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U.S. Justice Department Is Putting Together a “Comprehensive Strategy” for Cryptocurrency

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The U.S. Justice Department will take the lead on drafting up a “comprehensive strategy” for cryptocurrencies, according to Deputy Attorney General Rod Rosenstein. But the path forward won’t be easy as regulators play catch up to dark web criminals using cryptocurrencies to launder money.

Comprehensive Strategy

Rosenstein expressed the DOJ’s position at the Financial Services Roundtable in Washington over the weekend, where the subject of cryptocurrency was brought up during the question-and-answer period.

Cryptocurrency “is a new challenge” because it does not “flow through the traditional financial system,” Rosenstein said. Magnifying the issue is the encryption techniques cryptocurrencies employ to obscure the origin of the funds. Depending on which coin you use, tracing where the money came from is extremely difficult.

“What we’re working on now with our cyber crime task force is a working on a comprehensive strategy to deal with that,” he added.

The task force will be made up of representatives from several law enforcement agencies, including the FBI and Drug Enforcement Agency.

Although government agencies appear to be ramping up their fight against crypto-based cyber crime, Rosenstein urged banks to step up their anti-money laundering efforts.

Rosenstein, a 30-year veteran of the DOJ, also brought attention to the evolving threat of cyber crime, and urged consumers to use several types of identification when making purchases online.

Strategy Does Not Equal Regulation

It remains unclear whether this new strategy will lead to new market regulations in the future. Earlier this month, a top White House official indicated that the Trump administration was no closer to adopting a comprehensive plan for regulating digital currencies.

White House cyber security coordinator Rob Joyce said regulators must first wrap their heads around cryptocurrency before they decide to regulate it. In his view, this could be a long ways off.

“I think we’re still absolutely studying and understanding what the good ideas and bad ideas in that space are,” Joyce told CNBC at the Munch Security Conference in Germany. “So, I don’t think it’s close.”

U.S. commodity and securities regulators have a limited mandate to regulate cryptocurrencies. The Commodity Futures Trading Commission (CFTC) has investigative powers, but no jurisdiction over domestic exchanges, which operate at the state level. Meanwhile, the Securities and Exchange Commission (SEC) has taken special interest in ICOs, but has made no mention of overarching regulation for the digital currency class.

Criminals Favor Cryptocurrency

Criminals have been quick to embrace the enhanced privacy features offered by cryptocurrencies. According to a recent report, digital currencies such as Litecoin, Ethereum and even Dash are growing in prominence on the dark web. Although bitcoin remains the number one cryptocurrency embraced by cyber criminals, Litecoin has experienced a spike in popularity due to better transaction speeds.

So-called privacy coins offer even better masking techniques, with the likes of Zcash and Monero growing in popularity. Both currencies are said to offer more enhanced privacy and encryption features.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 699 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Altcoins

EOS Price Analysis: Cardano Founder Charles Hoskinson Warns of Regulatory Action Against EOS

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  • Charles Hoskinson projects some form of action from the SEC on EOS.
  • EOS/USD enjoys a relief rally on Wednesday, as price moves further north following recent bounce.

The EOS price hasn’t done much but decline of late. Back in August, EOS/USD entered into a very stubborn narrowing range. The price had been confined within this mode of trading right up until November. The range was seen from the $6 territory down $4 area. On the 19th November, EOS/USD bears had finally pushed for a breakout to the downside, from this mentioned range-block. Following this fall, the price plummeted over 60%, over the course of 3 weeks.

Cardano Founder Hoskinson Expresses EOS Regulatory Concerns

The Cardano (ADA) founder, Charles Hoskinson, has beliefs that EOS chief developer of the network is likely to face strong action from regulatory bodies. The SEC would be a potential regulator that investigates their $4bln ICO, as he has described as “egregious.”

Speaking at a press conference in Edinburgh, Charles Hoskinson has made a projection that the Securities and Exchange Commission will look at taking firm measures against Block.One. He believes that this would be done due to the way it had run and hosted the EOS ICO.  Hoskinson further detailed how the EOS token sale sits within the remit of the regulators for them to review the potential for harm of retail investors in the United States.

Charles Hoskinson Anticipating SEC Action on EOS

Hoskinson predicted that the SEC will likely bring punitive measures against Block.One for the way it ran the EOS Initial Coin Offering. The IOHK leader explained that EOS’ token sale falls well within the regulator’s remit to take action against any financial activity which harms US retail investors.

There were several fundamental issues with the EOS ICO, which clearly raise red flags, from Hoskinson’s view. He expressed for particular focus on the amount they had raised over the course of a year, in addition to their “utter lack of respect” for investors. Hoskinson said, the SEC “needed” to take action.

Technical Review – EOS/USD

EOS/USD daily chart

Most recently, the price has managed to stabilize, which could be due to sellers exhaustion. A bounce was seen on 7th December, after falling to a low of around $1.55. The bulls are attempting to make a convincing push back into the $2 territory. Demand in the near-term should now be observed from that recent low, $1.55 up to $1.80.

It is interesting to note the area of which EOS/USD received some comfort on 7th December (this is a known acting support). Back in November 2017 during the big bull run, the price consolidated within the mentioned demand zone for a brief period. This came before continuing its strong move to the north.

Downside Observations

EOS/USD daily chart

Should the near-term area of support fail to hold, then there could be some devastating moves to the downside. A breach of the $1 mark could very well be seen. The next major demand area will be within the depths of $0.90 region. EOS/USD had last traded down here again within the early part of Nov 2017 bull run.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 85 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Bitcoin

Bitcoin ETF Watch: VanEck, SolidX and CBOE Met With SEC on Monday

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Backers of a highly-touted bitcoin exchange-traded fund (ETF) application met with U.S. regulators last week to present a new case for why their proposed product should be approved. The contents of the meeting, which were published on the Security and Exchange Commission’s (SEC) website Wednesday, gave new reasons why the regulator should approve a specific rule change that would pave the way for the first crypto-backed fund to be listed.

Bitcoin Market Ready for ETF, Proponents Say

According to the SEC’s memorandum, the Office of Market Supervision met with members of VanEck, SolidX and CBOE on Monday. Rather than focus on regulation, the ETF backers argued that the bitcoin market is mature enough to list an ETF. The proponents also listed several examples of similar products that have been launched for commodities like gold and crude oil.

“Similar to commodity futures, the spot and futures prices [of bitcoin] are tightly linked,” the proponents argued, adding that “this is evidence of a well-functioning capital market.”

The proponents also urged the SEC to remain consistent in its definition of “significant markets,” arguing that bitcoin futures “is a significant, regulated market” when compared to the “dry bulk shipping market” that has already received regulatory approval for ETFs. The SEC has stated repeatedly that the bitcoin market lacks the significance and scale to protect investors against manipulation. VanEck and SolidX have long maintained that the bitcoin market is less susceptible to manipulation.

The meeting followed a closed-door gathering in late October that VanEck claimed had resolved issues regulators had identified in their previous disapproval orders. As Hacked reported, dozens of bitcoin ETF applications have been rejected outright by the securities regulator over concerns of market manipulation and investor safety.

Bitcoin ETF Unlikely Anytime Soon

Despite repeated efforts to convince U.S. regulators of the merits of a bitcoin ETF, the road to approval remains undetermined. That view was echoed recently by SEC Chairman Jay Clayton, who said the market must undergo important changes before an ETF becomes likely.

“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable,” Clayton said during last week’s annual Consensus Invest conference in New York, according to CNBC.

Clayton said venues like the New York Stock Exchange and Nasdaq have “surveillance” mechanisms that can prevent manipulation on the exchanges. However, “those kinds of safeguards do not exist currently in all the exchange venues where digital currencies trade.”

The SEC has yet to reach a final verdict on the VanEck SolidX Bitcoin Trust. At last check, a decision was expected later this month, though the process could get dragged out until February, according to industry sources.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 699 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Interviews

GDPR “helps transparency” and “honesty”: Brendan Eich, Rafal Szymanski and Sam Kim on Digital Advertising in 2018

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When thinking of industries which could potentially benefit from decentralization and distributed ledger technology, digital advertising and marketing may not be the first to come to mind.

When looking at a list created for Forbes by Bernard Marr entitled ‘Here Are 10 Industries Blockchain Is Likely To Disrupt’ published July 2018, for example, these sectors didn’t even feature.

Despite this, there have been some prominent examples of blockchain based solutions that focus on the space. Both in the form of currently released tokens, as well as forthcoming projects and ICOs.

1. Brendan Eich, Founder of Basic Attention Token (BAT)

Basic Attention Token (or ‘BAT’) has been the subject of a large volume of press since its launch last year for a myriad of reasons, not least due to the success of the coin itself and its ICO. BAT has recently suffered like the rest of the cryptocurrency market, and yet still resides at a respectable 32nd place in the CoinMarketCap ‘top 100’ listings on its homepage.

A large reason for its success can be attributed in part due to the fact that it was created by much of the same team behind Brave: a free, open source web browser which supports mobile platforms iOS and Android. It’s also available on Windows, macOS and Linux.

The Brave browser incorporates ad-blocking software with the intention of reducing unwanted and intrusive marketing. The result is a promised increase in browsing speed, in addition to options for users to anonymously support their favourite websites.

Behind and within both teams sits Brendan Eich, best known as the creator of renowned and highly popular programming language JavaScript.

In September 2018, Eich wrote a letter to the U.S. Senate Committee on Commerce, Science and Transportation. According to the Brave website the letter, in summary, stated that “the character of GDPR is congruent with the United States’ understanding of privacy,”

More recently, in an interview with German marketing paper Horizont (46/2018, 15th November 2018) Brendan Eich took a shot at one of the most dominant forces in digital advertising at present – Google. In the piece, he stated that:

“All information from which the user’s digital fingerprint could be reconstructed remains on the user’s computer. And we go so far in this strategy that even at Brave we do not want this data… we believe that Google’s ‘Don’t be evil’ must be supplemented by a ‘Cannot be Evil’ policy urgently.”

2. Rafal Szymanski, Founder of EasyVisual and Global Tech Makers

EasyVisual is a mobile advertising network and Global Tech Makers (website under construction) is a company which “actively develops IT products in the B2B and B2C sectors.” We reached out to the founder of these companies, Rafal Szymanski, recently about digital advertising.

Specifically regarding GDPR, Szymanski stated that he believes that it “helps us to create a more transparent and honest market.”. This comes from a perspective of the market as an area which “has rather strict rules for us as people working in digital marketing.”.

Whilst many have seen this legislation as a potential obstacle for blockchain-based businesses in Europe, the words of both Szymanski and Eich echo those of a study performed by a UK university which I covered earlier this month.

He continued:

“Though on one hand, it may seem that now our opportunities are limited, it is not so. The opportunities are limited only for those who do not want to lead a fair game. If you are an honest player, newly applied principles can be viewed as new incentives for looking for new solutions and strategies that will meet the market’s requirements.

“To go forward you should be ready to introduce changes to your business if it is needed. And I don’t think that speaking about digital marketing in such a wide meaning, there is any sense to speak separately about the future of the industry domestically and internationally.”

Regarding new technologies in general and how they may be affecting the industry, Rafal talked about “virtual and augmented reality” and how it “can be used to improve customers’ experience, making ads more interesting for them”.

“AR as well as VR provide us with an opportunity to build interactive forms of advertising which will increase the effectiveness of our work. Though right now these technologies are not widely adopted in marketing and advertising, I hope that in the future it will happen.”

3. Sam Kim, CEO and Co-Founder of Lucidity Tech

Lucidity Tech is an open-source blockchain based protocol for the advertising sector which seeks to become a comprehensive service provider focused on transparency of data usage. According to the official website “the ability to have access to a transparent, clean set of data from across the programmatic supply chain is game-changing.”

The protocol utilises decentralized technology for absolute “accuracy, security and consensus” and like Rafal Szymanski, we reached out to the people behind Lucidity. Subsequently we got to speak directly with CEO and co-founder Sam Kim about his company, blockchain and digital advertising.

Kim “firmly believe[s] that transparency is the most pressing need of the industry today”, falling in line with the ethos of Lucidity at present, and elaborated with the claim that:

“It’s been the most important issue since programmatic advertising started. Advertisers today have to trust that they are getting what they paid for. But it’s very clear that it is not happening today.

“It’s like ordering steak at a restaurant but getting a salmon plate instead. And, they insist you pay for it anyway.”

This is because,

“They are activating their customer data to run CRM campaigns, look-a-like campaigns and use multi-touch attribution to conduct cross platform campaigns. But all of this investment is useless if your vendor decides to cheat you and run the advertisements outside of your desired location.”

The full version of this interview with Sam Kim will be published soon, and will feature content that’s completely exclusive to that you have just read.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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