FreeCryptoCurrency.Me

Following bitcoin purchases by MicroStrategy and Square, Miller said every major investment bank and high net worth firm will eventually have exposure to bitcoin or commodities like gold.

Hany Rashwan, CEO of Amun/21Shares, explains how the proverbial bitcoin lightbulb went off when his native Egypt’s currency devalued in 2016.

As markets continue to digest the 2020 U.S. presidential election’s unique uncertainties, bitcoin traders say there’s capital on the sidelines that could propel the digital currency’s price to further highs.

The price of bitcoin has swelled during the past week, breaking through key price levels, including $15,000. Bitcoin isn’t the only crypto trading in the green, with Ethereum’s native crypto also gaining more than 10% over the same period. At last check, ETH was trading hands at $440 apiece.

Stocks also soared into the close on Friday, ending what is set to be the best week for the S&P 500 since April.

As for crypto, trading firm executives say investors are still sitting on the sidelines and waiting to allocate more into cryptocurrencies once the results of the election are finalized. At last check, former Vice President Joe Biden appeared favored to clinch the Electoral College, though ballots continue to be incrementally counted in several U.S. states. 

“We saw this as a great time to go risk-one,” said Kyle Davies, co-founder of Three Arrows Capital, said in an episode of The Block Live. “As soon as this clears, all this cash is going to be deployed.”

That sentiment was echoed by Joshua Lim, head of derivatives at Genesis Global Trading, who told The Block that the firm’s volumes have been “relatively two-way pivoting around the $14k level — we expect real-money buying of BTC and ETH to resume in earnest once there is more clarity.”

“The week leading into the election saw a massive futures and options expiration at the end of October,” Lim added. “Our desk handled a huge amount of CME-related volumes, both as spot OTC traded as a spread to the settlement benchmark price (BRR), as well as in the form of exchange-for-physical blocks, as traders adjusted their outright positioning and basis exposure.”

Underpinning the recent price action has been a lack of liquidations on futures platforms as traders move away from BitMEX, as noted by Akshai Rajendran of Pattern Research, who said during an industry panel Thursday that “the loss of BitMEX and the loss of liquidations” has translated into less downward pressure.

“I think the reason we’re not seeing the futures basis going wild on this rally—it’s driven by spot buying,” he said in a message to The Block, adding: “This also suggests staying power to me, as there’s no leverage to liquidate.”

Reporting this morning from CoinDesk shows BitMEX reported $54 million in liquidated bitcoin futures contract, well below the $75 million figure clocked in on October 21 when bitcoin was racing towards new highs for the year. 

Indeed, traders say this market rally has been quieter, noting fewer exchange outages and relatively muted volatility (although rolling realized volatility has picked up slightly). 

“I’m comparing realized vol and spreads on a 10-20% rally 6 months ago or 1yr ago vs now. It’s a lot more tame now relative to what this might have looked like last year,” Rajendran said. 

Recent developments in the market show this rally might have legs that the 2017 rally to nearly $20,000 did not, says Three Arrow’s Davies. 

“I think it is a confluence of a number of things,” he said. 

Davies said some firms are looking to allocate towards bitcoin as part of their treasury reserve strategy, following in the footsteps of MicroStrategy and Square. 

“DBS, which is the largest company in Singapore, the largest bank in Southeast Asia has announced they are going to have a cryptocurrency exchange, custody, and other solutions as well,” he said, concluding:

“Once one company decides they are going to hold bitcoin, immediately other adjacent companies need to ask the same question. When the large company in Singapore decides to do that, it becomes this cascading effect. It was not just one thing. Not just [stimulus], the DeFi yields coming off, corporate treasury stacking—but will all these happening I see this one-upmanship.”

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bitcoin’s price was close to $16,000 Friday but lost momentum while ether locked in DeFi is on a downward trend.

Canadian news outlet National Post reports that the country’s tax authority has gone to court in an effort to press crypto exchange Coinsquare to divulge information about its clients.

The November 6 report cites court documents from September, stating that “Canada’s tax agency is asking a judge to force Toronto-based crypto trading platform Coinsquare to hand over information and certain documents about all its clients since the beginning of 2013.”

According to the report, Coinsquare is weighing the CRA information request and weighing its options.

“Coinsquare maintains a robust customer verification process, and we understand our customers comply with all applicable Canadian laws relating to their cryptocurrency trading activities,” Coinsquare CEO Stacy Hoisak was quoted as saying by the outlet. 

The developments carry echoes of the U.S. Internal Revenue Service’s push to extract customer data from crypto exchange Coinbase. In 2018, the court sided with Coinbase, and the exchange ultimately provided the U.S. tax authority with information on those who used its services between 2013 and 2015. 

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Chair of the Prop. 24 advisory board and crypto advocate, Andrew Yang, thinks it could set a new bar for data privacy rights across the U.S.

Quick Take

• Crypto firms in the UK have until January 10 to be registered by the FCA or they are supposed to cease trading.
• Some in the industry are growing concerned over what appears to be a registration backlog.

This feature story is available to
subscribers of The Block Daily.
You can continue reading
this Daily feature on The Block.

In a year when the popular narrative says money printing went crazy, the host of “Making Sense/Eurodollar University” says the problem is actually too little money.

A charter would give the fintech national clearance for its blockchain-based financial services.

An Austria-based not-for-profit organization has threatened legal action against a payments processor it has branded the “Dutch Wirecard.”

The European Funds Recovery Initiative (EFRI), whose mission is to help victims of online investment scams, claims that Payvision, a company once valued at €360 million and now majority-owned by the Dutch bank ING, helped facilitate fraudulent investment schemes that put investors more than €75 million out of pocket.

EFRI says it is seeking restitution on behalf of 232 European investors, all victims of boiler room schemes run by Israeli Gal Barak. Barak was convicted of fraud and money laundering in September and sentenced to four years in prison.

ING and Payvision responded to requests for comment with near-identical statements, saying that they are aware of the allegations made by EFRI, that those claims are under legal merits assessment, and that they could not comment further.

Elfriede Sixt, co-founder of EFRI, has stated publicly that Payvision is a smaller-scale, Dutch version of Wirecard, the disgraced German payments firm which collapsed earlier this year after dogged reporting by the Financial Times exposed a $2 billion accounting scandal at the company.

It should be noted that while Payvision and Wirecard overlap in some business activities, Wirecard was a much bigger company at its peak. 

Prior to its downfall, the Berlin-based Wirecard was seen as a pioneer in payments. As recently as August 2018, the company was valued at more than €24 billion. Its core business was to help merchants process payments online, but it was also an issuer of prepaid cards — a service many European fintech businesses had relied on it for. Wirecard counted various crypto companies among its clients, including crypto.com, TenX, cryptotopay.me and Wirex.

The Netherlands-based Payvision similarly helps businesses accept local payments online and in person. According to the firm’s website, its clients include the carmaker Mazda and Candy Crush, the mobile game. 

The company appears also to have served at least one crypto firm. Based on documents shared with the Block by EFRI, one of the alleged fraudulent schemes appears to have included a crypto trading platform named Cryptopoint. One document entitled “Service Fees and Reporting” details the commercial terms agreed between Payvision and Cryptopoint for credit card processing. It’s not clear if Payvision has any other crypto firms as clients.

Cryptopoint has a checkered past. In May 2015, the UK financial services regulator issued a warning that the company was not authorized to provide financial services in the country, and that people should be “especially wary” of dealing with it. The platform had styled itself as a crypto and forex broker specializing in CFD trading.

On October 5, EFRI wrote to Payvision seeking more than €7 million in restitution payments. The letter, seen by the Block, gave Payvision until October 20 to make “a satisfying offer for reimbursement of Gal Barak’s victims”.

Now, the not-for-profit says it is preparing to take legal action against Payvision on behalf of the people it claims to represent. “We have a lot of material… If Payvision is not willing to talk to the victims, we have to take legal steps,” Sixt told the Block. 

Sixt added that she also filed a money laundering complaint against Payvision with the Dutch central bank last year, but claims it fell on deaf ears. 

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.