Patrick Thompson

SEC Suspends Trading for Three Public Companies after Blockchain Announcement

The SEC has suspended trading for three public companies that have made Blockchain related announcements.
SEC Suspends Trading for Three Public Companies after Blockchain Announcement

The SEC has suspended the trading of three companies that trade on the OTC Markets Group (OTCMKTS). Cherubim Interests, Inc. (CHIT), PDX Partners, Inc. (PDXP), and Victura Construction Group, Inc. (VICT) have had the trading of their shares suspended from 9:30 a.m. EST on Feb. 16, 2018, to 11:59 p.m. EST on March 2, 2018.

What prompted the SEC to halt the trading of these companies was a recent press release by all three stating that they had acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and Blockchain technology. To add insult to injury, CHIT had not been filing annual and quarterly reports with the SEC. What also troubled the SEC was CHIT’s announcement of a financial commitment they made to launch an ICO. The actions of the three companies have led the SEC to question the nature of these companies’ business operations and the value of their assets.

Patrick Johnson, the CEO of all three of the companies said, “We haven’t made any false claims about anything that we have put out.”

But just because Mr. Johnson alleges that his companies have not put out any false claims does not mean that it is true. Recently, there has been a series of troubling Blockchain related claims being made by public companies. Companies that are nearly underwater have been making public announcements that they will be incorporating Blockchain technologies into their business operations. When companies make announcements of this nature, they usually see their stock prices increase about 200 percent on average. In one case, Long Island Iced Tea Corp. changed their name to Long Blockchain and saw their stock rise 300 percent. When Eastman Kodak announced that they would be creating a digital asset called the Kodak Coin their stock rose more than 200 percent.

However, the practice of struggling companies changing their name and business model to incorporate the word “Blockchain” has the SEC worried that companies are using cryptocurrency and Blockchain technologies to capitalize on the gains that come with the trends. Jay Clayton, the chairman of the SEC said, “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams.”

It would not be surprising if algorithm trading related to the words cryptocurrency and Blockchain is taking place. If developers create an algorithm that is keen on cryptocurrency and Blockchain related business, an investor may strike gold by putting their money into a company that could one day be as big as Google due to their blockchain innovations. Seeing companies take advantage of emerging technologies is nothing we haven’t seen in the past. During the dot-com bubble, companies like Pets.com turned out to be worthless despite the “dot com” in their name. Considering that Mr.Johnson claims all three statements are in line with events that have actually taken place, it will be interesting to see what happens to his companies after further investigation.

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Darryn Pollock

European Union and Its Issues With Blockchain, GDPR, and Its Own Cryptocurrency

EU has had a long and problematic relationship with Blockchain and says it is not ready for its own cryptocurrency either
European Union and Its Issues With Blockchain, GDPR, and Its Own Cryptocurrency

The European Union, like many other nations across the globe, is looking to come to terms with the new Blockchain and cryptocurrency revolution has been sweeping in. The Union, as a collective, has not been too decisive in its stance when it comes to Blockchain, but it is slowly starting to inadvertently exclude itself.

The EU’s position has been mostly one of wait and see, but as that wait and see attitude extends, and the technology starts to overtake, there is a real danger of the EU being left in the cold.

Already it is having issues with its newly places, but seemingly already outdated, General Data Protection Regulation (GDPR) which is at odds with the very nature of Blockchain, although missing the entire point of it. Now there is also talk that the Union is not interested in putting in place its own Euro-backed cryptocurrency anytime soon.

No race for the Digital Euro

The EU is in a unique space globally to have such a strong and active membership within the entire region. It is a region that also operates, mostly, on one currency, and because of that world seemed primed to implement its own Digital Euro.

Mario Draghi, president of the ECB since 2011, stated that there is no real need for digital currency at this time and reaffirmed his belief that blockchain technology still requires some development before the ECB attempts to adopt it in any way.

The European Central Bank has never really placed too much importance on cryptocurrencies, citing the fact that many financial institutions were not investing heavily in cryptocurrency in the market. Thus it is not surprising that the ECB feels this way, but it does feel like a missed chance.

Still, the EU’s general understanding and planning around Blockchain has not been too sharp either as many companies have found as they were faced with the GDPR earlier this year.

The GDPR conflict

In March, the EU released the GDPR which is a regulation which is aimed at being forward thinking and one in tune with an advancing digital world. The GDPR essentially states that users have a lot more control of their data, and should they request it, they can ask companies to remove or alter it.

Straight away, this sends up red flags for Blockchain technology which uses its immutability as a key principle. In order to protect one's data on the Blockchain, it is done in a way that no one can alter it.

The EU’s viewpoint on this sort of data protection thus clashes. However, the GDPR is already out of date in many respects because it is still honing in on data that is only coming from a centralized source- such as Google, Apple, Microsoft or other such major corporations. However, because the Blockchain is decentralized, there is no entity to request to change or eliminate user data under the GDPR.

Room for resolutions

It is not all doom and gloom though as the GDPR and Blockchain companies are finding a way in which they can compromise and get around the strongest nature of the regulation while still appreciating the protection of data.

The issue, however, is that the EU has put Blockchain and cryptocurrencies at the back of their minds for some time now that it feels as if they are falling behind. Their most modern data protection regulation is already out of date, and their mindset for a future currency is that it is not adopted enough.

Down the line, the EU could be struggling to catch up should it’s viewpoint not change and cryptocurrencies become more of an importance for them.

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Alexander Goborov

Blockchained China: Ban or No Ban, the Crypto Sun is Refusing to Set

While China has indeed imposed a ban on ICOs and crypto exchanges, its relationship with the Blockchain is far from over
Blockchained China: Ban or No Ban, the Crypto Sun is Refusing to Set

With the population of 1.4 billion people, the largest of any in the world, and GDP of 12.5 trillion USD, China is, without doubt, one of the major global players. Nevertheless, there have been talks about the Chinese government’s unwillingness to accept the many benefits of the Blockchain technology, which culminated in China’s official crypto ban last year.

Does it mean that China’s romance with the Blockchain is bound to wither? The answer is not even close: this is a gross misreading of what has been actually happening.

The Ban

China banned ICOs in September of last year and soon after outlawed all cryptocurrency exchange platforms. Incidentally, that did not stop the price of Bitcoin from skyrocketing, but it did make many think that it would be China’s Blockchain finale.

As a matter of fact, this is not what the Chinese government had in mind. Their goal was not to prohibit Blockchain per se, but rather to combat ICO fraud which was ubiquitous on the mainland. Paradoxically enough, China is making a centralized effort to develop a decentralized phenomenon; after all, the Blockchain technology did make a mainstage appearance in China’s 13th Five-Year Plan for IT Development in December 2016.

In addition, the chairman of People’s Bank of China (China’s central bank), Zhou Xiaochuan, said earlier this year that digital currencies were, in fact, an inevitability, including those backed by nation-states, giving his reasons for the imposed ICO ban:

“For Blockchain projects with technological potentials, they should conduct thorough testing before rolling out services. Otherwise, a reckless expansion may incur serious security and financial stability issues.”

The Situation Right Now

The fact that the Chinese government acted decisively to fight fraud and instability (which was to be expected) by pushing the ban on ICOs and crypto exchanges does not mean that China’s relationship with the Blockchain is finished. Not by a mile.

Lest we forget that, to this day, three of the major crypto exchanges are de facto Chinese. The giants HitBTC and Bitfinex are based in Hong Kong. Sure, Hong Kong is not mainland China, so a different set of rules applies; however, it still is an administrative region of People’s Republic of China and has been since Hong Kong’s transfer from the UK in 1997. Most definitely, the Chinese government were well aware of what this ban would (or rather, would not) mean for Hong Kong’s crypto industry when they finally put their foot down.

Another huge player in the game is Binance, the world’s largest cryptocurrency exchange by trading volume, whose founder Changpeng Zhao is Chinese. Binance started out in Shanghai and later moved to Japan to avoid the ban, but it wouldn’t be unreasonable to assume that both the company and the Chinese government were well aware of each other intentions, well in advance. It is also quite possible (and even probable) that Binance maintains some ties with China to this day, since the company’s predecessor, Fusion Systems, is still operating from within China.

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Crucially, according to the most recent statistics by Datalight, today 56% of all patents in the world related to the Blockchain come from China. Furthermore, this year 47% of all attracted venture capital globally has also been Chinese. The month of January alone saw over 100 million USD in Blockchain-related projects in China.

The Future

Evidently, China’s affair with the Blockchain is not going anywhere; instead, the government wants to turn China into a global centre of innovation by adopting the Blockchain technology at the national level, including state commerce, government, and academia, as opposed to letting the ICO scammers roam free.

It has also been reported that China is extending its hand to Venezuela in their support of the latter one’s switch to the state-backed cryptocurrency, the petro, and DLT. This, too, must be indicative of something.

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In May of this year, China’s president, Xi Jinping, made it clear what direction the country is set to take in relation to the Blockchain, having declared:

“A new generation of technology represented by artificial intelligence, quantum information, mobile communications, internet of things and blockchain is accelerating breakthrough applications.”

Ban or no ban on ICOs and crypto speculators, it appears as though China is planning to make good use of what the Blockchain technology has to offer, and it has proceeded to do so already.

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David Dinkins

Physical Violence Against Crypto Owners On Rise, Thefts Prevalent

Criminals are targeting crypto holders, forcing them to transfer their funds under duress
Physical Violence Against Crypto Owners On Rise, Thefts Prevalent

In December, a man named Louis Meza arranged to meet a friend known to have a substantial fortune in Ethereum. Meza and an accomplice abducted the victim, while Meza went to his home and stole the device containing his digital wallet. Meza then forced the victim to transfer $1.8 mln worth of Ether to an address belonging to Meza. Fortunately, police were able to apprehend Meza, although the accomplice has yet to be captured.

With the dramatic increase in the value of cryptocurrencies over the last year, there has also been a marked increase in criminal activity against those with large and valuable investments.

While some hackers target exchanges, online wallets and the like, others target individual crypto owners with physical violence.

Despite the existence of ultra-secure hardware wallets, safes and safety deposit boxes, owners of digital currency find themselves vulnerable to the so-called “$5 wrench” attack.

Targeting crypto holders

Owners of cryptocurrency are more susceptible to this kind of attack due to the liquidity of their investment and the lack of middlemen. Stealing from a wealthy stockholder is a much more complicated process, involving brokers and limited business hours.

Those with large bank accounts have to somehow be transported to the bank and forced to comply with the robber (in a very public venue). The robber has to hope the victim can deceive bank employees into thinking nothing's wrong. It’s complicated and challenging.

On the other hand, most crypto owners can access their wallets immediately, from home 24 hours a day. They can transfer their assets quickly under duress, without the involvement of any intermediaries and without scrutiny from prying eyes. Since digital currency is more-or-less anonymous, a well-executed heist could be covered up much more easily.

Precautions

Jameson Lopp of BitGo recommends taking greater precautions against the $5 wrench attack. He has posted images on Twitter (part) of his security measures:

https://twitter.com/lopp/status/923635945441824770

Additionally, Lopp advocates storing your digital currency in multisig wallets. This would make it impossible for a thief to force you to transfer your wallet contents to them since you don’t have sole control of your funds. Other measures, such as securing your hardware wallet in a bank safety deposit box, would provide protection as well. The key is to make it as difficult as possible to steal your money, ideally by ensuring it isn’t readily available in the event you’re held up.

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🤷 Opinions David Dinkins

Google’s Cryptocurrency Ad Ban Signals Company Now Part of “Establishment”

Opinions
By banning all crypto ads unilaterally, Google has shown what it really thinks about freedom of speech, and busts its own iconoclast image
Google’s Cryptocurrency Ad Ban Signals Company Now Part of “Establishment”

The company that once stood up to giants like Microsoft and became famous for its “do no evil” approach has finally joined the establishment. Even though Google claims to be interested in “consumer protection,” an outright ban on all crypto ads seems like an overreach. The company is either taking the easy way out, but making sure they don’t have to actually use critical thinking, or they are out-and-out supporting the war on digital currency.

Google’s director of sustainable ads, Scott Spencer, told CNBC:

"We don't have a crystal ball to know where the future is going to go with cryptocurrencies, but we've seen enough consumer harm or potential for consumer harm that it's an area that we want to approach with extreme caution.”

Do no harm?

If Google lacks a crystal ball, as Scott put it, then why not take a more nuanced wait-and-see approach?

Blogger Vijay Boyapati explained on Medium that Bitcoin is presently in its fourth Gartner hype cycle, driven by institutional investors and growing mainstream interest. He predicts that the present bubble will eventually deflate, only to be surpassed, in time, by a much larger fifth bubble. This bubble, he predicts, will bring in the “late majority” of mainstream users and be driven by central banks adding Bitcoin to their foreign exchange reserves. He doesn’t make a price prediction for this fifth bubble but notes that gold serves a similar role in central banks’ stores. If the market cap of Bitcoin reached that of gold, each Bitcoin would be worth over $300,000.

Don’t take the word of an Internet blogger though. The managing director of the International Monetary Fund (IMF), Christina Lagarde, has written about the transformative potential of cryptocurrencies. As head of the IMF, Lagarde is essentially the central banker of central bankers, meaning both that she is incredibly influential and also that she is the literal personification of “the establishment.” If such a pivotal , and pro-establishment, pro-fiat, person can see the promise in crypto, why can’t Google?

Forget the future

Even if cryptocurrency has only a small chance of becoming the wave of the future, why would Google needlessly antagonize crypto supporters? Anybody can certainly see the importance of avoiding misleading ads and preventing scams, but surely Google could do at least a modicum of research to determine which cryptocurrencies were most relevant and least likely to be scams. A complete ban on anything crypto-related is a serious stretch and makes you wonder why Google is so afraid of digital currency.

The really strange thing about Google’s ad ban is that the company used to - at least before it became involved with China - be an unabashed supporter of free speech on the Internet. Google staunchly defends net neutrality and strong encryption, believing that both are absolutely necessary for free and open interactions online. The reader must wonder why Google is unilaterally banning all ads - themselves a form of speech - related to cryptocurrencies. Even Lagarde, the ultra-establishment banker, can’t deny the transformative potential of cryptocurrency:

“[Cryptocurrency] could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries.”

If the managing director of the IMF can see this, why can’t one of the world’s biggest tech firms? What say you, Google?

🤷 Opinions
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🕵️‍ ICO Watch Eric Eissler

Zeepin’s not Creepin’ It’s Ready to Go Live: Past-ICO Review

👁 ICO Watch
Tools for the creative industry to license, protect and share creative is about to go live at the end of August
Zeepin’s not Creepin’ It’s Ready to Go Live: Past-ICO Review

 

 

Zeepin is a decentralized Blockchain developed for the global creative industry and the decentralized sharing economy community. The Blockchain is designed to help global creative content creators with asset digitization and rights confirmation, ensure these digital assets, enable efficient transactions and crowd-funding of creative assets, help organizations and individuals improve innovation efficiency, and incubate a large number of self-governing for-profit creative organizations.

Financials

Zeepin had a one-day token sale on Jan. 18, where it was able to raise some $62 mln in one day. The cost of a token during the sale was $0.13 and half of all one bln tokens were made for sale on that day. The token entered the general trading market on Jan. 30 at $0.18 and has experienced several ups and downs since. The token price is currently on a downward trend and is at its all-time low price of $0.03. Its market cap has dissipated to $19 mln and daily trading volume is at $250,000. It could be said that the current bear, really big bear, market is weighing heavily on all token prices and there has been little relief from the ongoing price correction.

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Team

Zhu Fei- CEO & Founder

Fei is the former CEO of Arting365, with 15 years of experience in the creative industry. He has much experience in art and creative industry to drive Zeepin. He was the Director of Shanghai Top Young Creative Talents Association, Director of Shanghai-Jiangnan Intelligent Manufacturing Park Creative Industry Promotion Center, Director of Shanghai Industrial Design Association. Fei has founded Internet companies involving creative ecommerce, creative media, and design education, and has successfully created and operated a creative community with over 1.2 mln designer users.

Karl Xu-Co-founder & CSO

Xu has had much experience in strategy and operations. With an engineering degree in polymers, Xu has had the opportunity to work at GE in several management roles and SABIC. An engineering degree and more than 10 years of experience in business give Xu a strong foundation to be CSO.

Jason Xu- Senior Developer

Xu has worked for several enterprises and has more than 10 years of technology development and operation experience. He is familiar with the deployment and optimization of distributed applications and carried out certain research on data structure, asymmetric encryption, security protocol, and encryption algorithms.

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Mainnet launch, DApps Ready

Zeepin’s mainnet is scheduled to go live at the end of the month on Aug. 31. The company already has several DApps ready for launch including, but limited to  ZeeRights, ZeeCreate, ZeeSure, ZeeProof, ZeeWallet and CryptoGalaxy. These DApps will work within the Zeepin ecosystem to provide the tools creative producers need to secure their creative works.

While we were not able to get any response from the company on how they are dealing with perceived competition nor market acceptance, it could be said that they have a rather solid footing a massive amount of followers supporters on social media. The litmus test comes at the end of the month when the mainnet goes live. We must sit tight and wait until then.

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