CoinMetro’s CEO, Kevin Murcko brings you the most recent crypto market news during the weekly AMA every Friday.
Crypto Market News Highlights
1.Bitfinex Market Manipulation Lawsuit Refiled in New York and Joined by Second Case
This market manipulation lawsuit has nothing directly to do with the New York State Attorney General’s own investigation into Bitfinex/Tether. This a private, and probably a civil, suit. And now there’s more than one.
All it points to is the fact that the problems are piling up for Bitfinex, and indirectly for Tether/Noble Bank, among with a few other companies.
The SEC is good at their job. The Telegram company might be an okay company, but it still was an ICO — and most ICOs weren’t run professionally. They kept selling, because money kept coming in. Considering that this wasn’t set up as a regulated sale to begin with, they didn’t have any rules to follow.
As Kevin has said before, he believes that Telegram orchestrated their official merging of the two companies — the Telegram company, and the company that issued the tokens — because they knew very well that they were going to get hit by the SEC injunction lawsuit/investigation. That was quite expertly played.
The SEC will be looking for as much evidence they can, and this could lead to Telegram having to give up the funds raised in the US, as well as fines — and those fines could be massive, to the point where they might lose the entire raised sum.
3. Japanese Government to Limit Bitcoin Margin Trading Leverage to Just 2x
This was expected, but maybe not as low as 2x. In Japan, the leverage is limited to 25x in FX. Previous to that, brokerages in Japan and those soliciting clients outside of Japan into Japan, offered leverage sometimes up to 1000x.
Limiting leverage does not have the power that most of these legislators think it does. It limits you from going into larger negative balances, but in black swan events it really doesn’t. In normal trading, it limits it to an extent. However, someone who overleverages themselves at any amount of leverage, can very easily go negative.
The Japanese government is one of the most stringent, and one of the first to actually have legitimate licensing in the country — so this makes sense. The 2x for Bitcoin leverage will likely grow with time.
CoinMetro’s Margin Trading platform offers trading with 3x leverage.
4. Binance Eyes Japanese Market with Yahoo Japan, TaoTao Partnership
It amazes Kevin that a lot of companies are still willing to partner with Binance. Whether they don’t see a risk there, or if they think that Binance is “too big to fail”, or if they simply think that Binance was one of the first movers and the risk with them is low — Kevin would say that the risk is quite high.
Though, this is just an announcement. There has not been official word from Yahoo Japan/TaoTao that they accepted the partnership. Maybe they are just providing advertising services.
The partnership hasn’t really come to fruition yet, and we don’t know the extent of the possible partnership. So we will have to see how it pans out.
However, this is surprising to Kevin, and he does not see Binance’s risk lessening over time. Others might see it that way.
5. US and European Regulators Say Crypto a Priority This Year
Kevin mentioned in 2019 that 2020 would be the year of regulations, and more than likely the year of stablecoin-pegged assets, central bank digital currencies, all types of digitalized/tokenized currencies and tokenized hard assets on the blockchain.
It will still continue to be a year of regulation. 2019 saw a big pickup in basic regulation — KYC and AML — and the next step is actual legislation. Kevin expects most countries to apply existing directives, for instance in Europe, AMLD5/MiFID II. Same thing in the US.
Kevin expects the CFTC to take over most non-regulated trading. Licensing to operate in the US will then require 25 million in net capital. Kevin then expects the SEC to take over regulated instruments, which can require between 3–5 million for a license.
At the end of the day, as predicted.
6. US Judge Gives Craig Wright Until Feb. 3 to Access 1.1M Bitcoin at Heart of Ongoing Lawsuit
That’s not going to happen. Anyone with a brain should know that Craig Wright is not Satoshi.
Craig probably knew who Satoshi is, or was, Hal Finney for example. Or at least he knows that the real Satoshi is not going to reveal himself.
Bitcoin is probably the most widely used and decentralized crypto that exists, and having an creator, does limit the decentralization to a certain extent. There’s a weak point, a point of power. That’s why the real Satoshi — if he/she/they are alive — will stay hidden.
Craig Wright is a clown, and he does not have access to 1.1 million Bitcoin. February 3rd will come and go. Whether it gets an extension, we’ll have to see.
Curious to learn more about Bitcoin? Read CoinMetro’s comprehensive guide to Bitcoin!
7. Gemini launches own crypto-asset insurance unit
Gemini went down to the Carribean, and got an insurance company to underwrite their own whitelabeled insurance so they can provide up to 200 million of insurance on their cold wallets.
In Kevin’s eyes, this means that either they could not get the coverage from a known insurance provider, which is not that great news — or, more likely, the prices that they were offered were far too high.
Once we see how this functions, if Gemini does well and doesn’t lose any money on the insurances and not having to pay claims, then larger insurance companies will start lowering their fees and more and more crypto companies will have insurance.
Good news all around.
8. Bitcoin SV pump labeled as wash trading as BSV dump accelerates
Yes. Wash trading, front running. Your run of the mill market manipulation. Kevin saw statistics where liquidity in the BSV book was under a US dollar, and something like 30–40 millions worth of trades happening.
BSV was dumped off of most exchanges, and is only traded at a bunch of shady “we just create our own data”-exchanges.
This was obvious manipulation. Kevin believes that they’re trying to get as much money as they can out of BSV before the February 3rd date comes, as it’s going to be obvious even to their diehard supporters that Craig Wright is full of shit. Or the can gets kicked a bit more and they’re given a bit more time to dump on everybody.
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Tune in every Friday for “This Week in Crypto” with CoinMetro’s CEO Kevin Murcko on our Youtube channel: https://www.youtube.com/coinmetro
