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Switzerland Approves First Bitcoin-Cryptocurrency ETF with Ticker $HODL

The Bitcoin ETF $HODL, offered by Amun Crypto, will begin trading on Switzerland’s Six Swiss Exchange beginning next week. The ETF’s earnings will be linked to five different cryptocurrencies.

The ETF is being offered by Amun Crypto, a U.K. based fintech company. It will begin trading on Six Swiss Exchange next week. Six is Switzerland’s chief stock exchange, as well as the fourth largest in Europe.

According to the Financial Times, the ETF “[…] has been designed to track an index based on the movements of five leading cryptocurrencies.”

Roughly half (48%) of the ETF’s assets will be invested in Bitcoin (BTC) 00. The rest will be put towards bitcoin cash, XRP (30%), ethereum, and litecoin.

New Kid On the Block

Financial Times‘ writer Matt Flood notes that the ETF has been crafted in close accordance with the standards expected from traditional exchange-traded funds. This is according Hany Rashwan, Amun’s top executive.

Rashwan describes the aims of the ETF:

The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments

The Times reports that while competitors like CoinShares and Grayscale exist, they differ in legal form, whilst only being linked to one cryptocurrency. Seeding for the ETF will be fostered by Jane Street and Flow Traders, and it will trade using the ticker $HODL.

The Financial Times highlights the ETF’s arrival amid the lowest drop in BTC price 00 in over a year. The ETF is has been particularly the source of much hype in the cryptocurrency space. An exchange-traded fund product is expected to facilitate institutional buying of bitcoin.

Switzerland seems to be perpetually fixed in the crypto news cycle whether its happenings in Crypto Valley or the present ETF. Progress seems to abound.

In October, Bitcoinist reported on Crypto AG’s recently-granted cryptocurrency asset management license. A month earlier, Bitcoinist also wrote on Switzerland’s status as a top global Bitcoin destination.

What are your thoughts on the Bitcoin ETF $HODL? Share your thoughts below!

Images and media courtesy of Shutterstock, Twitter (@boscryptocnn, @MANT121266), YouTube (ThinkCrypto).

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Stablecoin Purchases Surged Amid Wednesday’s Crypto Market Drop

The crypto market took a turn for the worse on Wednesday when it lost nearly $30 billion in total market capitalization – but not every asset struggled to find buyers.

In fact, certain stablecoins like USD-C, TUSD and DAI each witnessed a more than 200 percent increase in 24-hour trading volume amid the broader market sell-off as traders flocked to what they may have perceived to be safer alternatives in an effort to escape market volatility.

The surge in stablecoin trading volume isn’t exactly surprising, given their main use case is to provide cryptocurrency users with the ability to convert volatile crypto positions into anti-fragile or ‘stable’ alternatives.

Due to regulatory constraints, USD or other fiat currencies are not readily available on most exchanges, thereby leaving stablecoins as an option.

For much of the history of the cryptocurrency market, one stablecoin – Tether (USDT) – has ruled the roost but this past year welcomed several more competitors like USD-C, PAX and GUSD, just to name a few.

Bitcoin’s breakage of the psychological support level of $6,000 on Nov. 14 was enough of a shock to turn the broader market risk-averse, which turned out to be the ultimate test for the younger stablecoins as it revealed which are becoming the most preferred – particularly during times of extreme market volatility.

Best performers

The graph below depicts the increase in 24-hour trade volume of the six largest USD-pegged stablecoins by market capitalization from before the market dump, early Nov.14, to after on Nov. 15.

USD Coin (USD-C), the regulated stablecoin backed by blockchain startups Circle and Coinbase, is the newest of the bunch yet witnessed the most notable uptick amid the market rout.

USD-C’s 24-hour trading volume surged nearly 400 percent from just over $5 million on the morning of Nov 14 to more than of $25 million by the next day, representing its highest level of volume in a 24-hour window to date.

The token’s performance also pushed it into the world’s 50 largest cryptocurrencies by market capitalization, according to CoinMarketCap.

It’s also worth noting the largest cryptocurrency exchange by adjusted volume, Binance, announced it will be listing USD-C this week, so its soon-to-increase availability could be a factor in making it a more attractive option to buyers.

The worst performer of the bunch in terms of 24-hour volume increase was the Paxos Standard Dollar (PAX). That said, PAX’s volume increased 50 percent from $45 million to $75 million within the time period.

The Gemini Dollar (GUSD) saw the least trading volume over the span, with a trade flow of $2 million and $3.5 million on Nov. 14 and 15, respectively.

USDT is still king

Although Tether was just the 4th best performer in terms of percent volume increase, its share of the trading volume in the six-member stablecoin market went largely unchanged between the start and conclusion of this week’s sell-off.

Those market-share changes are reflected in the table below:

According to data from CoinMarketCap, USDT’s 24-hour volume was 97 percent of the $2.6 billion in total stablecoin volume on November 14th.

Further, USDT held its ground on that front, seeing 96.9 percent of that volume the next day, when the total surged more than 100 percent to $5.5 billion.

Tether even began to lose its dollar-parity during the market sell-off – falling as low as $0.95 on the Kraken exchange – yet the closest competitor to USDT in terms of volume market share was PAX, at just 1 percent of the total stablecoin volume on Nov. 15.

CoinMarketCap data further reveals that USDT is tradeable on 400 cryptocurrency markets while PAX is available on just 35 – so by that measure, it’s not exactly a fair fight when considering USDT’s overall reach.

Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.

Balloons image via Shutterstock; graph data via CoinMarketCap

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Off-The-Grid Bitcoin Transactions Now a Reality

Following October’s news that Samourai Wallet was preparing to enable internet free bitcoin transactions, somebody only went and tried it. A Twitter user from New Zealand documented his off-line experiments online.

Another Fine Mesh

The ability to send bitcoin (BTC) 00 without internet or data connection relies on the goTenna mesh network. First, Samourai wallet creates a signed transaction and passes it to the TxTenna app. This then broadcasts the transaction to nearby mesh nodes via a paired goTenna mesh device.

The mesh nodes relay the transaction data until they find a node running TxTenna with an internet connection, which forwards it to the bitcoin network.

Out In The Field

Twitter-user Coinsure decided he would try to use his four goTennas to send a bitcoin transaction 19.2km. goTenna lists the maximum range in open environments as 6.4km, so this is the theoretical limit achievable.

First, he needed to plot suitable high ground points around 6.4km apart, where he could place his camouflaged goTenna nodes. Range drops dramatically in built-up areas, requiring more nodes to cover the area with a mesh network.

Lucky Girl

His girlfriend got to stay at home with another goTenna and receive the transactions, thus acting as a relay from the radio mesh network to the internet — and a recipient of the bitcoin being transferred. The phone sending the transactions had no connection other than a paired goTenna.

The first attempt was directly from the source device to the receiving device, at a distance of 5.61km. After confirming this was a success, Coinsure left a goTenna in the location and moved to the next, 7.06km away. He again managed to successfully broadcast a bitcoin transaction, this time a total of 12.67km.

Sadly, the third attempt, at an additional 7.15km distance was not successful, but this may have been down to an app crash on his girlfriend’s phone rather than a failure of the mesh network.

Pretty Cool

Coinsure did note that there was no confirmation or acknowledgment of the transaction until the wallet reconnected to the internet. Because of this and the risk of spending coins more than once, you are limited to just one transaction whilst offline. But yeah, that’s still pretty cool.

He also estimated that just 37 well-placed goTenna nodes could cover 1120 sq. km of Auckland and the surrounding area — which is also pretty cool.

What are your thoughts on offline transactions and a node-surrounded Auckland? Don’t hesitate to let us know in the comments below!

Images and media courtesy of Shutterstock, Twitter (@Coinsurenz, @Nic__Carter)

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After Friday’s SEC Actions, Experts Say ICO Party ‘Is Truly Over’

The U.S. Securities and Exchange Commission (SEC) has compelled two crypto startups to register their token sales as securities offerings. It’s the first time the SEC has pursued such an action without additional charges of fraud.

In a pair of orders published Friday morning, the SEC announced it had settled charges with CarrierEQ Inc., otherwise known as Airfox, and Paragon Coin Inc., wherein both startups would register their tokens as securities, refund investors, pay penalties of $250,000 and file periodic statements with the regulator for at least the next year.

And like last week’s settlement with Zachary Coburn, founder of the decentralized exchange EtherDelta, this seems to be a harbinger of things to come.

Nic Carter, a partner at Castle Island Ventures, a venture capital fund focused on public blockchain startups, believes the regulator is building up a body of case law against unregistered securities offerings and bad actors.

“It’s really hard to say or predict what the SEC is going to do, but from what I understand from their strategy, they’re going after the slam dunks, the low hanging fruit, the cases where it’s clear that there’s going to be a profit made with the token,” Carter told CoinDesk.

Friday’s orders seem to support that theory, according to Stephen Palley, a lawyer with D.C.-based law firm Anderson Kill. Based on the way they are worded, Palley says the orders “would appear to apply to 95 percent of all the token sales in the last two years.”

“In fact, the language is identical in a couple of places,” he added. “The footnotes are identical. I would say it definitely looks like a template to me.”

“Path to compliance”

Later on Friday, the SEC itself published a statement explaining its roadmap for regulating initial coin offerings (ICOs), crypto exchanges, secondary market trading platforms and other entities that facilitate token transactions.

Perhaps most notably, the U.S. regulator stated that “there is a path to compliance with the federal securities laws” for startups issuing tokens, even if “issuers have conducted an illegal unregistered offering of digital asset securities” already.

Palley pointed out that Friday’s orders went “through a pretty standard Howey analysis,” referring to the three-pronged test used to determine whether an object offered for sale qualifies as a security.

The Howey test specifically looks for an investment of money in a common enterprise, meaning that more than one party has funds tied up in the venture and an expectation of profit, said Casey Jennings, a senior associate with financial services law firm Seward & Kissel LLP.

Importantly, Palley noted, while previous orders against ICO startups have included allegations of fraud or similar misdeeds, Friday’s announcement did not.

For companies concerned about whether they may have violated securities law, Palley recommends checking in with a lawyer.

Carter went one step further, advising ICOs to move away from their tokens immediately:

“My advice to all ICOs would be to get ahead of the game and close up shop, delist the token, get everyone their money back and pursue a normal business model that doesn’t require a token.”

Ramping up

The SEC has been ramping up its efforts as it charges or settles charges with different startups, Palley noted.

Anthony Tu-Sekine, a partner at Seward & Kissel, agreed, noting that the SEC has “ratcheted up the volume” of its actions.

The DAO Report, for example, outlined the SEC’s views but did not take any actions against the organization, though this may have, in part, been because the DAO had already refunded investors, he said.

Palley noted that following the DAO Report was the Munchee order from December 2017 – at the time, Munchee agreed to refund all of its investors, but was not required to pay any penalties or fees.

“They’re tightening the screws a little bit,” Tu-Sekine said.

The SEC statement Friday recommended that projects reach out to legal counsel, as well as the regulator itself through its FinHub project.

Actually refunding investors may be an issue for some ICO projects. Carter noted that Paragon and Airfox were both able to provide full rescission to their investors, but not every ICO would be able to do that.

Even startups which have kept all of the tokens they raised during their sales will have lost money in terms of the U.S. dollar due to the bear market, he noted, meaning they may have difficulty paying investors.

From an investor perspective, Carter noted, “what matters is the notion of an ICO is pretty debunked as a fundraising method and we can go back to things that make sense for investors.”

He concluded:

“I guess it’s going to take the market a while to realize the party is over, but the party is truly over.”

SEC image via Shutterstock

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SEC Settles Securities Registration Charges Against 2 ICO Startups

Two cryptocurrency startups have agreed to register their initial coin offering (ICO) tokens as securities after settling charges with the U.S. Securities and Exchange Commission.

The SEC’s Friday announcement centered on two firms: CarrierEQ Inc., also known as Airfox, and Paragon Coin Inc., both of which conducted token sales last year. Airfox raised $15 million through its sale, while Paragon raised $12 million, according to statements.

The U.S. securities regulator contended that neither startup registered their ICOs as securities offerings, and neither qualified for registration exemptions. In addition to registering their tokens as securities, both companies will refund investors, file periodic reports to the SEC and pay $250,000 apiece in penalties.

The SEC’s statement noted that these two cases are the SEC’s “first cases imposing civil penalties solely for ICO securities offering registration violations.”

SEC Enforcement Division co-director Stephanie Avakian said that the agency 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.”

She added:

“These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”

The release further referenced the Munchee ICO, which the regulator halted last December. Like Airfox and Paragon, Munchee agreed to refund investors in its $15 million token sale, though the SEC did not impose additional fines at the time.

Friday’s announcement comes on the heels of the SEC revealing settled charges against Zachary Coburn, founder of the decentralized exchange EtherDelta, with running an unregistered securities exchange.

At the time, an individual familiar with the SEC’s thinking noted that the regulator is likely to focus increasingly on token trading platforms.

SEC emblem image via Shutterstock