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Ethereum, Bitcoin Prices Recover as China Bitcoin Ban Rumors Linger

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Lingering reports of an impending China bitcoin ban caused the cryptocurrency markets to contract over the weekend, but Monday brought a slight recovery. The bitcoin price saw a 3% increase, while the ethereum price experienced a 5% bump. Altogether, the recovery restored $6 billion to the total crypto market cap.

bitcoin price

Chart from CoinMarketCap

On Sunday, the Wall Street Journal–along with several other mainstream media outlets–cited unnamed sources who claimed that the People’s Bank of China (PBoC) is drafting regulations that will prohibit bitcoin exchanges from operating within the country. The sources said China will not attempt to ban over-the-counter trading or other P2P bitcoin use. Though yet to receive official confirmation, these reports added to those produced Friday by regional Chinese news sources.

bitcoin price

Chart from CoinMarketCap

The markets responded quite predictably, forcing the total value of all cryptocurrencies below $140 billion. Monday, however, the total crypto market cap reversed this trajectory, rising as high as $158 billion before tapering to a present mark of $144.5 billion.

Bitcoin Price Recovers from Sub-$4,000 Dip

Weighed down by BTC/CNY pairs on the major Chinese exchanges, the bitcoin price fell below $4,000 on Sunday. Monday’s early-morning rally raised the bitcoin price back to $4,262, but it has not yet been able to find sustained support for the $4,200 level. At the time of writing, BTC/CNY was still trading below $4,000 on OKCoin, BTCC, and Huobi.  The global bitcoin price, however, is $4,150, giving bitcoin a market cap of $68.7 billion.

bitcoin price

Bitcoin Price Chart from CoinMarketCap

The near-term future of the bitcoin price will depend heavily on whether the China bitcoin ban rumors receive official confirmation, so investors should continue to expect volatility.

Ethereum Price Sees 5% Bump

The ethereum price outpaced bitcoin on Monday, rising 5% for the day. After falling to $275 on September 10, the ethereum price reached as high as $300 during the morning hours of September 11. At present, the ethereum price is $290, which translates into a market cap of $27.4 billion.

ethereum price

Ethereum Price Chart from CoinMarketCap

Nevertheless, concerns over ICO regulation continue to impact ethereum. Much of the focus has been on last week’s China ICO ban, but regulators in a myriad of nations have issued public warnings against the nascent fundraising mechanism. Consequently, the Swiss Crypto Valley Association has announced their support for “careful” ICO regulations that will protect investors without hampering innovation.

Altcoin Charts Turn Green

The altcoin markets were generally positive, with the exception of a few smaller coins that appear to be on the latter end of a pump-and-dump.

ethereum price

Altcoin Price Chart from CoinMarketCap

The bitcoin cash price rose 5% to $531, although it could not restore its market cap to the $9 billion level. The Ripple price rose 8% $0.218, bringing its total valuation within $500 million of bitcoin cash.

ethereum price

Ripple Price Chart from CoinMarketCap

Fifth-place litecoin also saw its price jump 8%. The litecoin price has now recovered to $65, although this is still nearly $30 below the coin’s all-time high of $92.

litecoin price

Litecoin Price Chart from CoinMarketCap

Privacy-centric Dash and Monero each rose 5%, bringing their prices to respective values of $318 and $112. NEM, on the other hand, rose 4% to $0.256. Ninth-ranked IOTA rose 7% to $0.509, and ethereum classic concludes the top 10 with an 8% climb to $14.47.

Protostarr ICO Shuts Down Following SEC Pressure

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Protostarr has canceled its initial coin offering (ICO) after the U.S. Securities and Exchange Commission (SEC) opened an inquiry into the U.S.-based startup. According to the project, all Protostarr ICO funds will be returned to investors.

The announcement, which was communicated in a press release on the company website, reveals that SEC investigators contacted Protostarr on August 24 with questions about its ICO. The company’s platform intended to give crypto users an opportunity to invest in digital media celebrities on YouTube and Twitch and collect a portion of the channel’s advertising revenue.

From the statement:

On August 24, 2017, we were contacted by the United States Security and Exchange Commission regarding the initial coin offering of Protostarr tokens to fund the development of our Ethereum decentralized application. After consultation with multiple lawyers, we have decided to cease further operations and refund Ethereum collected in our crowdsale that began on August 13, 2017.

The press release also states that the company will return all Protostarr ICO funds to the Ethereum address from which they originated. Refunds began on September 2.

Protostarr CEO Joshua Gilson told Forbes that the startup had not consulted with a lawyer before launching their ICO and that it didn’t occur to the team that their ICO–which, unlike many crowdsales, was launched in the United States–would be subject to any special laws because of the startup’s location.

[The SEC investigators] called and asked for me to volunteer a bunch of information about the company. They gave me a quick little brief: They’re both federal investigators, anything I say has to be truthful or honest, I could be prosecuted for providing false information — a bunch of stuff like that, so immediately, I said, I would like to be open with you guys but this is sounding like an ‘I should get a lawyer’ kind of conversation.

After consulting with private lawyers, they decided to follow the advice of the SEC small business office and cancel the token sale.

That the SEC has begun contacting initial coin offerings directly is more confirmation that the agency is concerned about this nascent funding mechanism. Last month, the agency temporarily suspended securities trading for three publicly-traded cryptocurrency firms, citing questions about these companies’ statements regarding ICOs and blockchain technology. Earlier this week, several SEC executives stated that the agency has made ICOs a prominent focus, with one referring to ICO scammers as “roaches”.

Protostarr did not immediately respond to a request for comment, but in a BitcoinTalk post Gilson apologized to supporters and regretted that they had to cancel the project.

It is unfortunate though. We feel we had a novel idea that can help a lot of people, but because ICO’s are now on the SEC’s radar we would have to get a legal department hired on earlier than the plan, which we can’t afford to do while giving value to those who supported us. We are losing all the money we put into this, but want to make sure our supporters are taken care of. We will live and learn and start pushing forward as a team.

He added that “At least ETH is worth more now than it was during the campaign so everyone is getting more value back than they donated.”

MASTer Plan: Better Bitcoin Smart Contracts Could Go Live This Year

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The wait for more advanced bitcoin smart contracts might soon be over.

Spurred by last month’s SegWit activation, bitcoin developers are reviving a plan that would see the world’s most popular blockchain retooled with functionality long synonymous with ethereum and its more expressive code executions.

Known as Merkelized Abstract Syntax Trees (MAST), the concept has moved in fits and starts – Russell O’Connor, Pieter Wuille and Peter Todd put forward the idea, and Johnson Lau put together his own proposal last year – but the upgrade to SegWit makes the change not only possible, but possibly actionable soon.

So, Blockstream co-founder Mark Friedenbach is now breathing new life into the idea, putting forth a proposal this week that would have MAST deployed by way of soft fork (a backwards-compatible change to the blockchain’s rule set).

Should it be enacted (and in the world of bitcoin upgrades, that’s a big if), it would mean greater transaction flexibility. With it, users can require that a transaction will go through only if one of two or more things happen. For instance, a transaction could be redeemable only after a certain period of time, or only once two users give their blessing.

MAST also enables better user privacy, as it stores transaction data in a new way and doesn’t reveal unused scipts to the public blockchain. And finally, it could also allow for increased scaling potential, since it enables less data to be stored on the blockchain.

Merging features

Getting to those benefits, though, means fusing together two technical features: pay-to-script-hash (P2SH) and Merkle trees.

In an email addressing bitcoin developers, Friedenbach outlines three Bitcoin Improvement Proposals (BIPs), including the code, for adding two scripts that would make it possible for users to take advantage of MAST.

He explained what his proposed idea would enable, writing:

“These two features together are enough to enable a range of applications such as tree signatures … and a generalized MAST useful for constructing private smart contracts.”

The first BIP, “Fast Merkle Trees,” proposes a different Merkle tree structure than the one currently used by bitcoin to store transactions in blocks. The second BIP, arguably the most important one, describes the opcode – MERKLE-BRANCH-VERIFY – which is a script that would allow users to make new types of transactions.

“In brief summary, MERKLE-BRANCH-VERIFY allows script authors to force redemption to use values selected from a pre-determined set committed to in the scriptPubKey, but without requiring revelation of unused elements in the set for both enhanced privacy and smaller script sizes,” Friedenbach wrote.

The final BIP, “Tail Call Execution Semantics,” is a pretty complex read, but – put simply – explains a new way for bitcoin smart contracts to terminate.

The road to upgrades

Despite how complicated the technology sounds, Friedenbach said in practice it’s relatively straightforward.

“I believe that the implementation of these features is simple enough, and the use cases compelling enough that we could [roll out] these features in relatively short order, perhaps before the end of the year,” he wrote.

Interestingly, though, he mentioned the change could be made one of two ways, by BIP 8 or BIP 9, two methods of making bitcoin upgrades which have had plenty of back-and-forth over the past year.

SegWit was originally proposed to deploy via BIP 9, which called for a certain percentage of miners to signal for the change before it could be deployed. Because miners didn’t signal, SegWit stalled, and some argued BIP 9 gave miners (one group in an elaborate ecosystem) too much control over the future of bitcoin.

Because of that, some users have since rallied around BIP 8 as a better upgrading mechanism because it relies on bitcoin users and businesses rather than mining pools to enforce the change.

But Friedenbach’s lack of stance regarding this upgrading mechanism raises the question: after all the drama over SegWit – which took nearly two years to activate – how will upgrades be made in the future?

The way users, companies and developers choose to go on MAST (if they decide it’s the right step), might help determine that.

‘Revolutionary’: Finland Central Bank Paper Heaps Praise on Bitcoin

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Researchers at Finland’s central bank have dubbed bitcoin’s economic system “revolutionary” in a new staff paper.

The paper, released on September 5, constitutes an investigation into the ins and outs of bitcoin’s infrastructure, notably arguing that it constitutes a “monopoly run by a protocol.”

The three authors – Gur Huberman, Jacob Leshno and Ciamac Moallemi – contend that this characteristic offers a degree of protection against manipulation by bad actors by virtue of the protocol-layer dynamics.

The group write:

“Bitcoin is a monopoly run by a protocol, not by a managing organization. Familiar monopolies are run by managing organizations with discretion to determine and then change prices, offerings and rules. Monopolies are often regulated to prevent or at least mitigate their abuse of power.”

Other notable assertions featured in the paper include the argument that, because of this state of affairs, bitcoin itself “cannot be regulated.”

“Bitcoin is not regulated. It cannot be regulated. There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts,” the authors state.

Though the document itself states that the views enclosed don’t represent the official stance of the Bank of Finland, the publication is undoubtedly a notable one given the central bank’s involvement with the tech to date.

Last year, it organized a seminar on blockchain that included regulators, local academics and companies in an effort to support local research – a move spurred further along by the government as well. The city of Kouvola in Finland, for example, received €2.4m to test blockchain-powered shipping.

The paper’s authors closed by advocating for deeper research by other academics.

“[Bitcoin’s] apparent functionality and usefulness should further encourage economists to study this marvelous structure,” the three write.

Fully Invested, Always Long? Big Money Might Be Changing the Crypto Market

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As institutional investors pile into the cryptocurrency space, they may be altering the underlying dynamics of the market itself.

By virtue of buying in, institutional investors are pushing prices up, and that’s likely to continue as these investors place bets in a way that furthers an already bullish cycle many have labeled a bubble.

Bearing mountains of cash and a mindset unlike retail investors, crypto hedge funds are being directed to invest all (or most) of their cash. And without sophisticated mechanisms for shorting cryptocurrencies, retail investors have limited options and excessive risk in betting on price decreases.

Matthew Goetz, co-founder of new cryptocurrency fund BlockTower Capital, affirmed the impact of this buying pressure is likely to continue to mean the cryptocurrency market doesn’t behave like those of more mature assets.

Goetz told CoinDesk:

“As more capital comes in the space, from a market structure standpoint, whether it’s funds or some other structure, that will likely be a bullish catalyst for prices.”

And Goetz, who worked for more than a decade at Goldman Sachs, has no doubt that more capital will come.

“I think the space is going to continue to get more competitive, because people are seeing the opportunity set,” he said.

The bullish comments were echoed by Thomas Kineshanko, co-founder of Protos Cryptocurrency Asset Management, who believes the mechanisms at play are working to push cryptocurrency prices skyward even more.

“Given the total market cap of cryptocurrency of say $150 billion on any given day, and then you add say a billion dollars, prices are going to rise.  So yes, the money coming in to the market is going to raise prices – as long as there’s not any major sell-off,” Kineshanko told CoinDesk.

Short trading challenges

But institutional investors aren’t betting on major sell-offs, primarily because shorting is still an underdeveloped mechanism in the cryptocurrency market.

“The only thing you can’t do right now very efficiently [in cryptocurrency] is short assets,” said Philipp Kallerhoff, who runs trading at Protos.

He went on to draw a direct line between these difficulties and the upward pressure on their prices, stating:

“There’s momentum and pressure on the long side.”

BlockTower’s Goetz expressed similar concerns, saying that while shorting cryptocurrency is possible, it’s very risky so it must be approached “very selectively and very cautiously.”

Diving further into the claim, when investors short an asset, they’re expecting to buy at a lower price in the future, but this means investors are exposed to a theoretically unlimited downside risk, since increases to the price could be boundless.

This is far different from going long, since an asset’s price can only drop so much – to zero – from the price it’s currently at.

With that, in today’s markets it would take a great deal of nerve to short cryptocurrency.

Fully invested – or not?

Not only will institutional investors be unlikely to short cryptocurrencies, but the primary driver of staying fully invested is also pushing prices higher.

“People don’t want to pay you for holding cash,” Protos’ Kallerhoff said.

In traditional markets, hedging mechanisms – like highly liquid derivatives markets – are used to manage the risk of being fully invested. In the cryptocurrency space, investing fully in the markets would add additional upward pressure on prices.

Because cryptocurrency markets don’t have many of the hedging mechanisms, cash takes on that role in risk mitigation.

“I can’t speak for other managers,” Goetz told CoinDesk, “but this asset class is so volatile, that in order to invest you need to invest [in] holding some amount of cash. Cash is the main risk management tool available in this space.”

Timothy Enneking, managing director at Crypto Asset Management, echoed Goetz’s caution:

“When we don’t have a good feel for the direction the market is going to take in a given strategy, we usually pull a large percentage of the positions out of crypto and into fiat. Safer to wait for a sense of what’s going to happen there than in crypto.”

The result is that, while not quite the Wild West, the crypto asset class still has a long way to go before it behaves in a way familiar to the mainstream.

South Korean Court Declares Bitcoin Confiscation Illegal

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After Police seized 216 Bitcoins from an individual that was suspected to be involved in illegal activities with the digital currency, it was ruled by a South Korean court that the seizure was illegitimate.

The Suwon district court set a groundbreaking precedent in legitimizing the seizer, by ruling that Bitcoin and associated digital currencies are not subject to confiscation.

Sending a message to regulators

While South Korea is one of the more progressive nations towards Bitcoin and its legalization, as well as its regulation, this move by the courts could send shockwaves through regulatory bodies in the country as well as across the globe.

There are contrasting attitudes towards the digital currency, as China’s recent foray into its regulation has seen the socialist country take a hardline stance towards this innovative technology.

However, with the judiciary in Korea setting a precedent indicating its belief that Bitcoin should not be a confiscatable commodity, it could set a trend for many other nations to follow.

‘Cannot assume an objective standard value’

According to local reports from Kyunghyang Shinmun, it seems as if Bitcoin’s volatility may well be its saving grace in this matter, as the confiscation was deemed illegitimate because:

[it is]“not appropriate to confiscate Bitcoins as they cannot assume an objective standard value.”

Furthermore, the indication is that Bitcoin, as a digital currency, has no physical representation, and thus there is essentially nothing to be confiscated, according to the courts.

This also seems to suggest that the courts see Bitcoin as having a value, but it is an ever changing one, which could well mean they would be looking to instate certain rules surrounding digital currencies on their own.

Pornography Bitcoins

The case in which those judgement arose from involved an individual who was charged with running an illegal pornography website. The site had many members, but the operator never reported the membership fees which, may or may not, have been directly collected as Bitcoin – or perhaps transferred into digital currency at a later date.


Bitcoin Owes Success to Three Different Waves of Innovators

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Cryptocurrency is a complicated mixture of several different fields, which contributes to the difficulty people have in understanding it. Even the term is confusing and often leaves novices scratching their heads. However, the multidisciplinary nature of digital currency is also probably one of its greatest strengths.

Three different types of people are drawn to cryptocurrency: cryptographers/computer scientists, crypto-anarchists and finance professionals. Each of these types brings their own unique insights and perspectives.

The first wave: cryptographers and computer scientists

Bitcoin was invented and developed by the truly brilliant Satoshi Nakamoto. Although nobody knows Satoshi’s identity, we do know that the genius was exceptionally skilled in both cryptography and software development.

Cryptography is a rather eclectic field, the forte of mathematicians and codebreakers. Satoshi possessed a strong knowledge of cryptography, and when he combined it with his understanding of computer science, he discovered the solution to a vexing problem.

For years, some rather brilliant people had tried to devise a way to enable the transfer of value among a network of people who don’t trust one another. Such trustless transactions would have the potential to disintermediate the finance world completely.

Satoshi’s solution was the Blockchain, which serves as a perfect, trustless, distributed ledger of all transactions done on the currency network he created: Bitcoin.

Satoshi announced his development on the cryptography mailing list, an obscure forum frequented by some of the best cryptographers in the world. Hal Finney was one such person, and he worked with Satoshi very early in the Bitcoin’s history. In fact, the first Bitcoin transaction that ever took place was when Satoshi sent funds to Finney to verify that the software actually worked.

Over time, more and more cryptographers and computer science gurus became associated with Bitcoin, and sometime in 2012, Satoshi vanished. Others carried the torch and continued developing the protocol.

The computer scientists and cryptographers are the founders and maintainers of Bitcoin.

The second wave: crypto-anarchists

The second wave of digital currency enthusiasts were the crypto-anarchists. They saw Bitcoin as a way to liberate the world from the grip of oppressive governments and their fiat-based financial systems. This group tended to be politically motivated and unwilling to compromise on their basic principles.

Much of Bitcoin’s anti-establishment, decentralized culture comes from this group. Satoshi himself likely sympathized with their philosophy, based on posts he made to the mailing list and on BitcoinTalk.

Because of their nature, this group abhors all attempts to regulate digital currency. To them, cryptocurrency isn’t about becoming rich or achieving mainstream adoption. It’s a social and political movement.

The crypto-anarchists are the heart and soul of Bitcoin. They work hard to ensure the project remains decentralized and true to its founding principles.

The third wave: finance experts

Somewhere around the end of 2013, the digital currency sector caught the notice of finance professionals. This group is generally less politically motivated and more willing to compromise on issues such as regulation and taxation. They seek mainstream acceptance and adoption of cryptocurrency.

These finance specialists, many of whom have Wall Street credentials, have been highly successful in increasing the adoption of digital currency. With their help, Bitcoin has made significant inroads into the traditional financial system, and its value has boomed.

Some, like the Winklevoss twins, have sought to establish options for mainstream investors to participate. Though their proposed exchange-traded fund (ETF) application was denied earlier this year, they have appealed the ruling. Recent changes in key SEC personnel could aid their cause.

Likewise, Barry Silbert founded the Digital Currency Group which has full or partial ownership of a number of important Bitcoin-related companies. The Digital Currency Group owns Grayscale Investments, which sponsors the Bitcoin Investment Trust.

This trust is publically traded under the GBTC ticker, and its value is backed by sizeable Bitcoin holdings. GBTC is one of the only ways that US investors can expose their tax-advantaged retirement accounts to the price of Bitcoin.

Entire currencies, such as Dash, have been created when finance professionals discovered something that was missing in existing cryptocurrencies. Dash was founded by Evan Duffield, who himself holds a Series 65 license, and who realized that proper incentivization was missing from Bitcoin and other currencies.

Rather than relying on altruism to get people to run full nodes (as is the case with Bitcoin), Duffield thought these “masternode” owners should be paid for maintaining a copy of the full Blockchain (and performing other services for the network.)

While the number of Bitcoin nodes has been declining over the last several years, the number of Dash nodes has been rising.

A company called LedgerX will soon release a regulated market for the trading of Bitcoin futures, following the CFTC’s approval of their request this summer. This will allow traditional, mainstream investors to expose themselves to Bitcoin more readily, and will likely prove a crucial step in an ultimate ETF approval.

The finance group is responsible for much of the Bitcoin’s mainstream acceptance to date. They have brought in institutional money and are continuing to build on-ramps for traditional investors to gain Bitcoin exposure.

Multi-disciplinary

Bitcoin’s strength comes from the fact that so many disparate groups are interested in developing the project.

At first glance, it might appear that the programmers and cryptographers are solely responsible for Bitcoin’s success, but this isn’t so. Crypto-anarchists, financiers and others have all played meaningful roles.

Other talented individuals and groups will likely be attracted to digital currency in the future, and they likely have unforeseen roles to play as well.


BTC-e’s Vinnik Rejects US Judgment, Offers to Help Putin with Expertise

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Alexander Vinnik, a 38 year old Russian man (2nd L) suspected of running a money laundering operation, is escorted by plain-clothes police officers to a court in Thessaloniki, Greece July 26, 2017. REUTERS/Alexandros Avramidis

Assumed BTC-e CEO Alexander Vinnik has publicly stated his innocence and even offered to help Vladimir Putin as a digital technology specialist.

Speaking to Russia Today in his first official interview since police arrested him in Greece in July, Vinnik said he did not understand “what right” the US had to judge him as a Russian citizen.

When asked why he had not voluntarily turned himself over to US authorities, Vinnik replied:

“Because I do not think I’ve done anything to flout the law – that’s the first thing. Secondly, I don’t understand what relationship the US has to me and what right it has to judge a Russian citizen.”

BTC-e shut down at the end of July citing technical difficulties. It subsequently became known that the FBI had liquidated 45 percent of its funds and that users would be issued refunds in the form of tokens and the remaining 55 percent of available capital.

The reason for US interest was the alleged flouting of anti-money laundering laws, with Vinnik himself suspected of engaging in such activities.

Continuing his defense, he said that US president Donald Trump should focus on his own matters while offering to help Russian president Putin in his field of expertise.

“I’d tell [Putin] he needs specialists like me in the IT field, and that I could help him with that using my knowledge,” he added.

The US is seeking fines of $110 mln from BTC-e and another $12 mln from Vinnik himself.


OmiseGo Unphazed by China’s ICO Ban

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OmiseGo has moved to stamp out rumors about the company possibly being impacted by China’s crackdown on ICOs. Through a Reddit post OmiseGo reassured everyone that China’s ban on ICOs will not necessarily harm the OMG network.

On the post, OMG said China’s prohibition only refers to decentralized currencies, meaning it doesn’t necessarily affect the OMG network:

“The OMG network is currency-agnostic and the open-source, white-label digital wallet framework we provide will allow financial service companies to select what services they provide their end-users, in compliance with the regulations they must follow”.

OmiseGoing

With such transparency and constant updates from OMG admins, many investors were assured of the company’s long term resilience. Many praised OMG for its transparency and for assuring the public that they can still keep ‘OmiseGoing’.

Redditor koocer says:

“Good news and great time to stock up on more OMG :)”

Benkeele on the other hand says:

“This is why I’m strong in OMG. We believe”.

And soar-x says:

“great communication, this makes me proud as an investor”

PBOC regulation

The Chinese ICO market is in freefall after China’s Central Bank declared Initial Coin Offerings illegal.

The People’s Bank of China announced its stance on ICOs in the country and that it has completed its investigations on ICOs.

It has found out that the tokens used in ICOs are not issued by the monetary authorities, don’t have legal and monetary properties such as indemnity and coercion, don’t have legal status equivalent to money, and thus cannot and should not be circulated as a currency in the market.

With that determination, it is sure that any future activities involving ICOs will be punished, while those that have already completed its offerings will be penalized. Regulators also said that those who have already raised money must issue refunds back to their investors.

Jehan Chu, Managing Partner at Kenetic Capital Ltd. in Hong Kong says:

“China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action so this is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions — the short story is we all know regulations are coming.”


Finland Turns to Blockchain to Help Unbanked Refugees

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Finland is using blockchain technology to help unbanked asylum seekers enter the digital economy.

As reported by the MIT Technology Review, the Finnish Immigration Service has begun providing unbanked refugees with prepaid Mastercards rather than cash. These prepaid cards, which were developed by Helsinki startup MONI, also provide refugees with a unique digital identity stored on a blockchain.

MONI CEO Antti Pennanen told the MIT Technology Review that he hopes to see this service adopted by refugee camps throughout the world:

Our purpose has always been financial inclusion, and especially to help people in developing countries.

This technology benefits both refugees and the Immigration Service. For asylum seekers, it provides them with a verifiable identity that makes it easier to find employment. They can also use it to receive direct deposits and pay bills until they are able to open an ordinary bank account.

MONI provides the Immigration Service with improved monitoring abilities. Since all transactions are recorded in the blockchain, the agency can easily monitor where refugees are spending their money. This is an important tool for the government since, like most European countries, Finland has experienced a surge in refugees over the past few years.

Leveraging the Blockchain for Social Good

Finland’s adoption of blockchain technology to help refugees is just the latest example of how bitcoin and other digital currencies can provide the unbanked with the tools they need to gain access to the benefits of the digital economy.

Alongside MONI, there are a number of projects attempting to leverage distributed ledger technology to promote social good. FinTech startup Humaniq, for instance, hopes to provide mobile banking services to “economy-excluded” sectors.

Civic and BitNation are two more projects that seek to give people access to secure digital identities that transcend borders and cannot be lost or stolen. The IOTA Foundation recently entered into a partnership with Refunite, a non-profit organization that helps refugees reunite with their families. IOTA intends to help the organization provide displaced asylum seekers with verifiable identities.