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New Head Of South Korean Financial Regulator Considers Relaxing Cryptocurrency Regulations

The Korea Times is reporting new Financial Supervisory Service Governor Yoon Suk-heun said the country will consider relaxing cryptocurrency regulations. An official from one of South Korea’s four major cryptocurrency exchange operators, Upbit, said, “We don’t oppose regulations. But you can’t entirely kill the markets by simply imposing regulations. What the new FSS chief should think about is how the regulators should provide remedies to help crypto trading and blockchain technology get better.”

Monero Cryptojacker Using NSA exploit EternalBlue

BlockExplorer’s Armin Davis reports that following the use of the NSA developed EternalBlue exploit in the now infamous ransomware WannaCry, a new malware known as WannaMine has surfaced.

Iceland’s 600 Missing Bitcoin Mining Machines Reported To Be in China

Earlier this year 600 Bitcoin mining machines were stolen from Iceland, a case generally chalked up to unsolvable until a few days ago when Icelandic media outlet RUV reported the machines are likely in Tianjin, China. Cointelegraph reports, “In Tianjin, it was precisely a pattern of highly irregular electricity usage that is reported to have attracted the attention of a local grid operator, leading to the authorities’ confiscation of the suspect mining hardware.”

Bitmain to Begin Shipping Equihash ASIC Miners in June

Chinese mining rig manufacturer Bitmain has unveiled the first Equihash ASIC miners, BlockExplorer’s David Murray reports, “making it likely that it will soon be unprofitable to mine Zcash using GPU-powered devices.”

BlockShow Europe 2018 Coming Up May 27-28

BlockExplorer’s Isaac Rocket reports, “After an eventful two months of hosting blockchain meetups across Europe, Blockshow is bringing their journey to a close with the featured conference, BlockShow Europe 2018.” This will be a big event with over 80 blockchain experts presenting, on the most pressing issues of today’s blockchain community.

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Peer-to-peer (P2P) cryptocurrency exchange CoinTouch has shut its virtual doors over concerns related to the passage of the European Union’s new General Data Protection Regulation (GDPR), which will take effect later this month.

The exchange — which was based out of London and opened in 2014 — did not charge fees, and founder Chris Beach operated it at a loss as a service to the cryptocurrency community.

The platform allowed Facebook and Google users to securely set up P2P cryptocurrency trades with users within their social networks. When a trader placed a bid or offer, it would become visible to the user’s friends and friends-of-friends, which ensured that traders were able to verify the identities of their counterparties. If another trader wanted to fulfill an order, he or she could automatically send a message to the other user through Facebook, where the two parties could arrange the trade.

However, Beach wrote in a statement announcing the shutdown that the recently-passed GDPR — which adopts new standards for individual data privacy and use — introduces regulatory uncertainty that makes it too risky to continue to operate CoinTouch, particularly as a free service.

“I asked trusted contacts in the industry for advice on how to make CoinTouch GDPR compliant. They came back with different answers (through no fault of their own – the law is ambiguously defined),” Beach said. “I concluded that I cannot justify running a free service while taking on a legal risk.”

The developer, who operates a number of non-profit websites, said that he is in the process of shutting them all down before the new rules — which he says actually reinforce the dominance of tech conglomerates like Facebook, Google, and Twitter — take effect.

“So, perversely, this new EU law hurts small website like mine, but helps reinforce the dominance of Facebook, Google, and Twitter, who are able to prepare and defend themselves using established legal teams and cash reserves, and who now face less competition from startups,” he concluded.

Featured Image from Pixabay

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US regulators are cracking down on non-compliant securities issuers, and senior officials are set to meet to discuss whether that group includes the founders of Ethereum.

According to the Wall Street Journal, senior officials from the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) will meet on May 7 to hammer out whether certain cryptocurrencies — an ensemble that anonymous sources say excludes bitcoin — should be classified as securities under US law.

However, that group does include ether, whose creators are not anonymous and which was initially sold through a presale in 2014. That presale raised $18.3 million in bitcoin from contributors, who received an initial distribution of ether tokens when the network’s Genesis block was mined the next year.

The officials will reportedly consider whether ether, whose circulating market cap is $68 billion, is sufficiently directed toward its stated use case — running Ethereum DApps — or if token holders buy it primarily for its perceived investment potential.

They will also discuss whether the project’s creators retain a level of influence over the asset’s price that is comparable to the influence that traditional company executives have over a firm’s share price.

On Wednesday, Ethereum co-founder Joseph Lubin hit back at the report, arguing during an interview with financial publication TheStreet that the project engaged in copious legal due diligence when structuring its token sale and that he is “extremely comfortable” that regulators will not classify it as a security.

However, former CFTC Chairman Gary Gensler said recently that he would classify ethereum and XRP — the third-largest cryptocurrency — as “noncompliant securities,” though he acknowledged that ethereum’s present level of decentralization may earn it a favorable regulatory ruling.

The ethereum price initially fell in response to the news that regulators are examining whether the asset is a security, though it made a moderate recovery on Wednesday and was trading at $687 at the time of writing.

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The company behind wildly-popular encrypted messaging app Telegram has scrapped plans to open its initial coin offering (ICO) to the public, says an anonymous source close to the matter.

According to the Wall Street Journal, Telegram — which is developing a blockchain ecosystem called the Telegram Open Network (TON) — has determined that it does not want to enter the murky regulatory waters currently governing the ICO industry.

That’s not to say the company is hard up for cash.

As BlockExplorer reported, the chat platform already reported to the Securities and Exchange Commission (SEC) that it had raised $1.7 billion from fewer than 200 investors during two private ICO presales, which the firm conducted during the first three months of the year.

Those funds will purportedly be used to develop TON, which the company has privately described as a “third-generation blockchain” capable of processing millions of transactions per second. However, skeptics have wondered aloud whether that money will instead be used to fund Telegram’s general operations, as the app does not currently generate revenue.

One anonymous source cited in the report connected Telegram’s decision to shelve the public ICO to the SEC’s increasing oversight of the burgeoning ICO space, which has seen startups collectively raise billions of dollars over the past calendar year — and fraudsters make off with a noticeable percentage of it.

Since the presale excluded retail investors, Telegram was able to claim an exemption from traditional securities registration requirements.

However, opening the offering to the public would raise a number of thorny regulatory issues, and many observers believe the SEC is preparing to bring down the hammer on noncompliant ICO operators.

If a company as well-known as Telegram conducted a conventional ICO, it would present the SEC with a high-profile target if it desired to make an example intended to frighten other market participants into compliance.

Featured Image from Pixabay

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News Bytes for May 2, 2018

Welcome to News Bytes with BlockExplorer, your daily cryptocurrency news roundup. Today we will discuss top auto manufacturers forming a blockchain coalition, the SEC urging caution on ICOs, Australia cracking down on ICOs, Ethereum being under regulatory scrutiny, and Bitcoin being a contender to replace cash payments.

BMW, Ford, GM and Renault Form Blockchain Coalition

Four of the largest car manufacturers have formed a consortium focused on applying blockchain tech in the automotive sector. The Mobility Open Blockchain Initiative (MOBI) launched with the fairly broad goal of making transportation “safer, more affordable, and more widely accessible using blockchain technology.”

Top SEC Enforcement Official Urges Caution on ICOs

A top SEC enforcement official, speaking at a conference in New York on “The Future of Financial Fraud”, said some ICOs could be putting investors at risk. “They’re raising a lot of money, but they’re not complying with the rules that are in place to protect investors,” says Valerie Szczepanik, SEC assistant director of enforcement.

Australian Securities and Investments Commission Cracks Down on ICOs

ASIC is investigating misleading or deceptive conduct in the selling of cryptocurrencies. “If you are acting with someone else’s money, or selling something to someone, you have obligations,” ASIC Commissioner John Price said.

Ethereum Falls Under Regulatory Scrutiny

Ethereum fell 6 percent yesterday after The Wall Street Journal reported it has come under scrutiny by regulators. The cryptocurrency’s creation in 2014 was “probably an illegal securities sale” in the eyes of some regulators, The Wall Street Journal reports, citing people familiar with the story.

St. Louis Federal Reserve Bank: Bitcoin Could Be a Contender to Replace Cash Payments

Bitcoin could eventually become a contender to replace government-issued fiat money as a means of payment as it rapidly drives out the use of cash, according to a report from the St. Louis Federal Reserve Bank.