Russian officials have been accused of mining Bitcoin to fund election “interference,” while a UK study sees crypto soon becoming “mainstream.”
Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.
Top Stories This Week
US Charges 12 Russian Intelligence Officers With Crypto-Funded Election “Interference”
The U.S. Department of Justice released an indictment this week that charged twelve Russian nationals with the intention to “interfere” in the 2016 U.S. presidential elections. According to the indictment, Russian officials from the government’s Main Intelligence Directorate mined cryptocurrencies like Bitcoin in order to fund efforts to hack into various computer networks associated with the Democratic Party, Hillary Clinton’s presidential campaign, and U.S. elections-related state boards and technology companies. The Russian hackers then released stolen emails through a crypto-funded domain while promoting themselves as “American hacktivists.”
Billionaire Google Co-Founder Reveals He Mines Ethereum With Son As A “Side Hustle”
Sergey Brin, the co-founder of Google and the current president of Google’s parent company Alphabet, has said that he and his 10-year-old son mine Ethereum together as a “side hustle.” Brin also said that cryptocurrencies are “mind-boggling” and the crypto global network is “extraordinary,” admitting that Google hasn’t been on the “bleeding-edge” in embracing crypto.
UK Study Finds Crypto Has Potential To Become Mainstream Payment Means In Decade
A joint study by Imperial College and U.K. trading platform eToro writes that cryptocurrencies like Bitcoin could become a mainstream means of payment in the next decade, as they already meet one of the three main criteria of money— store of value. In order to become a fully fledged payment instrument, the study notes that cryptocurrencies must now solve their six main challenges: scalability, usability, regulation, volatility, incentives, and privacy.
Three American Economists Shoot Down Bitcoin’s Chances For Survival
Nobel Prize-winning economist Joseph Stiglitz, former chief economist at the International Monetary Fund (IMF) Kenneth Rogoff, and NYU economist “Dr. Doom” Nouriel Roubini have all expressed negative views about Bitcoin during an interview. According to the three economists, Bitcoin’s anonymity, volatility, and ability to be used for “nefarious activity” mean the coin will fail as a currency.
Elon Musk Refers To Twitter Crypto Scammers’ “Mad Skillz” In Tweet About Ethereum
Billionaire Elon Musk, the founder of Tesla Motors and SpaceX, tweeted this week about the “mad skillz” of Twitter scammers impersonating famous people to steal ETH and other crypto from their victims. Ethereum co-founder Vitalik Buterin responded to Musk by both asking Twitter CEO Jack Dorsey for help and noting his disappointment that Musk’s first tweet about ETH concerned scammers.
Most Memorable Quotations
“I want to know who is running the Etherium [sic] scambots! Mad skillz…” — Elon Musk, billionaire entrepreneur, on Twitter crypto scams
“We’re moving into a qualitative shift in the nature of money...towards a world of ‘global villages’ where you can have decentralized governance,” — Joseph Lubin, Ethereum Foundation co-founder
Laws And Taxes
Philippine Special Economic Zone Issues Three Provisional Crypto Exchange Licenses
The Philippine’s Cagayan Economic Zone Authority (CEZA) has issued provisional licenses to three crypto exchanges, reportedly two from Hong Kong and a third from Thailand. CEZA, which is a state-owned corporation that control the operations of the special economic zone, expects to attract $3 million of investment as a result of the issuance. The Philippine government announced in April that it would allow 10 blockchain and crypto-related companies to operate in the special zone to stimulate the economy.
EU Directive Sets New Legal Framework For Financial Watchdogs To Regulate Crypto
The EU Fifth Anti-Money Laundering Director, which came into force on July 9, will create a new legal framework for regulating digital currencies to protect against money laundering and terrorism financing. The new rules include stricter transparency requirements for the use of “anonymous payments through prepaid cards” and “virtual currency exchange platforms.
South Korea Legislators Reveal Crypto, ICO, Blockchain Bill Drafts
South Korean regulators will reportedly introduce drafts of bills regulating cryptocurrencies, initial coin offerings, and blockchain tech at an extraordinary National Assembly session which will take place from July 13-26. The bills are reported to call for regulations on crypto trading platforms in order to prevent money laundering, cybercrimes, and personal data leaks. Also this week, South Korean regulators promised to create more friendly blockchain investment legislation.
Report: India Won’t Ban Digital Currencies, But Will Treat Them As Commodities
An anonymous source in the government reported this week that India is not gearing up for a blanket crypto ban, but will instead treat digital currencies as commodities. According to the source, Indian regulators participating in a Finance Ministry-ordered crypto study are mainly concerned with tracking investors and funds to fight money laundering and illicit financing.
Bermuda To Introduce New ICO, Distributed Ledger Technology Regulations
Bermuda’s Premier and Minister of Finance has introduced new regulations on ICOs to the House of Assembly this week. The new regulatory guidelines lay out the information required for ICOs projects, as well as establishing compliance measures for companies conducting an ICO. The Premier also noted that the government will set out a legal framework for distributed ledger technology, passing the Digital Asset Business Act 2018.
London School of Economics To Offer Online Crypto Investing Course
The London School of Economics will offer an online course titled “Cryptocurrency Investment and Disruption” beginning this August. According to the announcement, students will learn the “practical skills” involved in dealing with crypto exchanges, crypto wallets, and how to evaluate the analytics of ICOs.
Blockchain-Based Phone To Be Released In November By Sirin Labs
Swiss smartphone developer Sirin Labs will release a blockchain-based phone, the Finney, this November with an expected price of $1,000. The phone will be based on the Android system, and run on SIRIN OS with an included cold storage wallet, a Token Conversion Service, and a DApp store. Sirin Labs previously released a privacy-focused smartphone in 2016 for the much higher price of $16,000.
Ledger Reportedly Attracts Industry Investors For Funding After Selling 1 Mln Wallets
Security-focused hardware wallet Ledger, which sold more than one million crypto wallets in 2017, is now seeking an additional funding found. The company already raised $75 million in a Series B funding round in January, but the new fundraising intends to attract “industrial partners who will also sign commercial contracts with the crypto startup.” Forbes reports that tech giants like Samsung, Siemens, and Google’s venture arm GV are interested, with talk of Ledger’s valuation reaching as high as $1 billion.
Czech Investment Banking Firm Reveals $100 Mln Fund For Israeli Blockchain Startups
Investment banking firm Benson Oak said this week that it would pump “around $100 mln” into Israeli startups with an emphasis on blockchain tech. The company has already raised one fourth, or $25 million, of the funds, and notes that Israel was chosen as a focus due to its potential for “great entrepreneurs” to develop blockchain further.
Bloomberg: Billionaire Steven Cohen Reportedly Backs Crypto, Blockchain Hedge Fund
Steven Cohen, the founder of Point72 Asset Management, is allegedly backing crypto and blockchain-focused hedge fund, Autonomous Partners. According to Bloomberg, Cohen invested in Arianna Simpson’s crypto hedge fund visa his private equity firm Cohen Private Ventures.
Mergers, Acquisitions, And Partnerships
Litecoin Foundation Partners with TokenPay, Acquires 10 Percent Stake In German Bank
The Litecoin Foundation has partnered with crypto-fiat payments firm TokenPay and acquired a 9.9 percent stake in Germany WEG Bank AG. TokenPay transferred its equity share of the bank to the Litecoin Foundation as part of an agreement that the foundation will provide blockchain and marketing expertise for TokenPay’s operations.
South Korean Logistics Giant Join Blockchain Transport Alliance
Seoul-headquartered logistics and shipping firm, Lotte Global Logistics, has joined the Blockchain in Transport Alliance (BiTA) this week. The BiTA was formed in 2017 to develop blockchain applications in transport and logistics industries, and includes as FedEx, Uber, shipping giant UPS, and GE Transportation as members.
Saudi Arabian Municipality Partners With IBM For Blockchain Development
The Riyadh Municipality in Saudi Arabia has partnered with IBM in order to develop blockchain tech for government services. The Riyadh Municipality, IBM, and Saudi tech firm Elm Company will collaborate on workshops for deciding with government services are suitable for blockchain.
Winners And Losers
The crypto markets are still down this week, with Bitcoin trading for around $6,297, Ethereum for around $438, and total market cap around $250 billion.
The top three altcoin gainers of the week are BitShares, Decred, and Enigma. The top three altcoin losers of the week are DigiByte, KuCoin Shares, and RChain.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
FUD Of The Week
Head of Chinese Regulator Says Blockchain Shouldn’t Be “Mythologized”
Fan Wenzhong, the head of the international department of the China Banking and Insurance Regulatory Commission, said this week that although blockchain innovation has “significant meaning,” one shouldn’t “mythologize” the technology. Wenzhong also added that decentralization is merely a loop of an old trend, and that cryptocurrencies are not “necessarily useful.”
20 Arrested In Chinese Cryptojacking Case Allegedly Affecting Over 1 Million Computers
A major cryptojacking case in China has led to the arrest of 20 suspects that reportedly garnered around $2.2 million in illicit profits by infecting over 1 million computers with cryptojacking mining scripts. Local sources report that the investigation began in January of this year after a security team alerted the Weifang City Public Security Bureau about a mining script hidden in freely-downloadable plugins.
Decentralized Crypto Platform Bancor Experiences “Security Breach” Involving $12 Mln
Bancor, a decentralized cryptocurrency platform, halted operations on July 9 as it investigated a “security breach” that reportedly involved around $12 million of Ethereum, $1,200 of Pundi X, and the platform’s native token BNT. The exchange reported that no users funds were affected, as cryptocurrencies are not held in hot wallets. Bancor’s head of communications told Cointelegraph that the exchange expected to be back online in 24 hours. As of press time, Bancor is back online.
Cybersecurity Firm Kaspersky Lab Finds More Than $10 Mln ETH Stolen Over Past Year
Kaspersky Lab reports that cyber criminals have stolen around 21,000 in Ethereum through social engineering schemes over the past year, with more than a hundred thousand alarms triggered on security software dealing with crypto since the beginning of 2018. According to the report, the scammers targeted investors interested in ICOs, using fake websites and phishing emails to illegally obtain their victims money.
Study Shows That Over 80 Percent Of ICOs Held In 2017 Were Scams
According to a study by ICO advisory firm Statis Group, more than 80 percent of ICOs conducted in 2017 can be considered scams. The study examined the life cycles of the ICOs, determining that four percent had failed and three percent had “gone dead.” The ICOs identified as scams garnered $1.34 billion of funding overall, which is 11 percent of total ICO funding in 2017.
Prediction Of The Week
Bitcoin Will Hit $60,000 This Year, Says TenX Co-Founder Julian Hosp
Julian Hosp, the co-founder of crypto startup TenX, repeated his previous prediction that Bitcoin will hit $60,000 this year. Last December, Hosp had forecasted that Bitcoin would see both $5,000 and $60,000 in 2018, and he is still “quite confident” that the $60,000 mark will become a reality.
Aleksandr Bulkin from Coinfund explains the impudence of assuming that a decentralized solution will automatically work, and the importance of avoiding the hubris that can blind developers to gaps in their project.
Chris Douthit, CEO and analyst at CryptoInvestingInsider.com, draws parallels between an American entrepreneur creating “fake news” in the 1800s to buy up as many gold mines as possible with the media “FUD” around cryptocurrencies today. Douthit details what he considers the recent “eye opening” changes that show the crypto space is actually moving in the right direction, like Bloomberg’s Crypto Galaxy Fund Index and Goldman Sachs’s future crypto trading desk.