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Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges

26/01/2020 by Idelto Editor

On January 3, 2020, a small group of crypto enthusiasts celebrated the second annual Proof-of-Keys day with hopes to get people to withdraw funds from centralized digital currency exchanges. However, exchanges holding massive amounts of BTC only saw their reserves grow larger and data shows that Coinbase now holds 1 million BTC ($8.4 billion). Crypto users are still keeping large sums of digital asset holdings on trading platforms despite the fact that 2019 saw the most exchange hacks in one year over the last decade.

Also read: The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

Despite Proof-of-Keys Day, Seven Trading Platforms Have More Than $25 Billion in Crypto Reserves

2019 saw a significant amount of trading platform hacks and exchange losses according to a recent report authored by the blockchain surveillance firm Chainalysis. The company noted that even though there were more attacks there was less money stolen. However, Chainalysis highlighted that malicious hackers are becoming smarter. “2019 saw more cryptocurrency hacks than any other year,” the report underlined. “But of the 11 attacks that occurred this year, none of them came close to matching the scale of major heists such as [2018]’s $534 million Coincheck hack.” Last year digital currency exchanges lost approximately “$283 million worth of cryptocurrency” due to breaches and malicious hackers.

About a month before the second annual Proof-of-Keys day initiated by Trace Mayer, news.Bitcoin.com reported on the vast number of coins centralized exchanges held in reserve. The list was provided by Bituniverse using the firm’s Exchange Transparent Balance Rank (ETBR). The ETBR list had shown that Coinbase held roughly 966,000 BTC during the first week of December 2019. Today, the ETBR report from Bituniverse shows the San Francisco-based exchange now has 1.03 million BTC ($8.5 billion) held in reserves. The data from Bituniverse stems from onchain exchange balances recorded by Etherscan and Peckshield.

Additionally, the numbers from Bituniverse can also be cross-referenced with data from Chain.info’s crypto exchange reserve list. Chain.info’s data is slightly different, showing that Coinbase holds 983,000 BTC but most of the data is fairly consistent with the findings from the Bituniverse application. Figures indicate that Huobi is the second-largest cryptocurrency exchange by reserve count with 462,000 BTC ($3.8 billion), 1.8 million ETH, and a large number of USDT as well. Binance has around 307,000 BTC ($2.5 billion) as of Saturday and 2.6 million ETH held in reserves as well. Then there’s Bitfinex (290,000 BTC or $2.8 billion), Bitmex (274,000 BTC or $2.28 billion), Bitstamp (242,000 BTC or $2 billion), Okex (211,000 BTC or $1.83 billion), Kraken (173,000 BTC or $1.8 billion), Bittrex (125,000 BTC or $1.2 billion), and Gemini (95,000 BTC or $922 million).

Proof-of-Solvency and the Recent Trend of Independently Recorded Crypto Reserve Lists

Other exchanges with a vast amount of digital assets held in reserves include Bitflyer, Gate.io, Poloniex, and Hitbtc. Bituniverse and Chain.info’s data shows that overall the centralized exchanges accumulated more reserves since the first week of December. Not only are a few crypto advocates afraid that large exchanges could be compromised for billions in digital assets by hackers, but there’s also the fear of fractionally reserving bitcoins.

There have been many articles and academic papers discussing the subject of proof-of-reserves when it comes to cryptocurrencies. Researchers from Stanford University published a report in 2015 called “Provisions” which tackles the subject of exchanges and reserve transparency. The Stanford researchers explained that proof-of-solvency “demonstrates that the exchange controls sufficient reserves to settle each customer’s account.” The paper introduces a privacy-preserving proof-of-solvency. “Whereby an exchange does not have to disclose its Bitcoin addresses,” the 33-page long academic paper notes.

During the last few months, platforms like Bituniverse and Chain.info have published reserve lists based on data provided by independent parties like Peckshield. Exchanges shown on these lists have neither confirmed or denied the bitcoin reserve data is legitimate. A number of community members within the cryptosphere believe trading platforms should provide their own reserve numbers so they can exemplify transparency themselves. Meanwhile, even though a lot of crypto influencers and proponents tell people regularly to store cryptos in a noncustodial fashion, the great majority of digital asset owners continue to store them on centralized trading platforms.

What do you think about the billions worth of BTC held on centralized digital currency exchanges? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Bituniverse App, Stanford, Chainalysis, Chain.info, Wiki Commons, Fair Use, and Pixabay.

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Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

25/01/2020 by Idelto Editor

Companies Continue to Flock to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

Crypto Valley, a fintech-friendly region centered on the canton of Zug, has been expanding to other parts of Switzerland and neighboring Liechtenstein. Despite all the challenges facing the blockchain industry, favorable regulations and improving access to banking and legal services are attracting more and more crypto companies. Their number has increased for a third consecutive year and many new jobs have been created.

Also read: Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

More Than 800 Crypto Firms Based in Switzerland and Liechtenstein

Almost 100 new businesses established a presence in the Swiss Crypto Valley last year, shows a new study. Its findings were released during the CV Summit in Davos on Thursday, a blockchain-focused event that takes place during the World Economic Forum’s annual meeting. The total number of companies working with digital assets and blockchain technologies in the Crypto Valley has reached 842, the survey reveals, compared to 750 in its last year’s edition. Jobs in the sector have also increased substantially – from 3,300 in 2018 to 4,400 by the end of 2019, the Swissinfo news portal reported.

The news comes despite a slowing growth rate across the industry, a trend that started after the boom of 2017 and continued into the first half of 2018. The number of “startup casualties,” the outlet notes, is also mounting. Failed projects include crypto company Alethena, tokenization platform Tend, real estate startup Swiss Real Coin, alternative banking project Oyoba, and digital payment provider Monetas. Some of these companies simply failed to persuade investors as to the viability of their business plans.

At the same time, funding for the top 50 entities in the report reached $4 billion and these are valued at a total of $25.3 billion. Among the newly established or relocating members of the industry added to the 2019 list are Facebook’s Libra, blockchain developer Casper Labs which moved to Switzerland, crypto exchange Bittrex Global which set up an office in Liechtenstein, Six Group’s digital exchange initiative SDX, licensed crypto banks SEBA and Sygnum. The last two companies, along with Bitcoin Suisse which also expects approval to become a bank, are leading employers as well.

Established Startups Attract More Venture Capital Funding

The Crypto Valley is home to five unicorns, or projects valued at more than $1 billion. These are Ethereum ($14.4B), Dfinity ($2B), Polkadot ($1.2B), Bitmain ($1B), and Libra ($1B). Another list names unicorn contenders like Tezos ($924M), Cardano ($869M), and Cosmos ($818M). The authors of the analysis, Swiss business incubator Crypto Valley Venture Capital (CVVC), PwC subsidiary Strategy& and other organizations, point out that “the report highlights the diverse ecosystem in blockchain and cryptocurrency consisting of startups, corporates, and government” as well as its “maturity and substance.” Mature startups that are at later, more advanced stages of their lifespan typically attract more venture capital funding, which has generally increased in the past few years.

A positive development in that respect is the gradual opening of the banking sector that comes with increasing regulatory certainty. While large banks and central banks recognize the potential of crypto-related technologies, they often create difficulties for crypto businesses. Smaller financial institutions, however, are more likely to engage with the industry. Swiss banks involved in the crypto space include Hypothekarbank Lenzburg, Maerki Baumann, and Arab Bank (Switzerland). “With regulatory certainty in Crypto Valley, private banks have been leading the adoption and provision of services,” the researchers note. Access to legal services has also improved markedly with an ever expanding number of law firms offering advice to crypto companies in both Switzerland and Liechtenstein. More than two dozen of them have been listed in the report.

During the summit, CVVC CEO Mathias Ruch noted the increased interest from large Chinese banks, government agencies and investors in Swiss blockchain know-how. Last year, Switzerland introduced broad changes to its existing laws in order to incorporate rules for the crypto space while Liechtenstein adopted a new Blockchain Act meant to attract crypto businesses by providing more regulatory clarity. This progress has led to the formation of multiple crypto hotspots – not only Zug, which is home to over half of all companies based in the Crypto Valley (425), but also Zurich, Geneva, Ticino, Vaud, Lucerne, and Bern. Liechtenstein has 80 registered blockchain businesses in its jurisdiction.

What are your thoughts on the expansion of Switzerland’s Crypto Valley? Tell us in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

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The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

25/01/2020 by Idelto Editor

Onecoin's Ponzi Scheme Demise and Aftermath Continues to Impact Investors

In late 2019, the remnants of multi-level Ponzi scheme Onecoin crumbled. However, Onecoin’s founder, dubbed the ‘crypto queen,’ Ruja Ignatova, remains on the run and law enforcement haven’t caught up with her yet. Moreover, police are investigating two churches in New Zealand that allegedly have links to the Onecoin operation and founders.

Also read: Onecoin Websites Suspended as the $4 Billion Ponzi Crumbles

After Onecoin Operations Implode in Cairns, Investors Accept They Were Scammed

In 2014, Ruja Ignatova, Sebastian Greenwood, and Konstantin Ignatov launched a project called Onecoin and allegedly acquired $4 billion from investors unlawfully. Ignatova and her cohorts claimed that Onecoin was a legitimate cryptocurrency and the project followed the coattails of the crypto hype up until mid-2019. Multiple reports had disclosed that there was no blockchain behind Onecoin and the product was merely a multi-level marketing (MLM) Ponzi.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors — From left to right: Ruja Ignatova, Konstantin Ignatov and Sebastian Greenwood are the three accused creators of the Onecoin Ponzi scam. In January 2020, Judge Valerie Caproni gave Onecoin victims permission to serve Ruja Ignatova by alternative means. Ruja Ignatova has been missing for well over a year and law enforcement have not caught up with her. Konstantin Ignatov and Sebastian Greenwood were arrested in 2019.

A few weeks ago, news.Bitcoin.com reported on the Onecoin project falling apart at the seams as leaders were arrested and various websites were seized. For a while, a few Onecoin websites remained operational but most have since been taken down by domain hosts or local law enforcement. Websites like onecoin.eu, oneworldfoundation.eu, and oneacademy.eu show a “server hold” notice when entering the site.

Now in certain locations around the world, Onecoin side projects are also imploding and revealing how large the crypto Ponzi operation has grown over the years. Reports are now showing how Onecoin was very prevalent in Australia and New Zealand, signing up investors from numerous cities. On January 25, the Cairns Post reported on how investors from the east coast have started to accept that they have lost money. The Cairns Post exposed how the scheme was affecting Cairns residents in November but at the time investors were still in disbelief. Now Cairns residents have come to a point of acceptance, the news outlet notes. “I have come to the realization that the truth has been misrepresented to the Onelife network,” a Cairns-based Onecoin investor wrote.

Shilling Onecoin Packages in Church and Living the ‘High Life’ in Florida on House Arrest

Further, it seems that the Onecoin Ponzi infected the town of Auckland, New Zealand, and the region’s Samoan church. New Zealand’s Department of Internal Affairs (DIA) is currently investigating the Auckland-based Samoa Worship Centre over connections with the Ponzi. Onecoin leaders allegedly sold high-profile Samoan church community members “tens of thousands of dollars” worth of Onecoin products.

Reports disclose that both the Samoan Independent Seventh Day Adventist Church (SISDAC) and the organization’s sister worship center were used to shill Onecoin packages. According to the Auckland worship center’s pastor, Avele Tanielu, his church had no ties to the Onecoin operation. The DIA is investigating both churches and Onecoin operations are banned in Samoa. SISDAC has told the press that it was cooperating with authorities and maintains the church itself did not transgress against any money laundering laws.

In addition to the church investigations and the implosion in Cairns, in the U.S. former attorney Mark Scott has been allowed an extension to prepare motions to defend himself against a prison sentence. Scott is accused of laundering $400 million worth of Onecoin’s proceeds. Currently, Scott is under house arrest in Florida and his lawyers are allegedly preparing for a new trial or an acquittal motion. Additionally, Scott’s legal team says that Scott needs to undertake treatment for “longstanding medical issues” and they are requesting more time to prepare for new motions. However, media reports and prosecutors also note that Scott was recently “spotted out to dinner” with bodyguards and was living the “high life” in Florida.

New York Southern District Court Gives Victims Permission to Serve the ‘Crypto Queen’ by Alternative Means

While the aftermath of Onecoin’s demise continues to shake victims, it seems as though most of the operations are coming to a halt. The so-called crypto queen Ruja Ignatova has been missing for well over a year and she has yet to be charged like Sebastian Greenwood and Konstantin Ignatov were last year. In the U.S., Judge Valerie Caproni has authorized victims who are suing Onecoin and Ignatova to serve her by alternative means.

The people suing Ignatova attempted to serve her through the onecoin.eu email account she used since 2016. Now thanks to Caproni’s court order, Onecoin victims have permission for alternative service. This means the plaintiffs can serve her with registered first-class mail to the Dubai headquarters, message her social media accounts and other means of contact. Caproni stressed that the plaintiffs must notify the court in writing whether they received a sender-return error for Ignatova or a contact message.

What do you think about the Onecoin Ponzi? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Fair Use, Twitter, Wiki Commons, and Pixabay.

The post The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors appeared first on Bitcoin News.

Leading Swiss Stock Exchange Now Offers 12 Crypto Exchange-Traded Products

25/01/2020 by Idelto Editor

Switzerland’s principal stock exchange, SIX Swiss Exchange, now has 12 cryptocurrency exchange-traded products listed. The latest addition, the 21shares Short Bitcoin, allows investors to profit from falling prices of the digital currency. Other listed crypto products include those that track the price movements of BCH, BTC, ETH, XRP, BNB, and tezos.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Newest Addition: An Inverse Product

SIX Swiss Exchange has listed an inverse bitcoin exchange-traded product (ETP) issued by fintech company Amun AG. The company announced on Thursday that this product “is the first short or inverse product of its kind using a digital asset as the underlying for an ETP structure.”

The product “tracks the opposite performance of bitcoin to give investors an easy, cost-effective and convenient way to gain exposure in both directions of the bitcoin price movements,” the company detailed. It is “designed to enable investors to profit from falling adverse price movements of bitcoin.” According to the announcement:

The 21shares Short Bitcoin ETP (Ticker: SBTC) seeks to provide a -1x return to the performance of bitcoin for a single day. This product obtains short exposure through borrowing bitcoin and simultaneously selling it on an execution platform.

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin — The above chart reflects the value of a $100 investment at the inception of the ETP, as of Dec. 31, with 2.5% per annum fee deducted. Returns shown are for illustrative purposes only and do not reflect any transaction costs or expenses. Source: Amun AG.

According to SIX Swiss Exchange’s website, the 21shares Short Bitcoin ETP started trading on Jan. 22. It is rebalanced daily, resetting at the end of each day, and its performance is not rolled over.

12 ETPs Listed on Leading Swiss Stock Exchange

SIX Swiss Exchange has a range of crypto ETPs listed. The first one was the Amun Crypto Basket Index ETP in USD, which began trading on Nov. 21, 2018.

The exchange then listed 10 more ETPs in 2019, nine of which were issued by Amun. They are Crypto Basket Index, Bitcoin, Ethereum, XRP, Bitcoin Cash, Binance, Tezos, Bitcoin Suisse Index, Bitwise 10, and Sygnum Platform Winners Index — all trade in USD, except the Amun Bitcoin Suisse Index which trades in CHF. The 10th ETP launched on SIX Swiss Exchange last year was Wisdomtree Bitcoin in USD.

This year, besides the aforementioned inverse bitcoin ETP, the leading Swiss stock exchange began offering several existing Amun ETPs in additional currencies. On Jan. 7, the Amun Bitcoin ETP and the Amun Ethereum ETP started trading in both CHF and EUR in addition to USD. On the same day, the Amun Crypto Basket Index ETP started trading in EUR, with the Amun Crypto Basket Index as the underlying investment. According to Amun, all of its crypto ETPs are listed on SIX Swiss Exchange, BX Swiss and Boerse Stuttgart in CHF, USD and EUR.

Amun further explained in its Thursday announcement that “21shares” now represents the new name of all ETPs it issues. The 11 existing ones will be migrated over to the new brand during the second quarter of this year. Moreover, the company’s base prospectus for exchange-traded products has recently been approved by the Swedish Financial Supervisory Authority.

What do you think of all the cryptocurrency ETPs listed on SIX Swiss Exchange? Would you invest in the new inverse bitcoin ETP? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock and Amun AG.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Iran Issues More Than 1,000 Cryptocurrency Mining Licenses

25/01/2020 by Idelto Editor

Iran Has Issued More Than 1,000 Licenses for Cryptocurrency Mining

The Iranian government has reportedly issued more than 1,000 licenses for cryptocurrency mining since it began regulating the industry. A number of large mining farms have set up in the country, but high electricity tariffs have kept many small investors away.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

1,000+ Licenses Granted to Miners

An official with Iran’s ICT Guild Organization, Amir Hossein Saeedi Naeini, has revealed the state of the country’s cryptocurrency mining industry, the Financial Tribune reported Friday. In an interview with Ibena publication, he said that cryptocurrency mining is a new industry but many people have been attracted to it in Iran. Noting that miners need to obtain a license, he shared:

The Ministry of Industry, Mine and Trade has issued more than 1,000 licenses for cryptocurrency mining in the country.

The official further elaborated, “Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy,” the news outlet detailed.

Major Challenge – Electricity Cost

Amir Hossein Saeedi Naeini believes that the cryptocurrency mining industry has the potential to help the Iranian economy. However, he explained that the cost of electricity is a major challenge for crypto miners in Iran. While “A number of large and industrial farming mines have been set up,” the official told the news outlet:

High electricity tariffs plus stringent regulations have made the sector less appealing for small investors.

He opined, “the operating conditions in this industry should not be such that only large capitalists enter the cryptocurrency mining market but that all miners can operate,” emphasizing that modifying the electricity rates and terms could boost the crypto mining industry and generate more revenue.

Iranian Crypto Mining Law

Iran’s cryptocurrency mining industry has been regulated since last year. The Iranian government officially recognized cryptocurrency mining as an industry in August after months of deliberation, Aljazeera reported on Aug. 4, 2019. Crypto miners must be licensed by the Ministry of Industry, Mine and Trade before beginning their operations.

The recognition of the industry followed a crackdown by various government authorities on crypto miners accused of using subsidized power. In June last year, Iran’s state television reported that the authorities seized approximately 1,000 bitcoin mining machines in two abandoned factories allegedly using government-subsidized electricity. A spokesperson for the country’s Energy Ministry said at the time that these mining machines were responsible for a 7% increase in power consumption.

“The electricity price offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70% of the average rial price at which the country ships off its natural gas,” the news outlet explained. Furthermore, the cabinet’s directive states that “Using electricity or natural gas to mine cryptocurrencies is forbidden in peak consumption times,” and calls for the ministry to set peak hours and install a grid of smart power meters. In addition, “using electricity and gas provided at household, agricultural or industrial grades is forbidden and will be met with legal action if found out,” the directive adds.

However, Amir Hossein Saeedi Naeini told Ibena that discussions are underway to set more favorable terms for crypto miners. Meanwhile, Iranian President Hassan Rouhani has been discussing creating a unified cryptocurrency for Muslim countries with leaders of other Muslim nations.

What do you think of the mining industry in Iran? Let us know in the comments section below.

Images courtesy of Shutterstock and Ibena.

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