UK mulls ban on crypto derivatives

The UK's Financial Conduct Authority (FCA) will be holding consultations on a "potential prohibition" of cryptocurrency-based derivatives, in order to protect consumers from risks posed by digital assets.

"[T]he FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin, including CFDs, futures, options and transferable securities," read the policy paper by the Cryptoassets Taskforce, which is composed of the FCA, HM Treasury, and the Bank of England. Not included under the proposed ban are cryptocurrencies classified as securities, which are then to be regulated by the European Securities and Markets Authority (ESMA).

The paper noted that the FCA has already supported ESMA's restrictions on contracts for difference (CFDs) that reference cryptocurrencies, a measure that took effect last August 1.

The report added that the FCA "will not authorize or approve the listing of a transferable security or a fund that references exchange tokens (for example, exchange-traded funds) unless it has confidence in the integrity of the underlying market and that other regulatory criteria for funds authorization are met."

The consultations have been scheduled for some time before the end of the year.

The task force also called for further clarification of general regulations for the cryptocurrency market, expressing similar concerns as the UK Treasury committee in its report released in September, such as price volatility of many virtual currencies.

While acknowledging the benefits of the use of cryptocurrencies, such as increased efficiency of financial transfers and the capacity to raise funds, the task force said, "Evidence of the current generation of cryptoassets delivering any of these benefits is limited and many use cases are unproven at a large scale," leading it to conclude that "in many cases, the risks posed by the current generation of cryptoassets outweigh any potential benefits."

The task force noted that the UK government itself is exploring the use of blockchain technology apart from financial services, having invested more than £10 million for various distributed ledger projects, and creating a £20-million GovTech Catalyst Fund to study applications of the technology for the public sector.

Last year, the FCA had already warned of the risks in investing in CFDs, but without suggesting a prohibition. It also issued guidelines last April affirming its authority over the trade of derivatives.

60% of Americans okay with crypto donations for elections

60% of Americans believe that it should be legal to donate cryptocurrencies for election campaigns, under the same rules that apply to U.S. dollar donations.

Research company Clovr, surveying 1,023 eligible voters in the country, also found that only 21% disagreed that cryptocurrency donations should be allowed.

At present, cryptocurrency donations are treated as in-kind contributions limited to $100 worth at the time of donating. This is based on a 2014 ruling, when the price of BTC was around $440.

54% of respondents said that cryptocurrencies were secure enough to be used for political purposes, while 73% of those who claimed to be knowledgeable about digital currencies said that security was not a problematic issue.

Only 42% saw cryptocurrencies as financially stable enough for political purposes. 52% of self-identified Republicans answered in the affirmative, whereas only 40% of Democrats and 35% independents did so.

Only about 25% said they would be more willing to donate to campaigns if cryptocurrencies were an option like fiat currencies. "[M]ost contributors still prefer to donate with U.S. dollars, but a growing number said they would prefer to either give exclusively with digital currencies or a combination of both dollars and cryptocurrency," Clovr noted.

Even though more than half of respondents supported legality of cryptocurrency donations, 62% said cryptocurrencies were more likely to be used illegally in the U.S. political system, compared to the U.S. dollar. "Even a slight majority of people who were incredibly familiar with cryptocurrency believed illegal campaign activity would increase," Clovr said.

The firm added, "State governments haven't yet jumped on the cryptocurrency bandwagon, but if the FEC [Federal Election Commission] and other federal agencies expand its use, then history indicates many will follow."

Already, several politicians have made use of cryptocurrency donations in their campaigns, including Brian Forde, running for California's 45th Congressional District, who received the support of, among other investors, the Winklevoss twins, founders of the Gemini cryptocurrency exchange.

HTC’s New Blockchain Smartphone Can Be Bought With Bitcoin

HTC, the struggling Taiwanese phone-maker, has launched a smartphone that can be bought only with BTC or ETH. Called the Exodus 1, the smartphone is blockchain-integrated and features a cryptocurrency wallet built into a secure enclave of the device.

HTC Sells Its New Cryptocurrency Wallet-Enabled Phone for 0.15 BTC

Initially announced in May, the Exodus 1 phone was unveiled in Berlin, Germany on Oct. 22. The handset will retail for 0.15 BTC or 4.78 ETH in early access deals, which is equivalent to $960. First shipments are expected in December, the company said.

"Exodus 1 is a foundational element of the crypto internet," Phil Chen, HTC's 'decentralized chief officer', said in a statement on the company's website. "For digital assets and decentralized apps to reach their potential, we believe mobile will need to be the main point of distribution."

Built into the Exodus 1 is a cryptocurrency wallet called Zion, which was developed by HTC to serve as a hardware virtual currency wallet. Chen said the wallet runs from a secure enclave on the phone's chip, separate from the Android operating system, to safeguard digital coins. He underscored the importance of keeping this area of the phone separated from Android because Google's operating system was "fundamentally insecure with a centralized system," exposing users' funds to theft by attackers.

"Think of [the enclave] as a micro OS that runs in parallel with Android," CNBC quoted Chen as saying. "It basically is a wallet, but the wallet, what it does is hold your private keys." Chen added: "The reason why you do a blockchain phone is … for everybody just to own their own keys. Everything starts there. When you start owning your own keys, then you can start owning your own digital identity, then you can start to own data."

Cryptocurrency-Only Pricing to Bring Device to Its Core Audience

HTC's new phone will run decentralized applications (dapps). It also features a Social Key Recovery function that helps users "regain access to their funds if they lose their private key via a select number of trusted contacts."

"Selling [the phone] in crypto only and being the first to do so means we are bringing this directly to the core audience and those who will want this device – the blockchain community," Chen told the South China Morning Post. He added:

It reflects our belief in cryptocurrencies – in fact we had to recreate and overcome many processes internally, as well as find new distributors, so that we can achieve the goal of only accepting cryptocurrencies as the form of payment.

Exodus 1 will be available in 34 countries including Hong Kong, Singapore, the United States, the United Kingdom and other European countries. However, the phone will not be available in China, which has taken a strict approach to bitcoin and cryptocurrencies.

More Companies Looking to Enter Blockchain Smartphone Market

HTC, which at one time was among the top manufacturers of smartphones in the world, is not the only company to try and offer a blockchain-focused phone.

Switzerland-based start-up Sirin Labs is currently accepting orders for its $999 smartphone, whose shipping has been delayed from October. Chinese information communication technologies firms such as Lenovo Group and Sichuan Changhong Electric have previously announced plans for a blockchain phone, but provided no details.

Earlier this month, Indonesia-based startup Pundi X unveiled its blockchain-powered handset called Xphone which, unlike HTC and Sirin Labs' devices, can operate on its own blockchain-based transmission protocol, independently of mobile carriers.

Aside from running dapps, Exodus 1 also comes with numerous features found on regular flagship smartphones such as dual rear cameras and a six-inch Quad HD+ display.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happens in Hong Kong on November 2

When the August 2017 Bitcoin Cash hard fork took place, it did not really create a new coin. Instead, Bitcoin Cash (BCH) was the rebirth of the original Bitcoin, designed to stay to true to the Satoshi Vision (SV).

With Bitcoin BCH, the roadmap is for massive on-chain scaling by significantly increasing the block size, enabling fast transaction processing, and keeping transaction fees very low. The key BCH developer groups have had some differences about how quickly BCH should scale, and the dangers of developer groups constantly trying to experiment with proposed technical changes to the Bitcoin protocol.

CoinGeek-sponsored Bitcoin BCH Miners Choice Summit happening in Hong Kong

Now we have Bitcoin SV, the new full node implementation for Bitcoin BCH that will restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH. By trusting the original design of Bitcoin rather than constantly changing it, Bitcoin SV will support global adoption, enterprise-level usage of BCH, and allow miners to earn more longer-term revenue.

To gain more insight about Satoshi Vision, as well as Bitcoin SV and SVPool, miners are invited to attend the CoinGeek-sponsored Bitcoin BCH Miners Choice Summit, taking place at The Harbour Grand Hotel in Hong Kong on November 2.

The dynamic half-day conference will feature the industry's most exclusive guest speakers, including nChain Chief Scientist Dr. Craig S. Wright and nChain Group CEO Jimmy Nguyen, along with CoinGeek Mining's Bob Yuan, one of the most respected mining professionals in China. More speakers will be announced soon.

Recently, Dr. Wright launched his personal initiative—the public Bitcoin BCH mining pool SVPool—to all public miners on the Bitcoin BCH network. SVPool represents BCH miners who support the Satoshi Vision and want to generate more long-term revenue. BTC miners who believe in Bitcoin's original vision are also invited to begin mining BCH with SVPool.

Wright explained: "If you believe in Bitcoin's original vision, you believe in Bitcoin SV and SVPool. For too long, developer groups have repeatedly tried changing Bitcoin. The original Satoshi protocol for Bitcoin does not need to be fixed. It has everything BCH needs to massively scale, support tokenization, smart contracts and other advanced features, and become the only global public blockchain. Just like the Internet has a stable protocol, Bitcoin needs a stable protocol so businesses can build upon a rock solid foundation rather than constantly moving sand."

The CoinGeek-sponsored Bitcoin BCH Miners Choice Summit is an event not to be missed. Seats are limited, so best to RSVP now to RSVP@svpool.com to confirm your attendance at this iconic event.

Miners are also invited to take part in the CoinGeek Week Miners Day, happening during the CoinGeek Week Conference in London this November. The SVPool and CoinGeek Mining team will be on-hand to discuss how you can do your part in making Bitcoin BCH realize its full potential. Secure your seat today via Eventbrite for the three-day conference that's shaping up to be the essential Bitcoin BCH conference this fall.

The Bitcoin SV project was created at the request of and sponsored by Antiguan-based CoinGeek Mining, with development work initiated by nChain. The project is also owned by the Antiguan-based bComm Association on behalf of the global BCH community, and the Bitcoin SV code is made available under the open source MIT license.

Security Giant G4S Offers Protected Offline Cryptocurrency Storage

G4S (LSE: GFS), a security services provider with operations in more than 90 countries, guards everything from cash transfers to nuclear power plants and prisons. The London-headquartered company has now started to offer cryptocurrency protection, according to a recent report.

Secure Vault Storage

The company, which has more than 560,000 employees throughout the world, announced on Wednesday that it has developed a new service providing high-security offline cryptocurrency storage, to help to protect assets from criminals and hackers. And the company is already providing the service to an unnamed European exchange, according to the Financial Times. It charges clients based on the number of different offline storage devices they want to use to store their private keys, and reportedly uses its own existing vaults for the service, rather than newly built facilities.

The company's press statement confirmed that cryptocurrency exchanges are already turning to them for help. Dominic MacIver, senior risk analyst at G4S Risk Consulting, commented: "Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions' experience in protecting high-value items and G4S Risk Consulting's experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology."

Heavily Restricted Access

The service is said to be more secure then other methods because G4S takes the keys offline, breaks them up and stores them in high-security vaults. Moreover, access to the sites in which they are held is said to be heavily restricted, with multiple layers of security. Clients can only gain access when all of the pieces are combined with specific technology.

"Offline storage has become a more established and secure way of storing crypto-assets," MacIver said. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage.' We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike."

October 18, 2018 ‘It’s time for Bitcoin BCH to grow up’: Jimmy Nguyen explains the importance of Bitcoin SV

October 15 marks an important event for the Bitcoin Cash (BCH) community. On that day, the release candidate of the Bitcoin SV client went live, one month ahead of the November Bitcoin Cash (BCH) network upgrade.

Bitcoin BCH miners and mining pools are encouraged to begin using Bitcoin SV, which is a new full-node implementation for Bitcoin BCH designed to fulfill the vision set out by Satoshi Nakamoto's original Bitcoin white paper. Currently, the Bitcoin BCH ecosystem has a number of full node implementations available, but what makes Bitcoin SV stand out?

The answer, according to nChain CEO Jimmy Nguyen, is straightforward: Like its initials, which stand for Satoshi Vision, Bitcoin SV better fulfills the original vision for Bitcoin.

"The goal of Bitcoin SV is to restore the original Bitcoin protocol, and then create an implementation that enables a protocol that is stable, scalable, and secure," Nguyen explained. "Those are our three main goals, and it's designed to really allow a protocol to enable what bitcoin was always meant to be but could not be once Bitcoin Core [BTC] took over the protocol, but now that it's been reclaimed in bitcoin cash, we want the software implementation to enable that vision to come to life."

With a stable protocol, businesses—especially the big businesses—will feel comfortable operating on it. Take the internet, for instance. Its evolution has been very slow, which, according to Nguyen, makes sense since businesses or those running websites or mobile applications don't want have to deal with time consuming, expensive protocol changes every six months. For BCH, some developers groups want to experiment by continually introducing new op_codes, changes and feature sets not found in the original Bitcoin protocol, which would lead to a continually shifting platform. In contrast, Bitcoin SV seeks to restore the original Satoshi client release 0.1 and then keep it stable and business-friendly.

"Do you want the big business of the world to build their house, their projects, on sand or on a rock foundation? We don't want the platform and the protocol to be moving quickly every six months. We want foundation to be rock solid," the nChain CEO noted.

Scalability is another key component of Bitcoin SV. While other implementations seek a gradual approach to scaling, nChain believes that the Bitcoin BCH network needs to scale bigger and quickly. With Bitcoin SV 0.1 version, the default maximum size of accepted blocks has also been increased from the 32MB soft limit to 128MB. The reason behind this comes down to one thing: economic reality. For Bitcoin BCH miners to remain profitable in two years, when the next block reward halving (from 12.5 to 6.25 coins) event is set to take place and even further halving after that, the network needs to start scaling now so miners earn more in transaction fees. 

For big businesses, scalability is also critical. Nguyen said, "They want to know that the network will be able to sustain the large capacity that's needed for their project and other companies' projects because otherwise they're going to be hesitant to say, 'Why would I commit millions of dollars of resources and time to build let's say my blockchain application on a network which may not be able to sustain that scalability issues?'"

Speaking of critical issues for cryptocurrencies like Bitcoin BCH, we have security. For the Bitcoin SV team, it means developing a world-class security system for Bitcoin SV's code.

"Security is definitely this key issue. We are going to work as hard as possible to implement the best practices possible and modeling some of the best practices from security systems and rigorous processes in some of the most mission-critical industries such as aerospace, national security, transportation. I think that will serve the bitcoin community well," Nguyen said.

In closing, the nChain CEO addressed the potential split that could happen in November, saying that it's natural in the Bitcoin ecosystem for groups to emerge with a different plan and vision—and it's up to the miners to choose.

Unlike other implementations, Bitcoin SV is born out of the desire to empower miners to direct the future of Bitcoin and also to ensure BCH miners remain profitable. Miners will have a choice and a voice to drive the process of restoring Bitcoin to its optimal state—that of unbounded blocks, original op_codes, and no artificial limits imposed on the protocol.

"We believe it's time for bitcoin to grow up. It's time for bitcoin to professionalize. We want a massively scaled network, we want worldwide adoption and enterprise-level usage. We want 5 billion people using Bitcoin Cash in the years to come. To get there, we need to demonstrate that its ecosystem is professionalized with world-class security, quality assurance practices with a scaled network, with big blocks to support big enterprise and global payments. And, going back to the first pillar, a stable protocol," Nguyen said.

A Bitcoin Rat Is Occupying Wall Street

Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

A Visual Perspective of Finance and Art

Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.

There's some new street art located across the street from the New York Federal Reserve building that's been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it's about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker's lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat's creator, who is also known as the "Warhol of Wall Street," explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

"So this piece is slightly different from the inflatable rats you see around the city. It's loaded with Bitcoin code and a couple related equations," explained Saiers during the interview.

Saiers adds:  

About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; '03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,' referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats

Over the last two decades, street art depicting the world's financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a "sewer rat." 

Banksy himself said the rat is something to look up to because these animals do whatever they want. "If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society," the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring 'honey badger of money' or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a "sewer rat of currencies."       

"Bitcoin isn't living in a bubble — Bitcoin is a sewer rat," Antonopoulos detailed during his speech. "It's missing a leg. Its snout was badly mangled in an accident last year. It's not allergic to anything — In fact, it's probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust."

Bitcoin Street Art Isn't Going Away Anytime Soon

Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there's an artist named Pascal Boyart aka "Pboy," who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

Bitcoin street art by Pascal Boyart aka 'Pboy.'

Saiers latest artwork and the many other artists located around the world shows there's a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist's Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.

Crypto thefts worldwide to hit over $1B in 2018

Cryptocurrency thefts globally are expected to reach over $1 billion this year, about four times the recorded thefts in 2017, according to a report from CipherTrace, a firm that specializes in ensuring legal compliance for blockchain transactions.

From the first three quarters of 2018, already $927 million worth of cryptocurrencies has been documented as stolen, according to the company.

Included in the listed amounts were high-profile hacks of cryptocurrency exchanges such as $530 million worth of tokens stolen from Japanese exchange Coincheck, and $195 million taken from Italian exchange BitGrail.

"Additionally, CipherTrace is aware of over $60 million in cryptocurrency that was stolen but not reported publicly," the report read.

The company also pointed out that the figure for the first three quarters of 2018 was already 3.5 times larger than all of the previous year, where $266 million was reported stolen globally.

CipherTrace, which deals with blockchain forensics and enforcement solutions, stressed that stricter regulations in the cryptocurrency trade were in demand all over the world. "Establishing their countries' reputations as 'safe' digital markets helps to attract trustworthy cryptocurrency exchanges and digital asset businesses," according to the company.

It cited the European Commission's fifth Anti-Money Laundering Directive last July, and policies and monitoring of the Financial Action Task Force, as part of current regulatory initiatives.

The report also noted how existing anti-money laundering (AML) and know your customer (KYC) regulations for the cryptocurrency trade have been moving the use of cryptocurrencies for criminal activity to less regulated markets. The result is that 97% of BTC payments for criminal activity ended up in unregulated exchanges or in exchanges of countries with weak AML legislation.

According to CipherTrace, 4.7% of total BTC received in countries with weak regulations comes from criminal activity, which it defined as directly coming from sources such as dark market sites, extortion, malware, money laundering sites, ransomware, and terrorist financing.

The data analyzed came from 45 million transactions in the top 20 cryptocurrency exchanges, up to last September 29. Using U.S. Department of State Bureau for International Narcotics and Law Enforcement Affairs data, CipherTrace determined that 79 of 212 "have weak AML regimes" due to lack of government controls to regulate drug dealing and money laundering, to enforce KYC regulations, report large and suspicious transactions, and maintain records over time.

The data showed that 95% of BTC paid from exchanges to criminals, worth $1.5 billion at present prices, was sent from unregulated exchanges.

CipherTrace added that "the unregulated exchange is growing at 300%, with risky transactions and criminal transactions growing fastest."

New Research Claims Most ICOs Have Profited Off Selling ETH

New Research Claims Most ICOs Have Profited Off Selling ETH

Bitmex Research is back with another detailed report, this time into the ethereum holdings of ICOs. Ethereum's downward trajectory has been attributed in some quarters to ICOs offloading ETH to pay the bills. If so, data suggests that those projects have profited handsomely off their ETH holdings in USD terms, despite its falling price.

Ethereum's tanking price, sliding from over $1,400 to below $200 in seven months, has alarmed many cryptocurrency investors. ETH is the backbone of the ICO economy, and its inability to sustain support levels against BTC has led to fears of there being a run on ethereum, akin to that which occurs when customers fear a bank lacks the funds to cover its liabilities. If Ethereum projects believe the cryptocurrency is likely to drop further, they will feel pressured to sell in order to maximize their capital, further accelerating the token's decline.

Commenters have been in disagreement over the extent to which ICOs cashing out has triggered ETH's downfall. Dapp Capitulation has been the go-to tool for anyone trying to keep track of which ICOs are moving ETH (presumably with the intention of selling) and when. In the last 30 days, for example, Status has sent 8,000 ETH to an exchange wallet and Decent has moved 20,000. New research from Bitmex and Tokenanalyst, however, provides a more holistic picture of ICO movements of ethereum. Its key finding?

Rather than suffering because of the recent fall in the value of ethereum, at the macro level, the projects appear to have already sold almost as much ethereum as they raised (in US$ terms).

The Coffers of Last Year's ICOs Are Not Yet Empty

In determining the profit or loss realized by Ethereum-based tokensales, Bitmex Research has created two columns: one for EOS and the other for everything else. Since EOS raised about as much as the rest of the market put together during its year-long fundraiser, it was necessary to record it separately to avoid skewing the data. A macro analysis of 222 ICOs found a total of 15.1 million ETH was raised, of which 11.3 million has been transferred out or sold. This leaves a remaining collective balance of 3.85 million ETH. Since EOS has offloaded all its ETH, this sum is shared among the other 221 projects.

The most useful data provided by Bitmex Research and Tokenanalyst is a calculation of whether ICOs that have sold a lot of ether can be expected to have made a profit or a loss. Broadly speaking, the older the ICO, the likelier it is to have profited from its ETH holdings. Projects that raised funds in late 2017 or this year, on the other hand, are almost certain to have seen the value of their crypto assets dwindle. Overall, the report finds non-EOS projects to have recorded net realized gains of $727 million through selling ETH, and to be sitting on another $93 million in unrealized gains i.e. ETH they've yet to sell.

Some Big Winners and a Few Losers

Not all projects have prospered: it's estimated that $34 million in ETH has been lost by projects being forced to liquidate their holdings at below the value they held during their crowdsale. The report concludes: "Despite the 85% reduction in the ethereum price from its peak, the projects have realised gains of US$727 million due to profits from ethereum they have already sold, often selling before the recent price crash. The 3.8m ethereum still on the balance sheets of these projects may not have that much of an impact on the ethereum price, as it represents a reasonably small proportion of the 102 million supply of ethereum. At the same time, on a macro level, the projects may be feeling reasonably confident rather than needing to panic sell."

Anonymous Leak Hit EOS With Corruption Allegations

In what appears to be a new turn of events for the controversy surrounding EOS blockchain developer Block.one, the firm now finds itself fighting back against allegations that influential Chinese groups are colluding to control its blockchain.

An anonymous source last week supposedly leaked an internal document claiming that "collusion, mutual voting, and pay-offs" is a common practice among block producers in the EOS network, TheNexWeb (TNW) reported. Chinese cryptocurrency exchange Huobi was further mentioned as one of the main actors behind the voting corruption.

According to the report, Huobi and other major block producers allegedly vote for each other in an effort to retain their status within the network, as well as securing their income streams. Further, Huobi reportedly receives EOS tokens in exchange for voting on others.

Huobi denies any "financial business" with the other nodes on the network, a tweet from Chinese crypto news source cnLedger said, referencing a statement from the company (in Chinese).

Block.one CEO Brendan Blumer said in a public statement on Monday that "we are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims." Blumer further added that he remains "very optimistic about the future of the EOS public blockchain […]"

The model used by EOS is a consensus model known as "Delegated Proof-of-Stake," which means that those who are heavily invested in the project also gets more voting power in deciding who gets to mine EOS. Huobi's EOS mining pool is currently the third most powerful block producer, and is rewarded with EOS tokens worth approximately USD 4,700 per day, according to TNW.

"In general, what EOS already brought is this massive social experiment to the world. You can think of it as a global borderless democracy thing happening across the world with voting politics (possibly even vote buying), with global consensus, with disputes and issues, with many solutions to one problem <...>," Vytautas Kašėta of EOS Lithuania, a block producer candidate, told Cryptonews.com earlier this year.

EOS has seen its price drop sharply since its peak in late April this year. At its all-time high, EOS traded at more than USD 20 per token, but is now down to a level of around USD 5.7, a decline of about 75%.