Cryptonews Rewind 2019: Q4 - China, War of Money, IPOs & Arrests
Here is what happened in the Cryptoworld in the last quarter of this year and this decade:
Total crypto market capitalization in Q4
We started this quarter with looking who is to blame for Bitcoin price crash. We were in for a surprise when a German bank stated that Bitcoin prices are in for a major boost next year and that current prices do not take into account the upcoming halving. Speaking of which, the discussions on the halving and what it might mean for the future of BTC miners have intensified. And October ended with BTC price explosion in one of the biggest rallies in history.
Telegram announced it would officially launch its TON blockchain network by the end of October. But due to a regulator's move, both TON network launch and the release of its Gram token could be delayed for “six months to a year."
Changpeng Zhao, CEO of Binance, seemed to have confirmed that users can buy crypto through WeChat and AliPay with cash in China, prompting a storm, but it's not something he wanted media to write about. A few days later, the exchange partnered with Amun in order to launch Binance Coin (BNB) ETP. And as Binance reached USD 1 billion in profit, their CEO got confused over the price of BNB. On the other hand, Bakkt announced the launch of the first regulated options contract for Bitcoin futures, aiming to lure institutional investors.
While Coinbase was granted an e-money license by the Central Bank of Ireland, the media speculated that South Korean cryptocurrency exchange Bithumb might end up “in Chinese or American hands” with the company that had agreed to buy the exchange, BK Consortium, expected to default on payment. On the other hand, a new cryptocurrency payment solution is in the works in Germany.
Even though G7 went to war over control for money, and central banks realized they can't ignore crypto anymore. A Ukrainian minister stated that the government wants to grant legal status to cryptocurrencies, moving them out of their current “grey area,” but he suggested taxing both miners and cryptocurrency traders. Soon we learned that Ukraine plans to legalize cryptocurrency mining in the next 2-3 years, as well as to push through crypto regulation ‘till the end of 2019. There were also reports that Japan could shun cryptocurrency investment trust offerings, while six large financial companies established a securities token association.
Miles away, Venezuelan president Nicolás Maduro said his country is working on an international and domestic payments system that will make use of cryptocurrencies. He also announced that Caracas will hand out up to USD 3.6m in Petro tokens, and the country authorized Petro-to-fiat trading. Meanwhile, smart contracts became legal in Russia, and the EOS operator, Block.one, settled with the Securities and Exchanges Commission (SEC). This news was followed with Nebulous, the company building the Sia decentralized cloud storage network, saying it too has entered into a settlement with the SEC.
The SEC also rejected an investment company registration application by the Cipher Technologies Bitcoin Fund, stating in its reasoning that Bitcoin is not a security. Additionally, it may not approve a BTC ETF for another two years. Meanwhile, the new Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Heath Tarbert, said that Ethereum is not a security but a commodity. While American politicians were hoping to strong-arm Facebook and Libra partners, British central bank officials laid out a roadmap for the token.
Speaking of Facebook, Russia said it'll block it and Telegram if their Libra and Gram tokens “run out of control,” and suggested that the USA may follow suit. As Jack Dorsey, CEO of Twitter, dismissed Facebook’s Libra project as a ‘gimmick’, we learned that the Libra alternative may be on a collision course with Binance's Venus project. Though Facebook's CEO contradicted himself again, as the hearing started, the company's shares soared at the same time BTC was nearing a death cross.
South Korea, as always, gave us plenty of crypto/blockchain news. We saw eleven giants teaming up for a government-backed “consortium-type” blockchain network, and more than 800 companies were doing business in crypto. Binance joined Kakao’s Klaytn blockchain project in its governance council, while Samsung added twelve more dapps to it Blockchain Keystore.
Meanwhile, the month saw China’s President Xi Jinping urging the country to accelerate the development of blockchain technology, Bermuda accepting payments for taxes, fees and other government services in USD Coin (USDC), and Australia’s biggest precious metals refinery Perth Mint teaming up with blockchain company InfiGold to launch government gold-backed token. In the meantime, Latin America was dominating crypto adoption news agenda, producing news every week.
Ripple made three crypto wallet related steps that might help XRP reach a wider audience, and Brave surpassed yet another milestone this year, reaching the number of 8 million monthly active users. We learned that some of the world’s leading carmakers will begin a pilot for a blockchain-powered vehicle identification platform. As Ethereum started looking for 1 million developers, we also learned how to turn our old smartphone into an Ethereum hardware wallet. We saw a victim of a Muhstik Ransomware attack paying in BTC to unlock his files just to strike back and hack his hackers, while in North Korea, Pyongyang cyber-criminals were becoming more skilful as crypto thieves.
Meanwhile, we talked to several experts at a conference and they picked 7 misconceptions about BTC and 10 main trends in digital assets this year, told us what might encourage people to use Bitcoin, and described to us what a state in which neither the government nor the Central Bank control money would look like.
November was another busy month. While the Bank of Ghana was considering issuing digital currency, and Kenya got blockchain-backed local currencies, the UK introduced new crypto tax rulings, stressing that Bitcoin is not money, and we learned that the EU finance ministers might discuss a new draft that advocates a common approach to cryptos. In Russia, the much-awaited crypto law took a confusing turn, but local experts did not rule out that it might stop legal trading in BTC, ETH and other altcoins. Furthermore, Russian major bank Sberbank introduced a new low-cost, cross-border remittance solution that it believes will be able to compete with cryptocurrency for cross-border transactions.
Additionally, Singapore and JPMorgan created a blockchain-powered prototype for foreign exchange payments, while Japan said it won’t be launching a digital yen soon. While Brave 1.0 was launched, Canaan failed to raise USD 100 million.
As Hong Kong published a framework for crypto exchanges, China removed BTC mining from the list of industries that might be eliminated. China’s regulators also stated that they are already looking at applying blockchain technology to cross-border trade finance.
After China had announced its new focus on the blockchain technology, South Korea followed suit with additional investments, and Ripple invested millions in one of the country’s top university blockchain research units, while a group of blockchain advocates was trying to change the government’s stance on crypto. Vietnam unveiled its blockchain plans and started working with South Korean companies towards their goals. We've learned that blockchain gaming may be doomed in the country and that a South Korean court jailed nine executives of Coinup for fraud. As two of the country's internet tech giants are strengthening their ties with the traditional financial sector for a blockchain/token/fintech drive, the country is thinking about jailing crypto exchange AML offenders, the unnamed CEO of a “top-three” crypto trading platform is facing assault and extortion charges.
Since we've mentioned Ripple, its CEO said he believes there are too many cryptos, while Japanese financial giant SBI Holdings, which revealed that its cryptocurrency ventures are making a profit, downplayed the potential of Bitcoin and altcoins, while praising XRP. Soon after, SBI Holdings invested in major U.S. based security token platform Securitize. While Ethereum managed an ‘insane’ number of transfers on its network and the real dapp transaction volume might be several times bigger than thought, several hundred XRP accounts have been linked to "dirty" USD 400 million.
Also, SatoshiLabs, the manufacturer of the Trezor hardware wallet, moved to distance itself from a somewhat unexpected endorsement from Venezuelan president Nicolás Maduro. This month also saw Bitcoin Cash (BCH) network's security put into question, while Binance Research found that, once Ethereum joins the game, the volume of staking activity will see more than a double-digit rise.
The Cryptoworld was shook by the news that Upbit lost ETH 342,000 (USD 53 million). Furthermore, after accidentally leaking users' emails, BitMEX found malicious groups trying to collect email addresses from its users. Soon after, a security expert reported that personal data and passwords belonging to users of the GateHub crypto wallet were dumped onto a hacking community website. Also, Bitfinex was hit with second class action lawsuit and threatened retaliatory legal action. Meanwhile, DX.Exchange closed "temporarily" while waiting for a merger or sale, users of Einstein Exchange and ezBtc.ca couldn't access their funds, and Bittrex and FTX each faced a lawsuit.
In the meantime, Samsung integrated Tron (TRX) support to its mobile wallet marketplace, the Samsung Blockchain Keystore, and Tron's CEO Justin Sun confirmed that he's an investor in the Poloniex exchange. On the other hand, Kraken CEO Jesse Powell said that altcoin hype has largely died off, Binance ignored the talk of crypto ban in India and acquired WazirX, and Indonesia got its (reportedly) first regulated local crypto exchange, called Tokocrypto.
More news came from Bakkt, which said they're focused on the development of a consumer app and merchant portal, and on testing with their first launch partner, Starbucks. A few day later, they opened the Bakkt Warehouse to all institutions. In the meantime, Overstock’s blockchain subsidiary tZERO said it will help tokenize at least USD 25 million of the value of a 180-unit luxury residential development.
And here we are in the final month of the final quarter in this 2019. The month started with two bad news: crypto exchange CryptoBridge is shutting down, while Vertcoin (VTC) experienced another 51% attack. Also, the BTC halving debate continued, specifically if it's priced in or not, and how different it'll be from previous halvings, though crypto market analysis firm Coin Metrics says there isn't enough historical evidence to make any predictions about crypto prices before or after halvings.
On the other hand, Huobi may finally be returning to the fold in China, over two years after a Beijing crypto crackdown forced domestic trading platforms out of the country. Bitfinex struck a partnership deal with Swedish cryptocurrency-powered gift cards operator Bitrefill, while Poloniex, now co-owned by Tron’s Justin Sun, delisted DGB after the founder of DigiByte, Jared Tate, criticized both Tron and Poloniex. Sun sparked yet another Twitter storm soon after by publicly committing USD 1 million to climate change activist Greta Thunberg’s cause.
Things got so bad for MATIC, that even Binance, responsible for the initial exchange offering of this project, decided to investigate the 'nightmarish' case. Binance also invested in the cryptocurrency derivatives exchange FTX, but before the investment was announced, both platforms registered the biggest gains in the crypto derivatives market in November. Furthermore, OKEx announced the launch of its Options Trading ahead of CME’s BTC futures contracts, while Amun AG got the regulatory green light to expand its crypto ETP offering in the EU. ShapeShift denied claims by Kraken that KeepKey can be hacked in 15 minutes.
Meanwhile, a potential major loophole in MakerDAO was exposed, prompting a swift reaction from the foundation. The Cryptoworld also wondered if Bitcoin SV (BSV) is about to sabotage itself. U.S.-based blockchain analysis company Chainalysis said that at least BTC 20,000 and ETH 790,000 might still be dumped on the market by the criminals from PlusToken, and two days later, PlusToken moved ETH 789,525. Speaking of ETH, the Ethereum Foundation selling USD 100 million worth of ETH raised transparency questions, and Ethereum was forced to have another hard fork in January, two months after Istanbul, to delay its Ice Age, while dapp data aggregator DappRadar claims that ETH is now leading the field in blockchain gaming, ahead of EOS and Tron.
The Cryptoworld faced another moral dilemma after an Ethereum developer was arrested for giving a speech at a North Korean’s blockchain conference. The dev, Virgil Griffith, 'armed' himself with a top lawyer.
On the other hand, Ripple dismissed the suit against them, stating that, even if XRP were a security, the plaintiffs still brought the case against the company too late. Regardless, SBI is considering issuing XRP as company-wide shareholder rewards, and days later, Ripple raised USD 200 million in Series C funding from a group of notable investors. But then we learned that BitMEX and its CEO Arthur Hayes are being sued for USD 300 million, while Shopin, an American blockchain retail startup, appears to be going ahead with a token sale, despite the fact that it has been charged by the SEC.
December came with many ups and downs. For example, OneConnect Financial Technology, a unit of China’s major insurer Ping An, aimed to raise up to USD 504 million in an initial public offering (IPO), compared to USD 1 billion reportedly considered in June this year. Also, the first publicly listed blockchain infrastructure company, Hive Blockchain Technologies Ltd., reportedly lost the last analyst covering it, and the price of its shares is far from the early days of it going public.
On the regulations and adoption side of the news, while central banks in the Eurozone are turning their attention to digital fiats, and the most central of all banks released 12 design elements for a wholesale token, the EU has taken a firm stance on stablecoins which will not actually stop stablecoin operators' plans. Nonetheless, the EU has asked citizens to help create crypto regulations. German banking giant Deutsche Bank said that forces that hold the fiat money system together look fragile and, over the next decade, some of these forces could begin to unravel, and demand for alternative currencies, from gold to crypto, could take off.
The People’s Bank of China (PBoC) issued some USD 2.8 billion worth of blockchain-issued financial bonds to small business loans in China, and it's preparing to test the digital yuan in Suzhou and Shenzhen, with a pilot launch now 'imminent.' Also, local authorities in Shenzhen launched a blockchain-powered electronic ID platform compatible with 24 forms of identification and certification. The head of the People’s Bank of China’s digital currency research institute, Mu Changchun, confirmed that a “digital form of the yuan” is on its way, but said it's different from BTC or stablecoins as it's not for speculation. Chinese regulators also warned that crypto crackdown is still effective.
Meanwhile, Russia's institutions are working together to prepare draft legislation that would allow the authorities to confiscate cryptocurrency, with plans to submit a proposal by the end of 2021. Cryptocurrency usage rates continue to soar in Brazil, despite the recent introduction of tax laws that require traders and investors to declare their Bitcoin and altcoin transactions, with Brazilians making 2.5 million crypto transactions in just 8 weeks. Meanwhile in Venezuela, citizens continue to queue around the block for “up to seven hours” at crypto-friendly stores to spend the Petro payouts.
Tokyo’s new stablecoin could be one of the world’s most ambitious yet – after city authorities revealed plans to ensure that 50% of all payments made in the capital are made using the token by 2025. In the meantime, one of Japan’s largest companies, Mitsubishi UFJ Financial Group (MUFG), in cooperation with human resources network Recruit , will launch a “digital currency” and smartphone-based payment service. Also, trading and investing platform eToro confirmed to Cryptonews.com that they are working on a debit card. While TD Ameritrade-backed ErisX launches Bitcoin futures for small investors, and Ping An subsidiary and Ripple-friendly SBI are working on bringing blockchain to banks, American mutual fund giant Fidelity is set to expand into Europe with a new UK-based branch.
While the CEO of Bitmain rival MicroBT is facing embezzlement charges in China, the latest court filing from David Kleiman’s estate claims that Craig Wright is not 'the victim here,' as Wright is trying to dodge the sanctions order which would force him to hand over billions of dollars’ worth of cryptocurrency. Furthermore, Japanese police appear to be close to a breakthrough in the ongoing investigation of the biggest hack in crypto history, as several men have became suspects as possible hackers of the Coincheck . That's not all, as South Korean prosecutors busted an apparent USD 18.4 million multi-level pyramid scheme centering around a fake token, the Australian Federal Police seized more than AUD 1.52 million (USD 1.04 million) worth of unspecified cryptocurrency on an electronic device, and the U.S. law enforcement arrested three men in connection with a USD 722 million cryptocurrency mining Ponzi scheme that targeted thousands of investors whom the conspirators called 'dumb' and 'sheep'. Additionally, Russia’s largest darknet community, Hydra, released a white paper as it prepares to issue an initial coin offering (ICO) that it says will see token growth skyrocket by 700% in six months, which prompted exit scam fears.
In the meantime, a London-based IT analyst admitted to blackmailing tech giant Apple in March 2017 after releasing a YouTube video of himself hacking into iCloud accounts. And speaking of YouTube, the very end of the year saw the giant restricting or deleting some crypto-related videos, forcing their creators into hiding, but then finally speaking out about the issue and admitting its mistake, prompting YouTubers to start returning from self-exile.
Also in December, we've seen Twitter launching a new project, bluesky, aimed at developing a 'decentralized standard for social media,' and Japanese e-commerce giant Rakuten saying it will allow customers to exchange their loyalty points for three leading cryptocurrencies. We've learned that kids in Japan are proving to be too smart for crypto scammer, we've made a list of great crypto gifts for your friends and family, and we've met the world's fastest and the only four-legged Cryptocurrency.
We're excited to see what stories the world of crypto will produce in 2020 for us to write for you to read. Happy New Year!
What other news from the fourth quarter you would like to add to this list? Let us know in the comments below.
Cryptonews Rewind 2019: Q3 - The Return of Bears and Growing Adoption
Cryptonews Rewind 2019: Q1 - Last Months of Crypto Winter & First Hacks
Cryptonews Rewind 2019: Q2 - The Big Rally, Libra & Regulatory Awakening