Block by Block Weekly Newsletter #39 — A New Chapter
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🎉 A New Chapter for Block by Block
Hello to my loyal (and new) subscribers! I have some exciting news that I’d like to share with you about the future of the Block by Block website and newsletter.
I’ve recently become a part of a new project working alongside Ethereum community heavyweight Eric Conner (@econoar). That project is EthHub (@ethhub_io) — an open-source, fundamentals-focused hub for all things Ethereum.
My original goal for Block by Block was to be exactly what EthHub is aiming to be. Unfortunately, due to time constraints, it became difficult for me to achieve these goals on my own. Now, working alongside Eric, I feel that I have the opportunity to achieve the original vision I had set out for Block by Block.
I want to be clear about one thing — the content of the newsletter will not be changing (and it won’t just be all about Ethereum). I’ll still be writing and curating it each week — just under the EthHub brand. As for the Block by Block website (https://blockbyblock.io), it will eventually be merged into EthHub.
So, from next week onwards, the newsletter will be called ‘EthHub Weekly’.
One more thing — Eric and I will be discussing the newsletter on the Into the Ether podcast every week — the official EthHub podcast. Be sure to subscribe to the podcast so you don’t miss any of weekly recaps and the amazing guests we’ll be having on in the future!
Thank you for all the support you’ve given me so far and I can’t wait to deliver a better, more feature-rich newsletter to you going forward.
Now, onwards to this weeks news and updates!
News of the Week
⚖️ SEC Charges Floyd Mayweather and DJ Khaled for Promoting ICOs
Pro boxer Floyd Mayweather and music producer DJ Khaled pumped up initial coin offerings without telling investors they were getting paid a promotional fee, according to a settlement announced Thursday.
Mayweather didn’t disclose a $100,000 promotional payment from Centra Tech Inc., while Khaled didn’t disclose a $50,000 payment. Mayweather also failed to disclose $200,000 he was paid to promote two other ICOs.
Mayweather will pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in interest. Khaled will pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in interest. Mayweather also agreed not to promote securities for three years and to cooperate with the investigation and Khaled agreed to a two year ban.
The two men settled the charges without admitting or denying the findings. The SEC says its investigation is ongoing.
🚨 US Treasury Sanctions Bitcoin Addresses
For the first time, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has traced illicit bitcoin activity to the public addresses of two sanctioned individuals.
According to a November 28, 2018, press release, the department is bringing action against Ali Khorashadizadeh and Mohammad Ghorbaniyan for their alleged involvement in the SamSam ransomware scheme. The two men reportedly helped the hackers behind SamSam convert millions of dollars of ransomed bitcoin to Iranian rials.
Any individuals or exchanges who do send funds to the two bitcoin address’ may be subject to secondary sanctions, including being cut off from the U.S. financial system entirely.
🤔 SEC Chair Says Crypto ETF Approval Depends on Exchanges Being Free from Manipulation
Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), said Tuesday that he doesn’t see a pathway to a cryptocurrency ETF approval until concerns over market manipulation are addressed.
“How that [manipulation] issue gets addressed, I don’t have a particular path. But it needs to be addressed” before an ETF gets approved, Clayton remarked during CoinDesk’s Consensus: Invest conference.
“The prices retail investors are seeing are the prices they should rely on, and free from manipulation — not free from volatility, but free from manipulation,” Clayton said during his appearance. Clayton also remarked that custody concerns also remain an issue ahead of any kind of ETF approval.
In this explosive report, Reuters details how crypto influencers are being paid to give positive reviews to burgeoning crypto startups.
One notable example of this is that earlier this year, Ukrainian start-up Hacken was looking to promote its new coin after raising $3 million online in late 2017. Chief Executive Dmytro Budorin and his team identified a list of almost 200 cryptocurrency social media personalities they thought could help them, he said.
Hacken paid $7,500 for Christopher Greene, host of Alternative Media Television — a YouTube channel with more than 500,000 subscribers — to review its coin in a video, Budorin told Reuters. In the 25-minute video, published on June 22, Greene raved about Hacken’s coin and business, describing it as a “huge market opportunity” with “potential 1,000x returns.” Nowhere in the video — which has more than 92,000 views — is Hacken’s payment to Greene mentioned.
The FBI has arrested the CEO of cryptocurrency platform AriseBank after he was indicted over an alleged multi-million dollar scam.
The news was announced Wednesday by the U.S. Attorney’s Office of the Northern District of Texas, which states that 30-year-old Jared Rice Sr. tricked hundreds of investors out of over $4 million and has now been charged with three counts of securities fraud and three counts of wire fraud.
Rice allegedly lied to prospective investors, claiming that the firm, which he called the “first decentralized banking platform,” would offer FDIC-insured bank accounts and Visa-linked debit and credit cards, in addition to crypto services based on its own AriseCoin token.
🤝 10 Crypto Firms Join Forces to Bring Order to Crypto Markets
10 leading crypto firms are trying to bring order to the sometimes chaotic market for digital currencies with a new working group that hopes to self regulate the industry.
The so-called Association for Digital Asset Markets, or ADAM, has been meeting in recent months to create a code of conduct for firms operating in crypto, according to Chad Cascarilla, the co-founder of Paxos. His company, a blockchain technology firm and crypto exchange operator, is one of the 10 founding members of ADAM. Others include market-making firms such as Genesis Global Trading and Hudson River Trading.
The new group, according to Cascarilla, aims to establish best practices that will breed confidence in the crypto market. “We are looking at ethics, price manipulation, guidelines for best execution,” he said.
😳 Galaxy Digital Lost $136 in First Three Quarters of 2018
Mike Novogratz’s crypto investment bank Galaxy Digital has lost $136 million in the first three quarters of 2018.
According to Bloomberg, Galaxy Digital’s realized and unrealized losses in Q3 amounted to $41 million, which when combined with the results of previous quarters, amounts to the firm being out $136 million so far this year. The firm’s share price also dropped to a record low after tumbling 55 percent this month.
Founded earlier this year, the company explained that the losses were mainly due to tumbling prices of major cryptocurrencies such as Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH).
Project Updates
Harbor Launches Tokenized Securities Platform
This week, Harbor launched its blockchain-based platform and compliance protocol built to transform private securities like commercial real estate offerings and investment funds into a more accessible and liquid form of private investment.
The first offering on the Harbor platform is a tokenized REIT representing $20M USD of private equity in The Hub at Columbia. Equity is divided into 955 shares (tokens) priced at $21,000 each.
The Aragon team have released aragonOS 4 this week that comes with new features and optimizations. The team also gives us a run down on how they’re upgrading the Aragon voting process.
Lastly, Stefano Bernardi (of Token Economy) has joined the Aragon team! Congratulations!
Messari Launches Disclosures Registry
Messari launched its open-source disclosures registry this week. The company is joined by a diverse, reputable group of 12 initial partner projects committed to transparency and self-regulation.
ConsenSys Labs has led a $2.1 million seed round for AZTEC, a startup that’s working to make ethereum transactions private. More info on the project over here.
The team at MyCrypto have launched an initiative focused on providing security tips every day leading up to Christmas!
Follow the successful stablecoin vote, the Dai stablecoin has now been added to Compound and you can start earning interest on your Dai.
Gnosis Safe Android App Released
Gnosis Safe is the first smart contract-based mobile wallet with multi-factor authentication, a simply onboarding experience, and a seamless user interface. Head here to install it.
Popular privacy coin Zcash (ZEC) begun trading on Coinbase Pro this week. Though, users are only able to withdraw their ZEC from Coinbase to ‘transparent’ addresses.
Messari Introduces the “Everything API”
The API provides the world’s most comprehensive institutional grade Bitcoin, Ethereum and blockchain data API, ranging from market data to fundamentals, blockchain metrics, and news.
This release packs a 30% speed improvement on in-sync block processing and various other features/bug fixes. If you’re running Geth, be sure to upgrade!
Kevin Owocki from Gitcoin breaks down how the team plans to create a financially sustainable ecosystem for open source software.
Crypto Startup Raises $12.75mil
Securitize, a startup hoping to use blockchain technology to upend the securities industry, raised a $12.75 Series A investment round led by Blockchain Capital. Other notable investors include Coinbase Evntures and Ripple’s Xpring fund.
Coinbase Launches Trading Desk
Coinbase has debuted OTC trading for its Prime customers (think institutional investors).
OTC, or over-the-counter, trading occurs between two parties directly ー as opposed to over an exchange ー typically between an investment bank and its clients.
Amazon Launches New Service for Building Blockchains
Announced Wednesday at Amazon’s re:Invent conference, the Amazon Managed Blockchain platform “is a fully managed service that makes it easy to create and manage scalable blockchain networks.”
Ethereum 2.0 Development Update #17
Raul from Prysmatic Labs covers the important updates over the last couple of weeks from the world of Ethereum 2.0 (Serenity).
Project Spotlight
Bitski lets you build user-friendly and cross-platform Ethereum apps. Using Bitski, you can build a decentralized app or game that feels just as easy to use as a standard app.
Bitski provides developers with access to the Ethereum network through their hosted nodes, and provide access to the user’s wallet using OAuth.
Interesting Tweets
- Blockchain is a movement
- Crypto regulatory hope
- Why this crypto winter may be worse than 2014
- Research on bitcoin accepting venues
- Marco Santori on the recent ICO judgement in California
- Will 2019 be the new 2015?
- Two Bitcoin address’ were added to a list of sanctioned parties in the U.S — what does that mean?
- Long Reads Sunday #22
Ecosystem Bits
Blog Posts
- Corrections and Recoveries
- The Wood-Zamfir Governance Debates
- ADAM: Vision and Founding Principles
- Two Point Oh: The Tale of Two Ethers
- How Cryptography Redefines Private Property
- The Tokenization of Real Estate
- What Bear Markets Look Like
- FOAM Devcon IV Recap
- 10 Rules for the Secure Use of Cryptocurrency Hardware Wallets
Podcasts
- Into the Ether (new podcast focusing on the world of Ethereum)
Misc
Website Updates
New research added to the site
New resources added to the site
Feedback
Thanks for reading. I’d love to get your feedback so please send an email to info@blockbyblock.io and I’ll be sure to get back to you! :)
Disclaimer: None of the information outlined in this piece should be taken as investment advice. Please click here for more information.
