What is Grayscale?Grayscale is the company that created the ETHE product. Their website is https://grayscale.co/
What is ETHE?ETHE is essentially a stock that intends to loosely track the price of ETH. It does so by having each ETHE be backed by a specific amount of ETH that is held on chain. Initially, the newly minted ETHE can only be purchased by institutions and accredited investors directly from Grayscale. Once a year has passed (6 months for GBTC) it can then be listed on the OTCQX Best Market exchange for secondary trading. Once listed on OTCQX, anyone investor can purchase at this point. Additional information on ETHE can be found here.
So ETHE is an ETF?No. For technical reasons beyond my personal understandings it is not labeled an ETF. I know it all flows back to the “Securities Act Rule 144”, but due to my limited knowledge on SEC regulations I don’t want to misspeak past that. If anyone is more knowledgeable on the subject I am happy to input their answer here.
How long has ETHE existed?ETHE was formed 12/14/2017. GBTC was formed 9/25/2013.
How is ETHE created?The trust will issue shares to “Authorized Participants” in groups of 100 shares (called baskets). Authorized Participants are the only persons that may place orders to create these baskets and they do it on behalf of the investor.
How does Grayscale acquire the ETH to collateralize the ETHE product?An Investor may acquire ETHE by paying in cash or exchanging ETH already owned.
Where does Grayscale store their ETH? Does it have a specific wallet address we can follow?ETH is stored with Coinbase Custody Trust Company, LLC. I am unaware of any specific address or set of addresses that can be used to verify the ETH is actually there.
Can ETHE be redeemed for ETH?No, currently there is no way to give your shares of ETHE back to Grayscale to receive ETH back. The only method of getting back into ETH would be to sell your ETHE to someone else and then use those proceeds to buy ETH yourself.
Why are they not redeeming shares?I think the report summarizes it best:
Redemptions of Shares are currently not permitted and the Trust is unable to redeem Shares. Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. Because the Trust does not believe that the SEC would, at this time, entertain an application for the waiver of rules needed in order to operate an ongoing redemption program, the Trust currently has no intention of seeking regulatory approval from the SEC to operate an ongoing redemption program.Source: Redemption Procedures on page 41 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
What is the fee structure?ETHE has an annual fee of 2.5%. GBTC has an annual fee of 2.0%. Fees are paid by selling the underlying ETH / BTC collateralizing the asset.
What is the ratio of ETH to ETHE?At the time of posting (6/19/2020) each ETHE share is backed by .09391605 ETH. Each share of GBTC is backed by .00096038 BTC.
Why is the ratio not 1:1? Why is it always decreasing?While I cannot say for certain why the initial distribution was not a 1:1 backing, it is more than likely to keep the price down and allow more investors a chance to purchase ETHE / GBTC.
I keep hearing about how this is locked supply… explain?As noted above, there is currently no redemption program for converting your ETHE back into ETH. This means that once an ETHE is issued, it will remain in circulation until a redemption program is formed --- something that doesn’t seem to be too urgent for the SEC or Grayscale at the moment. Tiny amounts will naturally be removed due to fees, but the bulk of the asset is in there for good.
The Trust’s ETH will be transferred out of the ETH Account only in the following circumstances: (i) transferred to pay the Sponsor’s Fee or any Additional Trust Expenses, (ii) distributed in connection with the redemption of Baskets (subject to the Trust’s obtaining regulatory approval from the SEC to operate an ongoing redemption program and the consent of the Sponsor), (iii) sold on an as-needed basis to pay Additional Trust Expenses or (iv) sold on behalf of the Trust in the event the Trust terminates and liquidates its assets or as otherwise required by law or regulation.Source: Description of Trust on page 31 of the “Grayscale Ethereum Trust Annual Report (2019)” – Located Here
Grayscale now owns a huge chunk of both ETH and BTC’s supply… should we be worried about manipulation, a sell off to crash the market crash, a staking cartel?First, it’s important to remember Grayscale is a lot more akin to an exchange then say an investment firm. Grayscale is working on behalf of its investors to create this product for investor control. Grayscale doesn’t ‘control’ the ETH it holds any more then Coinbase ‘controls’ the ETH in its hot wallet. (Note: There are likely some varying levels of control, but specific to this topic Grayscale cannot simply sell [legally, at least] the ETH by their own decision in the same manner Coinbase wouldn't be able to either.)
Yes, but what about [insert criminal act here]…Alright, yes. Technically nothing is stopping Grayscale from selling all the ETH / BTC and running off to the Bahamas (Hawaii?). BUT there is no real reason for them to do so. Barry is an extremely public figure and it won’t be easy for him to get away with that. Grayscale’s Bitcoin Trust creates SEC reports weekly / bi-weekly and I’m sure given the sentiment towards crypto is being watched carefully. Plus, Grayscale is making tons of consistent revenue and thus has little to no incentive to give that up for a quick buck.
That’s a lot of ‘happy little feels’ Bob, is there even an independent audit or is this Tether 2.0?Actually yes, an independent auditor report can be found in their annual reports. It is clearly aimed more towards the financial side and I doubt the auditors are crypto savants, but it is at least one extra set of eyes. Auditors are Friedman LLP – Auditor since 2015.
The company’s auditors Friedman LLP were also coincidentally TetheBitfinex’s auditors until They controversially parted ways in 2018 when the Tether controversy was at its height. I am not suggesting for one moment that there is anything shady about DCG - I just find it interesting it’s the same auditor.
“Grayscale sounds kind of lame” / “Not your keys not your crypto!” / “Why is anyone buying this, it sounds like a scam?”Welp, for starters this honestly is not really a product aimed at the people likely to be reading this post. To each their own, but do remember just because something provides no value to you doesn’t mean it can’t provide value to someone else. That said some of the advertised benefits are as follows:
Why is there a premium? Why is ETHE’s premium so insanely high compared to GBTC’s premium?There are a handful of theories of why a premium exists at all, some even mentioned in the annual report. The short list is as follows:
Are there any other differences between ETHE and GBTC?I touched on a few of the smaller differences, but one of the more interesting changes is GBTC is now a “SEC reporting company” as of January 2020. Which again goes beyond my scope of knowledge so I won’t comment on it too much… but the net result is GBTC is now putting out weekly / bi-weekly 8-K’s and annual 10-K’s. This means you can track GBTC that much easier at the moment as well as there is an extra layer of validity to the product IMO.
I’m looking for some statistics on ETHE… such as who is buying, how much is bought, etc?There is a great Q1 2020 report I recommend you give a read that has a lot of cool graphs and data on the product. It’s a little GBTC centric, but there is some ETHE data as well. It can be found here hidden within the 8-K filings.Q1 2020 is the 4/16/2020 8-K filing.
Is Grayscale only just for BTC and ETH?No, there are other products as well. In terms of a secondary market product, ETCG is the Ethereum Classic version of ETHE. Fun Fact – ETCG was actually put out to the secondary market first. It also has a 3% fee tied to it where 1% of it goes to some type of ETC development fund.
Are there alternatives to Grayscale?I know they exist, but I don’t follow them. I’ll leave this as a “to be edited” section and will add as others comment on what they know.
Coinshares (Formerly XBT provider) are the only similar product I know of. BTC, ETH, XRP and LTC as Exchange Traded Notes (ETN).
It looks like they are fully backed with the underlying crypto (no premium).
Denominated in SEK and EUR. Certainly available in some UK pensions (SIPP).
As asked by pegcity - Okay so I was under the impression you can just give them your own ETH and get ETHE, but do you get 11 ETHE per ETH or do you get the market value of ETH in USD worth of ETHE?I have always understood that the ETHE issued directly through Grayscale is issued without the premium. As in, if I were to trade 1 ETH for ETHE I would get 11, not say only 2 or 3 because the secondary market premium is so high. And if I were paying cash only I would be paying the price to buy 1 ETH to get my 11 ETHE. Per page 39 of their annual statement, it reads as follows:
The Trust will issue Shares to Authorized Participants from time to time, but only in one or more Baskets (with a Basket being a block of 100 Shares). The Trust will not issue fractions of a Basket. The creation (and, should the Trust commence a redemption program, redemption) of Baskets will be made only in exchange for the delivery to the Trust, or the distribution by the Trust, of the number of whole and fractional ETH represented by each Basket being created (or, should the Trust commence a redemption program, redeemed), which is determined by dividing (x) the number of ETH owned by the Trust at 4:00 p.m., New York time, on the trade date of a creation or redemption order, after deducting the number of ETH representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust (converted using the ETH Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ETH (i.e., carried to the eighth decimal place)), and multiplying such quotient by 100 (the “Basket ETH Amount”). All questions as to the calculation of the Basket ETH Amount will be conclusively determined by the Sponsor and will be final and binding on all persons interested in the Trust. The Basket ETH Amount multiplied by the number of Baskets being created or redeemed is the “Total Basket ETH Amount.” The number of ETH represented by a Share will gradually decrease over time as the Trust’s ETH are used to pay the Trust’s expenses. Each Share represented approximately 0.0950 ETH and 0.0974 ETH as of December 31, 2019 and 2018, respectively.
[Today's Hot Tips]submitted by LOEXCHANGE to u/LOEXCHANGE [link] [comments]
1. [Senior Japanese Officials: The current lack of Japanese digital asset tax policy may lead to capital outflows]
Shun Otokita, a representative of the Reformed Party, a senior official of the Japanese government, said that the current national tax system cannot yet accept digital asset declarations, which may lead to capital outflows, and pointed out the importance of market research on taxation of cryptocurrencies separately. Otokita acknowledged that it is difficult to quickly modify the tax law to apply to digital assets, but pointed out that it is necessary to conduct market research to determine which changes are necessary.
2. [BB: The global macro environment is jointly highlighting the value of encryption]
On April 7, Brendan Blumer, CEO of Block.One, tweeted that the global macro environment has never been as prominent in the value of encryption as it is now, and it will be the same for the next 24 months.
3. [The Central Bank continues to promote the development of legal digital currency]
According to the People ’s Daily news on April 6, the People ’s Bank of China ’s video and telephone conference on 2020 national currency, gold, silver and security work was recently held in Beijing. The conference made plans for the key work in 2020, and proposed to unswervingly advance the research and development of legal digital currency, systematically promote the reform of cash issuance and return systems, and accelerate the promotion of banknote processing business, issuance of warehouse guards, and issuance of fund escort transformation.
4. [Binance is subject to a class action in the United States]
Binance was subject to a class action in the United States, and lawyers said the case was unlikely to be rejected.
The Southern District Court of New York received a series of class action and the lawsuits targeting the top companies and projects in the crypto industry such as Binance. The news was first disclosed by Offshore Alert. It is reported that at least 10 similar class-action lawsuits were filed in the Southern District Court of New York, accusing Binance and other crypto companies of selling unregistered securities products to US investors. It is reported that the lawsuit was initiated by the US law firm Roche Cyrulnik Freedman, and the prosecution also included many executives such as Zhao Changpeng, CEO of the cryptocurrency exchange Binance. It is worth mentioning that the law firm had also represented Craig Wright in the multi-billion-dollar Bitcoin lawsuit.
[Today's market analysis]
BTC continued to rise from around $ 7070 early this morning, and rose to around $ 7300 at around 3:45. Now, BTC has returned to $ 7250 sideways. The mainstream currencies followed the consolidation and generally rose sideways. BTC is currently reported at $ 7288.06 at LOEx Global, an increase of 2.09% in the day.
The recent market has basically maintained a volatile trend around 7200 points, and there has been no surge or decline. Looking at the short line, the bulls have been relatively strong recently. On Saturday and Sunday, they did not choose to go down but oscillate to repair. Seeing that the rebound has recovered half of the decline, it is necessary to be cautious here, because after all, the previous currency disaster did not recover so quickly, just like a sudden illness, how can it recover so quickly. So now is a good time to sell high and sell low. Do not blindly bullish.
The real bottom is found afterwards and it was caused by funds. Every time I see it, the trend from the left to the right reverses the process. As an ordinary investor, if there is no more than 100 million in funds, you can see the right and enter the market, getting rid of the downward channel and turning to the right, there is a process of stabilization. At the same time, the trend of the pattern also has characteristic signals, such as the appearance of a single-day surge, red soldier and other signals. Then it will soon get rid of the downward channel, and the turnaround will slowly take shape. On the contrary, it is the same when you reach the top, for example, three crows, bearish engulfing, and other combinations. Thoroughly fundamental research on industries and varieties, quantified to actual operation, the test is more strategy, psychology, experience. In fact, it is necessary to analyze various different types of products. Mainstream coins and value coins, blue chip, white horse and technology stocks have different ways of playing. Different volatility will naturally have different operating methods. In principle, looking at industry trend opportunities from top to bottom, and then looking at specific varieties and trading points from bottom to top, they interact to understand the art of investment more deeply, and the unity of knowing and doing, in fact, everyone can do better.
Support level: the first support level is 7200 points, the second support level is 7000 integers;
Resistance level: the first resistance level is 7400 points, the second resistance level is 7700 points.
LOEx is registered in Seychelles. It is a global one-stop digital asset service platform with business distribution nodes in 20 regions around the world. It has been exempted from Seychelles and Singapore Monetary Authority (MAS) digital currency trading services. Provide services and secure encrypted digital currency trading environment for 1 million community members in 24 hours.
submitted by xSeq22x to QuantNetwork [link] [comments]
AX Trading LLC (AX), a technology-enabled registered broker-dealer and Alternative Trading System (ATS) operator, today announced a strategic partnership with Quant Network a pioneering technology company providing financial and regulatory technology as well as interoperability in financial services, payments and capital markets infrastructure. Through this partnership, Quant Network’s technology, Overledger a blockchain operating system, will enable universal interoperability for regulatory-compliant security tokens and digital assets to be traded on AX ATS, a regulated secondary trading market. AX intends to integrate Overledger to help foster the evolution of traditional capital markets infrastructure to facilitate the mass implementation of interoperable regulated digital assets. With the increased market adoption of digital assets and banking “coins” such as JPMorgan Coin, AX and Quant Network are at the forefront to enable the transferability and movement of digital assets. George O’Krepkie, AX CEO said: “we look forward to partnering with Quant. Their technology will allow our blockchain agnostic security token exchange to communicate seamlessly with issuers, traders, investors, and regulators across different blockchain protocols. This is a key technological breakthrough that will help us bring the benefits of security tokens to Main Street and Wall Street.” It is expected that the first interoperable digital asset offering may commence as soon as January 2020, and that the AX Trading ATS may be ready to enable and list interoperable digital assets and securities in 2020.Let’s have a closer look at what that means to truly appreciate the significance of the partnership by covering the basics for those not familiar with wall street.
What is an Institutional Investor / Trader?An institutional investor is an organization that invests on behalf of the organization's members. They consist of hedge funds, banks, investment banks, pension funds, insurance companies, endowment funds, or any other type of money management firm.
Institutional investors account for about three-quarters of the volume on the New York Stock Exchange (which alone handles more than $20 Trillion a year in volume). In the US, Institutional investors own about 80 % of the total market value of the equity (stock) market, which globally is worth more than $73 trillion.
Wall Street refers to the institutional investors I mentioned above whereas Main Street refers collectively to members of the general public who are not accredited investors and the overall economy as a whole.
Whilst the Equity Market is huge, Institutional investors also invest in other securities which are prime to be tokenised such as Real Estate Market (Globally worth $217 trillion), the Debt Market (Globally worth $215 trillion) and the Derivatives Market (Low end estimates at $544 trillion and high-end estimates at $1.2 quadrillion). All of which makes the current market cap for cryptocurrencies look like a drop in the ocean.
Who are AX Trading?AX Trading is a SEC-registered broker-dealer and Alternative Trading System (ATS) Operator. They are a member of FINRA (Financial Industry Regulatory Authority)and SIPC ( Securities Investor Protection Corporation) regulated authorities. The SEC has some of the most stringent regulations in the world for listing securities and there are fewer than 50 SEC-registered Alternative Trading System Operators in the United States, of which only a handful are currently implementing Digital Assets. Others are awaiting regulatory approval with Coinbase, Circle etc are all looking at getting into this huge market.
AX Trading have investors and sponsored brokers including the likes of Credit Suisse, (a multinational investment Bank and Financial services company worth $27.5 billion). AX currently have over 800 Institutional traders (these are not individuals, but corporations such as hedge funds, banks, investment banks, pension funds, insurance companies, endowment funds etc).
AX Trading have also partnered with Euronext, the largest Stock Exchange in Europe with a market cap of $4.65 trillion as of 2018, in the creation of Euronext Block which utilises AX Trading.
What is an Alternative Trading System?An Alternative Trading System (ATS) is an SEC-regulated trading venue which serves as an alternative to trading at a public exchange. ATS account for much of the liquidity found in publicly traded issues worldwide. They are known as multilateral trading facilities in Europe, electronic communication networks (ECNs), cross networks, and call networks
AX is the world’s first “Electronic Trading Network” (ETN) where institutional traders can proactively connect and trade with other counterparties in a secure environment. Unlike traditional stock exchanges/ECNs that show orders to everyone and traditional dark pools/crossing systems that show orders — presumably — to no one, AX allows institutional traders to pick and choose WHOM they want to notify and also WHAT information they want to share with them.
Institutional investors may use an ATS to find counterparties for transactions instead of trading large blocks of shares on national stock exchanges. These actions may be designed to conceal trading from public view since ATS transactions do not appear on national exchange order books. The benefit of using an ATS to execute such orders is that it reduces the domino effect that large trades might have on the price of an equity.
How does AX Trading Work?The AX Trading process begins when one trader sends an “initiated” order to AX. The order can be routed to the AX ATS via one of our broker sponsors such as Credit Suisse. The initiated order triggers a “Call Auction” on AX, a period of time when the order will rest in AX to be matched against other orders from auction responders.
The Initiator of an AX auction decides who they want to invite to participate in the auction, whether they be all 800+ institutional members or targeted to specific ones, as well as how much info they want to disclose about the order. Based on these instructions, the AX ATS then notifies the members inviting them to participate in the trade.
The invited members can then participate in the trade by either placing buy orders of their own or placing sell orders. At the end of the AX auction period, all orders are brought together, and a match is performed.
In the traditional, continuous market with displayed bids and offers, traders are often chasing liquidity. In other words, the price may move away from them the more they buy or sell to what is commonly called “market impact.” On AX, the advantage of their call auction model is it brings liquidity — in the form of participant orders to the buyer rather than them chasing liquidity.
What is a Security Token?Security Tokens are different than Utility Tokens or Cryptocurrencies. A security token is a digital representation of a traditional security. It may represent shares in a company, interest in a fund, real estate, art collectables, or essentially any asset a party can own. Anthony Pompliano wrote an article explaining tokenised securities in more detail which you can see here
Security Tokens are digital assets subject to federal security regulations. In layman terms, they are the intersection of digital assets (tokens) with traditional financial products — a new technology improving old things. If cryptocurrencies like Bitcoin are considered “programmable money” then you can consider Security Tokens a version of “programmable ownership.” This means that any asset with ownership can and will be tokenized (public & private equities, debt, real estate, etc).https://preview.redd.it/21cz6zvus0m31.png?width=569&format=png&auto=webp&s=883eb844e1061cddd585903549dde829098765c2
Quant Network community member David W also wrote an excellent piece on the benefits of tokenisation of assets in a lot more detail than what I will briefly cover here and strongly recommend you check it out.
The Tokenisation of assets is therefore inevitable, because it is a better way to record, exchange and monitor asset ownership for all parties involved. The amounts at stake represent many hundreds of trillions of US dollars
What are the benefits of a security token?
Security Token Issuance PlatformsSecurity token issuance platforms allow issuers to issue Security tokens that represent the security such as Shares in their company etc in return for capital. This is known as a Primary Market. Importantly it’s not just the issuance that they look after, it’s the whole life cycle of a digital security to ensure they remain continuously in compliance as they are traded etc. They also provide reporting to the issuer so they can see who owns the tokens and what dividends to pay out.
Securitize are one of the leading security tokens issuing platforms. They have created the DS Protocol, a blockchain agnostic protocol for security tokens which manages the whole lifecycle of a digital security, ensuring it remains continuously in compliance. They have issued a number of security tokens on the Ethereum network as well as recently working with IBM to tokenise the Corporate Debt Market (worth $82 Trillion). On the back of this they joined Hyperledger, an open source project which includes Enterprise blockchains such as Hyperledger Fabric which IBM is heavily involved with.
They recently also became the first SEC-registered transfer agent, which means Securitize can now act as the official keeper of records about changes of ownership in securities.
There are many companies in this sector which are utilising various blockchains, Other examples include:
Trading VenuesWhilst the issuance platforms above generally also include their own exchange where the token can be traded on, secondary markets such as those offered through traditional stock exchanges and Alternative Trading Systems provide significantly more liquidity.
Traditional Stock Exchanges have been very active in blockchain with some going through proof of concepts, to those like SIX SDX Digital Exchange which is due to launch later this year. They are using various blockchains and cover the full process from Issuance, Trading and Post Trade / Settlement services. I have briefly outlined which blockchain they are using / testing with along with source to read more about it below:
Post Trade — Central Security DepositoriesSituated at the end of the post-trading process, CSDs are systemically important intermediaries. They thereby form a critical part of the securities market’s post-trade infrastructure, as they are where changes of securities ownership are ultimately registered.
CSDs play a special role both as a depository, involving the legal safekeeping and maintenance of securities in a ‘central depository’ on behalf of custodians (both in materialised or dematerialised form); as well as for the issuer, involving the issuance of further securities by issuers, and their onboarding onto CSDs’ platforms.
CSDs are also keeping a number of other important functions, including: dividend, interest, and principal processing; corporate actions including proxy voting; payment to transfer agents, and issuers involved in these processes; securities lending and borrowing; and, provide pledging of share and securities.
Blockchain technology will enable real-time settlement finality in the securities world. This could mean the end of a number of players in the post-trade area, such as central counterparty clearing houses (CCPs), custodians and others. Central Security Despositories (CSD) will still play an important role according to reports:
“CSDs could have an important role to play in a blockchain-based settlement system. As ‘custodians of the code, CSDs could exercise oversight of, and take responsibility for, the operation of the relevant blockchain protocol and any associated smart contracts.” Euroclear Report
Another group of 30 central securities depositories (CSDs) in Europe and Asia are researching possible ways to “join hands” in developing a new infrastructure to custody digital assets. The CSDs will attempt to figure out how to apply their experience in guarding stock certificates to security solutions for crypto assets.
“A new world of tokenized assets and blockchain is coming. It will probably disrupt our role as CSDs. The whole group decided we will be focusing on tokenized assets, not just blockchain but on real digital assets.”
You can read more about how blockchain will affect CSD’s here
Examples of CSD’s in blockchain
The Importance Of Interoperability
The evolution of DLT and the wide adoption across industries and across different market segments is resulting in many different ledgers networks, but the ultimate promise of DLT can only be realized when all ledger networks can seamlessly interoperate. — from the recent DTCC whitepaper with AccentureIt’s clear from the above that interoperability will be crucial in order to unlock the true potential of Distributed Ledger Technology. Issuance platforms will seek to interoperate with as many secondary exchanges as possible to provide maximum liquidity for issuers. Issuance platforms and secondary exchanges are each using a wide range of different blockchains that all need to interoperate as part of the trade process. CSD’s will also need to have interoperability between other CSD’s as well as to the secondary exchanges (again each using different blockchains).
Enter Quant Network’s OverledgerQuant Network’s blockchain operating system, Overledger, provides interoperability between any current and future distributed ledger technology as well as easily connecting Off Chain / Legacy networks as well as plans to connect directly to the Internet. Within 10 months it has proven it can provide interoperability with the full range of DLT technologies from all the leading Enterprise Permissioned blockchains such as Hyperledger, R3’s Corda, JP Morgan’s Quorum, permissioned variants of Ethereum and Ripple (XRPL) as well as the leading Public Permissionless blockchains / DAGs such as Bitcoin, Stellar, Ethereum, IOTA and EOS as well as the most recent blockchain to get added Binance Chain. All without imposing restrictions on connected chains, being Internet scalable and able to easily integrate into existing networks / infrastructure.
Overledger a blockchain operating system, will enable universal interoperability for regulatory-compliant security tokens and digital assets to be traded on AX ATS, a regulated secondary trading market. AX intends to integrate Overledger to help foster the evolution of traditional capital markets infrastructure to facilitate the mass implementation of regulated digital assets. With the increased market adoption of digital assets and banking “coins” such as JPMorgan Coin, AX and Quant Network are at the forefront to enable the transferability and movement of digital assets
Overledger enables Universal Interoperability where digital assets can move across blockchains so that they can interact with smart contracts on different blockchains. It does this by locking the asset on one blockchain and then representing it on another blockchain either by creating a representing token or representing it via metadata. This will enable all of these different parties such as Issuance platforms, Exchanges, CSD’s, traders etc to move the digital asset from their respective blockchain onto AX Trading’s platform for secure, immediate and immutable trading to take place. Potentially it would even allow Digital Assets / Securities to settled on a public permissionless blockchain such as the recently connected Binance Chain in a completely safe, secure and compliant way.
Regulators would be able to run a node and view transactions in real time ensuring that compliance is being kept. Potentially they could also benefit from using Quant Networks Multichain Search capability http://search.quant.network/ to be able to fully track assets as they move across blockchains.
George O’Krepkie, AX CEO said: “we look forward to partnering with Quant. Their technology will allow our blockchain agnostic security token exchange to communicate seamlessly with issuers, traders, investors, and regulators across different blockchain protocols. This is a key technological breakthrough that will help us bring the benefits of security tokens to Main Street and Wall Street.”
SecurrencyAX Trading have also partnered with Securrency (who have previously tokenised over $260 million in real estate assets). Securrency provide a protocol that enables security tokens to remain in compliance regardless of what blockchain the token is on. Due to the layered approach that Overledger has adopted from the learnings of TCP/IP, this protocol can be easily integrated on top of Overledger to enable security tokens to move across blockchains as well as ensuring they remain in compliance with regulations programmed into the token.
Delivery vs Payment (DvP)
A DvP transaction involves the settlement of two linked obligations, namely the delivery of securities and the payment of cash. DvP avoids counterparties being exposed to principal risk, i.e. the risk that the seller of securities could deliver but would not receive payment or that the buyer of securities could make payment but would not receive delivery. Following this requirement, a DvP securities settlement mechanism has to ensure that the delivery of securities and the payment of cash are linked in a way where one leg (obligation) of the securities trade is conditioned to the final settlement of the other leg (obligation) of the trade. Thereby final settlement is defined as “the irrevocable and unconditional transfer of an asset or financial instrument, or the discharge of an obligation by the FMI or its participants in accordance with the terms of the underlying contract”. — STELLA — a joint research project of the European Central Bank and the Bank of JapanWe have seen how Overledger can provide interoperability for the securities to move across Issuers platforms, integrate with Stock exchanges, Central Security Depositories and AX Trading. Now we need to be able to ensure that payment is guaranteed and in a way that offers immediate settlement which is irrevocable. To do this we need to represent FIAT on the blockchain so that it can interact with smart contracts and settle transactions on the blockchain.
J.P.Morgan’s CoinJ.P.Morgan is the largest bank in the United States and ranked by S&P Global as the sixth largest bank in the world by total assets as of 2018, to the amount of $2.535 trillion.
J.P. Morgan was the first U.S. bank to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling the instantaneous transfer of payments between institutional clients.
With J.P.Morgan’s $2.6 trillion balance sheet, expertise in blockchain and global payments network, J.P. Morgan can seamlessly and securely transfer and settle money for clients around the world. J.P. Morgan are supervised by banking regulators in the United States and in the international jurisdictions in which it operates.
How does JPM Coin work?A Buyer purchases JPM coins in advance which get represented on the Permissioned Quorum blockchain ($1 =1 JPM Coin). Quant Network’s Overledger could then provide interoperability to lock those tokens on Quorum and represent those onto another blockchain / AX Trading’s Network. By being able to represent securities and FIAT on the same blockchain (even though the underlying assets are on different blockchains) this provides instant finality / settlements to occur.
Once the seller receives the JPM coin in exchange for the securities they have sold they will be able to redeem them for USD. It also doesn’t necessarily mean that they have to have a JP Morgan account to redeem them, you could imagine in the future that the Bank instead redeems the JPM Coin and credits the users account. Similarly the buyer of the security token redeems the represented token and unlocks the security token on the original blockchain.
You can read more about JP Morgan’s Coin here as well as its use cases
J.P Morgan is betting that its first-mover status and large market share in corporate payments — it banks 80 percent of the companies in the Fortune 500 — will give its technology a good chance of getting adopted, even if other banks create their own coins. “Pretty much every big corporation is our client, and most of the major banks in the world are, too,” Farooq said. “Even if this was limited to JPM clients at the institutional level, it shouldn’t hold us back.”Overledger enables different securities tokens / digital coins representing FIAT currencies to be brought together from the various permissioned / permissionless blockchains onto one platform where trading / settlement can take place. Overledger is the only technology that can do this today across the leading permissioned and permissionless blockchains as well as existing networks, all in a secure, scalable and easy to integrate way.
Quant Network are working with AX Trading to bring more digital assets, securities and tokenised assets to their existing 800 institutional traders in an already live and connected FINRA and SEC regulated exchange. AX Trading is not just about trading securities but other digital assets such as Bitcoin, Ethereum and potentially even Quant in the Future.
This is a multi-trillion dollar market with huge global enterprises, traditional exchanges and global banks are all adopting DLT at a rapid pace and going into production at scale in a matter of months, examples include the NYSE Bakkt launching Bitcoin futures later this month, Swiss Stock Exchange ($1.6 Trillion market Cap) is due to launch their digital exchange running on Corda (SDX) by the end of the year. The DTCC are due to launch their Trade Information Warehouse which processes $10 Trillion of cleared and bilateral derivatives by the end of the year. JP Morgan who transfer $6 Trillion every day are due to launch their JPM coin at the end of year and AX Trading is due to offer their first digital asset by January 2020.
Quant Network’ Overledger enables the bridging of traditional finance infrastructure with the new decentralised finance infrastructure DeFi of the future, helping to redefine Wall Street and Capital Markets.
Crypto Briefs is your daily bite-sized digest of cryptocurrency and blockchain-related news – keeping you up-to-date with under the radar crypto news from around the world.submitted by CryptoHamstereu to u/CryptoHamstereu [link] [comments]
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
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Good morning everyone! How's Monday going for you so far?submitted by rokkex to Rokkex [link] [comments]
As usual, let's take a look at last week's news highlights in more detail.
South Korean electronics giant Samsung is planning to bring cryptocurrency and blockchain features to more phones across its Galaxy range.
eBay has denied rumors that it is going to start accepting cryptocurrency as a payment method, according to a Bloomberg report on May 14.
Cryptocurrency exchange Binance has announced that it is back online after completing a security upgrade prompted by a recent hack.
Monday, May 13 — Following a solid to break above the $7,400 mark earlier that day, bitcoin (BTC) has broken $8,000, with all top-20 cryptocurrencies trading in the green.
In a joint effort by several law enforcement agencies from 6 different countries, officials have dismantled a major global organized cybercrime network behind GozNym banking malware. GozNym banking malware is responsible for stealing nearly $100 million from over 41,000 victims across the globe, primarily in the United States and Europe, for years.
What are your thoughts on the above? Let us know in the comments section below!
submitted by crypt0hodl1 to PundiX [link] [comments]
We’re close to capping the first half of the year, but we assure you that Pundi X has barely scratched the surface in terms of what we can offer in 2019. A lot of works are in progress which we will announce when ready. Nonetheless, we have achieved some very promising milestones for the past few weeks, further highlighting our commitment to bringing easy payments and unparalleled crypto experience to our clients. More product enhancements, merchant activation, greater engagements, and higher security standards — these are what we have delivered last month.
Product DevelopmentXPOS certified by FCC and KC
We are proud to announce that XPOS received certifications from the Federal Communications Commission (FCC) and Korea Certification (KC), on top of the certification it has already received from CE and TRA. These certifications will certainly help build XPOS a trustworthy blockchain device as these markings indicate that from a safety and environmental protection perspective the XPOS can confidently be used by their customers.
Pundi X Open Platform is available for token listing from May 11
At the beginning of the month (1st May) we’ve launched Pundi X Open Platform that allows blockchain developers or businesses to sign up for a developer account to list their ERC20 tokens throughout XPOS, XWallet and XPASS. Not only that, now the developers have the option to create customized XPASS cards. To learn more about how to list on the Open Platform, you can read the instruction here.
NPXS buy back to incentivize quality blockchain developers to list on the Pundi X Open Platform
After announcing Pundi X Open Platform, the team has allocated the tokens from the Partnership Reserve Fund (PRF) to encourage good blockchain projects to list on Pundi X payment platform by subsidizing their initial liquidity pools. The source of PRF is the NPXS that we buy back from the open markets. On May 20, we executed NPXS buybacks equivalent to 500 ETH at around $0.00072 dollars on May 20, 2019.
This month we continue improving XWallet by adding more features and support. Here is a list of improvements we made in May:
We’ve also working hard to make XWallet app on more platform. It is now available on Samsung Galaxy Store.
You can use XWallet app for not only topping up and paying cryptos instantly with XPOS merchants across 30 countries but also sending tokens to any XWallet user in the world without fee when the receiver uses the ‘Collection’ feature. Most of XWallet users are also using staking feature from both XWallet and their own ERC20 private wallets to get FX tokens.
As of today, XWallet has more than 200,000 registered users and growing.
Merchant Adoption and XPOS partner updateDoshEx brought crypto payment to coffee shops in South Africa
Dosh Exchange is now expanding their XPOS footprint to coffee shops in South Africa. Pundians can now enjoy the best coffee in town using XPOS. XPASSes can also be bought in-store and used at the counter immediately.
iBank introduced Cao Jun XPASS card during New York Blockchain week
Limited editions of Cao Jun XPASS card powered by Pundi X and IOST have made its first appearance during a Night at BlockchainImpact event on May 15 during the blockchain week in New York. The cocktail gathered Limited Partners (LPs) and General Partners (LPs), family offices, corporate investment offices, and individuals for networking opportunities and blockchain investments. To get the limited editions of CaoJun XPASS cards, you can order them at https://www.ibankdigital.io/ibankxpass
Pundi X and BlockVibe
Thanks to BlockVibe’s cryptocurrency savvy members, Pundi’s XPOS system will now be available in more businesses in the future. This new partnershipwill not only bring cryptocurrency closer to becoming a mainstream form of payment, but will also cement Pundi X’s crucial role in helping realize this possibility.
BlockVibe has successfully held an event on the Korean American Chamber. In this event, XPOS has been introduced to the participants. In the near future, there will be more and more XPOS merchants activated by BlockVibe.
Bit2Big in Blockchain Summit Nigeria
On 24th May, the CEO of Bit2Big and blkchainafrica, Mr Kiberu Nagenda was presenting at BlockchainSummit Nigeria. Summit participants can also experience the transaction via XPOS devices.
Pundi X EventsPundi X at the BitConfBR in Sao Paulo
Pundi X Brazil team had an action-packed weekend at BitconF held from 6 to 9 May. Attendees headed to our stand and top up cryptos in their XPASS cards and XWallet, while learning more about our company and our advanced XPOS technology.
La Conexion Conference in Medellin
During 21–22 May 2019, Brazil Country Manager of Pundi X Joao Victor Mendes attended the La Conexion Conference held at Country Club Medellin, Colombia. Joao discussed the adoption of digital assets and their direct impact on the retail industry, in light of the huge potential for blockchain development in Latin America.
Keynote at Blockchain Finance Conference, APAC in Singapore
On May 8 2019, Vic Tham, CEO of Quantum Energy Asset Management and Chief Investment Officer of Pundi X Labs was a speaker at Blockchain for Finance Conference, APAC. Vic Tham has delivered keynote regarding investing in Blockchain or Fintech startups.
Bitcoin Pizza Day
On 22 May 2010, programmer Laszlo Hanyecz bought two pizzas for 10,000 bitcoins. Known as the first real-world transaction with bitcoin, this event paved the way for greater exploration into the world of crypto payments. To learn more about the history, you can read the revolution of cryptocurrency payment at CoinMarketCap.
Pundi X is grateful to be a part of this massive revolution, and of course we celebrated the day by satisfying some Bitcoin Pizza Day-induced cravings. We partnered with Papa John’s in Seoul and offered pizza discounts to anyone who used their XWallets to purchase from the store as well as hosting a 24 hour online XPOS flash sale.
XBlockchain Meetup in Seoul
The following day in Seoul, we held an XBlockchain Meetup with Function X Foundation and Dapp.com. In the meetup, we have shared the update and ongoing R&D progress, including upcoming integration with Binance Chain and new social networking service on Function X ecosystem, FX Thread (code name). XWallet users will be the first to preview and test this service before the launch of XPhone.
David Ben Kay, Chief Legal Counsel of Pundi X, has officially onboard to lead Function X Foundation. He shared the foundation vision and status of Function X development in this meetup.
InnoVEX Forum in Taipei
On May 30, I had the honor to be invited to deliver keynote about blockchain for smart payment at InnoVEX, one of Asia’s leading startup platforms in conjunction with Computex 2019 and later participated the panel led by Jason Hsu, Taiwan’s Crypto Congressman with Dominik Schiener from IOTA and Jeff McDonald from NEM Foundation.
Pundi X joins the Blockchain Collaborative Consortium in Japan
Japan-based Blockchain Collaborative Consortium (BCCC) welcomed Pundi X on 27 May, in a step for us to engage Japanese institutions and regulations and develop awareness around blockchain. According to BCCC, they promote the widespread adoption of blockchain technology, particularly through the acquisition of latest information and basic knowledge of blockchains, training of engineers and planners, formation of network willingness of practical experiments and implementation, and the implementation of blockchain related business to be widely notified to the market and the adoption of blockchain to various businesses.
The crypto space in Japan is growing at a desirable rate, and we are hopeful that Pundi X will be one of the frontliners in helping BCCC achieve its goals.
NPXS token removalhttps://preview.redd.it/xhwud1tuhv231.png?width=699&format=png&auto=webp&s=ae5b9e62f58668d382d89557da1ec0f6ef4aa30a
Pundi X team has executed the token removal as planned on May 11, 2019. A total of approximately 14.5 billion (7.59 billion of NPXS and 6.95 billion of NPXSXEM) have permanently removed from the supply. You can check the details here.
Monthly unlock token mechanism is completedThe monthly unlock tokens came to an end on May 31 as announced. The team will complete the last batch of unlock NPXS and NPXSXEM by mid June. After that, there will be no monthly unlock tokens.
For the KYC verified NPXS/NPXSXEM XWallet users, don’t forget you have the option to hold your NPXS/NPXSXEM to stake for FX tokens till March 19, 2020.
That’s all for the highlights of Pundi X Insider in May. Hope you enjoy our progress. I look forward to sharing our next update in June!
submitted by GTE_IO to u/GTE_IO [link] [comments]
News by Coingeek: Noah Bradley
As active as the blockchain and cryptocurrency spaces are on a continual basis, it may sometimes be difficult to keep up with everything that’s going on. It’s also difficult to separate the real news from the fluff — those pieces that are only designed to appear noteworthy but that are, in fact, just publicity campaigns. In an effort to provide crypto enthusiasts with an overview of what’s going on, here is a rundown on some of the top stories of the week.
Bitfinex and Tether have had another rough week. There was some good news, as well as bad, as the saga over their close relationship and questionable activities continues. On the one hand, Bitfinex has been told by a judge that it won’t have to turn over documents related to those activities for now. The New York Attorney General’s Office wants to know exactly what the two have been doing behind closed doors, and they’re fighting the office over its reported lack of jurisdiction. Until a request to have the case dismissed over those jurisdiction claims can be answered by a judge, Bitfinex can ignore the request.
On the other hand, though, neither of the two entities should think that it’s off the hook. While they have been given a brief reprieve in the fight with the New York government, they face a separate one with New York investors. A law firm in the state, Roche Freedman, has filed a class-action suit against Tether for its “fraudulent” stablecoin scheme. Tether’s USDT stablecoin is no longer pegged to the U.S. dollar, as it had been advertised, and the company is accused of using its position to manipulate the crypto market.
Alipay was forced to take a defensive stance this week after rumors started circulating that it was now accepting crypto payments. This would have been against the Alibaba-owned payment platform’s own rules and would, according to the company, possibly violate payment financial regulations. Alipay has a strict no-crypto policy that doesn’t permit the platform to be tied in any way to digital currencies. The announcement came after the Binance exchange stated publicly that it was now able to receive fiat payments using Alipay, via a third-party processor, which didn’t sit well with Alibaba.
The U.S. Securities and Exchange Commission (SEC) rejected yet another rule change proposal that sought to introduce a crypto-based exchange-traded fund (ETF). This one had been submitted by Bitwise Asset Management and the NYSE Arca exchange at the beginning of the year, and received the same response as have the myriad of other requests — the possibility of market manipulation prevents the SEC from signing off on the proposal. Bitwise has indicated that it might try again, but at a much later date.
On October 6, Bitcoin SV (BSV) reached a new milestone. A review of blockchain activity revealed that BSV had surpassed BTC in the total number of transactions per day. That day, BSV saw 290,000 transactions, while BTC saw 288,000. One of the biggest reasons for the increase comes from the difference in transaction fees. An average BTC transaction will set someone back around $51.42, while the average cost for a BSV transaction is just $0.31.
If there were any questions about how Bank of America (BoA) views the future of digital currency, things were just cleared up a little. BoA had long been a staunch opponent to anything having to do with crypto, but then began to seek blockchain patents and explore the fringes of the Bitcoin ecosystem. Its latest move leaves zero doubt about what is coming, as it has recently completed a recruitment action that was launched to find a Ripple expert to work in-house. The individual, according to BoA’s LinkedIn job posting, would “lead the project management team for the Ripple Project.”
Lichtenstein is still determined to be a leading financial hub, even if that hub centers on digital currency and not fiat. The country’s Parliament just approved a new Blockchain Act, which will give better protection to companies and investors, and will almost certain attract a lot of activity to the mid-Europe country.
Ariel Ling, co-founder and COO of BitMax, has shared her thoughts on the current state of digital assets and what to expect in the next years, what retail investor should take into account when buying any cryptocurrencie and the key factors that drive the value of the token/coin.submitted by BitMax_Support to BitMax [link] [comments]
Ariel Ling, BitMax COO
Why, when and how have you started your crypto journey?
I started my crypto journey at the beginning of 2018 when my long-time friend, the co-founder and CEO of BitMax.io, Dr. George Cao “pulled” me out of the traditional Wall Street and asked me to join him in launching this exciting venture. Three main drivers are 1) to learn more about blockchain technology and its transformational applications in different industries; 2) to leverage in-depth traditional finance expertise to improve overall crypto trading and exchange market structure for better efficiency and transparency; 3) to have a chance to work with a talented and driven team who share similar vision, passion and conviction to build a top global digital asset trading platform as well as a wonderful organization from good to great!
If your friend will ask you: should I consider cryptocurrencies as investment opportunity? What will be your answer? Will you recommend any specific digital asset?
Coming from traditional finance perspective, I would explain my thoughts process from three angles — 1) types of crypto or digital assets as the foundation for understanding; 2) whether they, are more for short-term trading or mid-term investment 2) what are elements for investment valuation and decision-making so our friends can assess and make decision for themselves.
First, in general there are three types of digital assets:
Second: is digital asset good for trading or investment? due to the nascent nature and very short history of market development with most of retail investors’ participation and lack of proper regulatory framework globally, there are quite some market manipulation, speculation and fraud activities in the current market, causing significant volatility and investors loss across all types within very short period of time. This made it very hard for any investors to assess the real valuation and momentum drivers behind those large swings. So at this point, I would think with its high volatility and risk, digital asset in general is more of very short-term trading product than investment vehicle. From liquidity perspective, major currency/coin-type will have more market depth across exchanges, hence more suitable for short-term trading-focused strategies.
Third, from traditional investment perspective, it is critical to assess digital asset investing from valuation and fundamental perspectives, such as business model, future growth, economic return vs. person’s risk tolerance and investment objectives. For major coins, especially Bitcoin itself with its longest history among all the digital assets, have started to provide certain payment function similar to fiat currencies in certain countries. Hence, there are more interesting dynamics to the Bitcoin investing based on one’s view of Bitcoin usage over mid-term horizon and the relative valuation vs its production (mining cost) especially with the price down to 3,500–3,650 USD. For security-type or utility tokens, the performance over short-to-medium term really comes down to combination of intrinsic value of underlying blockchain projects and token economics. Similar to Internet in 1990s, blockchain technology projects are still at the early stage of development and looking for meaningful and applicable use cases to bring real economic benefit from the economics and business model perspective, so it becomes very difficult to apply traditional finance valuation and assess the real intrinsic value of those projects. Recent market crash has brought many of those tokens down to near zero value. So the investment in those tokens are extremely high risk and everyone should be really careful and prudent in the evaluation of any specific projects for the decision-making and risk protection.
What is the story behind BitMax? Who are the foundefounders? When it was founded?
Q1 2018, Dr. George Cao and I founded Global Digital Mercantile (GDM), global operator of digital asset platforms, including BitMax.io based on Singapore for overseas markets and North America’s trading platform aiming for the first half of 2019. BitMax.io started public beta testing mid July, 2018, and was officially launched later mid August. On November 18th , we launched our mining mechanism, the industry very first transaction-mining & reverse-mining mechanism, which has made us the industry leading third-generation cryptocurrency exchange — after first generation of traditional exchanges like Binance, Gemini, Coinbase, etc. and 2nd generation of transaction-mining ones like FCoin, Bitthumb, etc.
Just a quick introduction of my partner. Dr. Cao studied Computer Science in the University of Science and Technology of China, and earned his PhD degree from the University of Chicago. Dr. Cao was the Founder and the Chief Investment Officer of Delpha Capital Management, LLC., New York, specializing in trading equity, ETFs and commodity future products in all major exchanges across the globe. He is also the founder and managing partner of Whitestone Investment Group, a New York based venture fund that invests in a large variety of startup companies that are in the high tech, fintech, big data and medical area. Before founding Delpha Capital, Mr. Cao worked at the Equity Division of Barclays Capital in both the New York and London offices. During that period, he oversaw equity electronic trading in the U.S., European and Asian markets. Prior to Barclays, he researched and traded U.S. equity as a Portfolio Manager at Knight Capital Group.
For me, I have built more than 18-year extensive experience in strategic planning, business development, financial risk management and regulatory implementation across major trading asset classes (Equity, FX, and Fixed Income) at several top global banks. Previous to jumping into digital asset trading, I ran USD liquidity and investment product for top financial institutions and corporate clients at tier-one global investment bank. Before that, I ran US Broker Dealer as COO and head of Business Development for Germany 2nd largest bank. Earlier from 2007 to 2012, I was global equity trading COO across Lehman Brothers and Barclays Capital, building out trading franchise and market making businesses globally. I have four degrees — graduated top of class from Nankai University with two Bachelor degrees in Finance and English Literature and got my MBA from NYU and Master of Mass Communication from University of Georgia.
Where is Bitmax located? Are you a distributed team or do you have an office to work together? How many people work for Bitmax?
Our global team of 50 members are based off two main location — New York with 20 members, including all the founding members, and Beijing with 30 members.
Would you be so kind to introduce briefly the core team members?
Both George and I are very proud of our 10-member founding team. Similar to us, they are all from Wall Street top firms like Morgan Stanley, Deutsche Bank, Goldman Sachs, Bloomberg, and top high-frequency hedge funds with deep experience in the fields of financial engineering research and development of large-scale quant trading infrastructure. Our educational background span across multiple prestigious institutions including Columbia University, University of Chicago, Carnegie Mellon University, and New York University in the United States, as well as Peking University and Tsinghua University in China. So one special thing about BitMax.io is that very few exchanges in the crypto trading space are built by solid team like ours with strong traditional finance mindset and trading background.
You’ve started BitMax during market downtrend in pretty competitive environment. What is your value proposition? Why traders should switch to BitMax?
I think BitMax.io is actually very special in this market, and our team is very proud of what we have built in the short period of six months. There are at least three reasons I think traders should chooseBitMax.io:
Second, our quant-driven tech platform. Our development members were all from high frequency and quantitative systematic trading shops. They definitely make sure the platform was resilient and it can actually handle billions of volume during the design and build. The platform resilience and scalability were fully being tested when we launched the transaction mining and reverse-mining. The first day, we actually had, within the first 24 hours, the trading volume of 1.6 billion in notional; and our system didn’t flinch, didn’t slow down, and didn’t shut down. This is very rare in any of today’s exchanges where you can frequently see the slowdown, the crash, and very slow user responses, especially with transaction mining exchanges.
Third, what we are extremely proud of and all the users can see, is our 24/7 customer services built upon the core Wall Street client-centric concept. Besides our customer support team who never sleep, George actually stands behind the platform almost 24/7 answering questions from the customers, seeking solutions for their issues, and providing the most responsive customer service for the entire crypto trading space.
BitMax CEO, George Cao, is often seen in official Telegram group answering different questions.
We constantly remind our team: customer first. When we design a product, when we launch a system, and when we look at user needs, we all look from customers’ perspective, from how we can protect the users. When we look at primary listing, we only select the high-quality projects because we want our users to have the best investment and trading experience on BitMax.io.
Are you satisfied with the current results of BitMax? Is transaction mining model giving expected volume? What is the % of traders using this model?
We are very pleased with current business development and delivery results from client acquisition and trading perspectives.
On the business development side, we completed the global setup for both 50-member team organization and comprehensive legal entity structure from Asia to North Americas in 2018, which laid down foundation and paved way for 2019 business expansion especially with US.
Since our platform launch in mid Aug, we successfully started Industry FIRST transaction mining and reverse-mining exchange and built out the most active global communities and users within four months in the bear market, with registered users more than 95k; average daily active traders more than quadrupled since the start of transaction mining; average daily trading volume of $465mm through the month of January and February in 2019. Those are extremely promising under this tough market condition.
From the composition of trading volumes, there are two parts — transaction mining which grows exponentially; second is organic, the regular trading which has experienced healthy increase as well because of all the listing activities and all the incentives we have. The regular trading takes about 5% of total trading volume, which is very good for an exchange which was launched in August and running right into the bear market.
What are the key factors that drive the value of the token/coin?
From traditional finance /investment view token economics is really a balance act between business / economic model and exchange market force, driven by three factors: intrinsic value and sustainability, supply and demand, and liquidity and depth.
First, from a traditional finance perspective, we need to look at the intrinsic value, the economic valuation behind a project. How does this project make money? Do they really have fundamentals? Do they really have a viable business model? Do they really have a solid user base for future growth? For example, our exchange business model is very simple. We are exchange; People trade on our platform. The more they trade, the more transaction fee the exchange collect — the revenue source. The exchange will last when people keep trading on the platform and the transaction revenue generated covers the operating cost of running an exchange.
Second, it is the supply and demand of token on the market — who will buy and for what purpose; who will sell and under what scenarios. For major currency coins like Bitcoin, people might buy and sell for potential investment or use in actual payment processing. For other types of token, it is more driven by short-term trading pattern and profit taking. So it is extremely important to set up certain token mechanism to support the equilibrium of supply and demand like how Central Banks manage the supply of currency in circulation through monetary policies.
Third, when the market force comes in, it comes down to the liquidity and depth. Exchange is about liquidity and market depth. That means there has to be enough of trading volumes at each pricing level for each token. For BitMax.io, we have very sophisticated market making model that is similar to Designated Market Maker model of New York Stock Exchange. We focus on providing liquidity and maintaining a fair and orderly market for those token listings who agree to engage our market making services.
Every exchange is looking for good projects in order to become a premiere market for this new asset. Can you name some projects that impressed you recently (even if you are not discussing possible listing with them)?
BitMax.io has strict listing requirements in order to identify high-quality projects for our users. Very proud that we have listed five industry star projects in the last several weeks, with more in the pipeline. All of them have the following attributes that made them successful — viable and profitable business model, growing user bases, strong community support, and comprehensive funding sources.
One of the shining examples is European project named LTO Network listed mid Jan. Its price has been steadily rising since then, as more and more people get to know their business model and more project support comes into the market place to buy the tokens — It uses blockchain technology to streamline a lot of legal processing for one of EU governments, which is very easy to understand its economic value from a revenue perspective. This is simply what people need to see eventually, clean and clear from business economic model perspective.
Let’s imagine a crypto market in 5 or 10 years. Can you make any prediction what the market will look like? What customers will expect from exchange in 5–10 years?
Based off my long-time experience in traditional trading, especially how equity market evolved last twenty years, I would imagine maturing market structure and entrance of institutional investors are key mandatory and healthy development of digital asset market.
First, As the market develops and expands globally, traditional institution participation is a must, in order to upgrade and strengthen the overall market structure and maturity, making it more transparent and resilient, and most importantly enabling the real broad-base adoption of digital assets. Most institutional investors, such as mutual fund, pension fund and other financial institutions, hold the majority of world investment assets, not individual retail investors. Only when those big guys join the market, will there be real revolutionary improvement and expansion of the digital asset just like any other financial markets.
Second, I would expect the market to become more structured with major building blocks for transparent trade life cycle processing and separate risk analytics supporting services. Current crypto trading market is very fragmented with exchanges taking on different roles of trading, wallet management, custodian, etc. Also the lack of clear and consistence regulation on market structure has led to many aspects of market inefficiency — inconsistent liquidity and depth, wide spread, high transaction cost, high volatility, speculation, etc. This definitely hampers the broader adoption of digital assets from institutional investors.
Forward looking, multi-tier structure under some level of regulatory framework with clear guidance is required for future maturing market. Similar to security market, there should be at least three layers of different and independent roles: the role of broker dealer to handle the client relationship with good KYC/ AML processes, retail clients, other financial institutions, blockchain players and to take client order as agent or dealer; the role of exchange to focus on listing and trading — liquidity provision and order matching; the role of clearing house to provide clearing and settlement and custodian on custody of assets with proper control and independence. It is very clean and clear with good check and balance in place.
What are the key challenges for 2019?
During our 2018 business planning, we clearly view 2019 to continue being full of challenges with market uncertainty from both asset price and valuation as well as regulatory development globally. In prep for that and further growth of our platform, we have laid out the following four main strategic objectives and they are all well underway:
With current market crash or correction, there are two possibilities from trading perspective — recovery depending on whether this is a V down or U curve. The U curve occurs when the market collapses, it takes a longer time for market to find the bottom and struggle to rise up. The V down is like a quick collapse — dropping down very fast and reaching the bottom, and then, with some catalyst event, either catalyst from market structure, or catalyst from the market expansion itself, suddenly it gives a boost and bounces right back up.
For market recovery, besides all the investment and economics elements I’ve discussed above, I believe one critical factor is the regulatory development especially clear guidance from key regulatory bodies of those major financial markets such as US, UK, EU, etc. on those key building blocks I mentioned in the maturing market structure. Once those in place, more traditional institutional investors will be ready to get in and hence boost the liquidity and valuation of the digital assets. That is the new beginning of digital assets being accepted as part of Main Street investment globally.
A New York law firm last Friday filed class action suits against 11 well-known companies in the digital asset industry, claiming they sold unregistered securities to investors.The companies targeted include names like Binance, BitMEX, Block.one, Civic, and the Tron Foundation.. The suits focus on companies that participated in issuing or trading tokens associated with the initial coin offering ... Schneiderman’s office sent a letter and questionnaire to companies including New York-based Gemini Trust Co. and itBit Trust Co., as well as Bitstamp USA Inc., Payward Inc., Bittrex Inc., Circle Internet Financial Ltd., Binance Ltd., Elite Way Developments LLP, Gate Technology Inc., and Huobi Global Ltd. Perhaps the biggest (alleged) crypto scam related to New York is the most popular stablecoin: Tether (USDT). The New York Attorney General, Letitia James, has brought a suit against Hong Kong-based iFinex Inc. - the operator of Bitfinex and the owner of Tether - alleging that the company printed up to $850 million in unbacked Tether to cover unreported losses. Trade over 40 cryptocurrencies and enjoy the lowest trading fees in America. New York, September 17, 2020 — Binance, the global blockchain company behind the world’s largest digital asset exchange by trading volume and users, announced today the agreement to support BUSD stablecoin on Flow, the blockchain developed by Dapper Labs, the company behind CryptoKitties and NBA Top Shot.This is an important step for all Flow ecosystem builders, who are propelling the next ... The financial regulating body, New York State Department of Financial Services (NYDFS) said that the “double your money with bitcoin” scam as a result of the infamous Twitter hack on July 15 led to “weaponization” of major social media companies. The policymakers have called for strong cybersecurity to curb such events. NYDFS claimed that in […] New York has positioned itself as a difficult place for the cryptocurrency industry with the notorious BitLicense driving many companies out of the state. More so, Binance has been working towards increasing its influence in the West with Binance.US growing steadily since it launched in September last year. Difficult Times in New York. While ... New York, September 17, 2020 — Binance, the global blockchain company behind the world’s largest digital asset exchange by trading volume and users, announced today the agreement to support ... Cryptocurrency New York: 11 cryptocurrency companies sued - New York City, NY - Eleven cryptocurrency companies are sued in a New York court due to violating cryptocurrency laws. The 10 cryptocurrencies are binance USD (BUSD), bitcoin , bitcoin cash , ethereum ... Crypto companies can create a “coin-listing or adoption policy” tailored to their specific business model and risk profile. If approved by the DFS, the company would be able to “self-certify the listing or adoption of new coins in addition to those on the Greenlist, without any further approval from DFS ...
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