Category: Cryptocurrency

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Japan-based Liquid Exchange has canceled the sale of Telegram’s Gram tokens and returned funds to customers as the messaging app company remains embroiled in an SEC lawsuit.

The exchange has said that it is acting in compliance with the investor agreement, which states that Telegram’s Open Network (TON) should have been launched by October 31, 2019; otherwise it must initiate the process of returning funds to investors. As a result of the longstanding lawsuit brought against the messaging app by the SEC, an injunction has been brought out to prevent the launch of TON indefinitely.

In a blog post posted earlier today, Liquid said, “The Gram Token Sale on Liquid has been canceled, and all funds that were held in escrow by Liquid have now been returned to Liquid users who participated in the Gram Token Sale. Every Liquid user that submitted a purchase order for Gram tokens via Liquid will receive an email in the coming days with further details.”

Despite being one of the largest early investors, Liquid’s Gram sale is totally unaffiliated to Telegram due to the terms of sale in the original ICO, which state that the reselling of Gram tokens within the first 18 months from the launch of TON is prohibited and could lead to the cancelation of the tokens. Despite this, a secondary market for Gram tokens quickly sprung up, with some investors seeing gains in excess of 400%.

>> Ethereum (ETH) Soars 35% in a Month: What to Expect Now?

Telegram has been fighting a lawsuit with the SEC after the commission alleged that Gram tokens are, in fact, a security, and therefore the US$1.7 billion raised by way of an ICO in early 2018 should have been registered with the commission. Telegram has unequivocally denied all allegations leveled at it; however, it was hit with new evidence this week, which appeared to show that at least two entities invoiced Telegram for a commission from selling Gram tokens in June and July of 2018, several months after its ICO ended.

Telegram is set to return to court with the SEC on February 18 and 19, when more clarity should be provided on the future of TON and Gram tokens.

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Ethereum (ETH) continues to gather pace after an impressive start to the year. The second-largest cryptocurrency by market cap has already risen to a two-month high of $165 after a 13% rally this week. Over the past month, the cryptocurrency has rallied by more than 35% and is showing no signs of slowing down.

Ethereum Price Gain

Price gains have coincided with an uptick in trading volume, affirming renewed investor interest in crypto after a roller coaster 2019. Trading volumes have more than doubled to highs of $17.9 million over the past month.  Ethereum is not the only one experiencing gains in the market. Many other altcoins have also rallied by an average of 5% as bullish sentiments continue to boost the sector.

When it comes to ETH price action, the $155 area is its immediate support level. The bulls, on the other hand, will have to break the $165 resistance zone, if the cryptocurrency is to continue powering high. Above $165, the next hurdle is at the $170–$172 level.

Ethereum Price Catalysts

Gains in trading volume and price stem from a number of factors that continue to work in favor of Ethereum. Growing economic uncertainty in Venezuela has once again continued to fuel demand for cryptocurrencies. Likewise, reports that a cryptocurrency bull run is on the horizon has seen investors start jostling for positions.

>> Bitwise Withdraws Bitcoin ETF Application with SEC

The launch of Ethereum 2.0, often referred to as Serenity, is another development likely to shape Ethereum sentiments and prospects in the market this year. Set to be rolled out in phases, Ethereum 2.0 should bring about Shading, proof of stake, and a new virtual machine, among other things.

Ethereum 2.0 will trigger the proof of work consensus algorithm, which Bitcoin has already integrated. Likewise, the upgrade will bring about Beacon Chain, shard Chains, and State Execution. Ethereum co-founder Vitalik Buterin has already released a block explorer that will support Beacon Chain and track a testnet version.

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Bitwise Asset Management has withdrawn its longstanding Bitcoin ETF application with the SEC, after the proposal was rejected by the commission in October.

Bitwise first filed an application with the US Securities and Exchanges Commission for what would be the first-ever Bitcoin ETF in January of last year, after several other companies had failed with similar proposals. Bitwise’s application was seen as the greatest hope for a Bitcoin ETF given key differentiations between its proposal and ones that had gone before it. The index was intended to take Bitcoin’s value from a variety of crypto exchanges and, therefore, offer a more accurate and precise market value for the coin.

Another important difference was Bitwise’s plan to regulate the ETF by having a trusted third-party bank or company hold its physical Bitcoin. In March, the company released the Bitwise Report on exchange volume, claiming that 95% of Bitcoin trading volume is fabricated. Bitwise used this as an argument for the SEC to accept its ETF proposal. By disregarding the majority of the exchange volume, the firm maintained that price formation for BTC occurred mostly on regulated exchanges, according to Cointelegraph.

However, the proposal has now been rejected after the SEC said it did not meet the necessary legal requirements to prevent market manipulation or other illicit activities. “This is the next step towards our long-term goal of bringing a bitcoin ETF to market, and we plan to refile our application at an appropriate time. We are currently working hard on answering the questions that the SEC raised in its 112-page response to our initial filing,” said Matthew Hougan, Bitwise’s global head of research.

>> Bitcoin Jumps to 2-Month High on CME Futures and Options Boost

The SEC has rejected at least a dozen Bitcoin ETF proposals, with another application from Wilshire Phoenix, which will combine Bitcoin and US Treasury bonds, expected to be ruled on by February 26.

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Bitcoin (BTC) is the subject of increased buying momentum after coming under pressure early in the year. After plummeting to $6,860, the flagship token has bounced back and is currently staring at a 2-month high of $9,000. The 15%+ rally has come at the back of improvements in fundamentals.

Bitcoin Futures Boost BTC

According to Valiendero Digital Assets founder and CIO Christopher Brookins, Bitcoin was oversold in the fourth quarter. With the bottom firmly in, Brookins expects the coin to continue powering high amidst a confluence of fundamentals and technical.

The launch of Bitcoin futures in the mainstream market by the CME Group is a key fundamental development that continues to support Bitcoin’s run on the upside. The move has once again reinvigorated hope that it is only a matter of time before the token finds its way into the mainstream financial sector.

Similarly, Bitcoin Options provide yet another avenue for institutional investors to invest in the cryptocurrency. The options and futures continue to spark excitement in the cryptocurrency market, consequently fueling the buying spree. The fact that the Bitcoin Options has attracted over 5,400 trades since January 7 underscores the strong demand in the market.

JPMorgan Warning

Amidst the price gains, analysts at JPMorgan believe that BTC’s price could pull lower. According to the analysts, the cryptocurrency is still overvalued significantly. The fair value, according to the analysts, is about $5,500. The JPMorgan analysts arrived at the $5,500 intrinsic value on treating Bitcoin as a commodity, consequently looking at its marginal cost of production.

>> CME Bitcoin Options Eclipses Bakkt with a Strong Start

In contrast, Mike McGlone, a senior commodity analyst at Bloomberg Intelligence, believes Bitcoin has what it takes to continue powering high after a roller coaster 2019. According to the analyst, the digital cryptocurrency will continue to rise, given its fixed supply edge at the back of increasing adoption. Bitcoin should also benefit from the fact that it is winning the adoption race as a store of value in the mainstream financial sector.

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CME Group’s Bitcoin options got off to a good start this week with US$2.3 million traded on the first day, eclipsing the slow start made by rival exchange Bakkt.

The Chicago Mercantile Exchange (CME) launched its highly anticipated Bitcoin (BTC) options on Monday, with 55 contracts changing hands on the first day alone. An options contract represents a right, but not an obligation, to purchase one Bitcoin futures contract, which represents 5 BTC or approximately US$2.3 million at its current value.

CME is a direct rival of Bakkt, a crypto trading platform launched by the parent company of the New York Stock Exchange, the Intercontinental Exchange (ICE). Bakkt was one of the most anticipated arrivals in the crypto space in 2019, having been touted as an access point for institutional investors to the world of crypto. However, things didn’t go quite to plan for Bakkt, as trading volumes fell well short of expectations, with just 623 contracts being exchanged in the first week of launch.

“Successful options products require a robust, liquid underlying futures market, our CME Bitcoin futures have rapidly evolved over the last two years to become one of the most liquid, listed bitcoin derivatives products in the world, averaging nearly 6,400 contracts (equivalent to 31,850 bitcoin) traded each day in 2019,” Tim McCourt, managing director at CME Group, wrote in a LinkedIn post.

The strong debut of CME’s options contracts coincides with Bitcoin’s best start to a new year since 2012. On Tuesday, the world’s leading cryptocurrency hit a two-month high of US$8,745, rocketing 8% in just under 24 hours. While the considerable interest in the multiple futures products now available to investors likely played a part in those gains, renowned BTC trader Murad Mahmudov said a combination of price, volume, and open interest in the crypto space are likely to signal a further bull run.

>> Bitcoin SV Soars on Rumors: Will the Real Nakamoto Please Stand Up?

However, a single day of trading is not enough to truly gauge the future performance of CME’s options trading, and the first weeks and months will provide a clearer picture of the state of the new Bitcoin options market.

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Bitcoin SV

One of the most interesting events in the crypto sphere in the New Year has been the strong gains that have been generated by cryptocurrencies like Bitcoin SV (BSV). One pattern that can be discerned from the recent gains in BSV is the fact that it followed one of the two conscientious Bitcoin hard forks.

While most of the other cryptocurrencies traded flat, BSV managed to gain as much as 45% over the course of the past 24 hours. It goes without saying that it has given rise to a lot of speculation with regards to the price action.

Key Drivers

One of the most popular theories that have been put forward by market watchers is that Craig Wright may have gotten hold of the final set of documents that could prove that he was indeed the founder of Bitcoin, Satoshi Nakamoto. The documents in question are known as the Tulip Trust documents, and it has been claimed that Wright is going to submit those documents next week at a court hearing. The court hearing is related to the case between Wright and the late David Kleiman’s estate. Kleiman used to be Wright’s business partner, and this speculation has resulted in a major rally in Bitcoin SV.

This is a crucial development in the case and is particularly important since the judge gave Wright until February 3 to produce the documents. In a court order on January 10, the judge explained, “Given the Defendant’s many inconsistencies and misstatements, the Court questions whether it is remotely plausible that the mysterious ‘bonded courier’ is going to arrive.”

>> Telegram Hit By New SEC Evidence Showing Token Trading After ICO

The possibility of Wright getting his hands on these documents has created a lot of speculation, and much of it is being played out in the Bitcoin SV price action. It remains to be seen what goes on during the court proceedings next week.

Bitcoin SV has soared over 145% since the beginning of the new year.

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The SEC has produced new evidence in its case against Telegram, which shows that the company was engaged in trading Gram tokens several months after its initial coin offering (ICO).

Messaging app Telegram has been embroiled in a lawsuit with the US Securities and Exchanges Commission, which alleges that US$1.7 billion raised from the sale of Gram tokens between January and March 2018 should have been registered with the authority because the tokens constitute a security. Telegram has consistently refuted these claims and published a statement last week to address the ongoing case.

However, the SEC has produced damning new evidence, which shows that at least two entities invoiced Telegram for commission from selling Gram tokens in June and July of 2018, several months after its ICO ended. Investment fund Da Vinci Capital and Gem Limited, a Maltese-based firm, which was included in the Paradise Papers, requested commission of $209,783 and $1.1 million, respectively, for “subsequent sales” of Gram tokens.

According to the invoices presented by the SEC, Da Vinci Capital sold over US$2 million worth of Gram tokens to ITI Funds on June 20, 2018. Gem Limited sold US$8.6 million of Grams to Goliat Solutions and a further US$4.5 million to Space Investments Limited on July 2, 2018.

“These documents undermine Telegram’s claimed affirmative defense that the Offering was exempt under Regulation D. First, Telegram either raised more than the $1.7 billion for which it claimed an exemption, or it did not raise $1.7 billion as of March 29, 2018 and the later funds may have been raised through underwriters,” an SEC filing said. Regulation D is intended to prevent purchasers of tokens from acting as underwriters, meaning they essentially sell securities to the issuer for a commission.

>> Chainlink (LINK) is Outperforming Bitcoin: Here are the Key Drivers

The SEC has successfully sought an injunction against Telegram, which will prevent it from launching its TON blockchain and Gram tokens until the case is resolved. Both parties will return to court on February 18 and 19.

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The crypto space is again back in the news after having had a turbulent period in the second half of 2019 and one of the crypto tokens that has come to attention recently is Chainlink (LINK).

Key Drivers

Some market analysts now believe that this little-known cryptocurrency is actually doing much better than Bitcoin, the biggest cryptocurrency in the world by market cap. At the start of the year, Bitcoin had been in the doldrums but the turmoil in the Middle East due to the assassination of an Iranian general by the United States has turned the tide.

BTC slipped below $6,000 at one point but ever since the strike on January 3, Bitcoin has managed to go on a bull run that has sustained over the past days. That being said, the bull run has slowed down a bit over the past few days. Chainlink is currently the 18th biggest cryptocurrency in the world by market capitalization and the token has made significant gains in 2020 so far. Since the beginning of the year, it has gained as much as 25% and since the start of 2019, it has managed to generate gains to the tune of 1,800%.

That is the sort of performance that should make crypto traders sit up and take notice. There can be no doubt that the gains made by the token are not temporary but a case of sustained gains over a longer period of time. Moreover, it represents greater gains than Bitcoin and Chainlink could come into focus among market participants sooner rather than later.

>> Bitfinex and Tether Lawsuit Revised After Plaintiffs Drop Action

According to experts, the recent rally in Chainlink is apparently linked to the enthusiasm towards cryptocurrencies in China. As everyone knows, China is potentially one of the biggest crypto markets in the world and the possibilities have created a lot of enthusiasm in the crypto space.

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Controversial cryptocurrency exchange Bitfinex and its sister stablecoin issuer Tether have had a lawsuit against them withdrawn by two plaintiffs and re-filed with the addition of a new plaintiff.

The two companies were accused of creating “the largest bubble in human history” in a lawsuit filed in New York in October, which alleged that Bitfinex and Tether manipulated the crypto market out of up to US$1.4 trillion. A second, similar case was then brought against the two companies by Eric Young and Adam Kutz, who claimed that Bitfinex and Tether “monopolized and conspired to monopolize the Bitcoin market,” as well attempting to manipulate the market and making inaccurate claims.

Both cases were built upon longstanding claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a far greater demand for cryptocurrencies than was the reality.

A document filed on Tuesday, January 7, in the US District Court for the Western District of Washington shows that both Young and Kutz agreed to the voluntary dismissal of their case against iFinex, the parent company of Bitfinex and Tether. The suit was refiled the following day with the addition of David Crystal as plaintiff. It is not yet known why Young and Kutz decided to refile the case, and US law states that cases which have been voluntarily dismissed can never be brought to court again if it is dismissed a second time.

Both companies are steadfast in their denial of the accusations, describing the claims thrown at them as “meritless and mercenary.” Stuart Hoegner, general counsel to Bitfinex, said that the refiled case was also baseless and “will be disposed of in due course.”

>> Bitcoin SV (BSV) Jumps Another 28%: Gains 55% So Far in 2020

Tether had emphasized that its coin is backed 1:1 with the US dollar but flip-flopped on this stance in February when under investigation by the Department of Justice, changing its position to say its reserves “from time to time may include other assets.” Tether then made another walk back from this claim in April, when one of its lawyers admitted in court that the USDT was actually only 74% backed by cash or cash equivalents.

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Bitcoin SV

The crypto space has had a bit of a rollercoaster ride over the course of the past year, during which many cryptocurrencies have had their time in the sun, and one of the more notables tokens to considers in this regard is Bitcoin SV (BSV).

Key Drivers

In a development that will come as a major boost for investors in the token, Bitcoin SV has managed to break out into a rally on a day on when the wider market has remained largely stagnant. BSV has been in the middle of a largely sideways trend prior to the breakout.

Earlier on today, Bitcoin SV was trading at $116 a token, but the token experienced a sudden jump to $149, up over 28% for the day. Market watchers are not yet quite sure about the reasons behind the jump, and that has given rise to all kinds of speculation.

For instance, the legal battle between the proponent of BSV and the estate of Craig Wright, who claims to be Satoshi Nakamoto, has been cited as one of the reasons behind the pump. BSV has had an impressive year so far and has gained as much as 55% in 2020.

>> Ethereum Dev Indicted By Grand Jury Over North Korea Appearance

The token has rocketed from the beginning of the year, and experts believe that much of the gains made by BSV are apparently due to the upcoming hard fork that is coming in February. The BSV blockchain is going to have the much anticipated Genesis upgrade on February 4 this year, and it is believed that traders are piling on to the cryptocurrency ahead of this. However, it remains to be seen whether BSV can hold onto the gains in the days leading up to February 4. Crypto traders should keep an eye on Bitcoin SV.

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