Bitcoin Magazine’s Week in Review: Exchanges, Altcoins and Allegations
Coinbase continues to grow with their new high-end investment product Coinbase Custody, while Binance had to run a system update following some issues with its Syscoin wallet API.
On the topic of regulation, the EU has put out another report on virtual currencies warning officials not to ignore them but treat them like any other financial instrument; the SEC is reaching out to seek comments on a new ETF; and Ripple finds itself on the wrong end of yet another lawsuit claiming that its XRP token is a security.
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Coinbase launched Coinbase Custody this week, the latest in their suite of products. This new service is catered toward institutional investors and big spenders, offering its clients cryptocurrency cold storage options, “institutional-grade broker-dealer” services and asset coverage.
The services will only be available to American and European institutions, though the company hopes to expand its offering into Asian markets as well.
The EU’s Policy Department for Economic, Scientific and Quality of Life Policies released a report entitled “Virtual currencies and central banks monetary policy: challenges ahead.”
In evaluating cryptocurrencies as a novel, potentially disruptive technology, the report ultimately concludes that “[policy] makers and regulators should not ignore VCs, nor should they attempt to ban them … VCs should be treated by regulators as any other financial instrument, proportionally to their market importance, complexity, and associated risks.”
The Securities and Exchange Commission (SEC) is seeking comments on another bitcoin-based exchange-traded fund (ETF). The proposal in question calls for the listing and trading of SolidX bitcoin shares, and stems from the VanEck SolidX Bitcoin Trust, which states it will invest in “bitcoin only.”
The SEC is now asking for comments on the Trust’s newly proposed regulatory changes from “interested persons.” Though several companies have tried to list bitcoin ETFs before, concerns regarding the cryptocurrency’s liquidity and its consistent price swings have led to rising concern amongst SEC representatives, which can make the listing process difficult or long-winded.
On July 3, 2018, Binance suspended all trading and withdrawal services due to “irregular” Syscoin (SYS) trades carried out “from a number of API users.” The exchange has since resumed all activities. Questions remain, however, as to the root cause of the problem.
While the price of Syscoin had hovered around 0.00004 BTC, an order for 1 SYS in exchange for 96 BTC was placed and completed on Binance. This trade sent the market into overdrive as users assumed that the exchange or the Syscoin protocol had been compromised — though Syscoin insists that the chain was never compromised or hacked.
Ripple is staring down the barrel of yet another securities lawsuit — its third one this year. The suit’s plaintiff, David Oconer, is demanding that the court classify XRP as a security, while also seeking relief for the “damages, recession” that he incurred from investing in the coin.
The suit argues that Ripple never registered with California’s Commissioner of Corporations for qualification, a mandatory registration for any securities offering in the state. The plaintiff alleges that Ripple’s sale of XRP in a “never-ending initial coin offering” resembles that of an IPO, with the currency itself acting like a dividend for the ROI its promotion promised to investors.
This article originally appeared on Bitcoin Magazine.