Major Crypto Exchanges Collaborate to Create Self-Regulatory Organization

Four major cryptocurrency exchanges are teaming up develop a self-regulatory organization (SRO) that would work cohesively to develop rules, regulations, and to set new regulatory standards for the cryptocurrency and blockchain industry.

News of the potential SRO comes several months after the idea was first proposed by Cameron Winklevoss, co-founder of the Gemini exchange.

The self-regulatory organization is called the Virtual Commodity Association Working Group. It will be working to draft, and lobby, sets of regulatory measures that would reduce the amount of fraud and scams within the industry.

It would also help world governments to implement common sense and “do no harm” regulation to the crypto industry. If taken seriously by regulatory authorities, the group could become a powerful SRO group that could change the cryptocurrency markets for the better.

Self-Regulatory Organization Long in the Works

The four exchanges that have signed onto the Virtual Commodity Association Working Group are Gemini, Bittrex, Bitstamp, and bitFlyer USA.

Although unconfirmed, it is likely that the Winklevoss brothers, the two men at the head of the Gemini exchange, are the ones behind the creation of this group, as this has been a long-held idea by the brothers.

The news of the group comes five months after Cameron Winklevoss explained a very similar concept in a personal Medium post, where he outlined his idea, citing the proposed group’s purpose as:

“Foster financially sound, responsible, and innovative virtual commodity markets through a system of industry sponsored standards, sound practices, and oversight that promotes price discovery, efficiency, and transparency…Incentivize the detection and deterrence of manipulative and fraudulent acts and practices, including partnering with regulators and particularly the CFTC to share or refer information, as appropriate.”

The concept is not unconventional, as it is modeled off of similar organizations that exist within equities and securities markets. These groups are very similar conceptually in that they develop industry standards and work closely with regulators in order to reduce fraudulent practices while still allowing for innovation.

While speaking to Business Insider, the founder of CoinRoutes, Dave Weisberger, discussed the new group, saying:

“It is a great sign that multiple competing exchanges have recognized that working together, to improve the overall industry, in their mutual self-interest…Institutions are genuinely skeptical today over the fairness and data quality in the crypto market. At CoinRoutes, even though we help our clients consolidate the data, there is a lot of concern over the quality of the exchange data we aggregate as well as underlying manipulation. An industry SRO is a great start towards ameliorating those concerns.”

Winklevoss Twins Continue Moving Forward Despite Several Setbacks 

The development of a self-regulatory group is a win for the Winklevoss twins, who have been hit hard by several setbacks over the course of 2018.

Following the bull run at the end of 2017, Gemini exchange has seen declining trading volume ever since.  The brothers also have seen a drop in value of their personal cryptocurrency holdings, which supposedly account for a large portion of their net worth.

The worst setback for the brothers, however, was the denial of their exchange’s proposed ETF by the U.S. Securities and Exchange (SEC). This denial not only closed the chances for Gemini becoming the first issuer of a Bitcoin ETF, but it also negatively affected market sentiment, leading to a brief market sell-off.

AltcoinToday.com

Photo via Shutterstock.

Source: Newsbtc

loading…

Weekend in Review: SEC bans energy investor, China police arrest suspect of crypto theft, Contest winners to get iPhone X from Tron

Recapping the biggest news stories of the weekend. If you’ve missed the top stories of the weekend, this post offers a comprehensive look at the stories that made headlines. A lot has happened in the cryptocurrency and blockchain world, SEC has banned energy investor, Chinese police have arrested suspect of cryptocurrency theft, Facebook Contest Winners to Get iPhone X from Tron, and much more. Here’s an overview of some of weekend’s most interesting news and articles.

SEC bans energy investor over ICO fraud

SEC bans energy investor over ICO fraudSEC bans energy investor over ICO fraud

The Securities and Exchange Commission (SEC) has banned an energy investor over ICO fraud and imposed a penalty of $30000 against the founder of a company David T. Laurance who executed a fraudulent initial coin offering (ICO) to fund oil exploration and drilling in California. David is the president and CEO of Tomahawk Exploration LLC which is registered as an oil drilling company. In June 2017, Laurence created “Tomahawkcoins” with a goal to raise $5 million in an initial coin offering (ICO). It was publicized that this fund would be used to drill ten wells in California. Although the ICO failed to raise money, Tomahawk issued tokens through a “Bounty Program” in exchange for online promotional services. It also claimed that ‘token owners would be able to convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens. The SEC found that Tomahawk and Laurance violated the registration and antifraud policies and guidelines of the federal securities laws. Without admitting or denying the SEC’s findings, Tomahawk and Laurance consented to a cease and desist order and Laurance consented to an officer and director bar, penny stock bar, and a $30,000 penalty.

John McAfee, the New CEO of Blockchain Project Luxcore (LUX)

BlockchainJohn McAfee will be the New CEO of Blockchain Project Luxcore (LUX)

John McAfee, an American computer developer and founder of McAfee; a well- known software company specialized in computer security has been appointed as the new CEO of a blockchain solution and service firm Luxcore (LUX). Luxcore is a blockchain company that produces and develops enterprise-ready security and privacy solutions and products. Luxcore will expand its innovation on PHI2algorithm supported by blockchain to create and develop core products. These products include an open-source blockchain token of value, Lux Coin & the closed source products like LuxGate and Parallel Master nodes are some of these products. The primary goal of Luxcore is the effective use of blockchain.

US Judge Orders Hacker To Pay Bail In Crypto

us-judge-orders-to-pay-in-cryptoUS Judge Orders Hacker To Pay Bail In Crypto

US judge Alex G. Tse has ordered an accused hacker Martin Marsich to pay the approximate of $750,000 in cryptocurrency for bail. Martin illegally accessed the network of popular gaming company Electronic Arts (EA). He was arrested in San Francisco National Airport on Aug 8 when he was trying to board a flight to Serbia. on March 25, 2018, a gaming company Electronic Arts (EA).situated in the Bay Area found that an attacker had illegally compromised its internal computer network and gained access to parts of the company’s computers. He was later identified as Marsich who gained access to 25,000 accounts that enable clients to purchase items for use in video games. Marsich also sold the gained information and access details on the dark world websites. US Judge Corley granted him bail on the condition that he post the equivalent of $750,000 in cryptocurrency for bail.

Chinese Police Arrests Suspects of $87 Million Cryptocurrency Theft

Chinese Police Arrests Suspects of $87 Million Cryptocurrency Theft Bitcoin EthereumChinese Police Arrests Suspects of $87 Million Cryptocurrency Theft Bitcoin Ethereum

Chinese police have arrested three hackers who purportedly stole 600 million yuan ($87 million) worth of cryptocurrencies. In this attack, hackers targeted holders of various major cryptocurrencies. These attackers were stealing money from different individuals and businesses by hacking into their computers. The local police from the Hebei, Xi’an, and Hunan provinces are still investigating the case. Police in the northern city of Xian started investigating this matter in the month of March when a victim surnamed Zhang complained that hackers had hacked his computer to steal 100 million yuan (US$15 million) worth of cryptocurrency.

Bitcoin Investor Sues AT&T

bitcoin-investor-sues-attBitcoin Investor Sues AT&T

Bitcoin investor and cryptocurrency entrepreneur Michael Terpin has sued telecommunications company AT&T for $224 million over theft of cryptocurrency. Michael Terpin is the founder of Transform Group and BitAngels. He has filed a lawsuit against AT&T. According to Terpin, hackers are continuously targeting cryptocurrency investors and despite knowing this AT&T failed to secure his phone number. Attackers were able to steal his phone numbers in a fraud called as SIM swapping, SIM hijacking, or “port out scam. In a lawsuit, Terpin has stated that he was victimized by not one, but two hacks within seven months.

Follow us on Twitter, Facebook, Steemit, and join our Telegram channel for the latest blockchain and cryptocurrency news.

SEC bans energy investor over ICO fraud

The Securities and Exchange Commission issued a penalty of $30000 against the founder of a company that perpetrated a fraudulent initial coin offering (ICO) to fund oil exploration and drilling in California.

David T. Laurance’s LinkedIn profile states that he is the president and CEO of Tomahawk Exploration LLC which is registered as an oil drilling company with 8 years of experience in that company. In June 2017, Laurence created “Tomahawkcoins”  with a plan to raise $5 million in an initial coin offering (ICO). It was advertised that this capital would be used to drill ten wells in California. Although the ICO failed to raise money, Tomahawk issued tokens through a “Bounty Program” in exchange for online promotional services.Tomahawk also claimed that ‘token owners would be able to convert the Tomahawkcoins into equity and potentially profit from the anticipated oil production and secondary trading of the tokens’ as per the official report by the SEC.

The SEC’s Evidence

According to the SEC’s order, Laurence and Tomahawk Exploration LLC attempted to raise money through the sale of blockchain-based digital tokens called “Tomahawkcoins.” The SEC’s order found that Laurence’s promotional materials used inflated projections of oil production that were contradicted by the company’s own internal analysis and misleadingly suggested that Tomahawk possessed leases for drilling sites when it did not.

The bench found that the promotion material described Laurence as having a “flawless background”, but his shady past came up later revealing he had a prior conviction dating back to 1993 in a mail fraud case involving a penny stock scheme. Laurence, who is 76, neither disclosed his criminal past nor did he inform investors of the risks involved in his oil business Tomahawk, which was intended to explore Kern County, California.

The SEC’s Verdict

‘The SEC’s order finds that Tomahawk and Laurance violated the registration and antifraud provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Tomahawk and Laurance consented to a cease and desist order and Laurance consented to an officer and director bar, penny stock bar, and a $30,000 penalty’ according to the official press release.

Robert A. Cohen, Chief of the SEC’s Cyber Unit warned that “Investors should be alert to the risk of old-school frauds, like oil and gas schemes, masquerading as innovative blockchain-based ICOs”.

The SEC’s Office of Investor Education and Advocacy (OIEA) issued an Investor Alert to encourage investors to use the simple and free search tool on Investor.gov. to check the background of anyone selling or offering them an investment. SEC Action Lookup – Individuals (SALI) is another tool that helps investors identify individuals who have been convicted by the SEC. OIEA’s ICO Investor Bulletin also warned investors to watch out for potential warning signs of investment fraud including promises of “guaranteed” high investment returns.

Gary DeWaal, special counsel at Katten Muchin Rosenman who specializes in digital currencies said that “This is just another wolf in a different type of sheep’s clothing, but it’s still sheep’s clothing,”. He added that “This is just using a different medium for an old-fashioned fraud”.

Note of caution to Investors

Exit ICO scams have cost investors over $100 million according to a recent study published by digital asset newsletter Diar. The Chinese company Shenzhen Puyin Blockchain Group holds the highest position in such scams currently, which was able to raise $60 million from three different ICOs. The company raised funds for three ventures – ACChain, Puyin, and BioLifeChain – none of which materialized. Cryptokami and NVO raised $12 an $8 million before seemingly abandoning work on their projects. Cryptokami’s site is now defunct, and NVO hasn’t updated its Facebook page since March.

It seems that early stage speculation far distorts the true value of tokens offered. A report suggests that after analyzing the top ten ICOs whose tokens have been trading for at least six months, it was found that on average their price fell by 93 recent from the associated token’s all-time high. However, as numerous Twitter users have pointed out, these figures should be viewed with caution as the numbers overly distort the overall figure of growth.

The lack of robust regulation has resulted in the ICO sector being hit by a plague of exit scams. The current infrastructure makes it close to impossible to ensure the legitimacy of projects being listed, after all, there are no legal obligations in this arena to deliver a product once you have raised secured funding. It’s pretty much a digital wild west as far as the law is concerned. Projects that are just plowing forward, slowly using up the capital raised, but still have nothing to show for it are even more alarming.

As reported by Cryptoticker earlier on several occasions, we advise you to maintain high caution when dealing with ICO’s.

Follow us on Twitter, Facebook, Steemit, and join our Telegram channel for the latest blockchain and cryptocurrency news