[{"innerBlocks":[],"postId":306,"name":"core\/freeform","blockType":{"name":"core\/freeform","keywords":[],"attributes":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"},"metadata":{"type":"object"}},"providesContext":[],"usesContext":[],"selectors":[],"supports":{"className":false,"customClassName":false,"reusable":false},"styles":[],"variations":[],"blockHooks":[],"apiVersion":3,"title":"Classic","description":"Use the classic WordPress editor.","category":"text"},"originalContent":" $\"Financial$ \n\nIn this issue:\n

\u2022 Tax Analysis: Crypto Thefts; Market Declines \u2013 Strategies to Manage Losses<\/a><\/p>\n<\/a>The Blockchain Effect: NASA, IoT, Supply Chain and State Initiatives<\/strong>\n\nBy: <\/em>Diana J. Stern<\/em><\/a>\n\nOn Monday, NASA Ames Research Center published a paper about a permissioned blockchain framework that addresses privacy and security issues for FAA air traffic data using certificate authority, smart contract support and secure communication channels. The impetus for the proposal is that the FAA is mandating national adoption of an Automatic Dependent Surveillance Broadcast system, but, as the paper argues, the system leaves a question mark around certain security concerns. Also in security, a report found that only approximately 48 percent of businesses can detect a breach of their IoT devices \u2013 and that there will be more than 20 billion connected devices by 2023. In addition, of 950 IT professionals surveyed, 23 percent believe blockchain could be the answer for securing IoT devices. The results of the study suggest that 91 percent of organizations that do not use blockchain technology today are likely to consider it going forward.\n\nIn supply chain initiatives, a major U.S.-based international automaker and other companies at various stages of the mineral supply chain launched a pilot to monitor the responsible production, trade and processing of cobalt. The eventual goal is to explore an open, industrywide blockchain platform for tracking minerals used in consumer products. The World Wildlife Fund was also active in supply chain this week. The WWF Australia launched a tool that enables businesses and consumers to track food using QR codes and blockchain technology. In other enterprise news, a major U.S.-based package delivery and supply chain management company made a strategic investment in Inxeption Corporation, a blockchain-based B2B e-commerce platform that helps merchants increase online sales.\n\nA major energy company in Spain is using Energy Web Foundation, a blockchain-based platform purpose-built for the energy industry, for a renewable energy pilot. One of the company\u2019s takeaways from the test drive was to use blockchain tech to issue a guarantee of origin so that consumers have a verifiable certificate about the source of the energy they consume. The largest cargo shipping company in Israel, Zim, has been piloting a blockchain-enabled platform for electronic bills of lading for over a year, and is now making the offering available to its clients for selected trades. Zim said the value proposition includes improved workflow and digitization of paper-based processes. Finally, Vermont put out an RFI to test whether blockchain technology can improve the efficiency, accuracy, security and transparency of regulatory processes. The pilot program will allow new captive insurance companies to register with the state.\n\nFor more information, please refer to the following links:\n

\n \tNASA Eyes Blockchain Tech to Secure Aircraft Flight Data<\/a><\/li>\n \t
NASA: Air Traffic Management Blockchain Infrastructure for Security, Authentication, and Privacy<\/a><\/li>\n \t
Use of blockchain technology to help secure IoT data, services and devices doubles in a year<\/a><\/li>\n \t
Ford Motor Company, Huayou Cobalt, IBM, LG Chem and RCS Global Launch Blockchain Pilot to Address Concerns in Strategic Mineral Supply Chains<\/a><\/li>\n \t
Inxeption Announces Investment from UPS Strategic Enterprise Fund<\/a><\/li>\n \t
WWF Launches Blockchain Tool to Track Food Along Supply Chain<\/a><\/li>\n \t
Major Spanish Energy Company to Use Blockchain in Renewable Energy Tracking<\/a><\/li>\n \t
Israel\u2019s Top Cargo Shipping Firm Zim Opens Blockchain Platform to All Clients<\/a><\/li>\n \t
Vermont: Department of Financial Regulation and Secretary of State Collaborate on Captive Insurance Blockchain Pilot<\/a><\/li>\n<\/ul>\n<\/a>Blockchain Announcements From Traditional Financial Institutions and Emerging Platforms<\/strong>\u00a0<\/strong>\n\nBy<\/em>: <\/em>Robert A. Musiala Jr.<\/em><\/a>\n\nOn Monday, one of the largest banks in the world announced that over the course of 2018 it settled $250 billion in foreign exchange trades using an internally developed blockchain platform that, among other benefits, allowed the bank to verify settlement without external confirmation. Meanwhile, a major Swiss investment bank announced that it is launching a cryptocurrency custody service targeted at institutional market participants. In the commodities markets, the blockchain-based commodities trading platform Vakt, which runs on the Quorum blockchain, has added a major U.S.-based multinational energy company to its platform and industry consortium. On Jan. 10, cryptoasset index provider Bitwise Asset Management filed a registration statement with the SEC seeking approval for a physically held bitcoin exchange-traded fund (ETF). According to a press release, the proposed ETF will differ from prior ETF proposals because it will use regulated third-party custodians to hold its physical bitcoin.\n\nAccording to reports, late last week the security token trading platform tZERO announced that it has begun releasing security tokens into the custody of investors who purchased the tokens during a private offering completed in August 2018. Another announcement this week stated that the Aspencoin, a securitized token associated with the St. Regis Aspen Resort, will be migrated to the Securitize platform to enable trades across multiple exchanges. In Europe, the Belarus-based blockchain technology company Currency.com issued a press release claiming to have launched \u201cthe world\u2019s first fully-functional trading platform for tokenised securities.\u201d According to the press release, the platform will offer \u201ca tokenised version of a contract for exchange of a specific equity, commodity or index.\u201d\n\nIn recently published findings, a study by MarketWatch <\/em>searched the SEC\u2019s Edgar database and identified 287 Form D filings that contained key terms indicating that funds raised from accredited investors involved an initial coin offering (ICO). The study estimated the total value of Reg D exempt ICO-related fundraising events at $8.7 billion for the year 2018. Another study recently published by BitMEX<\/em> analyzed ICO tokens issued to members of ICO teams. The study found that the total value of tokens held by ICO team members has declined from $24 billion to $5 billion, due mostly to falling market prices for the tokens.\n\nTo read more about the topics covered in this week\u2019s post, please see the following:\n
\n \t
HSBC settles FX deals worth $250 billion on blockchain in last year<\/a><\/li>\n \t
Swiss Multi-Billion Dollar Bank Vontobel Launches Regulated Crypto Custody<\/a><\/li>\n \t
Chevron, Total and Reliance join oil blockchain platform Vakt<\/a><\/li>\n \t
Bitwise Files For New Bitcoin ETF<\/a><\/li>\n \t
Overstock\u2019s tZERO Begins Distributing Its Security Token to Investors<\/a><\/li>\n \t
com Launches World's First Tokenised Securities Trading Platform Following Investment From Larnabel Ventures And VP Capital<\/a><\/li>\n \t
Aspencoin Migrates Over to Securitize with $18 Million Security Token<\/a><\/li>\n \t
ICOs continue to raise money via SEC back door<\/a><\/li>\n \t
Tracking US$24 billion Of Tokens ICO Makers Allocated To Themselves<\/a><\/li>\n<\/ul>\n<\/a>Cryptocurrency Exchanges and Payment Providers Announce New Products<\/strong>\n<\/strong>\n\nBy: <\/em>Joanna F. Wasick<\/em><\/a>\n\nWays to exchange cryptocurrency continue to grow. Bittrex, a U.S.-based cryptocurrency exchange, announced its launch of an over-the-counter (OTC) trading desk that will support the nearly 200 cryptocurrencies the exchange currently offers. According to Bittrex, the OTC desk will allow parties to transact directly, unlike exchange trading, which matches buy and sell orders through an order book. Binance, another prominent exchange, announced its new fiat-to-crypto exchange, which will be based in the island of Jersey. \u201cJersey Binance\u201d will purportedly enable traders in Europe and the UK to trade Bitcoin and Ethereum against the British pound and the Euro. New reports also reflect a continued increase in the number of cryptocurrency ATMs, citing roughly 4.9 ATMs installed per day worldwide (with more installed in the United States than in any other country). Getting paid in cryptocurrency by an employer may soon become easier as well. Bitwage, a cryptocurrency payment and wage service, announced a new system that allows companies to pay salaried employees in cryptocurrency. The system includes a new crucial feature that converts a portion of funds into dollars so employers can pay withholding taxes. And one fiat-backed cryptocurrency began the new year with positive news. Cryptocurrency finance company Circle released the third audit of its fiat-backed stablecoin USD Coin. The audit, conducted by a major U.S. accounting firm, confirmed that USDC tokens do not exceed the company\u2019s fiat reserves.\n\nAccording to recent reports, daily volatility of bitcoin is down a full 98 percent from last year. This volatility decrease comes hand in hand with a significant decrease in price \u2012 the price for bitcoin is down nearly 68 percent from this time last year. Some predict that the decrease is here to stay: bitcoin\u2019s spot price is currently higher than its futures price. Regardless of pricing, one company is making sure cryptocurrency owners can store their wealth in style. A luxury Swiss watchmaker is now offering \u201cBlockchain Watch,\u201d a handcrafted timepiece with a built-in crypto-wallet. The watch is priced over $100,000 and can only be purchased with bitcoin.\n\nFor more information, please check out the following links:\n
\n \t
Bittrex Launches OTC Trading Desk With 200 Cryptocurrencies<\/a><\/li>\n \t
Binance Targets EU, UK Traders With New Fiat-to-Crypto Exchange<\/a><\/li>\n \t
Circle\u2019s USDC Stablecoin Fully Dollar Backed, Says Latest Auditor\u2019s Report<\/a><\/li>\n \t
USDC: INDEPENDENT ACCOUNTANT\u2019S REPORT<\/a><\/li>\n \t
Almost 5 New Cryptocurrency ATMs Installed Worldwide Each Day, Data Shows<\/a><\/li>\n \t
Bitwage Now Lets Firms Pay Salaried Staff in Crypto<\/a><\/li>\n \t
This $100K Luxury Swiss Watch Will Have a Built-In Crypto Wallet<\/a><\/li>\n \t
Bitcoin Price Volatility Is Down 98% Year-on-Year<\/a><\/li>\n \t
Bitcoin Futures Now Trading At Discount to Exchange Prices<\/a><\/li>\n<\/ul>\n<\/a>Cryptocurrency Exchange Hacked, Crypto-Malware and Wallet Vulnerabilities Exposed<\/strong>\n\nBy: Jordan R. Silversmith <\/em>\n\nOn Jan. 15, several news outlets reported that a New Zealand-based cryptocurrency exchange, Cryptopia, had gone offline after being hacked, with about $2.44 million worth of ether tokens and about $1.18 million worth of centrality tokens being transferred to unknown wallets on Jan. 13. Shortly after the hack, cryptocurrency exchange Binance froze and quarantined certain tokens sent to its exchange by the entity allegedly responsible. In related news, gate.io announced that $100,000 worth of cryptocurrency stolen from its exchange during the 51 percent attack on Ethereum Classic allegedly has been returned by the hacker who took it. Gate.io mentioned in its post that the hacker may have been a \u201cwhite-hat\u201d hacker seeking to demonstrate security risks.\n\nRecent hard forks of Ethereum Nowa (ETN) and Ethereum Classic Vision (ETCV) have reportedly been tarnished by malware that appropriates the private keys of users trying to redeem their forked coins. Meanwhile, malware posing as a movie file on popular torrenting site The Pirate Bay reportedly has been found to trigger a chain of nefarious activities that include cryptocurrency thefts. Additionally, a recent report has highlighted vulnerabilities in numerous \u201ccold storage\u201d cryptocurrency wallets, including Trezor One, Ledger Nano S and Ledger Blue. The report, titled \u201cwallet.fail,\u201d outlined research into the vulnerabilities of popular hardware wallets, which are typically considered more secure than wallets hosted online.\n\nA recent rash of ransomware attacks known as the Ryuk ransomware, estimated to have earned hackers $2.5 million in Bitcoin, likely came from Russian cybercriminal activity rather than state-sponsored North Korean actors, crypto-focused news site Hard Fork reported on January 14. According to a recent report from Zerohedge<\/em>, Russia is preparing to make major investments in bitcoin as part of a larger trend in which the country has been liquidating its U.S. Treasury holdings and investing in other foreign currencies and commodities like gold. One source has claimed that Russia intends to purchase as much as $10 billion in bitcoin, beginning as early as February. Russian government officials have refuted this claim.\n\nFor more information, please check out the following links:\n
\n \t
New Zealand Crypto Exchange Cryptopia Goes Offline Citing Hack<\/a><\/li>\n \t
NZ Exchange Cryptopia Reports Hack With 'Significant Losses'<\/a><\/li>\n \t
Binance Freezes \u2018Some\u2019 Tokens Stolen From Cryptopia: CEO CZ<\/a><\/li>\n \t
io Got Back 100k USD Value Of ETC From The ETC 51% Attacker<\/a><\/li>\n \t
Two Alleged Ethereum \u2018Scam Forks\u2019 Appropriating Users\u2019 Private Keys, Report Finds<\/a><\/li>\n \t
Fake Movie File Infects PC to Steal Cryptocurrency, Poison Google Results<\/a><\/li>\n \t
Cryptocurrency Wallet Hacks Spark Dustup<\/a><\/li>\n \t
Research Suggests Russian-Based Hackers Behind Ryuk Ransomware\u2019s $2.5 Million Gains<\/a><\/li>\n \t
Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions<\/a><\/li>\n \t
Russia Denies Buying $10 Billion in Bitcoin, Telegraph Story Fake News<\/a><\/li>\n<\/ul>\n<\/a>International Regulators Target Cryptocurrency Exchanges, ICOs and Tax Compliance<\/strong>\n\nBy: <\/em>Simone O. Otenaike<\/em><\/a>\n\nBitmex, a Hong Kong-based Bitcoin derivatives exchange registered in the Seychelles, reportedly deactivated the trading accounts of clients from the U.S. and the Canadian province of Quebec this week. Bitmex also imposed similar restrictions against clients from\u00a0North Korea, Iran, Syria, Cuba, Sudan and Crimea, to avoid violating anti-money laundering and anti-terrorist financing laws. Coincheck, a Japanese cryptocurrency exchange registered with the Kanto Financial Bureau, recently lost\u00a0$530 million in\u00a0altcoin\u00a0tokens due to a hack. Despite the loss, Japan\u2019s Financial Services Agency granted full permission for\u00a0Coincheck to continue operations in the country.\u00a0According to a recent report from South Korea\u2019s Ministry of Science and ICT, Internet & Security Agency, and the Ministry of Economy and Finance, only a third of cryptocurrency exchanges satisfy the government\u2019s network, security and wallet management standards. The South Korean agencies inspected a total of 21 cryptocurrency exchanges from September to December 2018 and examined 85 different aspects. Only seven of the cryptocurrency exchanges satisfied the applicable standards:\u00a0Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco and Huobi Korea.\n\nAlso this week, the Finance Minister of Malaysia announced that the Securities Commission plans to regulate initial coin offerings and the trade of cryptocurrencies effective Jan. 15. Meanwhile, The Cyberspace Administration of\u00a0China\u00a0(CAC) introduced new regulations for\u00a0blockchain-based companies that operate in China. The CAC\u2019s guidelines require companies to permit authorities to access stored data and obtain an ID card or mobile number from its users \u2012 the new regulations will be effective Feb. 15. In Spain, The\u00a0Spanish\u00a0National Securities Market Commission added 23 unauthorized\u00a0cryptocurrency\u00a0exchanges to its warning\u00a0list\u00a0this week. The Danish Tax Council will soon permit its Tax Agency to access cryptocurrency trader information from exchanges. Upon the Tax Agency\u2019s request, cryptocurrency exchanges must produce trader information, including trades, names and addresses, and central person registration numbers, for the period spanning 2016 \u2013 2018. The Danish Tax Agency ultimately plans to use this trader information to determine if citizens are paying taxes on any profits.\n\nFor more information, please check out the following links:\n
\n \t
Hong Kong Bitcoin Derivatives Exchange Bitmex Forced to Stop Providing \u201cIllegal\u201d Trading Services to American and Quebecois Customers<\/a><\/li>\n \t
Japanese Regulators Grant Cryptocurrency Exchange License to Coincheck<\/a><\/li>\n \t
Two Thirds of Korean Crypto Exchanges Fail Government Security Check<\/a><\/li>\n \t
South Korea Government Approves Seven out of 21 Cryptocurrency Exchanges\u2019 Security Policy<\/a><\/li>\n \t
Malaysia to regulate initial coin offerings, cryptocurrency trade<\/a><\/li>\n \t
China Introduces New Anti-Anonymity Regulations for Blockchain-Related Companies<\/a><\/li>\n \t
Spanish Securities Regulator Adds 23 Forex and Cryptocurrency Exchanges to Warning List<\/a><\/li>\n \t
Danish Tax Agency to Collect User Data from Crypto Exchanges<\/a><\/li>\n<\/ul>\n<\/a>Tax Analysis: Crypto Thefts; Market Declines \u2013 Strategies to Manage Losses<\/strong>\n\nBy: <\/em>Roger M. Brown<\/em><\/a> and <\/em>Nicholas C. Mowbray<\/em><\/a>\n\nIt\u2019s hard to read about developments in the cryptocurrency space without seeing articles about token thefts, post-initial coin offering declines in value and market volatility. These are recurring themes reported on in our Blockchain Monitor blog posts. According to a recent survey<\/a>, U.S. investors who have sold bitcoin collectively have realized approximately $1.7 billion in losses, but only 53 percent plan to report bitcoin gains and losses on their tax returns.\n\nLike most commercial events, tax planning presents ways to provide value, reduce risk and\/or enhance operating efficiency for crypto market participants. Proper tax planning can yield positive results and should be considered by investors with significant crypto market activity. Favorable tax treatment can be achieved by addressing the fact that crypto assets are capital assets for market participants that are not dealers. That means that gains and losses are not \u201cordinary\u201d from a tax perspective, which in turn means that any net capital losses of an individual taxpayer can be carried forward to provide for a $3,000 annual deduction only until the carryforward is used up (assuming there are no capital gains in that or proceeding years).\n\nThere are many strategies to minimize inefficiencies related to the characterization of gains and losses as capital verses ordinary. Some of these include:\n
\n \t
Disposing of crypto assets in a way that creates an ordinary deduction rather than a capital loss.<\/li>\n \t
Holding crypto assets in certain entities where character is less relevant and gains and losses offset each other without regard to character.<\/li>\n \t
Planning to achieve dealer status where crypto assets are treated as ordinary in nature.<\/li>\n<\/ul>\nDepending on a taxpayer\u2019s investment strategy, there may be a trade-off between long-term capital gains tax rates and tax rates for ordinary income. However, those rates will not apply when a crypto asset is held for less than one year. Moreover, avoiding inefficiencies of mountains of capital loss carryforwards could militate in favor of employing a strategy that is not reliant on a long-term holding period.\n\nSeparately, other considerations might exist when crypto assets are held by a domestic corporation. This is because capital losses can be carried back for three years, providing refunds of prior taxes paid on capital gains. In addition, corporations can carry capital losses forward for only five years, after which they vanish (whereas individuals can carry forward their capital losses indefinitely). Thus, corporations might have more pressure to pursue strategies that avoid capital losses.","saveContent":" $\"Financial$ \n\nIn this issue:\n
\u2022 The Blockchain Effect: NASA, IoT, Supply Chain and State Initiatives<\/a><\/p>\n
\u2022 Blockchain Announcements From Traditional Financial Institutions and Emerging Platforms<\/a><\/p>\n
\u2022 Cryptocurrency Exchanges and Payment Providers Announce New Products<\/a><\/p>\n
\u2022 Cryptocurrency Exchange Hacked, Crypto-Malware and Wallet Vulnerabilities Exposed<\/a><\/p>\n
\u2022 International Regulators Target Cryptocurrency Exchanges, ICOs and Tax Compliance<\/a><\/p>\n
\u2022 Tax Analysis: Crypto Thefts; Market Declines \u2013 Strategies to Manage Losses<\/a><\/p>\n<\/a>The Blockchain Effect: NASA, IoT, Supply Chain and State Initiatives<\/strong>\n\nBy: <\/em>Diana J. Stern<\/em><\/a>\n\nOn Monday, NASA Ames Research Center published a paper about a permissioned blockchain framework that addresses privacy and security issues for FAA air traffic data using certificate authority, smart contract support and secure communication channels. The impetus for the proposal is that the FAA is mandating national adoption of an Automatic Dependent Surveillance Broadcast system, but, as the paper argues, the system leaves a question mark around certain security concerns. Also in security, a report found that only approximately 48 percent of businesses can detect a breach of their IoT devices \u2013 and that there will be more than 20 billion connected devices by 2023. In addition, of 950 IT professionals surveyed, 23 percent believe blockchain could be the answer for securing IoT devices. The results of the study suggest that 91 percent of organizations that do not use blockchain technology today are likely to consider it going forward.\n\nIn supply chain initiatives, a major U.S.-based international automaker and other companies at various stages of the mineral supply chain launched a pilot to monitor the responsible production, trade and processing of cobalt. The eventual goal is to explore an open, industrywide blockchain platform for tracking minerals used in consumer products. The World Wildlife Fund was also active in supply chain this week. The WWF Australia launched a tool that enables businesses and consumers to track food using QR codes and blockchain technology. In other enterprise news, a major U.S.-based package delivery and supply chain management company made a strategic investment in Inxeption Corporation, a blockchain-based B2B e-commerce platform that helps merchants increase online sales.\n\nA major energy company in Spain is using Energy Web Foundation, a blockchain-based platform purpose-built for the energy industry, for a renewable energy pilot. One of the company\u2019s takeaways from the test drive was to use blockchain tech to issue a guarantee of origin so that consumers have a verifiable certificate about the source of the energy they consume. The largest cargo shipping company in Israel, Zim, has been piloting a blockchain-enabled platform for electronic bills of lading for over a year, and is now making the offering available to its clients for selected trades. Zim said the value proposition includes improved workflow and digitization of paper-based processes. Finally, Vermont put out an RFI to test whether blockchain technology can improve the efficiency, accuracy, security and transparency of regulatory processes. The pilot program will allow new captive insurance companies to register with the state.\n\nFor more information, please refer to the following links:\n
\n \tNASA Eyes Blockchain Tech to Secure Aircraft Flight Data<\/a><\/li>\n \t
NASA: Air Traffic Management Blockchain Infrastructure for Security, Authentication, and Privacy<\/a><\/li>\n \t
Use of blockchain technology to help secure IoT data, services and devices doubles in a year<\/a><\/li>\n \t
Ford Motor Company, Huayou Cobalt, IBM, LG Chem and RCS Global Launch Blockchain Pilot to Address Concerns in Strategic Mineral Supply Chains<\/a><\/li>\n \t
Inxeption Announces Investment from UPS Strategic Enterprise Fund<\/a><\/li>\n \t
WWF Launches Blockchain Tool to Track Food Along Supply Chain<\/a><\/li>\n \t
Major Spanish Energy Company to Use Blockchain in Renewable Energy Tracking<\/a><\/li>\n \t
Israel\u2019s Top Cargo Shipping Firm Zim Opens Blockchain Platform to All Clients<\/a><\/li>\n \t
Vermont: Department of Financial Regulation and Secretary of State Collaborate on Captive Insurance Blockchain Pilot<\/a><\/li>\n<\/ul>\n<\/a>Blockchain Announcements From Traditional Financial Institutions and Emerging Platforms<\/strong>\u00a0<\/strong>\n\nBy<\/em>: <\/em>Robert A. Musiala Jr.<\/em><\/a>\n\nOn Monday, one of the largest banks in the world announced that over the course of 2018 it settled $250 billion in foreign exchange trades using an internally developed blockchain platform that, among other benefits, allowed the bank to verify settlement without external confirmation. Meanwhile, a major Swiss investment bank announced that it is launching a cryptocurrency custody service targeted at institutional market participants. In the commodities markets, the blockchain-based commodities trading platform Vakt, which runs on the Quorum blockchain, has added a major U.S.-based multinational energy company to its platform and industry consortium. On Jan. 10, cryptoasset index provider Bitwise Asset Management filed a registration statement with the SEC seeking approval for a physically held bitcoin exchange-traded fund (ETF). According to a press release, the proposed ETF will differ from prior ETF proposals because it will use regulated third-party custodians to hold its physical bitcoin.\n\nAccording to reports, late last week the security token trading platform tZERO announced that it has begun releasing security tokens into the custody of investors who purchased the tokens during a private offering completed in August 2018. Another announcement this week stated that the Aspencoin, a securitized token associated with the St. Regis Aspen Resort, will be migrated to the Securitize platform to enable trades across multiple exchanges. In Europe, the Belarus-based blockchain technology company Currency.com issued a press release claiming to have launched \u201cthe world\u2019s first fully-functional trading platform for tokenised securities.\u201d According to the press release, the platform will offer \u201ca tokenised version of a contract for exchange of a specific equity, commodity or index.\u201d\n\nIn recently published findings, a study by MarketWatch <\/em>searched the SEC\u2019s Edgar database and identified 287 Form D filings that contained key terms indicating that funds raised from accredited investors involved an initial coin offering (ICO). The study estimated the total value of Reg D exempt ICO-related fundraising events at $8.7 billion for the year 2018. Another study recently published by BitMEX<\/em> analyzed ICO tokens issued to members of ICO teams. The study found that the total value of tokens held by ICO team members has declined from $24 billion to $5 billion, due mostly to falling market prices for the tokens.\n\nTo read more about the topics covered in this week\u2019s post, please see the following:\n
\n \t
HSBC settles FX deals worth $250 billion on blockchain in last year<\/a><\/li>\n \t
Swiss Multi-Billion Dollar Bank Vontobel Launches Regulated Crypto Custody<\/a><\/li>\n \t
Chevron, Total and Reliance join oil blockchain platform Vakt<\/a><\/li>\n \t
Bitwise Files For New Bitcoin ETF<\/a><\/li>\n \t
Overstock\u2019s tZERO Begins Distributing Its Security Token to Investors<\/a><\/li>\n \t
com Launches World's First Tokenised Securities Trading Platform Following Investment From Larnabel Ventures And VP Capital<\/a><\/li>\n \t
Aspencoin Migrates Over to Securitize with $18 Million Security Token<\/a><\/li>\n \t
ICOs continue to raise money via SEC back door<\/a><\/li>\n \t
Tracking US$24 billion Of Tokens ICO Makers Allocated To Themselves<\/a><\/li>\n<\/ul>\n<\/a>Cryptocurrency Exchanges and Payment Providers Announce New Products<\/strong>\n<\/strong>\n\nBy: <\/em>Joanna F. Wasick<\/em><\/a>\n\nWays to exchange cryptocurrency continue to grow. Bittrex, a U.S.-based cryptocurrency exchange, announced its launch of an over-the-counter (OTC) trading desk that will support the nearly 200 cryptocurrencies the exchange currently offers. According to Bittrex, the OTC desk will allow parties to transact directly, unlike exchange trading, which matches buy and sell orders through an order book. Binance, another prominent exchange, announced its new fiat-to-crypto exchange, which will be based in the island of Jersey. \u201cJersey Binance\u201d will purportedly enable traders in Europe and the UK to trade Bitcoin and Ethereum against the British pound and the Euro. New reports also reflect a continued increase in the number of cryptocurrency ATMs, citing roughly 4.9 ATMs installed per day worldwide (with more installed in the United States than in any other country). Getting paid in cryptocurrency by an employer may soon become easier as well. Bitwage, a cryptocurrency payment and wage service, announced a new system that allows companies to pay salaried employees in cryptocurrency. The system includes a new crucial feature that converts a portion of funds into dollars so employers can pay withholding taxes. And one fiat-backed cryptocurrency began the new year with positive news. Cryptocurrency finance company Circle released the third audit of its fiat-backed stablecoin USD Coin. The audit, conducted by a major U.S. accounting firm, confirmed that USDC tokens do not exceed the company\u2019s fiat reserves.\n\nAccording to recent reports, daily volatility of bitcoin is down a full 98 percent from last year. This volatility decrease comes hand in hand with a significant decrease in price \u2012 the price for bitcoin is down nearly 68 percent from this time last year. Some predict that the decrease is here to stay: bitcoin\u2019s spot price is currently higher than its futures price. Regardless of pricing, one company is making sure cryptocurrency owners can store their wealth in style. A luxury Swiss watchmaker is now offering \u201cBlockchain Watch,\u201d a handcrafted timepiece with a built-in crypto-wallet. The watch is priced over $100,000 and can only be purchased with bitcoin.\n\nFor more information, please check out the following links:\n
\n \t
Bittrex Launches OTC Trading Desk With 200 Cryptocurrencies<\/a><\/li>\n \t
Binance Targets EU, UK Traders With New Fiat-to-Crypto Exchange<\/a><\/li>\n \t
Circle\u2019s USDC Stablecoin Fully Dollar Backed, Says Latest Auditor\u2019s Report<\/a><\/li>\n \t
USDC: INDEPENDENT ACCOUNTANT\u2019S REPORT<\/a><\/li>\n \t
Almost 5 New Cryptocurrency ATMs Installed Worldwide Each Day, Data Shows<\/a><\/li>\n \t
Bitwage Now Lets Firms Pay Salaried Staff in Crypto<\/a><\/li>\n \t
This $100K Luxury Swiss Watch Will Have a Built-In Crypto Wallet<\/a><\/li>\n \t
Bitcoin Price Volatility Is Down 98% Year-on-Year<\/a><\/li>\n \t
Bitcoin Futures Now Trading At Discount to Exchange Prices<\/a><\/li>\n<\/ul>\n<\/a>Cryptocurrency Exchange Hacked, Crypto-Malware and Wallet Vulnerabilities Exposed<\/strong>\n\nBy: Jordan R. Silversmith <\/em>\n\nOn Jan. 15, several news outlets reported that a New Zealand-based cryptocurrency exchange, Cryptopia, had gone offline after being hacked, with about $2.44 million worth of ether tokens and about $1.18 million worth of centrality tokens being transferred to unknown wallets on Jan. 13. Shortly after the hack, cryptocurrency exchange Binance froze and quarantined certain tokens sent to its exchange by the entity allegedly responsible. In related news, gate.io announced that $100,000 worth of cryptocurrency stolen from its exchange during the 51 percent attack on Ethereum Classic allegedly has been returned by the hacker who took it. Gate.io mentioned in its post that the hacker may have been a \u201cwhite-hat\u201d hacker seeking to demonstrate security risks.\n\nRecent hard forks of Ethereum Nowa (ETN) and Ethereum Classic Vision (ETCV) have reportedly been tarnished by malware that appropriates the private keys of users trying to redeem their forked coins. Meanwhile, malware posing as a movie file on popular torrenting site The Pirate Bay reportedly has been found to trigger a chain of nefarious activities that include cryptocurrency thefts. Additionally, a recent report has highlighted vulnerabilities in numerous \u201ccold storage\u201d cryptocurrency wallets, including Trezor One, Ledger Nano S and Ledger Blue. The report, titled \u201cwallet.fail,\u201d outlined research into the vulnerabilities of popular hardware wallets, which are typically considered more secure than wallets hosted online.\n\nA recent rash of ransomware attacks known as the Ryuk ransomware, estimated to have earned hackers $2.5 million in Bitcoin, likely came from Russian cybercriminal activity rather than state-sponsored North Korean actors, crypto-focused news site Hard Fork reported on January 14. According to a recent report from Zerohedge<\/em>, Russia is preparing to make major investments in bitcoin as part of a larger trend in which the country has been liquidating its U.S. Treasury holdings and investing in other foreign currencies and commodities like gold. One source has claimed that Russia intends to purchase as much as $10 billion in bitcoin, beginning as early as February. Russian government officials have refuted this claim.\n\nFor more information, please check out the following links:\n
\n \t
New Zealand Crypto Exchange Cryptopia Goes Offline Citing Hack<\/a><\/li>\n \t
NZ Exchange Cryptopia Reports Hack With 'Significant Losses'<\/a><\/li>\n \t
Binance Freezes \u2018Some\u2019 Tokens Stolen From Cryptopia: CEO CZ<\/a><\/li>\n \t
io Got Back 100k USD Value Of ETC From The ETC 51% Attacker<\/a><\/li>\n \t
Two Alleged Ethereum \u2018Scam Forks\u2019 Appropriating Users\u2019 Private Keys, Report Finds<\/a><\/li>\n \t
Fake Movie File Infects PC to Steal Cryptocurrency, Poison Google Results<\/a><\/li>\n \t
Cryptocurrency Wallet Hacks Spark Dustup<\/a><\/li>\n \t
Research Suggests Russian-Based Hackers Behind Ryuk Ransomware\u2019s $2.5 Million Gains<\/a><\/li>\n \t
Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions<\/a><\/li>\n \t
Russia Denies Buying $10 Billion in Bitcoin, Telegraph Story Fake News<\/a><\/li>\n<\/ul>\n<\/a>International Regulators Target Cryptocurrency Exchanges, ICOs and Tax Compliance<\/strong>\n\nBy: <\/em>Simone O. Otenaike<\/em><\/a>\n\nBitmex, a Hong Kong-based Bitcoin derivatives exchange registered in the Seychelles, reportedly deactivated the trading accounts of clients from the U.S. and the Canadian province of Quebec this week. Bitmex also imposed similar restrictions against clients from\u00a0North Korea, Iran, Syria, Cuba, Sudan and Crimea, to avoid violating anti-money laundering and anti-terrorist financing laws. Coincheck, a Japanese cryptocurrency exchange registered with the Kanto Financial Bureau, recently lost\u00a0$530 million in\u00a0altcoin\u00a0tokens due to a hack. Despite the loss, Japan\u2019s Financial Services Agency granted full permission for\u00a0Coincheck to continue operations in the country.\u00a0According to a recent report from South Korea\u2019s Ministry of Science and ICT, Internet & Security Agency, and the Ministry of Economy and Finance, only a third of cryptocurrency exchanges satisfy the government\u2019s network, security and wallet management standards. The South Korean agencies inspected a total of 21 cryptocurrency exchanges from September to December 2018 and examined 85 different aspects. Only seven of the cryptocurrency exchanges satisfied the applicable standards:\u00a0Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco and Huobi Korea.\n\nAlso this week, the Finance Minister of Malaysia announced that the Securities Commission plans to regulate initial coin offerings and the trade of cryptocurrencies effective Jan. 15. Meanwhile, The Cyberspace Administration of\u00a0China\u00a0(CAC) introduced new regulations for\u00a0blockchain-based companies that operate in China. The CAC\u2019s guidelines require companies to permit authorities to access stored data and obtain an ID card or mobile number from its users \u2012 the new regulations will be effective Feb. 15. In Spain, The\u00a0Spanish\u00a0National Securities Market Commission added 23 unauthorized\u00a0cryptocurrency\u00a0exchanges to its warning\u00a0list\u00a0this week. The Danish Tax Council will soon permit its Tax Agency to access cryptocurrency trader information from exchanges. Upon the Tax Agency\u2019s request, cryptocurrency exchanges must produce trader information, including trades, names and addresses, and central person registration numbers, for the period spanning 2016 \u2013 2018. The Danish Tax Agency ultimately plans to use this trader information to determine if citizens are paying taxes on any profits.\n\nFor more information, please check out the following links:\n
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Hong Kong Bitcoin Derivatives Exchange Bitmex Forced to Stop Providing \u201cIllegal\u201d Trading Services to American and Quebecois Customers<\/a><\/li>\n \t
Japanese Regulators Grant Cryptocurrency Exchange License to Coincheck<\/a><\/li>\n \t
Two Thirds of Korean Crypto Exchanges Fail Government Security Check<\/a><\/li>\n \t
South Korea Government Approves Seven out of 21 Cryptocurrency Exchanges\u2019 Security Policy<\/a><\/li>\n \t
Malaysia to regulate initial coin offerings, cryptocurrency trade<\/a><\/li>\n \t
China Introduces New Anti-Anonymity Regulations for Blockchain-Related Companies<\/a><\/li>\n \t
Spanish Securities Regulator Adds 23 Forex and Cryptocurrency Exchanges to Warning List<\/a><\/li>\n \t
Danish Tax Agency to Collect User Data from Crypto Exchanges<\/a><\/li>\n<\/ul>\n<\/a>Tax Analysis: Crypto Thefts; Market Declines \u2013 Strategies to Manage Losses<\/strong>\n\nBy: <\/em>Roger M. Brown<\/em><\/a> and <\/em>Nicholas C. Mowbray<\/em><\/a>\n\nIt\u2019s hard to read about developments in the cryptocurrency space without seeing articles about token thefts, post-initial coin offering declines in value and market volatility. These are recurring themes reported on in our Blockchain Monitor blog posts. According to a recent survey<\/a>, U.S. investors who have sold bitcoin collectively have realized approximately $1.7 billion in losses, but only 53 percent plan to report bitcoin gains and losses on their tax returns.\n\nLike most commercial events, tax planning presents ways to provide value, reduce risk and\/or enhance operating efficiency for crypto market participants. Proper tax planning can yield positive results and should be considered by investors with significant crypto market activity. Favorable tax treatment can be achieved by addressing the fact that crypto assets are capital assets for market participants that are not dealers. That means that gains and losses are not \u201cordinary\u201d from a tax perspective, which in turn means that any net capital losses of an individual taxpayer can be carried forward to provide for a $3,000 annual deduction only until the carryforward is used up (assuming there are no capital gains in that or proceeding years).\n\nThere are many strategies to minimize inefficiencies related to the characterization of gains and losses as capital verses ordinary. Some of these include:\n
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Disposing of crypto assets in a way that creates an ordinary deduction rather than a capital loss.<\/li>\n \t
Holding crypto assets in certain entities where character is less relevant and gains and losses offset each other without regard to character.<\/li>\n \t
Planning to achieve dealer status where crypto assets are treated as ordinary in nature.<\/li>\n<\/ul>\nDepending on a taxpayer\u2019s investment strategy, there may be a trade-off between long-term capital gains tax rates and tax rates for ordinary income. However, those rates will not apply when a crypto asset is held for less than one year. Moreover, avoiding inefficiencies of mountains of capital loss carryforwards could militate in favor of employing a strategy that is not reliant on a long-term holding period.\n\nSeparately, other considerations might exist when crypto assets are held by a domestic corporation. This is because capital losses can be carried back for three years, providing refunds of prior taxes paid on capital gains. In addition, corporations can carry capital losses forward for only five years, after which they vanish (whereas individuals can carry forward their capital losses indefinitely). Thus, corporations might have more pressure to pursue strategies that avoid capital losses.","order":0,"get_parent":{},"attributes":[],"attributesType":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"},"metadata":{"type":"object"}},"dynamicContent":null}]

Blockchain for NASA and IoT, Developments in Crypto Products and Payments, Cryptocurrency Exchange Hacked