‘Shouldn’t Be Allowed at All’: Former Indian Finance Ministry Official Skeptical of Bitcoin Regulation

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Shaktikanta Das, a key member in the Indian finance ministry, has come out against cryptocurrencies, stating that it will be extremely difficult to bring them under regulation.

Instead, he proposes, the government should seek a blanket ban on digital currencies in their entirety. In an interview with Quartz on March 7, 2018, he said

“You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and this should not be allowed at all.”

Bitcoin first caught the attention of the Reserve Bank of India (RBI) in late 2013, when it released a press release advising citizens against investing in cryptocurrencies. The release highlighted “potential economic, financial, operational, legal, customer protection and security related risks”. Several years later, the meteoric rise of the cryptocurrency market in November 2017 presumably motivated the central bank to issue another similar release.

Quite notably though, Das has been a very vocal opponent of bitcoin and other digital currencies. Furthermore, while he was the secretary of economic affairs in April 2017, he also led a committee to recommend laws and regulation for cryptocurrencies in the country. A year later, another committee, headed by Subhash Garg, is now expected to submit its draft in the next few months.

Das argued that while fiat currencies often have the backing of a country’s central bank and government, there is no underlying asset base for cryptocurrencies. He added,

“This (virtual money) is a parallel currency system developing and it is not legal. There is no legal provision which backs up these transactions.”

He also brought up the possibility of the involvement of digital currencies in illegal activities such as money laundering and terror financing. He is not alone in expressing these concerns either. In his annual budget speech, finance minister, Arun Jaitley, stated that the government

“will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system.”

India is hardly the only country to have given cryptocurrencies the cold shoulder in recent times. Only last year, governments of several countries set up committees to discuss and draft a framework for the regulation of these digital assets. China, in fact, went the extremist route and banned all initial coin offerings (ICOs) from being set up within its borders. Subsequently, the Chinese government also pressurized local exchanges into submission, forcing them to pivot their business to an international audience instead.

Even though Shaktikanta Das has little bearing on the Indian government’s final stance on digital currencies, his hostility against the asset class should not be taken lightly. Given his credentials, his words could be a telling tale of the ministry’s outlook towards bitcoin and other cryptocurrencies.

Featured image from Shutterstock.

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US: Wyoming Set Precedent By Creating New Asset Class For Cryptos, Hopes to Inspire Feds

The US state of Wyoming has now created a new class of assets in defining cryptocurrency as “Utility Tokens”, reports Forbes March 13.

As previously reported by Cointelegraph, the Wyoming state legislature passed House Bill 70 on March 6, which effectively exempts crypto from state securities regulations. The bill was signed into law by Governor Matt Mead March 8.

The new law excludes developers and sellers of tokens from state securities laws under the condition that they meet a certain number of caveats, namely that it must be used as a token for the exchange of goods and services and must not be marketed as an investment.

Co-founder of the Wyoming Blockchain Coalition Caitlin Long remarked on the important precedent set by the new law:

“The state of Wyoming is the first elected body in the world to define a utility token as a new type of asset class different from a security or commodity. This has been a hot topic in Washington D.C. recently, as the SEC considers cryptocurrencies to be securities, FinCEN says they’re generally money, and the CFTC views them as commodities. Now, however, you have a state coming out and defining utility tokens as a new form of property, and property is generally the purview of state law.”

Long and other members of the coalition believe that the new precedent may be a framework by which Washington will approach cryptocurrency regulation in the near future. Long added that, “I do believe the Wyoming approach will work under federal securities law and am optimistic the SEC will agree.”

House Bill 70 is one of five bills that have recently been turned into law in the state of Wyoming that aim to boost crypto and Blockchain businesses in the state. House Bill 19 amended the state’s money transmission laws that had previously prevented exchanges from effectively operating within the state; Coinbase and two other exchanges actually pulled out of the state in 2015. The remaining three pieces of legislation, all introduced by Long, aim to make Wyoming more competitive in attracting new crypto business.

House Bill 101 authorizes Wyoming corporations to create Blockchains to store records and the use of a network to identify shareholders and the acceptance of shareholder votes.

House Bill 126 allows the creation of “series LLCs” which are favorable to decentralized protocols as it enables LLCs to establish a compartmentalized series of members/managers, transferable interests or assets, and distributions to members. Senate Bill 111 exempts cryptocurrency from Wyoming state property taxes.

Speaking to Forbes, Governor Mead mentioned the proactive measures the state has been taking to turn Wyoming into, “a big technology state” including the establishment of the ENDOW Executive Council; Economically Needed Diversity Options for Wyoming.

Social Trading Platform eToro Updates Its Cryptocurrency Offering

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Appearances can be deceiving. That is why an unassuming man can flip burgers from a humble-looking food truck by day, while being copied with assets totaling at $12.75 million by night, without raising a single eyebrow. Currently one of the top traders on social trading platform eToro, 34 year-old Stephen Bliss has gone from practicing with a demo account to becoming an eToro Popular Investor, copied by thousands, with a return of 935% last year alone.

eToro’s revolutionary social trading platform has been likened to the ‘Facebook for traders,’ allowing users to interact with each other, exchange ideas, and join millions of other investors who have been automatically copying the leading traders in the community. Some of these traders achieve Popular Investor status, which gives them rewards such as monthly payments, generating a second revenue stream for them.

Since its inception in 2007, the easy-to-use platform has been at the forefront of making online trading accessible to almost anyone, regardless of background or location. While many other online trading platforms have floundered due to oversimplification and obtuse mechanisms, eToro has successfully managed to strike a balance between accessibility for beginners and improving upon important elements for experienced traders. eToro has gone on to solidify itself as the world’s leading social trading network for both short-term and long-term investments, offering instruments for both low and high-risk investments.

Now, investors can delve into the exciting world of cryptocurrencies and trade up to nine cryptos on eToro: Bitcoin (BTC), Ethereum Classic (ETC), Ethereum (ETHEREUM), Dash (DASH), Litecoin (LTC), XRP, Bitcoin Cash (BCH), NEO, and Stellar (XLM).

NEO and XLM are the latest additions to the platform’s ever-expanding cryptocurrency offering, following their breakout performances last year. NEO, a China-based cryptocurrency, established itself as one of the top 10 cryptocurrencies for 2017 by reaching a market cap in the billions and has continued to dominate the top 10 chart. XLM’s championing of an agenda to reduce poverty and facilitate banking services to bankless societies has also skyrocketed into the top 10 cryptocurrency list.

Crypto Needn’t Be Cryptic

Like its fiat currency offering, eToro’s cryptocurrency offering cuts through the fluff and places investors right where they want to be, without needing to download and install applications or setup multiple wallets before trading. The intuitive platform allows users to have complete and secure control over their accounts and funds, execute trades in real-time, and withdraw funds  without limitations. Its recently introduced CopyFunds investment strategies for cryptocurrency trading are set to become the industry standard for managed portfolio products. Moreover, the platform’s CopyTrader system allows investors to copy experienced traders and create a people-based portfolio.

With its diverse offering of cryptocurrencies and other financial instruments, eToro is hoping for more success stories like that of Stephen Bliss.

*Highly volatile investment product. Your capital is at risk.

*Past Performance is not an indication of future results

*The content is intended for information purposes only and should not be considered as an investment advice.

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R3 v. Ripple Lawsuit To Be Decided In NY As XRP Loses Its Appeal To CA Court

Ripple Labs Inc., the company behind the Ripple settlement system, has lost its opportunity to hold the court hearing over a contested contract with its rival R3 in its home state, California, Bloomberg reported March 13.

In September 2017, the R3 consortium filed a lawsuit in Delaware and New York against Ripple, claiming that the latter had violated a prior agreement between the two companies about the purchase of XRP digital currency. The contract included an option allowing R3 to buy up to 5 bln XRP tokens at a price of $0.0085 each at any time before the end of 2019.

Ripple further filed a counterclaim in California, accusing its former partner of infringing on a number of commitments associated with the agreement.

When the two companies began suing each other, the value of the contract in dispute was a little over $1 mln. However, after several months of court proceedings the price of XRP surged in value, significantly increasing the stakes as the 5 billion XRP in question are now worth about $3.85 bln.

A San Francisco state appeals court denied Ripple’s petition to appeal the order that dismissed its lawsuit against R3.

The procedure in San Francisco followed a verbal ruling made by a Delaware judge to dismiss R3’s own case in October 2017. The outcome of this legal battle now depends solely on the future decision of a New York court.

As the San Francisco-based Ripple claimed, having to bring the case before a New York court would cause the company “irreparable injury.”

Blockchain Technology Isn’t Just for Finance and Banking

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Despite what bitcoin and cryptocurrency skeptics may say, blockchain technology is here to stay. Just ask Walmart, IBM, or any of the traditional companies that are working on integrating blockchain solutions. Yet even among those who have a working understanding of blockchain technology, there is an underlying current that it can only help those in the banking and financial services sectors. Now, to be sure, banking and finance blockchain platforms are aplenty, and this is a good thing. But it foolish to say that blockchain technology only provides money-related solutions.

CB Insights recently released a research brief entitled “Banking Is Only The Beginning: 36 Big Industries Blockchain Could Transform”. The study examined over thirty different industries that could profit from the explosion of blockchain technology. And, despite the thoroughness of this list, it only begins to scratch the surface of the ways that blockchain is a disruptor. If blockchain really is the “new internet”, every aspect of everyday life can be radically impacted. Here are three unique ways that blockchain is changing up traditional industries.

Blockchain Can Change the Travel Landscape

Say hello to the Cool Cousin platform, a tech startup that has already launched a successful iOS app. The app allows locals to offer tips on where vacationers and tourists should go in their city. Travelers can discover new places by using Cool Cousin guides created by local residents. Cousins have the unique opportunity of giving visitors digital tours and pointing them to best businesses, restaurants, and attractions in their hometowns. Despite their recent success, Cool Cousin is working on blockchain implementation to take their app to a new level.

Cool Cousin’s blockchain development will hinge upon the use of smart contracts. Smart contracts will define and enforce the relationships between the platform participants, creating a set of checks and balances to maintain decentralization. Smart contracts will facilitate transactions between cousins and visitors, thereby fostering trust between the two groups. The platform will also implement the CUZ coin, its crypto token. CUZ coins eliminate the use of third parties and pave the way for cross border transactions and international payments. Travelers will save money while those who offer tips and advice will take home a larger share of the profits.

Blockchain Technology and Voting Systems

Another blockchain based platform, Follow My Vote, is looking to forever change the way elections take place. The use of blockchain technology allows for genuine transparency and auditability, of which there is a growing need in light of 2016’s election meddling. Every user can login into the portal and vote for their desired candidate(s). Each vote is anonymous and protected, but still publicly logged onto the blockchain. This means that anyone can audit the vote and follow the election process in real time. Users will be able to track their vote from the moment it is entered to the second it is counted, ensuring that the entire election process is secure and properly administered. In addition, the Follow My Vote platform allows for remote voting, saving the government money and sparing users’ precious time.

Decentralized Predictions Just Got Real

Not confined to a specific industry, the Augur platform is a decentralized predictive platform that rewards people for correctly anticipating future events. Users are presented with real-world scenarios like “Will the Democrats take the House in the 2018 midterms?” or “Who will win the World Series?” and are rewarded to correct predictions. If they buy shares with the correct outcomes, they will win real money prizes.

Not only does the platform create a way for users to earn money, it also aggregates large amounts of data to provide accurate forecasts about a range of topics. Augur gathers predictive data and creates marketable shares out of each event–for example, an outcome with a share price of $0.73 has a 73 percent chance of happening. It is estimated that this prediction platform will be more reliable than individual experts, opinion polls, and random surveys. The Augur platform and its forecasts can be used by myriads of businesses to estimate future revenues, run successful marketing campaigns, and launch new products into new target areas. The possibilities are endless.

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Coinbase Wallet Fixes SegWit Implementation Bug, Refunds Affected Users

The Coinbase wallet and exchange service has fixed a bug in the payment gateway system which caused users to lose their funds from Bitcoin transactions via the platform. The issue emerged two weeks after the cryptocurrency exchange announced the launch of Segregated Witness (SegWit) support for its transactions.

In their Reddit post on March 12, Coinbase user Dazzling_Substance shared a problem with the platform’s payment gateway when it failed to send Bitcoin to a merchant. The user suggested that the bug was caused by a problem in the Bitcoin Payment Protocol (BIP70) that provides communication between merchants and customers.

Dazzling_Substance suggested that Coinbase might have missed the update of the BIP70 protocol, subsequently causing the loss of coins he attempted to send:

“If you send payment to a merchant using a coinbase.com payment gateway, they will not receive the bitcoin and you will lose your coins due to a issue with their system (they have not updated the BIP70 to use segwit addresses and your coins are sent to a non-segwit address and are subsequently lost in their tracking system).”

The Coinbase team promptly commented on the issue to Cointelegraph, stating that the BIP70 payment protocol update has been implemented, but the problem emerged because the payment address requested was not SegWit-compatible. A Coinbase spokesperson stated that the issue has affected less than 30 customers and has been immediately fixed.

“As soon as we were notified about the issue we started working to resolve and the issue was fixed within hours. Less than 30 customers were affected by the issue and we’ve issued refunds to all customers.”

The BIP70 protocol was introduced by Bitcoin developers Gavin Andresen and Mike Hearn in July 2013 in order to improve Bitcoin payment services and provide safer transactions, preventing man-in-the-middle attacks.

On Dec. 14, US payment processor BitPay announced that it will require Bitcoin Payment Protocol-compatible wallets in order to resolve users’ payment problems such as underpayments and overpayments. On Jan. 10, BitPay acknowledged that some of the users have been inconvenienced by the requirement when they had to switch to BIP70-compatible wallets listed on BitPay’s support page.

Thought Network Patented Technology Brings Equality to the AI and Data Industries

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Artificial Intelligence is everywhere

Have you ever wondered how one day you searched “Best Smartphone of 2018” on Google and the next day you were bombarded with ads from smartphone companies? Or how watching a video on the ‘World’s Best Beaches’ on YouTube inevitably leads to plethora of holiday ads being shown on sites you are currently viewing?

As you might already understand, there aren’t millions of employees working at YouTube who personally follow you and suggest to you the most exciting videos or people monitoring your searches on Google to show you the most relevant advertisements. It is all done by computer coding and algorithms, or in other terms, by Artificial Intelligence, or AI.

General vs. Narrow Intelligence

Now, when many people hear about AI, they automatically imagine:

  1. a) intelligent robots that could make our lives easier, by helping us automate many tedious tasks and being our personal assistants;
  2. b) robots that at some point become too smart for us to control them, finally turn upon humans and start taking over the world (thoughts that are most likely inspired by “Terminator”).

These AI have what is called general intelligence. This means that, just like humans, they are proficient at many different and unique tasks – they can solve complex mathematical problems, identify animals, analyze the weather, speak, and more. The possibilities are endless.

But our current AI is far from being the intelligent machines depicted in Sci-Fi movies. The AI we have today have narrow intelligence, meaning that they are exceptionally proficient in once specific task, but can’t really do anything else.

AI in our lives

Some examples of artificial intelligence in our everyday lives include:

  • Google’s search engine, which is incredibly efficient in showing the most related results to your search input;
  • Email platforms that are incredibly effective at detecting spam email and automatically moving them to the “Spam” category;
  • Amazon knows exactly that when you buy a new pot; then you might also be interested in a new cookbook, an apron and a set of cutlery; and so on.

As you might see, AI is already a part of our everyday lives. But how do these platforms know all of these things? How do they know your preferences or what to show you? How did AI become so effective?

AI training

Artificial Intelligence starts off quite similar to humans – not very efficient at doing anything. To make it work like we want to, AI has to be trained. It has to learn, make certain connection, recognize patterns, and start making decisions based on the information gathered.

For that, humans have to feed enormous amounts of training data to the AI, so it could start learning and making connections.

For example, if you’d want to create an AI that would be incredibly efficient in recognizing bananas on pictures, then you’d have to give the AI millions of pictures of bananas. The algorithm starts to analyze these pictures and makes certain connections. After seeing characteristics like yellow, curvy, eaten by primates, and so on, repeating the patterns over and over, it comes to a conclusion that every banana is like that. When it has to identify a banana on a random picture it immediately starts looking for a yellow curvy object.

The baseline is that, to make artificial intelligence efficient, it needs vast amounts of training data. Gigantic companies like Google, Facebook, and Amazon have extensive amounts of information to work with, which is exactly why these companies’ platforms are so efficient.

Problems with AI training data

But problems appear when it comes to smaller companies and organizations. While Facebook boasts over 1.4 billion daily active users, and Google processes almost 2.5 million searches every minute, smaller organizations and businesses rarely have any data to be used for training AI. This means that the only organizations capable of developing artificial intelligence in this way are large multi-billion dollar corporations, big data companies, and government-backed research facilities.

Just finding enough data to be able to train AI is a strenuous task on its own, not to even mention finding the exact right data for your AI, especially when you don’t have millions of dollars laying around or a user base of a few million.

AI and data industry is monopolistic

Another problem comes with the fact that these organizations that do have the sufficient amounts of data to train AI are not particularly keen on sharing information about their algorithms and what their intentions are behind developing their algorithms. Leaving the common user in the dark about how their personal information is used, how these complex algorithms operate and what is done with the results.

These large internet companies know more about you than you might think, and quite frankly, more than you might like. You have no way of knowing exactly what Facebook does with your personal information, or how Google utilizes the things you have searched for in their engine.

Although the amount of data created every year grows exponentially, allocation of it is hugely disproportionate – a few large organizations have access to vast quantities of data, while the majority has almost nothing to work with.

Currently, the advancements in AI technology are not limited by our ability to create smart and functional algorithms, but by the availability of useful data to train these algorithms.

Most, if not all, world-changing innovations have started off small, but with artificial intelligence finding a way to realize an idea might prove to be almost impossible, without having access to vast amounts of information.

Maybe someone comes up with a brand new way to create self-driving cars, that would eliminate the problems we currently face in this industry, but without having a way to gather billions of miles worth of driving data, making such an invention a reality is impossible.

Thought Network is changing the current unequal paradigm

Thought is an AI and blockchain company changing the current, unreasonable situation with the AI and data market by creating a transparent and decentralized platform. It creates a rich ecosystem where the community is in charge of the algorithms and the data. Users can purchase and sell information, develop algorithms and sell the access to other users, creating a place where even the smaller companies have access to data that they can use to innovate and develop the field of artificial intelligence further.

“In the current paradigm, every piece of data is routed through servers, stored in data centers, and compiled and sifted through big data analytics and AI algorithms.” explains the CEO of Thought, Professor Andrew Hacker. “Thought introduces a new paradigm – a platform that combines data analytics and artificial intelligence to change the way the world creates, processes, interprets, and disposes of the near-limitless amounts of information being created.”

Thought is backed by Harrisburg University of Science and Technology and holds a patent for their innovative way of utilizing data. Thought is embedding every bit of data with artificial intelligence, making traditionally ‘dumb’ information, that only become valuable in the context of applications, smart and able to act on their own.

Professor Hacker continues, “In the Thought paradigm there is no difference between the data and the application layer; they are one and the same. In Thought, the data is smart and takes action as soon as it is created.”

Thought’s Smart Data patent applies to creating data containers called Nuances that store the information as well as a piece of application code that makes it able to function on its own. Nuances can communicate with each other and work together to realize their goal. No longer does data have to go through an extensive process to be analyzed. Instead, it can analyze and categorize itself.

“Thought has built a foundational, information transformation network with data as the commodity. The ecosystem hosts data-hungry applications for researchers in AI and cognitive computing, in diverse industries such as healthcare, transportation, government, media, utilities, and finance. The ecosystem is fuelled by monetization of sensor-based data and analytically rich data sets”, explains Professor Hacker.

Conclusion

Right now, only the largest organizations have access to sufficient amounts of valuable data to truly develop artificial intelligence, while the smaller guys are left out of the game, leaving many potential ground-breaking ideas undeveloped.

But by making AI and data more accessible to regular people who don’t have the luxury of having billions of dollars laying around, Thought can open up the field of AI to the smaller teams who may have incredible ideas. It encourages further development and provides the means to make these ideas happen.

Thought’s Pre- ICO is live now and lasts until the 13th of March. The main ICO starts on the 14th of March. To participate in the ICO and learn more about Thought please visit https://thought.live and to keep up-to-date with the latest news join Thought’s Telegram chat at https://t.me/thoughtcommunity  

What Should Be in an ICO White Paper? Expert Take

In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from Blockchain technology and ICO funding to taxation, regulation, and cryptocurrency adoption by different sectors of the economy.

If you would like to contribute an Expert Take, please email your ideas and CV to

a.mcqueen@cointelegraph.com

The rising popularity of Initial Coin Offerings (ICOs) — and an accompanying spate of fraud and market volatility — has prompted an overdue debate in Washington, D.C., and around the world, about the proper regulatory policies for ICOs and cryptocurrencies more generally. Some of the most common questions involve the appropriate division of authority between the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), and whether their authority should reach deep into the heart of the cryptocurrency ecosystem, the spot market. Still, others contemplate whether or not an entirely new or alternative regulatory regime is needed for cryptocurrency and token fundraisers, not only here but also in Europe and elsewhere.

This article is drawing from the Congressional testimony on cryptocurrencies, which intends to consider the current regulatory approach that regulators are using to monitor and oversee cryptocurrencies and ICOs and how to achieve further regulatory clarity in these markets.

The disclosure system embodied in US Securities laws is largely one where promoters share, among other things, material information publicly about their company, management, and securities being offered, as well as their intended use of proceeds. This information is then filed with the SEC. Most ICO disclosures, by contrast, are facilitated via currently unregulated “whitepapers” focusing largely on the existing technology or technology under development or to be financed via the offering. There is, as a result, a large gap between the disclosures required in an S-1 (and arguably Form 1-A) and that which is provided in most whitepapers.

Buyers of ICO tokens—whether they are investors seeking to profit or technology users seeking to support and participate in an innovative product— would expect some disclosures in order to make a purchase in an informed manner. These disclosures, some of which entrepreneurs themselves have identified, are especially relevant as ICOs transition from technical expert ecosystems to the distribution of instruments that are ever more likely to attract everyday investors and the retail public.

Promoter’s location

At least one credible academic study notes that in roughly 32 percent of ICOs, it is not possible to identify the issuing entity’s or promoter’s origin. This creates serious information asymmetries on the part of the investor. Without this information, it becomes impossible to know or identify what rules and legal protections might be afforded to investors. Further, investors have few means by which to contact relevant public authorities in case of fraud, theft or loss. ICO whitepapers should, therefore, set out a detailed statement (beyond a simple PO box) of where the issuer and its key management are located. Without a verifiable geographical address(es), ICO whitepapers should not be permitted for use in raising funds.

Problem and proposed technology solution

For most of the history of US Securities law, no information was more important for investors than the issuer’s financial statements. By being able to scrutinize balance sheets, cash flow and income statements, investors could evaluate a company’s past performance, make informed guesses about its future performance and profitability, and make an estimation of the value of a company’s securities. Due to the centrality of financial statements in securities offerings, an entire ecosystem of third party auditors, accountants and credit rating agencies were developed and relied on to ensure the accuracy of financial statements and their compliance with best practices.

ICOs tend to serve a different purpose from most traditional Initial Public Offerings (IPOs). Instead of funding industrial companies transitioning into a more mature cycle of development, ICOs involve products developed by startups identifying technology-based problems and proposing the sale or financing of technology-based “solutions”. In return for financing, promoters offer coins with varying currency, utility or securities features.

For most of these offerings, it is not a company’s past performance, or even financial statements, that are the window through which value is perceived, but more the venture’s technology proposition. Consequently, ensuring that investors (including retail buyers) understand the basic contours of the underlying technology solution is paramount as ICOs become more popular means of fundraising.

To that end, an optimal disclosure system for ICOs would require to the extent possible a “plain english” description of the technology problem and solution. Furthermore, for larger fundraises, the more technical parts of the whitepaper would ideally be subject to a system of third party validation (a “technology audit”) confirming that the solution disclosed in the whitepaper complies with sound engineering and mathematical principles. ICO promoters could be required to disclose just what if any third party audit of their solution was conducted (and if there was no such audit, then this, would be affirmatively disclosed), the material features of that auditing system, and the results of the audit. Meanwhile, all code, regardless of the size of the fundraise, would be posted to a public code repository, such as Github, so potential buyers can conduct due diligence on the code itself or other proxies for the strength of the code.

Promoters should avoid hyperbole when describing their solutions, an endemic problem in white papers – and should also be required to identify an objective basis for all forward-looking statements. Along these lines, disclosures should be made as to whether post-ICO financial statements will be provided to token holders.

Description of the token

Tokens can have a variety of different qualitative and economic features, for example utility, securities and currency. If the tokens will be based on a technological format that must comply with certain rules, such as the ERC20 standard, the disclosures should clarify what that means to a typical holder. Similarly, if special efforts will be made to list a token, such as to list a securities token on a regulated alternative trading system (ATS), or if there are trading restrictions on the security, those facts should be disclosed in a manner that is clear to the token holder. Token descriptions should relatedly indicate the intended use of the coins issued in the offering, their quantity, when and whether the founders or advisors will hold reserve coins, and how they may choose to liquidate them (including whether there are any restrictions on their ability to sell). Promoters should also be required to disclose the intellectual property/ownership of the company’s protocol (including which elements have been borrowed from elsewhere), as well as detail with specificity what legal rights holders of the tokens receive.

Blockchain governance

Investors should be informed as to how the supporting infrastructure operates, and how it will impact the governance of the token. Along these lines, the consensus mechanism for a virtual currency’s Blockchain should be disclosed, along with an overview of how governance decisions and other decisions affecting the network, for example software upgrades, will be coordinated among the various stakeholders such as developers, users and miners.

Qualifications of the technical team

Information about the business experience of executive officers and directors is a common disclosure requirement in registered offerings. They give investors a sense of the quality of management, and likely success of the company once a company goes public. In ICOs, where firms have limited histories and the technology at issue may be exotic, similar information about the offering’s technical team can be especially valuable. Coders have varying backgrounds, with some more (and much less) qualified, credentialed or experienced than others. In order to provide investors with some sense as to the expertise and credibility of the white paper, founders should be required to provide all material information relating to key engineering experience, skills, qualifications and other relevant attributes. Where relevant, developers should also be required to provide links to their previous work on a public code repository.

Risk factors

ICOs should include disclosures concerning the most significant risk factors affecting token holders in the offering document. Although most investors likely realize that even successful ventures might be later disintermediated by more efficient upstarts, a token holder may be surprised to find that the product does not yet function as intended or may develop a new use or purpose altogether depending on the development of the technology or, perhaps even less predictably, the wishes of the participants in the ecosystem. Holders should also understand the larger sectoral risks as well, including changes in the industry that could relegate some blockchain designs to more niche roles in the sector, and render many tokens worthless. Critically, buyers must be made fully aware of their potential vulnerability to hacking, data-loss, and disruption, as well as legal issues like privacy concerns and data portability across borders.

There are undoubtedly other important disclosures that could and should be operationalized in ways that are as effective and efficient as possible. But here’s to moving in a direction for the ICO market that would be good for legitimate projects and investors as well.

The views and interpretations in this article are those of the author and do not necessarily represent the views of Cointelegraph.

Chris Brummer is a Professor of Law at Georgetown University Law Center and Director of the school’s Institute of International Economic Law.

Grayscale Files to List Ethereum Classic Trust on Publicly-Quoted OTC Market

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Grayscale Investments has filed to list its Ethereum Classic Trust on a publicly-quoted over-the-counter (OTC) market, a move that will provide investors to buy this fund through retail brokerage accounts.

Grayscale managing director Michael Sonnenshein made this announcement during an interview with CNBC, revealing that Canaccord Genuity — the trust’s broker-dealer — had filed an application to have the Ethereum Classic Trust quoted on the OTCQX market later this year.

Once the trust is publicly-quoted, retail investors will be able to purchase shares through brokerage platforms and hold them in tax-advantaged accounts like IRAs. At present, shares are only offered through private placement and are restricted to accredited investors who purchase at least $10,000 worth of shares.

The Ethereum Classic Trust will be Grayscale’s second product to be quoted on an OTC market. The firm’s most well-known product, the Bitcoin Investment Trust (OTCQX: GBTC) has been publicly-quoted since 2015 and is a favorite among retail investors.

Shares, however, are not currently redeemable for the underlying assets, so its price often diverges from its net asset value (NAV) based on supply and demand. Demand for GBTC is so high that its shares regularly trade at a 60 percent or greater premium over its NAV. On Monday, GBTC shares closed at $15.16, approximately 67 percent over the fund’s $9.07 NAV, according to data from pseudonymous trader BambouClub.

As CCN reported, Grayscale has launched a slew of new funds in 2018, doubling the size of its product line. Most notably, the firm opened a fund that holds the five largest cryptocurrencies by market cap, providing investors with exposure to approximately 70 percent of the aggregate value in the market.

Earlier this month, Grayscale also launched individual trusts for Ethereum, Ripple, Litecoin, and Bitcoin Cash, adding to a lineup that already included the Bitcoin, Ethereum Classic, and Zcash Investment Trusts.

Coinbase, best known for its cryptocurrency exchange and brokerage platform, also announced this month that it will launch an investment product that tracks the market cap-weighted performance of the cryptocurrencies available on Coinbase’s platform. Unlike with Grayscale’s products, investors can purchase Coinbase Index Fund shares with Bitcoin and several other cryptocurrencies.

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Blockchain Platform to Connect Self-employed Domestic Workers and Customers With No Fees

A company that empowers service workers and helps them become entrepreneurial is planning to replace its app with a new Blockchain-based platform, helping providers with hard-earned reputations to win more business.

Crafty is initially going to launch in Brazil but believes its marketplace can transform the “extremely inefficient” service sector worldwide by ensuring a higher proportion of revenue goes to self-employed workers on the front line.

“Decent working conditions anywhere”

The founders of Crafty have already tested their concept through an app called Diaríssima, which launched in 2016. The company has described this as a minimum viable product (MVP), as it focused solely on connecting household cleaners with paying customers.

After opening for business in São Paulo, Diaríssima expanded nationwide and now boasts tens of thousands of customers and service providers, the company states.

Crafty, Diaríssima’s replacement, is to increase the number of services on offer considerably, and opportunities listed in its white paper include cooks, tutors, nannies, caregivers, gardeners and drivers. Underpinning all of this will be a Blockchain-based system where trust is established with every interaction between customers and providers.

This allows self-employed workers, who will use the platform for free without incurring any intermediary fees, to benefit from their reputation. In time, Crafty is planning to use artificial intelligence (AI) to offer “meaningful recommendations” to prospective customers who are searching for service providers.

Crafty is hoping to tackle five of the 17 Sustainable Development Goals established by the United Nations, one of which is “ending poverty in all its forms.” The company believes its lack of fees will result in higher frequencies of use, create a more level playing field where prices are more difficult to dictate and result in “decent working conditions everywhere.”

First Brazil, then the world

There are a few hurdles Crafty is determined to tackle. Among them is the fact that, on the face of it, a platform using cryptocurrency seems to be an unusual choice in a country where 40 percent of the adult population do not have a bank account (according to research by Instituto Data Popular.) Here, virtual accounts including debit cards would enable Crafty users to receive money and spend it opening new opportunities to 55 mln Brazilians and making cryptocurrency available to people from all socioeconomic backgrounds.

The company says it wants to encourage use of Crafty (CFTY) tokens in local commerce by negotiating partnerships with business groups and it claims this would enable token holders to access prepaid credit for everyday items such as mobile phones and electronics.

Crafty’s website and app have initially been written in Portuguese, but the company says its platform’s design means translating into other languages is easy.

Once a 45-day ICO concludes on April 9, the company is planning a massive promotional drive to attract new users, and a large proportion of its funding is being earmarked for marketing. It is expected that a virtual wallet will be integrated into Crafty accounts by September 2018. Additional services that providers can offer are going to be added every few months, with the platform forecasting that 150 professions will be covered by March 2020.

The company is confident that its idea can improve the lives of service workers around the world and plans to expand internationally in the coming years. Eventually, it hopes imperfections in the market will be eliminated, helping incomes to rise and granting more people access to a healthy, comfortable and financially secure life.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.