Why Crypto Bot Trading Is Choking Mass Adoption

Regulators are not going to help the industry, until it helps itself.

 

To a crypto layperson, hearing about Bitcoin price manipulation via sophisticated yet easy-to-procure trading bots may conjure dime-a-dozen conspiracy theories.

The deeper one delves into the intricacies of this exciting and often treacherous crypto industry though, the more sense such talk makes.

Not only is price manipulation very real and – at a closer glance – quite blatantly obvious, it is yet another major hurdle in the path of regulation, institutional adoption, and by extension: mass adoption.

According to CoinList’s Andy Bromberg, such practices “hurt the market’s reputation and they hurt individual investors”.

How do crypto trading bots work and why do people use them?

Long story short: trading bots are algorithmic auto-traders, capable of opening and closing positions, mimicking the activities of several trading accounts and pulling off a number of other hair-raising stunts that squarely put a nail into the coffin of crypto trading legitimacy, every time they’re executed.

These bots can be programmed to push a number of abusive trading strategies long banned in other markets, such as “wash trading” (the artificial generation of seemingly massive trading volumes, through the simultaneous opening of buy and sell orders) and “spoofing” (the opening of fake orders to generate fake buy- or sell-volumes, thereby pumping or driving down the price of an asset) etc.

The goal of such shenanigans is always to make money at the expense of the ‘honest’ trader.

Price manipulation hurts individuals, and it hurts mass adoption

How price manipulation hurts individual traders is self-explanatory: the mini pump-and-dump schemes resulting from abusive trading activity net profits for the bot users at the expense of regular, well-intentioned traders who believe they’re playing on a level field.

The damage wrought upon the overall direction of the crypto industry by these short-term profit-chasers is truly massive. They de-legitimize the very mechanisms responsible for crypto asset price-discovery, compromising the integrity of the market and prompting regulators to squarely deny ETF proposals, citing these issues.

It’s the reason that the CBOE wouldn’t get anywhere with its ETF proposal – and therefore withdrew it from consideration just minutes before publication of this article.

Can the industry self-regulate and rid itself of this “disease”?

The short answer is yes. The Winklevoss twins are already involved in various efforts and initiativesaimed at self-regulation, and the community as a whole acknowledges the need for some sort of market regulation.

But the real problem is that instead of punishing such activities, exchanges often welcome them as means to pump their own volumes. Indeed, some exchanges are known to readily put bots programmed for abusive trading activity at the disposal of their users.

While all this goes on, crypto enthusiasts over at Reddit entertain themselves by dabbling in a bit of attempted price manipulation of their own: a thread aimed at tricking bots into gleaning positive crypto sentiment off internet chatter was launched, and it took off big time.

Unless of course, the bots upvoted it themselves… oh dear God, Skynet.


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Author: James West
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Abusive crypto taxation in California reminds us why privacy matters

On November 3rd 2018, bitcoinist and crypto influencer Whale Panda took to Twitter to share an interesting Reddit post which tells a compelling story about how crypto assets are taxed. In a nutshell, it’s about a young person who bought cryptocurrencies on Coinbase in early 2017, has watched his portfolio grow exponentially in value, hasn’t sold any of the coins for fiat, but owes the state of California about $400.000 in taxes.

The case should be worrisome and make both regulators and cryptocurrency holders give this entire process a little more thought. Had the young man in our story bought Apple stocks, he wouldn’t have to pay taxes for his investment unless he cashed out. But in the case of cryptocurrencies, he basically has to pay money that he does not have for financial gains that never really materialized.

Similarly, imagine that you bought Egyptian antiques off Craigslist, discovered that their price has skyrocketed within months due to a current trend which made them fashionable, and you were automatically reported to the IRS for just owning them and being worth much more (despite never selling your possessions at an auction). It sounds ridiculous, doesn’t it?

But Coinbase, as an American company which complies to the fiscal laws of the land, was forced by greedy and clueless legislators to send reports on costumers who made investments. To those government officials, it didn’t matter that the cryptocurrencies were never sold for any kind of fiat, they simply wanted to tax according to their poorly informed assumptions.

The most frightening thought isn’t that a young man, who at some point was theoretically worth almost a million dollars in crypto, must pay a sum that he never physically owned. We’re dealing with a situation that can create a dangerous precedent and turn HODLing and crypto trading into an expensive luxury that very few people can actually afford.

The fiscal implications of buying cryptocurrencies from a KYC exchange

In the case of Reddit user Throwaway283921, he must pay taxes for capital gains because he’s done crypto to crypto trades, invested in some ICOs, and constantly sought to maximize his investment. Though the issue appears to be a little vague at first, he didn’t stick to his HODLing and, under the fiscal jurisdiction of the state of California, must pay taxes which are pretty much calculated using the highest prices of the cryptocurrencies he’s owned.

As it turns out, California considers that crypto trades are taxable events. This fact should make us all think about the consequences of starting out on platforms like Coinbase or Robin Hood, then recklessly getting involved in exchanging BTC for ETH or LTC according to your gut feeling on price increase. A lot of newbies receive the recommendation to start out on one of those friendly KYC exchanges, and they aren’t properly instructed on the tax implications of their state (they’re just supposed to know).

In comparison, had he bought their coins from a miner or whale from Local Bitcoins or some kind of crypto retailer, then proceeded to exchange the coins on ShapeShift or some kind of decentralized exchange, then none of this would have occured.

One could argue that owing $400.000 in tax money for an investment which reached $880.000 at its peak is insane. The rate is nearly 50 percent and the reason behind the taxation is vague at best. If the person has never used fiat money in this process and hasn’t withdrawn from the exchange, then they should pay their taxes in the cryptos that they own. That would be a fairer way of dealing with the situation, but then again. the legislators have probably passed the bill as a way of capitalizing on the bull market. His possession of USD was only hypothetical and based on the movements of the market, so it makes no sense to tax in fiat if the young man never owned it.

Unless regulators adjust to fairer practices, it’s better to buy crypto via private or OTC trades

We already have an unfortunate precedent which should serve as food for thought and give us enough of a reason to participate in crypto regulation debates in our communities. It’s absurd to ask for taxes in fiat as long as the cryptocurrencies have never been cashed out. If anything, in the event that the taxman is greedy, we should make sure that the taxation takes place in the same crypto assets that were traded, and the collectors instantly dump them on exchanges to get their fiat (or speculatively HODL themselves).

If HODLing is a taxable event just because you bought 0.1 BTC on Coinbase and had it in your wallet for an entire fiscal year, then this can potentially turn into a luxury that very few people can afford. Let’s assume that a phenomenal bull run happens, and then the price crashes just like in January 2018. Those who did not sell will most likely see the valuation of their assets drop significantly – it would be outrageous and dumb to tax them even if they never traded their assets for fiat, and at the highest price point from the previous bull run.

Legislators and regulators should understand that 1 BTC is still 1 BTC regardless of volatility in relation to fiat, and acknowledge that cryptocurrencies are global currencies. Sure, this is threatening to their national currencies, but so is ignorance (as wealthy people will simply buy Bitcoin to avoid paying taxes). Governments should walk on their pride and start accepting taxes in cryptos, as they would be the fairest in every situation. They can potentially get less fiat after the trade, but at least they get something (as opposed to basically encouraging people to buy Monero and completely dodge taxation).

But in order to push the authorities to stop enacting such greedy and abusive taxation policies, it’s better to just buy your coins from miners or get a job which allows you to get paid in them. Make trades only through decentralized exchanges, avoid exposing your public key so nobody really knows how many coins you own, and add your coins to a regulated exchange only when you want to withdraw fiat. This enables you to pay the fair amount in taxes and retract yourself from the arbitrary application of the law. Hopefully, it will also teach regulators a lesson about how they should deal with cryptos.


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Author: Vlad Costea
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Crypto Faces Global AML Regulations by June 2019, Says Watchdog

The international watchdog focused on anti-money laundering (AML) regulations has said it plans to institute a global framework for cryptocurrency beginning in June next year.

As Reuters reports, the Paris-based Financial Action Task Force (FATF) has taken a significant step forward in the process of regulating the famously unregulated market of digital currencies with its announcement this week.

FATF detailed plans to begin publishing rules that would set a standard for all cryptocurrency transactions, noting that global jurisdictions would be required to enforce certain licensing schemes or compliance checks on exchanges, financial service providers for initial coin offerings (ICO), and potentially digital currency wallet providers.

Marshall Billingslea, FATF’s president, was responsible for setting the early summer date for action next year following discussions this week between officials from 204 global jurisdictions.

The upcoming regulations come with a warning: any non-compliant countries will be put on FATF’s blacklist, meaning they will suffer from restricted access to the global financial system.

A statement released by the watchdog on Friday reads: “there is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism.”

A lack of global cooperation on cryptocurrency regulations until now has led to entirely different approaches being adopted by national governments, bringing uncertainty to crypto firms looking to expand their operations.

Countries have failed to agree on how best to manage the price volatility of the cryptocurrency market, and have been skeptical of wallets’ and exchanges’ inability to protect peoples’ investments on their platforms from hacks and ensuing theft.

During the G20 Summit earlier this year, leaders expressed a desire to expand existing international AML onto the cryptocurrency industry.


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Author: Amelia Trapp
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EU Lawmakers on Crypto Regulation and its “Wicked Problems”

Parliamentary discussions in the European Parliament in Strasbourg earlier this week revealed that EU politicians are still looking for common ground when it comes to the regulation of blockchain and cryptocurrencies.

As reported by Cryptonews.com, the EU is analyzing areas such as smart contracts, initial coin offerings, crypto assets in order to decide whether legislation is needed.
During the recent discussions, advocating for a laissez-faire approach to regulation were Romanian Cristian-Silviu Busoi and French Chistelle Leechavalier. The MEPs believed that blockchain technology must be given time to develop and mature before any decisions are made pertaining to regulation. Busoi, on his end, went as far as saying that regulating the industry now would certainly hamper innovation.

“The future competitiveness and capacity for innovation of European industry could be closely related to the adoption and implementation of distributed ledger technologies. Sectors such as energy, food, health, transport and manufacturing could be significantly reshaped by these emerging technologies,” Busoi said. He also added that, in his opinion, the technology of smart contracts is not mature enough to be considered legally enforceable.

Meanwhile, MEP Eva Kaili has announced “that blockchain has united this House, as all the parties in the Committee on Industry, Research and Energy (ITRE) voted in favour of the resolution under the principle of being technology neutral and innovation friendly in Europe.”

“One of the core messages of our text was to signify that the European Union aspires to become the global leader in the fourth industrial revolution,” she said.
However, MEP Miapetra Kumpula-Natri later stressed that there are “wicked problems” related to the Distributed Ledger Technology (DLT):
“Take for example trust in society.”
“How will DLT increase trust if new financial instruments based on the technology are volatile and not very transparent? Moreover, how do we ensure that core functions of society, such as taxation or prevention of crimes, can still function in a world where data is not centralised?” Kumpula-Natri said.

She added that blockchain technology developers need to answer these questions when developing the technology and applying it, “hopefully destroying some old thinking and models of the way of life today.”
Italian representative Dario Tamburrano, argued that the politicians should not “lose control” of the fledgling technology, and that it will therefore be necessary to pass legislation “in due time.”

Lithuanian representative Antanas Guoga, known as Tony G by poker players, on his end said that politicians will have to “live with” the fact that they may not have “much say” over the development of cryptocurrencies. Actions taken by EU politicians may, in other words, not have much effect on crypto, as these projects can easily move between favourable and unfavourable jurisdictions globally.

In September, the Bank for International Settlements (BIS), sometimes referred to as the “central bank of central banks,” warned that international coordination is the only way to properly regulate the cryptocurrency market, due to the global nature of this new market.
Despite the diverse range of opinions that exists when it comes to crypto regulations among EU politicians, Digital Single

Commissioner Andrus Ansip said he was pleased to see that the EU Commission was engaged with the development of the technology, saying about blockchain that it “cannot be overlooked.”


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Author: Fredrik Vold
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Congress Urged To Step Up Cryptocurrency Legislative Efforts

Stakeholders in the cryptocurrency industry have urged the U.S Congress to step up its legislative efforts or risk seeing the country fall behind in the emerging global cryptocurrency and blockchain technology narrative.

 

Securities Laws Inadequate for Virtual Currency Oversight

Recently, Rep. Warren Davidson (R-Ohio) hosted over fifty digital currency leaders to a roundtable discussion at the Capitol Hill. Other attendees included Andreessen Horowitz, Nasdaq and the U.S. Chamber of Commerce.

One of the top issues discussed was the regulation of cryptocurrency markets. According to CNBC, the chief policy officer at Coinbase, Mike Lempres, said that all the crypto industry wanted was a fair regulation of the virtual currency market. Lempres further stated that the Congress should try new methods of regulation.

Another issue that was brought forward was the application of the Howey Test to cryptocurrencies. The securities law originated from a Supreme Court decision in 1946, which determined if a digital currency was a security or not. SEC boss, Jay Clayton, has, however, stated that there would be no upgrade in standard to favor digital currency.

The crypto group also said that because of unclear regulatory policies, most crypto companies couldn’t tell if their ICOs are regulatory compliant. The industry founders further noted that some of these ICOs should be treated as a commodity.

Moreover, if the government employs stringent regulations or is uncertain, there was going to be an exodus. Most companies will move to friendlier crypto countries, leaving the U.S. behind.

Falling Behind Europe and Asia

 

The United States is at the risk of falling behind its European and Asian counterparts who have strong cryptocurrency regulations. Some of these countries strive for blockchain and cryptocurrency dominance.

Malta, popularly referred to as the “Blockchain Island,” has attracted significant crypto companies to its soil. When Binance faced regulatory issues from Japan, the company moved to Malta, with Prime Minister Joseph Muscat welcoming the cryptocurrency. Other crypto exchanges like BitBay equally announced its move to the Island. The Island approved three cryptocurrency bills back in June.

Apart from Malta, Switzerland is also struggling to become a Blockchain hub. Initially regarded as “the crypto nation,” the country’s status dwindled as its financial institutions were unfriendly towards crypto companies.

Thailand is also favorable towards cryptocurrencies, as the country’s regulatory body approved seven crypto exchanges. Japan’s stance on crypto, however, is firm. But the regulatory agency has stated there are no plans to curb the crypto market.

 

Capitol Hill and Cryptocurrency

There have been various deliberations by U.S. Congressmen regarding cryptocurrency. While some support the digital currency, others outrightly kick against it. One of the opponents of cryptocurrency is Rep. Brad Sherman, who called for the outright ban of Bitcoin mining. Also, Rep. Emanuel Cleaver called for a crypto probe, as it is used for illicit activities.

However, some members of the Capitol Hill favor the advancement of cryptocurrency. Congressman Tom Emmer recently pledged his support for blockchain technology and digital currency.


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Australian Regulators To Increase Monitoring Of Digital Asset Products And ICOs

ASIC says that crypto assets require “increased regulatory monitoring.”

This week, the Australian Securities and Investments Commission (ASIC) released its corporate plan for 2018-2022, which outlined its intent to increase scrutiny of cryptocurrency exchanges and initial coin offerings (ICOs).

ASIC, which regulates and monitors Australia’s financial industry, claimed that, although crypto assets represent a very small portion of global assets, their growth in popularity warrants “increased regulatory monitoring.”

According to the corporate plan, ASIC claims it will continue to examine products related to cryptocurrency and ICOs that pose potential threats to investors because of the “misconduct that is facilitated by or through digital and/or cyber-based mechanisms.”

ASIC plans to fight this kind of misconduct in 2018 and 2019 by “applying the principles for regulating market infrastructure providers to crypto exchanges,” and monitoring “emerging products, such as ICOs, and intervening where there is poor behavior and potential harm to consumers and investors.”

Cryptocurrency exchanges currently operating in Australia are required to adhere to anti-money laundering, counter-terrorism financing, and know-your-customer regulations implemented in April by the Australian TransactionReports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency.

This announcement seems to be the culmination of many debates surrounding the regulation of digital currencies in Australia. In April, ASIC was looking into applying Australian regulations to foreign ICOs that accept funds from Australian investors. By contrast, in October 2017 ETHNews reported that Tony Richards, head of the Payments Policy Department for the Reserve Bank of Australia, stated that he did not believe cryptocurrencies raised any pressing regulatory concerns. Just a few months earlier, the Australian Parliament posted a draft outlining anti-money laundering and counter-terrorism financing regulations on its website.

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Author: NATHAN GRAHAM
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NEW RESEARCH FINDS BACKDOOR ‘CENTRALIZED CONTROL’ IN MANY ICOS

Researchers from the University of Pennsylvania have found that a significant number of ICOs retained centralized control through undisclosed code. 



 

BACKDOOR CENTRALIZATION

The full paper, titled Coin-Operated Capitalism and published on July 18, is an “interdisciplinary effort spanning law, economics, and computer science,” according to University of Pennsylvania Law Professor David Hoffman.

The researchers looked at the top fifty ICOs which raised a total of $2.6 billion USD in revenue with the notional initial market cap of $3.8 billion. “We looked at the top fifty ICOs from 2017 taking into account every white paper, T&C and prospectus, every available piece of code, and every social media post we could get our hands on,” says Hoffman.

One of the biggest takeaways is that many ICOs did not promise that investors will be protected from insider self-dealing. In other words, there was no guarantee that the tokens won’t be subject to pumps and dumps by ‘whale’ traders, insider trading, and other market manipulations.

What’s worse, an even smaller number of projects actually expressed their promises in code. Specifically:

  • of 37 that promised vesting, 80% didn’t code it;
  • of 32 that promised supply restrictions, 25% didn’t code it;
  • of 17 that promised burning, 35% didn’t code it;
  • of 10 with tokens that could be modified (like Bancor), only 4 disclosed that right in English.

Ironically, the study found that investors “didn’t react to the absence of coded governance rules” despite buying into promises of self-regulation, disintermediation, and ‘trustless’ transactions.

Hoffman notes that a substantial portion of ICOs also exaggerated their claims of decentralization as they still required trust and centralized decision-making. He explains:

Surprisingly, in a community known for espousing a technolibertarian belief in the power of ‘trustless trust’ built with carefully designed code, a significant fraction of issuers retained centralized control through previously undisclosed code permitting modification of the entities’ governing structures.

Such ‘modifiabilities’ were found in the Polybius ICO, for example, whose smart contract code “extended well beyond changes to tokenholder voting rules.” Hoffman adds:

So there’s actually a lot of ‘trust’ in this market.

CODE ISN’T LAW

The findings also undermine the idea of “code is law” and self-regulation, at least for the time being.

On one hand, investors must trust the development team to actually build the product they hype in their whitepaper. On the other, they must have faith “that ordinary contract law litigation will back up old-fashioned terms of use, or that the byte code, which essentially no one will or could parse, renders those promises operable.”

It comes as no surprise that blockchain projects so far have a 92 percent failure rate and an average lifespan of just 1.22 years. Meanwhile, 20 percent were found to be scams, according to a recent report.

Though given SEC’s recent statement that “decentralized” cryptocurrencies such as Bitcoin and Ethereum aren’t securities, these findings could help regulators determine which ICOs are unregistered securities, i.e. “centralized” tokens.

The paper concludes:

As smart contracts play increasingly crucial roles in transactional relationships, courts and regulators will invariably be confronted with them in day-to-day practice. Legal actors will perhaps be faced with the task of assessing smart-contract quality to determine whether its producers lived up to duties found under paper-contract or background law.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: ALLEN SCOTT
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US Federal Economic Database Adds Crypto Data, Brings More Legitimacy to the Market

The Federal Reserve Economic Data (FRED) database, a governmental database, is reported to have added four cryptocurrencies to it.



 

FRED Introduces Coinbase Data to Its Database

On June 19th, a FRED publication noted that cryptocurrency data compiled from Coinbase, with data originating from 2014 to the current day, will be added to the U.S-based database, reports Quartz.

The announcement from FRED noted that data will be updated daily, specifically for the prices of Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, or the four cryptocurrencies which Coinbase currently offers.  It is likely that the operators of the database will add more cryptocurrencies in the future, in direct correlation with additions of other cryptocurrencies on Coinbase’s exchange service.

Although this is nothing significant in terms of widespread cryptocurrency adoption, this little nod by an important governmental organization shows how the cryptocurrency industry has gained some form of legitimacy.

The FRED database, maintained by the St. Louis Fed, has become a resource for economists and journalists worldwide, providing unique data points on a variety of geoeconomic topics. The information contained on the database includes gross domestic product (GDP). exchange rates, and everything in between.

Jared Bernstein, chief economist to Joe Biden, acknowledged his love for the resources which FRED offers, stating:

“To say ‘I love FRED’ is too weak, too glib. I depend on FRED. I count on FRED to help provide a better future for economic policy.”

The addition of cryptocurrency data, albeit rather limited, shows how the industry has evolved from underground assets to an important (and growing) factor in the overall economy.

This isn’t the first time that FRED has acknowledged cryptocurrencies, as researchers published five cryptocurrency and blockchain-based articles earlier this year. These topics, seemingly aimed at ‘no-coiners’ included an intro to Bitcoin, blockchain, and cryptocurrencies as a whole.

Cryptocurrency Gains Traction with Worldwide Governments

Despite declining prices, cryptocurrencies have still been gaining traction, finding occasional common ground with certain governments and organizations, based on traditional systems.

Coinbase recently opened up a custody service directly targeted for institutional investors, specifically for cryptocurrency balances worth a minimum of $10 million. With this new program, Coinbase hopes to entice institutional money to invest in the market, providing extremely secure cold storage for crypto assets.

Brian Armstrong, figurehead and the CEO of Coinbase said:

“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. By some estimates there is $10b of institutional money waiting on the sidelines to invest in digital currency today…”

It is likely that institutional investors would use a service like Coinbase Custody to secure their crypto assets, providing layers of nearly impenetrable protection through the use of unique verification techniques.

The common ground doesn’t end there, as governments have begun acknowledging this growing industry, by implementing rules and regulations on cryptocurrencies.

Governments, like those in South Korea and Japan, have recently implemented cryptocurrency exchange rules that are reminiscent of regulations seen with banks.  Although regulation has traditionally been viewed as a negative action, it still shows how cryptocurrencies are beginning to seep into classic financial systems, with cryptocurrencies intrusion on these systems causing regulatory bodies to treat cryptocurrencies as a legitimate asset.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: NICK CHONG
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One Rule For Corporations And Another For Cryptocurrency

Insider trading through corporate buybacks creates billions for executives.

Imagine (if you can) a much-hyped cryptocurrency startup. After a successful ICO, the company decides to burn some of its tokens, thereby limiting circulation and raising the price.

Suppose further that some executives decide to trade on the information, by dumping their tokens as the price spiked.

Last, and most improbably, imagine the Securities and Exchange Commission watching over the affair with folded arms, as if to say: “Well, that’s a real shame, too bad we can’t do anything about it. And, in fact, we created the rules that allow it.”

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This hypothetical might seem a tad unrealistic for the cryptocurrency world, where every ICO moves under a regulatory magnifying glass. But it’s perfectly acceptable in public corporations, where executives routinely take advantage of stock buybacks to cash in on their shares at a premium.

As [reported] public companies have bought back $178 billion of their own shares in the first quarter of this year, and $23.6 billion came from insider selling.

Unlike other forms of insider trading, buybacks are not covered by the securities laws that prevent corporate employees from trading on private information – ‘safe harbor’ laws provisions specifically allow it in this case. These exceptions need to change, according to  SEC Commissioner Robert Jackson. Although the Dodd-Frank reforms have written provisions to keep investors in the loop about insider selling, those provisions have not been specified. 

 “It’s not just that the regulations haven’t been finalized. It’s that the problem itself keeps getting worse,” Jackson said in a speech to the left-wing Center for American Progress. “You see, the Trump tax bill has unleashed an unprecedented wave of buybacks, and I worry that lax SEC rules and corporate oversight are giving executives yet another chance to cash out at investor expense.”

SEC investigators determined that corporate insiders were twice as likely to sell shares in the eight days after a buyback announcement. The average daily sale volume during those days was about $500,000, five times greater than the normal volume. 

However, as Jackson emphasized, there are no rules against selling during a buyback. “This trading is not necessarily illegal. But it is troubling, because it is yet another piece of evidence that executives are spending more time on short-term stock trading than long-term value creation.”

Coincidentally, phrases like ‘troubling but not necessarily illegal’ are the exact opposite of what Jackson’s colleagues have said about cryptocurrencies. SEC officials have praised blockchain as the future of financial technology, and at the same time criticized Ethereum and Ripple for not fitting to twentieth-century securities standards.

The address places stark contrast on the differing standards to which public companies and ICOs are held. While the SEC’s position has slightly thawed, the threat of regulatory action continues to darken skies over the crypto markets. Such threats are rarely aired except for the worst of public companies. 

Jackson concluded by calling on his colleagues to establish a “comment period” for the SEC to review its regulations, and you can imagine how unlikely it is for regulators to invite “comments” on cryptos. Asked if he thought the SEC would actually tighten the rules on corporate buybacks, he answered, “Hope springs eternal, man.”


Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Andrew Ancheta
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A Look Into the Future of Cryptocurrencies – 3 Predictions for the Cryptocurrency Market

As regulation of cryptocurrencies rises, investors’ faith in them will rise, too.

It’s less than a decade in, and cryptocurrency has already made a statement in the financial sector. Seemingly out of nowhere, this currency has managed to get people’s attention and, often, their admiration. And it’s already affecting some aspects of the general public’s lives, including entrepreneurship.

Adopting cryptocurrency and its underlying blockchain technology to work with already existing systems, of course, has posed challenges. A recent example occurred when the technology infrastructure company Stripe took a stab at incorporating a bitcoin payment option. Unfortunately, the result wasn’t a success.

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It turned out that the speed in processing bitcoin transactions turned off clients. In a blog post this past January, Stripe’s project manager, Tom Karlo, said his company’s customers rejected the cryptocurrency option because of confirmation lags, high fees and a disconnect between transactions and the fluctuations of the currency’s value.

In fact, digital cryptocurrency overall has had its fair share of failures. But despite them, many people still believe cryptocurrency has a bright future. In an interview, Kevin Murcko, CEO of CoinMetro, for instance, firmly stated his belief that cryptocurrencies are still developing and that there is more we’ll see in the cryptocurrency space.

“The cryptocurrency and blockchain industries are works in progress,” Murcko said. “Look at Bitcoin, for example; it’s not the way it was almost a decade ago. Aside from the change in value, it’s operating in different terrains. It’s receiving more feedback in terms of problems that provide areas for growth, development and innovation.”

True, cryptocurrency has had its ups and downs. However, the following trends of the cryptocurrency market give us a somewhat intelligent guess as to what we can expect in the future:

1. Cryptocurrencies will receive more patronage from institutional investors.

Given that more and more governments are looking into the regulation of cryptocurrencies, investors are feeling more comfortable about putting their funds into them.

With added regulation, institutional investors will be able to breathe easier and have less anxiety about the uncertainty of the cryptocurrency market. In fact, more investors are seeing cryptocurrencies as a viable asset because of their attractive returns: In December 2017 bitcoin hit a record high of almost $20,000 for one tcoin. Although the price has gone down since then, experts predict that Bitcoin’s value could actually go higher than that 2017 figure.

Billionaire investor Tim Draper boldly predicted, for example, that Bitcoin would achieve a value of $250,000 per coin by 2022.

However, any rise in that direction will be a gradual one. While some institutional investors are investing in cryptocurrencies, others are diligently watching the market. Therefore, the introduction and implementation of regulations may attract some of those watchers to jump in.

2. Why cryptocurrencies are being regulated

Lack of security has long been one of the biggest concerns for traders. In fact, a survey conducted by Encrybit, a cryptocurrency exchange platform, revealed that 40 percent of the participants polled saw security as a major concern.

According to the Securities Exchange Commission, cryptocurrency exchanges overall remain unregulated. This is in contrast to cryptocurrency’s conventional currencies counterparts, which are regulated by the central banks of their respective countries.

At times, hackers and cybercriminals have already taken advantage of the lack of cryptocurrency regulation and made trading in these currencies unsafe for investors.

However, attempts are in progress to regulate cryptocurrency in the international arena. For example, at the G20 summit in Argentina, directives were made for global regulations.

In a recent conversation I had about the future of the blockchain industry with Ahmed Khawanky, the CMO of IngotCoin, Khawanky emphasized the need to regulate the cryptocurrency market as a way to maintain security.

“When you try to push something new to the market,” Khawanky said, “there’s a need to win the trust of the people. People won’t trust something they don’t know or like. Therefore, ensuring security is the heart of the overall success of the blockchain technology.”

3. Cryptocurrencies won’t stop being volatile.

Despite the measures to ensure stability in the cryptocurrency market, it’s still a struggle to stop or at least reduce cryptocurrencies’ volatility. There are still so many factors keeping them volatile. These include: the currencies’ lack of intrinsic value, the lack of institutional capital, the implementation of regulations and thin-order books, among other factors.

Although regulation of the currency and their markets will help lower volatility, that alone will not be enough to make a considerable difference in cryptocurrencies’ volatile nature.

But, as cryptocurrency trading becomes more popular, we should be seeing an ebb and flow of volatility. While some people will benefit from the sudden increases those ebbs and flows bring to cryptocurrencies’ value, we should not overrule the possibility of a sudden crash as well.

In short, cryptocurrencies won’t stop being volatile. And that’s something any investor should plan for.



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Author: Toby Nwazor
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