This week’s summary of various cryptocurrency news and developments:
Facebook CEO studying cryptocurrencies in quest for decentralization
Mark Zuckerberg, in what he called personal challenges for the year ahead, revealed that he is studying cryptocurrencies and encryption to improve the social networking service he co-founded. He noted that this year he is going to focus on “fixing important issues” with technology, media and government, namely the current centralization these have. Per his words, a lot of people got into technology believing it was a decentralizing force that could put power in people’s hands. As Zuckerberg noted, there are now a few very large tech companies, and not a lot of small players. He added:
- “There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands. But they come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”
Visa Europe dropped various bitcoin debit cards
Visa Europe recently ended its relationship with large cryptocurrency debit card provider WaveCrest, causing thousands of people’s transactions to be declined. Bitcoin debit card companies Bitwala, BitPay, Cryptopay, TenX and others announced via Twitter their cards stopped working in Europe, and that customer funds will be returned. The move worried various users, as prepaid cards were one of the most popular ways to use bitcoin, given the network’s current congestion. Regarding its move, Visa Europe said it terminated its relationship with the prepaid card issuer for “violating Visa’s operating regulations.” The company added:
- “Our actions were not specific to cryptocurrency, but rather reflect the issuer’s failure to comply with Visa’s policies that ensure the safety and integrity of our payment system.
Coinbase reveals it won’t, for now, add XRP or other cryptocurrencies to its platforms
Ripple’s XRP token has been surging in value over the past few weeks, so much so it became the second biggest cryptocurrency by market cap. The cryptocurrency’s rise led to various rumors that Coinbase would add Ripple’s token to its platform, which forced the company to state it won’t be adding any new cryptocurrencies to its platforms for now. The blog post cites its Digital Asset Framework announcement, where it outlined the criteria it would follow to add new tokens to the Global Digital Asset Exchange (GDAX), and adds:
- “As of the date of this statement, we have made no decision to add additional assets to either GDAX or Coinbase. Any statement to the contrary is untrue and not authorized by the company.”
Bank of America’s Merrill Lynch blocks clients from investing in bitcoin fund
Merrill Lunch, Bank of America’s brokerage arm, blocked its clients and financial advisers from trading in bitcoin-related investments, the Wall Street Journal reports, upon reviewing an internal memo. The brokerage arm specifically highlighted Grayscale’s Bitcoin Investment Trust, a fund led by bitcoin mogul Barry Silbert. The memo, which circulated to roughly 17,000 advisers, claims the block was due to “suitability and eligibility standards” of the product.
Merrill Lynch’s policy has reportedly been in place since December 8, and has been extended to the recently launched bitcoin futures contracts. To the bitcoin mogul, the ban is a surprise as he is unaware of other firms implementing similar policies. Speaking to Reuters, Silbert said:
- “We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about the Bitcoin Investment Trust. We are unaware of any similar policies at other brokerage firms.”
Texas regulator hits BitConnect with a cease and desist order
According to a news release, the Texas State Securities Board (TSSB) ordered the blockchain-based startup BitConnect to cancel a token sale it planned for January 10. BitConnect, widely believed to be a ponzi scheme, was reportedly offering 100% annual returns on the tokens, which the TSSB determined qualify as unregistered securities. Moreover, the company wanted to promote its token by hiring recruiters, which the TSSB determined qualify as agents, who aren’t registered to sell said securities (the tokens). Notably, BitConnect has conducted a previous initial coin offering (ICO) in 2016 to launch its BCC token.
Per TSSB, BitConnect’s token sale was targeting Texas residents, as well as residents in other states. The company didn’t reveal any information about its financial status, including how it will earn profit or its exact location. The release added a warning against cryptocurrencies in general:
- “Investing in cryptocurrencies … carries significant risk because of regulatory and legal actions, competition from other cryptocurrencies, and the extreme volatility in the price of many cryptocurrencies.”
Egypt’s religious leader: “bitcoin is banned by Islam”
Egypt’s foremost religious leader, Grand Mufti Shawki Allam, has issued an official fatwa, banning cryptocurrencies such as bitcoin as, per his words, trading cryptocurrency is similar to gambling, which is forbidden in Islam. A fatwa is seen as ruling under religious law and, technically, isn’t legally binding. The religious leader issued it after consultations with several economic experts, Egyptian daily Ahram notes. An expert from the fatwa reads:
- “Bitcoin is forbidden in Sharia [law] as it causes harm to individuals, groups and institutions.”
Per the Grand Mufti, cryptocurrencies shouldn’t be used as they aren’t backed by the Central Bank of Egypt (CBE), and the lack of a tangible asset, as well as its semi-anonymous nature, could lead to tax evasion, money laundering, and terrorism financing, he said.
Bitcoin at $17,027 as its dominance falls to new lows
Bitcoin recently started recovering from the Christmas crash that saw it go down from an all-time high of over $19,000 to about $13,000. At press time, one bitcoin is currently trading at $17,027, and the cryptocurrency’s market cap is $283 billion. Notably, the cryptocurrency ecosystem’s market cap is currently of $798 billion, meaning bitcoin’s market share is of about 35.5%. According to data from CoinMarketCap, the flagship cryptocurrency’s dominance hit a low of 32.18% this week.
Ripple’s XRP token hits $3, making its founders and CEO among the richest on Earth
Last week, DeepDotWeb reported on Ripple’s surge, that helped it surpass Ethereum to become the number two cryptocurrency. This week, the XRP token came close to $4, but soon saw its price go down once Coinbase clarified it wouldn’t add the token to its platform for now. Nevertheless, the currency’s rise saw its founders and CEO become some of the richest people on Earth. According to Forbes, former CEO Chris Larsen has a 17% stake in the company and 5.19 billion XRP, while current CEO Brad Garlinghouse owns 6.3% of the company and “additional XRP tokens.” Co-founder Jed McCaleb is said to own 5.3 billion XRP.