Bitcoin Breaks $7,500 Point After a Week of Solid Growth, BTC Dominance Goes Up

Crypto markets are experiencing a mix of green and red today, July 22, with some of top 20 altcoins by market cap seeing a slight dip of around 1 percent over the past 24 hours, while Bitcoin (BTC) has reclaimed the $7,500 price point, according to Coinmarketcap.

Following a week of solid upswing, none of the top 20 coins by market cap are up or down by more than about 1 percent, showing relatively static growth.

Market visualization

Market visualization from Coin360

Bitcoin broke the $7,500 barrier today, up about 1 percent over a 24 hour period and trading at $7,516 at press time. The major cryptocurrency is up almost 18 percent this week, having traded roughly $1,000 less on Monday morning, July 16. The coin is also holding its monthly gains of around 21 percent.

Bitcoin price chart

Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index

In contrast, Ethereum (ETH) is seeing a slight decline today, down about half a percent over the past 24 hours to press time. The top altcoin is seeing just 3 percent gains this week, trading at around $463.

Ethereum price chart

Ethereum price chart. Source: Cointelegraph Ethereum Price Index

Total market capitalization is slowly building momentum, up around 1 percent from yesterday’s figures and currently valued at around $285 billion.

Total market capitalization chart

Total market capitalization chart. Source: Coinmarketcap

While total market cap is down from the intraweek high of almost $300 billion, Bitcoin’s dominance over altcoins is growing firmly this week, up 3 percent and currently amounting to 45 percent.

Percentage of Total Market Cap (Dominance)

Percentage of Total Market Cap (Dominance). Source: Coinmarketcap

This week has seen potential institutional movement into the crypto space, as investment giant BlackRock’s announced they were considering the launch of Bitcoin futures.

On Friday, July 20, the Chicago Mercantile Exchange (CME) reported that Bitcoin futures’ daily average volume has grown by 93 percent in the second quarter over Q1, with the number of open contracts on Bitcoin futures also having increased by 58 percent.

Also on July 20, BitMEX exchange CEO Arthur Hayes suggested that the current bull trend has the potential to give way to a BTC price point of $5,000 before skyrocketing to $50,000 in 2018.

EU Parliament Study: Central Bank Digital Currencies ‘Will Reshape Competition’ in Crypto Market

A study on issues of competition in fintech, commissioned by the European Parliament Committee on Economic and Monetary Affairs (ECON), was published July 20. It found that central bank-issued digital currencies could be a “remedy” for a lack of competition policy in the crypto sector:

“The arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the cryptocurrency market, broadening the number of competitors.”

The study mentions cryptocurrencies like Bitcoin (BTC) as “technological and operational paradigms that are a source of disruption for the entire sector, including monetary policy and financial stability.” Other “disruptive and innovative applications” of new technologies include “AI, cloud computing, biometrics, digital identity, blockchain, cybersecurity, RegTech, internet of things (IoT), augmented reality.”

Private digital currencies are defined separately from central bank-issued digital currencies (CBDC), noting that the CBDCs differ by being based on a “conventional bilateral settlement with a trusted central party.”

According to the study, since closed cryptocurrency systems require a supervisory authority, central banks could be considering using “permissioned cryptocurrency systems” to “complement or substitute” the currencies already used.

The study claims that CBDCs “will reshape the current competition level in the inter-cryptocurrency market” by adding to the pool of competitors:

“A potential inadequacy of traditional competition policy to address competition issues in the cryptocurrency markets can be found, suggesting direct public participation through a central-bank digital currency as a remedy.”

The competition issues, the ECON study notes, can be divided into “inter-cryptocurrency market” competition between cryptos, and “intra-cryptocurrency” market competition between service providers like wallets and exchanges.

In terms of “inter-crypto market” competition, the study reports that the “presence of network effects” and a high number of users of a cryptocurrency could provide a barrier to entry for other cryptos attempting to join the market. The study hypothesizes that this competition “may lead to potential collusive agreements between members of hypothetical cartels.”

For “intra-crypto market” competition, wallets, exchanges, and payment providers could create practices that would keep others out of the market, such as receiving inducements from miners that favor one cryptocurrency over another.

In mid-July, a new EU directive came into force that set stricter transparency rules for digital currencies to protect against money laundering and terrorist financing.

Also in July, virtual currencies were discussed for the first time at ECON’s “Monetary Dialogue” session, with five different briefing reports discussed on topics ranging from crypto and central banks to crypto and the “Eurosystem.”

Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution

The Fusang Investment Office, an Asia-based fund management firm focusing on family offices, is planning to launch a crypto-custody service in Hong Kong, local news outlet the South China Morning Post reports Sunday, July 22.

The custody service, Fusang Vault, will hold digital assets for clients as well as provide periodic audits, according to the company’s CEO Henry Chong. The service’s launch is planned for the fourth quarter of 2018.

Comparing digital assets to financial bonds, Chong noted the increasing need to provide an independent third party that would hold clients’ crypto assets, just like a demand for custodian bank services in conventional finance.

Chong stressed that since holding digital assets lacks the registration of ownership data, a crypto-custodial service is of “paramount importance”:

“Digital assets are akin to bearer bonds, whereby whoever that is holding the security is presumed to be the owner and there is no registration of ownership information of the security. Hence, the way we keep digital asset [sic] secured is of paramount importance.”

Fusang’s CEO added that the firm is already working with insurance companies to safeguard clients’ digital assets, without specifying features of the upcoming Fusang Vault service.

According to its website, the Fusang Investment Office is regulated by the Monetary Authority of Singapore and licensed by the Securities and Futures Commission of Hong Kong.

In early July, one of the world’s largest cryptocurrency exchanges, Coinbase, launched a crypto-custodian solution targeting institutional clients. Coinbase Custody is operated through an independent member of the U.S. Financial Industry Regulatory Authority (FINRA) in compliance with the U.S. Security and Exchange Commission (SEC).

At the end of June, Cointelegraph published an Expert Take on the financialization of the crypto ecosystem, noting the entrance of custodial solutions as a sign of more institutional investors coming in.

Bank of Canada Study Finds Double Spending in Blockchain is ‘Unrealistic’

The Bank of Canada (BoC) has published a study on the “incentive compatibility” of blockchain technology this week, finding that double spending is an “unrealistic” outcome.

The new BoC study focuses on a proof-of-work (PoW) protocol for blockchain technology, modelling the behaviors of a “honest miner” and a “dishonest miner.”

The Canadian bank’s researchers modelled a system to check whether a digital ledger like blockchain was immune to types of “cheating” such as double spending, when users change records in the ledger for their own gain.

The study writes that the main innovation of a digital ledger technology like blockchain is to make the users within the system responsible for the guarding of the system itself. For blockchain technology, the system approves new transactions when an update is agreed upon by all users in the system.

The study finds that if one miner controls more than half of all of the computational power, the miner would hypothetically be able to stage a “51% attack,” where

“Confirmation lags, in theory, lose their power in controlling double-spending incentives. The dishonest miner creates an arrival rate that is larger than those of the other honest miners combined […] and, thus, can always cheat by double spending.”

However, the study notes that in order for this to happen from an economic standpoint, a “dishonest miner” must have “deep pockets” and be “risk neutral,” concluding,

“These assumptions tend to be unrealistic and, in practice, users have little economic incentives to launch such an attack, especially when the computational investment by other miners is large.”

James Chapman, senior research director at the BoC’s funds management and banking department, had previously questioned the effectiveness and security of using blockchain tech for banking.

Another study conducted by major global management consultancy firm Bain & Company found that the implementation of distributed ledger tech like blockchain “has the potential to revolutionize transaction banking.”

Hodler’s Digest, July 16-22: Coinbase Backpedals on Regulatory Approval and Switzerland Becomes Even More Crypto Friendly

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Top Stories This Week

Crypto Exchange Coinbase Retracts Announcement Of Getting Regulatory Approval

Major U.S. crypto exchange and wallet Coinbase has retracted their previous announcement that they had secured approval from U.S. regulators to list digital tokens considered to be securities. According to comments sent to Bloomberg, not only were the SEC and FINRA not involved in Coinbase’s purchase of Keystone —an acquisition intended to make Coinbase into a broker dealer —  the SEC’s approval is “not required” anyway.

Stellar Blockchain “First” To Be Declared Sharia Certified For Money Transfers

Open source distributed payment platform Stella has reportedly become the first distributed ledger protocol to receive a Sharia compliance certification in the money transfer and asset tokenization fiend. With the Sharia certification, issued by the Central Bank of Bahrain-licensed Shariyah Review Bureau, Stellar will be able to operate in regions where financial services must comply with Islamic financing principles.

Top Swiss Exchange SIX Group “Open” To Adding Cryptocurrency Trading

The parent company of Switzerland’s principal stock exchange, SIX Group, said this week that it would be open to offering crypto trading services on its digital trading platform. Speaking about the possibility of a crypto trading addition, a SIX Group spokesperson said that there is a “real need” for establishing “transparency and accountability in the crypto-world.” SIX’s digital trading platform, set to be launched by mid-2019, will offer services like ICO consulting for those not classified as securities.

US Legislature Holds Two Cryptocurrency Related Hearings, One Positive, One Negative

The U.S. Congressional Subcommittee on Monetary Policy and Trade spoke about digital currencies this week in the context of both their domestic and global implementations, also exploring whether central banks should introduce their own digital currencies. Congressman Brad Sherman took an especially aggressive stance, stating that he thinks U.S. citizens should be banned outright from buying or mining cryptocurrencies. In a different House hearing, the main takeaway was that digital assets can shift their regulatory status at different stages. One legislator also noting that “Bitcoin is law enforcement’s best friend,” as it can be used for tracking illicit purchases on the blockchain.

Coinbase Creates Its Own Political Action Committee

San Francisco-based cryptocurrency exchange and wallet Coinbase has created its own political action committee (PAC), according to documents released this week. In the U.S., PACs operate by pooling campaign contributions from members with similar political goals, which they then donate to corresponding political campaigns. Coinbase’s move to form their own PAC could allow them to direct donations to politicians and campaigns that have a friendly stance to crypto and blockchain regulation. As of June 30, Coinbase has not raised any money through the PAC.

Most Memorable Quotations

Most Memorable Quotations

Steve Bannon

“We are working on some tokens now, utility tokens, potentially for the populist movement on a worldwide basis. But they have to be quality,”— Steve Bannon, co-founder of Breitbart News and former Chief Strategist for U.S. President Donald Trump’s administration

Ken Griffin

“I still scratch my head [about Bitcoin] […] I don’t have a single portfolio manager who has told me we should buy crypto, not a single portfolio manager,” Ken Griffin, CEO and founder of the Citadel hedge fund

Laws And Taxes

Laws And Taxes

Japanese Financial Regulator Receives Overhaul To Better Focus On Fintech Fields

Japan has revamped its financial regulator, the Financial Services Agency, in order to make the various bureaus more suited to address new challenges in the financial sector. Starting this week, the newly established Strategy Development and Management Bureau, a replacement for the Inspection Bureau, will work on policies for addressing the crypto market, fintech, and money laundering. The Money and Market Bureau will also contribute by developing a legal framework for dealing with fintech sector growth.

Russia’s Crypto Miners, Holders Will Be Regulated Under Existing Revenue Code

The Chairman of the Russian State Duma Committee on Financial Markets, Anatoly Aksakov, said this week that cryptocurrency miners and holders will be regulated under the Internal Revenue Code. Russia’s upcoming digital financial assets bill is expected to be published during the Duma’s fall session. According to Aksakov, the bill won’t include separate taxation schemes for crypto owners, meaning that both mining and circulation of crypto will fall under the existing provisions of the Russian Tax Code.

Indian Supreme Court Moves Final Decision On Crypto Dealings Ban To September

The Supreme Court of India’s final hearing on the Reserve Bank of India’s (RBI) ban prohibiting banks from working with businesses or persons dealing in cryptocurrencies has been reportedly postponed from July 20 to September 11. Following the postponement, a RBI senior advocate urged the Supreme Court to regulate cryptocurrencies, noting that they increase the potential for illegal transactions.

Adoption

Adoption

Five Crypto, Blockchain Innovators Makes Fortune’s “40 Under 40” List

Fortune’s “40 Under 40” annual ranking for the most powerful young disruptors in global business includes five crypto trail blazers this year. Ethereum co-founder Vitalik Buterin has made the list for the third time, and crypto wallet and exchange Coinbase’s Brian Armstrong appears as well for the second. Other crypto influencers that made the first for the first time include VKontakte and Telegram founder Pavel Durov — Telegram’s two ICOs for a native token held this year raised a total of $1.7 billion — and co-CEOs of brokerage app Robinhood, Vlad Teve and Baiji Bhatt, which includes a crypto trading platform.

British Pop Star Peter Gabriel Invests In Blockchain Startup Provenance

Peter Gabriel, the former frontman of musical group Genesis, has invested an undisclosed amount in Provenance, a blockchain startup. Provenance aims to apply blockchain technology to supply chains to create more transparency in food transportation, and will use the funding from Gabriel to implement its blockchain-based application with over 1,000 food and beverage businesses by 2025.

China Leads International Research Group On Internet Of Things, Blockchain Standards

China will be leading an international research group on the standardization of the Internet of Things and blockchain technology, according to a proposal adopted by the joint technical committee of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). The group will promote fiat-digital integration by providing a large number of industrial application scenarios, as well as by establishing a working mechanism to promote the international standardizations.

Japanese Internet Services Giant Launches Internet Banking Business With Blockchain

GMO Internet Inc. has launched a new internet banking business that will leverage blockchain as a central part of its operations, along with artificial intelligence and Internet of Things. The project has reportedly been in development since July 2016 via the ‘GMO Aozora Net Bank,’ in which GMO Internet, GMO Financial Holdings and Aozora Bank are joint investors. The new internet banking business will be open to GMO’s corporate and retail clients.

Mergers, Acquisitions, And Partnerships

Mergers, Acquisitions, And Partnerships

PayPal’s Peter Thiel, Bitain’s Jihan Wu Invest In EOS Developer Block.one

EOS developer Block.one has secured investments from PayPal’s billionaire co-founder Peter Thiel, as well as crypto mining hardware firm Bitmain’s Jihan Wu. Other investors that participated in Block.one’s latest funding round, whose total has not yet been released, include hedge fund billionaires Louis Bacon of Moore Capital and Alan Howard of Brevan Howard. EOS is currently ranked fifth on CoinMarketCap, with a market cap of about $7.3 billion.

Chinese Startup Nervos Network Raises $28 Mln For Enterprise Blockchain Development

Nervos Network, a Chinese blockchain startup founded by a former researcher and developer of the Ethereum Foundation, has secured $28 million in funding from entities such as crypto hedge fund Polychain Capital and venture capital firm Sequoia China to develop its enterprise blockchain solutions. According to Nervos, the startup will use the capital to provide a hybrid solution combining a secure public blockchain and an application chain.

Malta Stock Exchange, OKEx Sign Agreement To Create Securities Trading Platform

The Malta Stock Exchange (MSX) and digital asset exchange OKEx announced their collaboration this week for creating a new institutional grade security-tokens trading platform. The joint project, named OKMSX, aims to become a platform for digital asset exchanges with security expertise and client due diligence. MSX has also signed an agreement with Fifth Force, the operator of the Neufund platform that supports “any type of security or financial product to be issued as a token on blockchain creating Equity Token Offerings.”

Accenture, Multinational Aerospace Firm Thales Group Partner For Blockchain Solutions

Dublin-based consultancy firm Accenture has partnered with French multinational aerospace firm Thales Group in order to use blockchain to update aircraft supply chains. The blockchain solution, based on the Hyperledger Fabric, will work in tandem with Thales’ physically unclonable function tool to “track, trace and authenticate aircraft parts and materials.”

Boeing Partners With AI Company To Track Pilotless Vehicles Using Blockchain

Boeing has partnered with SparkCognition, a Texas-based company that will work with the aviation giant on a platform to track unmanned air vehicles and allocate flight corridors. Boeing, which invested $32 billion in SparkCognition in last month’s funding round, will get “a standardized programming interface to support package delivery, industrial inspection and other commercial applications” as a byproduct of the partnership.

Winners And Losers

Winners And Losers

The crypto markets have stayed relatively in the green this week, with Bitcoin near $7,500 and Ethereum near $465. Total market cap is currently around $282 billion.

The top three altcoin gainers of the week are Bitcoin Diamond, Decentraland, and Mithril. The top three altcoin losers of the week are Bytom, aelf, and Decred.

For more info on crypto prices, make sure to read Cointelegraph’s price analysis.

FUD Of The Week

FUD Of The Week

HashFlare Cloud Cryptocurrency Mining Platform Disables Services

HashFlare, a cloud crypto mining services, announced this week it was shutting down its mining services and hardware on curren SHA-256 contracts due to difficulty generating revenue. According to HashFlare, payouts were lower than maitenence costs for 28 days in a row, leading to the decision to disable their mining services.

Vietnam’s Central Bank Suspends Import of Cryptocurrency Mining Hardware

The State Bank of Vietnam has suspended the important of cryptocurrency mining hardware into the country. The decision follows an official request from the Ministry of Industry and Trade to temporarily ban imports of crypto mining machines — which reportedly had a volume of 15,600 units from 2017 to April 2018 — as they reportedly confuse the management of currency flows in Vietnam.

UPenn Study Shows Most ICOs “Failed” To Follow Through On Whitepaper Promises

A study from the University of Pennsylvania Law School has shown that many ICOs did not provide protection against insider trading or stick to their whitepaper promises. According to the study, a “significant fraction” of issuers also kept centralized control through “previously undisclosed codd” in their governing structures.

Citadel Hedge Fund CEO Tells Young Generation To Stay Away From Bitcoin

Ken Griffin, the CEO and founder of the Citadel hedge fund, said in an interview this week that he still “stratch[es] his head” about Bitcoin.” According to Griffin, the cryptocurrency is just a “solution in search of a problem,” and “not a single” portfolio manager has ever told him that they should buy crypto.

“Kodak-Branded” Bitcoin Miners Rental Plan Called Off

A scheme to rent “Kodak-branded” Bitcoin miners to customers has been called off, with Kodak noting that the product was not actually a “Kodak brand licensed product.” Spotlite USA, a firm that license the Kodak brand for its own products, had marketed the KashMiner at Kodak’s official stand at a tech show in Las Vegas. The miners would be rented out with an up-front fee of $3,400 and would allegedly result in $375 per month over two years through mining. A Spotlite USA executive reported that the SEC nixed the plan, so the miners will instead be deployed in Iceland.

Prediction Of The Week

Prediction Of The Week

Prediction Of The Week

Billionaire Marc Lasry Sees Bitcoin Hitting $40,000 As Crypto Becomes More Mainstream

Marc Lasry, the co-founder of Avenue Capital Group, said this week that Bitcoin is going to hit $40,000, as the trading crypto is becoming easier and more mainstream. According to Lasry, Bitcoin is the cryptocurrency that “everybody is going to come to,” and investors could make five to ten times their money in the next three to five years.

Best Features

Best Features

Blockchain Is Helping Build A New Indian City, But It’s No Cure For Corruption

Quartz India delves into the outcomes of one Indian city using blockchain — albeit a private one — for documenting land registration. The city turned to distributed ledger technology to avoid the common manipulation of digital lands records by corrupt government authorities, but according to Quartz, even the move to an allegedly untamperable ledger has left some farmers uncertain as to what happens in the stage before the information is put on the blockchain.

Why You Can’t Trust Most Cryptocurrency Whitepapers

Wired goes into depth about how whitepapers “rarely” achieve Satoshi Nakamoto-level quality, and why the crypto community may need more traditional vetting structures-— something other than calling “the person they have beers with” reading a whitepaper a “peer review.” Although the solution isn’t as simply as directly copying the academic guidelines for papers, as the process takes an amount of time that could hinder innovation, one solution posed to investors is the possibility of hiring technical consultants to vet those whitepapers first.

Reserve Bank of India Urges Supreme Court to Regulate Crypto

India’s central bank, the Reserve Bank of India (RBI), has urged the country’s Supreme Court to regulate cryptocurrencies, local news outlet the Financial Express reports July 21.

In April of this year, the RBI announced it will stop providing services to businesses or persons dealing with cryptocurrencies, citing high risks.

The RBI’s senior advocate Shyam Divan told a bench led by Chief Justice Dipak Misra that it is necessary to regulate Bitcoin (BTC) and other cryptocurrencies since these “particular means” will “encourage illegal transactions.”

Divan also pointed out that the issue has “immense policy dimensions,” attesting that crypto has the potential to impact global money flows.

The senior advocate explained that an interdisciplinary committee headed by secretary of economic affairs, Subhash Garg, set up in 2017 in order to develop the regulatory framework for cryptocurrencies, is examining the issue. The RBI will require three weeks to respond to multiple petitions on the regulations.

On July 19, the Supreme Court reportedly postponed the final hearing on the RBI’s ban on crypto dealings —  originally scheduled for July 20 — to September 11.

The April crypto-dealing ban received backlash from the Indian crypto community, including an online petition to reverse the ban that garnered over 44,000 signatures. In May, India’s Supreme Court decided not to grant an interim injunction against the RBI ban sought by eleven crypto-related businesses.

Also in May, India’s Supreme Court ordered that no petitions can be filed in any Indian High Court against the RBI decision to ban crypto dealings. On July 5, the RBI’s three month deadline for businesses to withdraw from crypto came to an end, meaning that the ban has fully entered into force.

On July 12, an anonymous source in the Indian government reported that authorities may plan on classifying cryptocurrencies as commodities, instead of implementing a blanket crypto ban.

Crypto Markets See Solid Upswing, Bitcoin Pushes $7,500

Crypto markets are seeing mostly green today, July 21, continuing the momentum of this week’s upswing. The top ten altcoins are solidly regaining strength today, up as much 8 percent, according to Coin360, with Bitcoin (BTC) only slightly in the green, hovering near yesterday’s levels.  

coin360

Market visualization from Coin360

The top cryptocurrency is currently trading at $7,426 at press time, up just under 1 percent on the day. Bitcoin saw an intraday low of $7,246.

btc

Low point in Bitcoin’s 24-hours chart. Source: Cointelegraph Bitcoin Price Index

Top altcoin Ethereum (ETH) has seen more significant growth over the past 24 hours, up almost 5 percent and trading at $466 at press time. The altcoin is holding weekly gains of almost 8 percent, peaking at over $500 on July 18.

Value

Ethereum weekly price chart. Source: Cointelegraph Ethereum Price Index

Total market capitalization of all cryptocurrencies is hovering around $282-283 bln, currently at $282.7, up about 2 percent over the past 24 hours to press time. Total market cap is down from this week’s peak of almost $300 bln.

Total market

Total market capitalization chart. Source: CoinMarketCap

Among the top ten cryptocurrencies on CoinMarketCap, Stellar (XLM) and IOTA (MIOTA) are up the most on the day, seeing over 7 and almost 5 percent growth respectively.

Other than stablecoin Tether, Cardano (ADA) is seeing the least 24-hour growth of the top ten coins, up only 1.53 percent. Cardona is however seeing major growth on the week, boasting a whopping 23 percent price increase.

Yesterday, July 20, the Chicago Mercantile Exchange (CME) reported that BTC futures daily average volume has increased by 93 percent in Q2 over Q1. The number of open contracts on Bitcoin futures also increased by 58 percent.

This week’s crypto market growth got further encouragement yesterday, July 20, when the CEO of crypto trading platform BitMEX suggested Bitcoin’s current bull run may give way to a price point of $5,000 before heading to $50,000 in 2018.

From Positive Regulation to Ponzi Comparisons: What Went On at US Congress Crypto Hearings

July 18 proved to be an important day for the crypto industry, as two separate U.S. Congress hearings centring the matter were held: one by the House Agriculture Committee, and the other one by the House Financial Services Committee.

The two stroke completely different tones: while the latter echoed the most conservative sentiments regarding the realm of crypto (with the somewhat obligatory call for a blanket ban), the former seemed more positive, as the board of experts provided the regulators with collected considerations bothering the industry. Nevertheless it’s the House Agriculture Committee hearing we should focus our attention.

Participants

The panel of witnesses was comprised of six industry representatives and academics:

Joshua Fairfield. Law and technology scholar specializing in digital property, electronic contract, big data privacy, and virtual communities. William Donald Bain Family Professor of Law.

Amber Baldet. Co-Founder and CEO of Clovyr startup, which essentially functions as a decentralized app store. Former lead at JPMorgan Chase’s Blockchain Center of Excellence (BCOE).

Scott Kupor. Managing partner at Andreessen Horowitz, a private American venture capital firm.

Daniel Gorfine. Director of LabCFTC, a branch of Commodity Futures Trading Commission (CFTC) agency aimed at promoting “responsible FinTech innovation”.

Gary Gensler. Senior Lecturer at the MIT Sloan School of Management. Predecessor of Christopher Giancarlo, current CFTC chairman (aka “crypto dad”). Former co-head of Finance at Goldman Sachs.

Lowell Ness. Managing Partner at Perkins Coie LLP, an international law firm.

Congress’ “vested interest” in crypto: opening statement

The House Agriculture Committee hearing dubbed “Cryptocurrencies: Oversight of New Assets in the Digital Age” was lead by Chairman Michael Conaway, a Republican representative for Texas’s 11th congressional district. Prior to the hearing, he issued the following statement:

“This hearing will shed light on the promise of digital assets and the regulatory challenges facing this new asset class. Our committee has a deep interest in promoting strong markets for commodities of all types, including those emerging through new technology.”

Thus, a rather positive attitude towards crypto was set from the very start by Conaway, who also explained why the House Agriculture Committee might be curious about the subject at all:

“[We] have a vested interest in shaping and constructing the definition of a security, because it directly impacts the definition of a commodity.”

Below are the keypoints and arguments extracted from the hearing.

Digital asset’s regulatory status might be fluid

Both scholars present, Gensler and Fairfield, have addressed perhaps the main question troubling US regulators: what is a Bitcoin? Currently, different US agencies view digital assets differently: for instance, the Securities and Exchange Commission (SEC) treats them as securities, while Commodity Futures Trading Commission (CFTC) considers them commodities.

Now, the witnesses proposed that a digital token’s legal status is in fact fluid: when it is marketed at a “pre-functional” moment in its development — i.e. during an Initial Coin Offering (ICO) — then the sale at that moment is an investment contract and thus a security, lying in the legal field overviewed by the SEC.

Further, when crypto tokens are realized and become used in a decentralized network a commodity becomes relevant to the CFTC. That could settle the Ethereum dilemma: last spring, the token was rumoured to be classified as a security. However, in that case its ICO that was held years prior to that would be deemed illegal (as it was not registered with the SEC at the time), and therefore the whole asset would become compromised, a scenario Gensler deemed dangerous for the industry.

Former CFTC chairman then proposed that state of the current state of cash-crypto markets resembles “at best a wild west,” and that the CFTC potentially requires more authority and resources to deal with the challenge. The SEC, for its part, could need 2-4 years to address the “thousands” of “noncompliant” actors in the ICO space, he argued.

Fairfield expressed a similar point of view, suggesting that the 70 year old Howey Test which the SEC applies to determine the purview of its jurisdiction, should be dismissed:

“Should tokens be deemed proper under the Howey test? I believe that we should look to the outer bound to figure out what beneficial and damaging uses the technology presents. Look to how the communities are using it –then regulate.”

Ness of Perkins Coie law firm contributed by claiming that over-aggressively extending securities classifications could seriously disturb the crypto space, which has evolved to cater value transfers “at the speed of software.”

“Bitcoin is law enforcement’s best friend”

When the committee members voiced their concerns regarding crypto’s involvement in illicit activities, Kupor of Andreessen Horowitz argued that “Bitcoin is law enforcement’s best friend,” given that pseudonymous transactions can ultimately be traced using intelligence tools that analyze traffic on the blockchain, a ledger famous for its transparency.

“Bitcoin is actually the worst tool to money launder, because every transaction is registered and [recorded]”

Similarly, Ness remembered that “the alleged Russian hackers were caught because they used Bitcoin,” in reference to the recent indictment that charged twelve Russian nationals with using crypto to fuel their efforts to “interfere” in the 2016 U.S. presidential elections.

Blockchain’s heroic deeds didn’t go unnoticed, although the technology is still mature

Fairfield stressed that “the potential value of blockchain technology is considerable”, and outlined seven examples of the technology’s success in different areas, including: corporation strategies, immediate and international payments, digitizing securities, secure transactions and transparent voting systems that would minimize the risk of facing another international scandal after a major election.

In her speech, Amber Baldet, former lead at JPMorgan Chase’s Blockchain Center of Excellence, also addressed the technology, although reminded that blockchain is not mature enough to be the ultimate solution to every single problem, voting included:

“When it comes to electronic voting, we need to take extreme caution, as we aren’t ready to tackle the complex computer science and coordination problem.”

Decentralization is not a serious problem for mainstream adopters

The panel of witnesses addressed the issue of decentralization, an aspect that often seems problematic in the context of mass adoption and regulation. However, as the experts suggested, there is no substantial hindrance on the way: Gensel called it a “natural irony” that the underlying technology is decentralized, but the industry has turned out to be concentrated in few hands: i.e. major centralized exchanges, such as Coinbase.

Similarly, Gorfine of LabCFTC noted that while the crypto technology allows for peer-to-peer transactions, “most activity takes place through a new type of intermediary where you can apply AML and KYC rules”.

Congressman Conaway summarized:

“As long as the stupid criminals keep using bitcoin, it’ll be great.”

Financial autonomy and inclusion: international experience

Amber Baldet argued that the US market is still largely unregulated, urging to notice other countries’ experience with the technology. She outlined Malta and Switzerland with its “Crypto Valley” as prime examples of positive adoption, and mentioned initiatives in other countries that are less known for championing the technology, like Afghanistan where Roya Mahboob, CEO and co-founder of Digital Citizen Fund, enrolled over 9,000 Afghan women and girls in education programs.

Room for skepticism

Republican congressman Collin Peterson seemed to be the less convinced about cryptocurrencies in the room. “So they are just printing money out of nowhere?”, he exclaimed at one point.

He then proceeded with the mandatory comparison of crypto space to a “Ponzi scheme,” and asked what backs Bitcoin’s value. Former CFTC Chairman Gensler parried:

“There’s really nothing behind gold either … what’s behind it is a cultural norm, for thousands of years we liked gold… We do it as a store of value, so bitcoin is a modern form of digital gold. It’s a social construct”.

Not for regulations, albeit not the “hasty ones”

While the overall tone of the hearing suggested that positive regulation (or, as Gensler put it, “clearer”, not overly harsh regulation) would help the industry thrive, CFTC’s Gorfine argued that the government should avoid proceeding with rushed decisions:

“… While some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models.”

The House Financial Services Committee hearing: call for a crypto ban, CBDCs are “one of the worst financial ideas”

Meanwhile, a parallel congress hearing’s discussion was not that fruitful for the industry, as the head of the Federal Reserve Jeremore Powell deemed cryptocurrencies as “dangerous of investors”, congressman Brad Sherman (the same one who called cryptocurrencies “a crock” in the past) went as far as to suggest “prohibit[ing] U.S. persons from buying or mining cryptocurrencies”, and Alex Pollock, senior fellow at the R Street Institute, argued that “to have a central bank digital currency is one of the worst financial ideas of recent times”

Celebs and Crypto: A Mixed Bag of Crypto Collaboration

In 2017, cryptocurrencies were thrust into the faces of millions like never before, as Bitcoin and numerous altcoins soared to breathtaking highs.

What followed can only be described as a media frenzy, as any noteworthy publication, website and media agency had some sort of coverage of Bitcoin and crypto toward the end of the year.

Most businesses wouldn’t have enough money to pay for this much advertising — but that is largely due to the fact that Bitcoin and its brethren cruised to all time highs that may not be reached again for years to come.

Nevertheless, over the past few years, crypto has received a star-studded boost from a number of notable celebrities from around the world. From actors to singers, rappers to sports people, a number of the world’s most recognizable faces have lent their voices to numerous cryptocurrency projects.

Some are deeply involved, while others seem to have taken the usual celebrity-endorsement route. Nevertheless, with millions of loyal fans around the world and an equal number of followers across multiple social media platforms, these celebrities can have a big influence over the perception of millions of people.

Given the diverse backgrounds and spaces in which they work, the celebrities also have the power to introduce cryptocurrencies to a wide variety of people, who otherwise may not have been introduced to the technology.

Here’s our list of notable celebrities that have made waves in the cryptocurrency space, as well as those who are just riding that wave for their own benefit.

Snoop Dogg

Snoop Dogg — ‘Putting tha Crip in Crypto!’

Twitter: 17.2 million; Insta: 25.3 million; Facebook: 36 million

Snoop Dogg has been in the rap game since 1991, and he’s one of the most recognizable faces of the music industry.

His most recent foray into the cryptocurrency space is as recent as April 2018, when he teamed up with Ripple as a performer for a VIP experience they had in May in New York City.

However, he’s been in tune with the industry since the launch of his 2013 album X, which fans could apparently buy with Bitcoin. What seemed like a tongue-in-cheek Tweet quickly became reality, as the likes of BitPay and Coinbase responded to the Tweet promising to make Snoop’s promise a reality.

At the time, Bitcoin was sitting at $1,000, so if Snoop made a load of sales in the cryptocurrency back then and ‘hodl’d’, he may have made a killing in 2017.

Snoop also put out a tongue in cheek reTweet of a Robinhood advertisement promoting the feeless exchange, with the memorable tagline, ‘putting tha Crip in Crypto:

Katy Perry

Katy Perry — ‘Crypto-claws’

Twitter: 107 million; Insta: 70.6 million; Facebook: 68 million

The pop star has over 70 million followers on Instagram, and 107 million on Twitter, bringing a new meaning to the term ‘star power.’

That means a massive number of her fans have seen and or reacted to a couple of crypto-related posts on her profiles.

In January, the American singer posted a picture on Instagram of her nails done up with a number of different cryptocurrency logos, including Bitcoin, Monero, Litecoin and Ethereum.

Back in November 2017, Perry posted another photo on Instagram, sitting alongside American investor Warren Buffett in an interview-style setting, with the caption: ‘nbd just asking Warren Buffett his thoughts on cryptocurrency’:

Considering that Katy Perry has the most followers on Twitter in the world, and is ranked 20th on the list of most followed Instagram profiles. Her positive outlook was definitely a boon to the perception of cryptocurrencies for millions of people.

Ashton Kutcher

Ashton Kutcher

Twitter: 18 million; Insta: 2.8 million; Facebook: 18 million

The American actor is famous for his role in That 70s Show, but he has gone on to make waves in Hollywood over the years.

Furthermore, he’s an accomplished venture capitalist and co-founder of A-Grade Investments.

He’s had a history of crypto interest — starting with a Tweet in 2014 that shared a link to the Ethereum website a full year before the project went live.

Kutcher has also invested in esports betting platform Unikrn, which also attracted investments from American investor Mark Cuban and Ethereum co-founder Anthony Diiorio. He has also invested in Bitcoin payment platform Bitpay.

With 18 million followers on Twitter and Facebook respectively and nearly three million on Instagram, Kutcher is another crypto enthusiast who has the capability to influence a large audience of followers.

50 Cent

50 Cent

Twitter: 6.69 million; Insta: 19.2 million; Facebook: 35 million

American rapper 50 Cent began his association with cryptocurrency in 2014 by allowing fans to buy his album Animal Ambition using Bitcoin.

Sources claim that 50 Cent made around 700 Bitcoin from his album sales — which is worth around $4.3 million at the current Bitcoin price.

What may have been more of a brain wave for the rapper than anything else was still a positive move for the cryptocurrency world, as 50 Cent has over 19 million followers on Instagram.

It seems as though the rapper has since removed the posts from Instagram and Twitter, but we all know he’s still ballin’. One Twitter user posted screenshots of the original post on Instagram.

50 Cent

Image source: Twitter

Lionel Messi

Lionel Messi

Twitter: 220K; Insta: 97.1 million; Facebook: 90 million

Barcelona and Argentina football star Lionel Messi is one of the most recognizable figures in the world, let alone sport. Messi has an astounding 96 million followers on Instagram and 88 million on Facebook, making him one of the biggest influences around.

Messi is definitely the most notable sportsman involved in the blockchain space. In 2017, Messi announced that he’d become an ambassador for SIRIN LABS.

The company is pioneering the blockchain-powered smartphone space, with its FINNEY model currently in development.

Messi endorsed the project on his Facebook page in a paid post, in a move that was aimed to reach an untapped market of people who may never have been introduced to blockchain tech.

“I am usually busy trying to decentralize defenses and after digging deeper into blockchain and decentralized systems, I’m excited to join SIRIN LABS as an ambassador to make blockchain more friendly with their upcoming operating system for smartphones!”

Floyd ‘Crypto’ Mayweather

Floyd ‘Crypto’ Mayweather

Twitter: 7.79 million; Insta: 20.6 million; Facebook: 13 million

Renowned boxer Floyd Mayweather has captivated audiences for his exploits in the ring, but there’s a reason he’s known as ‘Money Mayweather.’

While he’s undefeated in all 51 of his professional boxing bouts, Mayweather and his team have been just as aggressive in their business exploits. With a net worth of over $700 million, Mayweather certainly knows how to make money — and part of that is knowing what projects to be associated with.

However, all that being said, Mayweather’s endorsement of an Initial Coin Offering didn’t end well for the company behind the project. In September 2017, Mayweather was pictured promoting Centra, a cryptocurrency project that raised over $32 million during its ICO.

Less than six months later, the U.S. Securities and Exchange Commission indicted the three co-founders of the project for securities and wire fraud.

Earlier in 2017, Mayweather had posted pictures on Instagram supporting two different projects. One, Stox.com, is a Bitcoin price prediction platform, while the other is a decentralized marketplace Hubii network.

Jamie Foxx

Jamie Foxx

Twitter: 4.66 million; Insta: 5.3 million; Facebook: 9.4 million

American actor Jamie Foxx also got in on the cryptocurrency frenzy, promoting the launch of an ICO in September on Twitter.

Foxx’s endorsement of Cobinhood, a feeless cryptocurrency trading platform, was met with relative skepticism by the cryptocurrency community.

Andreas Antonopolous cautioned people to be wary of celebrity endorsements of investment opportunities.

“The worst reason to make an investment is a celebrity endorsement. Unfortunately, this tactic works, and that’s why they’re doing it,”

Donald Glover

Donald Glover — Not so ‘Childish’ Gambino

Twitter: 2.37 million; Insta: 3 million; Facebook: 1.5 million

Also known as Childish Gambino, American actor and rapper Donald Glover seems to be one of the first celebrities to advocate the use of Bitcoin.

All the way back in 2013, in an interview with Time, Glover expressed his interest in the use of Bitcoin and the possibilities it could bring to the world at large.

“I know a lot of people are skeptical, but I feel like if everything’s going to live online, why not Bitcoins? Being backed by gold seems very old and nostalgic to me. Being backed to a Bitcoin, which takes time to actually make and there’s this equation that has to be done, that feels realer to me and makes more sense.”

Fails — Mayweather, DJ Khaled, Paris Hilton and Steven Seagal

It hasn’t all been easy sailing for some celebrities and their cryptocurrency collaborations. A select few who have gotten behind certain projects have ended up with their own brands being damaged by the failures of some of these cryptocurrencies.

As we’ve touched on above, Mayweather was one of these celebrities to have endorsed an ICO that ended up being exposed as a fraud. Centra’s founders have since been arrested and charged — but Mayweather wasn’t the only celebrity to be linked with the ICO.

DJ Khaled

DJ Khaled

Twitter: 4.05 million; Insta: 11 million; Facebook: 3.5 million

American music producer DJ Khaled also endorsed the Centra Card, which was advertised as a cryptocurrency debit card that could be used to convert crypto into fiat currencies.

The ICO claimed that card was powered by VISA and Mastercard, but the SEC reported that this was, in fact, false. Khaled has since removed the post from his Instagram account.

DJ Khaled

Source: Medium/Instagram

Paris Hilton

Paris Hilton

Twitter: 17.2 million; Insta: 9.2 million; Facebook: 7.6 million

American television personality Paris Hilton was also part of the ICO frenzy in 2017. In a now of now-deleted Twitter posts, Hilton expressed her interest in the ICO of LydianCoin.

A couple of months later, the celebrity distanced herself from the project, after the CEO of LydianCoin’s parent company became involved in serious legal battles.

In November 2017, the SEC warned celebrities that they could face legal ramifications for promoting ICOs without disclosing certain details of their involvement with these projects:

“Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion. A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.”

Steven Seagal

Steven Seagal

Twitter: 108K; Insta: 121K; Facebook: 6.1 million

American actor Steven Seagal has been involved in one of the more bizarre cryptocurrency ICOs of 2018. Widely denounced as a ‘pyramid scheme’ or MLM company, Bitcoiin2Gen was launched in January, with Seagal named as a brand ambassador.

The project seemed sketchy at best, and numerous cryptocurrency publications labelled it as a pyramid scheme. The company denied the claims, saying it’s four level, pyramid-scheme-resembling commission structure was only in effect during the ICO.

It was hardly surprising that Seagal and the project’s founders announced that he was parting ways with Bitcoiin2Gen after the conclusion of the ICO in March 2017.

This was just days after the Tennessee Department of Commerce & Insurance (TDCI) Securities Division issued a warning to consumers about the nature of the project — which was deemed to be offering unregistered securities.

The Game

The Game

Twitter: 1.08 million; Insta: 9.3 million; Facebook: 7.9 million

American rapper The Game is well known as a marijuana entrepreneur, and his exploits in the industry spilled over to the blockchain space in August 2017.

In a video on Twitter, The Game promoted a blockchain-based platform, promising to bring big changes to the marijuana industry around the world through the use of smart contracts.

Unfortunately, the project followed a similar fate to those mentioned above. According to reports, the founders failed to register the ICO with regulators – leading to a lawsuit from investors.

A cautionary tale

As the old saying goes, there’s no such thing as bad publicity. This rings true to a certain extent, but celebrities may want to avoid being associated with fraudulent projects that could land them in legal trouble.

The SEC has made it pretty clear that notable figures in the entertainment industry should be wary of promoting or endorsing projects that could fall under the scope of a security.

As the past six months have shown, the cryptocurrency space is still a growing entity, full of good projects and a few bad ones. Onlookers would do well to take celebrity endorsements with a pinch of salt — and do their own research before jumping onto the hyped-up bandwagon.