Rakuten Acquires Crypto Exchange to Fast-Track Into the Japanese Market

Rakuten Inc. announced Friday that “it decided to acquire Everybody’s Bitcoin Inc. through its subsidiary, Rakuten Card Co. Ltd.” After the stock acquisition, which is expected to take place on October 1, Everybody’s Bitcoin will become a wholly-owned subsidiary of Rakuten. The acquisition cost is listed as 256 million yen (~US$2,305,484).

The e-commerce giant wrote:

We expect that the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future. In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function, and have been considering entry into the cryptocurrency exchange industry as the Rakuten Group.

Furthermore, the company revealed that a growing number of its FX and securities customers “have been calling for the provision of a cryptocurrency exchange service.”

Founded in 1997, Rakuten claims to have more than 1.2 billion members globally. The company has over 70 businesses across e-commerce, digital content, communications, and fintech. It owns messaging app Viber and has invested heavily in car-hailing service Lyft. In 2016, the firm established a dedicated research and development unit in Belfast called Rakuten Blockchain Lab. In addition, the Japanese government gave Rakuten a concession in April to operate Japan’s fourth major wireless carrier.

About Everybody’s Bitcoin

Known in Japanese as Minnano Bitcoin, Everybody’s Bitcoin began operating a crypto exchange service on March 30 last year. The exchange currently offers the trading of BTC, BCH, and ETH against the yen.

In April last year, the revised Payment Services Act went into effect in Japan, legalizing cryptocurrency as a means of payment and requiring all crypto exchanges in the country to register with the Financial Services Agency (FSA).

Everybody’s Bitcoin applied for a license on September 7, 2017, but its application is still under review. The FSA has, however, approved 16 crypto exchanges. As for those companies that were already operating crypto exchanges prior to the regulation taking effect, the agency has allowed them to keep operating while their applications are being reviewed. These companies are referred to as “quasi-operators” of crypto exchanges or “deemed” crypto exchanges.

Rakuten described:

Currently, Everybody’s Bitcoin operates the business as a deemed cryptocurrency exchange and is waiting for approval of the official registration.

A Fast Track to Registration

Since the hack of Coincheck in January, the FSA has tightened its review process of crypto exchanges. The agency has issued a number of business improvement orders and has temporarily shut down some quasi-operators.

On April 25, Everybody’s Bitcoin received a business improvement order from the Kanto Local Finance Bureau. “Everybody’s Bitcoin is working to implement improvements in the items outlined in the business improvement order,” Rakuten detailed.

Due to the stricter review process, most of the 16 quasi-operators have exited the industry. The FSA confirmed this week to news.Bitcoin.com that only three applications from these operators are left. They are for Coincheck, Lastroots and Everybody’s Bitcoin.

Coincheck was acquired by Monex Group after the hack. Lastroots just had more investments from SBI Group, which also has its own crypto subsidiary, SBI Virtual Currencies, and offers a crypto trading service called Vctrade.

According to Friday’s announcement:

Rakuten Group decided to acquire Everybody’s Bitcoin shares so that it can realize the early registration as a cryptocurrency exchange and develop cryptocurrency services to customers.

According to the e-commerce giant, Everybody’s Bitcoin “decided to expand the business under the Rakuten Group to maximize synergies…in order to further promote its cryptocurrency business.”


source: bitcoin.com

The Ledger: Tesla Tokenization, Bitcoin ETFs vs. the SEC, Indiegogo

Late Friday night, Elon Musk announced that Tesla would stay public, less than three weeks after the CEO initially tweeted that he was considering taking the electric-car company private.

There were many reasons Musk cited for why Tesla was “better off as a public company,” but one of them particularly struck me: “There is also no proven path for most retail investors to own shares if we were private,” Musk wrote in his official statement.

No proven path. Of course, he’s right. U.S. financial regulators restrict ownership of shares in startups and other private companies to so-called “accredited investors”—those considered wealthy enough to be able to afford the additional risks that come with owning stock that doesn’t trade on mainstream markets, making it illiquid.

But there is one risky investment that retail investors can own no matter how rich (or not) they are: cryptocurrency, obviously. The U.S. Securities and Exchange Commission doesn’t prohibit individuals from buying Bitcoin and other digital assets directly—largely because it can’t, due to the decentralized structure of the blockchains on which those cryptocurrencies run. On the other hand, the SEC has prevented cryptocurrency from becoming even more widely available—such as it did this week by rejecting the rest of the pending applications for Bitcoin exchange-trade funds, or ETFs.

Cryptocurrency, however, is far from “proven” when it comes to offering a responsible way for people to invest and diversify. Just check out this week’s “rekt” section for various tales of individuals who lost their savings in cryptocurrency.

Still, I can’t help thinking that crypto could one day help provide the path that Musk is looking for. It’s an idea that came up a couple of weeks ago on our show Balancing the Ledger, when Andra Capital’s Haydar Haba suggested creating a “Tesla Coin” to solve Musk’s problems.

There’s still a major obstacle in the way, though: Haba and other entrepreneurs offering “security tokens” currently also restrict them to accredited investors in order to stay on the right side of the SEC.

Slava Rubin, co-founder and CEO of Indiegogo, described on this week’s show how his company only sells its security tokens, usually backed by real estate, to those who prove their accredited status through a verification process. But he also alluded to the way tokenization could open up “a whole other asset class to more people” the same way Bitcoin does for investors around the world.

Unlike Bitcoin, though, such security tokens are backed by tangible assets with established real-world value, making them potentially safer for retail investors, Rubin added. “With one of these security token offerings, you have a clear building that has customers, that has employees, that has been around for years,” he said.

Maybe someday the SEC will allow everyone to own tokenized stock of companies—whether they’re public or private.


source: fortune

SEC rejects bitcoin ETFs

The SEC has again disapproved several proposals for a bitcoin ETF.

The latest rejection involves two ETFs filed by ProShares that would track bitcoin futures contracts, another from GraniteShares, and five leveraged and inverse ETFs from Direxion.

This follows on the heels of the SEC’s rejection of the Winklevloss ETF in July that would have traded physical bitcoin.

Similar to its rejection of the Winklevoss ETF, the SEC expressed concern about fraud and manipulation of bitcoin markets. It said that NYSE Arca, which filed the ProShares application, had not met its requirement “that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.'”

The SEC emphasized that the disapproval does not rest on an evaluation of whether bitcoin or blockchain technology has value as an innovation or investment.

While the SEC has yet to approve a cryptocurrency-based ETF, other applications are still in front of the agency, including an ETF that would track a basket of cryptocurrencies that was filed in July by Bitwise, and the VanEck SolidX Bitcoin Trust. The SEC announced it was delaying a decision on approval or disapproval of the VanEck ETF until Sept. 30.

source: CNBC

China Shuts Down Blockchain News Accounts on WeChat

In a fresh crackdown on cryptocurrency-related activities, China has blocked several blockchain-related news accounts on WeChat, one of its top social apps.

WeChat Crypto Accounts Shuttered

In 2017, China had imposed a ban on ICOs because of their unregulated nature and the scams associated with them. The recent ban has been imposed due to the accounts’ non-compliance with “national interests” and “public orders”, as the concerned accounts were found to be publishing information on Initial Coin Offerings (ICOs) and cryptocurrency trading.

The ban includes the accounts of some of the biggest cryptocurrency platforms of the country such as Jinse Caijing, Shenlian Caijing, Huobi News according to reports though their sites and apps are still functioning. These company’s leveraged WeChat’s large user base of over a billion members to reach out to their own niche audience segment. Their revenue models included sponsored content about upcoming ICO projects. The information offered on these accounts was crucial for blockchain enthusiasts and cryptocurrency investors who were looking to remain updated on blockchain projects and cryptocurrency price movements.

In May WeChat had suspended a third-party blockchain app which allowed users to create contract agreements and a unique social media ID using blockchain to ensure the authenticity and reliability of their identities and content.

China big on blockchain, but not on cryptocurrencies

Though the government is not supportive of ICOs and cryptocurrencies because of its concerns of financial stability and security, the country has been actively exploring blockchain technology for its implementation across various industries and processes.

In 2017, the country imposed a blanket ban on ICOs and cryptocurrencies, after having issued several warnings to cryptocurrency exchanges. According to reports, the ban has not proven to be very effective and ICOs are still going strong.

Chinese investors are still investing in crypto assets with the help of various cryptocurrency exchanges operating illegally in the country. Some of the exchanges have moved out of the country for now to circumvent regulations, but are continuing to provide their services to overseas and home country investors. ICOs are also continuing to proliferate, defying the imposed regulations. China’s Central Bank, however, feels that the cryptocurrency ban has been successful as recent data suggests that the Chinese Yuan now accounts for less than 1% of all crypto trades.

Blockchain exploration in the country is in full swing, as the government and major companies are looking to implement it across various processes and leverage the efficiency gains offered by it. WeChat has been testing blockchain for inducing efficiency and accuracy in employee expense reimbursement. China Aerospace is reportedly developing a blockchain invoice system to augment its existing electronic invoice system and enable enhanced traceability and accuracy of records.

Zheshang Bank, one of the largest commercial banks of China, reported that it has completed a blockchain-powered issuance of securities worth $66 million, becoming one of the first institutions in the country to utilize blockchain for such an issuance.

sources: newsbtc

How governments are using blockchain technology

There has been a fundamental shift in thinking about blockchain technology in the past year, and blockchain-related innovations are already providing solutions to longstanding problems.

Public sector agencies in particular are exploring its potential, according to Katrina Donaghy, co-founder and co-CEO of Civic Ledger, which focuses on civic applications of the technology.

“In Australia, we are still in a development stage, with government, industry, banks, academia and business exploring blockchain technology through proof of concepts,” she says.

“There is still a long way to go but we are moving from questions such as ‘what is blockchain technology?’ to ‘how can we start exploring its potential?’.”

The federal government is sending positive messages about blockchain technology. Standards Australia is the Secretariat for the International Standards Organization’s international technical committee for blockchain standards, and is looking at standards, definitions, rules, and other elements of the technology. This will provide a clear decision framework on issues such as governance, jurisdiction and interoperability of the technology.

“This role by Standards Australia will, I believe, be very significant in the long term,” Donaghy says.

“Another critical step is that the Australian Government’s Digital Transformation Agency is taking a lead with exploring blockchain uses in government. In our experience, their digital marketplace is very useful for Australian start-ups looking to secure government as their first customer.”

Donaghy also notes that the Australian Digital Commerce Association is working with government on behalf of the blockchain and cryptocurrency industries, assisting with the design of policy, guidelines and legislative changes to encourage innovation in the area.

Solving problems with blockchain

In developing and adapting blockchain technology, Donaghy makes comparisons with the early days of the internet, when no one really knew what to do with it. It was sometimes seen as a solution looking for a problem.

Within a remarkably short period, however, the internet became a central part of both business and social life. She believes blockchain technology will follow a similar path.

“Like the internet, we did solve the problems of scale, improving its use and imagining new applications,” she says.

“There are thousands of very smart people around the world working on building the blockchain infrastructure, most of which is done through open data protocols.”

Donaghy argues that blockchain has a special role to play in public administration as governments look for ways to modernise their services along digital lines.

Blockchain provides a neutral place for a transaction to occur, creating what Donaghy calls “a shared truth” of data.

This is crucial when governments take the role of the authenticator of data and, through rules, determine the allocation of resources and benefits.

She says a change of thinking will be required. Blockchain is not owned or governed by a central authority, and the data is decentralised and distributed across thousands of computers.

Government agencies are inherently centralised, so change management in relation to issues of control and the future of work will have to take place as the technology is being explored.

Peer-to-peer blockchain platforms

Donaghy points to a project that her company delivered for the Australian Government. The key issue was how to improve information in the Australian water industry to increase participation and confidence in water trading.

Civic Ledger developed Water Ledger, based on the public blockchain, Ethereum. The blockchain-enabled platform provides a means to verify all water trades and update state registries in real time to prove that a water trade has happened, as well as showing the location of the trade.

A crucial part of the system is the “tokenisation” of a physical asset: megalitres of water.

“It showed how blockchain technology could address very complex problems involving many participants and a large number of rules – in fact, over 15,000 rules,” says Donaghy.

“Water Ledger has become a key success story and is a case study of a peer-to-peer exchange platform that increases the transparency of activities across borders and jurisdictions.”

Civic Ledger has developed similar solutions for other agencies, including IP Australia and the City of Melbourne.

The company recently won the FinTech Australia award for Australia’s Emerging Fintech Organisation of the Year for 2018, which Donaghy sees as an important step forward.

“To be recognised by our peers and industry is a tremendous honour but we also see it as a signal to government, industry and business that blockchain technology is a real opportunity to redesign economies and societies that are inclusive and democratic,” she says.

“The award sends a message to other start-ups who are building blockchain applications or infrastructure that this is an area where there are opportunities to succeed.”

  • Key points about blockchain
  • There are opportunities for blockchain start-ups in government procurement.
  • Blockchain is very suitable for commerce which has many participants and complex rules.
  • The real-time nature of blockchain enables transparency and accountability.
  • The decentralised nature of blockchain will require changes in thinking, particularly within centralised organisations.

sources: intheblack

Ethereum Based Project, Priceless Aims To Add Value To Value of Humanity

Ai Weiwei, a Chinese activist and artist has partnered with an artist, Kevin Abosch to create a project called Priceless to maintain their relationship with cryptocurrency.

Weiwei is a Chinese contemporary artist and activist who spends time and effort to bring the world’s attention to stories and topics of human rights violations. He is the son of the Chinese poet Ai Qing and is interested in the technology of blockchain and is therefore partnering up with Kevin Abosch on the same.

Abosch on the other hand, is an Irish conceptual artist and photographer who currently lives in New York City. He is known for his photography, illustrations, sculpture and film. His interest in blockchain and cryptocurrency through Priceless is not new. Rather, in January, he created 10,000,000 virtual pieces of art that contained crypto tokens built on the Ethereum Blockchain.

He also had his blood drawn which he used to make 100 physical artworks imprinted with a 42 alphanumeric blockchain address that that corresponded to the creation of his virtual works. Abosch named the crypto tokens IAMA tokens which refers to the entire brand of ‘I AM A COIN’.

Furthermore, in February, his virtual artwork ‘Forever Rose’ that contains one ERC-20 token on the Ethereum blockchain was sold to 10 art collectors for USD$1 million. All this and more are making him the king of crypto in the art world.

Together, Abosch and Weiwei have created two tokens to show the world how the society perceives value. One of these tokens is highly unattainable while the other is open and available to all, meaning anyone can own a fraction of it.

Weiwei expressed his views on blockchain,

For me, [blockchain] is not about the technology, but an opportunity to set up a new system that could dismantle the old system, or at least offer a new possibility for communication.

It was further explained by Weiwei,

It’s not about a potential for creating art, but,rather, to question the existing system and the potential to create a new system outside of the establishment.

Abosch further commented,

From the moment we’re born, people try to ascribe value to us — ‘Oh, that boy is so full of potential, or oh, that girl is worthless’ — it’s something society does to us and it’s something we do to ourselves … Our project is just another thing to engage people in the hope that they will spend a little bit more time reflecting on the perversity of how most of us ascribe value to things.

Wallet addresses that contain the nominal amount of the PRCLS tokens have been printed on paper and are sold to buyers. Each token is meant to represent ‘priceless moments’ between the artists which is to further demonstrate how  a token can represent value such as human life and human interaction. An example of such a ‘priceless moment’ is ‘Walking In A Carefree Manner Down Schönhauser Allee.’

Ai further commented on blockchain by stating that it is an opportunity for change by bringing down the old system to, at least offer a new possibility for communication.

This project clearly brings together Weiwei’s love for human rights and Abosch’s interest and expertise in the cryptocurrency industry.


sources: coinfrenzy.io

Artist Ai Weiwei Uses Ethereum to Make Art About ‘Value’

Chinese artist and activist Ai Weiwei has partnered on a new art project that utilizes a pair of newly-minted ethereum-based tokens.

Motherboard reported Friday that Ai – well-known for his criticism of China’s Communist government as well as his art installations and photos – is working with Irish conceptual artist Kevin Abosch.

Together, Ai and Abosch have created two new tokens, freely distributable, in an effort to (as they describe it) illustrate how worth is perceived and imbued within modern society. And it’s an area that Abosch has already been working in – bridging the worlds of art and cryptocurrency through his work – as the New York Times previously reported.

The project, dubbed PRICELESS (ticker symbol: PRCLS), involves twin tokens, one of which is made publicly available to the extent that, in theory, every person on the planet could own a fraction. The other token, according to Motherboard, is locked away and inaccessible to anyone.

“It’s not about a potential for creating art, but, rather, to question the existing system and the potential to create a new system outside of the established one,” Ai told Motherboard.

As Abosch said to the publication:

Wallet addresses holding nominal amounts of the PRCLS token have already been printed on paper and sold to buyers, with each wallet address representing different “priceless moments” shared between Ai and Abosch, illustrating how the token can represent value.

Ai revealed in an interview with Motherboard that, for him, blockchain represents “an opportunity to set up a new system that could dismantle the old system, or at least offer a new possibility for communication.”


sources: coindesk

Ripple ‘definitely’ wants to target China with its blockchain-based payments tech, exec says

Ripple wants to target the Chinese market with its distributed ledger technology designed to speed up cross-border payments, an executive at the firm told CNBC.

“China is definitely of interest, it is definitely a target,” Jeremy Light, vice president of European Union strategic accounts at Ripple, told CNBC in a phone interview. “China is definitely a country and region of interest.”

Earlier this year, the blockchain company struck a deal with Hong Kong-based financial services firm LianLian International, aimed at powering the latter’s cross-border transactions between China, the U.S. and Europe. It is not clear whether Ripple’s technology is being deployed by LianLian yet.

Blockchain, also known as distributed ledger, is the technology that underpins cryptocurrencies like bitcoin. It records transactions across multiple locations, rather than one centralized server. Ripple’s distributed ledger technology is different to bitcoin’s, however, as transactions are validated by a network of independent servers — owned by banks, retailers and traders — rather than the “miners” that validate transactions on bitcoin’s public blockchain network.

If it were to seek an entry into the Chinese market, Ripple’s focus would unlikely be on advancing the adoption of cryptocurrency XRP, as Beijing has clamped down on the trading of virtual currencies. China last year banned initial coin offerings (ICOs), a controversial means of financial technology start-ups raising funds through the sale of new digital tokens.

Ripple currently has more than 100 financial institutions signed up to its network, including Santander, UniCredit, UBS and Standard Chartered. But with just one Chinese client, the firm would have a long way to go before making waves in the country. China is home to a number of large fintech (financial technology) firms, with payment apps like Ant Financial’s Alipay and Tencent’s WeChat Pay proving popular with Chinese consumers.

Elsewhere in Asia, Ripple has created an app called Money Tap in Japan, in partnership with 61 domestic lenders. The app is designed to allow banks to settle round-the-clock payments in the country.

Most banks and financial firms are uninterested in the cryptocurrency side of Ripple’s offering, however. Ripple is mostly known for its digital token, which is used to essentially bridge payments from one currency to another.

Instead, lenders have sealed deals with the start-up to use its xCurrent product, which is aimed at settling payments instantly around the world.

Ripple’s xRapid platform meanwhile — where XRP is used — has seen interest from money transfer firms including MoneyGram and Western Union. Both uses of the cryptocurrency are in trial phase rather than commercial deployment.

But there are fears the volatility of cryptocurrencies could inhibit XRP from seeing mainstream adoption with banks and other financial institutions. The cryptocurrency soared to unprecedented levels late last year and early this year, notching a record high of $3.81 — and a market value of $147 billion — on January 4, according industry website CoinMarketCap. It has since receded to just 29 cents, a decrease of more than 90 percent.


source: CNBC

Reality Shares Will Join Increasingly Crowded Bitcoin Hedge Fund Arena, Says Source

California-based asset manager Reality Shares has become the latest competitor in the Bitcoinhedge fund space, an anonymous source told Business Insider August 15.

Reality Shares, which became known in the cryptocurrency space this year after launching the first Chinese blockchain ETF in June, has reportedly already attracted $25 million for the fund.

Capped at $100 million, the multi-strategy fund would “be a mix of arbitrage, venture, and directional strategies,” the unnamed person “familiar with the firm’s plan” told the publication.

The 2018 bear market in cryptocurrencies has made life difficult for hedge fund operators, which number over 360 as of August.

As Cointelegraph reported previously, industry commentators have raised concerns that continued market suppression would lead to the closure of over 10 percent of said hedge funds by next year.

“People are able to leverage good returns last year to try to raise money this year, but this year is going to be different,” fund investor Rick Marini told Bloomberg about the downturn in April.

Venture capitalist Spencer Bogart meanwhile told CNBC in late June that hedge fund activity could in fact “artificially” lower Bitcoin prices.

Should Reality Shares raise the full $100 million amount, its fund would rival the only 28 that have passed the figure.


Blockchain-based social network Minds moves to ethereum

Blockchain-based social network Minds has announced that it has migrating its platform to the ethereum network.

After almost four months on its Rinkeby test network, the startup will be moving to ethereum for its full live launch. The company claims to provide a censorship-resistant, accessible social network for users, especially those in potentially authoritarian nations.

The platform also claims roughly 1.25 million registered users, about 75% of whom have already earned test tokens. These users will be eligible to receive the platform’s live token via a free “airdrop” distribution as a result.

The CEO Bill Ottman said that the team had engineered a “hybrid on-chain, off-chain model” to ensure that the system can handle the volume Minds is seeing and to provide a simple user experience for crypto newcomers. The on-chain and off-chain model will also help the platform handle large user volumes without congesting the ethereum network, according to the company.

Users can pay tokens to ensure a greater number of people see their posts, or earn tokens by interacting with content. Users can also use it to pay creators directly and subscribe to premium content.