A Clear Path for Ethereum

This article provides an overview of Ethereum’s rise, from conception through its initial coin offering (ICO) and beyond. Coinciding with the ICO came attempts to regulate and classify digital currency by multiple governmental and nongovernmental bodies — including the United States Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Uniform Law Commission, the Internal Revenue Service (IRS) and the Financial Crimes Enforcement Network (FinCEN). Each has its own opinion on the matter, and as of yet there has been no uniform definition, law or guideline. However, within the regulatory confusion surrounding digital assets on the blockchain, Ethereum enjoys a little clarity.

Section one outlines the rise of Ethereum and its timeline from a business perspective. Section two addresses the regulatory scrutiny that began in 2017 and the confusion resulting from varying perspectives and classifications of digital currencies. Section three provides examples of SEC enforcement of ICOs, and section four details the Howey test and how it applies to ICOs. Sections five and six explain the two most significant regulatory events for Ethereum. Section seven concludes by eliciting the confusion that dominates the digital asset realm yet the surprisingly clear, bright future for Ethereum.

The rise of Ethereum

Ethereum was first described in a white paper by Vitalik Buterin in 2013. It was formally announced at the North American Bitcoin Conference in Miami in 2014 and launched in 2015. However, in 2016 the Decentralized Autonomous Organization (DAO) was hacked, resulting in a $50 million loss to investors. 

In an effort to recover the losses, a majority of the Ethereum community decided in favor of a hard fork, which invalidated the transaction. This led to a split in the Ether. Ethereum (ETH) was used by those in favor of the fork, while Ethereum Classic (ETC) was used by those who continued on the old blockchain. Both are still in use today.

Regulatory scrutiny and confusion

In 2017, Ethereum took off. It had a successful ICO and launched the Enterprise Ethereum Alliance, which is a member-driven standards organization designed to “develop open, blockchain specifications that drive harmonization and interoperability for businesses and consumers worldwide.” 

Months after a formal petition to the SEC for guidance as to what rules pertain to digital assets, on July 25, 2020, the SEC released a statement on the Report of Investigation on The DAO, concluding that all cryptocurrencies could be subject to regulation. The SEC wrote that the requirements apply to those who offer and sell securities in the United States,“regardless whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless whether those securities are purchased using U.S. dollars or virtual currencies, and regardless whether they are distributed in certificated form or through distributed ledger technology.” 

The SEC also specified that “DAO tokens are securities” and that the “foundational principles of the Securities Laws apply to Virtual Organizations or Capital Raising Entities making use of distributed ledger technology.” The SEC further released an Investor Bulletin on ICOs on the same date to make investors aware of the potential risks when considering an investment in an ICO. 

Later, in October of 2017, the CFTC stated that digital tokens may be commodities or derivative contracts, depending on the circumstance, and reasoned that there is no inconsistency between its view and the SEC’s position that some digital currencies can be securities. The CTFC specified that it is the substance not the form of an activity that is considered when applying federal commodities laws and regulations. 

In the same month, the Uniform Law Commission released the Uniform Regulation of Virtual Currency Business Act, which stated that a user who obtains convertible digital currency and uses it to purchase digital goods or services is not considered a money service business.

However, FinCEN concluded that administrators or exchangers of centralized digital currencies and exchangers of decentralized digital currencies are money transmitters and therefore subject to the Bank Securities Act. This means that crypto exchanges are required to register with FinCEN and comply with regulatory rules. 

Meanwhile, the IRS classifies digital currencies as property for tax purposes.

The regulatory landscape for digital blockchain tokens that are not intended to qualify as securities remains unclear. In August 2019, however, SEC Commissioner Peirce announced her support for the establishment of a ‘non-exclusive safe harbor’ exemption from registration. In line with the Commission’s open-door policy, Commissioner Peirce, reinforced the Commission’s desire for feedback from lawyers and industry leaders as to how such a safe harbor could take shape. The safe harbor concept was again reinforced during the SEC Commissioners’ appearance before the U.S. House of Representatives Financial Services Committee in its hearing titled “Wall Street’s Cop on the Beat” on September 24, 2020.  

Related: Why Is the US Not Yet a Leader in Crypto Regulation? Experts Answer

SEC enforcement of ICOs

Since the SEC released its groundbreaking DAO Report 2017, there have been more than 30 SEC enforcement actions against ICO issuers and their officers, as well as countless subpoenas and information requests relating to ICOs. 

On Nov. 8, 2018, the SEC announced that it settled charges against Zachary Coburn, the founder of EtherDelta, who was found to be operating an unregistered national securities exchange and thus in violation of federal securities laws. According to the SEC, EtherDelta is an online platform used for secondary market trading of ERC-20 tokens. This is one of the most popular tokens and, according to Investopedia, “it has emerged as the technical standard used for all smart contracts on the Ethereum blockchain for token implementation.” Further, in its order against Coburn, the SEC stated that ERC-20 tokens are commonly issued in ICOs.

On Nov. 16, 2018, the SEC explained that both CarrierEQ Inc. (Airfox) and Paragon Coin Inc. conducted ICOs in 2017, after the DAO Report, warning that ICOs can be securities. Airfox, a Boston-based startup, raised approximately $15 million worth of digital assets, while Paragon, an online entity, raised approximately $12 million worth of digital assets. Neither company registered their ICOs pursuant to federal securities laws, and they did not qualify for an exemption to the registration requirements. 

Both companies settled with the SEC and agreed to register the tokens as securities. Stephanie Avakian, co-director of the SEC’s enforcement division, warned that the SEC has “made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities,” and it will “continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”

As recently as September 2019, enforcement continues. ICOBox and its founder were sued by the Commission for acting as an unregistered broker-dealer in connection with the platform’s activities and for conducting an illegal $14M unregistered securities offering for its own token, “ICOS.” 

Determination of whether a particular digital asset is a security, and therefore, whether the securities laws apply, is today governed by whether the subject tokens or coins fall under the definition of “security” as defined in the Securities Act of 1933, as amended, and a landmark U.S. Supreme Court case that followed. 

The Howey test, explained

The Howey test is a formula created by the U.S. Supreme Court used to determine whether a transaction qualifies as “investment contract” — therefore a security — and subject to federal securities laws. The Howey test framework derives from the 1946 Supreme Court case SEC v. W.J. Howey Co. and subsequent case law. The Howey case, in particular, involved a Florida citrus farm owner who would sell tracts of farmland to investors who then could choose to lease it back to Howey’s service company, via a service contract to cultivate and harvest oranges on the site. 

The test itself is comprised of four elements. If 1) there is an investment of money; 2) in a common enterprise; 3) with a reasonable expectation of profits; 4) from the efforts of the promoter or third party, then an “investment contract” exists. 

In Howey, the legal question was whether the contracts Howey was selling qualified as securities. Given that those who purchased and leased back the subject farmland did so assuming that it would generate a profit as a result of someone else’s efforts, the court found:

“The transactions in this case clearly involve investment contracts as so defined. The respondent companies are offering something more than fee simple interests in land. […] They are offering an opportunity to contribute money and to share in the profits of a large citrus fruit enterprise.”

Therefore, the offering needed to be registered with the SEC, and Howey violated §5 of the Securities Act of 1933 by failing to do so.

In the digital asset arena, the question becomes whether U.S. federal securities apply when a tokenized digital asset (or the right to acquire a token in the future) is offered, sold or distributed. Taking the analysis a step further involves determining whether the digital asset itself is a security, including an “investment contract.” The present answer for Ethereum is no.

Ethereum is not a security

For Ethereum, the regulatory uncertainty was somewhat abated on June 14, 2020, when the SEC’s Director of Corporation Finance, Mr. William Hinman, stated that Ethereum is currently not a security. He explained that “if the network on which the token or coin is to function is sufficiently decentralized” the assets are not necessarily investment contracts because purchasers would not reasonably expect someone to carry out essential managerial functions. 

In relation to Ethereum specifically, Mr. Hinman stated that the Ethereum network has a decentralized structure, and as such, “current offers and sales of Ether are not securities transactions.” Therefore, “applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.” To further elicit the reasoning behind his statement, Hinman clarified that “the economic substance of the transaction always determines the legal analysis, not the labels.” 

For example, the oranges in the Howey case had utility. “But Howey was not selling oranges,” he was “selling investments, and the purchasers were expecting a return from the promoters’ efforts,” Mr. Hinman reminded. 

Official relief from SEC enforcement

The July 25, 2020 Pocketful of Quarters No Action Letter from the SEC marked another step toward regulatory clarity for Ethereum and other ERC-20 tokens. The SEC granted no-action relief to Pocketful of Quarters (PoQ) for its ERC-20 token “Quarters,” which means that the SEC will not take enforcement action based on the specific facts and circumstances set forth in the request. This was the first token built according to the ERC-20 standard to receive regulatory approval. 

PoQ is a blockchain startup designed to create a universal gaming token redeemable across any video game platform. It is headed by 12-year-old CEO George Weiksner and his father, PoQ’s chief technology officer, Michael Weiksner. 

One element of the Howey test is a purchaser’s “reasonable expectation of profit” from a transaction. PoQ argued that the gamers on its platform have no such expectations, and the SEC agreed. The letter is a green light for PoQ’s token issuance, and a beacon for other platforms hoping to accomplish the same.

Clarity amid confusion

As of yet, the U.S. government has not exercised its constitutional power to regulate blockchain technology and cryptocurrencies to the exclusion of states. Thus, states are still free to design and enforce their own legislation, and several — including Arizona, Connecticut, Vermont, Delaware and Wyoming — have already done so.

Along with varying state regulations, there is federal confusion. The SEC considers digital currencies as securities if they meet the Howey test, the CFTC considers them commodities and the IRS taxes them as property.

Luckily for Ethereum, Mr. Hinman’s remarks and the PoQ No Action Letter have given it the regulatory clarity and freedom it needs to thrive. Ethereum also enjoys considerable institutional adoption from big names like Amazon, Coinbase, Fidelity, Google, Microsoft and Samsung in varying applications.

Google is pushing developers to build decentralized applications (DApps) on the Ethereum blockchain, while Microsoft is working with the Enterprise Ethereum Alliance to create crypto tokens and has also partnered with ConsenSys to offer Ethereum Blockchain as a Service on Microsoft Azure. With regulatory clarity and institutional support, it seems that Ethereum’s future is bright and boundless.

The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

The article is co-authored by Robin Sosnow and Veronica Dunlop.

Robin Sosnow, Esq., J.D., MBA, is the founder and principal of Sosnow & Associates PLLC, an innovative, boutique legal practice in New York City.  She also co-founded the Digital Securities Law Group, another New York City-based joint venture legal practice, which is focused specifically on the blockchain industry. She is a ground floor participant in the equity crowdfunding industry. Sosnow & Associates has worked through all the securities exemptions influenced or created by the JOBS Act and uses a business-minded approach to strategize with clients to promote efficiency, reduce risk and develop cost-effective solutions for their legal needs.

Veronica Dunlop is a legal intern for Sosnow & Associates in her third year at Brooklyn Law School. She plans to sit for the New York state bar in July 2020. Veronica is a Block Center International Business Law Fellow as well as a member of both the Brooklyn Journal of International Law and the Moot Court Honor Society, Appellate Division. Last year, Veronica competed in the Price International Media Law Moot at Oxford University, and this year she will be competing in the Willem C. Vis International Commercial Arbitration Moot at the University of Vienna.

Source Cointelegraph

Top-5 Crypto Performers: LEO, LINK. MIOTA, XRP, XTZ

Chinese fintech stocks have surged this year on hopes that the launch of a digital currency by the People’s Bank of China will increase demand for security and payment services. Morgan Creek Digital co-founder Anthony Pompliano said that if the digital yuan becomes a reality, it might threaten the dollar’s reign as the global reserve currency. However, he said that even if central banks issue their own digital currencies, people were likely to opt for a currency which cannot be manipulated, seized or censored. 

European Central Bank (ECB) president Mario Draghi has said that the central bank is closely watching developments in the cryptocurrency industry, but has found little value in stablecoins and crypto assets. However, with rapid developments in the crypto industry, he said that the ECB might change its view in the future.

Though Facebook’s Libra is facing stiff opposition from regulators around the world, the company has been working toward allaying their concerns. The social media giant is trying to get its chief operating officer Sheryl Sandberg to testify in front of the House Financial Services Committee. For the long term, the fundamental developments of the asset class are encouraging. 

Nevertheless, the past week has seen a sea of red in the crypto universe. Every major cryptocurrency is in the red over the past seven days. How should traders approach the top performers of this period? Are these outperformers showing signs of a turnaround or will they plunge in the near future? Let’s analyze the charts.


The best performer of the past seven days is UNUS SED LEO (LEO), which has declined by about 3% during the period. Cryptocurrency exchange Bitfinex has said that owners of LEO will benefit by access to higher allocations during its initial exchange offering compared to others who participate with other cryptocurrencies. Can LEO continue to outperform in the next few weeks? Let’s analyze its chart.


The LEO/USD pair has been under pressure since topping out at the end of June this year. It has consistently made a lower high and a lower low, which shows that traders are selling on minor rallies. The bulls have been attempting to stall the decline close to $1.0464 for the past three weeks. If successful, the pair might attempt a pullback that will face resistance at $1.36. 

On the other hand, if the support zone at $1.0464–$1.0075 breaks down, it can drop to the next support at $0.80. The bulls are unlikely to buy aggressively if the price slips to new lows and the traders who own positions will bail out of their positions. We will wait for the trend to turn around before suggesting a trade in it. 


Chainlink (Link) can now be used to pull reliable data about the various pairs traded on Binance. This can come in handy for various innovative decentralized finance applications. The listing on Kraken also helped put a floor beneath the prices. Can it stage a recovery from current levels? Let’s analyze its chart.


The Link/USD pair has been consolidating between the psychological support of $1.50 and the previous support turned resistance of $2.0531 for the past four weeks. The 20-week EMA has flattened out and the RSI is also close to the midpoint, which suggests a balance between buyers and sellers.

If the bulls can push the price above the overhead resistance of $2.0531, it will indicate buying at lower levels. The next level to watch on the upside is $2.8498, above which the momentum is likely to pick up. Conversely, if the bears succeed in breaking below the support of $1.50, a drop to $1.3139, which is the 78.6% Fibonacci retracement of the entire rally is probable. 

However, we like the way the cryptocurrency has held its support in this pullback. Therefore, traders can initiate long positions on a close (UTC time) above $2.0531 with a stop loss of $1.40.


The Iota Foundation has teamed up with the Linux Foundation. Together they will work to advance the development of an interoperable solution set for IoT, Edge and Cloud integration. In another partnership, the foundation joined hands with the European Institute for Technology (EIT) and EIT Climate KIC, to connect and scale sustainable solutions across the continent. With fundamental news backing Iota (MIOTA), can it rally from the current levels? Let’s study its chart. 


The bounce from the $0.244553–$0.207622 support zone fizzled out at the 20-week EMA.  Both moving averages continue to slope down marginally and the RSI is in negative territory, which shows that bears have the upper hand.

If the price slides below the support zone, it will be a huge negative because the next support on the downside is way lower at $0.104073. However, as the bulls have been defending the support zone for the past six weeks, the possibility of a breakdown is low.

Conversely, if the bulls defend the zone once again and the IOTA/USD pair climbs above the 50-day SMA, it will signal demand at lower levels. On crossing above $0.385033, a move to $0.541 is possible. There are two ways to trade this. Either buy on a rebound off the support zone, which gives a close stop loss, or wait for the price to rise above $0.335, which shows that the bulls are back in action.


Ripple, the company behind XRP has acquired Logos Network, a startup that focuses on speed and scalability. The Logos team will join Xpring to develop decentralized financial products. XRP has been a huge underperformer in the past few weeks. Can it stage a turnaround or will it continue to correct? Let’s analyze its chart.


The pullback in the XRP/USD pair reversed direction from just below the overhead resistance of $0.34229. This shows selling by the bears on minor rallies to strong resistance levels. The bears are currently attempting to sink the pair to new 52-week lows.

If the pair dips and sustains below $0.22, it will complete a descending triangle, which is a bearish pattern. The next support to watch on the downside is $0.19 and if that also cracks, the downtrend can extend to $0.13. The downsloping moving averages and the RSI in the negative territory also show that bears are in command.

Our bearish view will be invalidated if the pair bounces strongly from the current levels and scales above $0.34229.


Binance added support to Tezos (XTZ) and trading commenced on Sept. 24. However, the bounce due to the positive news was short-lived as traders used the opportunity to lighten up their positions. Tezos was the fifth-best performer of the past seven days. It slipped about 16% during the period. How does it look on the chart? Let’s find out.


The bulls are attempting to defend the critical support of $0.829651. If this support breaks down, the next stop is likely to be $0.650511, which is the 78.6% Fibonacci retracement of the rally and if that level also cracks, a drop to $0.33 will be in the cards. That will bring the large range of $0.33–$1.85 into play.

Conversely, if the XTZ/USD pair bounces off the support at $0.829651, it will act as a higher low. Above $1.20, a rally to $1.85 is likely. If bulls propel the price above this resistance, a new uptrend is likely. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The market data is provided by the HitBTC exchange.

Source Cointelegraph

$6.4M Worth of FSN Tokens Stolen From Fusion Network’s Swap Wallet

Fusion Network’s token swap wallet was compromised. Roughly a third of FSN tokens was stolen as a result.

Fusion Foundation announced in a Medium post published on Sept. 29 that its swap wallet was compromised, which resulted in the theft of 10 million native FSN and 3.5 million Ethereum (ETH)-based ERC-20 FSN tokens. The total worth of stolen FSN tokens was estimated at around $6.4 million at that time.

The Foundation’s investigation has not revealed any other affected wallets so far. The alleged cybercriminal reportedly started to launder the coins already:

“After the currency was stolen, abnormal wash-trading behaviour occurred, and some of the stolen tokens were sold across exchanges, in particular Bitmax and Hotbit.”

Private key stolen

The attacker reportedly obtained access to the wallet by stealing the private key associated with it. The author of the post claims that “the Fusion Protocol and technology itself has been and remains secure.”

In an attempt to prevent the laundering of the funds in question, deposits and withdrawals of FSN tokens have been reportedly suspended on cryptocurrency exchanges such as Huobi, OKEx, Bitmax, Citex and Hotbit. All the funds remaining in the token swap wallet were moved to a cold wallet, abnormal transactions are being tracked. Lastly, the Foundation is also working on some unspecified technological approaches to recover the funds.

As of press time, FSN is trading at around $0.174 — over 66% lower than the one it traded at yesterday, according to Coin360 data.

As Cointelegraph reported yesterday, Amerian Internet infrastructure firm Juniper Networks found a new spyware that uses Telegram app to replace crypto addresses with its own.

Source Cointelegraph

Zcash Bug Could Reveal Shielded Full Nodes’ IP Addresses

A bug in all Zcash (ZEC) implementations and most of its forks could leak metadata containing the full nodes’ with shielded addresses (zaddr) IPs.

Komodo (KMD) core developer Duke Leto disclosed the bug in a blog post published on his personal website. A Common Vulnerabilities and Exposures (CVE) code has already been assigned to track the issue on Sept. 27. Leto explained:

“A bug has existed for all shielded addresses since the inception of Zcash and Zcash Protocol. It is present in all Zcash source code forks. It is possible to find the IP address of full nodes who own a shielded address (zaddr). That is, Alice giving Bob a zaddr to be paid, could actually allow Bob to discover Alice’s IP address. This is drastically against the design of Zcash Protocol.”

Per the announcement, everyone who published their zaddr or provided it to a third party could be affected by the vulnerability. Leto claims that users should consider their “IP address and geo-location information associated with it as tied to […] zaddr.”

Multiple cryptocurrencies affected

According to Leto, users who never used a zaddr, only used it over the Tor Onion Routing network or only to send funds, are not affected. Furthermore, Leto also claims that Zcash is not the only cryptocurrency affected and provides a non-exhaustive list.

The cryptocurrencies included in the list are Zcash, Hush, Pirate, Komodo smart chains with zaddr enabled by default, Safecoin, Horizen, Zero, VoteCoin, Snowgem, BitcoinZ, LitecoinZ, Zelcash, Ycash, Arrow, Verus, Bitcoin Private, ZClassic and Anon. Leto also points out that Komodo has already disabled the shielded addresses feature and transitioned it to the Pirate chain, which means that KMD no longer contains the bug.

As Cointelegraph recently reported, Electric Coin Company, which launched and supports the development of privacy-coin Zcash, recently published a paper describing a trustless cryptographic system called Halo.

Source Cointelegraph

Æ Ventures’ Blockchain Accelerator Reaches $1.6M in Investments

Æ Ventures, an investment company providing initial funding, acceleration and advisory support to blockchain projects, announced that it’s Starfleet Accelerator program surpassed $1.6M in investments and opened applications for the third round.

Mentoring and funding for blockchain startups

Per the press release shared with Cointelegraph on Sept. 26, the third edition of Starfleet Accelerator program takes place in Malta and offers its members mentorship and investment opportunities up to $100,000. The program’s launch is planned for early November and blockchain startups have to apply by Oct. 20.

The initiative will start with what Starfleet Accelerator calls “Genesis Week” — a period during which “participating startups receive access to mentorship and support in areas such as business models, token economics, blockchain infrastructure, and æternity apps architecture, from the best experts in the industry.”

A blockchain accelerator in India

The company also announced that its first 2020 program will take place in India. Æ Ventures CEO Nikola Stojanow commented on the development:

“We are amazed at the growth of the Starfleet accelerator program from its start to now and we can’t wait to launch the third edition with new companies breaking blockchain barriers. […] Hosting the program in Malta and India presents new opportunities to engage the burgeoning blockchain culture in these regions and we’re proud to continue to foster global blockchain growth through these communities.”

As Cointelegraph reported on Sept. 23, blockchain analytics firm Elementus raised $3.5 million from backers including a sister company of crypto-friendly asset manager Fidelity Investments.

Source Cointelegraph

Crypto Markets Turn Green Following Tough Week, BTC Price Above $8,000

Saturday, Sept. 28 — All of the top-20 cryptocurrencies by market cap have entered the green zone, recovering from recent losses, with Bitcoin (BTC) hovering above the $8,000 mark, according to Coin360.

Cryptocurrency market daily overview. Source: Coin360

Cryptocurrency market daily overview. Source: Coin360

Over the past day, Bitcoin has been trading in a narrow corridor between $7,889 and $8,244, which mark the coin’s lowest and highest price points over the past 24 hours. At press time, BTC is trading at around $8,093, up around 1.6% on the day.

On its weekly charts, BTC is down by 20.4%, while its monthly losses amount to 18.16%.

Yesterday, Bitcoin’s Lightning Network developer Rusty Russel published a full disclosure of the network’s vulnerability discovered in August, accompanied by a solution. Russel pointed out that the vulnerability appeared while opening funding channels.

Bitcoin seven-day price chart. Source: Coin360

Bitcoin seven-day price chart. Source: Coin360

The second-largest crypto by market cap Ether (ETH) is currently trading at around $171,4, having gained 4.08% on the day at press time. ETH dipped to its lowest price point of the week at $161 on Sept. 24, reaching an intraweek high of $218 on Sept. 21.

Ether 7-day price chart. Source: Coin360​​​​​​​

Ether 7-day price chart. Source: Coin360

XRP has gained over 1% on the day and is trading at around $0.239 as of press time. The altcoin started the day near $0.234, gradually reaching its current price point. Over the week, the third-largest cryptocurrency by market cap registered losses of 17.9%, while its monthly losses are 6.79%.

XRP’s seven-day price chart. Source: Coin360

XRP’s seven-day price chart. Source: Coin360

Among other major gainers on the day, the charts show Tezos (XTZ), Algorand (ALGO), Chainlink (LINK), Binance Coin (BNB) and Bitcoin Cash (BCH), which have gained 6.53%, 3.56%, 4.7%, 3.7% and 3.42% respectively.

Total market capitalization of all cryptocurrencies is around $215.5 billion as of press time. The daily trading volume of all coins is $50.7 at press time.

On Sept. 27, in a letter addressed to European parliament member Eva Kaili, European Central Bank president Mario Draghi noted that the European System of Central Banks is closely monitoring developments in the cryptocurrency industry. Despite displaying a positive approach to new technologies, Draghi apparently thinks that stablecoins and cryptocurrency in general are not yet a substitute for fiat currency.

Keep track of top crypto markets in real time here

Source Cointelegraph

Brooklyn Nets’ Spencer Dinwiddie Cannot Tokenize His $34M Contract

The National Basketball Association (NBA) notified Brooklyn Nets’ player Spencer Dinwiddie that he cannot tokenize his $34.4 million contract.

As The New York Times reported on Sept. 27, the NBA pointed out that Dinwiddie’s initiative goes against the collective bargaining agreement in a statement sent to the outlet. The statement reads:

“According to recent reports, Spencer Dinwiddie intends to sell investors a ‘tokenized security’ that will be backed by his player contract. The described arrangement is prohibited by the C.B.A., which provides that ‘no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.’”

Dinwiddie, on the other hand, told the outlet that he intended to better illustrate the investment scheme to league officials, hoping to change their minds. He commented on his initiative:

“What better way to be invested in a player as a fan than to have some level of skin in the game. […] With the way mine works, if I play well in that player option year and we split the profits up the first year of my new deal, it greatly appreciates the return on this investment vehicle.”

Heightened fan involvement

Per the report, by tokenizing the contract Dinwiddie would have allowed investors to bet — and capitalize — on his ability to play well enough to earn an even more lucrative contract after the second year of his deal. As Cointelegraph reported on Sept. 16, the plan was to enable investors to buy into his three-year $34 million playing contract with his team.

According to the Times, he intended to raise $4.95 million to $13.5 million by offering an Ethereum-based security token developed by his company Dream Fan Shares. He also reportedly intended to guarantee to investors a few percentage points in interest over the duration of the contract and to set the minimum investment to $150,000.

As Cointelegraph recently reported, Turkish Football Club Galatasaray Spor Kulübü plans to launch Ethereum-based fan tokens in partnership with blockchain sports fan startup Socios based on sports tokenization platform Chiliz.

Source Cointelegraph

Crypto Exchange Coindirect Launches OTC Brokerage in South Africa

Cryptocurrency exchange Coindirect launches an over-the-counter (OTC) brokerage in South Africa.

As industry news outlet CoinInsider reported on Sept. 27, the platform creates a vast liquidity pool by integrating with global platforms, allows for Bitcoin (BTC) price locks after a confirmation and for instant processing with no fees or slippage. 

Aimed at high volume users

The service lets high volume users to avoid lengthy transactions that can reportedly take over 12 hours. The exchange’s COO Nic Haralambous added:

“During our first two years in the industry we have paid close attention to which users are driving the volume of crypto trading. Our approach is to bring cryptocurrency to as many users as possible, however, the data shows that a majority of the daily trading volume in South Africa right now comes from a very small percentage of traders.”

According to the report, the exchange also recently added other major features to the platform such as credit card payments, instant withdrawals and higher transaction limits.

As Cointelegraph recently reported, cryptocurrency giant Binance plans to roll out its OTC trading platform for Chinese yuan — only targeting the Chinese market — in October.

Source Cointelegraph

Facebook COO Sandberg in Talks to Testify On Libra Before The House

Facebook’s chief operating officer Sheryl Sandberg is in talks with the House Financial Services Committee to testify on Libra, Facebook’s stablecoin.

Discussions on market power and Libra

According to a Bloomberg article from Sept. 26, Facebook is currently trying to get its chief operating officer Sandberg in front of the House Financial Services Committee, perhaps as soon as next month.

Sandberg is expected to testify on the social media giant’s global market power and its plans to launch its stablecoin Libra in 2020, a source familiar with the talks told Bloomberg.

Sanberg’s previously testified in front of the Senate Intelligence Committee concerning data privacy, security and the U.S. presidential election-related misinformation campaigns on Facebook’s platform in 2016.

Mr. Zuckerberg goes to Washington

This testimony would follow a recent visit from Facebook’s CEO Mark Zuckerberg in Washington, D.C., where he had dinner with a handful of United States lawmakers, concerned over Facebook’s proposed Libra stablecoin project. 

Democratic Senator Mark R. Warner said Zuckerberg heard “consistent concerns about privacy, concerns around vile content and how it came to be dealt with.”

Facebook still set on 2020 Libra Launch

Last week David Marcus, head of Calibra at Facebook, signaled that a 2020 launch for Libra remains the goal, despite regulators’ pushback, by saying that the team behind Libra would address all concerns to create a suitable regulatory environment.

Source Cointelegraph

New Spyware Replaces Crypto Wallets on Clipboard via Telegram: Report

Amerian Internet infrastructure firm Juniper Networks has found a new spyware that uses Telegram app to replace crypto addresses with its own.

Masad Clipper and Stealer

Juniper Threat Labs, a threat intelligence portal at Juniper Networks (NYSE: JNPR), discovered a new Trojan-delivered malware implementing major global messaging app Telegram to exfiltrate stolen information, according to threat research released on Sept. 26.

Reportedly circulating under the name “Masad Clipper and Stealer” on black market forums, the spyware is capable of stealing a broad list of browsing data, including usernames, passwords, credit card information.

Moreover, the malware also includes a function that replaces cryptocurrency wallets from the clipboards with the one by the attacker’s party. According to the report, the spyware’s clipping supports a number of major cryptos such as Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC), among others.

Ongoing threat signals

Specifically, the malware uses Telegram as a Command and Control (CnC) channel, which reportedly allows the malware some anonymity. This malware is written using Autoit scripts and then compiled into a Windows executable, according to the report. After being installed, Masad Stealer starts by collecting sensitive information from the system like crypto wallet addresses, credit card browser data, PC and system information.

According to Jupiter Threat Labs, Masad Stealer sends all collected information to a Telegram bot managed by the threat actor, which also sends commands to the spyware.

The security portal concluded that Masad Stealer is an active and ongoing threat Command and Control bots were still alive at the time of publication.

Meanwhile, Telegram released a wallet for its TON Blockchain’s native token Gram in the app’s alpha version for iOS on Sept. 26. On Sept. 24, Telegram announced a bug bounty competition within its new smart contract coding contest.

Source Cointelegraph