Tag : US

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Bitcoin Futures Being Swapped for Physical Bitcoin Units


With the current rally gaining momentum, there’s rising institutional interest in Bitcoin. The last week of July is seeing Wall Street traders complete their first ever swap of Bitcoin futures for actual Bitcoin units.

Two institutional investors completed the first ever exchange of the CME Bitcoin futures for actual Bitcoin units. This counts as a major step towards mainstream adoption for Bitcoin.

E D & F Man Capital Markets and itBit cryptocurrency exchange made the transaction possible. They facilitated two traders so they could swap CME Bitcoin futures for the actual Bitcoin with the same value.

Also known as Exchange for Physical transactions, this sort of transaction allows investors to hedge the commodity and futures. It will allow them to have a diverse portfolio exposure for several kinds of assets. This provides many firms with liquidity, capital, or tax benefits. The EFPs get discussed and decided privately. When the settlement is made, they are reported to the exchange.

EFPs are nothing new. They have existed as a financial instrument for the futures and commodities market for a while now. It is just that this is the first time they have been used to process a futures swap with the underlying asset being a cryptocurrency, namely Bitcoin.

A representative of E D & F Man Capital Markets Inc has commented on this trade.

“Every day we facilitate EFPs for our clients in physical assets such as soybeans, wheat, and treasuries. EFPs on CME Bitcoin futures mark an important step forward in the maturity of the regulated derivatives market for digital currencies.”

With increasing interest by institutional investors, things are changing. Investment firms and hedge funds are going to wait for a shorter period of time when it comes to a regulated market for cryptocurrencies.

Until now, The US Commodity Futures only approved Bitcoin futures being traded for cash once the futures contracts expire. A cryptocurrency-enabled EFP will streamline the transition between digital assets and the mainstream market.

There has been a significant rise in Bitcoin futures trading since the CME group started offering Bitcoin futures trading in December of 2017.

Coinbase, a San Francisco based cryptocurrency trading platform secured a $20 million hedge fund. It plans to use the funds to allow institutional investors to have more options when it comes to their financial services.

The cryptocurrency world is bound to see more institutional capital flowing into the industry if the Bitcoin ETF proposal sees approval. This will also make Bitcoin the second digital asset to be listed on the public markets.

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Crypto Services Platform Founder Pleads Guilty to Fraud Charges in US


The world of cryptocurrencies has been wrought with trouble since the start including everything from the volatility in its value to ever-changing regulations. And with increasing popularity of the cryptocurrency industry, the aspect of fraud has become a constant nuisance for the community at large. Among the cryptocurrency scam was the creation of the now defunct cryptocurrency services platform called BitFunder and the cryptocurrency exchange WeExchange. In a recent turn of events, the founder of these two cryptocurrency related companies, Jon Montroll, has pleaded guilty to having committed fraud in a United States courtroom.
The investment platform and cryptocurrency exchange founder, Montroll has pleaded guilty to the federal charges he has been subjected to that he has stolen the funds entrusted to him by his customers and that he has lied to the regulatory authorities in the US about the theft of virtual currency.
The US Attorney for the Southern District of New York City stated that Montroll has pled guilty to one of the counts of security fraud and one count of obstruction of justice that he has been charged with. Montroll was arrested in February for his crimes, and each of the charges that he has pleaded guilty to carries a potential two decades of jail time.
For those who are not privy to the crimes that he has committed, BitFunder was a cryptocurrency investment platform created by Jon Montroll that allowed users to sell the virtual shares of businesses in exchange for the appropriate amount of Bitcoin units in return. This company started in 2012 and shut down only a year after it came into being. The allegation against him is that he used the platform in order to defraud the investors. He converted a portion of the cryptocurrency he was entrusted with using WeExchange for his own use without the knowledge of the users of his platform.
That and the fact that Montroll solicited investments in a security known as Ukyo.Loan where he made promises to the investors that they would be getting daily interest from him and that they could easily redeem the shares they had bought whenever they chose fit.
The same year saw hackers get away with 6,000 units of Bitcoin from WeExchange, which amount to $48 million right now. That left WeExchange unable to pay back the investors from Ukyo.Loan, the users of WeExchange itself and the BitFunder investors. He never bothered to report the breach and continued to solicit investments from customers.
Only after the investigation going on right now with the United States Securities and Exchanges Commission involved has he admitted to the theft having taken place and the funds having been stolen by hackers. He also accepted that he lied to the SEC about it previously.

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American Express to Use Blockchain Technology to Help Prove Payments


American Express has always been on the lookout for better ways in which it can prove that payments have occurred. With the latest filing for a patent by giant in financial services, it seems like American Express might be considering the possibility of a solution through the power of blockchain technology.
The US Patent and Trademark Office released a patent application just this past week in which the American Express Travel Related Services talks about utilizing a blockchain based system for the confirmation of payments. This will be including a merchant identifier and the transaction amount.
The concept of using blockchain technology based systems by American Express is based on adding to the very limited number of options for creating good quality evidence of transactions taking place between customers and merchants that go above and beyond the simple payment receipts.
The patent filed by the American Express clearly defines the role of distributed ledger technology in contract data, proof of payment data and transaction data among more important information. The idea is that having a possibly public blockchain network will add another layer of security and proof of transactions which are facilitated by the financial services giant’s network.
Considering all of these factors, the possible applications for a blockchain technology based system for the company are vast. American Express believes that the data can be utilized in order to unlock hotels, shared economy property doors using their card or even a rental so that they can check out the proof for the transactions having taken place on the network of American Express.
The implementation of this technology by the financial services giant can possibly even facilitate the likes of ticketless entry into venues like concerts and movie events (or more). It’s just another possibility to consider.
While there is no decision yet as to whether this new system will be hosted by a public or a private blockchain network, the potential applications of distributed ledger technology and current use cases highlight how the use of cumulative computing power can add a significant layer of security to the network.
Among other patents being filed by American Express, this is the latest in the series. The October of 2017 saw American Express Travel Related Services file for a completely different patent which is centered around a system for customer rewards.
Since then, the American Express company has come a long way with initial trials through a Membership Rewards program using Hyperledger’s distributed ledger technology for cardholders. It remains to be seen how the latest patent plays out for American Express.

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IBM to Partner with Riyadh for Blockchain Solution Implementation


Global tech giant IBM seems to be on a roll in recent times as it sees itself coming to agreement with a Saudi company Elm to accelerate the blockchain technology based solutions being implemented in the Riyadh municipality.
The United States based tech company IBM has recently agreed on a partnership with the Saudi company to help them leverage the power of blockchain technology and implement distributed ledger systems for payment services and some governmental aspects in Riyadh. Elm has been undertaking technology based solutions for the municipality of Riyadh for a while now and has been working with IBM and the local authorities. Both of these two enterprise level companies are aiming to broaden the applications of digital technology in the Saudi capital. The work is slated to improve the quality of the municipal services of Riyadh.
The Vision 2030 Plan
As a part of the Arab Kingdom’s Vision 2030 Plan, the two companies are going to work together and identify all the services which can benefit from the power of blockchain technology. Once the possibilities are recognized, IBM will take on the role of developing the blockchain technology based solutions at the municipal level. Elm will take things from there to implement the blockchain solutions at a government level.
The Vision 2030 Plan is the initiative being taken by the top most echelons of the Saudi Kingdom so that they can take the country from being a solely oil-dependent economy to being a hub of commerce and technology in the region.
The Vision 2030 Plan launched in 2016 and the Kingdom has since taken a lot of steps to work towards their end goal. One of the recent most steps which came just before the announcement of the partnership between Elm and IBM is the partnership between the central Saudi bank and the blockchain platform Ripple for cross-border payments.
Another example of a significant partnership undertaken by the Saudi government was one with ConsenSys, a US based blockchain startup company in May.
The CEO of the company Elm, Abdulrahman Al Jadhai spoke about the agreement with IBM saying that the partnership with the US based tech giant will significantly improve their approach towards tackling the upgrades to Riyadh’s municipal services.
Third Major Project in Recent Times
This is the third major government partnership blockchain based project that IBM has undertaken in recent times. After the first project where IBM was awarded the AUD Billion dollar contract by the Australian government for their plans to be a leading technology based government by 2025, IBM also embarked on a partnership with the state of Delaware in the US. Thus, their recent partnership with Elm in Riyadh marks their third maj