Tagomi, a crypto prime broker headquartered in New York, will join the Libra Association, the governing body for the Facebook-led stablecoin. Tagomi was founded by Jennifer Campbell in 2018, a former associate at Union Square Ventures.

Tagomi will become the Libra Association’s 22nd member. Members of the association are expected to contribute at least $10 million to the Libra Reserve, which holds the assets that back the cryptocurrency.

Tagomi has raised $28 million to date, making a $10 million commitment a large amount for a two-year-old startup. It should be noted that some of the biggest names in crypto are listed as clients on the company’s website: Galaxy Digital, Pantera and Electric Capital amongst others. Tagomi’s value proposition on its website is simple: “Executing large orders of digital assets is really hard. Tagomi makes it simple.”

Moreover, Tagaomi holds one of the highly-coveted BitLicences issued by the New York State Department of Financial Services, which allows it to serve New York residents.

The Libra Association itself has been in the news lately for all the wrong reasons —— many of its original backers are abandoning the project, fearing regulatory pressure coming from the U.S. government. The list of deserters includes Vodafone, Visa, Mastercard, Stripe, PayPal and eBay.

As for Tagomi, a Facebook-backed stablecoin could be a useful tool that would diminish its need for a fiat gateway.

Source: https://cointelegraph.com/news/crypto-prime-broker-tagomi-to-join-libra-association

Chamath Palihapitiya, the billionaire chairman of spaceflight company Virgin Galactic, has recommended that everyone hold Bitcoin (BTC) as a form of crisis insurance.

Speaking on CNBC’s Squawk Box, Palihapitiya said he believes that “everybody should probably have 1% of their assets in Bitcoin.”

Palihapitiya said that Bitcoin comprises a “fantastic hedge,” as every other financial instrument is correlated [...] except Bitcoin, which is fundamentally uncorrelated.”

“When you see the amount of leverage the financial industry is running, and you think about all these dislocations and all these exogenous things that are happening that you can't predict, there's a lot of risk to the downside, and it will be great that an average individual citizen, of any country in the world, has an uncorrelated hedge.”

Palihapitiya dismisses coronavirus as bull catalyst

However the billionaire former Facebook executive rejects the theory that economic woes resulting from the coronavirus outbreak will drive the crypto markets into a bull trend.

“I don’t think when [...] you wake up and see a coronavirus scare and the Dow down 2,000, you should not be going in and buying Bitcoin - that is an idiotic strategy,” he said.

The ‘Bitcoin is a safe haven’ narrative has certainly taken a battering this week with BTC tumbling up to 13% in 36 hours in tandem with the stock markets due to fears over the impact of the coronavirus. In contrast gold has performed well in its traditional role as a safe haven, gaining 0.5% in recent days to trade for $1,648.82 per ounce.

Put some Bitcoin under your mattress

Palihapitiya suggests that a better approach than trying to profit off short term market trends is for investors to put a small percentage of their net worth into Bitcoin as “insurance”.

“I think a reasonable strategy is to say 1% of my net worth should be in something completely uncorrelated to the world and how the world works. You quietly over some period of time accumulate a position and then just never look at it again and hope that that insurance under the mattress never has to come due. But, if it does, it will protect you.”

Palihapitiya is a longtime Bitcoin supporter and his company, Virgin Galactic, began accepting Bitcoin for its $250,000 spaceflights during November 2013, becoming one of most high-profile companies to accept BTC at the time. Palihapitiya told CNBC that it has received 7,957 “registrations of interest” since conducting the first flight in December 2018, which equates to to $2.39 billion in potential ticket sales.

Source: https://cointelegraph.com/news/virgin-galactic-ceo-everyone-should-have-1-of-their-assets-in-bitcoin

A group of South Korean money transfer and remittance companies has joined Ripple’s blockchain-based financial services network RippleNet to bolster the remittance market in the country.

In a Feb. 25 announcement, Ripple revealed that South Korea-based money transfer service providers Sentbe and Hanpass, and mobile and online based cross-border remittance services firm WireBarley have begun using the RippleNet platform. The collaboration is geared to improve remittances in Korea.

According to the World Bank, workers’ remittances, receipts in South Korea amounted to over $6.2 billion, in 2018. The top destination country for emigration-related remittances by South Koreans was reportedly the United States, which constituted more than 50% of the total number of remittances, with Malaysia running second.

Also Philippines

In addition to the three partnerships in South Korea, RippleNet has also announced it’s collaboration with London-based remittance service Azimo. The companies will open an On-Demand Liquidity corridor to the Philippines, with Ripple’s native token, XRP, as a bridge currency.

Commenting on the partnership, Richard Ambrose, CEO of Azimo, said: “Ripple’s ODL solution has significantly reduced the cost and delivery time for cross-border transfers, and our customers are seeing the benefits.”

Using the RippleNet platform will reportedly reduce liquidity costs by up to 60% compared to traditional banking solutions.

Increasing adoption of Ripple’s technology

In February alone, RippleNet onboarded Bangladesh-based Bank Asia and Mexican International Money Express, a money remittance services firm focused on the Latin and Caribbean corridor.

Another major financial institution that partnered with RippleNet this month was the National Bank of Egypt, which ostensibly hopes to access new markets, and to support and extend its remittance business in the Gulf region in particular.

At the same time, remittances giant MoneyGram announced a new service allowing real-time money sending based on Visa’s Direct Original Credit Transaction. The solution enables MoneyGram’s users to deliver funds to bank accounts through Debit card deposit.

Speaking with Cointelegraph, Kamila Chytil, COO at MoneyGram, pointed out that while Ripple is not involved in this service, the firm uses blockchain-based extensively in other areas:

“Today, MoneyGram is utilizing Ripple’s On Demand Liquidity product which allows MoneyGram to trade FX at a corporate level using XRP. It’s a back-end treasury function that’s not consumer facing. The technology is helping to solve the most expensive and time consuming aspect of the current process by reducing the amount of money the company needs to park around the world, which will eventually reduce working capital needs.”

Source: https://cointelegraph.com/news/ripplenet-to-boost-remittances-across-asia-with-new-partnerships

A former employee at Microsoft has been found guilty of 18 federal felonies in connection with a complex scheme to embezzle $10 million using cryptocurrency.

The man — a 25-year old Ukrainian national, Volodymyr Kvashuk — worked as a full-time software engineer at the firm from August 2016, before being fired in June 2018.

Kvashuk was convicted in the United States District Court in Seattle, the Department of Justice revealed on Feb. 25.

“A house of lies”

The multi-count conviction reveals the complexity of Kvashuk’s scheme, in which he hid behind accounts tied to his fellow employees and resorted to extensive fraud and cryptocurrency mixing services to cover his tracks.

The 18 felonies thus span five counts of wire fraud, six counts of money laundering, two counts of aggravated identity theft, two counts of filing false tax returns, and one count each of mail fraud, access device fraud, and access to a protected computer in furtherance of fraud.

In his role at Microsoft, Kvashuk was involved in testing the corporation’s online retail sales platform. He exploited his testing access to steal “currency stored value,” such as crypto gift cards, which he then resold at a profit on the web.

Beginning with small amounts of $12,000 in value using his own account access, Kvashuk turned to using test email accounts linked to other employees as the magnitude of his thefts escalated to millions of dollars.

To further obscure his connection to the scheme, Kvashuk used a Bitcoin mixing service to muddy the digital source of the funds that ultimately were cashed into his bank account.

Over a seventh month period, roughly $2.8 million in Bitcoin was transferred into Kvashuk’s account. He also used the ill-gotten proceeds to buy luxury goods, including a $160,000 Tesla car and a $1.7 million lakefront home.

Kvashuk falsified tax return forms, falsely claiming he had received the Bitcoin as a gift from family. Assistant U.S. Attorney Siddharth Velamoor told the court Kvashuk’s “crime of greed” dripped “fraud and deceit every step of the way.”

During the five-day trial, Kvashuk claimed he had been working on a special project for Microsoft’s benefit, rather than intending to defraud the firm. Velamoor’s colleague, assistant attorney Michael Dion, characterized the testimony as “a house of lies on top of a previous house of lies.”

For his crimes, Kvashuk faces up to 20 years in prison.

The crimes were reportedly thwarted by the U.S. tax agency IRS-CI Cyber Crimes Unit. Pointing to Kvashuk’s theft from both Microsoft and the federal government, IRS-CI special agent in charge Ryan L. Korner said:

“Criminals who think they can avoid detection by using cryptocurrency and laundering through mixers are put on notice […] you will be caught and you will be held accountable.”

Strengthening investigative powers

Earlier this month, U.S. President Donal Trump’s proposed budget laid out a tough stance against crypto-associated financial crimes.

It included a proposal to reconsolidate the Secret Service with the Department of the Treasury to improve the efficiency of cyber and financial crime investigations.

The administration also revealed it intends to continue to invest in tools that can help the government to combat new threats, such as the use of crypto in money laundering and terrorist financing.

Source: https://cointelegraph.com/news/ex-microsoft-employee-convicted-of-18-felonies-in-digital-currency-scheme

On Feb. 24, a California federal judge ruled that cryptocurrency investor Michael Terpin can proceed with his lawsuit against telecom corporation AT&T over a $24 million SIM hacking incident.

Terpin is arguing that an AT&T agent who was bribed by a criminal gang supplied data that allowed the hackers to steal $24 million worth of cryptocurrency in January 2018. Terpin is a prominent cryptocurrency investor who founded BitAngels in 2013.

On June 11, 2017, hackers were purportedly able to gain control of the investor’s phone number through a SIM swapping attack — allowing them to impersonate Terpin and convince one of his clients to send them cryptocurrency.

After meeting with AT&T representatives during June 2017 to discuss the hack, Terpin’s account was placed on a “higher security level with special protection.”

On Jan. 7, 2018, Terpin’s phone was hacked for a second time, with the investor alleging that an AT&T employee facilitated the SIM swap. Terpin attempted to contact AT&T to cancel his telephone number, however, “AT&T failed to promptly cancel his account.”

This resulted in the hackers using 2-Factor Authentication to reset the passwords for Terpin’s cryptocurrency wallets and steal $24 million in digital assets.

Three claims against AT&T upheld

Judge Otis Wright II dismissed 13 of the 16 claims brought against AT&T, however, he ruled that the telecoms giant must face statutory, contract, and tort damages claims. The court will also allow Terpin the opportunity to amend the rejected claims — except for a previously dismissed breach of implied contract claim.

Terpin intends to file a second amended complaint within three weeks to supplement his request for damages. The complaint will seek to demonstrate that AT&T was both aware of, and responsible for, “an ongoing sequence of cryptocurrency thefts due to SIM swaps dating back to well before Terpin’s hack.” Terpin stated:

“We look forward to demonstrating with compelling evidence the ‘advance knowledge and conscious disregard’ threshold by AT&T in its prior knowledge and ratification of ongoing SIM swaps causing economic loss.”

AT&T was aware of clients’ vulnerability to SIM hacking

The judge attributed the hack to AT&T providing “inadequate security measures to protect his SIM card.” Wright added that the telecom company is “morally culpable” through failing to prevent SIM swapping despite being “aware of the vulnerability of its customers” to the practice.

The court rejected AT&T’s motion to dismiss the claims, with the telecoms company claiming that Terpin had been unable to prove that he owned cryptocurrency or the precise method through which his crypto was stolen. Judge Wright concluded:

“The court finds this allegation adequate because Mr. Terpin alleges sufficient facts for the court to reasonably infer the hackers may have used [2-Factor Authentication] methods to glean Mr. Terpin’s personal information from various accounts, such as email or cloud storage.”

An AT&T representative stated that the company disputes the allegations and will continue to fight them in court.

Source: https://cointelegraph.com/news/judge-says-plaintiff-can-proceed-against-att-in-24m-hack-case

The US Securities and Exchange Commision has rejected New York based firm Wilshire Phoenix’s Bitcoin Exchange Traded Fund (ETF) application, citing ongoing concerns over market manipulation and a lack of surveillance-sharing agreements.

Commissioner Hester ‘Crypto Mom’ Peirce has publicly disagreed with the rejection.

NYSE Arca had submitted a proposed rule change to allow the listing and trade of Wilshire Phoenix's United States Bitcoin and Treasury Investment Trust. The proposal included both US Treasury Bonds and Bitcoin and hoped to address the SEC’s concerns over market manipulation by automatically rebalancing into bonds during periods of BTC price volatility.

Explaining the reasons behind its Wednesday ruling the SEC said the company had been unable to provide enough proof that it can protect itself from “fraudulent and manipulative acts and practices” in the Bitcoin market in order “to protect investors and the public interest.”

The SEC noted:

“The Commission must disapprove a proposed rule change filed by a national securities exchange if it does not find that the proposed rule change is consistent with the applicable requirements of the Exchange Act — including the requirement under Section 6(b)(5) that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices.”

The SEC has rejected at least nine previous Bitcoin ETF applications to date including applications from Bitwise Asset Management, VanEck/SolidX and Direxion. Kryptoin and Crescent Crypto still have crypto ETF proposals awaiting decisions from the SEC.

In her dissent to the rejection, Commissioner Peirce stated that the commission had “once again disapproved of a proposed rule change that would give American investors access to Bitcoin through a product listed and traded on a national securities exchange subject to the commission's regulatory framework."

“This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for Bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to Bitcoin-related products — and only to Bitcoin-related products."

Source: https://cointelegraph.com/news/crypto-mom-accuses-sec-of-shifting-standards-following-bitcoin-etf-rejection

The Malta Financial Services Authority (MFSA) has released feedback on the definition of security tokens and challenges such assets face in Maltese markets.

In a paper published on Feb. 25, the agency gave feedback on security token offerings (STO) from 18 industry stakeholders, including national agencies, regulated businesses, technology providers, law and consultancy firms, among others.

The MFSA initially asked industry stakeholders to provide their opinions and advice on the definition of STOs last July. It also asked for their assistance in interpreting the challenges STOs face within the existing legal framework. The MFSA noted the absence of clear definitions for transferable securities both by it and at the European Union level.

The feedback

According to the paper, the majority of respondents generally disagreed with the categorization of different types of STOs proposed by the MFSA. Most respondents said that there should not be a distinction based on whether the instrument is tokenized since the concept of transferable securities is unified by EU law. This distinction could ostensibly lead to risks of structuring arbitrage.

One suggestion was to develop a new framework for traditional transferable securities that deploy distributed ledger technology.

Others stated that Malta should adopt the taxonomy for crypto assets proposed by the Blockchain Research Institute, or that the categorization should depend on the impact of blockchain tech and the underlying infrastructure of a project.

The document contains other opinions on the issue, including the management of rights and obligations related to securities, double-checking verifications of transactions, and alternative solutions, among others.

Malta’s industry-friendly approach?

In Malta — which claims to be a “blockchain island” for its industry-friendly policies — crypto startups still struggle to obtain financial services due to regulatory sluggishness. Last fall, companies were being turned away by banks that did not have the “risk appetite” to support such ventures. Instead, financial services remain reserved for those that are fully regulated by the MFSA, a process that can take up to six months for a first response.

Just recently, news broke that major crypto exchange Binance was not authorized to operate in Malta as the MFSA claimed that it had never approved the exchange:

“Following a report in a section of the media referring to Binance as a ‘Malta-based cryptocurrency’ company, the Malta Financial Services Authority (MFSA) reiterates that Binance is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA.”

Source: https://cointelegraph.com/news/maltas-financial-watchdog-releases-industry-feedback-on-security-tokens

After evaluating data derived from crypto publication headlines, digital asset alternative data provider The TIE discovered a correlation between Bitcoin’s price in the market and mentions of the upcoming halving in media outlets.

“We noticed how, as mentions of the halving were decreasing last fall, that tended to correlate with downward price movement,” The TIE CEO Joshua Frank told Cointelegraph on Feb. 25. “Once that narrative picked up again, Bitcoin saw upward price movement,” he continued.

On Feb. 22, The TIE tweeted a chart showing the correlation. “The number of mentions of the halving in crypto publications appears to have led price movement of BTC,” the social media post said. “Mentions of the halving have hit an ATH.”


Source: https://cointelegraph.com/news/bitcoin-halving-mentions-in-crypto-media-correlate-with-bullish-2020-price-action