas Chippas, the investment’s purpose is to hire staff and “build out our infrastructure and secure the appropriate steps are taken to develop a regulated market for digital assets.”

Most Memorable Quotations

Most Memorable Quotations

Hester Peirce

“Definitely possible could be 20 years from now, or it could be tomorrow. Don’t hold your breath. The SEC took a long time to [establish] Finhub. It might take even longer to approve an exchange-traded product,” — Hester Peirce, commissioner of the United States Securities and Exchange Commission (SEC), speaking about Bitcoin ETF approval

Justin Sun

“#TRON will build a fund to rescue #ETH and #EOS developers from the collapse of their platform as long as those developers migrate their dapps to #TRON,” — Justin Sun, TRON CEO

Laws and Taxes

Laws And Taxes

US: Two New Bills Focusing on Crypto Market Manipulation, Regulations Introduced

Two new bills in the United States were compiled this month that focus on crypto market manipulation, with the aim to “position the United States to be a leader in the cryptocurrency industry.” The “The Virtual Currency Consumer Protection Act of 2018” and “The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018” will go before the House of Representatives, and were a bipartisan effort from congressmen Darren Soto and Ted Budd.

Swiss Finance Minister Prefers Current Laws, Rejects Creation of Blockchain Legislation

Ueli Maurer, the Swiss Minister of Finance, has rejected a possible blockchain law in a speech at blockchain conference this week. Switzerland plans to work with existing laws in order to regulate and legislate the new technology and its financial applications, as opposed to introducing a specific blockchain or crypto legal framework, according to Maurer. The government expects to propose changes to six laws, including the civil code and bankruptcy law, in 2019.

New York Financial Services Department Approves Blockchain Digital Payment Platform

The Department of Financial Services of New York (NYDFS) has authorized a blockchain-based digital platform offered by New York-based Signature bank. The financial services department will allow the bank to offer its digital payment platform Signet in the state, which uses blockchain tech to allow bank clients to “transfer ‘Signets’ to make payments with no transaction fees, at any time of the day, year-round.” The department noted that Signet has been subject to a “comprehensive and rigorous review” and needs to comply with “significant regulatory conditions.”

US Congressman Plans to Introduce Federal Cryptocurrency and ICO Regulation

Republican U.S. Representative Warren Davidson announced plans this week to introduce legislation on a federal level to regulate both cryptocurrencies and Initial Coin Offerings (ICO). The new bill would create an “asset class” for both crypto 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.”

G20 Leaders Call for Global Cryptocurrency Taxation and Regulation Systems

After their meeting this week, the G20 countries have called for the taxation of cryptocurrency, as well as its regulation to combat money laundering. According to a Japanese news outlet, the final text of a G20 document asks for a “taxation system for cross-border electronic payment services.” The document then continues that under the current laws, foreign companies without a base in Japan cannot be taxed by the local government, noting the need for this taxation system.



Mastercard Files Patent for Anonymization Method for Blockchain Transactions

Mastercard has filed a patent for a system that anonymizes transactions on a blockchain. According to the filing, the “the use of one or more intermediary addresses to obscure the source and destination of funds in a blockchain transaction” can be used in order to “increase anonymity of entities associated with blockchain addresses.” The system outlined by Mastercard would consist of a series of “anonymization request[s]” designed to anonymize the transactions themselves, rather than just the user behind any individual wallet.

Switzerland’s ‘Crypto Valley’ Ranked the ‘Fastest-Growing’ European Tech Hub

Zug, Switzerland, which is also known as “Crypto Valley,” has been ranked the fastest-growing tech community in Europe. According to the “State of European Tech” report from London-headquartered global technology investment firm Atomico, Zug tops the list in a comparison of year-on-year growth of attendees to tech-related “meetup” events per European city. The report notes that Zug has a 117 percent increase as compared with 2017.

More Than One Third of German Big Businesses See Blockchain as Important as Internet

A recent survey has shown that over one third of big businesses in Germany consider blockchain technology to be as revolutionary as the internet. The survey, conducted by the German Federal Association for Information Technology, Telecommunications and New Media (Bitkom), found that 15 percent of German companies think blockchain will “change society and the economy as much as the Internet.” Larger companies, with 500 or more employees, were more than twice as likely to hold that opinion, at 36 percent.

Abu Dhabi Int’l Financial Free Zone Completes Phase of Blockchain-Based KYC Project

The Abu Dhabi Global Market’s (ADGM) regulatory body, the Financial Services Regulatory Authority (FSRA), along with Big Four audit firm KPMG, released a review of the blockchain-based Know Your Customer (KYC) utility project this week, calling it a “successful” first phase. An international financial free zone in the capital of the United Arab Emirates (UAE) worked on the project for four months, along with a consortium of major UAE-based financial institutions. The review notes the use of cryptography and digital signatures can support a more secure and convenient system for upholding KYC industry standards.

US Air Force Graduate Schools Develops Blockchain-Based Supply Chain Tool

The graduate school for the U.S. Air Force has developed an educational tool based on blockchain technology for managing supply chains. The tool is a live application and a set of tutorial videos released by the U.S. Air Force Institute of Technology (AFIT). According to their report, “blockchain will revolutionize […] the digital infrastructure for future supply chains,” which can translate into “better visibility” for the military’s “extremely complex logistics network.” The Institute worked with private supply chain security firm SecureMarking and the University of South Dakota Beacom School of Business.

Mergers, Acquisitions, and Partnerships

Mergers, Acquisitions, and Partnerships

Seven Southern EU Member States Sign Declaration to Promote Blockchain Use

Seven southern European Union members states — Malta, France, Italy, Cyprus, Portugal, Spain, and Greece  — have released a declaration calling for the promotion of distributed ledger technology’s (DLT) use in the region. The document notes blockchain tech’s use in protecting citizens’ privacy and making bureaucratic systems more efficient, as well as its potential for use in the “education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare” industries.

Hardware Wallet Ledgers Partners with German Startup to Create Security Token Framework

Crypto hardware wallet firm Ledger and crypto startup Neufund have announced a partnership to let users manager security tokens through Ledger’s desktop application. The collaboration aims to develop an overall framework for security tokens. In addition, Ledger Live, which is a recently launched desktop app for crypto asset management, plans on “soon” adding an ERC-20 integration, which will let users manage security tokens issued via Neufund’s set of protocols.

US Trading-Comms Firm Partners With Blockchain Consortium R3

American trading-communications firm IPC system and enterprise blockchain software consortium R3 have partnered this week. IPC is known for producing trading turrets, i.e., communications systems used by financial traders on their trading desks. With the partnership, IPC will support R3’s Corda blockchain networks on its Connexus Cloud platform — a financial markets cloud-based platform for data, voice, and business communications and compliance.

Four Blockchain Companies Jointly Launch ‘Blockchain for Europe’ Association

Four major blockchain companies — Ripple, the NEM Foundation, Emurgo, and Fetch.AI — have formed a “Blockchain for Europe” Association. The organization’s aim to promote understanding and proactive regulation of blockchain and other distributed ledger (DLT) technologies across Europe, addressing the EU’s “fragmented” policy debate around blockchain. The organization will use education about the technology in the member states in order to advocate for future “smart” regulation, conducive to innovation, that will help the continent “shape the global agenda” on blockchain.

Funding Rounds

Funding Rounds

Overstock.Com’s Blockchain Venture Arm Purchases Equity in Blockchain Agri Project

Medici ventures, Inc.’s blockchain venture arm, has purchased $25 million in equity in agricultural blockchain project GrainChain. The project has developed a blockchain-powered system for the tracking of supply chain parties in the distribution process of harvests, allowing producers, buyers, and sellers to create smart contracts in order to secure funds throughout the grain transaction process. The platform is aimed at small- and medium-scale farmers, which can then remove the middlemen and conduct business outside of their immediate geographic area.

Seven New Funds in Ohio Plan $300 Million Investment for Blockchain Startups

Seven Ohio-based funds and other investment teams will contribute $300 million in investments into blockchain startups through 2021, as announced this week by executives. Speaking at a blockchain conference, the CEO of nonprofit JumpStart Ray Leach announced that the seven funds with investing $100 million in “early-stage startups that focus on using blockchain technology for business or government.” As well, “additional investment teams” will add $200 million for blockchain outfits working within Ohio’s social welfare projects, dubbed “Opportunity Zones.”

Sequoia Capital, Huobi Participate in $35 Mln Funding for Scalable ‘Blockchain’ Network

A new blockchain-type network led by a Turing Award recipient and various other academics have received $35 million in funding from investors including Sequoia Capital, IMO Ventures, FreesFund, Rong 360, Shunwei Capital, F2Pool, and major crypto exchange Huobi. The network, dubbed “Conflux,” aims to tackle blockchain scalability, proclaiming that its new testnet is capable of processing ”at least 6,500 Transactions Per Second (TPS), while supporting at least 20,000 nodes.”

Winners and Losers

Winners And Losers


The market is holding steady after a week of declines, with Bitcoin trading at around $3,489, Ripple at $.30, and Ethereum at $91.99. Total market cap is at about $110 billion.

The top three altcoin gainers of the week are TittieCoin, Bastonet, and TRONCLASSIC. The top three altcoin losers of the week are FREE Coin, Etheera and RabbitCoin.

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

FUD of the Week

FUD Of The Week

Former Israeli PM Calls Crypto a ‘Ponzi Scheme,’ But Thinks Blockchain Is Important

Former Israeli Prime Minister Ehud Barak compared digital currencies to Ponzi schemes but noted the importance of blockchain technology. Barak, who participated in the Camp David Accords in 2000, now serves as the chairman of medical marijuana producer InterCure. When asked about the comparison of the alleged marijuana investment “bubble” to crypto, Barak underlined that “he would never invest” in cryptocurrencies as “Bitcoin and cryptocurrencies [are] a Ponzi scheme.” However, Barak added that blockchain technology and smart contracts are important and useful technological and mathematical concepts.

US Securities Regulator Issues Cease and Desist to Delaware-Based Digital Asset Fund

The U.S. Securities and Exchange Commission (SEC) has issued a cease and desist against CoinAlpha Advisors LLC in addition to ordering a $50,000 penalty to be paid. The company had allegedly raised over $600,000 from 22 investors in at least five states, purchasing limited partnership interest in the fund in exchange for a proportional share of any profits derived from the fund’s investment in digital assets. However, even those CoinAlpha filed an exemption notice with the SEC in November 2017, the company was not registered with the SEC, meaning that they violated securities laws.

Chilean Supreme Court Rules Against Crypto Exchange Over Bank Account Closure

The Chilean Supreme Court has ruled against crypto exchange Orionx in a case over the right for state-owned bank Banco del Estado to close the exchange’s account. The high court revoked the July decision that protected Orionx and ordered the bank to reopen the account, with the court decision noting that the nature of cryptocurrencies prevents banks from receiving detailed information on transactions, customers, and companies that interact with the assets. The court has ruled that the bank did not violate any aspect of the Chilean constitution.

South Korean Financial Authority Warns 2 Banks Over Poor Crypto Transaction System

A financial authority in South Korea has warned major domestic banks Kookmin Bank and Nonghyup Bank over their lack of management of cryptocurrency transactions and Anti-Money Laundering (AML) regulation. The country’s Financial Supervisory Service (FSS) has found that the banks had “unreasonable elements related to virtual [currency] handling business.” The banks have also been given orders for improvement and must submit the measures to the FSS within three months or face more “direct sanctions.”


Prediction Of The Week

Quoine CEO: Bitcoin Will Surpass Last Year’s All-Time Highs by End of 2019

Mike Kayamori, the CEO of Japanese fintech firm and crypto exchange operator Quoine, said in an interview this week that he believes Bitcoin (BTC) will “surpass” its all-time price highs by the end of 2019. He also noted that the bottom is near for the top coin, citing the pressure on Bitcoin miners as an accurate sign of its coming. Kayamori added that the better practices across the industry, Japan’s crypto ecosystem, in particular, is experiencing a period of “consolidation.”

Best Cointelegraph Features

Best Cointelegraph Features

G-20 Summit Results: Crypto Is Important for Global Economy, Needs to Be Regulated and Taxed

After the G20 summit that took place last week, the global community learned that G20 leaders believe the cryptocurrency is worth bringing up in reference to the sustainable development of the global economy. In this analysis, Cointelegraph looks at how the G20 member states see their role in both crypto regulation and taxation.

EOS Community Is Challenged After Node Announces Financial Rewards for Votes

After various previous centralization scandals surrounding altcoin EOS, a new issue has surfaced, with one of their Block Producers (BP) allegedly offering money in exchange for voting them as a proxy in a thinly veiled “gamification.” Cointelegraph delves into the BP, Starteos, and how its offer of crypto for votes was received in the EOS community.

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Ledger, Neufund Partner to Create Security Tokens Framework

Crypto hardware wallet Ledger to allow users to manage security tokens through Ledger’s desktop app.

Cryptocurrency hardware wallet firm Ledger has partnered with German crypto startup Neufund to let users manage security tokens via Ledger’s desktop app, according to a press release Dec. 6.

Ledger’s collaboration with blockchain-based equity and crypto fundraising platform Neufund aims to develop a framework for security tokens. Ledger Live — a recently launched desktop application for crypto asset management — is reportedly adding an ERC-20 integration “soon.” The app will let users manage security tokens issued via Neufund’s set of protocols.

Previously, Neufund teamed up with cryptocurrency exchange BitBay to let investors buy and sell equity tokens with fiat currencies. At that time, Neufund was reportedly aiming to become the first end-to-end primary issuance platform for security tokens, specializing in equity tokens.

Meanwhile, Ledger announced in late November that it is expanding to New York as part of its development of institutional custody offering Ledger Vault. Ledger Vault is a form of custody solution allowing multiple members of a corporate entity such as a hedge fund to access the same cold storage wallet.

Also in November, the Germany-based IOTA Foundation announced it will integrate IOTA tokens with Ledger’s cryptocurrency hardware wallets.

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Seven EU States Sign Declaration to Promote Blockchain Use

During an EU meeting, seven southern EU member states released a declaration asking for help in the promotion of blockchain.

Seven southern European Union member states have released a declaration calling for help in the promotion of Distributed Ledger Technology’s (DLT) use in the region, the Financial Times (FT) reports Dec. 4.

The declaration was reportedly initiated by Malta and signed by six other member states, France, Italy, Cyprus, Portugal, Spain and Greece, during a meeting of EU transport ministers in Brussels on Tuesday.

The participating governments explained that DLT –– one type of which is blockchain –– could be a “game changer” for southern EU economies.

Namely, the document cites “education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare” as services which can be “transformed” by this technology. The group also cites blockchain tech’s use for protecting citizens’ privacy and making bureaucratic procedures more efficient.  

The report further notes that this technology has potential beyond digital government services:

“This can result not only in the enhancement of e-government services but also increased transparency and reduced administrative burdens, better customs collection and better access to public information.”

In mid-November, a member of the Executive Board of the European Central Bank, Benoit Coeure, declared that he considers Bitcoin the “evil spawn of the [2008] financial crisis.”

Also in November, banking groups BBVA and Banco Santander joined the EU International Association for Trusted Blockchain Applications (IATBA), Cointelegraph reported. The association itself is set to be launched Q1 2019 and aims to develop blockchain infrastructure and standards.

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CEO of Allegedly Compromised Wallet Bitfi Calls Teenage Hacker’s Claims ‘A Disgrace’

Cryptocurrency hardware wallet manufacturer Bitfi called claims their wallet had in fact been hacked a “disgrace” in comments to Cointelegraph August 2, as controversy around the company’s security prowess builds.

In a statement to Cointelegraph, Bitfi CEO Daniel Khesin said that it had “absolutely no evidence” the wallet was insecure:

“As of now, we have no evidence that our device can be hacked and if someone succeeds in doing so then we will immediately put out a fix to all devices to address the vulnerability that was discovered and it will be unhackable once again.”

Bitfi and official partner John McAfee had offered a bounty worth $100,000 in July for anyone able to compromise their so-called “unhackable” hardware wallet.

Photos of the wallet’s components drew controversy when they surfaced online last week, commentators voicing concerns Bitfi’s claims it had built the “most sophisticated instrument in the world” had little basis.

On Thursday, those concerns increased after Saleem Rashid, the fifteen-year-old who unearthed a security vulnerability in fellow hardware wallet Ledger in 2017, announced on Twitter he had succeeded in hacking Bitfi’s product.

The company appeared not to believe Rashid, arguing his decision not to claim the bounty meant the situation was not all it seemed.

Responding, Rashid retweeted cryptocurrency researcher Alan Woodward, who had also discussed the hack with Bitfi in the same Twitter thread.

“It’s not speculation based on what I’m looking at,” Woodward had written, continuing:

“And we don’t want your money. Give it to charity. We are concerned that others will entrust their money to something that is not secure in the way appear to suggest.”

An official Bitfi spokesperson told Hard Fork August 1 that the recent criticism of the wallet’s security on Twitter was the product of an “army of trolls” hired by hard wallet competitors Trezor and Ledger, stating:

“Please understand that the Bitfi wallet is a major threat to Ledger and Trezor because it renders their technology obsolete […] So they hired an army of trolls to try to ruin our reputation (which is ok because the truth always prevails).”

Trezor’s founder and CEO has since denied the accusation in a tweet.

Bitfi’s CEO Khesin meanwhile continued the skeptical position towards Rashid, challenging him to accept the money if he had in fact compromised the device.

“…The person claiming to have cracked the bounty has not come forward to prove it and has tweeted 5 min ago that he will not be pursuing the bounty because it’s not worth his time […],” he told Cointelegraph.

“Yet he tweeted to the whole world this morning that he hacked into our wallet. I think it’s a disgrace for any human being to do such a thing but I will leave to you to judge.”

After Rashid created code to ‘backdoor’ Ledger’s wallets back in November 2017, the company released posts describing the events as “NOT critical” and said possible attacks “cannot extract the private keys or the seed.”

Rashid then refuted the claims on social media and a post on his personal blog in March of this year, stating he could still “autonomously extract the root private key once the user unlocks the device” and use to it instigate manipulation of destination addresses for transactions.

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Thai Bond Market Association to Launch Blockchain-Based Registrar Bond Service Platform

The Thai Bond Market Association (TBMA) will deploy a blockchain-powered solution on its registrar service platform, local news agency Bangkok Post reports July 28.

The new registrar service platform, which is scheduled to be introduced this year, intends to provide a faster bond certificate issuance and, in turn, boost the liquidity of the secondary market, according to TBMA president Tada Phutthitada.

While market liquidity has been growing, the issuance of bond certificates still remains slow, which may cause serious limitations to the growth of corporate bonds in the secondary market. According to Mr. Tada, the platform will reduce the bond issuance time from current 7-15 days to 3-4 days.

“We are trying to accommodate the market to grow without risks that may cause limitations.”

The TBMA president revealed that the the new registrar platform is set to apply to the regulatory sandbox by the end of 2018, and will become the first fintech service applying to both regulatory sandboxes at the Thai Securities and Exchange Commission (SEC) and the Bank of Thailand (BoT).

The platform will be built on a smart contract platform using a private blockchain, which reportedly will provide users with a digitized settlement database, a bond subscription system, and bond transaction verification. It will also enable issuers, regulators, companies, and investors to have access to interest rates, payments and other bond information.

The TBMA will further develop the platform, eventually introducing ‘Bond Coin’, a clearing and settlement system to be developed within the next year.

TBMA’s executive vice-president Chaitat Prachuabdee also revealed that the company is now exploring the idea of launching its own “utility settlement coin” to support the digitized bond system.

The average trading value of corporate bonds in the secondary bond market has seen  significant growth over the past six years, reaching 5.09 billion baht ($152 million) in 2017, up from 4.33 billion (about $130 million) in 2016 and 800 million ($24 million) back in 2011.

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100 Tokens By 2020: Ledger Pledges Big Expansion for Crypto Custody

The race among crypto custodians to secure high-end clients is growing fiercer by the day.

Ledger, the France-based wallet and custody startup, is ramping up the number of cryptocurrencies it supports to meet the demand for multi-coin solutions, particularly from institutional investors.  

Revealed exclusively to CoinDesk, the company will add support for new crypto assets on the first Tuesday of each month, starting in August, with a goal of having more than 100 supported by the end of 2019. Currently, Ledger’s products and services handle only about two dozen tokens, and this week it’s adding support for tron (TRX) and zcoin (XZC).

The move is yet another sign of how the cryptocurrency industry is rapidly evolving, with an ever-widening array of assets to choose from and big-money players nosing around for investment opportunities and influencing companies’ business decisions.

While Ledger, founded in 2014, is primarily known for its hardware wallet and corresponding app for individual bitcoin users, CEO Eric Larcheveque cited its newer business lines – which offer custody services to hedge funds and other big players – as the driver behind this “Token Tuesdays” initiative. 

“If we want to sign those [institutional] customers, we don’t have a choice,” Larcheveque told CoinDesk. “We have to support the top 100 cryptos, minimum.”

For similar reasons, BitGo recently added support for 57 ethereum-based assets to its custody services for institutions. Meanwhile, thousands of wealthy accredited investors are on a waiting list for the crypto key management startup Casa, which is scheduled to release its self-managed bitcoin solution in August and eventually add other tokens.

In turn, however, Larcheveque predicted offering custodial support for a wider range of tokens could bring would-be whales off the sidelines, saying:

“This will allow hundreds of hedge funds to deploy their capital into crypto, and enable all these other financial institutions to move billions into crypto.”

Further, Ledger president Pascal Gauthier said bringing traditional players into the wider crypto ecosystem would bolster bitcoin’s real-world value, even if these investors ultimately buy other crypto assets. After all, the world’s largest cryptocurrency is still one of the largest liquidity conduits for cashing out tokens.

More broadly, “institutions coming into this industry means that there is even more trust and it brings more value to the industry,” Gauthier said.

A rising tide…

As Ledger courts institutions, it aims to do so in a way that enhances the hardware wallet’s utility for retail investors as well.

“I would say that the major drive for crypto integration, in the end, comes from the needs of our enterprise customers,” said Larcheveque. “At the same time, it profits our hardware wallet users. It’s a virtuous circle.”

For example, this week the startup also unveiled an upgraded version of the hardware wallet’s companion app. Unlike its predecessor, which was really several apps in one, the new Ledger Live automatically pushes updates to all parts of the app, so the company can add support for new tokens faster.  

Now, it’s much easier to imagine adding dozens of cryptos in just one year to meet Ledger’s business goals. At the same time, individual users can now manage different assets in one place rather than switching from one app to another.

“We really want to cover the maximum amount of cryptocurrencies,” said Larcheveque. “The Live [app] is the first step in this direction because it will give us a new foundation, a new platform, where we can add as much crypto as we want.”

App usage is growing faster than demand for Ledger’s hardware wallets, of which the company has sold over one million units. Larchevêque said the app, which can be used without the wallet, grew from 100,000 monthly users in November 2017 to 500,000 monthly users today.  

Open-source tools for Ledger Live also allow external communities to build support features for their favorite crypto. “Then we can publish them [support features] after review,” Larcheveque said. “Thanks to the community work by all these developers, we can scale much faster by adding new cryptos.”

Indeed, according to Tron’s head of engineering, Tian Han, Ledger’s new tron support was spurred in part by user-submitted code, although his organization also provided financial assistance. 

“Users got together to form a team to build the implementation. Tron employees weren’t involved aside from giving a grant,” Han told CoinDesk. “We also awarded an $80,000 grant to the Ledger Wallet integration team members, and have future grants planned for Trezor Integration as well.”

Self-custody tradeoffs

To some, the rush to offer token custody solutions to Wall Street incumbents may seem hard to square with the crypto community’s “be your own bank” philosophy.

But Ledger actually has two business lines targeting institutional investors. One is a series of partnerships with organizations such as Nomura Bank in Japan, which uses Ledger’s tools for full-custody services, more akin to a traditional deposit.

The other is called the Vault, an enterprise-grade custody solution for teams at an institution, like traders at a hedge fund, to self-manage crypto assets, an arrangement that’s more in line with the crypto community’s ethos. This multi-signature wallet is connected to many individual hardware devices for each team member.

“They are being their own bank just like with the Nano S [Ledger’s hardware wallet] you are being your own bank as an individual,” Gauthier said. “The different managers that are signing off on the transactions will all have a device”

So far, this self-custody approach appears to be rare, though. Typically, institutions don’t want to manage their own private keys, and even some that do so don’t want to be completely self-reliant.

“The best solution is I have a key, my partner has a key, and some guy that I’ve never heard before has a key,” said Travis Kling, co-founder of Ikigai Asset Management, a hedge fund that uses BitGo in this way.

In the view of Jameson Lopp, an infrastructure engineer at Casa, institutions are applying “old world” ideas about custody to these new digital assets.

Although full-custody services don’t align with Lopp’s philosophy of self-reliance, he acknowledged the need for a spectrum of services and healthy competition between companies like Casa, Ledger, and BitGo. He told CoinDesk:

“It’s perfectly fine if people choose to trust a third party. But the whole reason we got into this system in the first place is that people don’t have to do that if they don’t want to.”

Eric Larcheveque image courtesy of Ledger

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Ledger Attracts Tech Giant Investors After Selling More Than 1 Mln Wallets in 2017

Ledger, one of the leading security-focused hardware wallet suppliers, has sold more than one million hardware crypto wallets in 2017, earning a profit of $29 million, the firm said in an interview with Forbes July 9.

Having raised $75 million this January in a Series B funding round led by European venture capital firm Draper Esprit, the Paris-based company is planning to raise more funds this year.

Ledger’s president Pascal Gauthier revealed that while the January round was focused on venture capitalists, “who could advise on Ledger’s consumer Nano S business,” the new round intends to attract “industrial partners who will also sign commercial contracts with the crypto startup.”

Sources told Forbes that the forthcoming round has already attracted the interest of tech giants like Samsung, Google’s venture arm GV, and Siemens, with talk of Ledger’s valuation reaching as high as $1 billion.

Gauthier noted that the newly launched multi-user product Ledger Vault, which is designed for hedge funds and retail investors, has already caused a stir, with “literally clients queueing outside our office to buy it.”

Apart from introducing Ledger Vault, the company has recently teamed up with Japanese global investment bank Nomura Bank to develop a crypto custody solution for institutional investors. The new joint venture “Komainu” aims to deliver a digital asset infrastructure and operational framework for institutional investors.

In late 2017, Ledger’s hardware wallet Ledger Nano S made the top ten on Amazon’s best-seller list in the computer and accessories department, beating major competitors such as Trezor and KeepKey.

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The Financialization of the Crypto Ecosystem Is Accelerating, Expert Take

In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy.

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For crypto maximalists, the idea of banks getting involved in cryptos is contrary to the very principles on which Bitcoin was created. Cryptos are supposed to replace banks, not enrich them. But the reality is that cryptos are not yet ready to take over a financial system that took decades to develop. Whether crypto supporters like it or not, cryptos will have to adapt to existing regulations.

Even crypto maximalists need good old banks and institutional investors to get in on cryptos to see the value of cryptos increase. On their side, regulators realize more and more that there is no putting the crypto genie back in the bottle, the financial system will have to learn to coexist with cryptos.

The challenge for traditional banking will be to adapt to this new world, whose infrastructure and core principles are so completely different from what has ever been done in a pre-Blockchain era. To understand how the two ecosystems need to evolve to accommodate each other, it is necessary to first understand how each of them works.

You are your own bank, but…

The whole point of cryptos is that you do not need to trust a third party to hold your crypto assets. As long as you control your private keys, you are the only one able to initiate transactions and you do not face any counterparty risk, you are effectively your own bank. While this is great for individuals who want to reclaim their “monetary sovereignty” to quote Trace Mayer, this is not ideal when it comes to institutional investors.

Trusting institutional investors’ internal systems to safe-keep potentially billions of dollars in cryptos is a scary prospect. All it would take is one tech savvy employee to steal the cryptos. Remember that in the decentralized world of cryptocurrencies, transactions are final and immutable once recorded on the blockchain (unless the community decides to carry a hard fork, but let’s not get there). It is therefore not advisable that each institutional investor develop its own solution to hold the private keys of the cryptos it owns.

Enter custodians

In the past few months, while the market was dealing with the aftermath of the crypto frenzy of late 2017, solutions were quietly being built to allow institutional investors to finally get in. According to Mike Novogratz, founder of Galaxy Digital, 98% of the trading activity so far has been driven by retail investors. This is not how it was supposed to happen, at least not according to Wall Street. Retail investors usually come last to the party, after VCs, Wall Street and institutional investors. But this time institutional investors had no way of investing in cryptos. Legacy regulations all over the world usually require these investors to rely on custodians to safe keep their assets or to build in-house custodial solutions. This has been designed to protect investors against fraud by separating asset managers from asset custodians. This way, asset managers cannot lie on what is in their portfolios nor their valuations as third parties are actually holding their securities on their behalf. It also greatly simplifies trading activities as securities are being held by a few global custodians on behalf of millions clients. Instead of having millions of individual investors all over the world each owning stocks or bonds, a few giant custodians hold most of the global financial assets on behalf of millions of customers (Bank of New York Mellon has custody of $33 trillion of assets while JP Morgan has $28 trillion under custody).

Many companies have been making announcements at or after the Consensus conference. Ledger has developed technical solutions for custodians while Coinbase is launching a custodial service for example. Once these solutions are up and running and provided that institutional investors get approval from their investment committees to enter the crypto space, the market is likely to see large inflows of fiat currency. Having to rely on a few and most likely heavily regulated custodians will reduce the risk that smaller, less tech savvy institutional investors get targeted by hackers. At the same time, the larger the custodians, the more they will pose a systemic risk to the whole sector in the event of a massive theft of their cryptos…

Crypto exchanges having been wearing too many hats

Investing in the stock market has been made easier and easier in the past decades. What many investors may not realize is the mechanics that underpin the simple act of buying stocks. When one wants to invest in stocks, one simply opens a brokerage account, funds it with fiat currency and one can subsequently start buying and selling stocks. When a buy or sell order is initiated by an investor, the broker is going to route it through several exchanges in order to find the best execution price. Once the trade has been executed, it usually takes a few days to settle (yes, days…). Once the trade has been settled, the stock is effectively transferred to the brokerage account of the buyer. The trader may not even be aware of which exchange has been used to execute the trade. Whether NASDAQ, NYSE, IEX or any other exchange was used does not matter, the stocks bought are registered to the brokerage account of the trader. Investors do not need to have any account with any exchange, the brokerage firm is the one with accounts with the various exchanges. But this is not how it works in the crypto space, not at all.

In the crypto ecosystem, exchanges have been playing all three roles of brokerage firms, exchanges and custodians, a recipe for disaster. There are many reasons why financial markets evolved the way they did. Over the course of decades of financial crises, bankruptcies and frauds, regulations have been refined to protect investors. In the traditional finance world, exchanges do not hold any of the assets that are traded on their platform, all they do is provide an engine that matches buy orders with sell orders. But since exchanges are the gateway to cryptos, most people have assumed that they were no different from their brokerage accounts and that they benefited from the same level of protection as with a regular brokerage account, not understanding the concentration of risks underneath.

Centralized exchanges have been and will remain at the mercy of hacks because of the vast amounts of cryptos they control. It can never be said enough, if you leave your cryptos on an exchange, they are not really your cryptos. As long as an exchange is holding your cryptos on your behalf, you do not control them and you are at the mercy of hackers that are attempting to steal private keys from the exchange. Once you buy cryptos from an exchange, you should immediately withdraw them to your own wallet, this way only you control your private keys and you are shielded from hacks that may target exchanges.

“In the crypto ecosystem, exchanges have been playing all three roles of brokerage firms, exchanges and custodians.”

To solve this problem, a second generation of exchanges is emerging: decentralized exchanges such as IDEX or EtherDelta. These exchanges do not hold your cryptos on your behalf but simply provide the trading engine. Through smart contracts, traders can exchange cryptos without having to rely on a third party in the middle to hold their cryptos. This type of exchanges have become increasingly popular for ERC-20 tokens built on top of the Ethereum Blockchain.

The large number of crypto exchanges has also created a very fragmented market where price inconsistencies can be exploited by arbitrageurs. However, large arbitrage opportunities are unlikely to last for long as more and more brokers are entering the market with new trading platforms. These new solutions will enable institutional investors to execute large trades over multiple exchanges, which will enable them to optimize the price at which they buy or sell cryptos.

The blocks are falling in place

Over time, it is likely that the crypto ecosystem is going to look more and more like the traditional finance ecosystem with brokers and custodians, at least for institutional investors, which means that exchanges may go back to simply being matching engines instead of the one-stop-shops they are today.

Even though current prices are not reflective of the progress made in the whole crypto ecosystem over the past few months, the market is maturing fast and does not look anything like it did one year, two years or three years ago. Cryptos are on the radar of regulators all over the world, and it is a good thing because it is going to force the whole ecosystem to grow up from its current state of infancy. When and how this may end up being reflected in crypto prices is a much more difficult question to answer.

The views and interpretations in this article are those of the author and do not necessarily represent the views of and the World Bank.

Vincent Launay is a finance specialist at the World Bank in Washington DC. He holds an MSc in Finance from HEC Paris and a CFA charter.

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Ledger Interested In Supporting Tron [TRX]

Ledger, one of the leading hardware wallets on the market, has announced its interest in implementing support for Tron [TRX].

This was done in response to a tweet sent by a user who wanted to know if in the future the popular wallet could be used to store Tronix.

The French company mentioned that although they do not have current support for Tron [TRX], they welcome developers to work with them on future support.

The work required to achieve this implementation is especially complicated since Tron now operates its own mainnet. Previously TRX were simply tokens running on the Ethereum network.

Inmediatly after the tweet, Tron users quickly rushed to retweet and mention Justin Sun to make sure he was aware of Ledger’s intentions.

Right now Tron is receiving significant support from exchanges and tech companies around the world after migrating to its own mainnet. According to coinmarketcap, more than 100 different trading markets are available for this popular cryptocurrency.

Among the most recent and important supports to the Tron [TRX] mainnet are Binance, Bitfinex, Cryptopia, Bithumb, OkEx, Upbit, Huobi, Bittrex, Coinnest, Bancor, Yobit, among others.

Additionally, The use of a hardware wallet would be extremely positive for users and would be a new point in favor of the popular crypto.

Ledger’s invitation is especially important because if the Tron community were to provide adequate support, it would be possible to plan for its adoption, giving more serious consideration to the technical work involved.

At the moment, Ledger’s Trello board does not have Tron as one of its projects. The five most voted cryptos with planned support are XMR (870 votes), XSN (354 votes), ADA (375 votes), IOTA (160 votes) and DECRED (149 votes).

Without a doubt, a crypto as popular as Tron [TRX] could easily get a voting record within the project.

A predetermined answer by Ledger or legitimate interest in other altcoins?

Seems like these kinds of responses inviting developers to work with the Ledger team are not uncommon.

Looking at the Ledger TL, very similar responses to support requests for other cryptocurrencies appear very quickly.

However, In the face of other requests, they refrained from inviting developers to participate, simply mentioning that they have no support planned: