Ripple-Hired Lobbying Firm Will Get Paid [Partially] in Cryptocurrency

A lobbying firm in America’s political capital that has been hired by cryptocurrency firms including Ripple will now get a certain portion of its fee paid in XRP.

The Washington, D.C.-based Klein/Johnson Group has been contracted by the San Francisco-based Ripple and several other firms in the cryptocurrency sector and will be paid for its services in the U.S. dollar and XRP, according to Bloomberg. The lobbying firm will reportedly receive a monthly fee of approximately US$25,000 in fiat and an additional 10,000 XRP.

Klein/Johnson has been hired by blockchain and cryptocurrency firms that are organized under Securing America’s Internet of Value Coalition umbrella body. The goal of the coalition is to lobby regulators as well as lawmakers on cryptocurrencies. Besides Ripple, other organizations that have joined the coalition include digital asset investment firm Hard Yaka, crypto custodian company PolySign, and entertainment and content digital payments platform Coil.

Lawmakers and Regulators
According to Izzy Klein, the co-founder of Klein/Johnson, the lobbying efforts of Securing America’s Internet of Value Coalition will be directed towards the U.S. Congress, the Securities and Exchange Commission (SEC), and the Internal Revenue Service (IRS), as well as other government agencies and public organizations whose mandate and mission has a bearing on cryptocurrencies.

In the case of Ripple, for instance, there has been a long-running debate over whether the SEC should classify XRP as a security, a move which would place it under the market regulator’s scrutiny. While the SEC has offered clarity on bitcoin and ethereum (to some extent), XRP has not been accorded the same treatment despite an initiative to ensure it is not classified as a security. Three months ago, for instance, the CEO of Ripple Labs, Brad Garlinghouse, vehemently argued that the XRP token is not a security, as CCN reported:

“I think it’s really clear that XRP is not a security. XRP exists independent of Ripple and it would operate even if Ripple Labs failed. I don’t think that our ownership of XRP gives us control.”

Need for Regulatory Certainty and Clarity
With the debate yet to be settled — for XRP as well as other digital assets — 15 members of the U.S. Congress this week called on the SEC to offer clarity on cryptocurrencies and issue guidelines on initial coin offerings (ICOs).

In a letter signed by the 15 legislators hailing from both sides of the U.S. political divide and addressed to the chairman of the SEC, Jay Clayton, the authors pointed that there was uncertainty regarding how digital tokens are offered and sold. According to the members of Congress, this was slowing the pace of innovation in the world’s largest economy and driving business to other parts of the world where more clear rules and regulations exist.


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Author: Mark Emem
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Security Tokens to Bring 10% of Global GDP ($8 trillion) Into the Blockchain Ecosystem by 2024

Jeff Brown is a technology guru, analyst, and an angel investor for over 20 years now. He even attended and helped to develop first self-driving cars back in 2011th and even graduated the same astronautics program at Purdue University as also did Luis Armstrong, a man who walked the moon. And Mr. Brown bets on Security tokens and Blockchain.

Jeff attends a huge number exclusive cryptocurrency and blockchain event in New York what let Jeff become an “insider” in many blockchain and cryptocurrency related projects.
Brown is sure that the mainstream media doesn’t tell you much about the future of cryptocurrencies and adds, that crypto “insiders” are preparing to profit in the years ahead mainly from blockchain related technology and security tokens.

The wave of the security tokens boom is ramping up

According to Jeff, the New York Stock Exchange (NYSE) and NASDAQ top hedge fund managers and leaders in the blockchain industry are focused on the same thing: the creation of the security token industry. Brown said,

“One executive I spoke with expects security tokens to bring 10% of global GDP – roughly $8 trillion – into the blockchain ecosystem by 2024. That represents growth of 28X.”

Security Tokens to Take Over Wall Street

Security tokens make it much easier for companies to raise the capital they need to grow. Registering securities for a traditional IPO is a tedious, expensive process that requires companies to go through several layers of middlemen and costs millions of dollars on lawyers and brokers.

Security tokens will disintermediate those middlemen, which will reduce costs and simplify the process of launching a Security Token Offering (STO).
That will tear down the roadblocks currently preventing small businesses from raising capital which, in turn, will foster capital allocation to small-cap businesses that will drive economic growth.

And that is why security tokens will be the most robust asset class within 18 months.
Massive institutional capital will flow in from hedge funds, pension funds, and family offices. And the blockchain industry’s market cap will likely be in the trillions by early 2020 as a result.

That’s not just blind speculation it is coming from the highest tiers of Wall Street. Institutional players have not yet piled into the cryptocurrency market because they are waiting on a regulated token environment. The security token industry will provide that environment.


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Author: Karolis
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Cryptographic Experts Reveal Security Issues in Telegram Passport

Virgil Security, Inc., a cryptographic services provider, has published a report which raises concerns regarding the security of Telegram Passport.

Telegram Passport is the latest feature introduced by the messaging app last month. It allows users to upload personal identification documents such as passports, identity cards, and drivers licenses to be stored in the Telegram cloud. These documents are encrypted so that users can verify their identities on third-party services without exposing their personal data.

Virgil, however, thinks that this feature is not secure at all.

LIONBIT

Firstly, Telegram uses Secure Hashing Algorithm 2 (SHA-512), which is cryptographically weak. Virgil explains that in order to secure passwords, it should take a hacker more time to guess each password.

“It’s 2018 and one top-level GPU can brute-force check about 1.5 billion SHA-512 hashes per second.”

Salting is a way to include random data in a password; , however, even that won’t help in SHA-512’s case. Only a strong password will keep a users’ account safe from brute force attacks.

Virgil added that employment services website LinkedIn was hacked in 2012 since it used SHA-2’s predecessor, SHA-1. The attack exposed the passwords of 8 million LinkedIn users. Next year, online marketplace LivingSocial, which also used SHA-1, lost 50 million passwords in a similar attack. Hence, it is surprising that Telegram decided to use such a weak password protection system.

Secondly, Telegram claims that it encrypts user data and then sends it to the cloud. The data is then decrypted and re-encrypted to confirm the user’s identity on the third-party service. The data obtained is not completely random and uses SHA-2 once again. In addition to that, the app doesn’t include the option of a digital signature, and “the absence of digital signature allows your data to be modified without you or the recipient being able to tell.”

On its official blog post, Telegram wrote that the service was end-to-end encrypted and used a password only the user knew. However, this research show that the loopholes present in the codes makes the user vulnerable to hackers. Some of the alternatives provided by Virgil include SCrypt, BCrypt, Argon2, BrainKey and Pythia.

In August 2016, hackers exposed the phone numbers of 15 million Iranian Telegram users. Back then, a user authentication system that used SMS to complete the process resulted in the attack. Since Passport holds sensitive information, it may already be targeted by hackers. It is now up to Telegram to handle the situation and improve the security of this “high profile product”.


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Israeli Cybersecurity Experts Predict More Attacks on Crypto-Related Businesses in 2018

At a time when the cryptocurrency sector is nearly saturated with heists, hacks, and more ‘cryptocrimes,’ Israeli cybersecurity experts say more turbulence await crypto investors this year, as blockchain-based digital currency attacks will surpass other types of cyber attacks in 2018.

Present at the Tel Aviv University annual Cyber Week cybersecurity conference tagged “Blockchain, The New Digital Age, the nation’s experts on the subject matter made it clear that ‘stakeholders’ in the cryptosphere need to brazen up for more attacks this year.

Lotem Finkelsteen, a threat intelligence analyst at Check Point Software Technologies, said:

“Not a day goes by without our hearing about a new ICO [initial coin offering] scam or mining attack. Blockchain technology is suffering from reputational damage and one of the main obstacles for blockchain technology to move forward.”

Mixed Opinions Concerning Distributed Ledger Technology

Blockchain technology, the foundation upon which Satoshi Nakamoto built bitcoin and the same system that underpins other cryptocurrencies was praised by many and criticized by some at the event.

Director and Global Blockchain technology Lead at Accenture, John Velissarios noted DLT is steadily taking over the world economy, as more and more businesses are integrating the nascent technology into their operations. In his words:

“We’re seeing blockchain applications for capital markets, exchanges, clearing and settlement systems and payment systems. The technology is evolving and the applications are becoming more significant.”

While a hand full of banks and traditional financial institutions like Bank of England, and several others are seriously looking to either augment their existing systems with DLT or create new blockchain-based systems entirely, Haim Pinto, the chief technical officer (CTO) of Bank Hapoalim, firmly believes the ground breaking technology has nothing excellent to offer at the moment, as “blockchain is still in a hype cycle. We can’t just take it and use it,” he said.

Pinto also condemned the key property that gives distributed ledger technology an edge over centralized databases – immutability.

While data stored on legacy systems can be altered or deleted, it’s impossible to tamper with things saved in the ledger. This excellent feature makes DLT the most secure, transparent and reliable form of data storage for now.

However, Pinto reiterated that the immutable nature of the burgeoning technology makes it unfit for banks seeking to comply with the EU’s General Data Protection Regulation (GDPR) as nothing can be deleted on the blockchain.

“Distributed general ledgers cannot erase anything. That’s just one of the challenges. In addition, there are mathematical challenges. Distributed general ledgers can’t scale up to the volume of transactions we need to serve,” Pinto concluded.

Central Bank Warnings Continue to Loom

Similarly, on March 15, 2018, BTC Manager reported the Bank of International Settlements (BIS), had warned central banks against the perils of issuing cryptocurrencies.

Also, in BIS’s latest report, the ‘bank of central banks’ condemned digital currencies and blockchain technology saying the former is overly unstable and the latter cannot handle huge transactions that central banks systems process.

With each passing day, the battle between the crypto enthusiasts and pessimists keeps taking new dimensions. Almost a decade has gone already, and cryptocurrencies have failed to crumble, while blockchain is busy disrupting industries. It remains to be seen which party will emerge victorious in the long run.



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Ethereum and Bitcoin Prices Jump After SEC Official Says Ether Is Not a Security

A grey cloud hanging over the heads of cryptocurrency investors lifted Thursday after the Securities and Exchange Commission (SEC) ruled that Ethereum is not a security.


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The price of Ethereum shot up 10% to $514 in response to the decision, revealed on Thursday in prepared remarks from SEC Director of Corporate Finance William Hinman at the Yahoo Finance All Market Summit: Crypto.

“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions,” Hinman said.

Ethereum wasn’t alone in its rise. In total, the market capitalization of all cryptocurrencies tracked by CoinMarketCap rose by $18 billion on Hinman’s comments. The value of Bitcoin also climbed 5% to $518, while Ripple jumped 6% to 56 cents.

Previously, investors had been put into a nervous state of mind following reports in May that regulators were debating whether the asset, the world’s second-largest cryptocurrency by market capitalization, could be considered an equity. And even ahead of that, the crypto space had been shaken by comments in April by SEC chief Jay Clayton that he believes “every ICO I’ve seen is a security.” Bitcoin buyers however were offered some reprieve, with Clayton noting that he did not consider Bitcoin an equity offering.

Hinman explained his Thursday rationale about Ethereum as such: Because the Ethereum network is “sufficiently decentralized,” no single party is expected to make managerial decisions about the enterprise. And since decision-making is spread out, no single party or person will receive key information that could be used to an unfair advantage—for example, to conduct insider trading.

“As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful,” he said Thursday. “As with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value. ”

Though he also emphasize that while Ethereum is not classified as a security now, the classification is “not static.”

Still, the price of Ethereum is down 31% for 2018 amid a broader slowdown in the cryptocurrency market. The value of Bitcoin too, has fallen to $6,600, down from $13,860 at the start of the year.



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Development of Lightning Mobile Wallets Promises Faster Bitcoin Payments

Development of Lightning Mobile Wallets Promises Faster Bitcoin Payments

Since the turn of the year, the price of bitcoin has been battered with investors left to lick their wounds. Behind the scenes though, the development of Bitcoin has continued to defy market movements with the continuous development of the Lightning Network (LN), which has led to the creation of several bitcoin LN wallets.


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The Lightning Network ushered in the promise of easing network congestion by moving on-chain transactions to the second-layer protocol.

Here are some of the mobile wallets currently in development.

Eclair

Developed by Paris-based ACINQ, Lightning-ready Bitcoin wallet Eclair currently has 3,000 wallet downloads, and it came about as a result of three years of working on Lightning. The Eclair wallet is a real Lightning node not a remote control app for a node running on a server. Users can transfer money from a checking to a savings account by closing channels, generate Lightning invoices, and pay Lightning invoices through QR codes or Lightning invoices.

Dominique Padiou, a software engineer at Eclair, told Bitcoin Magazine that payment route computation is made by the wallet itself, which creates better privacy, similar to the way a node on a server would.

At the moment, the wallet is outbound only. This is a deliberate move as the company believes users need a mobile Lightning wallet to make payments but not necessarily to receive payments. There are plans, however, to add a receiving feature in the future.

For now, funds stored in LN channels cannot be backed up through the app. Padiou said the company plans to “improve the performance of the wallet in the future, make it secure and add a backup mechanism for the LN channels.” This wallet is only available on the Google Play Store

Bitcoin Lightning Wallet

Bitcoin Lightning is an SPV BIP37-based wallet developed by Anton Kumaigorodski. It features full Lightning Network support that provides for both on-chain and off-chain network transactions and is available in both testnet and mainnet.

Processing is local for both on- and off-chain transactions. Users can send and receive bitcoin almost instantly through dedicated channels. One unique quality of this wallet is that it uses a system of storage tokens to store channel backups and delay refunding transactions anonymously.

This process is important, since “having a mnemonic phrase won’t get your lost channel balance back unless you have a backup,” Kumaigorodski stated. The potential for funds to go missing due to inconsistencies remain, but Kumaigorodski added that “the wallet offers off-chain data loss protection by automating the channel.” This wallet is available on the Google Play Store.

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Rawtx

Rawtx, short for “raw transactions,” is a mobile Lightning Network wallet for Bitcoin that allows users to send and receive testnet bitcoins on the blockchain and Lightning Network.

The lead developer, known by the alias “raw tx,” told Bitcoin Magazine that they created the wallet for users who wanted to test out and get familiar with Lightning technology.

He went further to explain what makes the wallet unique. “It is the easiest to start with.

One of the first things we show the user is a way of opening a channel with Lightning faucet.” The Rawtx wallet is built on lnd which is one of the most stable Lightning implementations out there.

The app currently supports mainnet transactions but enabling it is not entirely straightforward. The developer told us that the current app available for download is only on testnet, but mainnet testing has begun and it looks promising.

The iOS version of the Rawtx wallet is scheduled to be released later this month while the Android version can be found here https://play.google.com/store/apps/details?id=com.rtxwallet

Other bitcoin Lightning wallets that have been released include LND Thin Wallet developed by Union 7 Labs, Swift Lightning Project and Shango Lightning Wallet. They offer similar features with very little difference in structure and how they process off-chain transactions.

Usability Issues

While Lightning has grown since it was first proposed back in 2015, there is still a long way to go in making these apps easy to use for everyday payments for the average person.

At the time of publishing, there are currently 2,135 open nodes and 5,566 channels. While there is lots of excitement and optimism about what the Lightning Network represents, users are expected to be cautious as the technology is still in development and surprises are possible.

There are also usability issues which could affect the speed of its adoption unless they are fixed. This is most evident in the channel creation process. A user has to go through a series of confirmations before a new channel is accepted, which means the user has to monitor the channel carefully.


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Your Crypto Exchange May Be Less Secure Than Your Email Account

Cryptocurrency exchanges and apps aren’t just among the most valuable targets for hackers, they also remain among the most vulnerable.

That’s the warning Chris Wysopal, chief technology officer at the security-tools firm Veracode, offered during a talk at the Collision conference here on May 1. It’s something that should be at the top of concerns for people looking to trade or invest in cryptocurrencies such as bitcoin, which are generated through increasingly complex mathematical “mining” and allow pseudonymous transactions online and across international borders — and have increased in value wildly, even after recent plunges.

“When we talk about cryptocurrency, we’re not talking about just stealing someone’s data that we then have to monetize,” he said. “We’re actually talking about stealing money. It’s a very, very attractive target for attackers.”


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Mistakes were made

Wysopal recounted a series of embarrassing but preventable hacks of cryptocurrency exchanges and apps. A partial selection:

  • In 2016, a bug in the smart-contacts code meant to allow automatic execution of transactions at a network called the Distributed Autonomous Organization allowed a hacker to siphon out $50 million worth of the cryptocurrency Ethereum.
    (Onstage, Wysopal said this happened in 2014; in an email Thursday, he said he mixed up that date with that of another cryptocurrency hack, the theft of some $460 million from the Mt. Gox exchange in 2014.)
  • In August of 2016, the cryptocurrency exchange Bitfinex got hacked to the tune of $73 million. A key cause: That Hong Kong-based site kept all of its security keys online instead of putting one in offline “cold storage.”
  • In January, attackers broke into another exchange, Coincheck, and stole $534 million in cryptocurrency. Their work was eased by that Tokyo-based firm keeping all of its customers’ funds in a single “hot wallet.” Observed Wysopal: “That seems really, really dumb. This isn’t how banks work, right? They don’t have all the money in the tellers’ drawers all the time.”
  • In February, the Ukrainian hacking group Coinhoarder stole $50 million from users of the Blockchain.info digital wallet by running Google (GOOG, GOOGL) ads that conned victims into thinking they were logging into the real site. Since then, Google, Facebook (FB) and Twitter (TWTR) have banned cryptocurrency ads.

What you can do

Wysopal — who began his information-security career as one of the first members of the L0pht hacking collective and then co-founded Veracode, now owned by CA Technologies (CA), in 2006 — offered some specific tips to his audience.

Enabling “two-step verification” — in which you confirm a login with a one-time password sent to your phone or computed by an application on it — topped that list. “You definitely want to use two-factor,” Wysopal said. (Note that two-step systems that rely on text messages to deliver those codes can be defeated if an attacker can take over your mobile number.)

He also advised complicating the efforts of would-be phishers by not logging in with a publicly-known email or number. “Don’t use an email address or a phone number that’s associated with that account that you’re then going to publish somewhere,” he said. “They need that identifier to then go try to impersonate you, either through SMS or just through email.”

For local cryptocurrency storage, Wysopal endorsed using hardware wallets (see my colleague Daniel Roberts’ how-to post) instead of mobile apps, saying “they’re not too expensive.”

Finally, he advised a little social-media modesty. “Don’t brag about your crypto fortune online,” Wysopal said, noting a January home-invasion bitcoin robbery in the U.K. “If you’re bragging about it, you’re just making yourself a target.”

What you can’t do

Wysopal closed his talk on a semi-optimistic note: “I think in the future we’ll have services that will help people understand the security behind an exchange, behind a wallet, behind a smart contract; we’re just not there yet.”

In a phone interview, though, he noted a structural obstacle to digital money attaining the same security as government-issued money in a bank: We don’t have regulations holding cryptocurrency firms responsible for losses due to hacking like those that hold banks accountable today.

“We’re so used to doing transactions and storing our money in places where there’s regulation and you have some liability by your provider,” he said. “That’s totally not there with cryptocurrency.”

Instead, it’s up to individuals in cryptocurrency markets to insist on better security. Wysopal is among them, although he said he only holds “a small amount” of digital currency.

“The thing that has to happen is, investors or customers need to demand some evidence that things are built securely,” he said.

The upside, as he noted in the talk, is that building a secure system for cryptocurrency should make other “infosec” problems look easy: “If you can make it here, you can make it anywhere.”


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Ledger wallet users unable to access BCH accounts for over 24 hours

According to reports, bitcoin cash users are frustrated with the Ledger hardware wallet as users have complained they cannot access their accounts. The firm’s chief technical officer, Nicolas Bacca, explained on Reddit forums that the team was still investigating the matter.

Ledger Wallet BCH Accounts Have Been Unavailable

Recently on the Reddit forum /r/ledgerwallet, a user complained about bitcoin cash (BCH) accounts being down for well over twenty hours. At the moment the issue is still unresolved as of April 10, 2018, 6:17 PM UTC as the company says a “data transfer” is now 81 percent complete and “the ETA for the end of the transfer is unchanged.” The Reddit post has a number of comments from BCH users “freaking out” and unable to see their coins or make transactions. Ledger has issued a status report concerning the issue stating:
“The new version of Bitcoin-ABC (Bitcoin Cash node) breaks compatibility with our parser — As a result balances shown on the Ledger Wallet are incorrect — Our engineering team is currently working on a fix.”

 

“Funds stay secured and you can safely receive transactions — In case of emergency, you can use Electron Cash to access them.”

Lam banner 3

A Complex and Serious Issue

Many BCH users have been upset with how long it is taking Ledger’s development team to address the problem. Ledger’s CTO Nicolas Bacca did talk about the matter with individuals commenting on the Reddit post and stated the fix could take days.
“The team is still investigating,” explains Bacca. “I’m not following this closely, but if invalid data was fed into our parser it could be necessary to reparse the whole chain which will take a few days. Thanks for your patience, and feel free to open an issue on Electron Cash Github if it isn’t working properly.”

“For any blogger trying to misquote me — this means that another team is working on it as fast as they can, but not myself.”

Eric Larchevêque the CEO of Ledger Wallet has also commented on the issue with BCH accounts.
“All of our infrastructure engineering team is working on fixing the outage since we have been aware a day ago — The issue is complex and we are taking this very seriously — Our CTO is not in charge of the infrastructure and is therefore not following this specific question closely — Others are,” Ledger’s CEO explains commenting after the company’s technical officer.

“We are now in the process of reindexing all our BCH nodes. Funds are safe and users can immediately access their funds through Electron Cash. Thank you for your patience.”

“The file transfer is over,” details Ledger’s status report, thirteen minutes later at approximately April 10, 2018, 6:40 PM UTC. “We’re now restarting the blockchain explorer to resync from block height 524442.”

lamium


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Centralized Ripple is Probably a Security Token

A primary attraction of decentralized cryptocurrencies is that they’re censorship-resistant. The more centralized a coin is, the easier it is for its supply to be controlled. But there’s another problem with overly-centralized cryptocurrencies such as ripple: they risk being classified as a security, which brings all kinds of problems.

How Centralized Must a Cryptocurrency Be Before It Becomes a Security?

Ripple has long been criticized for its centralization. These concerns have revolved around the degree to which Ripple, or its partner exchanges – aka Ripple Gateways – have the power to freeze and reverse transactions. Ripple’s greatest centralization problem may owe less to the way its nodes operate, however, and more to the amount of coins held by the company. Given that Ripple owns the majority of all XRP, the argument goes, anyone buying the coin is essentially buying shares in the company.

Many cryptocurrencies are the product of an incorporated company, but these companies don’t generally hold the bulk of the supply. For months, Ripple was regarded as a stick-on to become the next coin listed by Coinbase. But as news.Bitcoin.com recently reported, “Ripple may not qualify because Coinbase decrees it essential that “the ownership stake retained by the team is a minority stake””. This week, it emerged that Ripple had tried to buy its way onto Coinbase and GDAX, only for its $1 million sweetener to be rebuffed by the U.S. exchanges. There’s a certain irony in a centralized exchange not wanting to accept a coin because it’s too centralized.

 

Exchanges Don’t Want Securities

On Thursday, Binance moved fast to delist centra after the coin’s founders were arrested and the SEC’s investigation into possible security fraud cranked up. Cryptocurrency exchanges don’t want security tokens: they’re a regulatory headache, and exchanges such as Bittrex have already delisted tokens that could be deemed securities. Following its acquisition by Circle, Poloniex is believed to be following suit.  If ripple was to be classified as a security, its sale would be subject to much more stringent regulations in the U.S., making it more akin to a stock than a cryptocurrency.

2018 has been billed by some in the crypto space as the year of the security token, but these tokens will be traded on specialist exchanges that are licensed to sell them, and to accredited investors. Cryptocurrency exchanges have enough regulatory issues to deal with as it is, what with the threat of banking facilities being withdrawn at short notice, without having to worry about the SEC breathing down their necks.

Ripple Has Its Feathers Ruffled

Over the last couple of days, several commenters have crafted scathing critiques of ripple, averring that the cryptocurrency is swimming in security seas. “XRP is a security. Ripple Co is the issuer. Brad Garlinghouse, Chris Larsen, and other Ripple Co executives are subject to the anti-fraud laws under SEC jurisdiction,” opined Lawson Baker, adding “A supposed decentralized cryptocurrency can be a security with enough centralization.” Baker also claims to have assessed ripple using Coinbase’s own listing criteria, and found that there’s a 50% chance of the token being categorized as a security.

Lawson Baker continues: “XRP is definitely not decentralized. Ripple Co creates the common enterprise. Ripple Co initially distributed all of XRP for money. This is the “investment of money” element of Howey Test. Ripple Co and founders control more than ~60% of the XRP in existence. Control is general 10% of voting power in traditional finance. Ripple Co even controls the inflation / dilution rate of XRP”. He finishes: “Security analysis is a spectrum. XRP is the blinding security white light.’”

Ripple Critics Pile In

In a blogpost on April 5, Messari founder and prominent crypto voice “Twobitidiot” joined in, writing: “crypto companies tend to want things both ways. Act like a securities offerer when it’s convenient from a capital formation perspective or when you’re doling out “founders’ rewards”. Pretend you’re actually selling a currency or commodity when it becomes markedly less convenient from an investor disclosures standpoint.” He then went on to ask a series of questions such as “Why does the company write about XRP price appreciation as if it’s a milestone? Why do they do little to tamp down speculation around XRP enterprise adoption?” No, why do they actively insinuate big news is coming by writing things like “XRP markets began to connect the dots once again?”

XRP is by no means the only cryptocurrency that could be construed as a security, but it’s the most high profile, and its knockback by Coinbase has shed new light on Ripple’s business practises. If other crypto projects could spare $1 million cash and $100 million in tokens for a Coinbase listing, many would behave in exactly the same manner. As it is, only a handful of players including Ripple, with the billions of tokens at its disposal, is in a position to make such an offer. Centralized cryptocurrencies aren’t crypto and they aren’t currency either – they’re company stock.


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