Weekly News (OneCoin, Exchange Supervision, Maine Next, etc.)
The past week saw the attention of most Bitcoin users focused on the SEC’s decision on the Winklevoss ETF bid. That, as most of you know, did not end up well for Winklevoss or the first ever Bitcoin ETF. The price of Bitcoin reacted accordingly throughout the week in respect to the pending decision by the Securities Exchange. Just prior to the announcement, the price of Bitcoin surged to over $1,300.00 USD and right after the SEC’s denial announcement, Bitcoin fell to $1,022.68 USD. Amid all of the chaos and hype surrounding the Winklevoss ETF, there was actually a few other news pieces that are worth mentioning.
Winklevoss ETF Rejected by U.S. Securities Exchange Commission
Let’s get the big story out of the way first. For more than three years, the Winklevoss brothers, Cameron and Tyler, have sought to get their Bitcoin Trust accepted as an exchange traded fund. The United States Securities Commission (SEC) has taken their time, putting g the matter off, asking for public opinion and weighing the options and have finally reached a decision. DENIED. The reasons given for the denial are given in great detail in the 38 page decision document released this week by the SEC, but basically point to the fear of fraud and not enough regulation of Bitcoin as a currency. The statement that stands out is,
“As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”
The findings and decision document goes on to say that they will consider any future Bitcoin related funds once there are proper regulatory measures in place to the point where they feel satisfied that investors would be protected sufficiently.
OneCoin Investment Scheme Slapped Down Mafioso Style
OneCoin, a well-known investing scheme that is intended to defraud investors got a slap in the face by the Italian Antitrust Authority when the Italian watchdog group suspended the operations of several of OneCoin’s affiliates. This comes after the group picked up the speed of their investigation in December after they initially placed temporary injunctions against three affiliates and discovered that most of the money generated was from recruitment efforts. In the initial findings report, the Antitrust Authority stated,
“In fact, the bulk of the revenues…derives not so much from the purchase of [the] virtual currency OneCoin but rather by the payment of fees that consumers are requested to bear in the accession to the system, which in time to reach the goal of profit, appear to be required to recruit other consumers. These arrangements appear attributable to the typical dynamics of pyramid schemes.”
This is nothing new for OneCoin, who has had several national governments issues warnings to their citizens, including Nigeria, Uganda the UK and Belgium. This, however, is one of the toughest actions taken against the digital currency since the pyramid scheme-type activity first came to light, but they might no be the last. London Police are currently investigating OneCoin but have refused to comment citing the ongoing investigation.
Maine Next on List of US States to Pursue Blockchain Solutions
A proposal in the State of Maine, in the US, seeks to create a group that would study the blockchain tech and see how it could be implemented as an elections tool. The bill, put forth by the state’s senate outlines a plan for a commission to study using blockchain technology in conjunction with paper ballets in Maine elections.
If approved, the study needs to be completed no later than December 7th of this year, according to the bill. This is a use case that has been used many times, most recently in South Korea, where a provincial government used the tech to hold a vote on community projects.
PBoC Declares Need for Strict Bitcoin Exchange Supervision
In China, the People’s Bank of China announced that it is considering a slew of regulatory measures to ensure that the Bitcoin Exchanges there would be under strict supervision at all times. These measures include requiring licensure, creation of blacklists, probationary periods as well as other forms of regulation that could be named at a later date. For the time being, while nothing is set in stone as to what these new regulatory rules will be for certain, there is still a freeze on withdrawals from Chinese Bitcoin Exchanges.
“No-Fee Trading” and “Margin Trading” are definitely no longer allowed, based on the announcements made last month by the PBoC. How long the withdrawal freeze will continue is not yet known, but what was speculated to last only a few days, quickly changed to one month and is now approaching 5 weeks. BTCC, Huobi and OKCoin announced they had made the technical changes that they were required to make to meet the guidelines set forth by the PBoC. Yet, the exchanges are still down.
Local Chinese legal experts feel that the decision to reopen the exchanges will not come until after the National People’s Congress ends its current session later this month.
Singapore’s Central Bank Digital Currency Trial Ends
Singapore has just completed a trial that was testing inter-bank payments utilizing a distributed ledger. The Monetary Authority of Singapore (MAS) began the trials in November and worked closely with the R3 banking consortium, along with a group of member banks that include Bank of America, JP Morgan, and HSBC.
MAS says that a detailed report of the findings The MAS has stated that the tests with the other banks has already spawned several other trials and ideas in which they are considering pursuing.
New Hampshire’s Bitcoin Exception Bill Passes First Vote
A proposed bill which would exempt Bitcoin companies from state Money Service Business laws passed the first round of voting in New Hampshire this week. The bill passed in the House of representatives of the state with a final tally of 185-170. If it passes the senate, the bill will make digital currency users exempt from having to register as a money service business under New Hampshire’s state law.
The bill was initially put forth by a
Western Union employee, now a state representative and backed by another state representative who was an early adopter of Bitcoin himself. New Hampshire’s law would be the first to make digital currencies exempt from money service laws, and in fact is in direct contrast with New York laws that were written to specifically include digital currency businesses into the money services industry.
Bitcoin Core Update Features Things That Most Will Never Notice
The new update of the Bitcoin Core, version 0.14.0 is full of performance boosts; faster downloads, code shuffling that will allow for more room, further integration with SegWit and code to help boost scalability. Most of the end users of Bitcoin will not noticed anything different. That does not mean that things are not changing. Most of the changes coming out in the newest update are laying the groundwork for future updates and how they are done and it is those updates which will most likely feature noticeable changes. For now, rest assured that the Bitcoin Core is being handled by people who are putting forth great time and effort to help improve Bitcoin’s operations and functionality.
The SEC denials, Bitcoin Updates, Rollercoaster prices and all kinds of big name companies and governments researching the blockchain tech for implementation in their day-to-day’s. It was a typical week in Bitcoin if you think on it; a little bit of up, some down and a whole lot of status quo. While things may not always be bright and cheery, it doesn’t mean that they are all bad either. Let’s look towards the next week to see what it may bring.
Gene is an avid Bitcoin enthusiast and computer programmer who is currently studying to be a software engineer. He is 40 years old and lives in Daytona Beach, Florida with his girlfriend and their son.