[Week In Review] Bitcoin Drops Below $9,000, As Cryptocurrency Industry's Momentum Slows

In the second week since President Xi Jinping’s call for the acceleration of blockchain development, the cryptocurrency industry’s momentum has waned.

China

China has continued to stand in the spotlight of the global encryption and blockchain industry, as the country’s top leaders continue to support blockchain.

On Wednesday the People's Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) signed a Memorandum of Understanding to create a Proof-of-Concept for a trade finance platform. The project is going to connect HKMA’s eTradeConnect and the PBoC’s Trade Finance Platform.

In China’s latest Catalog for Guiding Industry Restructuring, the country has changed their stance on Bitcoin mining, as the National Development and Reform Commission (NDRC) has removed bitcoin mining from their industries that need to be phased out list.

Chinese cities adopted a new blockchain-based identification system. The identification system produced by institutes in Shijiazhuang assign one of a kind global digital IDs to Chinese smart cities. The aim of the project is to improve the connectivity and data sharing between cities.

Cryptocurrency exchanges

Huobi Global, the cryptocurrency exchange, announced in a blog post that they will be freezing U.S. accounts. The company’s user agreement specifically forbids the use of its trading platform in the United States. Huobi has been steadily deactivating the accounts of U.S. customers. The exchange is giving its users till the Nov. 13, to allow for refunds in Bitcoin (BTC) and Tether (USDT).

Cryptocurrency exchange, Bittrex, is facing a lawsuit for allegedly allowing the theft of user Gregg Bennet’s nearly $1 million in Bitcoin. Bennet believes that Bittrex violated their own security standards which allowed the hackers to access his cryptocurrency back in April. The lawsuit proposes that Bittrex committed “unfair and deceptive acts that misrepresented its level of security." Bennet claims to have realized his account was under attack and contacted the exchange, but due to a two hour delay the attackers got away with the funds.

Vancouver-based cryptocurrency exchange Einstein Exchange has disappeared with over $12 million. The company which announced it’s closing in the next two months on Oct. 31, has since disappeared. the British Columbia Securities Commission (BCSC) went to the Einstein offices only to find elevators were locked on all floors and were unable to get into contact with the head of the exchange. Einstein has seemingly cut all ties in their vanishing act, which may lead to customers never receiving their refunds.

DX.Exchange, the Nasdaq powered digital trading platform has shut down while seeking a merger or outright sale. That Estonia-based platform which launched in Jan. 2019, lasted only nine months. The company announced on Sunday that “the costs of providing the required levels of security, support and technology is not economically feasible on our own.”

Cryptocurrency

Bitcoin experienced a steep drop off on Friday, according to Bitpush Data. Bitcoin started the day off around $9,300 but it has been mostly downhill since then. At about 1 p.m. EST Bitcoin fell below the $9,000 mark. Two hours later Bitcoin reached a low of around $8, 7000. While the coin has somewhat rebounded at at the time of writing, sitting slightly over $8,800, this still makes for a loss of around 5% in less than 24 hours.

For the first time in the company’s history, Coinbase will allow users to earn rewards for holding the Tezos (XTZ) token, according to their blog on Wednesday. The new smart contract platform is now available to U.S. customers outside of New York and Hawaii. The estimated annual return for Tezos staking is around 5%. Before users can earn rewards, they must hold the coin for an initial 35 to 40 day period.

Bitfinex announced on their website Tuesday that the K.im token sale on the Bitfinex Token Sale platform will be postponed until further notice. Bitfinex cites the ever-evolving regulatory environment of cryptocurrency as the main reason behind the delay.

Blockchain

the Shanghai Municipal Commission of Commerce, Shanghai Customs and representatives from six bank branches in Shanghai, including the People’s Bank of China and the Bank of Communications, signed a Blockchain Alliance proposal for the city’s e-port area. According to an official from the General Administration of Customs of Shanghai this is the first blockchain application project in customs and the first service project for the CIIE.

Automaker Volvo is now getting into the blockchain game, as the company announced that it will utilize cobalt’s global traceability through the application of blockchain technology. Volvo reached the agreement with two suppliers, the China-based CATL and South Korea-based LG Chem. The goal is for the blockchain technology to provide a transparent and reliable shared data network, meant to boost the transparency of the raw material supply chain.

Tradewind Markets, the global trading platform backed by stock trading firm IEX, is launching a new system for stablecoin issuers to track the provenance of their precious metals. Tradewind’s development of the Tradewind Origins system is to put a halt to counterfeit gold seals and to aid precious metal investors find responsibly produced metals. Tradewind Origins will track the geography, the name of the mine and even the standards under which the metal was produced

Coca Cola is hopping on the blockchain bandwagon with the implementation of blockchain technology to oversee their cross-party transactions, according to Business Insider. Coke One North America (CONA), the tech firm that manages IT operations of Coca Cola’s bottlers, utilizes blockchain developed by German software firm SAP to manage the supply chain. CONA oversees multiple franchises that manufacture, ship and bottle around 160,000 orders daily.

VeChain, the Singapore-based blockchain application platform, has released a new blockchain-based tracking system for the food and beverage industry. The project named Foodgate, is the first solution that is powered by a public blockchain with verified as nd certified information for the entire lifecycle of the products being tracked.

Central Bank Digital Currency

President of Turkey Recep Tayyip Erdogan has announced that testing of their national central bank digital currency (CBDC) should finish in 2020. The Central Bank plans to release the national blockchain-based digital lira in accordance with the 2020 annual presidential program. The government plans to use this technology to develop a software platform for instant payment based on the digital lira.

The legal chief of Coinbase, Brian Brooks, is asking for the private sector to create a United States digital currency. Brooks argued that private corporations are in a better position to create a digital U.S. dollar. In Brooks' opinion the government should have a hands-off approach and do little if anything to regulate their underlying blockchains.

Law Enforcement

Parties involved with the cryptocurrency, ATM Coin, have been ordered by a New York court to pay $4.25 million in penalties for investment fraud. The Commodity Futures Trading Commission (CFTC) announced the U.S. District Court for the Eastern District of New York had entered the order on Nov. 1, for fraud and misappropriating client funds.

Zuoxing Yang, CEO and founder of Bitcoin mining rig manufacturer MicroBT is being held by Shenzhen Police, according to the BlockBeats. Police detained Yang on Nov. 8, to assist with an investigation. It is likely that Yang is being questioned on claims of intellectual property infringement concerning the technology of Beijing‑based Bitmain.

When asked about the challenges cryptocurrency presents to law enforcement’s anti-terrorist activities Christopher Wray, Director for the Federal Bureau of Investigation stated cryptocurrency is already a significant issue” and they can “project out pretty easily that it’s going to become a bigger and bigger one.”

The IRS often warns taxpayers to present undisclosed earning or face penalty. With cryptocurrency still in its early stages many investors are confused on how to report their digital assets. The IRS put out an even more baffling list of rules for virtual currency, however it appears that in most cases the tokens are only taxable once they’re sold. If users maintain transparency in reporting their numbers the IRS has played fair and saved users thousands in tax bills, however failure to report revenues will be treated as a transgression.

By Ramsey Baker

Related Articles