EOS Network Suffering From Degraded Performance, Says Coinbase

Major American cryptocurrency exchange Coinbase said that the EOS network is having some issues.

On Feb. 20, Coinbase issued a status update stating, “EOS network has degraded performance. Sends and receives might be delayed.” 

The exchange posted a tweet two days later, stating that the EOS network was still suffering from degraded performance and that hat external EOS sends have been temporarily disabled, but buys and sells of EOS within the cryptocurrency exchange were functioning normally.

However, EOS block producer EOS Nation responded on Feb. 22 that, although there had been issues with micro-forks on Feb. 20, the EOS mainnet was “currently extremely reliable.”

The tweet included a chart showing a slight blip on Feb. 20, where 192 blocks had been missed due to the micro-forking issue, but indicated a stable mainnet performance over the past two weeks.

Previous performance issues

The EOS network has had performance issues in the past, and the chart posted by EOS Nation only goes to highlight that. In the last week of January it missed an average of 20,000 blocks per day.
As Cointelegraph reported October 2019, research claimed that EOS could be hit by congestion attacks which could freeze the network. The exploit seemingly allowed an attacker to steal over $110,000 worth of crypto from an EOS gambling application. EOS’ parent firm claimed that the network was operating normally. 

The network had several problems with freezing just after launch, and has recently suffered from network congestion problems due to the EIDOS token airdrop.

Source Cointelegraph

Millions of Online Retailers Can Now Accept DAI on Coinbase Commerce

Coinbase Commerce, a platform that supports cryptocurrency payments for internet retailers, has added MakerDAO’s DAI stablecoin as a supported payment method this week

This integration will let merchants around the world accept the USD-pegged stablecoin as payment for goods and services without Coinbase Commerce taking any extra fees.

Merchants can add a “pay with crypto” button to their checkout process, or choose to accept DAI only. Shop owners can also currently earn a DAI savings rate of 7.5%.

This could open doors to over 800,000 stores and 3 million web shops on Shopify and WooCommerce, as well as anyone else seeking a way to accept decentralized stablecoins as payment. It also introduces merchants to a growing segment of the cryptocurrency market, letting them bridge the gap between DeFi app developers and their own businesses. 

DeFi (decentralized finance) is a popular movement sparked by cryptocurrency and blockchain technologies, bringing conventional financial services to the crypto sector.  

Rune Christensen, CEO of the Maker Foundation, told Cointelegraph a few months ago that:

“DeFi is a new generation of products that are entirely transparent, where users can see exact cash flows while achieving greater levels of trust and security that can be audited in real time. DeFi also incorporates the global nature of blockchain and its advantages, making these more efficient systems with lower fees and higher yields.”

Source Cointelegraph

Coinbase Fails to Top CryptoCompare’s Exchange Rankings due to 2019 Flash Crash

Coinbase, one of the most popular platforms in the United States, missed out on the number one spot in a ranking of crypto exchanges due to a 2019 Bitcoin (BTC) price glitch.

The major U.S. crypto exchange and wallet service did not get to the top of the latest CryptoCompare’s crypto Exchange Benchmark rankings because its institutional trading arm Coinbase Pro experienced a major Bitcoin price flash crash in October 2019.

CryptoCompare confirmed to Cointelegraph that the glitch was the primary reason behind the five-point drop for Coinbase in the “Negative Reports” section of rankings. “Coinbase would be top without this event, and in fact topped our rankings last year in June, before this event,” the firm noted.

As reported, Coinbase Pro experienced a system glitch that caused the deletion of some stop-loss orders before Bitcoin’s sharp drop from $9,260 to $9,055 on Oct. 31. That wasn’t the first time when Coinbase experienced a flash crash though. Back in 2017, the Commodity Futures Trading Commission was investigating Coinbase over an Ether (ETH) flash crash that occurred on its GDAX exchange. The GDAX glitch caused Ether to drop to just 10 cents from $317 in milliseconds before quickly recovering.

Another U.S.-based exchange ItBit gets the top rank

On Feb. 12, British crypto analytics firm CryptoCompare updated its crypto exchange rankings, releasing an accompanying report covering Q4 2019. The number of analyzed crypto exchanges on the online ranking amounts to 159 platforms at press time.

As previously reported, CryptoCompare’s rankings do not rely on aggregate volume data of exchanges but rather represents the firm’s proprietary risk-based method of ranking.

As such, New York-based ItBit, currently the 20th-largest crypto exchange by 24-hour volume, is now the top platform of the new Exchange Benchmark, while Winklevoss’ Gemini exchange slipped to second place since the previous ranking release.

In order, the top 10 crypto exchanges in CryptoCompare’s third Exchange Benchmark are: ItBit, Gemini, Coinbase, Kraken, Bitstamp, Liquid, Bitfinex, OKEx, bitFlyer and OKCoin.

The new top 10 list included only one newcomer, OKCoin, which was allegedly caused by Poloniex’s departure from the U.S. market in October 2019. Poloniex also saw a decline in their market quality score, CryptoCompare said in an email to Cointelegraph.

Top 10 crypto exchanges in CryptoCompare Exchange Benchmark Q4 2019

Top 10 crypto exchanges in CryptoCompare Exchange Benchmark Q4 2019. Source: CryptoCompare

Only 16% of crypto exchanges hold the majority of funds on cold storage

CryptoCompare launched its Exchange Benchmark in June 2019 in response to a study that claimed that 95% of volume on unregulated exchanges is fake. The analysis also aimed to warn crypto users about the level of risk across the industry, providing an overview of crypto exchanges based on eight major ranking components including regulation, security and market quality.

According to the latest Exchange Benchmark report, only 16% of analyzed crypto exchanges hold more than 95% of their crypto funds on cold storage, while just 4% of exchanges formally offer some form of crypto insurance. Additionally, crypto exchanges that are located in the U.S., Luxembourg, Japan and South Korea are among those associated with the lowest level of risk, according to CryptoCompare.

Source Cointelegraph

Bitcoin Hits $10K, Coinbase Controversy, Buffet with Buffett: Hodler’s Digest, Feb. 3–9

Coming every Sunday, Hodler’s Digest will help you 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

Bitcoin price hits $10,000 for the first time in 2020

We’re back in business! Bitcoin has reached five figures for the first time since last October. According to Coin360, BTC is up by more than 40% year to date — 8.3% over the past week. Champagne corks will also be flying in the Ether community, as the coin is up 21% to near $230 — a new 2020 high. But as the world’s biggest cryptocurrency returns to five figures, some believe there’s increasing potential for Bitcoin to lose value in the short term. Alameda Research co-founder Sam Bankman-Fried believes BTC may only continue appreciating if the coronavirus crisis worsens — and predicts it will slip back to $6,800 without “continued unrest.” Have global events been responsible for Bitcoin’s remarkable start to 2020?

U.S. Fed is exploring potential for digital currency, says board member

A member of the United States Federal Reserve’s board of governors has hinted that the institution is warming to the idea of central bank digital currencies. Lael Brainard, who chairs, said the Fed is “conducting research and experimentation” into CBDCs — and wants to be at the forefront of the debate given the dollar’s important role in global markets. This is a marked departure from less than 18 months ago when she said: “There is no compelling demonstrated need for a Fed-issued digital currency.” Of course, a lot has happened since then — including Facebook’s plans to launch Libra. In other news, it’s emerged that six major central banks are going to meet in April to discuss the development of CBDCs. Even though these talks will take place in Washington, D.C., the U.S. will not be attending — only representatives from the European Union, United Kingdom, Canada, Japan, Sweden and Switzerland will be around the table.

Mastercard CEO reveals why the company left Libra

When Facebook unveiled plans to launch a stablecoin, one of the most exciting elements was how major financial institutions such as Mastercard, Visa and PayPal were founding members of the Libra Association. Alas, all three quit a few months later with no proper explanation. Now, we’re starting to get answers. Mastercard’s CEO Ajay Banga, speaking to the Financial Times, attacked Libra for its lack of transparency. He said he also had concerns surrounding the stablecoin’s business model because the association hasn’t made clear how it will make money — and that the Calibra wallet didn’t seem to tally with Libra’s vision of serving as a financial inclusion tool. Nonetheless, Banga said he liked the idea of a global currency, describing siloed systems in a world where citizens travel globally as “really stupid.”

Some Coinbase users can’t withdraw more than $10 in Bitcoin a day

Now, here’s a mysterious tale. Some users of Coinbase are apparently not allowed to withdraw more than $10 a day. One Redditor said he had been subject to the limit, and that the company had denied his request to have it raised. Some of those who replied to the thread predicted that further restrictions could follow if crypto prices reach an all-time high. Cointelegraph asked Coinbase for an official statement on the matter, but, at the time of writing, no response has been forthcoming.

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Tron founder Justin Sun finally met with Warren Buffett for charity lunch

And a happy story to end our news round-up. Tron founder and CEO Justin Sun has finally had his charity lunch with billionaire Warren Buffett. Back in June, Sun had won an auction for the honor on eBay with a bid of $4.5 million — a record. However, the buffet with Buffett was pushed back by Sun due to medical reasons. After the pair broke bread in Nebraska, Sun said he was grateful for Buffett’s “wisdom and vision.” He added: “I’ll always remember his kindness and support and will take Mr. Buffett’s advice and guidance to make Tron a better ecosystem, business with all the partners in the blockchain space and beyond.”

Winners and Losers

At the end of the week, Bitcoin is at $10,089.42, Ether at $227.87 and XRP at $0.28. The total market cap is at $287,790,964,403.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are KickToken, Lisk and Decentraland. The top three altcoin losers of the week are Swipe, Synthetix Network Token and Quant.

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

Most Memorable Quotations

“I see more and more large accounts getting educated and set up to be accumulators of $BTC and believe on a risk-adjusted basis it’s the best place to bet on crypto.”

Mike Novogratz, venture capitalist

“It was really an honor, and I’m grateful for Mr. Buffett’s dinner, wisdom and vision.”

Justin Sun, Tron CEO

“The most important part of Bitcoin, when it comes to the global hedge, is the fact that it’s a non-correlated asset — meaning that, as stocks go up or down, Bitcoin doesn’t have correlation to that.”

Anthony Pompliano, Morgan Creek Digital co-founder

“As anyone who’s a trend follower knows — when you’re back above your 200-day, you’re back in a bull market. Whenever Bitcoin breaks back into its 200-day, its average six-month gain is 197%.”

Tom Lee, Fundstrat Global Advisors co-founder

“If you get paid in Libra […] which go into Calibras, which go back into pounds to buy rice, I don’t understand how that works.”

Ajay Banga, Mastercard CEO

Prediction of the Week

Bitcoin price may hit $27,000 all-time high by summer, predicts Tom Lee

Fundstrat Global Advisors co-founder Tom Lee believes Bitcoin’s best days are ahead. He told Yahoo Finance that he is “really optimistic” about the cryptocurrency’s short-term potential — primarily because it has gone back above its 200-day moving average. Lee claimed that this usually signals the return of a bull market, adding: “Whenever Bitcoin breaks back into its 200-day, its average six-month gain is 197%.” The investor firmly believes that May’s block reward halving will serve as a catalyst for further gains — and has previously said this event has not been “priced in.” Only time will tell whether he’s right.

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FUD of the Week

Unknown number of major league baseball players lured into crypto Ponzi scheme

Two men have been charged over an alleged crypto Ponzi scheme that duped an unknown number of investors — including professional basketball players. John Michael Caruso and Zachary Salter are accused of wooing their victims by posting about their supposed luxurious lifestyles on social media. It’s claimed that more than 90 people have been swindled out of at least $7.5 million since June 2018. Forensic accountants believe none of the money taken from investors was actually invested in cryptocurrency. Instead, $350,000 was spent on luxury car rentals, and the pair are said to have lost $830,000 during a 134-hour gambling spree at casinos in Las Vegas.

Report: North Korean hackers created realistic trading bot to steal money

North Korea’s Lazarus Group managed to steal from the DragonEx crypto exchange by creating a fake but realistic trading bot, according to Chainalysis. The sophisticated attack saw the cybercriminals create a compelling website and social media presence for a non-existent company called WFC Proof. The supposed firm offered software to employees of the Singapore-based exchange that was eventually installed on a machine that contained the private keys to DragonEx’s hot wallet. An estimated $7 million in various cryptocurrencies was subsequently taken. In a rather ironic twist, the WFC Proof website had warned visitors not to let anyone access personal private keys.

Craig Wright accused of confusing trial proceedings

The counsel for the estate of Dave Kleiman has accused self-proclaimed Bitcoin inventor Craig Wright of abusing attorney-client privilege to withhold documents and confuse trial proceedings. The long-running case relates to allegations that Wright misappropriated more than 1 million BTC that the pair had mined together between 2009 and 2013. A memorandum said: “To say discovery in this case has been challenging would be a dramatic understatement.” It also alleges that Wright has shown a “pattern of obfuscation,” with tens of thousands of documents being shielded from the plaintiffs.

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Best Cointelegraph Features

Crypto goes IPO — Ripple could lead the blockchain industry’s charge

As Joseph Birch explains, 2020 could be the year that crypto companies step forward and take the plunge into going public.

The Cointelegraph Top 100

Check out our list of the most important and influential people in the cryptocurrency and blockchain world, as chosen by Cointelegraph’s editors.

Alexander Vinnik claims injustice while now fighting charges in France

After 30 months in detention, alleged Bitcoin money launderer Alexander Vinnik has been extradited from Greece to France. Osato Avan-Nomayo takes a closer look at the case.

Source Cointelegraph

Coinbase Says Bitcoin Will Become Closer to Digital Gold in 93 Days

With May’s Bitcoin halving event drawing ever closer, Coinbase recently took to pushing the “Bitcoin as digital gold” narrative. In a tweet-storm to promote an accompanying blog-post published Feb. 7, it covered the key reasons why the halving and subsequent supply rate reduction will further cement that link.

Scarcity creates value

Since the gold standard was broken in 1971, the dollar’s value has declined and gold’s value, in dollar terms, has risen over 4000%. Gold has more value than similar metals such as copper due to its relative scarcity and difficulty to acquire.

Bitcoin has been designed to be scarce like gold and is artificially difficult to acquire through the Proof-of-Work process of mining. However, it also has an advantage over gold in being transferable through a communications channel.

Coinbase concluded:

“Armed with a myriad of technological advantages, accelerating development, and maturing global market, Bitcoin is a store of value to rival gold in the digital age.”

Halving increases scarcity

The supply of Bitcoin is limited by design, with new tokens being minted as a reward every time a block of transactions is mined. The initial reward level of 50 BTC per block has already undergone two halving events, bringing it down to the current 12.5 BTC per block.

After the May 2020 halving, mining rewards for each new block, mined approximately every ten minutes, will reduce to 6.25 BTC. This will bring the supply issuance of Bitcoin to a rate of around 1.7% per annum.

Stock-to-flow (S2F) is a measure of new supply rate over total supply, and post-halving, Bitcoin’s S2F scarcity will be on a par with gold’s.

“Gold’s stock to flow is higher than any other metal commodity, and bitcoin is set to soon follow,” notes Coinbase. 

Bitcoin stock-to-flow chart

Bitcoin stock-to-flow chart. Source:

No value without demand

S2F forecasts for the price will fail if there is no demand, and this holds true for fiat money, as much as any other commodity. As central banks increase the money supply, economies can sometimes prosper. However, if money supply overwhelms demand then hyperinflation events can occur.

Such events drive demand for safe havens such as gold and Bitcoin, and recent economic fear is reaching all-time highs, according to the Global Economic Policy Uncertainty Index.

This, along with Bitcoin’s myriad of technological advances and accelerating development, justifies Bitcoin’s title as digital gold, according to Coinbase.

As Cointelegraph reported, senior employees of Coinbase and Ripple recently formed a working group to advise United States regulators on policies to encourage innovation in the sector.

Cointelegraph News

Coinbase and Ripple Push for Regulatory Framework, US Congress Stalls

A new working group, spearheaded by senior employees of Ripple and Coinbase, is going to advise United States regulators on crypto-friendly policies. But congresspeople are too busy preparing for the upcoming elections, which means that U.S. crypto firms will have to continue hula-hooping through state-by-state regulations in the near future. 

Earlier this month, a D.C.-based advocacy group called the Blockchain Association, representing a number of high-profile cryptocurrency firms, launched a working group tasked with pushing for a U.S.-wide regulatory framework. Called the Market Integrity Working Group, the new entity is co-chaired by Breanne Madigan, head of global institutional markets at Ripple; and Rachel Nelson, Coinbase’s senior director and associate general counsel. So what is it, exactly? 

Ex-Wall Street execs will advise lawmakers on crypto regulation

The Blockchain Association’s Market Integrity Working Group was launched on Jan. 23. Both of its co-chairs are Wall Street veterans — Madigan worked at Goldman Sachs for 15 years, while Nelson spent five years at J.P. Morgan. 

When asked about the structure of Market Integrity Working Group, Blockchain Association’s communications advisor Graham Newhall clarified to Cointelegraph, “It is just that, a working group, under the umbrella of the Blockchain Association.” He added: 

“It is one of several such groups we’ve commissioned to work on specific issues relevant to the crypto economy.”

The advocacy group has launched various working groups on proof-of-stake networks (also co-chaired by Rachel Nelson), stablecoins, security laws, custody, and other industry-related topics in the past. Working groups “are simply a vehicle to maximize the expertise of Association member companies,” Newhall said, adding:

“They do not represent a separate entity, lobbying on its own behalf, rather we task expert members to study particular problems facing the crypto industry and potential regulations. The findings of these groups inform our conversations with regulators and lawmakers.”

As Newhall further explained to Cointelegraph, the Market Integrity Working Group co-heads were “chosen in discussion with Association members, pertaining to those individuals and companies that have a particular interest or expertise on a chosen subject.” The Blockchain Association has 22 member organizations, including Circle, Kraken, Ripple, Coinbase and 0x, among other U.S. cryptocurrency firms.

U.S.-wide crypto regulation: A distant, but largely unavoidable scenario

As leaders of the newly assembled Market Integrity Working Group, Nelson and Madigan are planning to advise regulators on how public policies can stimulate the cryptocurrency industry, specifically improving market integrity and providing consumers “the confidence they deserve.”

Notably, the organization highlights the “labyrinthine patchwork of state-by-state” regulations in the U.S. as one of the main obstacles for crypto businesses that ultimately results in “significant barriers to entry for new exchanges” and “a complicated compliance burden for existing exchange.” Market Integrity Working Group concludes: 

“Consumers and cryptocurrency exchanges deserve a clear regulatory framework, the establishment of which would ultimately enhance market integrity and drive consumer adoption of cryptocurrencies.”

However, the working group is aware that U.S.-wide regulation is not likely to be adopted in the near future. “We don’t think something like that is likely in the near term, especially in an election year,” Newhall told Cointelegraph. 

Experts confirm that federal crypto regulation is not exactly a pressing issue for Congress. “In the short term, this is an unlikely scenario,” Carol Goforth, law professor at the University of Arkansas, argued in an email conversation with Cointelegraph. According to her, in the near term, the legislators were first of all focused on the impeachment hearing and will now switch their focus to the upcoming 2020 presidential elections: 

“One way or another, the looming 2020 election cycle is likely to take precedence.  However, in the long run, it may as a practical matter be necessary for legislative intervention.”

However, Goforth notes, appropriate legislation would stop “a colossal waste of resources” that is happening due to U.S. regulators dealing with crypto on a case-by-case basis:

“Currently, the SEC is spending significant sums of money litigating the question of whether cryptotokens with a functioning purpose other than serving as a currency-substitute are securities at all. This is playing out in both the Kik litigation and Telegram ICO dispute. Even if the courts agree with the agency’s analysis (a battle that may have to be fought in multiple circuits unless and until the Supreme Court is willing to weigh in), that still leaves a set of regulatory requirements that were never designed with interests like cryptoassets in mind.”

Andrew Mount, litigation associate at Bressler, Amery & Ross, P.C., suggests that “we are headed towards federal crypto regulation” as the number of major cases involving crypto keeps piling up, although he also stresses that “it is anyone’s guess when it will happen.” He went on to elaborate:

“High profile cases like Facebook’s Libra and Telegram’s Gram push crypto into the national spotlight. With the crypto space rapidly expanding (and more “name brand” companies getting involved), Congress will face increased public pressure to enact legislation.”

Furthermore, Market Integrity Working Group’s proposed legislation “could expand the Commodity Futures Trading Commission’s (CFTC) authority to include the regulation and oversight of digital commodity exchange markets,” as per the blog post written by Madigan and Nelson. 

When asked why the working group would pick the CFTC over other major U.S. financial regulators like the Securities and Exchange Commission, Graham said that “the CFTC has a long history and expertise in monitoring the health and integrity of markets, so we think they are a good point of focus.” He added that for them, the SEC is also quite an important entity, but that the primary focus will be on the CFTC. As Goforth argues, expanding the SEC’s purview instead would make more sense:

“They have not had to develop standards for disclosure, or exemptions, and seem less well positioned to protect potential crypto entrepreneurs, markets, or purchasers. Amending the securities laws to specifically cover cryptoassets, and directing the SEC to adopt exemptions that protect persons engaged in the creation and distribution of such assets in the absence of fraud, would seem to me to be a more efficient approach.”

The establishment of a crypto-focused working group that aims to collaborate with congresspeople is still a healthy development for the industry, both experts agree. Goforth believes that lobbying is very effective in educating legislators, adding that the crypto market is still being stigmatized: “The real challenge will be to convince them that appropriate regulation of cryptoassets is in the best interests of their constituents.” Similarly, Mount told Cointelegraph that regulators are still cautious about the crypto markets:

“The primary issue holding back progress at the federal level is regulators’ lack of trust in the crypto markets. The SEC made this evident in their denial of Bitwise’s bitcoin ETF application in October 2019. The denial reflected the SEC’s uncertainty in the integrity of the bitcoin market.  Because the Market Integrity Working Group’s mission addresses this core concern, it should serve as an effective guide for future Congressional action.”

So, what’s the plan?

As for now, the Market Integrity Working Group has yet to produce a specific roadmap. “The group is new and will work on a detailed strategy in the weeks and months to come,” Newhall said. “We will be adding members to the group to respond to the sustained interest the launch has garnered thus far.”

According to Newhall, there are several lawmakers advocating positive crypto regulation, namely the co-sponsors of the Token Taxonomy Act, as well as representatives DelBene and Schweikert, who recently introduced a bill to exempt personal cryptocurrency transactions from taxation for capital gains — so, convincing the Congress might not be so difficult after all.

While the new working group headed by Ripple and Coinbase execs seems determined to convince U.S. lawmakers that a clear regulatory framework for cryptocurrencies is long due — and the legal wrangling of Telegram’s Gram clearly illustrates that point — the Congress won’t get to the case until the elections are over, experts predict. 

It means that the U.S. will most likely continue to fall behind in terms of federal crypto regulation throughout 2020. In the last month alone, the European Union and Singapore started overseeing crypto assets under new directives, joining the ranks of Japan, Switzerland, Malta and other countries that have made up their minds about cryptocurrencies and blockchain. On the positive side, the working group will have more time to research and prepare their arguments for the lawmakers, some of whom are already championing crypto-friendly regulatory measures.

Source Cointelegraph

Some Coinbase Users Can’t Withdraw More Than $10 in Bitcoin a Day

Major United States-based cryptocurrency exchange and wallet service Coinbase is allegedly not letting some users withdraw more than $10 per day.

On Feb. 2, a Redditor and self-described Coinbase user reported that Coinbase had put a $10 daily withdrawal limit for some users. The Reddit user, with handle Unholy_Crab1, claims that his subsequent application for higher withdrawal limits was denied by Coinbase.

The Redditor has also shared a purported screenshot which shows that the maximum amount of daily withdrawal from Coinbase in Bitcoin (BTC) was $10 for his account.

Source: Reddit

As of press time, the complaint thread has amassed over 40 comments, with the majority of Redditors expressing skepticism over Coinbase’s services so far. As such, some users in the thread expressed expectations that Coinbase would enforce more similar restrictions if crypto prices cross all-time high thresholds. Others suggested that a $10 daily withdrawal limit is a “literal scam amount,” while some users also noted that Coinbase is “about the only option for U.S.-based persons.”

Cointelegraph asked Coinbase to provide an official statement on the matter but did not receive an immediate response. This story will be updated should they respond.

Coinbase and Ripple recently announced a joint initiative to drive U.S. crypto adoption

Headquartered in San Francisco, Coinbase has emerged as one of the most popular digital asset platforms in the U.S., with services it describes as being available in more than 100 countries to date. The news on the alleged daily withdrawal limit by Coinbase comes amidst a recently announced joint initiative of Coinbase and Ripple to drive blockchain and crypto adoption in the United States.

On Jan. 23, Coinbase executive Rachel Nelson, together with Ripple exec Breanne Madigan announced the formation of the Market Integrity Working Group, which aims to “improve market integrity and provide consumers the confidence they deserve.”

Coinbase is not the sole crypto exchange that has been facing withdrawal-related complaints on Reddit recently though. Last week, Cointelegaph reported on popular Finnish crypto exchange LocalBitcoins allegedly quietly suspending user accounts, with some users reporting that they have to wait for at least 14 days to delete their accounts in order to withdraw their Bitcoin.

Source Cointelegraph

Coinbase Custody and Bison Trails to Lobby Staking Adoption

Coinbase Custody and Bison Trails have joined the ranks of the Proof of Stake Alliance (POSA), a Jan. 30 press release announced. Together with the alliance, they will advocate for the adoption of clear regulations on staking proceeds, as well as other development initiatives.

The Proof of Stake Alliance is an advocacy group founded in 2019 and featuring more than 18 members. It engages in regulatory and congressional discussions to promote staking-friendly regulation, as well as organizing events and educational initiatives.

As COO at Polychain Capital and POSA board member Matt Perona explained to Cointelegraph, the organization’s primary goal is to change the taxation regime for staking rewards:

“First, POSA is working to address how staking rewards received by token holders are taxed. POSA is currently trying to differentiate tax treatment from bitcoin mining guidance so that staking rewards are taxed on the disposition of the asset (the sale of the reward) as opposed to the receipt.”

Both mining and staking rewards are currently taxed in the U.S. as direct income, which offers a much higher rate than capital gains tax normally reserved for traditional assets.

The role of Coinbase Custody and Bison Trails

The new members of POSA will be helping the alliance to amend this regulation, as both organizations are deeply invested in the staking ecosystem by providing customers with the means to stake their assets.

A white paper drafted by Abraham Sutherland, a professor at University of Virginia School of Law, argues that the existing treatment is unfair.

In addition to its work on tax regulation, the alliance is also engaging with regulators such as the SEC and FinCEN to work on issues related to securities and money services regulation.

Both Coinbase Custody and Bison Trails will assist POSA in its initiatives. Replying to questions about their specific contribution, Perona explained:

“[They will conduct] meetings on the hill with congressional representatives educating them on Proof of Stake based technologies and their potential use cases. Meetings with regulators (SEC, IRS, Treasury, FinCEN) educating them on the intricacies of the technology and building a regulatory framework that allows for the growth and adoption of staking based technologies. Taking part in working groups and helping implement best practices industry standards”

The alliance’s educational efforts do not include institutions, however. When asked whether POSA is making efforts beyond regulator outreach, Perona replied:

“Currently, POSA is focused specifically on engaging with regulators and policymakers and trying to build a regulatory framework that is conducive to the growth of the staking industry. Our individual members might be having those types of conversations [with institutions] but POSA is not focused on that nor is it a function of POSA.”

Source Cointelegraph

Former Coinbase COO Joins Figure, Creator of the Provenance Blockchain Platform

Asiff Hirji has joined Figure, a U.S. lending company utilizing blockchain to process the loans, a Jan. 30 press release revealed. Hirji will be company’s new president, having previously served as president and COO of Coinbase and other financial services companies.

During Hirji’s two year tenure at Coinbase, he is credited with growing the company to over $1 billion in revenue and overseeing the expansion of its business and management team. Previously, Hirji occupied leadership roles at Andreesen Horowitz, TD Ameritrade, TPG Capital, Saxo Bank and others. 

At Figure, he will lead key business divisions while working to establish the company’s new merchant bank, which will use Figure’s blockchain platform Provenance to facilitate institutional financial services.

Figure currently provides a variety of lending options for consumers. Its primary focus is on home equity lines of credit, a type of loan where home equity is collateralized for cash, even with existing mortgages. The company also offers mortgage and student loan refinancing options.

Customers can gain access to lending through quick and fully digital applications, with the company using blockchain to simplify processing and drive down costs.

According to Hirji, this usage of blockchain technology allows to reinvigorate traditional financing options:

“Blockchain will crash the costs of financial services, making products more affordable and available to all. Figure is one of the very few companies actually turning that promise into reality. The opportunity now is to scale to more financial products and open this capability to all financial institutions.”

Specifically, Provenance streamlines financial operations primarily by removing complex paper document trails, which require qualified custodians and are difficult to access or modify.

Source Cointelegraph

Coinbase Launches International Cryptocurrency Custody Arm

Major United States-based cryptocurrency exchange Coinbase has established an entity in Ireland to expand its crypto custody services to European institutions.

According to a Coinbase announcement published on Jan. 30, the new entity is called Coinbase Custody International and is based out of Dublin.

The firm’s services will be the same as those provided by Coinbase Custody in addition to taking over all the staking activities performed by the exchange. 

Coinbase Custody initially began offering staking for select cryptocurrencies in March 2019, and expanded that service to international the following November. 

The advantages of a local operation

While Coinbase Custody has been serving European clients in the United Kingdom, Switzerland, Germany, Finland and the Netherlands since 2018, a new dedicated entity allows for completely localized service.

Per the announcement, this will bring the advantages of local staff, localized service-level agreements and clearer compliance with EU law:

“Europe is our fastest growing geographic segment and our international launch is a direct result of client demand. By offering our services from the same region in which our clients are located, it’s our goal that they will benefit from greater legal and regulatory clarity.”

Coinbase also said that, over the coming months, it plans to add support for more cryptocurrencies and features to its international custody service. 

Furthermore, Ireland boasts some of the lowest corporate income tax levels in Europe which, despite the protestations of lawmakers to the contrary, has earned it a reputation as a tax haven. Indeed, the country has the third-lowest corporate income tax rate among OECD countries as of 2019. 

Growing demand for custody 

As cryptocurrencies solidify their position as a new financial asset class, demand for services such as crypto asset custody is increasing. 

Rohan Barde, a research and innovation manager at industry expert association Blockchain Zoo, explained that custody services are needed to attract institutional investors who wish to reduce risk and comply with regulatory standards.

Cointelegraph News