Bithumb partners with South Korea’s largest accommodation app, Good Choice

South Korean cryptocurrency exchange Bithumb, the largest in the country, announced today it has formed a strategic partnership with South Korea’s largest accommodation app, Good Choice (여기어때), to make it possible to book accommodations and make payments with cryptocurrencies through Bithumb.

This is the first case in Korea’s domestic lodging industry to use cryptocurrencies…cryptocurrency transactions are to be made in 50,000 accommodations around the country. Bithumb says, “We are discussing with various companies to expand the use of cryptocurrencies.”

It’s the first case to that supports transactions with not just only one particular cryptocurrency but also various other cryptocurrencies. Depending on the business partnership, customers who book their accommodation with the app will be able to make payment with the cryptocurrencies through their Bithumb account.

As one of the most popular lodging applications in Korea, ‘Good Choice’ has 50,000 accommodations registered nationwide, including hotel chains. It boasts about their 2 million monthly users and over 2 million user reviews. In the future, it will also be easy to pay for a variety of accommodations in cryptocurrency, ranging from registered hotels, resorts, pensions, guest houses, and motels to camping, glamping, and Hanok.

According to coinmap.org, there are over 10,000 businesses that accept cryptocurrency. The biggest online travel site, Expedia accepts Bitcoins when making hotel reservations.  Japanese home appliance retailer, Big Camera supports bitcoin transactions in 59 of their offline stores.

This partnership reflects this worldwide trend in Korea. It is expected to help increase convenience as the cryptocurrency is used to book and pay for the accommodation for both Koreans and overseas travelers.

“Our partnership with the nation’s largest accommodation app has allowed Korea to join the global trend to see a greater use of cryptocurrency and we are continuously discussing with various companies for a greater use of a simple and safe payment tool, cryptocurrency in Korea, ” the Bithumb team said.

MIT-Founded Startup Raises $20 Million for Supply Chain Blockchain

Eximchain, a supply-chain focused blockchain startup founded in 2015, has raised $20 million from a group of investors.

Founded at the Massachusetts Institute of Technology’s media lab, the startup raised the funds to continue developing its own public blockchain – powered by private smart contracts – to provide different solutions for recording, transacting and distributing data for supply chain stakeholders.

The funding was led by FBG Capital, a major cryptocurrency hedge fund from China. Other participants included INBlockchain, a blockchain capital firm founded by Li Xiaolai (a Chinese cryptocurrency activist) and Hong Kong-based investment firm Kinetic Capital.

Eximchain said it’s now moving toward a token airdrop, which will see around 1.5 million ERC20-based EXC tokens distributed to ID-verified participants.

EXC, according to the company, can be further converted to native tokens on Eximchain’s own blockchain upon the launch of its main blockchain.

“After experimenting [with proofs of concept] on ethereum or private blockchains, the enterprise world is looking for technical solutions that can be deployed immediately to solve real supply chain problems”, said Hope Liu, co-founder and CEO of Eximchain, in a statement.

The funding round makes the firm the latest to join the increasingly popular trend of issuing airdrops – via which firms distribute tokens for free to interested parties, instead of holding token sales or initial coin offerings.

Freight containers image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Israel Bars Crypto Firms from Tel Aviv Stock Exchange Indices

Israel’s securities regulator has said that cryptocurrency-related firms may not be listed on the Tel Aviv Stock Exchange (TASE) indices.

According to an announcement from the Israel Securities Authority (ISA) on Wednesday, the watchdog said it will bar the entry of public companies who mainly hold, invest in or mine cryptocurrencies from the indices, citing high volatility as a risk for passive investors whose portfolios track the indices.

Crypto-asset firms can still be traded on the exchange itself, however.

The ISA said the the move comes after it had noted significant stock price swing upon announcements of public companies’ involvement in cryptocurrencies.

The authority said:

“In some cases, the companies’ reports (about cryptocurrency) led to a sharp rise in the share prices, even before they have real activities. The extreme volatility of trading in cryptocurrencies is also reflected in the trading in these companies, whose value rises and falls sharply, sometimes for no apparent reason.”

As such, the ISA indicated that the new rule is intended to ensure that passive investors will not be exposed to these public companies unless they actively choose to. The restriction will last for one year initially, subject to further examination at a later date.

The new policy also comes as a result of months-long consideration over possible measures to limit the effect of firms’ blockchain pivots on public stocks and stock investors. The topic first emerged in December of last year, when the authority’s chief proposed banning public companies on TASE from trading cryptocurrencies.

Elsewhere in the announcement, the ISA also noted that an interim examination report on initial coin offerings (ICOs) is expected to be published in coming days, following the establishment of a committee last August to provide recommendations for oversight of token-based fundraising activities.

Through a separate notice the same day, the ISA also warned the public on the risks of investing in ICOs, as they issue misleading or fraudulent promises of high investment returns. It further highlighted that ICOs “may be considered as a public offering of securities,” which, the agency stated, must be registered with Israel’s Securities Law.

TA index image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Bitcoin May See Relief Rally, But Bottom Still Elusive

Bitcoin (BTC) may see a corrective rally following losses this week, but it’s still too early to call a bottom, the technical charts indicate.

The cryptocurrency has spent a better part of the last 24 hours trading in a roughly sideways manner in the narrow range of $7,900-$8,400, according to CoinDesk’s Bitcoin Price Index (BPI). As of writing, the BPI is seen at $8,152. Meanwhile, the global average price, as calculated by CoinMarketCap, stands at $8,169 – up 0.15 percent in the last 24 hours.

The consolidation may have brought a little to the battered bulls and suggests a temporary low is in place at $7,676. Further, the shorter duration technical charts (prices as per Bitfinex) show potential for a relief rally.

1-hour chart

Bitcoin has created a bull flag pattern on the hourly chart – a continuation pattern – meaning an upside break to above $8,370 would signal a continuation of the rally from $7,665 (Wednesday’s low) and open the doors for $9,170 (target as per the measured height method).

The relative strength index (RSI) also shows a bull flag pattern, adding credence to the bullish setup on the price chart.

However, the 50-hour MA (moving average), 100-hour MA, and 200-hour MA are still all bear biased (sloping downwards), so the rally will likely be short-lived.

Further, on the way towards $9,170, BTC will face stiff resistance around $8,710 (bear flag support).

Daily chart

The daily chart also shows that the 5-day MA and 10-day MA are trending lower in favor of the bears. So, the primary trend is bearish.

That said, a close today (as per UTC) above the 10-day MA at $8,964, currently, would mark a positive follow-through to yesterday’s long-tailed doji candle, signaling a short-term bottom is in place at around $7,665.

View

  • A corrective rally to $9,000-$9,170 is likely as per the setup on the hourly chart.
  • A close (as per UTC) above the 10-day MA would signal the sell-off from the recent high of $11,700 has ended, although a sustained rally to $10,000 and above looks likely only after the 10-day MA has bottomed out.
  • In the larger scheme of things, only a close above $11,700 would invalidate the bearish set up on the weekly chart and signal a bearish-to-bullish trend change.
  • Bearish scenario: Repeated failure to hold above $8,342 (last Friday’s doji candle low) could yield a sell-off to $7,000. Note that bitcoin has already failed twice in the last 24 hours to keep gains above $8,342.

Markets image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Singapore Central Bank Touts Blockchain for Payments

The chief of the Monetary Authority of Singapore (MAS), the city-state’s de facto central bank, has spoken of blockchain’s potential in international payments.

During a speech on Thursday at a financial industry event, MAS managing director Ravi Menon doubled down on his belief that one of the “strongest” use cases for crypto tokens is to facilitate cross-border settlements.

Menon said:

“This is the challenge that Singapore’s Project Ubin has set itself to solve: to use blockchain technology to enable entities across jurisdictions to make payments to one another.”

He continued to say that, following two “successful” proofs-of-concept, MAS has partnered with the Bank of Canada “to test and develop a cross-border solution using crypto tokens issued by the two central banks.”

The comments follow Menon’s earlier remarks that, while he thinks crypto tokens are not entitled to be called currencies given a lack of payment, storage and accounting features, he believes “we can never say never” that they will not become a currency in the future.

That said, he also raised concerns during the latest speech over the growing risks associated with the emerging fiscal technology, saying that MAS has been increasingly watching areas such as fundraising, money laundering and affects on financial stability.

In particular, on the investor-protection front, Menon reiterated MAS’s previously reported initial coin offering (ICO) guidance, cautioning that certain tokens could be regulated as securities.

He said:

“Investor protection is another immediate concern arising from the crypto mania. Where the crypto tokens represent ownership or a security interest over an issuer’s assets or any property, or a debt owed by the issuer, they may be regarded as securities under the Securities and Futures Act.”

Under this rule, initial coin offering issuers must meet securities rules before launching token sales. Further, secondary markets that facilitate trading of ICO tokens should also be registered and approved by the MAS, according to Menon.

And yet, the managing director also stated that MAS does not wish to stifle innovation around blockchain technology by introducing burdensome regulation, although he conceded that striking the right balance remains a challenge to the authority.

Singapore image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

So Long ICOs, Hello Airdrops: The Free Token Giveaway Craze Is Here

Imagine getting $1,000 just for joining a newsletter.

Well, that’s effectively what happened for those that subscribed to Onchain’s mailing list early on in the project’s lifecycle. The company, which is building a distributed network designed to connect real-world institutions, gave 1,000 of its “ONT” crypto tokens to people who signed up to receive its emails prior to a certain date.

Those crypto tokens were distributed earlier this month and are now trading for a little over $1 per coin, according to CoinMarketCap. As you may have noticed, there was no “sale” involved.

“Ontology just raised a private round and then didn’t need to do a [public] crowdsale, so they just airdropped to eager NEO hodlers,” Keld van Schreven, a partner at blockchain investment company Kryptonite1, told CoinDesk.

Van Schreven’s comment speaks to a broader trend among token issuers. More are raising the money they need in private initial coin offerings (ICOs) and then skipping the public sale for what’s being called an airdrop. Effectively, these are just token giveaways to broader interested community members

Justin Schmidt of Translunar VC told CoinDesk:

“As a non-accredited investor, it is proving to be very difficult to find public sales to participate in until the tokens are traded on an exchange.”

Whereas the idea around public sales was that the people who buy in are those that understand the platform’s value and will promote the token, airdrops look to accomplish a similar goal, yet expecting that if people hold tokens, they’ll be interested in seeing the network, and the token’s price, grow and promote the platform just the same.

An internet search for “airdrops” or “free tokens” yields lots of websites, subreddits and Telegram channels that people can follow to gather up crypto tokens. And there’s even a Pokemon Go imitator under development that would allow companies to distribute free tokens to people playing an augmented reality game.

But these airdrops might not only be about building a community, they likely also have something to do with an uncertain regulatory environment.

For instance, in the U.S., many ICO issuers and investors have become convinced that the Securities and Exchange Commission (SEC) will eventually declare that all crypto tokens are securities and as such, need to be registered under cumbersome laws.

But even outside the U.S., completing know-your-customer (KYC) and anti-money laundering (AML) compliance for public sales takes a substantial amount of work and time.

Speaking to token issuers stepping away from public sales, Minhui Chen, a partner at Global Blockchain Innovative Capital (GBIC) told CoinDesk, “Raising money from private sales is so easy.”

Tokens, away!

According to Althea Allen, ecosystem relations at payments startup OmiseGo, her company pioneered the airdrop concept on ethereum in August last year, after announcing it would airdrop its “OMG” tokens to every wallet that held more than 0.1 ETH.

OmiseGo decided to conduct an airdrop to raise awareness about the project, but Allen spoke to the broader benefits of the distribution model, saying, “The real value of ethereum projects doing airdrops to all ETH holders is that it’s a crypto economic mechanism designed to incentivize ethereum project communities to maintain alignment with the entire ethereum community.”

The OMG token’s price has since been volatile (many crypto tokens are), but it has trended up overall.

Yet because of the ease to airdrop, many, including van Schreven, think crypto wallets are starting to feel “like spam in email.”

Indeed, in China, many people refer to these offerings as “candy,” Chen said, continuing:

“Low-quality projects are taking advantage of airdrops to make a fake community.”

And Schmidt echoed that, saying, “Not having the choice to decline these airdrops can, in my opinion, cause some issues in the future.”

As such, many investors, who nonetheless support the larger phenomenon also believe the mechanism could be used more effectively.

Brayton Williams of Boost VC, a fund that favors crypto projects with a strong focus on community, thinks issuers could do a better job of targeting with airdrops. For example, he’d like to see issuers focus airdrops on people based on geography, demographics, etc. to cultivate the best market for the future platform.

Williams told CoinDesk:

“Airdrops combine the best of paid referral programs with stock options. Potential users get paid for joining or using the network and have the potential upside if the network increases in value.”

Some crypto companies are taking heed of this advice.

Swarm, a blockchain for tokenizing private equity, just announced a few airdrop promotions, two of which encourage referrals, although by far the largest token sale on the platform is one that just drops tokens to existing cryptocurrency holders.

And Earn.com (formerly 21.co) has offered a standalone product for startups to distribute tokens directly to its members since the end of January. Startups that want access to Earn.com members pay small amounts of bitcoin to get users to sign up. But many are willing to pay a fee since the company validates every member, linking a wallet to one distinct person.

“The unique thing that Earn.com offers really is the validation side of things,” Dave Bean, from Earn.com’s sales team, told CoinDesk.

He added that while many platforms that allow token issuers to airdrop might have a lot of email addresses, many individuals could be gaming the system by signing up multiple times with different addresses.

Firewall USA

That said, issuers in the U.S. are still skittish about doing airdrops to promote platforms.

Stream, a blockchain-based video streaming platform, has delayed its airdrop indefinitely because of concern that airdrops could also be in violation of securities law.

“We can’t be sure,” said Todd Kornfeldt, counsel at the law firm Pepper Hamilton LLP, pointing to SEC actions from 1999 which targeted companies giving away free traditional equity.

“Perhaps the SEC thought there was some kind of quid pro quo in giving those securities away and that resulted in a benefit to the issuer,” Kornfeldt said. “And that fact pattern is similar to the fact pattern of an airdrop.”

This will definitely affect token issuers since the U.S. is the largest market both for investment and technology users.

But until the regulatory environment in the U.S. becomes more clear, token issuers may experience far less hindrance in the rest of the world.

Although some aren’t letting the regulatory environment hold them back. For instance, Onchain isn’t done using airdrops to promote its platform.

“The next community reward opportunity will be for active participation in Ontology after the release of the mainnet in Q2 2018,” Daniel Assab, a spokesperson for the company, said. “It won’t be for anything like a newsletter subscription, but no further details for now.”

Still many advise against airdrops for now.

According to Chen, “We advise [token issuers]: Don’t do airdrops. Please do public sales.”

In his mind, public sales actually engender a more authentic community. In other words, it brings in people who understand the project well enough that they’re likely to actually hold some of the tokens they buy to use in the future, instead of just dumping them on price rises.

Schmidt tends to agree, but hedges saying:

“It’s very early to see how this trend will result, but I do believe you need the actual users to have access to the tokens.”

Balloons photo via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Crypto Escapes Scrutiny at Annual China Investor Event

Cryptocurrencies were not brought up for criticism at an annual Chinese consumer protection event, despite rumors to the effect.

Multiple sources had shared rumors with CoinDesk in early March that major policy changes would be announced on Mar. 15 night during a national TV program to curb cryptocurrency activities in China, such as trading and disguised initial coin offerings (ICOs).

The annual show is hosted by China Central Television, the country’s official broadcast mouthpiece, in celebration of the World Consumer Rights Day, during which questionable company conducts are exposed for the sake of public safety.

It is further co-hosted by major Chinese government agencies including the Ministry of Industry and Information Technology, Ministry of Public Security, Supreme People’s Court and Supreme People’s Procuratorate.

The rumors had suggested that the program would expose initial coin offerings that still exist in China, some of which may operate so that certain people with access to ICOs would act as agents to invest on behalf of other Chinese investors.

“Every one was waiting to see what would happen during the night,” one source commented.

Indeed, the rumors appeared to have sparked uncertainty within the cryptocurrency community in China, which had already started circulating a leaked rehearsal list of the program prior to the event, in bid to spread an assurance that no discussion of ICOs was on the list.

In the event, the absence of cryptocurrency or ICO related topics promptly killed the talk of further crypto scrutiny for now, yet it still remains to be seen whether China will move to enforce further regulatory measures on cryptocurrency activities, following its existing oversight efforts.

As reported before, while China’s police force has been expanding its internet monitoring work to cover overseas cryptocurrency activities, regulators have also moved to reportedly block the domestic accounts of cryptocurrency exchanges on social media channels.

CCTV headquarters in Beijing via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

If Crypto Exchanges and ICO Teams Only Had a Brain…

David Silver is the founder of Silver Miller, a plaintiffs’ law firm that represents investors in cases against cryptocurrency exchanges and investment offerings.  The views expressed here are his alone.

You can reach him at DSilver@SilverMillerLaw.com or @dcsilver on Twitter.


While there are many different interpretations of The Wizard of Oz, I see a new one as it relates to the world of cryptocurrency and blockchain.

Dorothy represents the early adopters and believers. The Tin Man represents the Baby Boomer generation, designed for a different era, and slowly getting rusty. The Cowardly Lion represents both the economically depressed working man, weighed down with debt and mortgages, and a monetary system clinging to the industrial economy and hesitant to change.  

And the Scarecrow . . . well, I’ll get to him in a minute.  

But as Dorothy sings, “somewhere over the rainbow” there is a better place, and for us that is the blockchain:

Before you can get there, though, you have to go through the Wizard in Oz. And in this parable, the Wizard is the almighty government. In a slight departure from L. Frank Baum’s tale, this Wizard is every bit as powerful as he appears. But he’s still nothing to be scared of, as long as you’re doing the right thing. 

Because the obstacles that exist in Oz are a fabrication – an unnecessary layer of contradiction. Dorothy and her companions simply needed to look inward, and all the traits they needed to overcome the obstacles holding them back were inside them all along.  

The same could be said of cryptocurrency and blockchain.  

There is nothing that governments, including the U.S. government – whether it be Congress, the SEC, CFTC, FinCEN, or state regulators – can do to stop the growth and development of blockchain technology, provided that blockchain innovators are transparent, act responsibly, and stand accountable for their actions.  

But just like in The Wizard of Oz, you need to take the journey to complete self-discovery and realize those abilities are already within you.  

The regulators are coming, and so too is regulation.  Therefore, to be prepared for the Wizard, one has to understand what regulators are thinking and how to prepare for the next phase of the blockchain.

Scarecrow #1: Exchanges

On March 7, the SEC released a statement on potentially unlawful online platforms for trading digital assets. One group of Scarecrows in the space misinterpreted it badly.

Foolishly clinging to the notion that they are better and smarter than government regulators (if only you had a brain, you’d realize you are not as smart as you think), these Scarecrows concluded the SEC’s statement was limited to exchanges that trade ICO tokens.  

Look at the statement. Read it carefully. The SEC is coming after U.S.-based exchanges without such limitations:

Online trading platforms have become a popular way investors can buy and sell digital assets, including coins and tokens offered and sold in so-called Initial Coin Offerings (“ICOs”).  The platforms often claim to give investors the ability to quickly buy and sell digital assets.  Many of these platforms bring buyers and sellers together in one place and offer investors access to automated systems that display priced orders, execute trades, and provide transaction data. [Emphasis added]

There is only one smart way for exchanges like Coinbase, Kraken, Bittrex, Poloniex, Gemini, and HitBTC to react to this: put your money where your mouth is and demonstrate that you are accountable, transparent, and responsible for what happens on your platform.  

I have my doubts about certain exchanges, and recently, the lawsuits have been piling up. Whether they be the ones filed by my firm or others, the U.S.-based exchanges are being exposed for what they are: startups that were unprepared for the inflow of customers when fear of missing out (FOMO) hit the average user.  

Coinbase CEO Brian Armstrong and Kraken CEO Jesse Powell have both been extensively quoted about their inability to handle the influx of new users. Both are working to right the ship.  

Now that the SEC is knocking on the door, the companies that can demonstrate that their systems are compliant will be the survivors and leaders in the next phase of this revolution.

While some exchanges have been claiming for years that they have a professional quality protocol, 2017 proved that to be false. Those that adapt, adjust, and comply with state and federal regulations will dominate.

In June 2017, when former federal prosecutor Kathryn Haun (whose amazing 2016 TedX talk inspired me to do what I do – protect investors from cryptocurrency-related fraud) joined Coinbase’s board, the company stated that it was the safest, most trusted exchange on which to buy digital currencies, citing a commitment to regulations and compliance.  

The question is whether Coinbase and its brethren have lived up to that standard.  Private lawsuits and government regulators are going to provide those answers in 2018 and beyond.

As recently reported, the SEC has issued a blitzkrieg of subpoenas on exchanges, ICO promoters, attorneys, and other crypto professionals who aroused the wrath of the great and powerful Oz.  The silence from the recipients of those subpoenas, as well as in response to the SEC statement on exchanges, has been deafening.  

Kudos to Bittrex, the fourth largest exchange by profit (almost $2 million a day, according to Bloomberg) for being one of the few to pipe up. The company claimed that as a U.S.-based digital currency exchange, Bittrex uses a robust digital token review process to ensure the tokens it lists are complaint with U.S. law and are not considered securities.

But as in most statements written by corporate lawyers, look for the wiggle room. Bittrex goes on to say that it requires outside counsel for the issuers, not counsel for Bittrex, to determine that the tokens are not securities.  

So when the inevitable happens – and the SEC determines the tokens Bittrex has been selling are unregistered securities that Bittrex was never licensed or legally authorized to sell – Bittrex will blame the companies and their outside lawyers for the issues, not itself.

Scarecrow #2: ICO teams

In a short amount of time, companies who thought they were going with the safer, more conservative route – utilizing the Simple Agreement for Future Tokens (SAFT), which was endorsed by several high profile lawyers and law firms – are now concerned that the SEC has placed a target on their backs.  

Likewise, they are feeling the heat from the U.S. Treasury Department, whose FinCEN division recently declared that any developer that sells convertible virtual currency, including in the form of ICO coins or tokens, in exchange for another type of value that substitutes for currency is a “money transmitter” subject to proper registration with the Treasury Department, anti-money-laundering rules, and other regulatory and licensing requirements — requirements that, if not satisfied, could result in imprisonment.  

In a call-out to the second group of Scarecrows, those who thought they were clever enough to sidestep government regulations by using a SAFT, a highly-regarded lawyer at the Posinelli law firm recently made a concise statement to the crowd at a New York conference: SAFTs “are garbage.”  

While I happen to agree with that assessment, a SAFT by definition isn’t a thing.  Each and every SAFT is unique and written differently.

Just because everyone else did one, however, does not mean it is legal or responsible for attorneys to endorse or ICO promoters to rely upon.  The SEC and IRS will have to examine each and every ICO that utilized the generic SAFT framework and determine the regulatory compliance of each issuer.

And regardless of what the SAFT looks like, the SEC in particular is also going to be looking at the marketing used to promote the ICO and what investors were led to believe to procure their funds.  We all know that in the frothy ICO market of 2017, investors were led to believe they were going to be rich.

The SEC and IRS are also likely looking at how the ICO-enabling lawyers, accountants, and advisors were paid.  Did they accept tokens as a form of payment?

Quite tellingly, many of the law firms that embraced the SAFT have recently taken a step back and acknowledged that the pre-sale of a tokenized service needs to be done in compliance with securities laws even though those lawyers previously advised their clients that was not the case.  While most people do not believe that investors have a target on their backs, everyone else who worked on ICOs that utilized the SAFT should be concerned.

Back to the Wizard of Oz: In the book, Dorothy’s slippers are not ruby red as in the film; they are silver (my favorite color). It turns out that all she needed to get to the comfort and security of home was the help of these silver shoes.  

While achieving compliance with the law may not be as simple as tapping your heels together three times, it’s certainly within the industry’s power. Try it, and you might find there’s no place like home.

“Wizard of Oz” street art image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Royal Bank of Canada Explores Blockchain to Automate Credit Scores

The Royal Bank of Canada may be interested in putting credit scores on a blockchain.

In a patent application released Thursday, the bank outlines a platform built on a blockchain that would automatically generate credit ratings using a borrower’s historical and predictive data. The application as described proposes a system that would utilize more data sources than existing credit rating systems, improving the loan process while creating an immutable record.

Notably, the RBC patent application indicates that it would redesign the credit rating system to provide more transparency for users to understand how their scores are calculated. Further, adding this new level of transparency would help users improve their scores more quickly than is possible at present, according to the filing.

One way the system could work is by using marketplace information to analyze loan offers based on existing credit histories.

The application explains:

“In another aspect there is provided a system for credit and digital identity records with a distributed ledger of a plurality of nodes, each node including at least a computing device, and the distributed ledger having a plurality of blocks, each block comprising identification data linked to a set of identifiers for an individual, transaction data, a timestamp indicating when the block was created, and a hash reference for the distributed ledger.”

If a loan application is submitted, the system would automatically determine what sort of loan and creditor would be appropriate before generating a unique smart contract that contains the terms of the loan.

In other words, the blockchain-based system would automate every step of the credit rating process through a more transparent system, according to the filing.

At press time, it’s unclear if the system would use one single blockchain or multiple networks, or whether RBC would be ready to build the system if the patent is granted.

RBC image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

The Crown Prince of Liechtenstein Wants to Invest in Crypto

There may be a literal “crypto-king” one day in the not-so-distant future. The Crown Prince of Liechtenstein said last Friday that his family is considering investing some of their $5 billion fortune in cryptocurrencies.

Crown Prince Alois Philipp Maria told CNBC that investing in cryptocurrencies can help bolster the royal family’s fortune, which, though it is sizeable now, was much reduced after World War II.

“Particularly this whole new digital economy, it is something to look into more into the future,” he said.

Despite this interest, the Crown Prince went on to say that his family currently lacks “the internal expertise” to invest directly in crypto, and that he was unsure about the future of cryptocurrencies in general, explaining:

“I think we would rather do that or are currently doing that through our general exposure via private equity, venture capital funds where we are investing. Where cryptocurrency will move to, I think that’s very open still. So I think one has to really see that it’s a very risky asset class.”

As for blockchain, Alois is more bullish.

“I think particularly the whole blockchain technology is very interesting … blockchain will change a lot of areas, a lot of businesses in the future.”

He also suggested that his government could potentially utilize the technology, saying that “I think the attractive elements of blockchain technology could be used to make the state more efficient in the way it’s administered.”

The royal family is not the only party in Liechtenstein, a small country situated between Austria and Switzerland best known for its low corporate tax rates, to be interested in cryptocurrencies and blockchain.

Bank Frick, a family-run institution located in the town of Balzers, announced in early March that it now allows clients to invest directly in cryptocurrencies including bitcoin, bitcoin cash, litecoin, XRP and ether. The bank’s announcement cited demand from companies across Europe as the impetus for its decision.

Liechtenstein flag image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.