CIRCLE APPROVAL: BROKER DEALER DEAL: Circle Bid To Acquire SeedInvest Gets Go-Ahead From FINRA

Circle is in the midst of a serious ‘beef up’ of its operations, scale, and capital position. Word of a sizable capital raise (which we expect to be heavily funded by one of their largest current stakeholders – Goldman Sachs) made its way through crypto news outlets last week. And now, today, FINRA has approved the broker dealer acquisition via SeedInvest.

As per Circle’s corporate blog post:

“Circle has signed a definitive agreement to acquire SeedInvest, an equity crowdfunding industry leader and an SEC and FINRA registered Broker-Dealer. This acquisition will accelerate our strategy of delivering a token marketplace that enables businesses and individuals to raise capital and interact with investors using open crypto rails and infrastructure. This acquisition and planned new offerings are subject to FINRA approval.”

“The SeedInvest product includes many of the end-to-end capabilities needed for executing regulated crowdfunding, including startup due diligence, securities issuance, investor accreditation, payments and securities custody, as well as a broad range of innovative tools for startups to market their crowdfunding offerings online in a compliant fashion. With the merger and approval from key regulators, these capabilities will be expanded to support crypto-denominated investments including using fiat stablecoins such as USDC, as well as issuing and offering tokenized securities.”

Circle remains a largely institutional trading platform, but moves like this make it clear they have designs on expanding their horizons. In many ways the language above makes it look like they are positioning themselves to handle as many STO-like transactions as legally feasible.

The growth in the crypto ecosystem, even in the midst of a long tail bear market, is remarkable. Add Circle to the list of those making moves in spite of any crypto headwinds.

FACEBOOK STABLE COIN: BLOCKCHAIN BUILD OUT: As Facebook Continues To Build It’s Blockchain Team, Rumors Swirl Regarding A Potential Token

Facebook continues to stalk the crypto and blockchain space. If you stop and pay attention you can almost feel their eyes staring at the cracks in the ecosystem. And those cracks are feeding rumors regarding Facebook’s intentions when it comes to crypto and a potential native platform payment token.

Whether like or dislike Facebook it is hard to deny that a Facebook token of some sort would be a potential eye opener for adoption within crypto. Billions upon billions of users across Facebook, WhatsApp, and Instagram would have access to digital cash fostered by social media’s ultimate ‘elephant in the room’.

As we’ve discussed the potential for a Facebook token this week with several thought leaders in the space one particular theme kept coming up. A Facebook token would make the most sense as a dollar backed stable coin. It would provide incredible buying power for ‘unbanked’ individuals that find themselves part of all three platforms. The WhatsApp platform in particular, with it’s adoption across locations such as India (a notoriously un-banked country), would create enormous demand for a stable coin.

As Facebook staffs up across it’s blockchain initiatives (whatever those happen to be, nobody really knows) the next incredibly used and profitable product could be a Facebook token used across billions of daily active users across the globe.

One rumor we heard coming out of Silicon Valley is that Facebook considered several types of banking initiatives to integrate into WhatsApp over the past two years, but simply wasn’t satisfied with the potential solutions. With the advent of Bitcoin and other cryptocurrencies becoming a larger part of the financial discussion, as stable coin would seem to meet the needs that a potential banking operation may have had it been rolled out.

One source, who left Facebook two months ago, added:

“Facebook has flirted with acquisitions in the crypto space and has yet to pull the trigger. That is telling if you ask me. They could easily swallow up Coinbase tomorrow, but they’ve chosen not to up to this point. Just keep track of the size, scale, and names associated with their ever-growing blockchain team. As it grows you can bet they are getting closer and closer to pulling the trigger on a token of some sort. And my guess, to satisfy regulators, it would be tied to the dollar in the way stable coins have been. They (Facebook) could easily back a token with the cash hoard they have on tap.”

Whatever truth exists in these rumors a Facebook ecosystem token would be enormous. With access to platforms carrying billions of users on a daily basis, adoption would quickly dwarf and other coin in existence. The specter of ‘Facebook Coin’ becoming a competitor to Bitcoin would be a remarkable evolution to witness in real time. And it isn’t as far-fetched as you may think.

A reminder…Facebook matured in the depths of Silicon Valley and the best minds in the valley are constantly looking for the next big thing. And need we mention the headlines Facebook has dealt with overt the past 12 months?

A Facebook stable coin could be the next innovation from a company in need of something new and shiny to feed Wall Street. If one of techs ‘glitterati’ (Jack Dorsey) finds comfort basking in the glow of the crypto world, who’s to say others like him aren’t aware of the opportunity that lies in this fast growing industry. Nobody should be surprised if we eventually see a coin with Facebook’s fingerprints all over it.

CRYPTO JUSTICE SERVED: BINANCE DELISTS BITCOIN SV: Binance CEO Makes Good On Craig Wright Declaration As ‘Fraud’; Delists Bitcoin SV

Binance CEO, CZ, has made good on a public proclamation to delist $BCHSV should Craig Wright and Calvin Ayre continue their meritless crusade to sue anyone that doesn’t declare Craig Wright anything other than a fraud.

Across the crypto ecosystem the ‘Craig Wright is a fraud’ movement has come to an all-consuming crescendo over the weekend. More specifically, ‘FakeToshi’s’ most vocal provocateur, Peter McCormack received a letter from lawyers representing Craig Wright asking him to do all manner of ridiculous things that amount to ‘stop being mean to Craig’.

Peter McCormack publishes the letter and a sharply (and appropriately) worded response via Twitter. Kudos to Peter.

But CZ, the CEO of the worlds largest crypto currency exchange has put his money where his mouth is and delisted the token altogether.

Here is the statement from Binance:

“At Binance, we periodically review each digital asset we list to ensure that it continues to meet the high level of standard we expect. When a coin or token no longer meets this standard, or the industry changes, we conduct a more in-depth review and potentially delist it. We believe this best protects all of our users.”

“When we conduct these reviews, we consider a variety of factors. Here are some that drive whether we decide to delist a digital asset:”

  • Commitment of team to project
  • Level and quality of development activity
  • Network / smart contract stability
  • Level of public communication
  • Responsiveness to our periodic due diligence requests
  • Evidence of unethical / fraudulent conduct
  • Contribution to a healthy and sustainable crypto ecosystem

“Based on our most recent reviews, we have decided to delist and cease trading on all trading pairs for the following coin on 2019/04/22 at 10:00 AM UTC:”

Please note: 

  • All trade orders will be automatically removed after trading ceases in each respective trading pair.
  • To view your assets after trading ceases, please ensure you have not selected “Hide small assets” in your Funds page.
  • Withdrawals of these coins and tokens from Binance will continue to be supported until 2019/07/22 at 10:00 AM UTC.

“We thank you for your support as we continue to build the crypto ecosystem in a way that promotes transparency and long-term, sustainable growth.”

This will cause the back and forth to significantly ramp up, and one can only hope it does, so as to destroy whatever shred of credibility Craig Wright is hanging onto at the moment.

Let it be said again, “Craig Wright is a fraud.”

BAKKT BOARD: Bakkt CEO Pens Update, Announces Board Members

Bakkt continues to anticipate a pending approval from the CFTC to engage in the business of physically deliverable Bitcoin futures. The time and circumstances surrounding that approval has been a constant source of angst for those in crypto anticipating the heft that Bakkt will bring to the ecosystem.

While everyone waits (Bakkt included), CEO Kelly Loeffler posted an update via Medium. The update spoke specifically about the newly formed Bakkt board.

“We are charting a new course and it requires significant work, including by our Board, so I want to recognize our members. Chairing the board is Tom Noonan, a cyber expert and founder of numerous cybersecurity companies, including Internet Security Systems (IBM), JouleX (Cisco) and Endgame. Also joining me on the board are Jeff Sprecher, the Founder, Chairman and CEO of ICE and Chairman of the NYSE; Akshay Naheta, Managing Partner at Softbank; and Sean Collins, Managing Partner at Goldfinch Partners.”

Progress, if not slow and steady. One could make the case that announcing board members is a bit of a stop gap communication given the lack of visibility around when the CFTC may finally give them the thumbs up.

Still, this news coupled with a refreshed valuation approaching $1B, should fill the room for a short period. Maybe slow down the growing ‘When Bakkt’ memes.

SUN DOWN: Tron CEO Justin Sun Blows It On Tesla Giveaway; CT Pounces **Tron and Sun Responds**

The current mess that is a marketing schtick gone wrong at Tron is causing many to doubt the viability of the project and the veracity of its leader, Justin Sun. A Tron giveaway that clearly included a Tesla has backfired in a big way. And all of CT is currently trading memes as the mess is still all over the CT streets.

As it became clear that Tron and Sun didn’t have an immediate intention to make the winner of the contest whole by allotting the grand prize of a Tesla, CT called them out in every corner of the globe.

It is exceptionally rare to get CT to universally agree on anything. This face-palm of a PR screw up has brought all manner of factions together to point and yell ‘boo this man!’

The meat of the issue is this: Justin and the Tron team ran a contest with a prize named to be a Tesla vehicle. A twitter user XRP_UzGar clearly won the contest and should’ve been awarded the grand prize, a Tesla.

“Instead, Justin Sun backtracked and offered him this: However, I do recognize that this is an unfortunate situation, and would like to extend my warmest welcome to the next #niTROn summit in 2020, including a fully paid round-trip ticket to the event location. We are very grateful for your continued support. #TRON”

So instead of a Tesla the winner has been awarded tickets to fly around the world (next year, we might add) to hear and see Justin Sun speak. Ugh.

**Developing…

And as of the last hour Tron and Justin Sun have reversed course:

I’ve happily decided to give away two Teslas to further my mission of creating transparency, reliability and openness about blockchain. I want to explain openly and clearly what happened with the giveaway I announced earlier to clear up some confusion.

To generate better awareness of the blockchain industry and celebrate the introduction our USDT-TRON stablecoin to everyone in the world, I personally decided earlier this month to give away two cars — a Mini in China, and a Tesla for the rest of the world. I created pretty simple rules that I expected to generate excitement and get more engagement for the industry and stablecoin in general.

On Monday, my team on Weibo gave away the Mini through Weibo, and the community has responded happily. The draw brought great, positive attention to the industry. On Twitter, the team used a tweet randomizer tool because Twitter does not have an official drawing mechanism. The team was unfamiliar with the tool and performed a number of test draws to understand how it worked, which has led to some misunderstandings about how we did what we did. We also were unaware there would be concern about the video not being live-streamed and that it would create ambiguity and controversy.

To address those concerns, I decided to create a live-streamed draw to show we are open about everything we do. The person picked in that draw has already contacted us and will receive the Tesla. I’ve also decided to give a Tesla to @uzgaroth.

I spent many hours thinking of ways to show how blockchain and the newly launched TRON stablecoin will be a game-changer for both consumers and businesses. I take that seriously; we will more than likely have a few setbacks along the way. The team has taken some learnings from this, and we are more than happy to collaborate with Twitter and third-party developers to have good mechanisms to select winners (maybe even powered by blockchain technology!)

I personally believe the industry needs to have more transparency, reliability, and openness so that people both inside the industry and out trust blockchain in general and TRON in particular. My mission is to create positive change, and I hope people will continue to join that crusade.

Justin Sun

Tim Draper: “There is a clear case that cryptocurrencies will replace fiat currency altogether…”

Tim Draper remains an influential voice in the cryptocurrency community; if for no other reason than his bullish predictions.

In 2014, Draper predicted that Bitcoin would be worth $10,000 in three years. The prediction turned to reality when Bitcoin was soaring above and beyond this amount to reach an all-time high last December.

Tim Draper told Forbes in an exclusive interview:

“I didn’t want to make any predictions after that for a long time because I wanted to let the dust settle. For a while now I have been thinking that it was time for another prediction while introducing my new book, How To Be The Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs.”

Draper’s prediction, that led him to come up with $10,000 by 2017, was based on the idea that Bitcoin was going to be easy enough to use in the future and that people would be able to start trading with it and using it as a store of value.

He believes people are going to be able to spend cryptocurrencies like Bitcoin, in mainstream situations. Cryptocurrencies will be something people can access on their phone as it will eventually replace credit cards. He truly believes that cryptocurrencies will replace fiat currencies.

As of now, there is about $80 trillion worth of fiat currency in the world. As cryptocurrencies are expanding, Tim Draper believes that fiat currency circulation in the coming time will fall from $80 trillion to $30 trillion and will be replaced by cryptocurrencies eventually as it will grow to $100 trillion.

He predicted that Bitcoin might end up with a 20% to 30% market share. As he explains the scenario, he believes the asymptote will be somewhere around $130 trillion, but only maybe $100 trillion would be cryptocurrency and 20% of that would be Bitcoin.

He is of the view that Bitcoin has a network effect. For instance, if a user has Bitcoin and no one else does, then it is worthless. But if two people have Bitcoin, and recognize it, then a connection is created. With it the connection grows – it’s the square of how many nodes are in the network. Right now there are 40 million Bitcoin wallets. Tim predicts that this number will continue to grow and the value of Bitcoin will be determined by the square of that.

Tim, in his interview with Forbes, later shares his strong opinion that fiat currencies will disappear completely

Tim Draper on cryptocurrency replacing fiat currency:

“I think that in the future fiat will resemble carrying around change. For example, in the future, if we would buy coffee with fiat, the barista will look at us like we are crazy. I also think that soon we will be able to buy coffee and other things with Bitcoin, Ether, Bitcoin cash or any number of other cryptocurrencies all on our phone.”

“The way I look at getting started with cryptocurrency is to get involved a little at a time. I’d suggest purchasing a small amount of cryptocurrency on Coinbase or to put some crypto on a ledger. A ledger is a hardware wallet, so if you are worried about someone taking your cryptocurrency you can put it there. It’s amazing that all you need now is a USB port and you are able to hold all your money in your own hands.”

As the crypto world awaits the outcome of his latest prediction, they have an opportunity to read his book and think the way that he does. At least that is the idea behind the new publication. Rest assured, many will do so in the coming months. Also, rest assured, should his prediction not come true crypto trolls will roast him for it! Thus is the nature of the crypto community.

POP! BANG! JP MORGAN COIN: Hedge Fund Sources Claim Surge In Volumes And Prices Directly Tied To JP Morgan Announcement

Crypto purists scoffed at the JP Morgan coin announcement – and rightfully so. After nearly three years of shunning Bitcoin and crypto altogether, Jamie Dimon and his cohorts cooked up a crypto of their own.

Every news outlet in the world covered it. Every single one. And the news lasted for days and quickly made its way into the heads and hands of what most crypto diehards would call ‘plebs’.

Guess what those ‘plebs’ did with the JP Morgan coin information? They bought Bitcoin, Bitcoin futures, Ethereum (a whole lot of $ETH) and all manner of alt-coins as the crypto markets surged.

We went on the hunt to find out if a hunch we had had some meat to it. In speaking with our staffs friends and family, every single one of them asked “what do you think of the JP Morgan coin?”

That set our ears ablaze and gave us a reason to have deeper industry conversations.

Sure enough several hedge fund contacts were seeing and hearing the same thing. In the short run, the JP Morgan coin announcement breathed new life into the crypto narrative and added a large slice of credibility.

One hedge fund source said the following:

Every adult with a bank account and a job knows who JP Morgan is. So the announcement of a native cryptocurrency brought interest to a renewed and fresh level that had been diminished throughout nearly all of 2018. My wife even asked me about it the day after it was announced. The huge bounce in volumes in Bitcoin and, for example, Bitcoin futures at the CME are indicative of the wave the announcement caused.”

A second hedge fund source went a step further:

It isn’t that far fetched to foresee a look back in six months and point to the $JPM coin as the catalyst that busted the bear market. Sentiment and narrative play a huge role in what remains a pretty small markets at this point. The JP Morgan news pushed prices higher across the board and those price increases weee seriously validated by a surge in volumes.”

Again, nobody with a reasonable grip on the history and mission of Bitcoin and crypto believes that the JP Morgan coin poses any sort of existential threat to the ecosystem. In fact, those that claim that it may just be another shitcoin may not be that far off.

Be that as it may, everybody we’ve run into that is outside the crypto echo chamber has one question and one question alone: What do you think of the JP Morgan coin?

EXCLUSIVE: BITCOIN ETF ‘EVENTUAL APPROVAL’: Another SEC Commissioner Predicts Eventual Bitcoin ETF Approval/s (hedges on risk profiles)

In a yet to be released post in Congressional Quarterly, the lone Democrat commissioner left at the SEC, makes several interesting claims in favor of an eventual Bitcoin ETF approval, and potentially multiple approvals.

Robert J. Jackson Jr., in a long form interview, set to be released on February 11th, believes that he expects an eventual applicant to meet the necessary standards for an approval.

A leak of the document can be found below:

As is pointed out in the first page of the article above, the last vote taken on a Bitcoin ETF (the Winklevoss ETF) was defeated by a vote of 3-1. A quick check via simple math says that a turn by Jackson into the potential ‘aye’ column would put the vote at an even 2-2. That is a profound step forward.

As reported last week, VanEck and Solid X resubmitted their Bitcoin ETF for consideration after pulling it just two weeks prior. This effectively restarted the shot clock for approval, thus taking advantage of market maturity and changing attitudes like Mr. Jackson’s.

VanEck Solid X has gone to get lengths to communicate with the SEC and its commissioners on a regular basis, hunting for the secret sauce that leads to an approval. It sounds like, based on the above rhetoric in the interview, they are having a positive impact on the SEC’s commissioners.

Ultimately the proof will be in the proverbial pudding – and that pudding is votes cast for an approval or disapproval of a Bitcoin ETF. As legal experts have pointed out, the VanEck Solid X pull and subsequent resubmission pushes the shot clock on an eventual decision into the second half of 2019. Given that regulatory agency watchers believe that the likes of Bakkt, Fidelity, Nasdaq, ErisX, and other larger crypto futures initiatives will have been in operation by that time, the specter of manipulation may have dissipated.

Again, time will tell.

BAKKT EXPECTATIONS: APPROVAL TIMELINE: Sources Expect BAKKT To Win CFTC Approval In March (pending US govt shutdown)

For those of you closely watching the Bakkt narrative, in the hopes that the launch of the Intercontinental Exchange initiative will bust the bear market – we’ve got some good news for you. Sources in and around both the CFTC and Bakkt have been whispering about a potential approval and firm launch date.

It looks increasingly likely, pending any disruption via another US government shutdown, that Bakkt will win its CFTC approval and begin trading physically deliverable Bitcoin futures in March. The sources we spoke to refused to go on record, but were eager to share the potential timeline with us. They walked us through the ‘meat grinder’ that is the regulatory process and what to expect from Bakkt once an approval is passed on.

A source familiar with the Bakkt CFTC approval process said the following:

“You have to understand that the regulatory process is different than any reasonable business practice that most of you would recognize. It is ridiculous if you ask me. But it is the reality that we are faced with and are operating in. And understand this as well, the current administration is incredibly pro-business and pro-innovation; yet this process is still a meat grinder. I am sure that Jeff (Sprecher) and Kelly (Loeffler) are frustrated. Most believed that an approval would have come late last year. Either way, here we are, and an approval looks imminent.”

A source close to Bakkt (an early institutional investor in the project) gave us this piece of information late last night:

In a way the delays have helped gather clients who will provide liquidity and volume at launch. The Bakkt team has used the time wisely and spent endless hours courting some of the biggest banks and names on the street to be trusted trade partners from the word ‘go’. All signs look to be headed toward mid-March for a final CFTC sign off. And for those out there that have talked about Bakkt delaying for an extended period of time – that is ridiculous. Take a close look at the resume of Jeff (Sprecher) and Kelly (Loeffler), they aren’t in the business of losing. The launch will occur days after approval is finalized. Short of an elongated government shutdown, expect that to happen in March.”

Bakkt remains the most closely watched institutional development in the crypto space. Why? The vast network of potential clients already committed to Intercontinental Exchange operations (essentially ALL of Wall Street and any financial institution that trades commodities with any meaningful volume) could be the type of Bitcoin volume that could break the back of the bear market and send Bitcoin higher.

Beyond simply a well-heeled potential client list, should Bakkt be successful their announced joint venture partners, Microsoft and Starbucks (Boston Consulting Group – BCG is also an announced joint venture partner, but we will cover that connection in a separate article), represent that kind of adoption and real world ‘use-case’ network that could potentially bring Bitcoin to the masses. Retail, tech, software, devices, and on and on. This is the Bitcoin dream that has brought some of the worlds most well known venture capital firms to the Bakkt table.

The chatter regarding an imminent (albeit 30-45 days) approval from the CFTC should create a buzz and keep the team at Bakkt on alert. If you’ve been keeping score their staff has more than tripled and the list of job openings continues to grow.

They are preparing for the biggest Bitcoin push the crypto ecosystem has ever seen. That isn’t hyperbole. Google search the daily trading volume of gold futures and prepare to have your mind blown. The only way Bitcoin can be added to the Starbucks app and used to pay for your next ‘coffee milkshake’ is the promise of serious liquidity and price transparency. Bakkt is set to provide that in spades.

BREAKING: COINBASE ADDS XRP: Coinbase Pro Announces XRP Deposits, Accepting Inbound Transfers

And the XRP army rejoices. A collective exhale. The mob has been satisfied. Let them eat cake. And all manner of euphemisms associated with a long awaited, yet inevitable, outcome.

Coinbase officially announced that Coinbase Pro will add XRP, the official cryptocurrency of Ripple Labs, and make it available via several trading pairs.

The venerable and hyperactive XRP army is in ‘melt up’ mode at the moment. Here was the official language from Coinbase:

“After 10am on February 25, 2019 we will begin accepting inbound transfers of XRP to Coinbase Pro. We will accept deposits for a minimum of 12 hours prior to enabling full trading. Please note that inbound transfers require the specification of an XRP destination tag.”

“Once sufficient supply of XRP is established on the platform, trading on the XRP/USD, XRP/EUR, and XRP/BTC order books will start in phases, beginning with post-only mode and proceeding to full trading should our metrics for a healthy market be met. XRP trading will initially be accessible for Coinbase Pro users in the US (excluding NY), UK, supported European Union member nations, Canada, Singapore, and Australia. Additional jurisdictions may be added at a later date.”

“XRP is the cryptocurrency used by the XRP ledger, which supports international currency exchange and remittances. The ledger is powered by a network of peer-to-peer servers. All accounts on this network can send or receive XRP to/from each other, while XRP can be used to send underlying fiat currencies between two parties. In this way, XRP can function as a bridge currency in transactions involving different currencies such as US dollars, Japanese yen, Euros, Francs, and others in use on the XRP network.”

“Please also note that XRP is not yet available on Coinbase.com or via our mobile apps. We will make a separate announcement when that occurs.”