Cointelegraph By Ana Berman


During an on-stage discussion at Consensus, Brian Armstrong, CEO of major United States cryptocurrency exchange Coinbase, said that its custody service has already received $1 billion in crypto under management. Coindesk reported on Armstrong’s comments on Wednesday, May 15.

Panel moderator and Wall Street Journal reporter Paul Vigna asked Armstrong about the perspectives of institutional investments in the crypto industry. In response, the Coinbase CEO provided an example of his own company, noting that Coinbase Custody managed to get $1 billion in assets under management in just 12 months after its launch. He also mentioned that 70 institutions signed up to the service during that period.

Moreover, Armstrong believes that investments in the sphere will grow rapidly, as institutions want their funds to be active while in custody. The Coinbase CEO stated that institutions want their funds to stake, vote and do governance on-chain.

As for the most popular asset among the institutional investors, Armstrong thinks that bitcoin (BTC) is still at the top of the list. However, the interest in other coins is growing too, which is why Coinbase currently provides 30 altcoins for institutions, he noted.

Finally, Armstrong mentioned that Coinbase Pro — an upgraded trading platform for advanced users — currently has more than 60% of its trading volume coming from institutions. The company is also interested in the idea of a self-custody solution, and is discussing the matter with Israeli-based startup StarkWare.

As Cointelegraph previously reported, Coinbase officially launched its custody for institutional investors last July. Back then, the company revealed that it would enable its new institutional clients “to participate in the crypto ecosystem through proof of stake and distributed governance.”

Just yesterday, the U.S. exchange made a major announcement concerning the expansion of its services to 50 more jurisdictions, such as Brazil, South Africa

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The United States Department of Justice released a fifteen-count indictment on May 9 that charges a hacking group labeled “The Community” with SIM swapping in order to steal cryptocurrencies.

U.S. Attorney Matthew Schneider and his colleague from the U.S. Immigration and Customs Enforcement Angie Salazar announced the charges in the Eastern District of Michigan. Per Salazar, the investigation was led by Homeland Security Investigations on two continents.

According to the indictment, five Americans and an Irishman are charged with conspiracy to commit wire fraud, wire fraud and aggravated identity theft. Another three, who reportedly are the former employees of mobile phone providers, are charged in a criminal complaint with the wire fraud related to “The Community.”

As described in the document, the hacking group used SIM swapping — a type of identity theft attack that generally targets a weakness in two-factor authentication. The perpetrator usually gains control of a target’s mobile phone by convincing or bribing the employee of the mobile provider to swap the phone number to a SIM card controlled by the hackers.

After successfully swapping the numbers of their victims, “The Community” managed to gain access to their various online accounts, including cryptocurrency exchange accounts and wallets. As a result of fraud, approximately $2.5 million worth of cryptocurrency was sent to wallets controlled by the hacking group. Attorney Schneider clarified that in this case, three mobile phone service provider employees purportedly helped swappers to steal money.

The charges of conspiracy to commit wire fraud and wire fraud carry a maximum penalty of 20 years in prison each. Meanwhile, a conviction of aggravated identity theft could add up to two years in prison for the defendants .

According to Irish news website The Journal, a 20-year-old man from Dublin was arrested in Ireland upon the request of the

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DAI stablecoin, which is pegged to the United States dollar, is now in a relatively stable position, according to the president and COO of MakerDAO, Steven Becker, in an Q&A session on May 2.

The transcript of the meeting, which focused on demand and supply imbalance, appeared on Reddit. Becker discussed the efficacy of the stability fee alongside MakerDAO’s head of community development Richard Brown and Vishesh Choudhry of the company’s Foundation Risk Team.

According to Becker, DAI is now stable thanks to the community’s implementation of the stability fee. “Consider the peg is stable. However it is stable at a discount,” he added.

Becker reasoned that the fluctuations of the stablecoin’s rate are not necessarily the result of a supply/demand imbalance. He speculated that this phenomenon might be a reflection of the industry’s current regime.

Last week’s community vote was between a 2% and 3% increase, with the latter coming out ahead. Today, May 3, will witness an executive vote on that 3% increase.  If it passes, the stability fee will land at 19.5%.

Foundation Risk Team’s Choudhry noted that the fee is not especially burdensome. As the stability fee changes, the fulcrum point of bull/bear equilibrium shifts, making it a critical decision.

MakerDAO launched DAI in December 2017 as an ERC-20 token pegged at 1:1 with the U.S. dollar.  This exchange rate is maintained via over-collateralization with ether (ETH). However, for much of 2019 DAI has been below $1 and has even dropped below $0.95 periodically, according to CoinMarketCap.

As Cointelegraph previously reported, MakerDAO users have voted to increase the stability fee on several occasions this year. Still, the community is not fully convinced that the value of DAI has stopped fluctuating. If MakerDAO implements more substantive solutions, DAI could become crypto’s ‘default’ stablecoin.

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The blockchain division of global social trading platform eToro has launched a cryptocurrency exchange for pro traders, a press release shared with Cointelegraph on Tuesday, April 16, states.

EToroX claims to be a secure a secure and fully regulated trading venue. As for now, the platform offers 37 trading pairs, with the ability to convert six cryptocurrencies to fiat, such as the dollar, euro and Swiss franc.

The exchange currently allows users to trade bitcoin (BTC), ethereum (ETH), ripple (XRP), dash (DASH), bitcoin cash (BCH) and litecoin (LTC). According to the managing director of eToroX, Doron Rosenblum, the exchange will launch more pairs in coming months.

Moreover, eToroX has launched eight stablecoins that are backed by the New Zealand dollar (NZDX), Japanese yen (JPYX), Swiss franc (CHFX), United States dollar (USDEX), euro (EURX), U.K. pound sterling (GBPX), Australian dollar (AUDX), and Canadian dollar (CADX). The stablecoins will be issued and controlled by eToroX.

Co-founder and CEO of eToro, Yoni Assia, said that the platform is set to bring crypto to a larger range of investors:

“We want to bring crypto and tokenized assets to a wider audience, allowing them to trade with confidence. This is the future of finance. Blockchain will eventually ‘eat’ traditional financial services through tokenization.”

Assia believes that financial services will eventually be transferred to blockchain, as the tech brings a new paradigm for asset ownership. According to him, traditional asset classes such as art and property will also be tokenized.

In March, eToro officially launched its platform and crypto asset wallet in the U.S. Later the same month, the company announced that it has acquired smart contracts development company Firmo in order to explore and add more tokenized assets.

In other stablecoin news, Canadian cryptocurrency exchange Coinsquare has recently announced that it will be

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Samsung SDS has reportedly agreed to cooperate with Indian IT giant Tech Mahindra in an attempt to enter the overseas blockchain market, The Korea Times writes Sunday, April 14.

SDS, the systems integration arm of Korean tech behemoth Samsung, allegedly plans to expand the use of its Nexledger blockchain platform in India, the United States and Europe.

As per the agreement, the two companies will reportedly seek more business opportunities in the region. Moreover, Samsung SDS will cooperate with Tech Mahindra on further Nexledger updates.

Nexledger, a blockchain security platform launched in 2017, has since been used in finance, manufacturing, logistics and other areas. For instance, the solution was trialed by the Korea Customs Service in its export customs logistics services. Forty-eight different organizations, including public agencies, shipping and insurance companies, also joined the test.

More recently, Samsung SDS announced it is launching its own blockchain accelerator technology, Nexledger Accelerator, following a successful test with Hyperledger Fabric. The solution reportedly improves transaction processing speed.

In March, parent company Mahindra reportedly trained 70% of its employees to deal with new technologies, including blockchain, AI, Internet of Thingsand cybersecurity.

Moreover, Mahindra has previously used IBM blockchain technology in order to create a solution for discounting invoices between its auto division and suppliers. According to IBM, the company is also investigating the use of blockchain to track parts and improve auto recalls.

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The United States Securities and Exchange Commission (SEC) reportedly required two funds to eliminate the word “blockchain” from their monikers, Bloomberg writes April 12, citing sources familiar with the matter.

The exchange-traded funds (ETFs) of both Amplify and Reality Shares reportedly mentioned blockchain in early filings. Per Bloomberg’s unarmed interlocutors, the two funds were encouraged to change their names at the last minute in 2018.

Despite eliminating the word “blockchain,” the funds’ tickers still refer to the technology. Ampilfy’s funds are traded as BLOK, while the product is described as “transformational data sharing ETF.” Reality Shares are using the title BLCN, depicting its product as “Nasdaq NexGen economy ETF.”

Moreover, Bloomberg claims that there were other blockchain-related funds who eventually changed their names following the SEC’s request.

Per the Investment Company Act of 1940, issuers are obliged not to use “materially deceptive or misleading” names. In 2001, the SEC adopted the Names Rule (Rule 35d) to clarify the guidelines. The funds are therefore required to ensure that at least 80 percent of assets coincide with the description in their monikers.

According to Bloomberg, the SEC is on high alert due to the growing number of ETFs launched by funds that offer to invest in a wide range of projects and services. The number of assets in these funds has nearly tripled between 2014 and 2018, and more than 10% of new ETFs in 2018 targeted a particular theme, the media out states.

As Cointelegraph previously reported, in early 2018 the SEC had warned that U.S. companies who change their name to include the word “blockchain” would soon face increased scrutiny from the regulators.

SEC chairman Jay Clayton recently noted that the crypto industry will stay in the regulator’s focus in the nearest future. He believes that there is a path

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The International Monetary Fund (IMF) and the World Bank have jointly launched a private blockchain and a so-dubbed quasi-cryptocurrency, the Financial Times (FT) reports on April 12.

According to the newspaper, the asset called “Learning Coin” will be accessible only within the IMF and World Bank. The coin has no money value and thus is not a real cryptocurrency, the FT underlines.

As the FT has learned, “Learning Coin” was launched in order to better understand the technologies that underlie crypto assets. Its app will serve as a hub where blogs, research, videos and presentations are stored.

During the test, the World Bank and IMF staff will earn coins for achieving certain educational milestones. The institutions will allow them to redeem the assets gained for some rewards, which will allow them to learn how coins can be used in real life.

Per the IMF, the banks and regulators across the world have to catch up with crypto technologies that are rapidly developing. The FT quotes the IMF as saying:

“The development of crypto-assets and distributed ledger technology is evolving rapidly, as is the amount of information (both neutral and vested) surrounding it. This is forcing central banks, regulators and financial institutions to recognize a growing knowledge gap between the legislators, policymakers, economists and the technology.”

Moreover, after the test, the World Bank and IMF reportedly might use blockchain to launch smart contracts, combat money laundering and enhance the overall level of transparency.

Earlier in April, IMF managing director Christine Lagarde said that blockchain innovators are shaking up the traditional financial world and have a clear impact on incumbent players. She also noted that the potential of blockchain-based technologies and assets is embraced by regulators and central banks, who recognize its positive effect.

Meanwhile, a World Bank official expressed

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Blockchain technology could possibly be used by 50 percent of all companies within the next three years, the vice president of blockchain product development at software company Oracle said on Monday, April 8.

Frank Xiong participated in the Forbes CIO Summit in Half Moon Bay, California, where he estimated that 50 to 60 percent of companies will use blockchain technology in the next few years.

At the same time, Xiong believes that people have become much more realistic about what blockchain can affect in various business models:

“We’re past the stage that blockchain can cure everything, so people are becoming more realistic about what’s good for their business model.”

According to Forbes, Oracle currently has more than 100 customers using its blockchain solution for supply chains. As Cointelegraph previously reported, the company launched a suite of software-as-a-service (SaaS) applications based on its Oracle Blockchain Cloud Service in late October 2018. The offering purportedly enables customers to track products through supply chains, increase transparency, accelerate product delivery, and improve customer satisfaction.

More recently, Oracle partnered with a European-based fintech startup that offers a payment platform for banks and financial institutions. The company will use Oracle Blockchain Platform to improve its payments processes and remove intermediaries.

A recent survey conducted by Big Four auditing firm KPMG shows that high-profile executives are interested in blockchain, but mostly delay its adoption in their companies.

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The so-called Digital Taxonomy Act of 2019, which United States legislators introduced yesterday, April 9, offers to allocate the Federal Trade Commission (FTC) $25 million annually to prevent crypto-related crime.

The document was introduced to the U.S. House of Representatives by Rep. Darren Soto (D), who is known for his pro-crypto stance. The act is dedicated to the FTC’s role in preventing “unfair or deceptive acts or practices in transactions relating to digital tokens.” It also requires a report to congress on the FTC’s actions related to digital tokens.

According to the current draft of the Digital Taxonomy Act, the FTC should be granted $25 million in funding each year from 2020 to 2024. The commission will use the money to prevent and combat crypto-related crimes.  

Moreover, the document gives brief definitions of core crypto terms, such as a token, distributed ledger and digital unit.

If the bill is adopted, the FTC will be obliged to present an annual report on its crypto-related regulatory actions to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate.

As Cointelegraph reported yesterday, another bill, dubbed the Token Taxonomy Act of 2019, was reintroduced to the House of Representatives the same day.

The document, initially proposed last December by Reps. Warren Davidson (R) and as well as Rep. Soto, sought to exclude digital currencies from being defined as securities by amending the Securities Act of 1933 and the Securities Act of 1934. Its new version clarifies the jurisdiction of both the FTC and the Commodity Futures Trading Commission.

The bill also calls for more regulatory certainty for businesses and regulators in the U.S. blockchain industry, along with clarifying conflicting state initiatives and regulatory rulings that have confused the issue.

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Most tax and finance executives do not consider adopting blockchain technology, according to a recent survey conducted by Big Four auditing firm KPMG. The results of the poll were shared with Cointelegraph on Tuesday, April 9.

A poll undertaken during a recent webcast, dubbed “Understanding Blockchain – It’s Not Just About Crypto,” was held in February 2019. KPMG asked around 450 tax and finance executives from different companies about blockchain and other technologies.

Generally speaking, the survey has shown that tax and finance executives are seeking different solutions to eliminate routine tasks from their teams’ operations. However, blockchain adoption is not a high priority, according to the results.

At least 60% of respondents claimed they would like to deploy blockchain in their companies to automate some repetitive tasks. Nonetheless, 67% were not using the technology at the time, while the other 27% were not sure whether their company was using it.

The participants also cited the key factors that impede blockchain implementation within their companies. 33% and 22% of respondents mentioned a lack of resources and funding, respectively. Other respondents named a lack of access to the technology decision-makers, along with the lack of tech capabilities.

Innovation principal and tax leader for blockchain at KPMG David R. Jarczyk thinks that blockchain might significantly improve the workflow of high-profile teams. While blockchain is doing the routine work, they can focus on analyzing data, he added.

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information,” Jarczyk concluded.

An earlier survey conducted by KPMG in late 2018 showed that almost half of the high-profile executives believe that blockchain will likely or very likely change the way their business is conducted within the next three years. 41%

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