Lebanon Banks' Shutdown Is ‘Most Potent Case’ for Crypto: Nassim Taleb

Bitcoin (BTC) proponents are encouraging Lebanese citizens to swap fiat for crypto after it emerged the country’s banks would stay closed.

Banks to open “once normalcy restored”
In an ongoing Twitter debate which began on Oct. 24, commentators vented anger on behalf of Lebanon’s population, which has been without banking services for more than a week.

Following civil unrest, banks everywhere closed their doors. Six working days later, a senior banking executive said the status quo would continue until conditions improved.

“Once normalcy is restored, we are very confident that we can resume servicing our customers in full capacity,” Salim Sfeir, head of local lender Bank of Beirut, told Reuters on Thursday.

Previously, long queues were seen at ATMs as worried consumers attempted to access their wealth. Around 65% of Lebanon is banked, figures say, leaving two-thirds of the country cut off from personal funds.

Taleb: shutdown “most potent case for crypto”
For well-known Lebanese statistician, former trader and author of “The Black Swan,” Nassim Nicholas Taleb, the government’s policy was enough to directly endorse cryptocurrencies such as Bitcoin.

“The most potent case for cryptocurrencies: banks are never there when you need them,” he summarized in a tweet. Taleb continued:

“And they are trying to bully the public so they avoid accountability and profit disbursements. Bankers are legal crooks.”

The anger is reminiscent of other recent episodes of economic chaos, during which states have withheld money for their own purposes. In addition to Hong Kong this year, an infamous example is India, which in 2016 began a series of botched currency reforms which left hundreds of millions of people holding worthless notes.

India’s taste for Bitcoin soon increased dramatically, before a hardline policy saw its exchange sector all but evaporated last year.

It is worth noting that unlike banks, the decentralized Bitcoin network operates 24/7 with 99.98% uptime since its inception, according to monitoring resource Bitcoin-uptime.

Rich Dad Poor Dad Author: Bitcoin Is Messing Into the Fed’s Territory

Robert Kiyosaki — author of the 32 million-copy bestseller Rich Dad Poor Dad — has taken a coy stance on Bitcoin’s David and Goliath-like battle with the Fed.

Kisoyaki — whose book has reportedly sold 32 million copies across 40 countries and has an estimated net worth of $80 million — made his remarks during an interview with Bloomberg on Oct. 22.

Bitcoin taking on “one of the most powerful banks ever created”
Kosayaki is no stranger to controversy: his bestseller remains one of the most well-known personal finance books ever written, yet he has also become mired in several scandals, notably over his financial education firm’s bankruptcy filing in 2012.

During the interview, Kosayaki reiterated his belief in investing in assets such as gold, oil and real estate. When asked for his perspective on new asset classes, particularly Bitcoin, he gave an arch response:

“I think it’s so interesting. they’re taking on the FED, one of the most powerful banks ever created. And they’re messing into their territory. That’s like me taking on McDonald’s. So I think they’re gonna step on them. I think it’s a very exciting time.”

Kosayaki’s perspective as an investor was resolute from a personal standpoint, yet he broadly encouraged investors to follow their personal instincts and gut:

“Personally, I’m a technosaurus rex. I can barely use a cellphone. So I’d best stay out of cryptocurrencies. So if you’re a young person and you like crypto, it might be your place. Again, everything is ‘just do what you love.’ I love businesses, I love gold ... I love using debt as money — because in 1971 the dollar became debt — and I love paying no taxes legally.”

While Kiyosaki is a critic of corporate debt-driven finance, he advocates for an opportunistic and deft approach to the systemic volatility it generates, as manifested in major boom and bust cycles. He told Bloomberg his predicted that the next downturn will be sparked by a crisis in the pensions sector between 2022 and 2025.

Sleepwalking into crisis
Earlier this week, former Bank of England governor Mervyn King said the world was “sleepwalking” into a financial crisis even worse than that of 2008.

As part of a newly-revitalized quantitative easing tack, the Fed has injected $210 billion into the economy since mid-September of this year. King warned that:

“By sticking to the new orthodoxy of monetary policy and pretending that we have made the banking system safe, we are sleepwalking towards that crisis.”

Gold advocates like Kiyosaki and proponents of Bitcoin’s digital scarcity alike remain staunch critics of central banks’ interventionist policies.

New Bitcoin ETF Proposal Filed With SEC by Gold Fund Veteran

Delaware-based asset manager Kryptoin Investment Advisors applied with the United States Securities and Exchange Commission (SEC) to launch a Bitcoin (BTC) Exchange Traded Fund (ETF) on Oct. 15.
A Bitcoin ETF on the New York Stock Exchange
According to the filing document published by the SEC, the Kryptoin Bitcoin ETF Trust is meant to be traded on the New York Stock Exchange Arca. Notably, the ETF product is designed:

“... To provide exposure to bitcoin at a price that is reflective of the actual bitcoin market where investors can purchase and sell Bitcoin, less the expenses of the Trust’s operations.”

The company plans to hold Bitcoin and value the shares of the trust according to the Chicago Mercantile Exchange Bitcoin Reference Rate. The cryptocurrency will be held at an unspecified third-party insured custodian that is also regulated under the Investment Advisers Act of 1940.

The SEC filing also details that the Trust will hold Bitcoin “in seeking to ensure that the price of the Trust’s shares is reflective of the actual bitcoin market.”

However, the Trust will not purchase or sell bitcoin directly but will acquire it via shares called “baskets.” The report continues:

“Instead, when it sells or redeems its Shares, it will do so in ‘in-kind’ transactions in blocks of 100,000 Shares called ‘Baskets’ at the Trust’s net asset value (‘NAV’). Only Authorized Purchasers may purchase or redeem Shares with the Trust, and they will do so by delivering bitcoin to the Trust in exchange for Shares when they purchase Shares.”

A notable executive
Another notable detail is that the head of exchange-traded product at Kryptoin is Jason Toussaint, former managing director at the World Gold Council and ex asset manager of SPDR Gold Shares, one of the largest Gold ETFs in the world.

Meanwhile, the race to launch the first regulated Bitcoin ETF is becoming increasingly competitive.

Earlier this month, documents revealed that the Wilshire Phoenix Fund has updated its own Bitcoin ETF proposal filed with the SEC. Also this month, asset manager Bitwise alongside NYSE Arca confirmed the intention to refile their application for a Bitcoin ETF after the latest SEC rejection.

US House Committee Demands Zuckerberg Testify About Libra Before January

The United States House Financial Services Committee has reportedly invited Facebook COO Sheryl Sandberg to testify on Oct. 29 about the company’s plans for its Libra stablecoin.

According to a report from The Information on Oct. 3, the invitation comes with a key condition: that CEO Mark Zuckerberg consent to appear before the committee before January 2020.

Sandberg would follow David Marcus’s testimony
The Committee, chaired by Rep. Maxine Waters, has recently announced its plans to prioritize scrutiny of Facebook’s proposal for Libra and corresponding digital wallet Calibra as part of its fall 2019 agenda.

According to The Information’s sources, Sandberg will be questioned about Libra as well as about Facebook’s advertising policies. The social media titan reached a $5 million settlement with civil rights groups this March over the allegations that its advertising had facilitated discriminatory practices in the housing market.

Should the testimony take place, Sandberg would be the second Facebook executive to testify before the Committee regarding Libra. In mid-July, Calibra CEO David Marcus testified about matters including anti-money laundering and other compliance measures, as well as the issue of public and government trust in the company’s surveillance and data collection measures.

A hostile response from lawmakers
As Cointelegraph reported, Rep. Maxine Waters has proved to be one of the more Libra-sceptic lawmakers in the U.S., expressing her concerns that the tech giant has “demonstrated pattern of failing to keep consumer data private on a scale similar to Equifax” and had “allowed malicious Russian state actors to purchase and target ads” to — purportedly — influence the 2016 U.S. presidential elections.

In mid-June, she requested that Facebook halt work on Libra, citing the firm’s “troubled past.”

This week, leaks from two July 2019 internal Q&A sessions between Zuckerberg and Facebook employees revealed the CEO’s early strategy for Libra’s launch.

During the sessions, the CEO acknowledged that the project faced “real issues. Finance is a very heavily regulated space ... preventing money laundering, preventing financing of terrorists and people who the different governments say you can’t do business with.”

CME Exec: No Plans for Physically Settled BTC Contracts Currently

The Chicago Mercantile Exchange (CME) Group has no current plans to launch physically settled Bitcoin (BTC) contracts, a senior executive said.

Tim McCourt, global head of equity index and alternative investment products at CME Group, told MarketsMedia on Oct. 1 that all new contracts or products are driven by customer demand.

CME’s new options will be settled in BTC futures
CME has been trading BTC futures since December 2017 and recently revealed plans to launch options in the first quarter of 2020, pending regulatory review.

Its current Bitcoin futures contracts are settled in cash. McCourt said that “the number one demand from customers has been for options on our futures” since the launch of its futures product.

Since December 2017, there have been 20 successful futures expiration settlements, with more than 3,300 individual accounts trading the product. Year to date, reported 7,000 CME Bitcoin futures contracts — equivalent to roughly 35,000 BTC — were traded on average each day, breaking a new all-time high this May.

Institutional interest in Bitcoin is growing
McCourt noted that “institutional interest in bitcoin is growing but they need time to become familiar with the market and get approval to use new products.” Current participation is reportedly spread between hedge funds, commodity trading advisors and asset managers, as well as crypto-focused hedge funds and trading firms.

The planned forthcoming options will use CME Group’s existing technology, matching engine and clearing mechanisms, and the product is currently undergoing the Group’s standard testing procedures.

Bakkt launches physically settled futures to tepid market
In late September, Intercontinental Exchange launched its much-anticipated Bakkt, a regulated platform offering physically settled BTC futures contracts and custodial services approved by the Commodity Futures Trading Commission.

Sluggish launch of the new product has in part been identified as a possible contributing factor to Bitcoin’s recent price weakness: in the days following Bakkt’s debut, BTC/USD plummeted from near $10,000 to under $8,000.

Bakkt COO Adam White earlier told reporters that the platform hoped its futures would aid price discovery long-term.

Facebook Will Create ‘Shadow Banking’ System, Major U.S. Banks Warn

Facebook’s crypto project Libra will potentially create a “shadow banking” system, according to the banks at the Federal Advisory Council (FAC).

U.S. banks fear Libra will reduce payment volumes
After the United States Federal Reserve asked some of the nation’s largest banks about Libra, the banks expressed their negative stance towards the project, outlining the risks of potential decline in demand-deposit accounts and bank payment volumes, Bloomberg reports Sept. 30.

Libra and similar stablecoin projects, where a digital coin is pegged to an underlying value consisting of one or more fiat currencies, also pose a possible challenge to the bank business model built on privacy, the banks reportedly said during a quarterly meeting of the FAC earlier in September.

Noting that around 52% of the U.S. population, or 170 million people, were considered active Facebook users in 2018, the banks suggested that Facebook is potentially creating a digital monetary ecosystem outside of sanctioned financial markets, or a “shadow banking” system.

The banks argued:

“As consumers adopt Libra, more deposits could migrate onto the platform, effectively reducing liquidity, and that disintermediation may further expand into loan and investment services.”
Banks want to keep managing local economies
Additionally, the banks warned that Facebook’s Libra could impact the national monetary policy, citing the “potential to reduce the ability of states to monitor, manage and influence local economies.”

The FAC, which includes twelve representatives of the U.S. banking industry, consults with and advises the Fed Board on economic and financial issues within the Board's jurisdiction.

On Sept. 26, Bloomberg reported on Facebook planning to get its chief operating officer Sheryl Sandberg in front of the House Financial Services Committee in October to testify on Libra and its plans to launch the stablecoin in 2020.

South Korean Exchange Upbit Ends Orderbook Partnership With Bittrex

South Korean cryptocurrency exchange Upbit has broken its partnership with Bittrex in a reorganization of its Bitcoin (BTC), Ether (ETH) and Tether (USDT) markets, local South Korean news outlet Decenter reported on Sept. 25.

Previously it had a shared order book arrangement, with Bittrex orders being visible in the Upbit bid windows.

Upcoming reorganization of markets
In a notice to customers, Upbit announced its intention to introduce changes into its BTC, ETH and USDT markets. These changes include the introduction of market orders, limit orders, and stop-limit features, although no further details of this are given.

The notice did, however, include particular mention of the order book sharing with Bittrex being discontinued. This was later edited to remove specific reference to Bittrex.

Bittrex edited out of notice
The original wording, under the heading, “Discontinued order book sharing with Bittrex,” was as follows:

“As a result of the changes, you will no longer be able to see orders placed at Bittrex in the Upbit BTC, ETH and USDT markets.”

However, the updated notice has the heading, “Only Upbit member's orders are displayed on the order book,” and reads, “After changes are applied, only orders place by Upbit users are displayed on BTC, ETH and USDT markets.”

Upbit recently emerged as one of the leading exchanges in the latest Blockchain Transparency Institute report. It has also delisted privacy coins over concerns about money-laundering.

Kim Dotcom to Sell His ‘Built on Bitcoin’ Token Next Month on Bitfinex

Cryptocurrency exchange Bitfinex has announced the relaunch of its Initial Exchange Offering (IEO) platform Tokinex as Bitfinex Token Sales and will offer the token of P2P digital content and monetization blockchain K.IM on October 22.

The news was revealed in a press release shared with Cointelegraph on Sept. 24.

A Bitcoin-integrated token
Per the release, K.IM has raised $2.5 million in funding from BnkToTheFuture, Bitcoin Capital and Max Keiser. According to the project’s roadmap, the platform is expected to go live in Q3 2020 alongside a formal listing on Bitfinex.

Entrepreneur, digital rights activist and founder of now-defunct file-sharing website Megaupload, Kim Dotcom, commented on the development:

“Combining the internet with Bitcoin gives us a real chance of achieving the original promise of the internet; freedom of speech, commerce and finance. ... I founded K.im to allow artists, content creators and digital businesses to cut out all the middlemen and sell content and digital goods without censorship and outside of monopolies.”

According to Dotcom, the Bitcoin blockchain has been able to scale so far and can now support a slew of new possibilities.

“We can finally create our KIM token on top of Bitcoin thanks to recent technical breakthroughs like Lightning and Liquid. Bitfinex is the perfect partner to help us distribute KIM tokens, built on Bitcoin, to those who want to access the freedoms that our products provide,” Dotcom explained.

Bitfinex courts LEO holders
Bitfinex meanwhile notes that the renewed IEO platform will have “direct integrations with the Bitfinex exchange itself.” The company’s chief technology officer Paolo Ardoino commented on the current IEO landscape:

“Most IEO’s are marketing campaigns that focus on achieving a short-term result, but that’s not how real businesses are built. Successful businesses are built through long-term, sustainable growth.”

Bitfinex also announced that its native utility token, Unus Sed Leo (LEO), will be part of all future token sales and its holders will have access to higher allocations than those participating with other digital assets.

As Cointelegraph recently reported, United States-based cryptocurrency exchange Coinbase has also indicated it is considering the launch of an IEO platform.

Ripple Avoids XRP Question as It Moves to Dismiss Securities Lawsuit

Blockchain network Ripple has filed a controversial motion to dismiss a lawsuit over it allegedly selling unregistered securities.

Ripple: Securities ruling beyond scope of the court
In a court filing uploaded by Fortune on Sept. 20, lawyers representing the company against investor Bradley Sostack dismissed the claims against it.

Part of an ongoing legal battle, Sostack says Ripple’s sales of altcoin XRP in 2013 constituted an unlawful securities offering.

Ripple denies this, but the case has thrown up wider concerns over the legality of Ripple’s operations regarding XRP. As Cointelegraph reported, executives have refused to acknowledge the company’s relationship to the token, despite their huge personal holdings and sell-offs of it, which continue.

“Court need not resolve whether XRP is a security”
Now, fresh suspicions are already swirling after lawyers’ motion to dismiss failed to address the securities aspect of XRP at all.

“Because of the multiple, independent grounds for dismissing this action, the Court need not resolve whether XRP is a security or currency for purposes of this Motion, which assumes Plaintiff’s allegation that XRP is a security,” a section reads.

The substance of the filing attracted attention from crypto-focused lawyer Jake Chervinsky, who adopted a realistic stance on the proceedings.

“They make twelve separate arguments for dismissal of the plaintiff's claims. Not a single one squarely addresses whether XRP is an unregistered security,” he summarized on Twitter on Friday.

The latest developments appeared to have little impact on XRP markets, the token continuing to trade flat over the past 24 hours at just under $0.30.

Nasdaq Launches Decentralized Finance Index for Digital Assets

Major United States stock exchange Nasdaq has unveiled a blockchain decentralized finance (DeFi) index Defix (DEFX). According to a Defix press release published on Sept. 9, brokerage firm Exante streamlined the launch of the Defix index.

A disparate group of crypto assets
The index includes crypto assets of projects such as the one of Proof-of-Work blockchain Amoveo (VEO), decentralized exchange protocol 0x (ZRX), prediction market Augur (REP). Also the governance token of the decentralized autonomous organization behind the DAI stablecoin and MakerDAO (MKR).

Amoveo main developer Zack Hess commented on the development:

“I am glad to see increased awareness being brought to decentralized finance projects.”

A broker specialized in crypto funds
Exante launched its Bitcoin (BTC) fund in 2012. Notably, the fund reportedly totaled an overall return of investment of 70,000% since its inception.

Furthermore, the firm also released the XAI fund, composed of six major altcoins Ether (ETH), Ethereum Classic (ETC), Monero (XMR), XRP and Zcash (ZEC).

As Cointelegraph reported at the end of August, Elwood Asset Management — owned by British billionaire and Brevan Howard founder Alan Howard — is planning a $1 billion venture into the crypto hedge fund space.