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3 things you need to know:
One: BitGo receives regulated custodian status. The firm will now be able to offer clients a regulated custody solution. Previously, their custody solutions were not regulated, and required the end user to perform their own rigorous due diligence.
- It starts in Dakota: BitGo was approved by the South Dakota Division of Banking to act as a regulated digital asset custodian, giving the company the ability to offer institutional clients with a regulated custody solution targeted towards their needs.
- Institutions: Institutional clients will be the main target as BitGo goes to market with this regulated solution, and BitGo will meet all AML and KYC requirements. A regulated custodial service is a big step towards getting institutions comfortable with the idea of digital asset investments. I expect to see a proliferation of regulated custodians in the near future — word on the street is that Goldman is already working on a custody product of their own.
“The trust company will enable us to offer a qualified custodial offering that is regulated, that has the money laundering and know your customer requirements. Our custodian offering already has money laundering and KYC requirements … [but the Trust is] for institutional clients … especially for those who are registered advisors and broker-dealers,” BitGo’s chief compliance and legal officer Shahla Ali explained in the interview with CoinDesk.
Two: CEO of GAW Miners sentenced to 21 months of prison for fraud. Joshua Garza pled guilty to a wire fraud charge connected to his scamcoin PayCoin (XPY).
- Ponzi: “Founded in 2014, Bloomfield-based GAW Miners was a firm that specialized in manufacturing, supplying and selling special hardware for crypto mining. The company was shut down in 2015 following allegations of operating as a Ponzi scheme, which was followed by a lawsuit in 2016.” The company promised a floor price of $20 per token, but the token only traded at a max of roughly $15.
- There’s more where this came from: We’ve seen legal bodies cracking down on fraudsters recently in the news, and people are actually going to jail for it. As time goes on, I think we’ll be seeing a lot more cases like this punishing malicious actors for their misdeeds. Eventually the market will have to weed out these players if we are to have more widespread adoption.
- Read more…
Three: Ripplenet has partnered with SBI and Siam Commercial Bank to allow real time remittance payers. This initiative is aimed at Thai workers who send money home to family.
- A big market opportunity: Remittance is a strong use case for blockchain technology, given the time-intensive nature and multiple parties involved in the process coupled with extremely high fees:
“The remittance payments industry is enormous. According to estimates made by the World Bank in 2017, migrants sent $450 billion to their families in developing countries. However, analysts believe approximately $32 billion in remittances fail to reach recipients due to high transaction costs during cross-border transfers.”
- Thai market: There are approximately 45,000 Thai migrants relying on the remittance infrastructure currently in place in Japan to send money back home to family. This solution is aimed at those workers, and it will allow them to send yen in real time back home which the recipient receives in Thai baht.
“Through the process, Thai workers can open an SBI Remit account online and link it to an account associated with Siam Commercial Bank. Once they receive an SBI card, they can visit an ATM to make a deposit, which will be posted to their Thai bank account in real-time. Essentially, the Japanese yen deposited in Japan using SBI Remit will be available to withdraw as the Thai baht in Thailand.”
Also in the news:
- Ether Records Highest Daily Trading Volume in 12 Months
- Another Smart Contract Hack? EOS Dice Game Pays Single User $600K Over 36-hour Period
- Overstock.com Lets Customers Buy Bitcoin via Its Crypto Wallet Portfolio Company
- France to Adopt Legal Framework for ICOs
- European Central Bank: ‘No Plans’ for Digital Currency, Cash Demand Growing
Direction: Yesterday went exactly as predicted. We wicked up to 6600, couldn’t break through and dumped back down to 6400 where we are currently trading. Direction from here however, is unclear as we haven’t shown any strong trend. Based on overall trend, I’d expect a small dip here, but the next big move is uncertain as of now.
Key Support: 6400, 6480
Key Resistance: 6580, 6700
Actions: I’ve exited all trades longs and shorts. We’re trading back within range, above support but on a downtrend now.
Fear & Greed
F&G is also relatively neutral. Sorry people, this is a boring outlook section today.
Around the corner:
- Block Seoul Global Summit — September 16–19th
- PolicyPal Supernodes Registration — September 17th
- Cboe XBT Expiration Date — September 19th
- EOS London Hackathon — September 22–23rd
- Moscow International Blockchain Summit — September 25th
- Add your own event here
What I’m reading today:
In this great thought piece, a16z outlines the case for decentralized platforms (like Ethereum, EOS, etc). This was rolled out in part to defend their sizable investment in Dfinity (a next-gen Ethereum), but includes a lot of really neat insights.
Their main argument is that the internet of today is controlled by massive centralized behemoths, such as Google, Facebook, Twitter, etc. These companies have garnered too much power, and are able to dictate the rules of the internet, and disenfranchise anyone who threatens their goals.
This means that the incentives of users and the platforms are misaligned. Platforms tend to extract value from those that “build” on top of them (whether that is by posting, sharing, or actually building real applications). As users begin to trust these platforms less, innovation and creation slows.
The fundamental problem, according to a16z, is that trust is not scalable.
“Cryptonetworks will enable the emergence of a new breed of digital platform that, unlike the centrally governed platforms of today, will be owned and governed by their respective communities of users and developers. The resulting broad representation of interests will go a long way toward ensuring that they operate and evolve in a way that is both neutral and fair.”
The argument can be boiled down to (my words):
The internet has become centralized and creators get too little in the governance of the platforms they build on. They are not innovating as much due to abuse of power by these centralized platforms.
Cryptonetworks allow a way to “scale trust”, and build systems where communities get a cryptographically secure say in how platforms are operated, theoretically re-aligning incentives and preventing abuses of power, and unilateral decisions that have massive impact on the platform.