Japan’s Financial Regulator to Introduce New ICO Regulations

Japan’s financial regulator is set to introduce new Initial Coin Offering (ICO)

regulations to protect investors from fraud, local news outlet Jiji Press reported Dec. 1. According to “informed” sources cited by Jiji, business operators conducting ICOs will be required to register with Japan’s Financial Services Agency (FSA). The agency is reportedly planning to submit bills revising financial instruments, exchanges and payment services laws to the ordinary parliamentary session that starts in January.

This action has been undertaken “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals' investment in ICOs for better protecting them.” A study reported by Cointelegraph this July identified 80 percent of the ICOs conducted in 2017 as scams.

As Cointelegraph Japan reported last month, the FSA Study Group on Virtual Currency Exchange industry conducted its tenth meeting to discuss ICOs. The tokens emitted during ICOs where classified into three categories: virtual currencies without issuer, virtual currencies with issuer and tokens with issuers that are also obliged to distribute revenues. According to the report, the first and second token classifications are subject to settlement regulation such as the Financial Instruments and Exchange Act. The third of ICO tokens is subject to investment regulations like the Financial Instruments and Exchange Act.

Estonia: Amendments to Anti-Money-Laundering Regulations Will Tighten Crypto Regulation

The Estonian Ministry of Finance will shortly add amendments

to a recently-passed financial bill that are meant to “tighten” crypto-related regulation, Estonian financial newspaper Äripäev reports Nov. 28. According to the article, a new version of the Anti-Money-Laundering (AML) and Terrorist Financing Prevention Act came into force this week in Estonia, conforming legislation to the EU’s so-called “Fourth Money Laundering Prevention Directive.”

The regulation introduced this week reportedly introduces “virtual currency exchange service providers” and “virtual currency payment service providers,” while before there only was “alternative means of payment service provider.” Still, the Financial Supervision Authority (FI) has since announced that cryptocurrencies and the companies offering crypto-related services introduce money laundering risks, which is reportedly the reason for the new amendments, according to Äripäev.

As Cointelegraph reported, Estonia has rolled back its plans to release Estcoin, a national digital currency, after the President of the European Central Bank Mario Draghi criticized the initiative. Canada is also looking towards more regulation to prevent crypto from being used for money laundering, as the Canadian House Finance Committee recommended during its review of the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA) in mid-November.

Article Produced By
Adrian Zmudzinski

Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.

https://cointelegraph.com/news/crypto-markets-meet-december-in-green-bitcoin-trades-above-4-200

 

David https://markethive.com/david-ogden

Judge Refutes SEC’s Claim on Blockvest ICO Token Being a Security,
Will Go to Trial

  

The crypto world received a surprising win from the U.S. justice system today.

Earlier this week, a California judge slapped down an SEC attempt to classify an ICO token as a security. U.S. District Judge Gonzalo Curiel of the Southern District of California declared yesterday that the Securities and Exchange Commission (SEC) has failed to provide adequate proof that the Blockvest ICO tokens should be considered securities. For that reason, Judge Curiel has turned back a request from the SEC for a preliminary injunction against the backers of the Blockvest ICO and its BLV tokens. It’s the first federal decision finding that the SEC hasn’t shown a digital asset offered in an ICO is a security. This is a big win for the crypto community.

As reported by CCN.com, the SEC uses three crucial metrics to determine whether or not a token is a security. These metrics date back to the 1946 SEC v. Howey Co. case. That case led to a landmark decision that governs the SEC’s enforcement of securities laws to this day. The SEC claimed that the Blockvest ICO involved the illegal sale of securities in the form of tokens, and that the tokens failed to pass the Howey Test. Judge Curiel disagreed with the evidence presented by the SEC and was not satisfied with the SEC’s arguments.

The judge took particular issue with one specific requirement: in order to prove a token is a security, the SEC needs to prove that the tokens were sold to investors with the promise of expected profits. Judge Curiel was reportedly not convinced that investors had expected to make a profit on the purchase of Blockvest ICO tokens. Instead, Judge Curiel was convinced that the tokens were simply used to test the platform – not as a genuine investment.

The Blockvest ICO Used a Fake SEC Logo to Feign Regulatory Approval

Blockvest, for its part, appears to be far from innocent in this case:

Blockvest was one of the shadier ICOs of the last year. Part of the problem was that Blockvest appeared to create a fake SEC logo to feign approval. Blockvest created a logo for a fake organization called the Blockchain Exchange Commission, apparently for the sole purpose of convincing investors that it was a regulated entity. Blockvest allegedly created the Blockchain Exchange Commission (complete with an official-looking “BEC” symbol) because they wanted to convince investors that Blockvest’s ICO had been approved by a legitimate regulator. The BEC symbol looked suspiciously like the SEC’s symbol.

The Blockvest ICO Attracted Just 32 Investors

Ultimately, the Blockvest ICO failed to generate a splash in the crypto community – despite the best efforts of the Blockvest team. The project received less than $10,000 in total investment from just 32 investors.

The Judge Believes Blockvest Tokens Pass the Howey Test

The Howey Test refers to the 1946 decision in the case between the SEC and the Howey Co. The test states that something can be considered a security if it has certain properties associated with a security. Judge Curiel clearly believes that the Blockvest tokens pass the Howey Test. Therefore, they should not be considered securities.

Here’s how CCN.com summed up the issue:

“According to the judge, the SEC was unable to prove what promotional materials that investors – who numbered only 32 and whose total investment was under $10,000 – had responded to. While the SEC was able to demonstrate that investors were purchasing coins due to evidence shown on checks cashed, the judge did not feel this satisfied the evidence requirements in the Howey Test.”

Part of the reason the judge slapped down the SEC’s request was because of intelligent defending by the Blockvest team.

Blockvest Gave a “Brilliant Defense”

Blockvest’s defense has been described as “brilliant”. Blockvest claims its tokens were only used for testing of the exchange – nothing more. The defense’s claim rests on the idea that most investors were actually well-known friends of defendant and Blockvest ICO creator Reginald Buddy Ringgold III. Blockvest also faced scrutiny for claiming to have raised $2.5 million during the ICO. Blockvest, however, defended that claim by stating that the $2.5 million figure was “overly optimistic” and relied on a single investor. That deal later fell through. The judge ultimately agreed with Blockvest’s defense. Blockvest’s BLV tokens should not be considered securities because the way they were marketed and sold did not meet the standard of a security sale. Thus, BLV tokens cannot be declared as securities at this time.

Here’s how the judge summed up his decision, as reported by Law.com:

“Based on the above, the Court DENIES Plaintiff’s motion for preliminary injunction. The Court also DENIES Defendants’ ex parte motion for evidentiary hearing and leave of court to file supplemental declarations. (Dkt. No. 30.) The Court also STRIKES Plaintiff’s Supplemental Declaration of David Brown and Defendants’ Opposition and Response. (Dkt. Nos. 39, 40.)”

After the decision was announced, Blockvest’s assets were unfrozen. However, the battle between Blockvest and the SEC is far from over.

Blockvest
Isn’t Off the Hook and Could Face Penalties for Using the SEC’s Logo

The judge has struck down the SEC’s claim that Blockvest tokens should be considered securities. The judge feels that the SEC has insufficiently proven previous wrongdoing on the part of Blockvest, which means there should be no reason for the injunction. However, that doesn’t mean Blockvest has escaped without penalty.

The biggest problem with Blockvest could be in the use of the SEC logo. As mentioned above, Blockvest fabricated an organization called the Blockchain Exchange Commission (BEC). The logo for that organization looked identical to the logo of the SEC. The fake BEC logo was displayed on the Blockvest ICO website, indicating to users that the Blockvest ICO had received official approval from the SEC. The SEC, as you can imagine, does not take kindly to people abusing its logo, and Blockvest could face further penalties.

Conclusion:
This is Good News for Future ICOs Seeking to Avoid Repercussions

The Blockvest ICO was one of the sleaziest ICOs in the crypto space. The creators of the ICO went so far as to create a symbol that looked like the SEC logo. Despite the low-quality ICO, the SEC was still unable to prove that Blockvest’s tokens could be considered securities. This case is a big deal: it’s the first federal decision on whether the SEC can regulate digital assets from ICOs as securities. It remains to be seen what impact this will have on other ICO cases moving forward.

Article Produced By
Bitcoin Exchange Guide News Team

https://bitcoinexchangeguide.com/judge-refutes-secs-claim-on-blockvest-ico-token-being-a-security-will-go-to-trial/

David https://markethive.com/david-ogden

The Making of the First US
ICO Fraud Case

In common law systems, it is precedent that informs judicial approaches

to new and previously unaddressed matters. The precedent that will likely shape the body of U.S. case law on fraudulent initial coin offerings (ICOs) is currently being forged in a federal court in the New York borough of Brooklyn, where a 39-year old entrepreneur, Maksim Zaslavskiy, has pleaded guilty to committing securities fraud. The development that will most likely result in a landmark decision – the jury will gather in April 2019 to decide on a sentence – is yet another twist of a now 14 month-long effort, involving both the U.S. Department of Justice and Securities and Exchange Commission (SEC). Previously, the process has already yielded a fateful ruling by a federal judge who in September established that securities law is applicable to ICO-related cases.

The case that is poised to become so consequential for the whole ICO space deals with two ventures that neither issued a token nor developed any blockchain-powered infrastructure: REcoin and Diamond Reserve Coin both only existed on paper. Yet it also makes perfect sense that the authorities first went after the most brazen instances of ICO fraud, the ones that hurt rookie retail investors the worst and inflicted the most reputational damage on the industry.

When the SEC first filed a complaint against Zaslavskiy in a federal court in September 2017, it was estimated that REcoin and Diamond Reserve Coin ICOs resulted in around 1,000 investors losing some $300,000. Having fallen for Zaslavskiy’s aggressive marketing campaign, these people were led to believe that they either invested in a digital asset that was backed by real estate located in developed countries (REcoin), or purchased a tokenized membership in an elite club for wealthy business people, with physical diamonds in the company’s custody underlying the value of tokens.

In fact, though, they were buying “worthless certificates,” as U.S. district attorney, Richard Donague, put it, on Nov. 15, 2018, Zaslavskiy admitted in his guilty plea: “We had not yet purchased any real estate.” He now faces up to 5 years in prison, pending the decision of a jury panel. The regulator is also filing a civil lawsuit against Zaslavskiy.

The making of a fraudster

The Ukrainian city of Odessa, overlooking a scenic coastline of the Black Sea, is known for its vibrant spirit and unique culture. Throughout both the Imperial and Soviet periods of its history, the city has been home to a large Jewish community. As the final years of the USSR saw the liberalization of immigration policies, many Odessan Jews chose to leave for either Israel or the West. Born in Odessa, Maksim Zaslavskiy was 12 when his family relocated to the U.S. While Maksim was destined to make ICO history, his brother, Dmitry, chose a banking career and later became an executive director for Morgan Stanley. Zaslavskiy’s social media pages, as well as websites of many organizations he ran at various points of time, were either deleted or became unavailable in the wake of the high-profile investigation into his activities. The main source of information about his pre-trial life is now the four-hour interview to the SEC representative that he gave in September 2017, of which the Fast Company magazine managed to obtain a transcript.

In 2003, Zaslavskiy received his degree in finance from Baruch College, followed by a LLM from Yeshiva University’s Cardozo School of Law three years later. He worked as an IT consultant for several banks before starting his own international business, whose nature is difficult to infer from the interview. Zaslavskiy also claimed to have been involved in real estate business since the age of 18, yet Fast Company’s investigation failed to verify his employment with the firms he claimed to have worked for. According to the interview, the 2008 crisis became a major blow for Zaslavskiy’s business, further entrenching him in his resentment of the U.S. financial system. He turned to charity work, founding a philanthropic organization called Live Love Laugh. However, it is impossible to say whether the ambitious statements on its website (which is now down) were ever backed by any real actions, since the entity appears to never have been properly registered.

Zaslavskiy has also written at least three books (under the name Avi Meir Zaslavsky) that can be still found on Amazon. These are how-to guidebooks on the ins and outs of real estate business. Another one, which appeared around the time his two ICOs were in full swing in August 2017, sets out to explain the reader that “what you perceive and use as money is designed in such a way that the wealth created by the economy truly benefits only large banks and multinational corporations.” Apparently, the book was meant to lend credibility to Zaslavskiy’s claim for intellectual leadership in the crypto space, as its press release presents him as “one of the world’s leading currency decentralization proponents.” The publicity campaign around the book provides a glimpse into Zaslavskiy’s approach to marketing himself and his ventures: bold, extravagant, overblown. Unsurprisingly, this style carried over to the way his two ICOs were presented to potential investors.

Real estate tokens and Initial Membership Offerings

For someone disenchanted with both the traditional financial system and traditional means of making money, the ICO rush of 2017 presented innumerable opportunities. The beauty of the ICO model was that it opened up the world of venture capital, previously reserved exclusively for professional investors, to anyone with a few spare dollars and some interest in the uncharted space of blockchain applications. The flipside of it is that some of the newcomers were unable to tell legitimate projects from outright scams replete with red flags.

Megalomaniac language and exaggerated promises are usually telltale signs of something not being right with the venture that’s taking off. Zaslavskiy’s projects had both. REcoin, announced in June 2017, presented its founder as a “Real Estate guru” and proclaimed that the 101REcoin Trust held properties “in developed and stable economies like the USA, Canada, Japan, Great Britain, and Switzerland” without providing any evidence in support. Also, an “international team of attorneys and programmers” was allegedly there to “work tirelessly” on increasing token holders’ fortunes. As the court proceedings later revealed, no such team ever existed.

In August, after facing the first signs of SEC interest to REcoin, the “Entrepreneur, Philanthropist, and Author Max Zaslavsky” began his marketing campaign for an allegedly diamond-backed digital asset, the Diamond Reserve Club token. The release (beginning with “If the Holy Scriptures have taught us anything at all…”) touted a brand new Initial Membership Offering model, which was supposed to tokenize investors’ participation in a large ecosystem of interconnected businesses. It also suggested that the tokens could be inherited by the investors’ grandchildren. One would think that the theatrical language and gargantuan assurances of the two ICOs’ public-facing documents would only make any reasonable person scoff. Yet from July through September Zaslavskiy and his accomplices managed to amass around $300,000 before the SEC took the matter to court.

The fallout

On Sep. 29, 2017, the SEC brought a civil complaint to the U.S. District Court for the Eastern District of New York against Zaslavskiy and his two companies for violating U.S. securities laws. Recoin and DRC responded on their websites with a joint statement that argued that it was due to “lack of legal clarity as to when an ICO or a digital asset is a security,” suggesting that their operations were not within the SEC’s purview.

However, the Feds seemed to disagree. On Nov. 1, Zaslavskiy was apprehended by FBI agents and criminally charged with a conspiracy to commit securities fraud. In early December, he pleaded not guilty and secured a $250,000 bail backed by his family’s Brooklyn house. In February, Zaslavskiy’s defense filed a motion to dismiss the indictment on the grounds of inappropriate application of securities law to cryptocurrencies. Yet both the DoJ and SEC insisted that REcoin and DRC tokens passed the Howey test – a legal standard that determines whether a contract is a security.

In September, U.S. district judge Raymond Dearie concluded that for the purposes of the case, the tokens could, indeed, be treated as securities, potentially setting a precedent that could shape the future of ICO regulation. The judge was also unequivocal in characterizing the nature of

Zaslavskiy’s enterprises:

“Stripped of the 21st century jargon, including the Defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds.”

Article Produced By
Kirill Bryanov

https://cointelegraph.com/news/the-making-of-the-first-us-ico-fraud-case

David https://markethive.com/david-ogden

David https://markethive.com/david-ogden

Introduction: A Statistical Analysis Of ICO Performances
In Differing Market Conditions

These past several months, an analysis of ICO performances in the midst of varying market volatility was conducted by the data science team at Lunar Digital Assets. Intuition would probably lead a typical retail investor to believe that an ICO will perform better in bull markets as opposed to bear markets (and in stable markets which are void of any particular direction).

A SURVEY OF 288 CRYPTO INVESTORS:

At the inception of the idea for this study, we were curious to see what cryptocurrency traders and ICO investors thought regarding the performances in bull and bear markets. So we asked various networks of traders and investors a fairly simple question. The results were astoundingly favored towards bull markets, as most would expect. However, it should be pretty noteworthy that 29% of those surveyed disagreed with the majority. (29% because the 12% that voted for «Anytime» would be investing in bull markets as well.) In hindsight, we probably should have had «I don't know» added to the list of choices.

SURVEY RESULTS: WHEN'S THE BEST TIME TO BE INVESTING INTO ICOs?

• Bull Markets: 171 (59%)
• Neutral Markets: 40 (14%)
• Bear Markets: 35 (12%)
• Anytime, doesn't matter: 33 (12%)
• Never: 9 (3%)

In this analysis, we aim to bring credence to or dispel this commonplace notion using statistical analysis and hypothesis testing. We strongly believe that this study is especially helpful in the relatively young market of cryptocurrencies and initial coin offerings, whereas traditional financial markets have a much longer history and established patterns and trends. We will attempt to answer the question that everyone thinks they know, but doesn't really know: Do ICOs really—statistically—perform better in bull markets?

DATA SCRAPING, CLEANING, & EDA

DATA OVERVIEW AND EXPLORATORY ANALYSIS: FINDING RELIABLE DATA IN THIS FRAGMENTED, YOUNG MARKET CAN BE CHALLENGING.

The data for this study was acquired from Coinist, which provided a sample data size of 457 initial coin offerings. Although we are aware that there were many more ICO's conducted, we believe that 457 is an ample size to draw inferences from. Coinist was also the only data source that readily had ROI information (the figures were also spot checked for accuracy), and went as far back as 2013 up until the data the captured in May 2018 when this study was being conducted.

As basis of analysis, we will be using each coin’s Return on Investment (ROI) since the ICO Ending date as a measure for investment performance. Due to the varied nature of ROI across ICOs, I will be using a common logarithmic function (Base 10) of each coin’s ROI as reasonable means of comparison. This is especially useful as we are concerned about relative performance in different market conditions and not an associated scalar value.

CAPTURED DATA: 

1. Name of Coin
2. 1-Hour % Change
3. 24-Hour % Change
4. Weekly % Change
5. ICO Date (last day of token sale)
6. ICO Price
7. Current Price
8. ICO Return on Investment (ROI)

DATA CLEANING

We did not find any major issues with the data other than one mislabeled adte for the coin APX. The ICO date was set to May 21, 1970. While cross referencing with other sources, we had determined and fixed the APX ICO date to May 21, 2017. Outliers: NXT's overall ROI of ~24,000% was an obstacle to proper comparison and analysis. Despite being a significant outlier (the next best performer was Ethereum at ~1,900%), we decided to keep this data and regularize it via a common logarithmic function for analysis.

EXPLORATORY DATA ANALYSIS

The goal of EDA is to visualize the data in different perspectives to glean additional insights for further analysis, anomaly detection, and data consistency. In this section, we will visualize the data from a high level. First, we wish to explore the pace of ICOs and visualize the rise of ICO as a means of capital funding: We see a staggering yet unsurprising increase in ICOs in 2017 followed by a decline in 2018 YTD. However, we would not be surprised to see the annual 2018 value exceed 2017’s ending tally. It should be noted that since the data was taken in May, as predicted, the number of ICOs is steadily rising.

MORE EDA: VISUALIZING WINNERS AND LOSERS

In the full article published on Lunar Digital Assets, you can visually see the ROI of ICO's categorized in different segments:

• Yearly ROI —
  Our dataset captures the following years and the associated numbers of ICOs held in that year. The below violin plot provides a visual summary of statistical descriptors of the ROI performance by ICO Year 
• Monthly ROI —
  On a monthly basis, ICOs that end in April have the best median performance but also likelier to perform the worst of any month other than December. Otherwise, there does not seem to be a significant difference in ICO performance based on Ending Month.
• ROI by Market Conditions:
  Another important distinction to consider when analyzing ICO ROI was whether or not the ICO occurred in a bear, bull, or purgatory market environment. Date ranges were leveraged from Thomas Lee, Head of Research at Fundstrat Global Advisors. Please also note that any date ranges not included are considered “purgatory runs” or what traders like to call «sideways markets.»
• ROI per Year by Market Environment:
  When taking out the year dimension of the view, the plot suggests very little difference in median ROI performance.
• ROI of all ICOs in Bull, Bear, and Purgatory Markets:
  The plot suggests very little difference in median ROI performance, but one very odd statistic was that bull markets see more outliers of negative performance and purgatory markets see more outliers of positive performance (likely due to NXT's ROI as the coin had its massive run-up in a purgatory market in 2013).

  It appears that the market conditions do not have a significant impact on the median returns of ICO's. Now we can move on to see if, on average, ICOs perform better in bull markets than in bear markets.

METHODOLOGY AND STATISTICAL ANALYSIS 

MEDIANS AND AVERAGES ARE NOT THE SAME!
The primary method of analysis used to assert our assumption is a hypothesis test using a Z-Test. In order to appropriately perform the test, we require that the distribution of the data be unimodal and normally distributed. In our sampling method, the sample size must be larger than 30 and our samples be independent. We find that each market environment contains 173 ICOs during a bull market, 143 during bear markets and 142 in purgatory markets. As a result, our population and ensuing sample sizes will be greater than 30. Moreover, our population samples are assumed to be independent.

To assert our data is unimodal, an Exponential Cumulative Distribution Function was constructed. The theoretical model takes the mean and standard deviation of our ROIs and plots hypothetical data points. We compare this with the actual plot of our ROI data. In the below graph, we find that our real data is closely aligned with the ideal model and thus can be assumed to be unimodal and normally distributed. The goal of our statistical analysis and hypothesis test is to determine whether ICOs, on average, perform better (has a higher average ROI) during a bull market than in a bear market. To accomplish this, we need to construct the confidence intervals and then the hypothesis test parameters.

We begin with establishing a 95% confidence interval to provide insight on the range of differences that we can observe. Taking 100 random samples from the Bull and Bear populations, the difference in the mean is -0.159. At the 95% confidence level, the difference in Logarithmic ROI can range between -0.52 and 0.21. For our hypothesis tests, our statements will be expressed as:

• H?: μ1 — μ2 = d?
• Hα  μ1 — μ2 > d?

Where μ1 is the mean bull market ROI and μ2 is the mean bear market ROI. D? will be 0 (zero) to signify the difference in the means. Our null hypothesis posits that there is no difference between bull and bear market returns while our alternative hypothesis posits that there is a positive difference. Our critical rejection region will be [1.64 to infinity]. Following a stratified sampling method, we arrive at the two population means:

• Mu1 (Bull Market): -0.19
• Mu2 (Bear Market) -0.04

The Z-Test statistic formula will be the difference in means (μ1−μ2) less D0 divided by the square root of the standard error of both the bull and bear market ROIs. We arrive at a test statistic of -0.717. This value does not fall into our critical rejection region of [1.64 to infinity] and therefore fail to reject the null hypothesis. This suggests that there is no difference between the average ROI (and by extension performance) between bull and bear markets. This assertion continues to hold true at both the 99% and 99.9% confidence levels.

We additionally tested if this holds true when we change the Alternative hypothesis from Ha:μ1−μ2>D0 to Ha:μ1−μ2≠D0 (which denotes that there is a significant difference between the average ROI in bull and bear markets). We find that at the 95%, 99% and 99.9% confidence levels we still fail to reject the null hypothesis.

SUMMARY OF FINDINGS

SURPRISE! BAD PROJECTS WILL BE BAD PROJECTS, REGARDLESS OF THE MARKET'S HEALTH.

In summary, we found there to be no statistical significance in the average ICO performance in either a bull or bear market. In fact, we find that

1) there tends to be far more performance losers than winners regardless of market environment
2) ICOs, on average, tend to underperform in both bull and bear markets (where the market is driven by incumbent coins and tokens), and
3) bull markets see more outliers of negative performers!

We can safely say that there needs to be more studies done, and there are so many more variables at play here. But those looking to raise working capital through an ICO should not focus on trying to time the market but rather focus their efforts on other aspects such as the actual product, the white paper, marketing hype, building the community, and etc.

When I assigned our research team this task, I thought that I was going to prove to the world that investing in ICOs during a bear market was a bad idea. Not only was I proven wrong, but this study has given me new epiphanies on how to further capitalize the downtrends. Since then we have embraced the philosphy of truly growing organic communities and building a strong foundation for projects. While most would think that a bear market would have negative effects on all projects, the numbers were fairly clear here, and numbers don't lie. During bull markets, I suppose there's more confirmation bias as there are many more ICO's going on, which means more headline news of X, Y, and Z coins doing 500x returns. 

To all the projects that are on the sidelines waiting for the bull market to come, that is a bit concerning — ultimately, it means you have no faith in your own project. True tech and true community will overcome bear markets, as projects like Chromapolis and Cloudbric has proven.

Article Produced By
Han Yoon
Lunar Marketing

https://icobench.com/thebench-post/126-exclusive-lunar-insight-ico-performances-are-mostly-unaffected-by-bear-markets

David https://markethive.com/david-ogden

Report: Popular ICO Listing Sites Show Massive Inconsistencies in Project Fundraisers

A Bloomberg report on November 5, 2018, pointed out the vast inconsistencies in the amount of capital raised by Initial Coin Offerings (ICOs) raised in 2018, as per data compared on several websites.

Lacking Consistency and Incentives

In an industry that banks on providing transparency and accuracy to every dataset available for public viewing, the verifiable sources of information look bleak. Much of this is attributed to the lack of uniform industry standards available for the blockchain and cryptocurrency sector, while conflicts of interest may come into account to explain the remainder of such instances.

Tokens issuers in 2018 raised $22 billion in 2018 according to CoinSchedule, an ICO listing site, or just $11 billion if data from Autonomous Research is considered. The two figures represent a mammoth difference in the number of funds raised and form a concern for investors, journalists, and academics who look towards researching the cryptocurrency market for making strategic decisions and publishing educational content.

Alex Buelau, the co-founder of CoinSchedule, cites a lack of incentive for information dissemination platforms as a prime reason for listing inconsistent data in the absence of industry-standards. In addition, sites like his make profits based on advertising revenue and sponsored token listings, which may mean displaying inflated fundraisers to attract unassuming investors. For a $200 billion industry banking on a few startups to access information, Buelau’s comments point out a problem larger than the lack of usable applications for cryptocurrencies; the absence of establishing a common truth for dynamic developments in the nascent sector.

The cryptocurrency exchange RubyX, for example, has raised a massive $1.2 billion if CoinSchedule is trusted, a paltry $200 million based on ICO Rating, and is altogether excluded from Autonomous Research due to a lack of “online footprint.” A more extreme instance is of the controversial Venezuelan cryptocurrency Petro, which raised $3.3 billion if President Nicolas Maduro’s statements are to be believed, but only $735 million if ICO Rating and CoinSchedule are assessed.

Elementus’ co-founder Nuria Prunera notes on-chain data must be relied upon to track ICO investments, instead of an online database. But, a major issue with such a method is the inability to capture fiat payments for tokens. Autonomous Research claims it uses 50 trackers to determine token information and manually removes any datasets it deems fraudulent or inflated. However, head of strategy Lex Sokolin ascertains the trackers lose effectiveness over time, especially as the “economics of a database weaken.”

The advent of token “pre-sales,” or making fundraising available to an elite set of investors prior to public offering, also makes ICO data difficult to fully compute. Tokens firms are increasingly offering private deals to venture capitalists, wealthy investors, and crypto hedge funds, without the token’s price, conditions, and lock-in periods available to retail investors.

Meanwhile, crypto-specific funds have been cashing in on similar private deals since inception, which contributes vastly to the disparate funding reports provided by various listing firms. While making huge profits matter to individual investment businesses, it threatens to relegate cryptocurrencies to the very sector it aims to differentiate from: the corrupt world of IPOs, pre-IPO deals, and public misinformation.

Article Produced By
Shaurya Malwa

Shaurya is the Editor at BTCManager. After graduating in business from the University of Wolverhampton, Shaurya ventured straight into the world of cryptocurrencies and blockchain. He believes decentralizing the world's financial, economic, and political systems is mankind's next giant leap.

https://btcmanager.com/author/shaurya-malwa/

David https://markethive.com/david-ogden

How One Project is Fighting Fake ICO Reviews Using AI and Blockchain

 Revain, a service for collecting customer reviews,

released a full-scale working 1.0 version of its Ethereum-based platform. As the project team reported to Cointelegraph, the 1.0 version is completely blockchain-based, containing a veri?cation system and artificial intelligence (AI), among many of its other new features. “Users can see all of the reviews written in the blockchain on a special page,” reads the official press release.The Revain platform was launched in order to change the process of collecting reviews from customers, by means of blockchain technology. The service is aimed to help new projects and startups obtain feedback from users. Specifically, the platform was designed for companies that have concluded their crowdfunding or ICO campaign.

Refining the Dashboard

The basic element of the Revain platform is its Dashboard, which allows startup teams to communicate with users and reward them for high-quality reviews. “We have been actively working on creating the Dashboard. There have been ten releases: versions 0.1 to 1.0 with a number of new features added,” the Revain team reported to Cointelegraph. According to Revain’s previous press release, the Dashboard may be helpful for companies in various ways. Firstly, replying to specific reviews is a great tool for managing negative reviews and encouraging positive ones. Secondly, as the Revain team assures its users, a large number of quality reviews about a company will make it stand out among others in a very positive way.  

Revain is using AI to monitor the quality of reviews, with no third parties involved. The AI moderation system will be able to consider the tone of the reviews, as well as filter them based on certain parameters — such as emotion, language style, and social tendencies. “Revain AI ?lters out low-quality reviews and makes quality ones eligible for rewards,” reads the company’s press release. Users are supposed to benefit from writing reviews on the Revain platform. In order to motivate authors to write reviews, companies can reward users with internal tokens called RVNs.

Revain has recently introduced its first premium service for blockchain projects and crypto exchanges which were designed to help them improve their reputation and perception among the crypto community. A premium subscription was the main part of the latest v0.9 release of the Dashboard. Besides the premium subscription, Revain completely redesigned the complimentary email and added the ability to share a specific review. Due to blockchain technology  and Ethereum platform especially, all of the reviews cannot be deleted or changed, says the company’s website. So far, the platform covers a few kinds of reviews: ICOs and crypto exchanges. In addition to these, the company plans to add other sectors at a later.

Article Produced By
Nick Bakursky

https://cointelegraph.com/news/how-one-project-is-fighting-fake-ico-reviews-using-ai-and-blockchain

 

 

David https://markethive.com/david-ogden

The Rise of Cryptocurrency Ponzi Schemes

David https://markethive.com/david-ogden

Beyond Crypto Friendly: Swiss Bank Helps Clients Participate in ICOs

Here’s something we don’t hear every day:

LakeDiamond ICO

The first ICO to be offered as an investment option on the banking platform is LakeDiamond, a lab-grown diamond company which is raising funds to purchase new equipment. They will offer more ICOs in the future. The pre-sale of this ICO is ongoing and offers a 10 percent bonus up to 4 million CHF (just under $4 million).The regular public sale will not open until January. Presumably, buyers will not have the opportunity to realize any gains or exchange their tokens for other cryptocurrencies before the spring.

The token itself is pegged to the cost of diamond production. Each token is meant to be equivalent in value to “1 (one) minute of growth reactor operating time, which produces lab-grown diamonds. One minute is the smallest possible unit, so the tokens are non-divisible past this point. If a diamond plate takes 180.5 minutes to grow, it will consume 181 LKD.” While this is not an ICO Review, LKD tokens are priced around 50 cents each. There will be a maximum supply of close to 6.8 million. The funds raised will be used to improve and expand the firm’s operations. Within the system, the tokens will have utility.

Lab-grown diamonds are a growing industry which markets themselves as more ethical. The movie Blood Diamond speaks to the reason that the ethics of traditional diamonds can be seen as questionable. Like all industries which require entry into disadvantaged countries and massive labor forces, the diamond industry has its share of detractors. Nevertheless, not everyone feels they are more ethical. There is the fact that they require less labor and if they became the norm, many thousands of people would find themselves without a livelihood.

You Don’t Need a Bank to Invest in ICOs

Yet, there’s certainly nothing unethical about investing in a firm to help it grow. LakeDiamond is meeting a demand and wants the public’s help to get there. SwissQuote feels it is a good investment opportunity for its account holders, and so they have partnered. All the same, cryptonaughts have invested in ICOs since before banks even took notice of bitcoin or any other cryptocurrency. While it is certainly positive to see a bank be so forward-thinking, ultimately banks are not necessary for investment into ICOs and are furthermore decreasingly necessary for anything at all as the blockchain revolution moves on.

Article Produced By
CCN-Altcoin News

https://www.ccn.com/beyond-crypto-friendly-swiss-bank-helps-clients-participate-in-icos/

David https://markethive.com/david-ogden

Bermuda Government Approves First ICO Under New Regulatory Regime

The government of Bermuda has awarded the first certification

for an Initial Coin Offering (ICO) under the island nation’s new regulatory regime for crypto and blockchain business, the country’s only daily newspaper, the Royal Gazette reports Oct. 18. According to the Royal Gazette, the Minister of National Security Wayne Gaines — whose office oversees ICT policy and innovation — announced that fintech company Uulala was awarded certification by the Bermudan government today at the Bermuda Executive Forum in Miami. In July, the Premier and Minister of Finance of Bermuda David Burt introduced new regulations on ICOs to the lower house of the country’s Parliament, the House of Assembly. The new guidelines require ICO issuers to provide detailed information about “all persons involved with the ICO.”

Issuers must also disclose a review of the project, detailing key aspects of the product or service such as the market audience, financing system, the amount of money that is planned to be raised, and technical aspects associated with software and blockchain specifications. The Royal Gazette reports that Uulala aims to improve financial inclusion of unbanked and underbanked people by providing financial services. The firm has reportedly developed a decentralized peer-to-peer network “to load cash into the digital economy.” Once funds are deposited, users purportedly have access to a virtual MasterCard, with which they can participate in e-commerce, as well as pay bills or send cross-border payments.

The company’s CEO Oscar Garcia told the Royal Gazette that Uulala aims to raise $50 million dollars in its token sale, and has already raised $10 million privately. Garcia noted the country’s thorough regulatory standards; it reportedly took four months for the firm to get approval for its license. Despite the wait, Garcia said: “Bermuda is known as a financial hub and it is very forward thinking on blockchain and fintech… They have a reputation of being excellent regulatory stewards and we thought that would be a better fit for us than a jurisdiction where we could say we’re good, they’d believe us and give us approval in three weeks.”

Bermuda has been cultivating a friendly regulatory environment for fintech, crypto, and blockchain-related business over the course of the past year. In addition to the aforementioned regulations, the country also began to amend the Banking Act in order to establish a new class of bank to render services to local fintech and blockchain organizations.The government has also signed memoranda of understanding (MoUs) with several blockchain and crypto-related companies to both promote the industry in Bermuda and create jobs for the local population.

Article Produced By
Aaron Wood

Aaron Wood is an editor at Cointelegraph, with a background in energy and economics. He keeps an eye on Blockchain's applications in building smarter and more equitable energy access globally.

https://cointelegraph.com/news/bermuda-government-approves-first-ico-under-new-regulatory-regime

David https://markethive.com/david-ogden