CFTC Commissioner: Crypto Industry Should Regulate Itself

At the Yahoo Finance All-Markets Summit on February 7th, a U.S. CFTC regulator encouraged the digital currency industry to start formally regulating itself.

Brian Quintenz, a commissioner with the Commodity Futures Trading Commission (CFTC), said that the crypto industry should form what’s known as a self-regulatory organization, or SRO, similar to those that exist in other areas of the financial world, while the government tries to figure out what exactly to do about Bitcoin and over a thousand other cryptocurrencies.

“I would like to use this opportunity right now to call on the investment community and the advocacy community around digital currencies to create some type of self-regulatory organization that can develop standards around cyber policies, data retention, record keeping, financial records obligations, insider trading, ethics, codes of conduct,” Quintenz said during an interview at the event.

The best model for a crypto SRO is probably the Financial Industry Regulatory Authority (FINRA), which oversees more than 4,500 brokerage firms in the U.S., setting licensing requirements, enforcing trading rules, and settling disputes. But some consumer advocates liken SROs to coyotes guarding the henhouse. For example, in the lead-up to the 2008 financial crash, FINRA and other financial-industry groups clearly failed to stop the fraud and excess that eventually threatened the entire financial system. Congress, as a result, passed strict new rules in subsequent years — exactly the kind of intervention the crypto industry hopes to avoid.

Regulation is a complex issue. Many feel the true virtue of cryptocurrencies is the ability to work outside of government regulation and the complicated rules that govern most financial markets. On the other hand, some see regulation as inevitable and say it’s in the industry’s best interest to be proactive and accept — or even promote — sensible regulation.

At a Senate hearing on February 6th, the heads of the CFTC and the Securities and Exchange Commission (SEC) expressed both enthusiasm and alarm at the rapid rise of cryptocurrencies and associated industries. One thing the regulators pointed out was that there are no “safety nets” for cryptocurrency exchanges the way there’s FDIC insurance for bank deposits. But they also said new forms of currency represent worthwhile financial innovation, suggesting they need to be properly regulated.

Currently, both the SEC considers cryptocurrencies to be commodities, while the CFTC has considered changing its approach. While the Internal Revenue Service (IRS) requires that gains from cryptocurrency are also subject to federal income tax rules. States have some jurisdiction, too, further muddying the picture — basically, there’s a lot of overlap and it’s not completely clear who should, in fact, have the final say. In the meantime, as Quintenz advised, perhaps the industry itself should take the reigns.


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This week, Colorado House Representative Jared Polis sent a letter to the U.S. House Committee on Ethics (HCE) asking the organization to put forth statutes that require government employees to declare their Bitcoin and other digital currency holdings: “A Member or covered employee should report any virtual currency holding as they would report any other commodity, such as gold.”

In a written petition sent to the HCE dated February 5th, Jared Polis — who has been called “Bitcoin-friendly” — argued that because cryptocurrency assets are regarded as commodities by several agencies, Congress members should follow the same financial disclosure requirements as for traditional assets. Currently, both the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) regard cryptocurrencies as commodities. While the Internal Revenue Service (IRS) requires that gains from cryptocurrency are also subject to federal income tax rules.

A lot of U.S. states digital assets are considered securities or commodities, and Polis argues that U.S. politicians are already required to declare traditional assets. He says it is “critical” that the HCE provide this type of guidance to government employees.

Polis accepted Bitcoin for election donations in 2014, and the representative has stated in the past, “I will protect bitcoin in U.S. Congress.” He says that it is clear that existing statutes that require asset disclosure can easily cover digital currencies too. The representative also suggests that the HCE should look towards the guidelines already drafted by government agencies such as the CFTC, the SEC, and the IRS. In addition to commodities like gold, the U.S. Stock Act requires politicians to disclose real-time purchases and sales of stocks. Anything that exceeds over $1,000 whether it be a stock or a commodity must be declared to the public, and Polis says cryptocurrencies are no different.

Polis concludes by stating that the ever-increasing use of cryptocurrency as an alternative to traditional payments and investments necessitates Congress to take the appropriate actions. He believes a set of virtual currency disclosure guidelines will help maintain transparency and deter conflicts of interest. “Financial disclosures are critical to maintaining public trust in elected officials and the integrity of Congress — I look forward to working with the committee on this issue.”

This proposal may reflect an acceptance of cryptocurrency by regulators; recently, Arizona and California regulators have both shown a friendly approach towards cryptocurrencies.  For those who are interested, you can read the Colorado petition here.

BnkToTheFuture, the world’s largest online investment platform for investing in FinTech, Bitcoin and Blockchain companies has been facilitating investments in Bitcoin and Blockchain companies with securities law in mind since before ICO’s were born. The platform has so far witnessed investments worth over US$270mln from over 50,000 global professional investors who are very much interested in funding the future of finance and technology. Through BnkToTheFuture, they are investing in the equity of the most valuable FinTech, Blockchain and Bitcoin companies.

Their next challenge for the platform aims to develop a marketplace for trading securities tokens on their compliance-driven platform.  The BFT token sale is now whitelisting for their main sale for those that want to use the BF Token on their new due diligence and investor relations portal. After being whitelisted, members can purchase the BF tokens during its public sale starting February 16, 2018.

What’s so special about BF Token Team?

BnkToTheFuture started investing in the equity of entities some of which have become the most valuable companies in their respective verticals. Some of the familiar companies on the list include the likes of Kraken, BitFinex, ShapeShift, BitStamp and over 100 others. The company has been the early backer of a number of early tokens like Ethereum, MaidSafe, Storj and various other early ICOs or token sales.

The experienced BnkToTheFuture team stayed ahead of regulations, registration and licensing requirements while the rest of the players are sensing the pressure of regulatory enforcement actions. The token is designed to unlock priority access to deals for qualifying members of their platform as well as open up a new due diligence and BFT rewards platform for those that wish to be involved in improving deal selection, due diligence and investor relations with the goal of creating a more transparent market for securities tokens.

Get Whitelisted Now

If you want to participate in the BF token sale, starting from February 16, 2018, you must get whitelisted by 10pm UTC on February 13, 2018. Only whitelisted purchasers are able to take part in the BFT main sale.

How to Get Whitelisted?

Users can get their ETH address whitelisted here, until February 13, 2018. Non-whitelisted addresses transactions will fail if they try to purchase in the main sale. Users are also required to enter the details of their BnkToTheFuture.com account. If you have not yet made an account, you can create one here and upload your identity documents.

Once users complete this step, they can come back to the platform on February 16, 2018, and all whitelisted addresses having BnkToTheFuture Accounts can purchase between 10,000 to 100,000 BF tokens out of total 30,000,000 BF tokens, based on “First Come-First Serve” basis.

The Bottom line

The BFT Public Sale is already anticipating a huge demand. If you want to purchase BFT, you must be ready by the time the public sale starts. Visit https://bf-token.bnktothefuture.com/ to get yourself whitelisted before the time runs out.

 

Getting paid in Bitcoin or other cryptocurrencies makes sense for a lot of people; freelancers tend to benefit from this new form of money. In the sports industry, it seems there is far less interest in cryptocurrency right now. Canadian speed skater Ted-Jan Bloemen is a clear exception in this regard. His new sponsorship with ONG Social ensures he gets paid in the native digital currency. Bloemen is also competing at the Pyeongchang Olympics, which makes this deal even more intriguing.

Bringing cryptocurrency to the masses will not be easy whatsoever. Most people simply don’t care enough about this new form of money. It is rather surprising to find out one of the Winter Olympics speed skaters is a different breed in this regard. Ted-Jan Bloemen seems merit in digital currencies, partially thanks to a one-year sponsorship with ONG Social. This project is a social network and cryptocurrency community packaged into one.

An Interesting Choice by Ted-Jan Bloemen

Moreover, Bloemen will share his Pyeongchang journey on ONG Social as well. He is also appearing in a VR experience on CEEK VR, another platform which sponsors him during this journey. In exchange for these participations, Bloemen will be paid in cryptocurrency. This correlation between traditional sports and digital currencies creates an interesting precedent. Athletes can elevate VR and new social platforms to new heights just by being present.

CEEK VR CEO Mary Spio comments as follows:

“Bloemen’s support for cutting-edge technologies is reflective of his proclivity for pushing the boundaries. We believe Virtual Reality isn’t just great for our audience (Ceekers) but will ultimately be used for training and maximizing player performance and potential.”

Unlike what people may expect, Bloemen isn’t too worried about the volatility of digital currency. He is not getting paid in Bitcoin or any of the other major currencies. Instead, it seems ONG Social has its own currency. At the time of writing, we do not know how many coins the Canadian speed skater will receive exactly. All things considered, this is a fun and exciting partnership for all parties involved. Whether or not cryptocurrency has a bright future ahead in the sports industry, remains to be seen.

The exponential growth in crypto markets, especially over the course of 2017, means that even the mainstream media is now covering various events and biggest market announcements. Some of the highlights include the crackdown of crypto trading by various governments, widespread criticism of Bitcoin by financial community (although that has since changed somewhat), the introduction of Bitcoin futures market and the volatility of returns of Bitcoin and other products. The price swings are not for the fainthearted and while the allure of excessive returns drive more and more people to the market, this volatility is becoming hard to rein in, especially as the ICO market matures.

Even though choosing a crypto asset to invest in is not difficult enough, investing in a currency is made more complex by numerous warnings by pundits that a lot of cryptocurrencies are either fraudulent or do not deliver any value to people buying tokens. Late last year, Joseph Lubin, co-founder of Ethereum, said that many of the sales are used to back high-quality projects, but there have been a lot of copycat projects where people copy all the same materials (and) don’t intend to deliver any value to the people buying the tokens. While another prolific name in crypto space, Brad Garlinghouse, CEO of Ripple, pointed out that “…a lot of what’s happening in the ICO market is actually fraud, and I think that will (eventually) stop”, while also adding that many investors are now suing token issuers.

But it is not just fraud that crypto investors are afraid of – given the digital nature of the asset class, hacking is also considered to be one of the biggest threats. Most recently, a Japanese exchange has lost $530 million in cryptocurrency because of hacking. In this case, the worst outcome has been averted by the exchange which said it would return about 46.3 billion yen or $425 million of the virtual money it lost to hackers. However, other cases did not end so well.

However, the team behind Escroco has filled the gap in the marketplace with an innovative product that aims to connect investors with borrowers in a way that lowers risk and maximizes profit. One of the key parts of the project is the insurance product. This covers the loss of an investor in the case of borrowers exiting from the market, irrespective of whether this was caused by bankruptcy or by fraudulent activities. While the loss prevention scheme does minimize the risk of outright loss, not all cases of loss get 100% reimbursement, as this is based on investment ratings.

The Escroco (ESC) token was created using the Wave Blockchain technology, designed in the way that benefits investors and borrowers alike. Now, the team is announcing a cash airdrop (Escroco Cash Airdrop or ESA), where the new token will be worth $1 which the holders will get for free at the ratio of 4:1 (4 ESC get 1ESA). Only those who keep their coin on a waveswallet.io will be able to get the new coin and the date of the airdrop is to be between 15 Feb -25 Feb.

Key Points

  • Bitcoin price rose this past week and moved above the $8,000 level against the US Dollar.
  • There is a crucial bearish trend line forming with current resistance at $8,200 on the 4-hours chart of the BTC/USD pair (data feed from SimpleFX).
  • The pair has to move above the trend line resistance and $8,900 to gain further upside momentum.

Bitcoin price recovered nicely this past week above $7,000 against the US Dollar. However, BTC/USD is currently facing resistance and is correcting lower towards $7,100.

Bitcoin Price Trend and Resistance

There was a slow and steady upside move above $6,500 bitcoin price against the US Dollar. The price managed to move above a couple of important resistance levels such as $7,000 and $8,000. However, the upside move was protected by a major resistance at $8.900. BTC price failed to move above the $8,900 and $9,000 resistance levels, and started a downside move.

More importantly, there is a crucial bearish trend line forming with current resistance at $8,200 on the 4-hours chart of the BTC/USD pair. The trend line resistance acted as a monster barrier near $8,900 and prevented further gains. The pair is currently correcting lower and it has moved below $8,100. Moreover, the price declined below the 23.6% Fib retracement level of the last wave from the $5,816 low to $8,941 high. It seems like the price may correct further lower towards the $7,400 level.

Bitcoin Price Weekly Analysis BTC USD

The most important support is near the 50% Fib retracement level of the last wave from the $5,816 low to $8,941 high. On the upside, the price has to move above the trend line and resistance at $8,200 to gain upside momentum. On the downside supports are $7,400, $7,200 and $7,100.

Looking at the technical indicators:              

4-hours MACD – The MACD is currently reducing its bullish slope.

4-hours RSI (Relative Strength Index) – The RSI has just moved below the 50 level, which is a negative sign.

Major Support Level – $7,100

Major Resistance Level – $8,200

 

Charts courtesy – SimpleFX

Key Highlights

  • ETH price climbed higher this past week above the $880 level before facing sellers against the US Dollar.
  • There is a major bearish trend line forming with resistance at $860 on the 4-hours chart of ETH/USD (data feed via SimpleFX).
  • The pair is currently correcting higher and it may correct further towards the $740 and $720 levels.

Ethereum price started a decent upside move against the US Dollar and Bitcoin. ETH/USD is currently correcting lower since it struggling to break the $890-900 levels.

Ethereum Price Trend

This past week, there was a good start to a new upside wave in ETH price above the $700 level against the US Dollar. The price made good ground and it was able to move above the $750 and $800 levels. However, the price struggled to move above the $880-900 resistance levels. It faced a strong sell zone near the $895-900 levels, which ignited a downside correction.

More importantly, there is a major bearish trend line forming with resistance at $860 on the 4-hours chart of ETH/USD. The pair recently failed to move above the trend line and declined below $850. It has breached the 23.6% Fib retracement level of the last wave from the $553 low to $897 high. The current trend is a bit bearish with signs of sellers around the $850-860 levels. On the downside, there is a major support near the $740 level. Moreover, the 50% Fib retracement level of the last wave from the $553 low to $897 high is near $725.

Ethereum Price Weekly Analysis ETH USD

Therefore, the $725-740 zone is a decent support and the price may find bids near the stated levels. Below the mentioned $725, the price may once again come under bearish pressure. On the upside, the price has to close above $860 and $890 to gain upside momentum.

4-hours MACD – The MACD is currently moving lower in the bullish zone.

4-hours RSI – The RSI has moved below the 50 level.

Major Support Level – $725

Major Resistance Level – $860

 

Charts courtesy – SimpleFX

Key Points

  • Bitcoin cash price made a nice upside move this past week and traded above $1,100 against the US Dollar.
  • At the moment, the BCH/USD pair is attempting to settle below a major bullish trend line with support at $1,200 on the 4-hours chart (data feed from SimpleFX).
  • The pair may correct lower in the short term towards the $1,120 and $1,080 levels.

Bitcoin cash price surged higher before facing sellers near $1,375 against the US Dollar. BCH/USD is currently correcting lower and it could retest the $1,080 support.

Bitcoin Cash Price Upside Hurdle

This past week, there was a sharp upside move initiated in bitcoin cash price from the $980 swing low against the US Dollar. The price climbed above the 23.6% Fib retracement level of the last major decline from the $1,764 high to $748 low. The upside move was strong as the price was able to move above the $1,000 and $1,200 resistance levels.

There was even a break above the 50% Fib retracement level of the last major decline from the $1,764 high to $748 low. However, the upside move was protected by the $1,375-80 levels and the 100 simple moving average (4-hours). Furthermore, the price failed to move above the 61.8% Fib retracement level of the last major decline from the $1,764 high to $748 low. At the moment, the price is correcting lower and is trading below the $1,250 level. More importantly, the BCH/USD pair is attempting to settle below a major bullish trend line with support at $1,200 on the 4-hours chart.

Bitcoin Cash Price Weekly Analysis BCH USD

If the pair settles below the $1,180 level, it could decline further. The most important support and buy zone on the downside is around the $1,080 level.

Looking at the technical indicators:

4-hours MACD – The MACD for BCH/USD is currently reducing its bullish slope.

4-hours RSI (Relative Strength Index) – The RSI for BTC/USD is just around the 50 level.

Major Support Level – $1,080

Major Resistance Level – $1,380

 

Charts courtesy – SimpleFX

As crypto becomes more popular the number of cyber criminals looking for some easy pickings will increase. Online scams are nothing new but the nature of cryptocurrencies means that those without the technical expertise will be additionally vulnerable. Banks and credit card issuers have acknowledged this which may be the reason behind their buying blockade.

Recently Bloomberg reported that the major players such as JP Morgan Chase, Citigroup, and Bank of America declined crypto purchasing as company executives analyzed ways that customers could get scammed. Officially JP Morgan’s stance is that people may not pay back their credit card debts if the crypto markets fall and they lose out.

ICO Worry

Initial coin offerings, which made $3.7 billion last year, were at the top of the list of concerns. To raise money startups sell tokens at big discounts usually for Ether. A number of bogus ICOs have been reported recently and the fear is that clients will get burnt if they do not research them properly. It can often take days for tokens to be issued and cardholders can dispute the charges causing further problems.

Most major exchanges eschew the tokens but some ICOs still allow credit card purchases. Facebook, which has been a hotbed of scams, recently banned ICO advertising but this has not stopped individuals using the platform to peddle their fraudulent token sales.  Kodak warned potential investors last week that phony websites and Facebook accounts are promoting and even claiming to already be selling their planned digital token, Kodakcoin.

Card confidence

Another concern is that fraudsters can open a credit card account with a stolen identity. Using the new card the scammer would be able to accumulate a stash of cryptocurrency and tokens. Genuine credit card buyers are not worried as they’re not using their own funds, one user who bought Bitcoin at the top posted;

“Am I worried? No. I bought it on my credit card through Coinbase and had planned the repayments would be paid out of Bitcoin profits. First payment due in a couple of weeks and I believe we will start to rise up before then.”

Coinbase has recently introduced a ‘cash advance’ fee for credit card usage which effectively adds a 10% tariff to all crypto purchases. In a blog post the company said;

“Banks and credit card issuers may now add cash advance fees to purchases of digital currency. Customers will notice this listed as a separate line item on their credit card statement. These additional fees are not from Coinbase. Because these fees are charged directly by the bank or credit card issuer, unfortunately we don’t have a way of knowing when they might be charged or how much they might be.”

Preventing people borrowing to buy crypto is healthy for the market and less likely to cause the bubble effect we witnessed last month. With only genuine traders and investors funding purchases with their own fiat the ecosystem should start to stabilize somewhat.