Jay Clayton is the SEC chairman and has been in the spotlight of cryptocurrency and blockchain regulation recently. His opinions divulged from that of the average politician where he has gone out of his way to define the difference between ICO’s and what he referred to as “pure cryptocurrencies” like Bitcoin and Ether. Earlier today, the chairman was at Princeton university where he discussed cryptocurrencies and ICOs with students and staff.
In other news, the popular US based cryptocurrency exchange, Coinbase, announced that it will be launching an incubator fund to early stage cryptocurrency startups. The intention of the fund is to help grow the blockchain and cryptocurrency ecosystem, by supporting early stage companies with seed funding.
And finally, Craig Wright is back in the news with some more Blockchain drama at Deconomy 2018 in South Korea. Craig Wright is well known in the community as the man who proclaimed himself as Satoshi Nakamoto, which many people have harsh feelings about. Vitalik Buterin had it out for Wright when he began live tweeting his speech while attending Deconomy.
30% of Finance Execs Want Blockchain, New Version of Casper Released, OpenSea Raises funding
Recently in news The Financial Executives Research Foundation says that 30% of financial executives will commit resources to blockchain, Ethereum released a new version of Casper, and non-fungible digital items merchant, OpenSea, raises funding from valuable industry VCs.
Last week the American Institute of CPAs held a blockchain symposium with leaders announcing that the technology will “ impact all areas of practice” and new industry organizations like the Accounting Blockchain Coalition cropping up in what seems an almost weekly basis. The Financial Executives Research Foundation issued a report today looking at the growing promise and practical challenges of applying blockchain solutions to financial reporting and accounting work.
The report, sponsored by Deloitte, interviews industry leaders, academics and practitioners regarding their hopes on distributed ledger technology. The paper also includes a survey of financial leaders regarding the current use of cryptocurrencies like Bitcoin and their plans to adopt blockchain solutions in the future. Researchers surveyed a group of financial executives, 30 percent of whom said they “plan to commit resources to blockchain within the next year and a half, though they don’t know yet what potential the technology holds.”
The report predicts that fundamental principles of accounting and auditing, such as staffing and training strategies, will need to be adapted or completely changed in order to integrate blockchain technology. According to the report, only a third of the participants in the survey expressed readiness to address those changes.
Andrej Suskavcevic, president and CEO at Financial Executives International and Financial Executives Research Foundation said:
“Blockchain is a powerful technology that presents numerous areas of opportunity in the financial sector. This report provides a baseline to help financial professionals understand where we are in terms of vetting, adapting and adopting blockchain. It also encourages them to begin thinking about how open ledger technology and its real-time verification and transactional capabilities can help them excel in their roles.”
A new version of the code behind Casper, a planned change to the way the Ethereum network reaches consensus, has been published for wider scrutiny by auditors and client developers. Danny Ryan, the developer behind Casper FFG, posted a “first release” of the code to GitHub Tuesday. Short for “Friendly Finality Gadget,” FFG is the first iteration of Casper, and will possibly be followed by others.
Vitalik Buterin, who created Ethereum, addressed the Casper upgrade at a conference in Toronto last week, calling it “hopefully one of the more joyous experiences in Ethereum in a fairly short time.”
Once implemented, Casper FFG will alter Ethereum’s software so that updating the blockchain involves a combination of proof of work and proof of stake consensus. Proof of Stake on Ethereum will enable a new group of eth holders, called validators, to add blocks to the chain by betting their personal holdings on the validity of that block.
Casper will retain Ethereum’s current Proof of Work protocol to do most of the heavy lifting, using Proof of Stake to validate “checkpoints” periodically. Because the network can only handle so many validating nodes, the minimum deposit will start off at 1,500 ether to be a validator. In the future, the system will move to a fully Proof of Stake system. The Casper upgrade will require a hardfork for the system to be enabled, as it is not compatible with the current form of consensus. It will be interesting going forward to see how the upgrade progresses, Ethereum is the first blockchain to perform such a major move of consensus change.
OpenSea, the marketplace for non-fungible digital assets such as cryptokitties, has raised a round of funding from well known investors in the tech and blockchain space. Coming out of Y-Combinator last winter, OpenSea today announced a $2 million seed equity round led by 1confirmation, with participation from Founders Fund, Foundation Capital, Blockchain Capital, Coinbase Ventures, Chernin Group, Stable Fund and Blockstack.
OpenSea will enable a marketplace for all sorts of digital assets made possible by new token standards, such as Ethereum’s ERC-721. The Ethereum-based decentralized application for buying, selling and breeding digital cats was a quick hit within the community, launching in November last year and peaking in December, when the game nearly brought the Ethereum blockchain to a halt as it tried to deal with a significant increase in transactions.
This bottleneck on the Ethereum blockchain sparked many conversations on blockchain scalability, many fans of Ethereum have been pushing for Casper to arrive soon because of it. That being said humans have always had a history of collecting things; it’s nothing new. From physical coins to Pokémon cards, people love collecting. It’s a hobby that forms as a result of a unique interest in scarce items. Similar to how the value of a commodity is related to its scarcity, the value of a collectible item to a collector is connected to its rareness among other items. The ERC 721 standard will enable some cool things in the future, and OpenSea is one of the few companies leading the pack in a digital marketplace for decentralized assets.
Arizona Takes Lead on Blockchain-Friendly Regulation
The state aims to be the most competitive state for blockchain innovation
Recently, there have been a few states that are rolling out positive laws and relaxed regulation around blockchain technology. One of the states leading the pack is Arizona.
On April 10th, 2018, the Senate passed House Bill 2601, which expands Arizona’s crowdfunding exemption and defines the difference between a Security Token and Utility Token. The bill was introduced by Representative Jeff Weninger, who has committed a lot of his work recently to bills relating to blockchain and cryptocurrencies.
Representative Weninger has been extremely involved with blockchain-positive legislation in Arizona. Recently he introduced HB 2434, which created the first ever Fintech Sandbox in the United States. This allowed for startups, entrepreneurs and established companies to experiment with products, services, business models and delivery mechanisms without running up costs associated with regulation and obsolete laws.
The new crowdfunding exemption bill aims at placing Arizona as a competitive state for blockchain innovation given the current uncertainty of laws and regulation surrounding cryptocurrencies and ICOs. The security exemption only qualifies for offerings made in the state of Arizona for Arizona residents. In addition, a purchaser engaging in an intrastate offering that complies with these provisions is not considered an underwriter unless the purchaser purchases more than 50% of the securities or virtual coins offered for sale in the offering.
The bill allows security exemption for utility tokens if they qualify to the following definition: If the token is to be used to facilitate a transaction within 90 days it is exempt from being labeled as a Security and is then defined as a Utility Token exempt from securities law.
Arizona’s bill is similar to the recent house bill introduced in Wyoming, HB 0070, which grants exemptions to utility tokens in the state as well reading that “a person who develops, sells or facilitates the exchange of an open blockchain token is not subject to specified securities and money transmission laws”.
Both the Arizona bill and Wyoming bill are very different than the way the SEC looks at initial coin offerings. Chairman of the SEC, Jay Clayton, stated during a Senate hearing in February, “I believe every ICO I’ve seen is a security” but has also maintained a position of viewing blockchain technology and cryptocurrency as an innovation that shouldn’t be stifled.
Weninger’s bill has passed through the Arizona Senate and made its way to Governor Doug Ducey’s desk where it awaits his signature into law as of April 10th.
22 Countries Join Together for Better Blockchain Regulation
During Digital Day 2018 in Brussels, Belgium the event was highlighted by the new agreement between 22 European countries to make better blockchain regulation. The partnership will allow member states to exchange both experience and expertise in technical and regulatory fields.
This cooperation is a follow up to the Digital Single Market initiative which began in early 2015. The project was notably re-evaluated and revamped around Digital Day 2017 in Rome. Essentially, the initiative is to create a more singular and regulated experience for all Europeans across the web. Their three key figures are to improve access, environment, and economy in order to maximize the public and private sectors of internet usage.
The Commissioner for Digital Economy and Society, Mariya Gabriel, was excited to present the partnership. She gave a brief speech where she was quoted:
In the future, all public services will use blockchain technology. Blockchain is a great opportunity for Europe and Member States to rethink their information systems, to promote user trust and the protection of personal data, to help create new business opportunities and to establish new areas of leadership, benefiting citizens, public services and companies. The Partnership launched today enables Member States to work together with the European Commission to turn the enormous potential of blockchain technology into better services for citizens.
With so many countries unsure of how to tackle regulating blockchain technologies, it is highly possible that a fragmented ecosystem could be created without alliances such as this one. By joining together, and inviting all of Europe, they can create policies that are accepted across the board. It will also make it that much easier for new blockchain startups to meet a standardized level of compliance.
JP Morgan Overcharging Crypto Buyers?
JP Morgan is back in the crypto news with a class action lawsuit that is definitely making some customers mad. Allegedly, JP Morgan is being accused for overcharging customers that use third party services to purchase cryptocurrencies. According to the complaint filed by San Diego-based law firm Finkelstein & Krinsk LLP. and their client, Mr. Tucker, JP Morgan treated his cryptocurrency purchases as cash advances, as far back as January.
Mr. Tucker is seeking refund of the fees as well as “statutory damages in the amount of $1 million, plus his costs of this action and reasonable attorneys’ fees and expenses incurred therein”. The cash advance fees amounted to just over $143 between January 27th and February 2nd. $143 is certainly an annoying charge, the lawsuit comes after Tucker tried to settle the issue unsuccessfully with JP Morgan, making him fear that he might not be the only one affected.
Golem Brass Launches on Mainnet
Golem finally launched their Brass beta on the Ethereum mainnet allowing users to pay to rent CPU power for tasks or lend CPU power for payment.
Today’s excited news revolves around Golem, a highly anticipated fog-computing dapp. Golem finally launched their Brass beta on the Ethereum mainnet allowing users to pay to rent CPU power for tasks or lend CPU power for payment. Crypto News Network is in no way affiliated with Golem.