Pantera Capital Braces for SEC Action Against 25 Percent of ICO Investments

Pantera Capital Braces for SEC Action Against 25 Percent of ICO Investments

Pantera Braces for SEC Action Against 25 Percent of ICO Investments

Increasingly frequent action taken by the SEC against initial coin offerings is expected to lead to more cryptocurrency projects being forced to refund investors. Among those expected to be affected is the first U.S.-based cryptocurrency investment firm, Pantera Capital, with the company bracing to receive refunds on a quarter of its ICO investments.

Also Read: BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report Volume

Pantera Capital Anticipates a Quarter of ICOs in Portfolio May Be Targeted for Securities Violations

Pantera Capital Braces for SEC Action Against 25 Percent of ICO InvestmentsIn a letter written by Dan Morehead and Joey Krug, Pantera’s co-chief investment officers announced the company’s expectation that one in four of its ICO investments will be deemed to comprise unlicensed securities. If that proves to be the case, the projects may be compelled to issue refunds to investors. The concerns have been sparked by the SEC’s Nov. 16 announcement that coin offerings Paragon Coin and Carriereq had issued tokens to non-accredited investors in violation of securities laws.

The letter states: “While we believe the vast majority of the projects in our portfolio should not be affected, approximately 25 percent of our fund’s capital is invested in projects with liquid tokens that sold to U.S. investors without using regulation D or regulation S,” adding “If any of these projects are deemed to be securities, the SEC’s position could adversely affect them.”

Further elaborating regarding the projects of concern, the letter estimates that “about a third (approximately 10 percent of the portfolio) are live and functional,” noting that “while they could technically continue without further development, ending development would hinder their progress.”

Pantera-Backed Paragon Coin Targeted by SEC

Pantera Capital Braces for SEC Action Against 25 Percent of ICO InvestmentsParagon Coin, an ICO that received backing from Pantera, was fined $250,000 by the SEC on Nov. 16 for having failed to register its token sale with the agency. The company is also required to compensate investors who sold the tokens at a loss, in addition to those who are still holding Paragon Coin.

The SEC then described the action as comprising “the commission’s first cases imposing civil penalties solely for ICO securities offering registration violations,” adding that “Both companies have agreed to return funds to harmed investors, register the tokens as securities, file periodic reports with the commission, and pay penalties.”

Do you think we will see widespread refunds being issued by ICOs as regulatory pressure mounts? Share your thoughts in the comments section below!


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BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report Volume

BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report Volume

The Blockchain Transparency Institute (BTI) has published its December 2018 “Exchange Volumes Report,” claiming that only two of the top 25 cryptocurrency exchanges by reported volume on Coinmarketcap pairings accurately report their trade volume. The report also asserts that wash-trading is estimated to comprise 99 percent of the purported volume for 12 of the top 25 cryptocurrency pairings by reported volume.

Also Read: Cryptocurrency Enthusiasts Can Pay $10 Million for a 12-Night Stay in Space

BTI Claims Binance and Bitfinex Accurately Report Volume

BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report VolumeAccording to the BTI’s December report, the two largest exchanges by trade volume are Binance and Bitfinex, both of which the report asserts do not distort their volume through wash-trading. According to Coinmarketcap’s reported volume rankings, as of this writing, Binance ranks as the third largest by 24-hour volume, with Bitfinex positioned at 21st place.

The BTI estimates that Upbit is the third largest exchange, despite ranking 39th on Coinmarketcap, followed by 27th-ranked Kraken, 34-ranked Coinbase, 41st-ranked Bitstamp, 54-ranked Bitflyer, 62nd-ranked Poloniex, 50th-ranked Bittrex, and 55th-ranked Gate.io. As such, BTI estimates that only one of the top 20 exchanges by reported volume should be ranked in the top 10.

The report also takes particular aim at Okex, claiming to have found “just about all of their top 30 traded tokens to be engaging in wash trading.”

Wash-Trading Estimated to Comprise 80% of Reported Volume Among Top 25 Crypto Pairings

BTI’s December volume rankings report also analyzed the purported volume of the top 25 virtual currency pairings by reported trade activity, again finding Binance and Bitfinex to have accurately reported trade volume.

Wash-trading has been estimated to comprise 80 percent of reported volume among top 25 crypto pairings. The BTI also found wash-trading forms 99 percent of trade activity for 12 of the pairings, including Coinbene’s top-ranked BTC/USDT pairing, Oex’s fifth-ranked ETH/BTC pairing, Digifinex’s eighth-ranked BTC/USDT pairing, and Coinbit’s ninth-ranked BTC/KRW pairing.

The BTI estimated only one percent of the reported trade volume to be genuine for the top 25-ranking pairings hosted on Coinsbank, Ooobtc, Rightbtc, Dobi trade, Bcex, Simex, and Coinzest.

Of Adjusted Volume Rankings by Crypto Pairing, 30% Found to Engage in Wash-Trading

BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report VolumeBased on BTI’s research, the most-traded cryptocurrencies pairing is Binance’s BTC/USDT pairing, despite ranking third on Coinmarketcap at the time of the report’s publication. The BTI asserts that all of the top five-ranked pairings by adjusted volume to have accurately reported trade activity, with Bitfinex’s then fourth-ranked BTC/USD pairing ranking as the second largest by volume, followed by 33rd-ranked BTC/USD pairing on Coinbase, Bitflyer’s 42nd-ranked BTC/JPY pairing, and Kraken’s 47th-ranked BTC/USD pairing.

Despite the BTI finding only a quarter of the reported volume for the BTC/USDT pairings hosted by Hitbtc and Huobi to be genuine, both pairings retained their rankings as the sixth and seventh most traded cryptocurrency pairings.

Upbit was found to accurately report the volume of its BTC/KRW pairing. According to BTI, the pairing ranks as the eighth-most traded cryptocurrency pairing, despite ranking 60th according to Coinmarketcap. The purportedly second-ranked BTC/USDT on Okex was found to comprise the ninth most traded cryptocurrency market, despite only 11 percent of reported volume having been found to be genuine. BTI found the then 82nd-ranked BTC/USD pairing on Gemini to comprise the tenth most traded market, also estimating reported volume to be accurate.

The BTI warns token projects against paying to list on exchanges suspected of wash-trading, arguing that the tactic is employed to entice aspiring crypto projects into paying exorbitant listing fees.

What is your response to the BTI’s December findings? Share your thoughts in the comments section below!


Images courtesy of Shutterstock


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post BTI Claims Only Two of Top 25 Crypto Exchanges Accurately Report Volume appeared first on Bitcoin News.

Free Speech Social Network Gab Starts Accepting BTC

Free Speech Social Network Gab Starts Accepting BTC

Free Speech Social Network Gab Starts Accepting BTC

Gab, a social network dedicated to preserving freedom of speech, has announced that its store now accepts BTC directly after banks and payment processors denied the platform service. “Literally no one can no-platform our new crypto shop,” Gab announced. The platform integrated Btcpay Server after it was refused service by Coinbase and Bitpay.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Gab Begins Accepting BTC

Free Speech Social Network Gab Starts Accepting BTCSocial network platform Gab announced on Thursday that its integration of Btcpay Server has been completed. Its store now accepts payments in BTC and LTC.

Launched as a free-speech alternative to Twitter in August 2016, this fast-growing website is currently used by several alt-right and libertarian personalities who have been censored from using popular social networks. Among Gab’s users are Alex Jones, Ann Coulter, Stefan Molyneux, and Milo Yiannopoulos.

Gab offers free accounts as well as four levels of pro membership, which are three months for $15, six months for $30, one year for $60, and five years for $200. Gab’s store also sells $25 “Make Speech Free Again” ballcaps. Btcpay is now the store’s only checkout option.

The platform tweeted on Thursday, “Literally no one can no-platform our new crypto shop. No one. Not banks. Not the media. Not activists. Not online mobs.”

Free Speech Social Network Gab Starts Accepting BTC

About Btcpay

Free Speech Social Network Gab Starts Accepting BTCBtcpay is a free and open-source payment processor that allows anyone to directly receive payments in several cryptocurrencies “with no fees, transaction cost or a middleman,” its Github page describes. The software conforms to the same invoice API format as Bitpay, allowing merchants to easily migrate from using Bitpay’s paid service to the Btcpay platform.

Merchants can use the app to accept direct, peer-to-peer cryptocurrency payments without requiring know-your-customer (KYC) information, the software’s Github page details, adding:

Btcpay is a non-custodial invoicing system which eliminates the involvement of a third-party. Payments with Btcpay go directly to your wallet, which increases the privacy and security. Your private keys are never uploaded to the server. There is no address re-use since each invoice generates a new address deriving from your xpubkey.

Recovering From Censorship

Free Speech Social Network Gab Starts Accepting BTCGab has been a victim of censorship for most of its existence, often resulting from racist views posted by some of its users. The matter came to a head on Oct. 27 when Gab made national headlines after one of its users, Robert Bowers, killed 11 people at the Tree of Life Synagogue in Pittsburg.

Bowers was identified as a neo-Nazi who made anti-semitic threats on Gab, posting that he was “going in” just before the shooting. Paypal, Stripe, Godaddy, and Medium all terminated their relationships with Gab soon afterward, along with Gab’s web hosting provider. The platform was subsequently down for eight days as the company searched for a new web host. For about a month afterward, Gab’s only income was from customers mailing checks to the company’s headquarters.

Free Speech Social Network Gab Starts Accepting BTCDespite the media often painting the platform as an online haven for racists, Gab claims to have staff constantly monitoring all content posted on its platform for violations of its terms of service. Its stated restrictions on expression include threats of violence, promotion of terrorism, child pornography, revenge porn and doxing.

On Nov. 20, the company tweeted, “Gab has been denied by multiple banks during the underwriting process for a new payment processor. Multiple processors supported us, their banks did not.” The platform added, “Gab is the supreme example of why bitcoin exists. We will be integrating @Bitpay asap because @Coinbase already banned us.” However, after Bitpay also rejected the platform, Gab took the suggestion of several Twitter users to integrate Btcpay Server. In another tweet, Gab wrote:

You will never fully understand the power and importance of bitcoin until you go through the underwriting process with banks trying to get approved for online payment processing. They essentially want your unborn child, an arm, and all of your personal data to get an answer.

What do you think of Gab accepting BTC? Let us know in the comments section below.


Images courtesy of Shutterstock, Btcpay Server, and Gab.


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