Ethereum ICO Treasury Withdrawals Hit 2018 High in December

Ethereum ICO Treasury Withdrawals Hit 2018 High in December

Projects which had their initial coin offerings (ICOs)

on the blockchain of Ethereum have quickly liquidated their ETH holdings since June of 2018. Treasury withdrawals hit a year-high in December with more than 420,000 ETH being liquidated.

420,000 Ethereum Sold in December

Upwards of 420,000 ETH has been liquidated from ICO treasuries so far in December, making the month the largest withdrawal period this year according to Diar. The market research firm also reveals some statistics for 2018’s prolonged bear market. In January, the total amount of ETH held in ICO treasuries was 4,623,148. Currently, this number has been reduced to 3,052,168 ETH. The average monthly withdrawal is 2.45 percent while December has seen 12.20 percent of Ether withdrawn from treasuries or a total of 423,816 ETH so far. November was also a month of a massive selloff as over 290,000 ETH were liquidated, led by Tezos’ 82K ETH drawdown.

Sold at Year-Low

Almost half of the total withdrawn amount of ETH in December can be attributed to one single project – Filecoin. It sold off all of its holdings of 216,906 ETH. Another project which liquidated almost all of its ETH holdings was Substratum, withdrawing 8,931 ETH in December. Kyber, on the other hand, withdrew 66,454 ETH and is currently left with a little over 3,000 ETH in the treasury. The reasons for the selloff are undisclosed.

Looking at ETH’s $137.714 -0.01% yearly price chart, however, shows that the third quarter has been particularly unforgiving for the cryptocurrency. In December, it fell down to as little as $83, which is almost 95 percent down from its all-time high values at the beginning of the year.

Article Produced By
Georgi Georgiev

ICO Projects Liquidating Eth at Increasing Rate: Diar Research

ICO Projects Liquidating Eth at Increasing Rate: Diar Research

The liquidation of the initial coin offering (ICO)

Ethereum bonanza of 2017 and early 2018 has reached its highest rate yet, according to the cryptoasset research analytics firm Diar. The collapse in cryptoasset prices since February of 2018 has hit many firms and projects involved in the industry, contributing to the liquidations. Ethereum was the perfectly suited cryptoasset to act as a vehicle for token sales. Its “smart contract” capability allows anyone to create a digital asset on its platform, in whatever quantity and with whatever characteristics and mechanics are desired.

According to data taken from the recent NKB Group report on token sales, $9.97 billion was raised for token sales between December of 2017 and June of 2018, with a large portion of that raised via Ethereum. Dozens of cryptoasset startup projects thus became huge shareholders of Ethereum’s ether tokens.

Diar find that the projects they have been tracking

have sold their ether tokens at an increasing rate beginning in the summer. Between February and June, the amount of ether held by these projects dropped only from roughly 4.4 million to 4.2 million; from June to now, however, the amount of ether held has fallen from 4.2 to about 3.5 million. All told, 24% of Ethereum tokens have been sold off among the holders in question. The value of all those tokens has also fallen dramatically, too, from the mid-$400 area during the summer to just $115 at time of writing.

DigixDAO (DGD) is now the top holder of ether tokens among the projects in question. DigixDAO purports to be a gold-backed stablecoin, with each DGD token representing one gram worth of gold bullion. Diar claim that the Aragon (ANT) project has sunk a large portion its ether tokens into DAI – an algorithmically-backed Ethereum stablecoin pegged to the US dollar – presumably in an effort to take refuge from the collapsing prices hounding the market of late.

Languishing Projects, Increased Professionalization

There have been many notable examples of the 2018 bear market biting, with some projects closing their doors (virtual or otherwise). Perhaps the leading developer group of Ethereum Classic (ETC), ETCDEV, was forced to shut down recently citing lack of funds. And the preeminent Ethereum development company itself, Consensys, recently fired 13% of its staff, in addition to restructuring its management strategy.

But although at least two recent reports on token offerings have concluded a dramatic fall in funds raised through the – perhaps now defunct – ICO method, they also conclude that overall funding from venture capital firms is up and rising – reflecting an increasing professionalization of the industry.

Article Produced By

Colin Muller

Colin studied history and political economy at some pretty good universities. He also did other things. He thinks changing the nature of money will change the nature of humanity.

ICOs Have Sold Another 400,000 ETH in the Past 30 Days, What Went Wrong?

ICOs Have Sold Another 400,000 ETH in the Past 30 Days, What Went Wrong?



ICOs have sold ◊416,000 eth in the past 30 days,

the highest amount within a monthly period since summer. In August they sold just 100,000 eth according to data by Santiment, rising to ◊300,000 in September. Then in November they sold ◊100,000 within a week and now more than ◊400,000 in the past month. Far less than some periods during January-March when ICOs sold ◊630,000 within just one day on the 27th of March 2018 as our general analysis showed earlier this year. Some of that, however, was probably due to eos. Once they run out of eth, it considerably cooled down until seemingly now.

Eth sale by ICOs, December 2018.

Some of the top eth projects are also some of the top eth sellers. SingularDTV being the biggest of them, with Aragon and Kyber not far behind. Status has been selling and selling, but all four still have huge sums of eth, although such sums are now not worth very much. All tracked ICOs still have about 2.9 million eth, which is now worth just $290 million, about as much as one top ICO was worth last year.

It’s worth noting that despite ICOs selling by hundreds of thousands a month, the total combined sum remained the same at circa ◊3.3 million. That however has changed recently, suggesting there aren’t many new ICOs making an entrance. That is probably because SEC has exercised jurisdiction, and after months of megaphone negotiations, it does look like they have now reached a position that can allow this space to work with them. That’s because we kind of got what we wanted as far as general principles are concerned. So to understand where we are, and how to move forward in a reasonable or equitable manner, we need to understand where we were.

The Slockit DAO was eth’s debut in 2016 through a pretty fascinating idea of a Decentralized Autonomous Organization (DAO) that promised an innovative method of addressing some corporate governance problems. In corporate governance, there are some well known and very difficult problems that basically deal with the matter of trust. Shareholders, who are the owners, have to delegate the daily running of the company to managers or executives. That gives the latter great power. As the former are dispersed, their ability to hold the executives to account is weak and limited.

What the concept of the DAO proposed was the idea of the shareholders, or in this case eth holders or it can be token holders, maintaining custody over the funds by sending them to a smart contract that then moves the funds on if/then based rules. So in effect removing trust to some extent. That proposal was new and unique, but how to actually make it work wasn’t an easy question. A common sense and impartial analysis of it led to basically a redesign of the current corporation with some key differences.

Looking at what was innovative and what wasn’t, we had a new way of pooling funds through a method which allowed those who pooled the funds to still have custody over them and to have a binding say over how they are spent in a generally non-playable manner. The only real innovation here was that instead of handing over the funds to directors to manage or mismanage them, you hand over the funds to an inanimate entity – to the smart contract – which is answerable only to the shareholders through code based rules on voting outcomes on whether to move or not x amount to x.

That small difference was and remains very radical because it effectively eliminated or minimized the opportunity for the management class to abscond or misbehave. They were effectively turned into contractual workers, fireable at will, so placing the shareholder in charge. It was however a limited improvement. You still needed the management class. The workers. The accountants, so on. The shareholders were basically made the CEO or the directors, but how now to really make them do that function was the question.

We never got to the answer. The obvious starting point was to have professionals bid for professional roles with the main professional here being some sort of HR personnel that looks and analyzes things, puts up reports, with shareholders bothered only occasionally when a decision needs to be made, somewhat the same as CEOs who are there mainly for direction or to choose a path when there are crossroads. You can see the problem. What if the HR person doesn’t deliver, or is rubbish at it, or whatever report is misleading, or the professional misbehaves? Well you fire them by shareholders not voting to renew their contract, thus not releasing new funds, same as CEOs or executives currently keep them in check.

Does that work? Reality intervened so we didn’t get to experimentally find out the answer. A bug in the Slockit smart contract was exploited. The idea of shareholders having custody now needed a qualifier of: if some smart kid doesn’t take custody due to some bug. If something goes wrong who is accountable – Jay Clayton, the current SEC chairman, recently said – and if the answer is no one, well it better not go wrong. Was there an audit of the Slockit smart contract? Should have there been a cap considering it was so new and thus bugs were to be expected? Did they mislead, firstly by calling it the DAO, so tainting the whole concept?

What’s gone has gone and as stated this was all very new. A toddler learning to walk is expected to fall and quite often. There were mistakes of course, but understandable and easily forgivable. SEC, however, turned around during summer last year to say the Slockit DAO was a security, but no liability for the Slockit DAO devs. Clayton has now revealed that he, and more widely SEC, had no clue about what was going on during summer 2017. They were sort of being introduced to this new world. So we don’t think that report has standing as far as the Howey test of what is a security is concerned.

That requires an investment of money in an enterprise. Where Slockit was concerned, there was no investment of money, but a transfer of money to a smart contract. A smart contract of course is not an enterprise, it can be merely a bank vault if designed well like multisig wallets. SEC could, or would have to, say that so far there is no security. It’s a mere pooling of funds, but that pooling of funds was aimed at effectively acting as a Venture Capital (VC) investor. Eth holders who had put money in the smart contracts were to be asked by entrepreneurs to give them some of the funds in order to build whatever. The shareholders would then vote yay or nay.

SEC could turn around and say that although this is raising money from the public through the facility of a smart contract, it is still raising money from the public. There still needs to be some way of holding that entrepreneur to account for delivering. How to do so was subject of much debate, with the obvious one being the giving of small sums subject to delivery, so unlocking funds gradually.

Had that all been tried, we would be in a different place, but as stated that experiment was cut short. Effectively the whole idea was thrown out overnight. There would no longer be a smart contract that gives shareholders pretty direct custody of funds (pending bugs), there would be no binding votes, no incremental release of capital, no DAO and really no innovation where corporate governance is concerned. There would instead be only a plain handing over of money on the promise of building something in a fingers crossed way because now they can abscond, not deliver, and so on.

And some did abscond. Roman Mandeleil, a then trusted and a somewhat prominent member of ethereum’s community, raised quite a lot of money to then only vanish from the scene in a pretense of being ill. Ill with partying on other people’s money. Now obviously no one wants that sort of thing, except for thieves, so ethereans turned against this sort of capital formation as it amounted to a considerable misallocation of limited funds in many cases. They effectively called in SEC, or maybe we did in amplifying their voice. When SEC came, however – and very quickly – we had a situation whereby two worlds were learning about each other.

We of course were quite familiar with this space, but not so much with securities laws. SEC was familiar with securities laws, but not so much with this space. So there probably were things said by both sides that now they might not repeat, but our main concern was whether a token is a caterpillar that can transform into a non-security and whether a start-up can have the ability to raise funds from the public.

We argued for both, and both have been promised. SEC’s Director of Corporate Finance William Hinman, the “good cop,” has now promised to flesh out SEC’s policy towards token ICOs, which is really more of a general policy of say a basement dweller with an innovative idea who wants to raise funds from the public, a slightly more established start-up who might want to raise $20 million, a more established company who might want to raise up to $100 million, and then we get to someone who should have all the lawyers and resources, so it’s kind of outside of our main concern. From an impartial and common sense perspective, which is kind of what all good laws are about, compliance shouldn’t cost someone who wants to raise say $10 million more than 1% of the funds or 2% at most at $200,000.

That’s still quite a lot, and in effect makes VC seed-funding almost mandatory, but while SEC does have a duty to protect investors, it does also have a duty to promote capital formation. The former shouldn’t come at the cost of the latter being impossible where the public is concerned. There needs to be checks, but very, very different ones for $10 million as compared to $1 billion because obviously there are far less investors to be protected in the former. SEC’s chairman has now promised a laddered approach. Congress has asked them to produce a number of studies and reports, so we don’t doubt they genuinely mean it because as times change, the law does need to adapt, or it loses public support and thus it is no longer the law.

Even a start-up that raises $20 million, however, does need to deliver at least yearly figures of revenue, profits, users numbers and so on. Otherwise one can’t judge, on probabilities, whether the investment is worth it as they’d be shooting in the dark. Now for a basement dwelling start-up raising say $5 million, it may be that they can be taken at their word under a signature of oath which places them at risk of criminal liability if they are lying. Some will risk it, of course, but we can’t eliminate risk completely, only minimize it.

Where raised funds are say $50 million, then you need audited accounts. Higher than that, then maybe a best efforts clause and so on. Many projects that have ICO-ed are currently providing effectively no information whatever, even though they should. Some of these projects have raised hundreds of millions, yet there is no accountability. No one has a clue whether they are managing or mismanaging the people’s money. Basically investors are at their mercy.

Obviously that’s the opposite of what was aimed. The idea was to put investors in charge, not make them weaker than they were. So all these ICOs that keep selling hundreds of thousands of eth need to provide accounts. They need to comply with reporting requirements, especially if they have raised more than $20 million. They need to implement some sort of binding input from token holders and so on. Maybe what was, was, and a line can be drawn under it, but the ICO space does need to mature as do SEC’s rules with many details remaining unanswered, which may change in this new year.

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How a simple solution made this Indonesian startup hundred of millions of dollars

How a simple solution made this Indonesian startup hundred of millions of dollars

Access Indonesia is a series by Teoh Minghao,

Tech in Asia’s business development head specializing in market access to Indonesia. He aims to help foreign companies learn more about Indonesia’s tech landscape and strategic partners who can accelerate your growth in the country. When I met Roby Tan, he looks like any other young aspiring entrepreneur. He’s casually dressed in jeans, a traditional Indonesian batik shirt, and a pair of sneakers. At 45, Tan is the founder of two listed companies in the Indonesian Stock Exchange. Mitra Komunikasi Nusantara Tbk PT (MKNT) has a market capitalization worth US$70 million and posted US$443 million in revenue last year. Kioson has US$138 million market cap and logged US$79 million in 2017 revenue.

MKNT’s core business is telecommunications, selling gadgets, phones, top-up vouchers, and networking devices. According to its 2017 annual report, the company has a total of 94 branch offices, 15,000 resellers, and 125,000 retailers. Kioson is a subsidiary of MKNT. It’s an online-to-offline startup, similar to Indonesian e-tailer Kudo. Kioson provides hardware (such as kiosks or tablets) and software products to enable more than 35,000 agents and small and medium-sized enterprises to transact online. These companies have long outgrown the startup status, but I want to highlight Tan’s zero-to-one journey to inspire other entrepreneurs.

Early days

Tan didn’t come from a rich family. His early life started in Makasa, a city in Eastern Sulawesi where his family ran a small store that sold coffee and cloves. His parents sent him to study in Jakarta at the Tarumanagara University, but he didn’t like it. Without their knowledge, he dropped out of school after a month and started his own business, selling computer parts and accessories. He continued to run his small profitable shop for 10 years before he sold it to his brother in 2002 and pursued a new opportunity in the telecommunications industry. Tan got into the telco business because he spotted an opportunity: the sheer market size of 200 million users who were putting up with inefficiencies around pulsa, or phone credits in Indonesia.

Pulsa is a necessity, like rice. Every Indonesian needs it,” he says.

Tan admits that when started out in 2003, he was a newbie who didn’t have a clear idea of how he could contribute to the industry. As a result, he only sold phone credits in his startup’s first year while learning about the market and its challenges. In that same year, Indonesia had 13 telcos issuing their own phone credit vouchers. Phone credits were sold via printed scratch cards of various denominations: US$1, US$2, US$5, US$10, and so on. All vouchers were produced in Jakarta and shipped to more than 98 cities across Indonesia. To make sure they had enough stocks, distributors of phone credits need large capital to buy the various denominations from all 13 telcos. And even if they had the money, they often experienced supply shortages.

A simple solution

Tan and his partners came up with a simple solution. They spent US$1,300 to buy 100 vouchers of different denominations from all the country’s telcos, scratched all the cards, and put the phone credit redemption codes into a spreadsheet. Next, they built a server so that distributors can send a text message to it to request for credit. The server automatically sent the redemption code after it verified that the distributor had enough deposit with MKNT.

Using this system and their position as the first mover in the market, Tan’s team of 10 was able to recruit 4,000 sub-dealers across major cities in Indonesia. Within a year, they were managing more than 60,000 resellers. So how does this solution work? A reseller sells a US$1 phone credit at US$1.20 to end users, and this profit is shared among the resellers, sub-dealers, and MKNT. Tan also highlighted that he is happy that not only is MKNT doing well, but it also enables many poor owners of small shops and even car-park attendants to make significant income.

“I remember one of our sub-dealers was a rombong rokok (a one-man roadside pushcart vendor selling cigarette sticks) who barely earned US$1 per day. He came in as a sub-dealer very early on and recruited many resellers under him. Within a few years, he was able to buy a house and cars, and started his own happy family,” shares Tan.

I asked Tan if he had any advice for entrepreneurs.

He says, “The five people you hang out with will determine who you are, how you think, and eventually, what you will achieve. So make sure you find yourself a good circle of friends. Also, prayers and meditation help. They give you the right state of mind, making you prepared for daily challenges. Be positive every day.” If you’re keen to learn more about the tech business environment in Indonesia and expand there, go on a chat with Minghao here. If you’re from an Indonesian company that wants to support and partner with incoming foreign companies, please fill in the form here.

Article Produced By

Minghao Teoh

About me: Entrepreneurial, adventurous, fun-loving, spent 4 years in Indonesia, hustler, love sports, enjoy competition, Arsenal fan since 18, into crypto, tech recruitment

ICOs: One Year Later

ICOs: One Year Later

With the sale of digital coins,

start-ups have taken many billions of dollars of capital last year. For the financiers, however, that has by no means paid off according to a study.

In August 2018, Digipulse declared himself a victim of a hypeship, which it was co-fired with. At the end of 2017, the start-up acquired approximately $25 million in an Initial Coin Offering (ICO) through Ethereum blockchain platform to build a secure digital asset inheritance service. But other ICOs were in demand at that time, so the price of Ethereum units shot up. This, in turn, meant that the use of the network became too expensive for Digipulse. So the young company was radically re-thinking: Instead of storing it in a blockchain, data is now classically stored on cloud servers, and those who want to use the service can only pay in dollars instead of using crypto-money. So you can confidently consider the Blockchain plans of Digipulse as failed.

Higher risks with ICOs

Nevertheless, the company is one of the positive exceptions in the ICOs of 2017, because after all, it still exists and has developed a specific product. The majority, on the other hand, sees things differently: The audit firm looked at the 110 largest ICOs in 2017 and found that 71 percent of them had neither a finished product nor a prototype until October 2018.

Also, the value of the digital coins they issue was well below their first market price in the vast majority of cases?—?here Digipulse is no exception. Anyone who would have invested in a portfolio of the examined ICO coins on January 1st, 2018, would have recorded a loss of 66 percent

until October.

“ICO-funded companies seem to be at higher risk due to a number of factors,” the EY experts wrote.

Researchers at Boston College had calculated this summer that investing in ICOs on average yield high returns. But this consideration covered only a short period. As things stand now, the more experience with ICOs, the more disillusionment it gets.

Up and down again

In keeping with this, the ICO hype?—?along with the price losses in most cryptocurrencies?—?seems to be gradually slowing down. Although in the third quarter of 2018 with ICOs still added about 2.4 billion dollars. However, that was only half as much as in the previous quarter and only about a fifth of the volume in the first quarter, which had been at nearly $11.5 billion. In fact, the numbers found by EY are not as bad as they might seem at first sight. 71 percent without a product or prototypes, in turn, means that at least 29 percent of ICOs have already implemented their plans.

Alex Lielacher of the crypto-market research firm Brave New Coin refers to this point. He compares ICOs with “seed funding,” the first start-up financing by venture capitalists?—?in this phase, normal start-ups usually have to offer only speculation and theoretical considerations.

Not unlike other startups

While the number of seed-funded projects in the US has grown rapidly since 2009, there has been little increase in follow-on financing. For Lielacher this shows how difficult it is not just for ICO-funded companies to get from the start-up phase to a marketable product. He points out that according to a rule of thumb from the venture capital industry, around 90 percent of all start-ups financed by it fail. Against this background, the previous success rate of the ICOs examined by EY is no longer so frightening.

The EY experts also point out that many companies have failed in previous technical revolutions. And for those who fared better, it took a while for them to mature enough to be considered an investment for a wide range of investors. In the meantime, according to their forecast, interest in ICO will probably shift from private investors to professionals “who know what downside risks exist and can handle them”.

Article Produced By
Marko Vidrih

Marko Vidrih
I love writing, and that is why I do it. A passion for not only providing the information but for helping people understand.

Does the Fall of $158M Crypto ICO Show Necessity of Strict Regulation?

Does the Fall of $158M Crypto ICO Show Necessity of Strict Regulation?


Recently, Sirin Labs, an initial coin offering (ICO) project that raised $158 million

during the bull market of 2017, made the headlines for its controversial pivot from a hardware-based business model to supplying software to mobile phone manufacturers. According to a report released by Bloomberg, nearly a year since the ICO, the company has not been able to generate any profit and its mobile phone called “Finney” was met with underwhelming demand from the market. The project is now facing a serious funding crunch and its capital is set to run out within 6 to 12 months.

Is Strict Regulation Required?

Last year, the project secured a mega-round from investors in the public cryptocurrency market to develop a mobile phone that uses cryptocurrencies as its native currency and allows users to trade and utilize digital assets. The vague business model of the company set out to compete against giants like Samsung, Apple, and Huawei in a highly competitive market.

At $999, the pricing of the mobile phone of Sirin Labs is right up there with Samsung’s Galaxy series and some of Huawei’s latest mobile phones that are considered to have the best specifications in the mobile phone market. Sirin Labs responded to the Bloomberg report stating that the Google Pixel camera module budget cost around $200 million, implying that the budget was not enough to develop a proper mobile phone.

However, the company could have adjusted to the initial capital it raised during its ICO and determined that the integration of cryptocurrencies is simply not enough to compete in the mobile phone market. The company’s entire business model can also be at risk of becoming redundant if a major mobile phone maker directly integrates cryptocurrencies into its models, and HTC has actually done it last month.

The company said:

“SIRIN LABS raised a little over 200,000 Ether, which is currently approximately $16m. We managed our risk efficiently by converting enough Ether to develop an amazing phone (for example, the Google Pixel camera module budget cost around $200 million to develop). I believe we have enough money to make SIRIN LABS a profitable company, even in today’s market, even though our task is more challenging these days, unfortunately.”

Individual investors, given the state of the market in 2017 wherein the valuation of every cryptocurrency and ICO project was rising through the roof, put in a substantial amount of money in projects like Sirin Labs that established vague and unrealistic business models. Even with the pivot, if it intends to provide software to mobile phone manufacturers, then it is competing with Android and Google, which supplies every major mobile phone brand in the market.

ICOs are struggling to find relevance in the market and the problem that Sirin Labs is currently dealing with is not exclusive to the project. Large-scale companies like ConsenSys have realigned their vision and long-term strategy to focus on delivering products that can realistically be adopted by the mainstream.

ICO Regulation

Regulation cannot force investors to make more intelligent investment decisions, as investors lose out in strictly regulated markets like the stock and real estate markets. But, in some regions like Japan and South Korea, the government has started to restrict ICOs to institutional and accredited investors that have the means to properly evaluate the vision, business model, and scope of a project before engaging in a large funding round.

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Blockchain News

French Firm Becomes Europe’s First Regulated Crypto Asset Manager Funded by an ICO

French Firm Becomes Europe’s First Regulated Crypto Asset Manager Funded by an ICO

France has one of the toughest regulatory environments in Europe

and the world generally when it comes to finance and specifically cryptocurrency. The country has in recent times taken a few cursory steps toward becoming a hub of ICO activity, but strict enforcement of crypto regulations is the cost of doing business in a well-connected financial hub like Paris.

Napoleon Group Gets Green Light from AMF

Napoleon Group, which is backed by BNP Paribas bankers Jean-Charles Dudek and Stephane Ifrah, and private equity investor Arnaud Dartois, used the ICO funding model about 9 months ago to raise about 10 million euros by issuing around just almost 30 million NPX utility tokens, which are used for access to trading bots and quantitative strategies on the platform. One only needs a single token to access the platform. According to the firm, they are the first to overcome all the regulatory hurdles in French law and acquired approval to offer managed cryptocurrency assets to institutional traders everywhere. This is big news for France and Europe more generally.

Individuals can already benefit from the quantitative strategies available on the platform for bitcoin and ether, as well as the main global stock market indices. The first investment vehicles are expected to be launched in the first half of 2019. The group consists of three entities: Napoleon Capital, Napoleon AM, and Napoleon Index, set to launch next year, which will be another first, in that it will be a Benchmark Regulated-registered blockchain index publisher and administrator, which means they are future-proofed for Eurozone regulations set to be fully enforced around the bend in 2020.

Regulation is important, whether those in the crypto space like it or not. Attracting real capital and institutional wealth has been a long process for the crypto space. People don’t want to transact in a market where they can be regulated out of existence at any minute, so regulations that are clearly defined put them back in their comfort zone. France is still outlining its whole crypto framework, but one thing that is clear is that those who profit from cryptocurrencies in France will be paying a flat tax like any other asset, which is, according to co-founder and COO Arnaud Dartois, “the maximum that could have been done in France. It’s not enough. It’s not competitive in regards to what is done in other countries, but it is the best we could hope for at this time.”

As they say in their most recent press release:

“The AMF’s decision validates the Napoleon Group’s approach from the outset: to comply with the strictest financial standards and to rely on regulation to meet the needs of institutional investors. The Group has always believed in the need to regulate the crypto and blockchain industry in order to accelerate its adoption and has participated in numerous meetings and workshops with both public and private players over the last quarters.”

Proof of Performance

Albert Bergonzo/Wikimedia Commons Napoleon has actively participated the development of the ICO-friendly regulations that France is working on, having discussed the regulatory environment at length with the powers that be for over a year, as Dartois explained to this reporter in

an interview Friday.

“Actually, we have been in touch with the French regulator AMF for over a year, and we have done some lobbying to explain to them the importance to be very proactive on crypto and blockchain, and the hold that France can have to lead it. […] Tokenization of assets will be the next big wave, and they have to give the ecosystem, the framework, to seize this opportunity. And they have done it in a quite nice way, meaning they don’t have a very fixed or constrained framework, but something that is very light – they have a very flexible approach to that. It is understood that this is a huge opportunity for France and they have done a nice job.”

Napoleon’s primary market will be institutional investors and traders who have money in France and would like to gain exposure to crypto markets. What they have done is not easily done, and the association with former BNB Paribas banker Jean-Charles Dudek likely didn’t hurt.

Next year, they intend to launch Napoleon Index, which which requires the latest European regulatory approval under the BMR directive. Dartois says the index product will “enable anyone to prove the performance of any benchmark calculated and administrated by Napoleon Index via a public blockchain.” The result is that users can confirmed that the value of any algorithm or index are legitimate, after a requisite period of obfuscation data. The firm calls this feature “proof of performance.” Napoleon Index is scheduled to launch next year after approval is finalized. Dartois said it is currently operational, but just hasn’t received full regulatory approval yet.

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International Cooperation ‘Critical’ to Bringing Illegal ICOs to Justice: SEC

International Cooperation ‘Critical’ to Bringing Illegal ICOs to Justice: SEC


International cooperation is essential for eradicating ICO fraud,

said Steven Peikin, co-director of the Securities and Exchange Commission’s enforcement division. Peikin made the remarks during a December 3 speech at Harvard Law School’s Program on International Financial Systems, where he discussed the astonishing growth of the ICO market. “The sponsors of ICOs are, in many instances, located outside the United States,” Peikin said. “And international cooperation is critical to our ability to investigate and, where appropriate, recommend that the Commission bring enforcement action.”

ICOs Have Spiked 22,000% Since 2016

Peikin noted that the ICO market has “exploded from a mere concept to a phenomenon” in just a few short years. In 2016, ICOs raised less than $100 million. In 2018, that figure skyrocketed to more than $22 billion — a spike of 22,000%. With that rapid growth has come a massive increase in fraudulent activity. Complicating matters for regulators is that the money raised in initial coin offerings often comes from investors both inside and outside the United States.

Peikin noted that the novelty of ICOs — coupled with the excitement surrounding blockchain technology — makes them an alluring vehicle for investors. This exuberance can sometimes blind them to the risks associated with this nascent asset class, he warned.

Peikin: ‘Some ICOs are Outright Frauds’

“The growth in the ICO market can obscure the fact that these offerings are often high-risk investments,” Peikin said. “The issuers may lack established track records. They may not have viable products, business models, or the capacity for safeguarding digital currencies from theft by hackers. And some of the offerings can be simply outright frauds.”

Steven Peikin then alluded to the example of PlexCoin founder Dominic Lacroix, a Canadian citizen who fleeced as much as $15 million from thousands of US investors for his sham ICO by promising a 13-fold profit in less than a month. The SEC learned from Canadian authorities that Lacroix had a long history of running similar financial scams in Quebec.

In May 2018, US and Canadian regulators launched over 70 investigations into cryptocurrency scams and fraudulent initial coin offerings as part of a wide-ranging crackdown called “Operation Crypto Sweep". As CCN reported, the North American Securities Administrators Association sent cease-and-desist letters to operators of sham crypto companies in more than 40 jurisdictions across the United States and Canada.

Operation Crypto Sweep Targets Scams

Operation Crypto Sweep came shortly after a finding that fraud was alarmingly widespread among crypto investment promoters. Securities attorneys have also warned celebrities who endorse ICOs that they could be sued for aiding and abetting fraud if they promote sham crypto products. Last week, that warning turned into a rude awakening for boxing champ Floyd Mayweather and music producer DJ Khaled, when they were fined a combined $767,500 by the SEC for illegally promoting ICOs.

 These regulatory crackdowns — combined with the current bear market — have led some industry insiders to declare that the ICO market is dead.“The ICO market is dead — over,” said Barry Silbert, founder of crypto investment fund Digital Currency Group. “You now have the lack of demand from ICOs. And you have all the sponsors of the ICOs who raised a bunch of bitcoin [and ether] that are now starting to sell that.”Even though he believes that ICO mania is over, Silbert remains bullish about the future of the cryptocurrency industry, and he called the current market downturn an “awkward transition” that will pass

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ICO News


Even After $30 Billion Invested Most ICOs Are Doomed

Even After $30 Billion Invested Most ICOs Are Doomed

In the course of recent years, initial coin offering (ICO) ventures

in the crypto market have raised harvested more than $30 billion. However, most ICO projects have little to display, particularly relating to end-user development, blockchain adoption, and predominantly, general user activity on decentralized frameworks.

5 ICOs that have delivered

A small number of tokens have exhibited success in substantiating clear vision, growth paths, and credible use cases of blockchain innovation that’s advantageous for users. Binance Coin (BNB), example, which at present operates as the base cryptocurrency of the Binance exchange, will be widely used to process peer-to-peer trades upon the launch of the Binance decentralized exchange (DEX). Additionally, countless merchants have also as of late started to utilize BNB to receive crypto payments.

WePower (WPR) based on the blockchain is a Green Energy Trading Platform and is committed to finding solutions to relevant issues of funds access for energy developers and furthermore coordinate venture access for final consumers. The tokens can be used for long-term investments in addition to earning purposes. The company has a well-developed ICO profile and is currently meeting their milestones and roadmap schedule.

Solve.Care (CC) is rated as the top healthcare platform on the Blockchain by icoSource. Solve.Care boasts 26 years in Healthcare IT and aims to decentralize and ameliorate healthcare administration utilizing blockchain technology. This will improve the care outcome with the help of effective coordination and reduce the enormous global clinical and IT system costs associated with the current healthcare system. The ICO profile meets all technical requirements and is highly rated by experts.

XYO Network (XYO) is building the world’s first people-powered location network built on blockchain technology. the world’s first decentralized location verification system with more than one million Bluetooth and GPS devices already around the world. With the acquisition of GEO, which provides a protocol that allows anyone to easily distribute and verify Proofs of Location in a decentralized network, XYO is poised to help bring the promise and the benefits of blockchain technology to the real world on a massive and global scale in location-reliant trade markets that generate a staggering $11 trillion in activity.

Markethive (MHV) built on the Blockchain has positioned itself to be the world’s first social/marketing platform that offers complete privacy, along with total freedom of speech. With over 200 engineers and a hive of portals, hubs, E-commerce and marketing tools, Markethive’s influence in the sphere of entrepreneurs, business owners, commercial artists will rise to prominence. The system is up and running with Infinity Airdrops about to be executed. This is unprecedented in this industry and with its vision to bring universal income and success to all its members, it is set to be the number one Social/Market Network.

Imminent demise for most

While there are a few coins in the crypto market that represent feasible applications of the blockchain, the vast majority of projects have questionable roadmaps and long-term procedures.

As Uber’s Sam Gellman said:

“After $30 billion invested in the past two years in ICOs there still isn’t a single crypto app with a real user base for anything other than speculating on crypto. The BTC price movement is tough, but the lack of real user base for anything they’re investing in is tougher.”

With regulatory obstructions initiated by the U.S. Securities and Exchange Commission (SEC), the ICO ecosystem will turn out to be considerably more troublesome for both innovators and projects. This week, the U.S. SEC impeded two ICO ventures named AirFox and Paragon, portraying their token sales as unregistered security offerings and requesting the two tokens to refund all

of their investors.

“They have also agreed to compensate investors who purchased tokens in the illegal offerings if an investor elects to make a claim. The registration undertakings are designed to ensure that investors receive the type of information they would have received had these issuers complied with the registration provisions of the Securities Act of 1933 (“Securities Act”) prior to the offer and sale of tokens in their respective ICOs.”

The U.S. SEC affirmed that it supports the blockchain and the employment of newly developing technologies. However, the commission said that market contributors must recognize and abide

by local regulations.

“We wish to emphasize, however, that market participants must still adhere to our well-established and well-functioning federal securities law framework when dealing with technological innovations, regardless of whether the securities are issued in certificated form or using new technologies, such as blockchain.”

The significance of Bear Market

2018 bear market will separate worthy ventures from the fallacious and those that endure will be projects that have a definite vision, direction, zealous user base, and an ambitious model. As the capital in the market drops, speculators who recently put resources in every new venture in the market will become more judicious and it will be a real test for token sales without focused methodologies to interest general society. In time, as investors learn to exact due diligence and the market evolves into a more aggressive area, under-achieving projects will inevitably experience a decline in investment opportunities, user activity, and demand.

Article Produced By
Deborah Williams

I am a freelance writer for the Market Network and crypto/blockchain industry. I’m a strong advocate for technology, progress and freedom of speech and I live for a change.

Japan’s Financial Regulator to Introduce New ICO Regulations/Estonia: Amendments to Anti-Money-Laundering Regulations Will Tighten Crypto Regulation

Japan’s Financial Regulator to Introduce New ICO Regulations

Japan’s financial regulator is set to introduce new Initial Coin Offering (ICO)

regulations to protect investors from fraud, local news outlet Jiji Press reported Dec. 1. According to “informed” sources cited by Jiji, business operators conducting ICOs will be required to register with Japan’s Financial Services Agency (FSA). The agency is reportedly planning to submit bills revising financial instruments, exchanges and payment services laws to the ordinary parliamentary session that starts in January.

This action has been undertaken “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals' investment in ICOs for better protecting them.” A study reported by Cointelegraph this July identified 80 percent of the ICOs conducted in 2017 as scams.

As Cointelegraph Japan reported last month, the FSA Study Group on Virtual Currency Exchange industry conducted its tenth meeting to discuss ICOs. The tokens emitted during ICOs where classified into three categories: virtual currencies without issuer, virtual currencies with issuer and tokens with issuers that are also obliged to distribute revenues. According to the report, the first and second token classifications are subject to settlement regulation such as the Financial Instruments and Exchange Act. The third of ICO tokens is subject to investment regulations like the Financial Instruments and Exchange Act.

Estonia: Amendments to Anti-Money-Laundering Regulations Will Tighten Crypto Regulation

The Estonian Ministry of Finance will shortly add amendments

to a recently-passed financial bill that are meant to “tighten” crypto-related regulation, Estonian financial newspaper Äripäev reports Nov. 28. According to the article, a new version of the Anti-Money-Laundering (AML) and Terrorist Financing Prevention Act came into force this week in Estonia, conforming legislation to the EU’s so-called “Fourth Money Laundering Prevention Directive.”

The regulation introduced this week reportedly introduces “virtual currency exchange service providers” and “virtual currency payment service providers,” while before there only was “alternative means of payment service provider.” Still, the Financial Supervision Authority (FI) has since announced that cryptocurrencies and the companies offering crypto-related services introduce money laundering risks, which is reportedly the reason for the new amendments, according to Äripäev.

As Cointelegraph reported, Estonia has rolled back its plans to release Estcoin, a national digital currency, after the President of the European Central Bank Mario Draghi criticized the initiative. Canada is also looking towards more regulation to prevent crypto from being used for money laundering, as the Canadian House Finance Committee recommended during its review of the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA) in mid-November.

Article Produced By
Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.