Sharding, True USD Launches and More Custody Players: This Week in Crypto

Make sure you check out our previous edition here, now let’s go over what happened in crypto this week. Also, make sure you subscribe for this week’s edition of The CCN.com Podcast on iTunes , TuneIn , Stitcher , Google Play Music , Spotify , Soundcloud , YouTube  or wherever you get your podcasts.

Price Watch:

• Bitcoin is up 5.46% this week to $6,500 after a somewhat tumultuous week. On Monday, we reported that despite Bitcoin’s price being at $6,300, the market was heading for a 2018 low. The price continued to appreciate slowly and oscillated between $6,300 and $6,400 on Tuesday, September 11th before declining to $6,200 later in the day. Over the next two days, the market managed to re-approach the $6,500 level and continued to approach $6,600 through Tuesday. Analysts consider these weeks move to have found stability at the $6,500 level.
• Ethereum is up 16% this week to $222 after a hard drop of 31% last week, 5% the week before and drops of 11%  and 24% in the preceding weeks with single and double-digit drops going back months. The recent drops have been blamed on ICO sell offs. Vitalik has said that the days of 1000x growth are gone. A statement he clarified this week as something that pertained to the market capitalization. This week marked a turn around as Ethereum surged 9% on Thursday and it was said that last weeks prices at least represented ‘a’ bottom . In the same day, Ethereum had appreciated nearly 23% from its intraday low. The price continued to increase into the next day hitting $220 leaving the market cap over $200 billion again.
• The entire coin market cap is up 6% this week following bitcoins price increase and double digit gains by Ethereum and Monero. The state of affairs has led Galaxy Digital founder Mike Novogratz to declare that the market has bottomed out. Not everyone is so optimistic about alt coins though, with Sonny Singh, chief commercial officer at BitPay ,

Startups:

• Gemini Launches Crypto Smart Contract to Wide Criticism – Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has announced the creation of a USD-pegged Ethereum token that looks to supplant tether (USDT) as the stablecoin of choice among bitcoin traders. The criticism has come from a tech publication called Good Audience  where blockchain researcher Alex Lebed performed a code review of the Gemini dollar smart contract, finding that, contrary to the ethos and technical specifications of decentralized cryptocurrencies like bitcoin, GUSD includes a provision that allows its “custodian” — namely Gemini — to freeze any account.
   
• Brave Browser Files GDPR Complaint Against Google – Brave, the web browser founded by Mozilla pioneer Brendan Eich  and funded through an initial coin offering(ICO), has fired two shots across the bow at Google.  The company, whose browser blocks obtrusive and privacy-infringing advertisements by default, has filed formal complaints  against its much larger rival in Britain and Ireland, hoping to trigger provisions in the recently-implemented European General Data Protection Regulation. The company has since removed  Google as it’s default search engine.

Banks:

• Citigroup to Offer Crypto Custody – According to Business Insider , sources close to Citibank revealed that the $175 billion New York-based bank will offer crypto custody solutions to institutional investors through the launch of a product called Digital Asset Receipt (DAR) which will enable institutional investors to invest in cryptocurrencies in a fully insured and regulated manner.

Governments:

• S.Korea’s Central Bank Expresses Concern Over ‘Kimchi Premium’ – Officials at the Bank of Korea (BOK), the country’s central bank, have called for continued vigilance  into South Korean crypto trading markets in an attempt to keep a lid on the heightened premiums of cryptocurrency.
• ‘BitLicense’ Regulator Approves Stable Coins (Including Gemini’s Token) – In a statement published Monday, the New York Department of Financial Services (NYDFS), creator of the “BitLicense” framework for cryptocurrency companies, confirmed that it had given two chartered companies, Gemini Trust Company and Paxos Trust Company , permission to begin issuing these so-called “stablecoins” to clients.
• Blockchain Records to be Accepted as Legal Evidence in China –  The Supreme People’s Court of China said this week that blockchain records will now be admissible in court. According  to the South China Morning Post, internet courts which have been set up with a view of handling internet-related legal disputes will now be in a position of recognizing digital data as evidence upon verification by methods that include, among others, blockchain, time stamps and digital signatures. The move marks another step toward blockchain-based evidence management as we’ve seen in the U.K and in legislation in Vermont .
• SEC Halts Trading of ‘Bitcoin ETF’ – The SEC announced the temporary trading suspension of the “Swedish bitcoin ETF.” on Sunday, while U.S. markets were closed for the weekend, claiming  that “there is a lack of current, consistent and accurate information concerning” the funds, Bitcoin Tracker One (OTC: CXBTF) and Ether Tracker One (CETHF), which have been listed on Nasdaq Nordic since 2015 but have only recently been made available to U.S. investors through an over-the-counter (OTC) market.
• ICOs are Covered by Securities Laws: US Judge – Judge Raymond Dearie  of the U.S. District Court Eastern District of New York today ruled that U.S. securities laws cover ICO token sales  in a case against a fraudulent ICO promoter Maksim Zaslavskiy, whom prosecutors are looking to bring up on fraud charges  for defrauding investors of more than $300,000 from a scam ICO called REcoin.
• OTC Trading in Russia on the Rise – According to local reports , the daily trading volume of major cryptocurrencies like Bitcoin and Ethereum in Moscow alone can reach $50 million on peak days, which is relatively small in comparison to major cryptocurrency exchanges but large given the regulatory uncertainty in Russia. The trend closely follows a trend we’ve seen in China. 

Noteworthy:

These are a few pieces that were particularly popular this week.

• Vlad Zamfir Codes Sharding Prototype, What it Means for Ethereum Scalability – At ETH Berlin, one of the world’s largest Ethereum hackathons, Zamfir said in an interview with Rachel Rose O’Leary of Coindesk  that Ethereum developers will be able to run the proof-of-concept on their computers in the upcoming weeks, but it is still a prototype that is not close to being integrated into the Ethereum network.
• Mining Gold Requires 20x the Energy of Bitcoin Mining – According to LongHash , every year, more than $87.3 billion is spent on mining gold. In contrast, less than $4.3 billion is used to mine Bitcoin.
• Opinion: The State of Ethereum – Review of the current state of Ethereum & how we got here.
• Bitcoin Hashpower Doubled Since May Despite 70% Correction – Fundstrat, a Wall Street-based investment firm led by Tom Lee, reported  that the hash power of Bitcoin has doubled since May. CCN.com’s own Joseph Young  examines why this trend is occurring.

About the Author

Jake Sylvestre

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