Crypto’s Merger Problem and What Can Be Done When M&As Go Wrong

Mergers. They’re a tricky business at the best of times, but when conducted in a nascent industry in which regulations, guidelines and best practice haven’t been firmly established, they can be absolutely perilous. Just ask Coinbase, which acquired blockchain analytics startup Neutrino in February for what turned out to be a fee of $13.5 million. This seemed all fine and dandy at the time, but it soon emerged that founding members of Neutrino’s staff had links to Hacking Team, an Italian software firm that had controversially sold surveillance tools to international law enforcement agencies and even to authoritarian governments (e.g., the United Arab Emirates).

Given that crypto prides itself on helping individuals escape the overbearing control of centralized institutions, it would be an understatement to affirm that this merger — once the above details were made public — didn’t go down too well with the wider community. Indeed, the merger created a public relations nightmare for Coinbase, which hurried doggedly to wash its soiled image (largely by affirming that ex-Hacking Team staff will “transition” out of their new roles at the exchange giant).

Yet, more broadly, this episode has also raised the wider issue of mergers and acquisitions (M&As), particularly as they relate to and occur within the cryptocurrency industry. That’s because Coinbase is one of the largest companies in the industry, and seeing as how even it couldn’t quite exercise enough due diligence in this case, it begs the question of what other players in the space are doing when they merge with or acquire other companies.

This question becomes all the more urgent when it’s recognized that 2018 set a new record for the industry, with $559 million being spent in the United States alone on mergers and acquisitions. However, lawyers specializing in M&As explain that there are a number of things shareholders can do in serious cases of mismanagement, while it’s also clear that mergers are another area that will improve for the industry as it becomes more mainstream and regulated.

Due diligence

What makes the Coinbase incident particularly interesting is that the San Francisco-based exchange was aware of Neutrino’s links to Hacking Team prior to the acquisition. In other words, the failure of the company to perform “due diligence” didn’t fall specifically on finding out about these links, but on recognizing that such links would be viewed negatively by Coinbase’s customers and by the wider cryptocurrency community.

As a Coinbase spokesperson told Motherboard at the end of February:

“We are aware that Neutrino’s co-founders previously worked at Hacking Team, which we reviewed as part of our security, technical, and hiring diligence.”

So once again, the oversight didn’t relate to awareness of Neutrino’s affiliations, but to awareness of how such affiliations violate the values of people likely to trade, own and use cryptocurrency. And in some ways, this is a more serious failure than simply not knowing about Hacking Team, since it indicates a startling lack of understanding of crypto on Coinbase’s part and intimates that its values possibly don’t align with the majority of people who involve themselves with the likes of Bitcoin and Ethereum.

And the question is, did people at Coinbase really not ask themselves how the links between Neutrino and Hacking Team would be perceived by the general crypto public?

Well, according to a blog written in early March by the exchange’s CEO, Brian Armstrong, they didn’t.

“However, we had a gap in our diligence process,” he wrote. “While we looked hard at the technology and security of the Neutrino product, we did not properly evaluate everything from the perspective of our mission and values as a crypto company.”

This raises a further question: Should companies undertaking mergers or acquisitions perform due diligence in the areas of values and public image? According to Rocket Lawyer founder and CEO Charley Moore, this is something they generally do anyway, regardless of whether they should. “Yes, businesses typically place high value on their reputations and good will,” he told Cointelegraph, although he also explained that the level of due diligence can vary according to the companies involved and the type of merger they are pursuing:

“First, it’s important to note that all combinations of businesses are not the same. In fact, there are many different ways to combine two or more companies, to accomplish sometimes competing goals, like limiting liability, retention of employees and/or managing tax consequences. Having said that, the level of diligence or, ‘scrutiny’ may vary, depending on the type of combination being executed. Regardless, some level of scrutiny is typical in most cases.”

This appraisal is seconded by other lawyers experienced in M&As. Gerald Brant is a partner at Akin Gump, and like Charley Moore, he notes that the appropriate amount of scrutiny can vary from case to case. “In general, you can’t say that one company should always exercise the same amount of due diligence when acquiring another,” he said.

Brant also told Cointelegraph that determining how a merger might reflect on a company’s publicly declared “values” can be a tricky business, although corporations generally do consider what an acquisition is likely to mean from a marketing perspective. “It’s hard to assess how an acquisition could reflect on a company’s values, since these can be vague and ill-defined,” he explained. “But most firms will look at the marketing and reputational implications, and whether the two companies are a good fit in terms of corporate culture.”

Redress

It therefore seems that Coinbase may have deviated from ordinary company practice in not considering the Neutrino merger “from the perspective of our mission and values as a crypto company,” as Brian Anderson put it. However, assuming that a company has failed to carry out due diligence and that a merger has reflected badly on its reputation, two more questions remain. Firstly, where does the blame lie for a mishandled acquisition? And secondly, what can shareholders or stakeholders do in the event of a “bad” merger affecting a company’s subsequent performance?

According to Gerald Brant, despite each case needing to be evaluated on its own terms, it’s normally the case that responsibility lies with more than just the chief executive.

“The fault usually lies with everybody involved in the merger,” he said. “The CEO, the board, and the advisors.”

Still, given that it was Brian Armstrong who wrote the apologetic blog following the Neutrino acquisition, it would seem he took ultimate responsibility for the purchase and for not sufficiently considering how it would look to the outside world. That said, even if Armstrong has published a mea culpa, it’s not certain just what anyone with a stake in Coinbase could do to redress any harm that’s been caused to the value of the company. As Charley Moore said, “Shareholders may bring a variety of legal actions based on multiple potential theories, including breach of contract and civil or criminal statutes,” yet the fact is that Coinbase hasn’t breached any contract in completing the Neutrino acquisition and neither has it violated any criminal statutes.

Still, seeing as how M&As are growing part of the crypto industry, it’s worth getting a handle on what shareholders could do in other, hypothetical cases. And according to Dan Zimmerman, a senior counsel at Akin Gump, they do have the option of legal action, although this is normally limited — as a practical matter — for serious cases where a decline in share price and company value can be demonstrated as having followed from a merger or acquisition.

“Shareholders do have the option of bringing fiduciary duty claims against a company if a merger goes badly,” he said. “However, being successful in a claim against a company’s directors is made less likely by the difficulty in pointing to an objectively measurable change in the share price and reputational harm following an acquisition.”

In the case of reputational harm, Zimmerman also explains that shareholders would have a better chance of success if they could prove that the directors hid material information when completing an acquisition. This is something that didn’t appear to happen with Coinbase and Neutrino, although that’s not to say it couldn’t happen in the crypto industry in the future. However, because most crypto-related companies aren’t publicly listed, it won’t always be possible for shareholders or stakeholders to pursue litigation. If an individual’s “shares” in a company amount only to the crypto tokens of that company, and if such tokens are not considered to be securities, for example, then there isn’t much he or she could do under U.S. securities law.

Zimmerman also adds that, legally, there practically isn’t anything shareholders can do to stop a merger after the fact. “Shareholders can attempt to prevent an acquisition via an injunction,” he said, “but this has to be sought before the acquisition has been completed.” Added to this, attempting to prevent an acquisition in a court of law places the burden of proof on the plaintiffs, meaning that this is a viable option only when shareholders have a solid case that a merger would be detrimental to them and the company.

Bigger industry, more mergers

This account indicates that it may be difficult for shareholders or stakeholders to obtain reparations in the event of a botched merger, particularly in the context of the cryptocurrency industry. And at first glance, this might seem like discouraging news for everyone involved in crypto, particularly as 2019 may very well set another new record for M&As, seeing as how Kraken has already spent $100 million in buying futures provider Crypto Facilities. Indeed, Justin Tabb, the CEO of Amplify Exchange, told Cointelegraph that crypto should get used to M&As and welcome them as a positive development for the industry:

“Mergers within the cryptocurrency space will undoubtedly become a more common occurrence as the space matures. It is historically beneficial to both the industry and the individuals that the given industry services. It shows a maturation of the entire sector and is an organic way of weeding out those that are not ‘well enough to sustain.'”

This positivity aside, there’s a possibility that the more crypto-related firms like Coinbase acquire other companies, the more they run the risk of inflaming the crypto community. Put differently, the whole concept of mergers may be inherently problematic for the cryptocurrency industry, or at least for the community underlying it, because — as Justin Tabb also explained — crypto has its own distinct set of values that are often incompatible with the values of “mainstream,” non-crypto companies, and that may be violated by a merger with such companies.

“The cryptocurrency sphere encompasses a set of ideals all in its own of how people want to see the world become compared to the way it works now,” he said. “Companies that veer away from the spirit of a trust-less ecosystem as part of a free and open society may find themselves opposed to the values that a majority of their customers find important and this could negatively impact their business by alienating their core demographic.”

However, one important — and encouraging — aspect of the Coinbase-Neutrino controversy was the response from Coinbase. Even if Coinbase’s private shareholders weren’t in a position to seek recompense for the controversy surrounding the merger, the wider crypto community was able to exert pressure on the crypto exchange via its shared outrage and via the #DeleteCoinbase campaign. The community may have had no formal mechanism by which it could change anything, but by speaking more or less in unison, it eventually forced Coinbase to remove the Hacking Team-linked staff members from their positions.

Of course, such pressure can’t always be applied in every situation. Nonetheless, when a larger crypto company relies on the good will of its customer base, there’s little doubt that this customer base has the power to make it suffer if the company does something it doesn’t like. And this is something the community should bear in mind as the industry gears up to complete even more M&As in the coming months and years.

BitTorrent Live, a Video-Based Social Media Platform, to Launch in Q2

BitTorrent Live, a Video-Based Social Media Platform, to Launch in Q2

TRON has added another offering to its vast empire by joining the social media game as they announced on March 27, 2019, that they would be launching BitTorrent Live, a video-based social media site, in the next few months.

Details about BitTorrent Live

Things have certainly been busy for TRON in the last few months as they have announced the launch of their native BTT Token.

Now, BitTorrent, which was acquired by TRON in 2018 has announced on March 27, 2019, that they would be launching their own P2P social media site in the second quarter of 2019.

This announcement was made via a press release and the new platform will be called BitTorrent Live. As soon as the decision was made public, early access viewership of the platform was enabled.

From the details that have been made public, BitTorrent Live intends to function in the same way as other video-based social media sites such as Snapchat and TikTok in which users can create live video content and connect with other users.

From all indications, live streaming will be a significant feature in the platform and users can do so from anywhere in the world that they have Internet access. In terms of consuming content and connecting with others, there will be the option to search based on the topics that interest them and view content within that category. Likes and comments can be given for any content that is viewed.

There was also mention of blockchain being incorporated into the platform to ensure a standard of privacy. On top of this, cryptocurrency will be enabled as a payment option for BitTorrent Live, which is no surprise considering TRON owns it.

The Past and the Future

While this new platform is an exciting development to look forward to, this isn’t the first time such an idea has been conceptualized.

It has been in the works as far back as 2012 and Bram Cohen, the founder of BitTorrent, said that his goal with the platforms was to kill off the television, though the platform wasn’t originally a social media site.

TRON has expressed high hopes for BitTorrent Live as the next big social media app.

“Imagine chatting with your favorite athlete, becoming immersed in a music festival, or meeting new friends to share your passions – all by simply firing up the BitTorrent Live app,” said Justin Sun, CEO of BitTorrent.

“Our strong foundation of decentralized technology will allow us to fulfill our vision of a boundary-free Internet while being at the forefront of a new content experience.”

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Fake Volume on Crypto Exchanges Isn’t the Half of It

Daniel Cawrey is CEO of Pactum Capital, a cryptocurrency investment firm focused on market making and liquidity. Formerly a CoinDesk Contributing Editor, he is author of the upcoming “Mastering Blockchain” book to be published by O’Reilly Media.


Recently, a report was produced by Bitwise Asset Management showing the existence of faked volumes in the bitcoin market – 95% of total volume according to its research. It’s hard to disagree with many of the facts in the report. Yet there are some items left out in this presentation to the SEC.

It’s hard to justify bitcoin is a mature asset and has a sophisticated market supporting it. And despite the fabricated volumes across crypto exchanges, this presentation makes a compelling argument there is maturity.

However, this market isn’t sophisticated and there are key issues the report simply does not address.

Problematic Exchanges Outside of the 95%

It cannot be disputed there are issues with exchanges reporting fake volumes. It’s hard to argue CoinMarketCap isn’t complicit in reporting false crypto volumes. However, more questions need to be asked about two exchanges listed in the Bitwise report as having “Actual Volume.”

The report to the SEC lists Binance and Bitfinex as two of the 10 exchanges that have actual crypto volume…

…but leaves out specific information from those two exchanges that have over 50 percent of “real” volume, like on this histogram slide.

The report states that Binance and Bitfinex comprise over 50 percent of the total bitcoin spot volume. Yet neither of these two exchanges have normal banking relationships like others in the report do.

Both exchanges have significant regulatory issues that make their inclusion in this presentation to SEC concerning. Binance, for example, was funded by an ICO, supported by a token that looks a lot like a security and has not been able to obtain standard banking partnerships. Bitfinex has had significant banking issues, losing several relationships – even suing Wells Fargo at one point.

Both of them also use Tether.

The Tether Problem

Tether is a blockchain-based “stablecoin” built on the Omni (formerly Mastercoin) protocol. It is designed, as specified in its white paper, to use something called “Proof of Reserves” backed by the US dollar, to be pegged to USD. This “Proof of Reserves” tenet is supposed to hold and verify the USD peg via regular audits.

Basically, each Tether is supposed to be backed by a dollar in a bank account somewhere. According to the report in the custody part of its presentation, audits in crypto should be easy to accomplish.

Problem is, there’s never been an audit completed for Tether.

Citing “complexity,” an auditing firm hired to verify Tether’s “Proof of Reserves” was terminated – it has never had an external auditor complete this process. And like Bitfinex, Tether has also had its share of banking problems. That shouldn’t be surprising – Bitfinex and Tether seem to be very closely interrelated.

In fact, even the report admits Tether isn’t a stablecoin at all.

That’s not what Tether is supposed to be. It’s supposed to be pegged to USD. And it is used by Bitfinex and Binance to avoid having to satisfy the actual banking and regulatory compliance work that entails.

The Blockchain Transparency Institute

To further support the report’s analysis, there is a reference to a group called the Blockchain Transparency Institute. Claiming “a common institutional understanding of the true nature of the real market,” the report cites the Institute and its research in identifying 56 exchanges with fake volumes.

Interestingly, there’s very little transparency around who runs the Blockchain Transparency Institute. There’s no listing on its website of who is managing this group, who is on its board if it is a non-profit or details on the methodology of its research.

There’s isn’t even an About Us page.

A quick glance at the “Partners” page at the Institute’s website reveals a fascinating detail: Bitwise Investments, author of the SEC report, is listed as an “investor class supporter.”

Source: https://www.blockchaintransparency.org/

Why didn’t Bitwise disclose it has a pre-existing relationship with the Blockchain Transparency Institute in its report?

Other Questions to Ask

It should be applauded Bitwise put together this presentation.

Someone needed to comprehensively detail the amount of wash trading cryptocurrency exchanges are conducting. However, regulators should be asking some key questions:

1. Why is Binance referred to as one of the exchanges that makes up the so-called “real market”?

All exchanges in the report are registered Money Services Business with FinCEN, except for Binance, which makes up by far the most – 40.47% of the total “actual” crypto volume traded.

2. Why are the two largest exchanges in the report, Binance and Bitfinex, not more closely examined for their relationship with Tether, an unregulated and unaudited “stablecoin?”

Binance and Bitfinex alone make up 54.41% of “real” volume according to the presentation.

3. Who runs the Blockchain Transparency Institute?

According to the Blockchain Transparency Institute, the exchanges with the least amount of faked volume are Binance and Bitfinex. Yet these exchanges lack normal banking relationships and are supported by an unregulated stablecoin

Credit is due to Bitwise, a company in the crypto space taking the time and effort to do this research to help regulators. However, the picture provided is incomplete.

Bitcoin is not a mature, stable market if two exchanges without banking – and supported by an un-auditable, unregulated stablecoin – comprise half the “real” cryptocurrency trading volume.

Half of the “actual” BTC volume in this report is done on exchanges with no banking relationships and not enough in the way of compliance. This shows there is still a lot of growth left in this market before bitcoin becomes mature. It will happen, and it will be to the benefit of everyone involved.

Yet it’s going to take time, and it’s going to require patience. Surely the regulators realize that by now.

Puzzle piece via Shutterstock

Emurgo-Ledger Partnership Fuels Cardano (ADA) Demand, up 23 Percent

  • Cardano price up 21.9 percent from last week’s close
  • Ledger Nano S now supports ADA
  • A breakout above 6 cents at the back of high transaction volumes means bulls are in control

Ledger Nano S now supports Cardano (ADA) after Yoroi’s integration with the hardware wallet maker. Because of their superior market share, Ledger’s support is beneficial for ADA since more users would be willing to invest and securely hold their assets. Meanwhile, increasing demand could further drive Cardano (ADA) prices above 9.5 cents towards 20 cents.

Cardano Price Analysis

Fundamentals

Holders of Cardano (ADA) can now purchase Ledger Nano S and confidently store the coin’s private keys, Emurgo and Ledger have announced. The integration began yesterday after Emurgo, the business wing of the Cardano triage, said Yoroi, the native wallet of ADA, was now supported by ledger devices.

“Ledger, a leader in security and infrastructure solutions for cryptocurrencies and blockchain applications, and EMURGO – the official commercial arm of Cardano, the first peer-reviewed third generation blockchain – are excited to announce full integration of Cardano’s ADA with the Ledger Nano S.”

No doubt, this is a step in the right direction and cements Cardano’s figureheads drive towards making the smart contracting platform mainstream. As the first peer-reviewed and innovative platform, the projects aim is to dislodge Ethereum through a scalable and secure network where quality over quantity (of development and code) is always a top priority.

Besides, while this integration secures user interest, it also reveals Cardano’s preferences. Ledger is a de-facto leader and since inception, it has sold more than 1.5 million devices. Furthermore, it is also the only wallet with certification from the thorough French Cybersecurity Authority, the CSPN.

Candlestick Arrangement

At the time of press, Cardano (ADA) is ahead of the pack, outperforming other assets and up 23 percent from last week’s close. It is the ninth most valuable coin, closing in on USDT and Binance Coin. From candlestick arrangement, we expect ADA to add to their gains.

Not only is it trading within a bull breakout pattern after clearing the 4.5 cents resistance level but accompanying volumes are highs. Because of high participation, BB is widening. Besides, ADA bull bars are banding along the upper BB meaning momentum is equally high favoring buyers.

As a result, every low should be a buying opportunity. The ideal first minor target should be Q2 2018 highs at 9.5 cents.

Technical Indicators

As prices edge higher, transaction volumes should exceed Mar 23 average of 231 million. It is no doubt that sustained volumes would easily propel prices to 9.5 cents.

Chart courtesy of Trading View

Bitcoin Pushes $4,100 as Oil Futures See Losses

Thursday, March 28 — most of the top 20 cryptocurrencies are reporting slight to moderate gains on the day by press time, as Bitcoin (BTC) stays over $4,000.

Market Visualization Courtesy of Coin360

Market Visualization Courtesy of Coin360

Bitcoin is up nearly half a percent on the day, trading at around $4,087, according to CoinMarketCap. Looking at its weekly chart, the current price is over 1 percent higher than $4,060, the price at which Bitcoin started the week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Bitcoin 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) is holding onto its position as the largest altcoin by market cap, which is at about $14.7 billion. The second-largest altcoin, Ripple (XRP), has a market cap of about $12.9 billion by press time.

ETH is also up by just half a percent over the last 24 hours. At press time, ETH is trading around $140, after having started the day at nearly the same price. On its weekly chart, Ethereum has seen its value increase about two percent.

Ethereum 7-day price chart. Source: CoinMarketCap

Ethereum 7-day price chart. Source: CoinMarketCap

Second-largest altcoin Ripple has gained the same half a percent over the 24 hours to press time, and is currently trading at around $0.31. Looking at the coin’s weekly chart, its current price is close to one percent lower than the price at which it started the week.

Ripple 7-day price chart. Source: CoinMarketCap

Ripple 7-day price chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, the one reporting the most notable growth is Tezos (XTZ), which is up about 15 percent on the day. Tezos has grown nearly 12 percent this week, following a number of developments for the platform.

The total market cap of all cryptocurrencies is currently equivalent to $143.2, which is nearly 3.5 percent higher than $138.3 billion, the value it saw one week ago.

In traditional markets, the stock market is seeing discreet gains so far today, with the S&P 500 up 0.13 percent and Nasdaq up 0.22 percent. The CBOE Volatility Index (VIX), on the other hand, has lost a solid almost two percent on the day at press time.

Earlier today, CNBC reported that the stocks fell as the trade talks between the United States and China resumed and the fears of the economy slowing down endure.

Major oil futures and indexes are mostly down today, with WTI Crude down 0.72 percent, Brent Crude down 0.83 percent and Mars US down 1.34 percent. Opec Basket on the other hand is up by 0.18 percent, and the Canadian Crude Index has seen its value decrease by 0.66 percent, according to OilPrices.

Temporary Sell-off at $62, Will Litecoin (LTC) Bulls Prevail?

  • Litecoin prices bullish with resistance at $62
  • Banks could be toying with negative interest rates
  • Volumes driving prices above minor resistance must exceed 254k of Mar 16

The idea of a duo currency economy with negative interest rates is feasible says the IMF report, and that is massive for cryptocurrencies. Adoption could see a migration to inflation proof and global coins as Litecoin (LTC) and Bitcoin.

Litecoin Price Analysis

Fundamentals

Crypto is a rebel coin, an alternative currency borne out of financial desperation. At the height of the great financial crisis, value was pulverized.  A dropping USD had a cascading effect did damage livelihoods.

From lost value and QE to “prop the economy”, the world has never been the same. The economy is recovering ten years after the economic catastrophe. What we now have are ultra interest rates, a recovering global economy but general indifference to invest as different central banks toy with the idea of negative interest rates.

From a recent IMF Staff study, it reveals that it is indeed possible to design a duo currency system that works in the interest of the economy even if interest rates are sub-zero. In such a case, digital currencies are likely to flourish.

“In a cashless world, there would be no lower bound on interest rates. A central bank could reduce the policy rate from, say, 2 percent to minus 4 percent to counter a severe recession. The interest rate cut would transmit to bank deposits, loans, and bonds.”

Candlestick Arrangement

Litecoin

Like Bitcoin, Litecoin is trading within a bullish breakout pattern but with massive liquidation at $62-65 zone. Even so, we expect prices to recover, break above this minor consolidation and race towards $90. However, the only way for that confirmation is a buildup of strong bull momentum that would thrust prices above Mar 16 highs while confirming the three-day bull reversal pattern of Mar 25-27.

Such a move reaffirms the bull breakout pattern of Mar 5. All the same, we should point out this deterrent. In the daily chart, there are hints of weakness now that Litecoin (LTC) prices are printing lower relative to the upper BB.

That is why it is important for prices to rally above $65 because if prices drop below Mar 26 lows at $57 and below the middle BB, LTC could slide to $50 in a retest phase.

Technical Indicators

Our anchor bar is Mar 16—254k, and in an uptrend, any break above $62 must be with high transaction volumes above 254k and even 407k of Mar 5. Mar 27 bull bar had a high ATR but with low volumes—168k meaning risk-averse traders should be on the sidelines until when our trade conditions are right.

Chart courtesy of Trading View

Bitcoin Price Holds $4k, Bull Flag Possibly Formed

Bitcoin (BTC) is maintaining stability above the critical $4,000 price mark, after making an important breakout to the upside in the last day or so. The leading crypto has established itself, in the short term, above the February-March uptrend – and perhaps more importantly, is making inroads into the 2018 linear downtrend resistance zone.

bitcoin price 28 march(source: TradingView.com)

Currently ranging sideways, Bitcoin price action has all the hallmarks of a bull flag. A move higher would retest the previous support/resistance (S/R) zone put in in late February, resting between $4,100-4,200.

bitcoin price 28 march(source: TradingView.com)

However, a failure to break up again would not wreck the almost two-month-long positive Bitcoin narrative: Continued sideways consolidation will give altcoins runway for further gains (which have already been considerable, lately); and there remains a $100 cushion between the current BTC price and the local uptrend support (the green field, below).

bitcoin price 28 march(source: TradingView.com)

A slightly longer view of the broad Bitcoin trend is an uptrend channel (below), intact since late February. A further Bitcoin push higher from here, according to this pattern, would yield a target price of about $4,130. Somehow breaking down out of this channel, Bitcoin would encounter several S/R zones to stop a capitulation all the way back down to the regional uptrend around $3,500. Even hitting this area would not be disastrous.

bitcoin price 28 march(source: TradingView.com)

A view of Bitcoin’s daily chart shows us in the middle of three trends of varying gravity: The critical yearly (linear chart) downtrend, which has rebuffed Bitcoin all through 2018 (red field); the regional S/R zone surrounding $4k (purple); and the local uptrend support/channel that Bitcoin has respected for over a month. This confluence is pictured in the purple circle, below.

bitcoin price 28 march(source: TradingView.com)

It is this chartist’s opinion that breaking the yearly downtrend – with any amount of force – is the most important event to watch right now, even if local price action is also exciting.

bitcoin price 28 march(source: TradingView.com)

(The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research)

Galaxy Digital Shares Skyrocket After Novogratz Takes 80% Equity Stake

Novogratz Bitcoin News

Galaxy Digital Shares Skyrocket After Novogratz Takes 80% Equity Stake


Analysts were congratulating cryptocurrency merchant bank Galaxy Digital CEO Mike Novogratz March 28 after share performance rocketed.


Galaxy Among ‘Best Crypto-Related Performers’

Data from Bloomberg and other sources confirm something of a renaissance for Galaxy, which as recently as the end of last year had seen its fortunes decline dramatically.

At press time, GLXY was trading at around $2.50, a 4.6 percent rise on the day and increasingly towards its annual high of $3.18.

By contrast, November saw shares hit a low of just $0.89, part of the knock-on effect of the Bitcoin market downturn, which saw the cryptocurrency lose almost half its value during that month.

A short-lived bull run November 28 failed to restore sentiment immediately, Galaxy seeing further losses before an abrupt U-turn began this year.

Now, both the bank and CEO Novogratz are receiving admiration from analysts, who note the upturn in performance came directly after he increased his stake in the company to 80 percent.

Galaxy, they note, is one of the best-performing cryptocurrency traders, despite not even having an in-house cryptocurrency token.

What Bear Market?

The turnaround comes as Galaxy pushes forward with investment plans despite the sluggish pace of cryptocurrency markets more generally.

In an extensive interview with TechCrunch this week, co-founder Mike Engelbert was predictably buoyant about the future, noting business expansion was likewise continuing.

“Our investment business is our biggest business by far,” he told the publication.

Our trading business is growing quickly, even through a downturn in the market, though it’s really taking the longest to stand up as any trading business would.

Given that in November, Galaxy’s trading losses totaled almost $140 million, Engelbert did not discount the likelihood of more pain in the future.

“We’ll definitely see more as this technology continues to develop. We’re still a ways away from it being the seamless technology we enjoy with the web,” he said.

But it’s probably not all that different from what we lived through the last time around, where a few companies become massively important and a lot of them don’t.

Onwards And Upwards With Bitcoin?

Novogratz has also upped his steadfast faith in bitcoin price in recent weeks. Speaking in various interviews, he highlighted Bitcoin’s future utility as ‘digital gold,’ as well as speaking vaguely about price performance by 2020.

On the latter topic, he is less stridently bullish than other major crypto investment moguls such as Tim Draper but still believes upside is easily achievable through this year.

“We’ve kind of hit an equilibrium in this $3400 – $3600 zone,” he said in February.

Could it go down? Of course, it could; all markets could go either way, but it feels like we’re… grinding along at the bottom and the next move will be significantly higher.

As Bitcoinist reported, not everyone has since agreed, fresh warnings this week appearing that volume signs indicate a retracing below $4000 for Bitcoin is imminent. Closing the month below $3800, one analyst added, would cement the likelihood of more bearish behavior.

What do you think about Galaxy Digital’s performance? Let us know in the comments below!


Images courtesy of Shutterstock

Cryptojacking: Malicious Cryptocurrency Mining Is not a Crime, Japanese Court Rules

Cryptojacking: Malicious Cryptocurrency Mining Is not a Crime, Japanese Court Rules

A court in Japan has acquitted an individual accused of embedding a cryptojacking malware in his website to surreptitiously mine cryptocurrency using the computing power of the visitors to the site. Local Japanese media platform, The Mainichi reports that the court ruled that such activity wasn’t a criminal offense. Meanwhile, Internet security experts continue to express alarm over the growing threat of cryptojacking attacks.

Punishing Cryptojacking Would be Excessive

The Yokohama District Court on March 27, 2019, ruled that an individual charged for cryptojacking, illicitly mining cryptocurrency using the computing resources of others, was innocent of any crime.

According to the details of the case, the individual in question embedded the Coinhive cryptocurrency mining malware onto his website in October and November 2017.

In its judgment, the Presiding Judge, Toshihiro Homma declared that any punishment for the alleged activities of the accused would be excessive. Judge Homma went on further to say:

“[The actions of the accused] do not constitute a crime as we cannot say embedding the program was socially unacceptable.”

According to the court’s ruling, cryptojacking exploits could not be considered malware or computer viruses. However, the court did mention that the actions of the accused did encumber the victims, but the effect of such encumbrances was ultimately deemed to be minor.

Potentially Dangerous Precedent

Prosecutors on the case had called for a fine of up to 100,000 yen (about $900). Counsel for the prosecution informed the court that the victims who were none the wiser as to the cryptojacking had to pay higher electricity bills.

Such a landmark decision by the court in Yokohama could have negative implications for the fight against the rising threat of cryptocurrency mining malware. What the ruling describes as a minor inconvenience could cost a considerable sum in electricity bills as well as other costs.

An IBM X-Force report from late February 2019 shows that cybercriminals are increasingly pivoting away from ransomware attacks into cryptojacking. According to the report, cryptojacking went up by a whopping 450 percent during the course of 2018.

Such is the spread of cryptojacking that hundreds of thousands of websites are currently infected globally. App store platforms like Microsoft and Google continue to remove newly discovered cryptojacking apps. No corner of the Internet framework appears safe as routers have also been known to be infected with cryptocurrency mining malware.

Internet security researchers say the less disruptive nature of cryptojacking forms part of the allure for cybercriminals. However, while siphoning the computing resources of others to mine cryptocurrencies might seem a minor infringement now, experts warn that more sinister attack vectors could evolve if not dealt with decisively.

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Exchange KuCoin Enables Credit Card Purchases of Crypto

Singapore-based crypto exchange KuCoin has partnered with Israel-based payment processing company Simplex to let its users purchase crypto via credit card, an official announcement revealed on March 27.

The exchange has already added the service to its assets page, the announcement reports. Now users can purchase Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash ABC (BCHABC) and Litecoin (LTC) for both dollars and euros. The service is reportedly available in more than 100 countries.

As the release notes, Simplex — which also has offices in the United Kingdom, U.S. and Lithuania — has already provided its “fraud-free” payment processing services to other companies, such as Shapeshift, the Litecoin Foundation, Xapo and Changelly.

As Cointelegraph previously wrote, KuCoin closed a Series A funding round worth $20 million in late November 2018. The round was led by IDG Capital, Matrix Partners and Neo Global Capital. The exchange reported that the funds would be used to release KuCoin’s 2.0 platform.

Earlier this year, Malta-based top cryptocurrency exchange Binance also added support for credit card purchases. Later the firm introduced credit card purchases in its official wallet, Trust. In both cases, the company also partnered with Simplex to provide credit and debit card purchases of XRP, BTC, BCH, LTC and ETH.

In March, major United States retailer Kroger started negotiating with the Morgan Creek Digital team, considering the deployment of the Lightning Network in its stores. The decision came shortly after the brand had stopped accepting Visa at some locations due to excessive fees.