Cointelegraph By Thomas Simms


SprinkleXchange, a blockchain-powered initial public offering platform, is preparing to list its first company in June, Bloomberg reported on May 17.

According to Alexander Wallin, the bourse’s CEO, it is hoped that up to 1,000 companies will join over the next three to four years.

The Ethereum blockchain is used for settlement and clearing, and its users will be able to trade listed companies and cryptocurrencies 24 hours a day. Switzerland’s SIX stock exchange is also planning to launch a blockchain-powered digital exchange, which will be powered by blockchain consortium R3’s Corda Enterprise platform.

According to Bloomberg, SprinkleXchange claims its blockchain-focused approach offers time and cost savings when compared with traditional stock exchanges as key systems are automated. Wallin told Bloomberg:

“We have the luxury of being first with this, but we’re aware that it will become a crowded market. It’s like moving from VHS to streaming; Netflix did it nicely and was first, but now there are lots of streaming sites.”

Companies with a market cap of between $20 million and $200 million are being encouraged by SprinkleXchange to consider a listing, and Wallin claims firms from a broad range of sectors have expressed an interest so far, including the real estate and biotech industries.

SprinkleXchange is operating as part of Bahrain’s regulatory sandbox, and for now, it has permission to list a maximum of 10 companies.

In March, Cointelegraph reported that Bahrain had invited Indian companies to join its fintech sandbox with the aim of facilitating the development of blockchain tech in the region.

In February, the Shariah-compliant crypto exchange Rain became the first to complete Bahrain’s regulatory sandbox.

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Fundstrat Global Advisors co-founder Tom Lee has claimed that the crypto winter is over in a tweet on May 19.

In the message, Lee said last week’s Consensus conference in New York City was the latest of 13 signs indicating that the industry is recovering after a tough few months.

His timeline of events documenting the turnaround dates back to November 2018, when a bitcoin cash (BCH) hard fork battle exhausted the bitcoin (BTC) supply held by two rival mining pools.

Other significant milestones listed by Lee include Jan. 23 of this year, when on-chain transactions turned positive year-on-year for the first time in 12 months.

He also pointed to how Fundstrat’s Bitcoin Misery Index (BMI) rose above 67 on March 27 — a watermark that had not been reached since August 2015. This was followed in April by a surge in over-the-counter trading and on-chain activity, as well as BTC’s first bullish golden cross since October 2015.

More recently, at the start of May, Lee said that the crypto industry proved its resilience when there was a stable market reaction to the controversy surrounding Bitfinex and Tether, after the New York Attorney General accused the crypto exchange of losing $850 million and using funds from the affiliated stablecoin operator to secretly conceal the shortfall.

Lee is known for his forecasts on where crypto prices are heading. On April 29, he predicted that BTC will hit historic new highs by 2020.

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A global threat report has concluded that the three most common malware variants detected in April were crypto miners, according to a news release on May 14.

Check Point Research said Cryptoloot, malware that uses the victim’s computing power to mine for crypto without their knowledge, was last month’s biggest threat. XMRig, open-source software which is used for mining monero (XMR), was in second place. Rounding off the top three was JSEcoin, a JavaScript miner embedded in websites.

Despite their prevalence, the company’s researchers believe that criminals are shifting their focus away from crypto mining. Several popular services used to target unsuspecting computer users, such as Coinhive, have closed. In addition, the collapse in crypto prices at the start of the year meant other strategies were more lucrative.

According to Check Point, multi-purpose trojans are on the rise — with its experts warning this is concerning because of how they steal private data and target databases and backup servers with ransomware demanding up to $1 million.

Maya Horowitz, the company’s threat intelligence and research director, said:

“As these malware constantly morph, it is crucial to have a robust line of defense against them with advanced threat prevention.”

Last month, American software company Symantec detected a spike in a new crypto mining malware, Beapy, that targets enterprises. Beapy is reportedly spread through malicious emails, and according to researchers, its file-based approach to cryptojacking is considerably more profitable for hackers than browser-based tools.

Also in April, two Romanian cybercriminals were convicted in the United States of spreading malware to steal credit card details and illicitly mine crypto.

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ConsenSys has teamed up with LVMH and Microsoft to build a blockchain-powered platform that allows consumers to verify the authenticity of luxury goods, according to a news release on May 16.

The consortium says the system, known as Aura, is designed to “serve the entire luxury industry with powerful product tracking and tracing services.”

LVMH brands including Louis Vuitton and Christian Dior are already involved in the project — and discussions are underway to extend Aura to other high-end names within the group. The news release added:

“AURA makes it possible for consumers to access the product history and proof of authenticity of luxury goods — from raw materials to the point of sale, all the way to second-hand markets.”

The technology sees unique information about every product stored on a shared ledger. Customers are then able to use a brand’s official app to obtain a certificate offering details about its provenance.

According to the group, Aura — which is based on the Ethereum blockchain and utilizes Microsoft Azure — will also offer ethical and environmental information, instructions for product care and warranty services.

The team behind Aura hope it will eventually be used by rival luxury brands too, enabling them to offer a tailor-made service or strengthen customer loyalty. Ken Timsit, managing director of ConsenSys Solutions, added:

“AURA is a ground-breaking innovation for the luxury industry. ConsenSys is proud to contribute and to work with LVMH on an initiative that will serve the entire luxury industry, protecting the interests, integrity, and privacy of each brand.”

Reports that AURA was in the works first emerged in March.

High-end brands are increasingly turning to blockchain to confirm the provenance of their products. Recently, reports suggested that premium liquor brand Ailsa Bay was planning to release a scotch whisky tracked with a blockchain-based system.

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Lobbying groups are urging the Reserve Bank of India (RBI) to allow crypto-related products to be tested in its regulatory sandbox, Indian daily The Economic Times reported on May 16.

The RBI’s proposed framework, unveiled last month, would allow blockchain technology to be tested on a small number of consumers — but cryptocurrencies, exchanges and initial coin offerings are excluded.

Nasscom, a trade association of Indian IT companies, is calling for the regulator to rethink, and argues the RBI would better understand the risks associated with crypto by including it in the sandbox. The organization said:

“Since cryptocoins and tokens are an important component of the blockchain technology, the draft regulations appear to exclude testing of smart contracts and other approved blockchain technology under the sandbox.”

Meanwhile, the Payments Council of India has warned innovation will be difficult to achieve if the sandbox’s framework has such large exclusions.

Sandboxes are used by regulators around the world, including the United Kingdom’s Financial Conduct Authority. Some startups are concerned that India’s hardline approach will mean innovative products cannot be tested in their home country, even if they are permitted in international markets.

India’s relationship with crypto has been fraught at times. Late last month, a report suggested that the world’s second-most populous nation was considering a complete ban on digital currencies.

On May 10, Indian crypto exchange Coinome announced it was halting operations because of regulatory difficulties.

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A third of the world’s ether (ETH) is owned by just 376 people, according to Chainalysis research published on May 15.

Despite controlling a large portion of ETH’s circulating supply, the study found these “whales” are responsible for just 7% of all transaction activity.

Chainalysis concluded that while these individuals don’t necessarily have a meaningful impact on ETH’s price, they do contribute to market volatility when big sell-offs are made.

These figures could be seen as an improvement compared with 2016, when whales owned 47% of ETH’s circulating supply.

According to the team’s report, about 60% of whales hold their assets and do not regularly trade with exchanges.

Analysis of activity from 2016 to 2019 also revealed that ether prices tend to follow movements in bitcoin (BTC.) Researchers added:

“On average, a 1% increase in bitcoin prices yesterday leads to a 1.1% increase in ether prices today.”

Overall, the blockchain analytics company believes that concerns about the impact of whales on market prices may have been overstated, but added:

“We cannot rule out the possibility that whales can impact price changes within single days based on outlier events.”

Last month, the company’s research revealed that at least 95% of crypto crimes investigated by law enforcement involve BTC.

Chainalysis also recently expanded its real-time transaction monitoring tools to cover 10 cryptocurrencies in response to demand from law enforcement agencies.

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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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Kaleido has launched a new business-to-business (B2B) tech stack with a view to helping companies “reinvent their core payment systems and supply chains,” according to a news release obtained by Cointelegraph on May 15.

The ConsenSys-backed company said the stack brings together the necessary tools and technologies that businesses need to build modern networks delivering operational improvements and new revenue streams.

According to Kaleido, businesses that use its platform will easily be able to digitize assets by issuing custom tokens. Other features, including an asset registry, document store and app-to-app messenger, are “plug and play” — and the company says this means enterprises will no longer need specialized skills in order to build and benefit from decentralized applications.

Steve Cerveny, the founder and CEO of Kaleido, said:

“Blockchain has brought a radically better way for businesses to solve an age-old problem of transacting with trust and transparency. The leading networks we’re partnering with are spotting pockets of this future before everyone else does.”

Kaleido claims it has helped multinational corporations including T-Mobile, Heineken, Sony, Shell and Fox implement blockchain-based solutions in their businesses.

In November, Kaleido and Amazon Web Services launched a marketplace to help enterprises implement blockchain solutions — a move designed to eliminate the custom code required to build blockchain projects.

Last May, the Enterprise Ethereum Alliance released its architecture stack, which was designed to standardize specifications for Ethereum-based business applications. The group has hundreds of major companies among its members, including Santander and JPMorgan.

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Blockchain entrepreneur Alex Tapscott has been fined $25,000 by the United States Securities and Exchange Commission (SEC,) according to a filing on May 14.

Tapscott is the CEO of NextBlock Global, and in the filing, the SEC said neither the Canadian company nor its securities had ever been registered with the commission.

The 33-year-old and his company have also been ordered to cease and desist from committing further violations of the Securities Act.

According to the SEC, NextBlock was founded by Tapscott and three others in June 2017 for the purpose of investing in blockchain companies and related digital assets.

During an offering that raised $16 million, the entrepreneur and his company made false representations that four prominent blockchain professionals were serving as advisors. The SEC document adds:

“These misrepresentations were part of the selling point of NextBlock’s fundraising effort: that NextBlock and Tapscott had access to, and unparalleled relationships with, opinion-makers, the best entrepreneurs, and the highest profile figures in the blockchain community. NextBlock and Tapscott knew or should have known that the statements to investors regarding these advisors were inaccurate.”

The SEC said this conduct amounted to a violation of the Securities Act.

Earlier this week, Tapscott was fined $148,000 by the Ontario Securities Commission, and he agreed to lead ethics seminars at Canadian business schools as part of the settlement. NextBlock itself has paid a $520,000 penalty.

These previous fines were taken into account when the SEC made its ruling.

The furor involving NextBlock emerged in 2017 when Forbes reached out to the four high-profile individuals listed as advisors — including Ethereum founder Vitalik Buterin. All of them denied having any involvement, prompting the company to return funds to investors.

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EBay has denied rumors that it is going to start accepting cryptocurrency as a payment method, according to a Bloomberg report on May 14.

Speculation has been mounting since the e-commerce giant took out ads at the Consensus conference in New York City. One of the billboards said:

“Virtual Currency. It’s happening on eBay.”

It has been suggested that this week’s surge in crypto prices, which has happened without explanation, was linked to hopes that eBay was preparing to embrace crypto.

Given how the online auction site bills itself as “the world’s largest marketplace,” such a move would have been a major milestone in the industry’s quest to achieve mainstream adoption, Bloomberg reports. But addressing the rumors directly, an eBay spokesperson said:

“Cryptocurrency is not accepted as a form of payment on the eBay platform, nor is it part of our payments strategy.”

The online marketplace does currently have a section marked Virtual Currency, where people can use traditional monetary forms to purchase crypto from sellers.

The eBay clarification is not the only rumor that has been discredited over recent days. Excitement had started to build in the crypto community in April when a tweet suggested that TD Ameritrade, which holds an estimated $1.3 trillion in assets, was testing bitcoin (BTC) and litecoin (LTC) spot trading on its brokerage.

But Sunayna Tuteja, the company’s head of digital assets, told Bloomberg:

“Currently we’re not. We have what we call paperMoney, which is what our clients can try for trading strategies. It was a simulation. So there was no actual execution.”

Despite these denials, other major brands have confirmed this week that they will allow customers to spend crypto in their stores. On the first day of the Consensus conference, the likes of Whole Foods Market, Barnes & Noble and Bed Bath & Beyond

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