Peter Todd Accused of Sexual Abuse, ZCash Founder Testifies

Peter Todd Accused of Sexual Abuse, ZCash Founder Testifies

Peter Todd filed a defamation suit against Sarah Michelle Reichwein a.k.a Isis Lovecruft, after the former accused him of sexually harassing her. In support of her argument, Zooko Wilcox, founder of ZCash and the Electric Coin Company, testified as an acquaintance to both as well as the second complainant who claims Peter Todd raped her on a visit to Germany: Todd vehemently denies these claims, July 17, 2016.

Allegations and Rebuttal

This incident was first seen in a public forum when Lovecruft replied to a GitHub issue raised by Todd on code she had written, accusing him of standing up for someone (Jacob Appelbaum) who had raped her.

Until April 2019, when Todd filed a defamation suit, none of this was in the limelight, and after Zooko’s testimony, it has resurged over social media.

In his testimony, Zooko claims to have seen Todd’s advances towards a female friend of his, after which she told him she feels uncomfortable and to help her get away. After finding out that Todd supposedly spoke of Lovecruft, made unwanted sexual advances, and spoke of them in a demeaning manner to a group of friends.

Nearly a year later, Zooko claims to have learned from another female friend that Todd had raped her while she was mentally ill; her testimony is included in court records but her identity remains anonymous to the public.

Isis Lovecruft has also accused another of sexual abuse, Nadim Kobeissi, the author of Cryptocat.

The next hearing is set for August 22, 2019.

Diversity in Crypto

The lack of representation from females in the software and cryptography space has long been a topic of debate. While some believe it is because of the relatively lower number of women in the engineering talent pool, a lot of there believe it is a practice that arises out of malice.

People have tried to use blockchains to register things like consent, but that brings about a large number of issues – the biggest of which is the inability of a party to revoke consent after it is registered.

This is a wake-up call for the entire community to see that abuse does exist within the realm of software and network development. Whether Peter Todd is guilty or not is up to the court, but people must be more vigilant about such incidents.

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PayPal Set to Challenge Blockchain-Based Payments with Xoom

PayPal Set to Challenge Blockchain-Based Payments with Xoom

PayPal, the global payments giant, has announced that its Xoom payments and remittance solution will soon go live in the United Kingdom and 31 markets across the world, reports PYMNTS on July 15, 2019.

PayPal Extends Xoom’s Reach

In a bid to remain relevant in a world where cryptocurrency and distributed ledger technology-based remittance systems are fast transforming the payments ecosystem, PayPal has expanded the reach of its Xoom service.

The global remittance heavyweight has reportedly revealed that Xoom, its international money transfer service will now function in the United Kingdom and 31 other jurisdictions across the world.

PayPal says Xoom will make it possible for millions of people living in the U.K as well as other European nations to send remittance payments to users across 130 countries including Nigeria, India, China, the Philippines and more.

To make the Xoom solution successful, Paypal has reportedly partnered with top banks and financial institutions in the Philippines and other regions, to offer instant deposits while cash pickups are available only in banks and some malls.

Commenting on the expansion of the Xoom remittance service, Julian King, general manager of Xoom said in an interview with PYMNTS that:

“PayPal’s Xoom business and Paypal itself has seen a long-term secular trend in the digitization and now mobilization of the management and movement of money. In the case of Xoom, we saw that the service was a materially underserved market segment, with no appropriate, meaningful innovation.”

The Xoom service enables users in supported regions outside the United States to transfer up to 8,800 GBP ($11,029) per transaction, while the U.S has a transaction limit of $50,000.

Ripple Still Dwarfs Xoom

Though Xoom facilitates next-day money transfers at fees lower than that of PayPal, the service, however, has a long way to go before it surpasses blockchain-based remittance platforms like Ripple.

Specifically, Xoom reportedly offers next-day money transfers for $4 in Europe and $9 to other countries. Ripple, on the other hand, sends international payments via its numerous blockchain-based payments solutions within minutes, with meagre fees.

BTCManager informed on July 15, 2019, that Spain’s Santander Bank had expanded its Ripple-powered cross-border payments service. It now allows users to transfer more than $11k between the U.K. and Poland in less than a minute without charges.

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Report: Regulated Digital Money will Boost Global Payments Systems

Report: Regulated Digital Money will Boost Global Payments Systems

Supranational economic institutions have been studying the effects of cryptocurrency and blockchain. In a report released by the IMF, July 15, 2019, they highlight the potential for cryptocurrencies and traditional digital money to spark a new age of payments. In the future, it is idealised that cash dependence will severely reduce and most economic activity will be digital.

Ushering in a Digital Economy

Today, you can walk into a coffee shop and swipe a card or scan a barcode, then proceed to walk away with both parties fully assured that a payment was made. Someone from the 1900s would’ve thought it was magic or some kind of illusion.

The IMF predicts that the adoption of e-money will be rapid going forward. Their definition of e-money are payment providers like Alipay, M-Pesa, PayTM, and WeChat as well as cryptocurrencies like Libra and other stablecoins. An evident inference from this is that the IMF and other supranational institutions do not see Bitcoin as a legitimate payment service.

CBDCs or Central Bank Digital Currencies, encompass any cryptocurrency or digital coin issued by a central bank and backed by their reserves. The IMF seems to stress that they will be reliable as they are backed by fiat reserves without acknowledging that fiat itself is only backed by trust in governments and nothing physical or digital.

The Fiat Standard

Their disdain for Bitcoin is likely because of the volatile nature of the cryptocurrency, evident from their constant emphasis on stable forms of money.

A very interesting point touched upon by this report is the issuance of a corporate coin/private e-money that is tied to central bank reserves. At this point, the IMF makes its agenda crystal clear: fiat is and always will be the only form of money, everything else must be backed by fiat and indirectly tied to it. This further explains their fascination with stablecoins like Paxos and TrueUSD as they are directly backed by dollars.

Many are predicting this will lead to a huge influx of corporate cryptocurrencies in the public domain. JPM Coin is not publicly available yet, making Libra the only corporate crypto that will be available for public consumption.

Cryptocurrencies like Bitcoin will continue to flourish no matter what any government or institution says. It’s important to remember that Bitcoin is volatile when you measure it in terms of fiat; one bitcoin is always equal to one bitcoin.

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Venezuelans File $30 Million Lawsuit against Crypto Ponzi Scheme

Venezuelans File $30 Million Lawsuit against Crypto Ponzi Scheme

A group of Venezuelan citizens has dragged the owners of Eagle Financial Diamond Group Inc. and Argyle Coin have been dragged to court for defrauding them through their diamond-backed crypto Ponzi scheme.

Now, the plaintiffs are demanding their initial investment money plus interest on the funds, as well as fees spent in pursuing the case, reports PYMNTS.com on July 16, 2019.

Argyle Coin Victims Fight for Justice

Per sources close to the matter, the victims of a crashed diamond-powered pyramid scheme organized by Eagle Financial Diamond Group Inc., and Argyle Coin have filed a $30 million lawsuit demanding to get both their capital and interest back, plus other fees.

The plaintiffs say the orchestrators of the scam project promised them huge returns on investment in a bid to lure them into pumping funds into the Ponzi scheme.

The seven Venezuelans who claim to be newbie investors, have accused Harold Seigel, a Canadian investment radio host, his son Jonathan Siegel and his partner, Jose Angel Aman, of misleading them through their bogus claims and lofty promises.

The investors claim that both Eagle Financial and Argyle Coin failed to provide them with any documentation showing where their funds were invested. They said the organizers of the project also failed to give them access to their Argyle Coin wallets.

BTCManager informed earlier in May 2019 that the U.S. Securities and Exchange Commission (SEC) had obtained an emergency court order halting the operations of Eagle Financial Diamond Group Inc., Natural Diamonds Investment Co., and Argyle Coin.

At the time, the civil enforcement action accused the Siegels and Aman of using investors money to run a pyramid scheme targeting over 300 investors in Canada and the U.S.

According to the SEC complaint, Aman started offering unregistered securities in May 2014, lying to investors that the startup would invest their funds in fancy-colored whole diamonds.

Instead, the fraudsters misappropriated more than “$10 million of investor funds to pay other investors their purported returns. And for Aman’s expenses, including rent on his home, purchases of horses, and riding lessons for his son” according to reports.

Though the SEC and other regulators are yet to win the battle against fake crypto investment schemes, the fact remains that these financial watchdogs remain determined to sanitize the cryptospace.

On July 11, 2019, BTCManager informed that court authorities had fined two Americans $360,000 for impersonating the Commodity Futures Trading Commission (CFTC) in a bitcoin scam.

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Polkadot Launches Kusama: An Experimental Research and Development Network

Polkadot Launches Kusama: An Experimental Research and Development Network

On July 16, 2019, Polkadot announced the release of Kusama, a community-driven experimental network that allows teams and developers to deploy their parachains and get a feel for the radically new governance mechanisms that Polkadot offers. An explicit warning from the team to users is that this is not a testnet.

Refining Decentralized Governance

Kusama is an unrefined release of the Polkadot network that will serve as a means for the system to prove its governance ability in a decentralized manner. By using a real environment and keeping inclusion limited to developers, Polkadot wants to give future developers and builders a feel for the network before the mainnet launch.

In the release of their Alexander testnet, Polkadot revolutionized on-chain governance with a unique Proof of Stake (PoS) algorithm. It uses validation and nomination as two distinct processes to eliminate bad actors while not compromising on efficiency.

In their own words, Kusama is not a testnet – it’s a “canary-net.” The Canary network will warn the development team of issues that need to be rectified before a mainnet is launched. As an early experimental version of Polkadot, the goal is to recreate the real economic conditions that would prevail over the network.

There is no reasonable way to understand the potential dangers without realistically simulating the environment. The network intrinsically lacks security, but this is done purposely to expose the flaws of the network.

Kusama is planned for launch in the northern hemisphere this summer and will be powered by its native token, KSM.

Has Ethereum Already Won?

This is a question that lingers on the mind of most cryptocurrency enthusiasts. The growth of EOS and TRON has been remarkable, but no other network can boast the same degree of developer loyalty seen on Ethereum.

With ETH 2.0 on the horizon, throughput is also set to rapidly increase, as indicated by Vitalik Buterin.

Polkadot was founded by a co-founder of Ethereum, Dr. Gavin Wood. He doesn’t have the same clout and brand value as Vitalik, which is one of the biggest reasons Ethereum has managed to stay on top.

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Bitcoin Suisse Applies for Banking License with Swiss Regulators

Bitcoin Suisse Applies for Banking License with Swiss Regulators 

In a bid to expand its crypto product offerings and strengthen its position as a global provider of crypto-based financial services, Bitcoin Suisse AG has applied for a banking license with the Swiss Financial Markets Supervision Authority (FINMA), according to a press release on July 16, 2019. 

Bitcoin Suisse Seeks Banking License 

As stated in its press release, the leading Swiss-based regulated cryptocurrency broker and financial services provider, has applied for a banking license with FINMA, following the Swiss Banking Act Art. 1a.

The six-year-old cryptoassets broker has also applied for a securities dealers’ license, as required by the region’s Stock Exchange and Securities Trading Act (SESTA).

According to the team, the licenses would enable Bitcoin Suisse to expand its platform further, providing users with regulated crypto-based products and services and also solidify its status as a leading provider of cryptocurrency financial services.

At a time when a vast array of financial regulators across the globe have made it mandatory for Bitcoin-linked businesses to obtain the relevant licenses that distinguish them from scam schemes, Bitcoin Suisse says its also adapting to the changing regulatory landscape.

As part of plans to make its banking license filing a success, Bitcoin Suisse says it has placed CHF 45 million (~$45.5 million) in an unnamed Swiss bank, as collateral for “a default bank guarantee, to safeguard clients’ fiat deposits and pooled crypto funds.”

The firm claims it has also achieved several significant milestones in recent months, including the expansion the number of tradable digital assets, with more than 6,000 trading pairs, as well as the provision of a large scale collateralized crypto lending service to its institutional clients.

While the issue of hacks remains a mystery in the cryptospace, Bitcoin Suisse AG says it has become one of the safest business and technology providers of highly secure crypto storage, with an impressive volume of $1 billion as of June 2019.

The regulated Swiss financial intermediary and one of the pioneers of the Crypto Valley, says the number of banks and institutional clients for which it provided prime brokerage, anti-money laundering services, and blockchain analysis, also increased significantly this year.

Earlier in April 2019, BTCManager reported that Liechtenstein’s Bank Frick and Bitcoin Suisse had launched a BTC-ETH certificate to track the performance of the two cryptos over a two-year term.

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CoinFLEX to Launch Polkadot’s DOT Futures on July 17, 2019

CoinFLEX to Launch Polkadot’s DOT Futures on July 17, 2019

CoinFLEX, a platform that offers physically-delivered Bitcoin and Tether futures, is looking to launch its first initial futures offering (IFO) on July 17, 2019. The first project, Polkadot’s DOT tokens, will be offered at $75 each during the IFO.

The sale is in a bid to meet a $1.2 billion valuation for the development of the virtual asset, according to reports on July 16, 2019.

CoinFLEX to Launch First IFO

Per sources close to the matter, CoinFLEX will be running its first IFO on July 17, 2019, for the presale of Polkadot’s DOT tokens at a “discount” price of $75 per DOT.

While speaking to the media, Mark Lamb, CoinFLEX’s CEO, revealed that this is the first futures market the exchange will create for a non-existent virtual asset. The mechanism will determine the price of the coin even before its launch.

CoinFLEX is backed by Roger Ver, the creator of Bitcoin Cash. The exchange launched in April 2019 with four contracts including bitcoin (BTC) and ether (ETH), with plans to expand to Binance coin (BNB) and TRON (TRX) this summer.

As reported by BTCManager earlier in March 2019, CoinFLEX launched its native asset called FLEX.

The cryptoasset is used to pay transaction fees on the platform and also grants holders access exclusive opportunities on the futures exchange.

Reportedly, 300 FLEX holders will be allowed to purchase DOT contracts, and each user is expected to lock-in at least a thousand FLEX tokens to be a part of the IFO.

A trader who made comments said the high price of the contract is in a bid to meet a $1.2 billion valuation set by Gavin Wood, Polkadot creator and Ethereum co-founder. As such, the contract’s price may exceed $100 for each DOT later on if all goes as planned.

Notably, CoinFLEX’s CEO, Mark Lamb, has made it clear that the team is uncertain about the expiration date of the IFO contracts because a date has not been fixed for the launch of its mainnet. However, the contracts will expire four weeks after the successful launch of the tokens.

Lamb has also hinted that some large, unnamed Asian investors have offered millions of dollars worth of DOT tokens to aid in the market making of the altcoin.

On January 8, 2019, BTCManager informed of CoinFLEX’s launch of the first physically-delivered Bitcoin futures even before competitors like ErisX and Intercontinental Exchange (ICE).

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Canadian Startup Partners with Authorities to Launch Tax Payments in Bitcoin

Canadian Startup Partners with Authorities to Launch Tax Payments in Bitcoin

According to a press release dated July 15, 2019, the city of Richmond Hill, Canada, is rolling out a project that allows residents to pay property taxes with bitcoin (BTC) through crypto startup, Coinberry.

Pay Property Tax with Bitcoin

Canadian digital currency platform, Coinberry, has opened negotiations with the city of Richmond Hill to provide crypto payment solutions for the municipality. The City of Richmond Hill is located in the outskirts of Toronto and is home to more than 200,000 residents.

The Council, which took place on July 10, 2019, was willing to innovate with digital currency and has voted in favor of entering into an agreement with Coinberry to provide residents and business the option to pay property taxes in Bitcoin.

The city of Richmond Hill is, therefore, becoming the second Canadian municipality to allow citizens to pay their taxes in cryptocurrency. Indeed, in March, Innisfil, a town in Ontario, allowed residents to pay property tax in bitcoin through the service offered by Coinberry. Innisfil has 36,000 residents and was used as a pilot project to test whether the community was ready to embrace innovative digital cryptocurrency payments.

Coinberry is a Toronto-based, FINTRAC-registered, financial technology solutions provider focused on blockchain and digital currency solutions. It is the first and only Canadian cryptocurrency platform to have secured partnerships with local municipalities, making it one of the leading companies in Canada.

A similar project was launched in the American state of Ohio back in 2018. That initiative allowed businesses to pay their taxes directly in BTC. The crypto-friendly move in Ohio has largely been attributed to the state’s treasurer, Josh Mandel.

According to the WSJ reports, Mandel is looking to “plant a flag” for Ohio as a leader in cryptocurrency adoption. He stated that he “sees [bitcoin] as a legitimate form of currency.” Following the launch, on January 4, 2019, online retail giant Overstock announced that it would pay a part of its Ohio state business tax in bitcoin.

Governments and local municipalities are increasing their awareness of cryptocurrencies and projects like these may trigger other councils to consider the roll-out of crypto payments as a settlement method in the future.

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A Security on Bitcoin’s Lightning Network Could Protect Users from Thieves

A Security on Bitcoin’s Lightning Network Could Protect Users from Thieves

In the last research report published on July 15, 2019, Bitmex analyzes the Bitcoin Lightning Network with respect to channel closure.

The research is focused on a mechanism called “Justice Transactions” that punish dishonest parties and prevent them from stealing funds from other Lightning channels. According to the report, 241 Justice transactions were identified, representing 2.22 bitcoin in value, since the Lightning Network was launched at the end of 2017.

Justice Has Been Served

On July 15, 2019, Bitmex published its third report on the Lightning Network concerning channel closures and the incentives designed to prevent dishonest lightning nodes from stealing funds by broadcasting an earlier channel state.

To prevent this behavior, the lightning network enables a defense system named “justice transactions” which involve the closure of the suspicious channel. It should be noted that the punishment is not limited to the loss of the funds linked with the theft but also concerns all the bitcoin in the relevant channel.

The study analyzed transactions which appear to be justice channel closures, dating back as far as December 2017 when the Lightning Network was effectively launched. Data collected goes up to June 2019 and identifies a total of 241 possibly dishonest transactions which corresponds to a total of 2.22 bitcoin.

(Source: Bitmex)

Bitmex used its own methodology to search for justice transactions, which was described as a “basic search methodology.” The research also proposes an alternative method developed by Alex Bosworth, from Lightning Labs, that may be more robust.

It is important to specify that the 2.22 BTC represents the total funds claimed by honest non-channel closing nodes but this does not necessarily mean that thieves tried to steal all that money. Dishonest nodes may have punished thieves by an amount larger than the value they tried to steal hence swelling the figure.

Plus, this number could include some users that were trying to test the efficiency of the Network. For example, BitMEX itself is responsible for five of the 241 transactions. In this case, however, there was no loss of funds as BitMEX owned all the nodes and funds stolen.

A Broader Perspective

According to 1ml.com, the Lightning Network counts 9,064 nodes with 32,303 channels and a network capacity of 896 BTC. Therefore, 241 justice transactions, with a value of 2.2 BTC corresponds to only 0.7 percent of the current number of lightning channels, a reasonably small value relative to the size of the Lightning Network.

Justice transactions will play a vital role in making the Lightning Network a robust, reliable, and scalable payment system. The report notes that it is still too early to understand the optimal justice rate as too high a value would mean that successful thefts may be too prevalent.

On the contrary, a very low value would mean that nobody is attempting theft. This could lead to less monitoring over the channels thus increasing the risk of channel thefts in the future.

The Lightning Network is spreading its branch of action as discussed previously on BTCManager. The technology was recently integrated for Coinbase users and on the peer-to-peer cryptocurrency trading platform Hodl Hodl. It appears that the layer two solution is slowly becoming a standard.

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SeedCX Subsidiaries Secure New York BitLicense

SeedCX Subsidiaries Secure New York BitLicense 

Seed CX, a regulated bitcoin trading platform for professionals, has achieved a significant feat in its development, as two of its subsidiaries, Seed Digital Commodities market LLC (SCXM) and Zero Hash LLC, have obtained virtual currency licenses from the New York State Department of Financial Services (DFS). Securing the BitLicense will enable SCXM to function as a matching engine for crypto trading activities, while Zero Hash will operate as a money transmitter for SCXM, according to a press release on July 15, 2019.

Seed CX Gets the Elusive BitLicense

As stated in its press release, the New York Department of Financial Services (DFS) under the leadership of Linda A. Lacewell, has approved the BitLicense applications of two Seed CX subsidiaries, Seed Digital Commodities Market LLC (SCXM) and Zero Hash LLC.

Specifically, the DFS has given SCXM the go-ahead to operate as a matching engine for buyers and sellers of bitcoin and other blockchain-based digital assets, as well as a platform for block trades for sophisticated investors and institutional traders.

Zero Hash, on the other hand, will function as the sole money transmitter for the SCXM exchange.

The Next Step

Founded in 2015 by Brian Liston and Edward Woodford, Seed CX provides institutional investors with a market for trading and settling spot digital assets via its subsidiaries. 

Seed CX is backed by Bain Capital Ventures and other highly reputed firms including F2Pool, Dekrypt Capital, Origin Capital and more.

Commenting on the firm’s BitLicense success, Edward Woodford, co-founder and CEO of Seed CX stated that the license represents the “next step” in the company’s growth and it will enable Seed CX to expand its trading and settlement services to New York-based firms through its subsidiaries.

In his words:

“We will be able to expand trading and settlement services to New York firms through our institutional platform that provides institutions with a robust technology, operational support and regulatory compliance they need.”

Seed CX has now added the elusive BitLicense to its growing list of registrations from various regulators including the CFTC (Swap Execution Facility), FinCEN (Money Services Business), NFA (Introducing Broker) and more.

Since the introduction of the BitLicense regulation by Benjamin Lawsky, New York’s first Superintendent of Financial Services earlier in July 2014, only 21 bitcoin and fintech firms have succeeded in securing the license.

So far, holders of the much-criticized license include Square, Robinhood, Bitstamp, Tagomi Trading Cottonwood, Genesis Global Trading and NYDIG, to mention a few. 

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