Tag: bitcoin news

How the US Government Shutdown effecting Bitcoin

Published / by Jonathan / Leave a Comment

The longest government shutdown in U.S. history is hurting the crypto industry, too.
As the impasse in Washington stretches into its record-breaking fourth week, the closure of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has put key developments – namely, the approval and launch of products and services involving cryptocurrencies – on hold.

Notably, the launch of Bakkt’s bitcoin futures market was delayed in part by the company’s inability to secure approvals before Dec. 22, 2018, when the shutdown began. The platform, created by Intercontinental Exchange (parent of the New York Stock Exchange), is in a holding pattern until regulators can open a 30-day public comment period. A new launch date for the platform, which most recently was set for Jan. 24, has yet to be announced.

When ETF?

Exchanges aside, even certain products are now potentially at risk.

Perhaps one of the most highly anticipated bitcoin-related products is an exchange-traded fund, or ETF. The SEC currently has one rule change proposal sitting before it, filed by VanEck, SolidX and Cboe.

The proposal has already been delayed a number of times, and now faces a final deadline of Feb. 27. If the SEC does nothing, under existing law, the proposal would be approved. Specifically, Title 15 of the U.S. Code states that any proposed rule changes “shall be deemed to have been approved by the [SEC] if … the [SEC] does not issue an order approving or disapproving the proposed rule change.”

However, some legal experts say an approval-by-default is unlikely to happen, even if the shutdown drags on.

Ethan Silver, chair of the broker-dealer practice at law firm Lowenstein Sandler, anticipates that, should the shutdown continue, any staffers who remain on duty would reject the application.

“I think if they were forced to deal with it, they would sooner deny it than be put in a position [where it is approved on a technicality],” he said, explaining that the regulator would likely cite “market integrity” or a similar emergency contingency as a reason for the denial.

Similarly, Jake Chervinsky, a lawyer with Kobre & Kim, said on Twitter that the SEC would likely find some way to reject the proposal during a protracted shutdown, a view also shared by attorney David Silver of the Silver Miller law firm.

The commission has yet to approve any crypto ETFs, rejecting nearly a dozen in 2018. That has not yet deterred companies from trying to be the first to bring such a fund to market, however. Just last week, Bitwise Asset Management announced its intention to launch a bitcoin ETF with NYSE Arca.

While the company has filed an initial registration form, NYSE Arca has not yet submitted the rule change proposal, and so the SEC cannot yet consider the ETF.

Please advise

Beyond launches, the crypto space – at least in the U.S. – is still waiting for increased clarity and official guidance on how to safely handle digital assets.

Vince Molinari, co-founder of the regulated trading platform Templum, told CoinDesk that initiatives the SEC may have planned, such as guidance on custody, are likely to be delayed.

“I think the entire space gets pushed back,” he said. “It could be a quarter or two before things go back, it could be longer depending on how long the shutdown’s in effect.”

Compounding the issue, he noted, is that even after the shutdown ends, staffers have to catch up on anything they missed during the furlough.

“There’s talk about the [initial public offering] calendar being pushed back,” he said.

Mining manufacturer Canaan is at least one crypto firm reportedly considering a U.S. IPO. While the company is said to be in the early stages of this decision, Molinari believes an extended shutdown could postpone IPO approvals “indefinitely.”

The issues mirror those faced by the financial technology sector in the U.S. more broadly, as noted in an analysis piece published by Roll Call, a news site focused on the U.S. federal government.

Roll Call noted that the CFTC, which has requested information on ether and the ethereum network, is unable to review any comments already submitted. In its request for information, the CFTC noted that any submissions would “advance [its] mission of ensuring the integrity of the derivatives markets,” which may indicate the regulator is assessing a potential ether futures market.

Why Bitcoin, Bitcoin Cash & Crypto Market has been Crashing

Published / by Jonathan / Leave a Comment

Japan might be leading the race to become a global giant in cryptocurrencies, but it also is gaining news for all the wrong reasons as well. Japanese exchanges have been found vulnerable to hacks and security glitches pretty often and things don’t seem to be improving. In a recent hack, Japanese cryptocurrency firm Tech Bureau Corp said it said its Zaif Exchange was compromised to hackers and has nearly lost US$60 million worth of crypto assets.

Hack despite business improvement orders by regulators
In hacks, exchanges and companies are usually surprised by the attacks as they themselves are not aware of the vulnerabilities. But in case of this hack, it looks more of a negligence then unawareness. Tech Bureau the company that runs Zaif exchange was already slapped with two business improvement orders by the Japanese regulators this year.

In its statement, the company said its Zaif exchange was hacked over a two-hour period on Sep 14. It detected server problems on Sep 17, confirmed the hack the following day, and notified authorities, the exchange said on Thursday.

In this theft, virtual currencies worth about ¥6.7 billion, including Bitcoin, Monacoin and Bitcoin Cash, were stolen from the exchange’s “hot wallet”. About ¥2.2 billion worth of the stolen currency was its own while the remaining ¥4.5 billion belonged to customers, it said.

Following the hack, Tech Bureau said it had agreed with JASDAQ-listed Fisco Ltd to receive a ¥5 billion (US$44.59 million) investment in exchange for majority ownership. The proceeds from the investment would be used to replace the digital currencies stolen from client accounts. However, Fisco said in a statement the ¥5 billion in “financial assistance” may change in value if the amount affected by the theft changes upon further investigation.

Documents seen by Reuters on Thursday showed Japan’s Financial Services Agency would conduct emergency checks on cryptocurrency exchange operators’ management of customer assets, following the theft. FSA officials were not immediately available for comment.

Loss: caused by hacking damage The type and quantity of the virtual currency that we lost due to hacking damage are as follows.

  • BTC 5966
  • MONA Currently being investigated
  • BCH It

is estimated that the total loss due to damage more than the current investigation is equivalent to approximately 6.7 billion JPY (including MONA and BCH) in Japanese yen. The reason for not being able to determine the damaged quantity at the moment is that the server is not restarted until the reliable safety can be confirmed in order to prevent secondary damage. As soon as the quantity of the lost virtual currency is determined, we will report it promptly.

Impact on customer’s assets due to hacking damage:

Among the virtual currencies equivalent to about 6.7 billion yen lost, our company’s unique assets are approximately 2.2 billion yen, and the virtual currency equivalent to customer’s assets is about 4.5 billion It becomes yen.
After discovering this case, we are striving to secure financial resources not to damage the customer’s assets, and we will explain the situation in the following “3. Response of our company”.