Tether Releases $250 Million Worth of New Tokens, Renews Controversy

Tether

According to Omni Explorer, Tether generated $250 million worth of new USDT tokens last May 18th.

Tether is the company that issues the so-called stablecoins USDT. Tether claims these are backed at a 1:1 ratio by US dollars. The company was roundly criticized before due to lack of transparency after it broke ties with Friedman LLP, an auditing firm before an official audit could be done.

With a virtual monopoly on stablecoins, the total supply available of Tether coins has risen to 2.5 billion. A fair number of critics, however, find it hard to believe all tokens are backed by US dollars.

Anonymous blogger Bitfinex’ed is one such critic. The blogger has pointed out a correlation between Tether coin generation and price increases in mainstream cryptocurrencies like Bitcoin and Ethereum. Apparently, Bitcoin prices increase by about $120 and Ethereum went up by $10 an hour after the issuing of the $250 million worth of new Tether tokens.

Bitfinex, one of the world’s largest cryptocurrency exchanges, is a sister company of Tether and has threatened legal action against critics for questioning Tether’s 1:1 ratio with USD, which is hard to credit without an actual audit.

Tether, however, may not be the queen of the stablecoin sphere for long. New faces in the game, like Circle, which is backed by Goldman Sachs, TrueUSD and Basis have all begun developing their own take on stablecoins.

Colorado Law Proposes Accepting Crypto for Political Campaigns

Colorado Crypto Legislation

According to a report from local news group Denver Post last May 17th, Colorado politicians could soon accept Bitcoin or other cryptocurrencies as campaign contributions.

Colorado Secretary of State Wayne Williams made the proposal for allowing donations of cryptocurrencies in political campaigns in draft rules presented on May 16th, the Denver Post reported.

The Federal Election Commission (FEC) already approved acceptance of Bitcoin, categorizing it as in-kind donations for political campaigns, and gives the campaign 10 days to transfer the donated cryptocurrency into their campaign’s official depository.

According to the Denver Post, Colorado is most likely to follow the FEC’s designation of cryptocurrency as an in-kind donation. This would mean the donation could be returned or refunded back if the value of the donated cryptocurrency exceeds the aggregate limit.

While such donations may be convenient for the donor, Colorado’s deputy secretary of state Suzanne Staiert reportedly said, “[i]t’s going to be an accounting problem, potentially, for campaigns who want to use it.” However, Staiert also added that the “FEC is doing it now, so we are just going along for the ride.”

Colorado won’t be the first US state to go down this trail. New Hampshire actually began allowing candidates to accept contributions in cryptocurrency back in 2014.

Earlier this May, a piece of state legislation to create guidelines for identifying crypto tokens was voted down in the Colorado state Senate, in what some perceived as a blow to blockchain innovation in the state.

Bithumb Readying Move to London

Bithumb UK

ZDNet Korea reports that Bithumb is going to launch a trading platform in the UK.

Bithumb is the largest cryto exchange in South Korea and the sixth largest in the world by trade volume, handling about half a billion dollars in trading volume a day.

According to official documents, Bithumb Europe was registered lat February 27th, with offices at City Road in Islington, London. It will be headed by a Mr. Rahul Khanna, who is a partner of a firm called Canary Asset Management.

Bithumb will own 80% while Canaru Asset Management will own 20% of Bithumb Europe.

The new platform will be using the URL bithumb.uk. However, the website is currently non-functional. The delay may be due to the exchange’s search for a compliance specialist.

A spokesman for BTC Korea.com, owner of Bithumb, said to ZDNet Korea that: “Bitsum [Bithumb] is preparing to advance to Europe.”

The UK has been attracting crtypto exchanges lately, a welcome trend given the recent exodus of traditional financial institutions to Europe.

Huobi, a Singaporean exchange recently announced that it was going to set up shop in London due to the fact that it has “the most active trading scene across all of Europe.” Huobi handles almost $2 billion in trading daily, making it the third-largest cryptocurrency exchange in the world.

Meanwhile, London Block Exchange reportedly expanded its menu, now including Bitcoin Cash and Ethereum Classic. A recent survey of more than a thousand Londoners found out that 14 percent had purchased cryptocurrency at some point, and 20 percent of those that hadn’t been considering doing so.

British crypto businesses have also banded together, urging the government to regulate them formally to ensure their stability and protect customers.

AI is the Way for Chinese ASIC Maker in Case of Government Regulation

Bitcoin Miners

Due to the Chinese government’s recent hard-line stance against crypto, ASIC manufacturer Bitmain announced that they would turn to AI development as an alternate revenue source, Bloomberg reports May 17th.

Chinese regulations have included bans on ICOs, a blanket ban on “exchange-like services” and another ban on foreign crypto exchanges.

Bitmain is known for manufacturing the processing chips and miners used to mine for a wide variety of cryptocurrencies, which include Bitcoin, Ethereum, and Monero. The release of Antminer last March led Monero to upgrade so as to preserve their ASIC-resistant nature.

Jihan Wu, Bitmain co-chief exec, told Bloomberg in an interview that because “artificial intelligence requires lots of computations,” it would be a good fit for the company.

“As a China company, we have to be prepared.”

The executive continues.

Bitmain’s recently launched BM1680 chip, released October of last year, is a more cost-efficient alternative to those made by NVidia and Advanced Micro Devices, albeit less powerful.

Wu – predicting that AI chips would in the future account for 40 percent of the company’s revenue – told Bloomberg that Bitmain is “just trying to do something that they cannot take care of well enough.”

Reports show that four-year-old Bitmain made somewhere between #3 and $4 million last year in operating profits, compared to 27-year-old rival, which made around $3 billion last year.

Tea-Based Crypto Project Busted by Chinese Police

cop caught criminal vector

A cryptocurrency project has been scuttled by Chinese law enforcement for allegedly soliciting investments with fraudulent claims.

In a report from the Guandong Daily, a provincial media outlet, Shenzhen police arrested six individuals last Monday. They were accused of defrauding 3,000 Chinese investors out of $47 million by selling a cryptocurrency they claimed was backed by a commodity.

The suspects allegedly set up a firm based in Shenzhen called PEB, which beginning in January 2017 issued a blockchain-powered token dubbed Pu’er Coin, according to reports.

The project’s website says holders of the token were entitled to hold a contract which represented ownership of an amount of Pu’er Tibetan tea the firm supposedly had in stock, which the firm claimed to be worth billions of dollars.

While the token could be exchanged in a secondary market called Jubi.com, another website later claimed the contract could bring in a 12 percent annual return if investors choose to lock their funds for 12 months.

Police reports say that, though the firm had only a “very limited amount of the tea in stock,” it also promised high short-term returns to investors in social media promotions and roadshows at high-end hotels.

The police also said the project succeeded in attracting investors via manipulation of the secondary market, using it’s own funds to drive up the token price during the course of 2017.

The arrests mark another notable crackdown on alleged cryptocurrency fraud in China as law enforcement in the country have taken a hardline stance against illegal fundraising.

Previously, Xi’An Police have arrested the founders of an alleged nationwide crypto pyramid scheme that is said to have collected $13 million from over 13,000 people.