Coin News

A new venture involving institutional heavy hitters from across banking, trading and energy sectors is tapping into the Ethereum blockchain to settle commodity trades.

Headquartered in Switzerland, the initiative called komgo SA brings together ABN AMRO, BNP Paribas, Citi, Crédit Agricole Group, Gunvor, ING, Koch Supply & Trading, Macquarie, Mercuria, MUFG Bank, Natixis, Rabobank, Shell, SGS and Société Générale.

The company has recruited team members from Easy Trading Connect 1 and Easy Trading Connect 2, two blockchain-powered pilots for trading energy and soft commodities. Seeing as the new settlement platform will be built on Ethereum, the venture has struck a development partnership with Ethereum incubator ConsenSys, as well.

“We are now entering a new era of simple and inclusive access to blockchain technology to advance stronger, more collaborative, business relationships previously out of reach. We are thrilled to see leading commodity trade finance banks and commodity houses come together to create komgo SA, which will radically simplify and accelerate trustworthiness, auditability, and accessibility to trade financing across the industry,” Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, stated in the official announcement.

In digitizing the settlement process, a platform like komgo SA could streamline commodity trading, cutting through the paper-laden procedure that is required for these assets to change hands.

The venture hopes to release its two flagship products by year’s end. One of these will set standards for know-your-customer (KYC) verification for its users, wherein “the exchange of documents will be executed in an encrypted way over the blockchain on a need to know basis.” The second product will be a digital letter of credit that will allow institutions to “submit digital trade data and documents” to any bank that has onboarded the platform.

Texas Securities Commissioner Travis J. Iles has issued emergency ordinances against three separate fraudulent cryptocurrency schemes linked to Russian scammers.

The orders were issued on September 18, 2018, against DGBK Ltd., an offshore digital “bank” that claims to have developed a hack-proof custody solution for digital assets and virtual currencies; Coins Miner Investment Ltd., a Russian cryptocurrency investment promoter; and Ultimate Assets LLC, a purported cryptocurrency and foreign exchange trader.

Coins Miner Investment Ltd.

Based in Russia, Coins Miner extracts money from U.S. residents under false pretexts, pretending to act on behalf of Coinbase, the San Francisco–based crypto exchange platform. According to the Emergency Cease and Desist Order, it does this by sending spam emails impersonating Coinbase, deceiving investors into handing over their money by leveraging the brand image of the digital asset platform.

The order further specifies that a certain Ana Julia Lara, acting on behalf of Coins Miner, falsely claims to work for Coinbase as a crypto trader. To this end, she also sends out a photograph to investors purportedly showing her with the president of Ripple, whereas the person in the photograph was actually a vice president of Cointelegraph Media Group.

Claiming to operate out of the U.K., Coins Miner is actually based in the Russian city of Volgograd, and it makes several fraudulent claims on its website to prospective investors. On its website and in its marketing efforts, the company also deliberately misrepresents a video of a Fortune journalist to make it seem as though its offering is being promoted. In addition, it uses stock photographs to represent its team and its office deceitfully.

Under Texas law, the investments promoted by Coins Miner are classified as securities, but they are not registered to sell securities in the state.

DGBK Ltd.

Belize-based DGBK claims to have developed a hack-proof custody solution for digital assets, and it solicits funds to develop this concept. Claiming to be at work on a so-called Photon Encrypted Ledger Key, a digital wallet that can be opened using biometric data, the company claims that it can facilitate fully anonymous and untraceable transfers of cryptocurrencies and fiat currencies like the U.S. dollar.

Using a misappropriated video of Barack Obama speaking at the 2016 South by Southwest (SXSW) Interactive festival in Austin, DGBK offers prospective investors the opportunity to invest in the DGBK token with promises of up to 1,900 percent returns following the ICO, set to be held next year.

The company claims to have on its payroll a litany of cybersecurity experts and blockchain specialists without offering any proof to support these claims, and it also offers securities for sale without following the necessary registration requirements.

Ultimate Assets LLC

Claiming to be based in Arlington, Massachusetts, but with no provable address, Ultimate Assets promises investors that an investment of $1,000 will turn into $10,000 within just three weeks. It also falsely claims that all initial investments in the trading program are fully indemnified and that refunds will be issued in the event of failure to yield profits.

Its principals listed in the Cease and Desist Order are also accused of violating the Texas Securities Act by offering securities investments without being registered with the Securities Commissioner.

Texas Securities Commissioner Travis J. Iles has issued emergency ordinances against three separate fraudulent cryptocurrency schemes linked to Russian scammers.

The orders were issued on September 18, 2018, against DGBK Ltd., an offshore digital “bank” that claims to have developed a hack-proof custody solution for digital assets and virtual currencies; Coins Miner Investment Ltd., a Russian cryptocurrency investment promoter; and Ultimate Assets LLC, a purported cryptocurrency and foreign exchange trader.

Coins Miner Investment Ltd.

Based in Russia, Coins Miner extracts money from U.S. residents under false pretexts, pretending to act on behalf of Coinbase, the San Francisco–based crypto exchange platform. According to the Emergency Cease and Desist Order, it does this by sending spam emails impersonating Coinbase, deceiving investors into handing over their money by leveraging the brand image of the digital asset platform.

The order further specifies that a certain Ana Julia Lara, acting on behalf of Coins Miner, falsely claims to work for Coinbase as a crypto trader. To this end, she also sends out a photograph to investors purportedly showing her with the president of Ripple, whereas the person in the photograph was actually a vice president of Cointelegraph Media Group.

Claiming to operate out of the U.K., Coins Miner is actually based in the Russian city of Volgograd, and it makes several fraudulent claims on its website to prospective investors. On its website and in its marketing efforts, the company also deliberately misrepresents a video of a Fortune journalist to make it seem as though its offering is being promoted. In addition, it uses stock photographs to represent its team and its office deceitfully.

Under Texas law, the investments promoted by Coins Miner are classified as securities, but they are not registered to sell securities in the state.

DGBK Ltd.

Belize-based DGBK claims to have developed a hack-proof custody solution for digital assets, and it solicits funds to develop this concept. Claiming to be at work on a so-called Photon Encrypted Ledger Key, a digital wallet that can be opened using biometric data, the company claims that it can facilitate fully anonymous and untraceable transfers of cryptocurrencies and fiat currencies like the U.S. dollar.

Using a misappropriated video of Barack Obama speaking at the 2016 South by Southwest (SXSW) Interactive festival in Austin, DGBK offers prospective investors the opportunity to invest in the DGBK token with promises of up to 1,900 percent returns following the ICO, set to be held next year.

The company claims to have on its payroll a litany of cybersecurity experts and blockchain specialists without offering any proof to support these claims, and it also offers securities for sale without following the necessary registration requirements.

Ultimate Assets LLC

Claiming to be based in Arlington, Massachusetts, but with no provable address, Ultimate Assets promises investors that an investment of $1,000 will turn into $10,000 within just three weeks. It also falsely claims that all initial investments in the trading program are fully indemnified and that refunds will be issued in the event of failure to yield profits.

Its principals listed in the Cease and Desist Order are also accused of violating the Texas Securities Act by offering securities investments without being registered with the Securities Commissioner.

Following a successful launch in California only a few months ago, the U.S. branch of cryptocurrency exchange OKCoin is adding five new coins to its listings. Those coins include Ripple (XRP), Cardano (ADA), Stellar lumens (XLM), Zcash (ZEC) and 0x (ZRX).

OKCoin made the announcement today, September 19, 2018. The new coins will be paired with the U.S. dollar, bitcoin and ether, the native cryptocurrency of the Ethereum platform. Trading against fiat pairs will be available to California residents only, while crypto-to-crypto pairs will be available in California along with 20 other states across the U.S.

“We are very pleased to welcome these five new cryptocurrencies and all of the communities that trade them,” said Tim Byun, OKCoin USA CEO, in a statement. He added that OKCoin is committed to only bringing in tokens “that offer utility, value and demonstrable use cases.”

The moves comes at a time when the exchange is aggressively growing its business in the U.S. OKCoin originally set up shop in Mountain View in November 2017. In June 2018, the company relocated to San Francisco, and the following month, it officially announced its presence in the U.S. when it began offering trading between the U.S. dollar and several major cryptocurrencies. Just a week ago, after getting the green light from U.S. and state regulators, OKCoin opened up crypto-to-crypto trading in numerous other states.

The exchange itself has a long history. One of the oldest crypto exchanges, OKCoin was originally launched in China in 2013. At the time, China was considered the world’s hub for bitcoin trading, and OKCoin became one of the three biggest exchanges in the country, alongside Huobi and BTCC.

OKCoin originally focused on bitcoin-to-yuan trades. To attract a crowd of more professional traders, the following year, the company launched OKEx, which offered hundreds of token-to-token trading pairs. The setup is similar to how Coinbase, a popular cryptocurrency exchange in the U.S., operates Coinbase Pro (formerly GDAX).

China’s cryptocurrency trading business took a hit when the Chinese central bank began regulating bitcoin starting in December 2013. In September 2017, the People’s Bank of China lowered the final curtain when it issued an all-out crypto trading ban in the country. In the past 18 months, OKCoin  was also deeply affected when regulations kept it from providing service in nine other countries.

Today, OKEx is listed on CoinMarketCap as the second-largest exchange by trading volume, but looks can be deceiving. Critics argue that the exchange is a virtual “ghost town” and 93 percent of trading volume is fake. In an attempt to regain some of its former glory, OKCoin International relaunched in April 2018, with an eye on the U.S.

Due to regulatory uncertainty in the U.S., it may run into some old, familiar roadblocks. If the U.S. Securities and Exchange Commission (SEC) rules that Ripple, Ada and other popular coins are securities and subject to the same regulatory oversight as stocks, OKCoin will have to either severely limit its offerings or register with the SEC as a broker-dealer or move to become a licenced alternative trading system (ATS), sort of along the lines of what Coinbase is aiming for and what Circle is doing with Poloniex.

Following a successful launch in California only a few months ago, the U.S. branch of cryptocurrency exchange OKCoin is adding five new coins to its listings. Those coins include Ripple (XRP), Cardano (ADA), Stellar lumens (XLM), Zcash (ZEC) and 0x (ZRX).

OKCoin made the announcement today, September 19, 2018. The new coins will be paired with the U.S. dollar, bitcoin and ether, the native cryptocurrency of the Ethereum platform. Trading against fiat pairs will be available to California residents only, while crypto-to-crypto pairs will be available in California along with 20 other states across the U.S.

“We are very pleased to welcome these five new cryptocurrencies and all of the communities that trade them,” said Tim Byun, OKCoin USA CEO, in a statement. He added that OKCoin is committed to only bringing in tokens “that offer utility, value and demonstrable use cases.”

The moves comes at a time when the exchange is aggressively growing its business in the U.S. OKCoin originally set up shop in Mountain View in November 2017. In June 2018, the company relocated to San Francisco, and the following month, it officially announced its presence in the U.S. when it began offering trading between the U.S. dollar and several major cryptocurrencies. Just a week ago, after getting the green light from U.S. and state regulators, OKCoin opened up crypto-to-crypto trading in numerous other states.

The exchange itself has a long history. One of the oldest crypto exchanges, OKCoin was originally launched in China in 2013. At the time, China was considered the world’s hub for bitcoin trading, and OKCoin became one of the three biggest exchanges in the country, alongside Huobi and BTCC.

OKCoin originally focused on bitcoin-to-yuan trades. To attract a crowd of more professional traders, the following year, the company launched OKEx, which offered hundreds of token-to-token trading pairs. The setup is similar to how Coinbase, a popular cryptocurrency exchange in the U.S., operates Coinbase Pro (formerly GDAX).

China’s cryptocurrency trading business took a hit when the Chinese central bank began regulating bitcoin starting in December 2013. In September 2017, the People’s Bank of China lowered the final curtain when it issued an all-out crypto trading ban in the country. In the past 18 months, OKCoin  was also deeply affected when regulations kept it from providing service in nine other countries.

Today, OKEx is listed on CoinMarketCap as the second-largest exchange by trading volume, but looks can be deceiving. Critics argue that the exchange is a virtual “ghost town” and 93 percent of trading volume is fake. In an attempt to regain some of its former glory, OKCoin International relaunched in April 2018, with an eye on the U.S.

Due to regulatory uncertainty in the U.S., it may run into some old, familiar roadblocks. If the U.S. Securities and Exchange Commission (SEC) rules that Ripple, Ada and other popular coins are securities and subject to the same regulatory oversight as stocks, OKCoin will have to either severely limit its offerings or register with the SEC as a broker-dealer or move to become a licenced alternative trading system (ATS), sort of along the lines of what Coinbase is aiming for and what Circle is doing with Poloniex.

In April 2018, former New York Attorney General Eric Schneiderman sent off inquiries to more than a dozen cryptocurrencyexchanges to learn more about their internal operations. Now, after months of investigation, the New York Attorney General’s office has made its findings public.

A report titled “Virtual Markets Integrity Initiative,” released on Tuesday, September 18, 2018, confirms what many already know to be true: Many cryptocurrency exchanges do not have proper consumer protections in place and are often targets for market manipulation.

The questionnaire originally went out to 13 crypto exchanges. Ten voluntarily complied with the study, but four did not respond, arguing they did not serve customers in New York. But, after investigating three of those non-responders — Kraken, Binance, and Gate.io — the New York Attorney General’s office “referred Binance, Gate.io, and Kraken to the Department of Financial Services for potential violation of New York’s virtual currency regulations.”

Kraken, the only one of the four based in the U.S., was the most vociferous in its refusal to respond to the inquiry, calling the initial request “ill-prepared” and “an overly broad fishing expedition that asks questions irrelevant to the stated objective and misses obvious questions that actually would be helpful.”

Report Highlights

The report highlights three broad areas of concern.

First, exchanges dabble in several lines of business that would normally be carefully monitored in a traditional trading environment. Platforms often simultaneously offer a venue of exchange, perform a role similar to broker-dealers, and act as money transmitters. At the same time, many also have their own large crypto holdings and even issue their own cryptocurrencies.

“Each role has a markedly different set of incentives, introducing substantial potential for conflicts between the interests of the platform, platform insiders and platform customers,” the report states. As an example, the report points out that exchange employees often trade on their own platforms, even though they may have access to information about future trades or upcoming coin listing.

Second, the report claims that many exchanges make little or no effort to halt abusive trading activities. “Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns,” the report says.

What is more, there is often no way to monitor suspicious trading across multiple platforms, and “few platforms seriously restrict or even monitor the operation of ‘bots,’” the report states. “Those factors, coupled with the concentration of virtual currency in the hands of a relatively small number of major traders, leave the platforms highly susceptible to abuse.”  

Finally, the report argues that safeguards for customers funds are “often limited or illusory.” Exchanges lack a consistent approach to third-party audits that serve to show that exchanges own the coins or fiat money they claim to hold. “That makes it difficult or impossible to confirm whether platforms are responsibly holding their customers’ virtual assets as claimed.”  

Concerns over market manipulation in cryptocurrency exchanges have been popping up again and again. In thinly traded markets, it becomes very easy for so-called “whales” or large holders to move the price of bitcoin, or any cryptocurrency, in whatever directly they want.

The report comes at a time when the U.S. Justice Department is investigating crypto market manipulation, and the Securities and Exchange Commission (SEC) has rejected numerous bids for bitcoin exchange-traded funds (ETFs) on the basis that cryptocurrency markets are simply too vulnerable to fraud and manipulation.