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What The Cryptocurrency Craze Of The Past Can Teach Us About The CBD Craze Of The Present

As a young, successful angle investor,Chris Hollod has his Spidey Sensefinely tuned to the next big things in the marketoften long before us mortals have even heard of them. Case in point: He was an early investor in Uber, Airbnb, and Pinterest and, in 2013, he invested in bitcoin anddid quite well before that bubble burst.

Now his focus is on what he describes as "startups who are at the convergence of culture and wellness," which includes many emerging CBD brands.

Hollod sees many similaritiesboth good and badbetween the current CBD boom and the cryptocurrency boom of yore. Here, he shares his wisdom.

Image credit: Courtesy of Chris Hollod

I grew up in Atlanta and went to Vanderbilt.I took an investment banking job with Wachovia in Charlotte. Everything was going well until the market crashed in 2008, and my entire team was laid off. But, in hindsight, I now realize that this was one of the best things that happened to me. With my newfound freedom, I spontaneously booked a flight to LA and havent looked back since.

When I arrived in LA in 2009, I started working for Ron Burkle [a world-renown billionaire investor]. He asked me to manage A-Grade, which was his new venture capital fund with Ashton Kutcher and Guy Oseary, and I quickly discovered my passion for venture investing. That was a life-changing moment for me.I ended up doing more than 100 deals with Ashton. We were truly at the forefront of the consumer-tech boom and invested in companies likes Uber, Airbnb, Pinterest, Spotify, Houzz, Warby Parker, Nest, and Casper.

While running A-Grade, I also started to handle all of Rons personal venture investments and became his Traveling Chief of Staff. We traveled the world together nonstop for six years. We also started another venture fund with our friend DA Wallach, called Inevitable Ventures, where we invested in companies like Thrive Market and Memphis Meats.

But, by the end of 2017, I was craving simplicity and freedom. So I quit my job to focus on my personal hobbies as well as my own angel investing. I launched my own company, Hollod Holdings, and have been investing in consumer start-ups at the convergence of culture and wellness. So far, Ive invested in a variety of different companies including Recess, Dirty Lemon, Matchabar, Mud/Wtr, Magic Spoon, and JuneShine. At the moment, Im most excited about CBD and alternative alcohol.

Through all of my tech investments with Ashton, we caught wind of bitcoin at a very early stage. I luckily bought bitcoin in January 2013 when it was only $15 a coin. Fast-forward to the end of 2017, and I sold the majority of my position for $15,000 a coin, which was the best return of my career. I could invest for the rest of my life, and Ill never see another 1,000x return like that. Its crazy! I also used the returns to start day-trading a bunch of other digital currencies.

Overall, it definitely taught me how to better understand and predict speculative bubbles, because it was the first true bubble that I experienced from start to finish. No matter how much research I did or how much I learned, I realized that both psychological and sociological factors would always transcend fundamentals. I saw so much activity based on either herd mentality or FOMO-based investing, which are two of my least favorite things in the investing world. Before the ultimate price collapse, it seemed like most people were simply investing based on anecdotal evidence. Everyone was so eager to believe all of the hype because they all wanted to make a quick buck. Thats obviously not a sustainable recipe for long-term success.

My obsession with CBD started in January 2018, when California officially made recreational cannabis legal. My girlfriend and I started hitting the various dispensaries in our hood so that we could better understand all of the different trends. I was immediately blown away by the endless variety of products, but I never truly found enjoyment in THC. Thats when I was fortuitously introduced to CBD. I became so intrigued by CBD that my girlfriend started slow-cooking cannabis flower with coconut oil in order to make our own homemade oils and balms.

I started learning more and more about the compound through my personal consumption, and I quickly saw the unlimited upside potential from a business perspective. If you think about it, CBD offers a universal value proposition. Namely, a more stress-free and healthy existence. In my ideal investment scenario, my hope is that CBD, as an active ingredient, can potentially become as ubiquitous as caffeine.

I really like how the legal landscape continues to shift in our favor, which ultimately entices more consumers into the space, which in turn attracts more entrepreneurs. It becomes a virtuous cycle of simultaneous supply and demand increase.

I still think its early days though. In the last poll I read, 56 percent of adults did not know or were confused about the differences between THC and CBD. Theres still a large educational hurdle, but I think the industry is on the right track.

CBD initially began gaining mainstream attention in 2013, but the current hype is absolutely undeniable. The industry is valued at roughly $2 billionright now, but various research reports expect the industry to increase in size to upwards of $20bn by 2025. Thats serious growth! I think the current craze is based on a confluence of four trends, including a changing legal landscape, permeation of broader health and wellness trends, rising anxiety rates, and increased innovation in the sector. The official passing of the Farm Bill at the end of last year was obviously a pivotal moment for CBD. Not only did the bill make hemp production legal, but it also helped remove the general stigma associated with cannabis-based compounds. If you look at our society, anxiety is the most common mental illness, and its affecting people of all ages. CBD can help, as long as its legal, accessible, and standardized.

When I first moved to LA in 2009, most of the health and wellness trends were confined to the coasts, but you now see these trends quickly permeating the rest of the country. CBD is simply the next step in the health and wellness conversation. Lastly, I think the increased productization is helping fuel the movement. A tincture can admittedly be a bit intimidating to some people, but now you have access to an endless array of products from lotions to gummies to capsules.

I actually think there are a lot of similarities across the two seemingly disparate trends. First and foremost, because both trends are at the bleeding edge of innovation, they create a dichotomy with the public. The trends are either met with fear or curiosity. The fear is then magnified through all of the unsubstantiated anecdotes and exaggerations, which fuel eye-popping growth in the early days. Remember when people were saying that bitcoin was going to change the world, the internet, and our financial system all at once? Thats such a huge claim that can only be met with extreme skepticism from the average person. Similarly, so many people are saying that CBD is a magic elixir that can cure all of your problems. In both cases, I do not think these heightened hyperboles are beneficial. Because when people refer to CBD as a cure-all, the critics will draw parallels from previous miracle cure manias and thus dismiss CBD as snake oil.

Also, in both instances, the legal landscape has not caught up to the progressive trends. Both industries are still relatively unregulated, which creates huge barriers for mainstream adoption. There is also a large educational chasm that needs to be addressed. The crypto trend took a hit when uneducated people started experimenting with it. I think the same is true with CBD. Too many people are testing products without fully understanding what theyre putting in their bodies.

Its also funny that both cryptocurrencies and CBD seemingly offer universal value propositions. Crypto can make you rich (and remove all of your financial problems), and CBD will make you feel amazing (and remove all of your health problems). Overall, there needs to be more specificity, education, and uniformity across both industries.

When it comes to differences, Id like to think that CBD is way more approachable and accessible than bitcoin. When I bought my first bitcoin, it was ridiculously cumbersome and tedious. And now its expensive. But when it comes to CBD, you can spend $5 on a well-made drink like Recess for example. For the sake of simplicity, you can think of CBD like a supplement or vitamin, which at least evokes some level of comfort and is grounded in biology. Whereas the crypto trend was almost impossible to comprehend and only existed virtually. Hell, I traded the stuff for years, and Im still nowhere close to being an expert.

I think we can definitely extract a lot of valuable lessons from the recent crypto rollercoaster ride. We quickly learned that when you combine a relatively amorphous legal landscape with limited government regulation and significant consumer anecdotal evidence, you get a recipe for insane volatility. Just as we witnessed the SEC and IRS crack-down on cryptos, I think the FDA and FTC are going to make big waves in the CBD world. And at this point, I welcome their involvement. There definitely needs to be more standardization and transparency in the sector. During the crypto boom, I had so many random unsophisticated friends that were trading very esoteric coins without properly doing their homework. And guess what, most of them got burned. I think that activity is now analogous to all of the baristas and bartenders that are sporadically dosing coffees and cocktails with CBD. All of these products need to be better regulated, because a few bad experiences can potentially taint the entire market.

We also saw a ton of crypto trading platforms shut down because of bad behavior. When it comes to CBD, I think the trading platforms are analogous to the cannabis dispensaries. Some of the dispensaries are amazing, but there are others that are clearly sketchy and not operating at the appropriate standard. So, if a customer buys sub-par CBD product, their image of CBD could be forever polluted.

The cryptocurrency trend benefited significantly from high-profile brand ambassadors, whether celebrities were talking about it or C-level finance executives. So my hope is that more brand ambassadors infiltrate the CBD world to further bolster the positive image of the compound. Brand ambassadors are great at both educating the general public and also helping to remove stigmas.

It was also helpful when reputable banks and companies started accepting cryptocurrencies as a legitimized form of payment. So, in terms of CBD, I think it will be hugely beneficial to the overall industry once more doctors get involved and there are more clinical studies.

We also saw a dramatic proliferation of digital currencies that were riding the coattails of bitcoin. I think the same phenomena will occur with CBD. There are more than 100 cannabinoids in the cannabis plant, so for the sake of my analogy, if CBD is Bitcoin, maybe CBN and CBG could become the next two popular compounds. With that said, Im really excited to meet with entrepreneurs that are pushing the limits in the industry. But, just like the crypto craze, Im always wary of the entrepreneurs entering the space to make a quick buck. And there are a lot of them. There were so many horrible Initial Currency Offerings (ICUs) which ultimately contributed to the crypto market crash. Im now afraid that too many people are incorrectly and selfishly slapping a CBD logo on their products in order to capitalize on the hype.

Lastly, during the crypto craze, the most successful people looked deeper than just the superficial coin and began thinking outside the box. The smart people were focused on learning about and leveraging blockchain, which is the underlying technology that powers bitcoin. Based on that learning, its easy to simply market CBD as a superficial de-stress product, but Im excited about the entrepreneurs who are diving deeper into the biology of the compound and understanding the potential within the pharmaceutical realm. At the end of the day, whether its crypto or CBD, I think progress will inevitably prevail.

The first brand that my girlfriend and I fell in love with was Papa & Barkley. We love their bath soaks and we're very impressed with their authenticity, transparency, and memorable backstory. Im a huge fan of Recess, which was my first CBD investment. I was lucky to have invested in Recesss seed round, and now the company is the leading CBD beverage company. Recesss branding and marketing strategies are unique in that they seek to capture and define a feeling. I think the company has a ton of mainstream potential given its relatively low price point and approachability. Im currently advising my friends company, PearlCBD, which I think is going to set a new standard in the space. PearlCBD will be offering premium Pharma-grade products with total customer transparency spanning from the companys organic hemp farms to its FDA-registered lab. I think this will be vital in the wake of all the unlicensed and untested products on the market.

Im always testing new products on a weekly basis, but when it comes to simple recommendations to friends, I really enjoy the product offerings from Life Elements, Plant People, Juna, and Sagely. I like it when entrepreneurs experiment with different CBD-inspired formulations, whether its adding adaptogens, honey, or even botanicals. I also think its important to define the customer experience, so I respect brands that actively specify the use-case of the product, whether its for relief, energy, or sleep. Lastly, Im really impressed by Mendi, which is Megan Rapinoes new brand. Mendi is focused on the high-end market and is educating athletes on the benefits of CBD for recovery and pain management.

Funny enough, I actually start with Instagram. When I first started investing, I would attend all of the conferences and demo days and take meetings with every single entrepreneur. But now, I think Ive found a more effective and efficient vetting process. I like how all facets of a company can nicely coalesce within an Instagram page. Its such a digestible and powerful format. A companys Instagram page allows me to quickly measure branding, messaging, connectivity, and aesthetic. Since this has become the first step in my vetting process, Im now able to efficiently review several companies in just a few minutes.

If the company passes my Instagram test, then I always want to sample the product so that I can better understand the taste, ingredients, nutrition, and packaging. Ill never invest in a pre-launch company or a company that I have not yet sampled. I always want my diligence process to be deeply authentic.

Lastly, my final step is to meet with the entrepreneur. At this point in my career, I only want to work with people that I share a connection with, so I take all of my meetings at my house. I really want to get to know each founder and make sure that I can actually help them with their business.

Ive received a lot of great advice over the course of my career, and I was incredibly lucky to have two amazing mentors in Ron Burkle and Ashton Kutcher. Ron taught me a lot over eight years. I actually kept an active memo pad to record all of his amazing insights and pieces of advice. One of Rons quotes, which I think is both timely and transferable to the cannabis entrepreneur is, Id rather have to slow you down than speed you up. Ron told me this many times, and I felt very empowered by it, especially since I came from such a bureaucratic and structured career in investment banking. As an entrepreneur, youll always be confronted with your fears and insecurities as well as potential barriers, but you must keep pressing forward. Dont slow down. Kick down doors. Speed is critical.

Like Ron, Ashton is also extremely insightful. He helped me make the shift from the scarcity paradigm to the abundance paradigm. When I started out in my career, I was super competitive. Im an expert negotiator and always viewed business intersections as zero-sum games. And I initially brought this scarcity mentality into the world of venture capital, which I quickly realized is more predicated on camaraderie. By migrating to the abundance paradigm, I soon realized that I could succeed while also helping others succeed as well. It might sound trite, but at the end of the day, you want to interact with people that you like. I think this is relevant advice for all of the CBD entrepreneurs since the industry is so nascent and there is still a large consumer educational hurdle. As they say, a rising tide raises all boats, so I think it behooves cannabis entrepreneurs to play nicely and cooperate, at least for the time being

Related:What The Cryptocurrency Craze Of The Past Can Teach Us About The CBD Craze Of The PresentCustomers Are Ready for CBD, But Is E-Commerce?Report: CBD Market To Hit $22 Billion By 2022

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What The Cryptocurrency Craze Of The Past Can Teach Us About The CBD Craze Of The Present - Greenwich Time

As of the end of 2019, Congress has introduced 21 bills addressing cryptocurrency and blockchain policy that could be considered in 2020 by the second year of the 116th Congress. Indeed, U.S. legislators have been busy examining the landscape of how this new technology has been and could be impacting businesses, consumers, and society at large. Although Congress introduced a total of 22 bills that involve cryptocurrencies or blockchain technology, there are three main public policy areas that will likely be the continued focus of the 116th Congress into 2020.

UNITED STATES - OCTOBER 31: The Capitol dome is reflected in the compass on the East Plaza of the ... [+] U.S. Capitol on Thursday, Oct. 31, 2019. (Photo By Bill Clark/CQ-Roll Call, Inc via Getty Images)

The first main public policy issue relates to how cryptocurrency might be used in a wide variety of very dangerous activities, such as evading U.S. sanctions, human trafficking and terrorist use. In addition to these concerns, many legislators are also looking for the U.S. to explore how the unique tracking capabilities of cryptocurrencies as well as blockchain technology may assist U.S. government agencies in the pursuit of bad actions in the activities mentioned.

The second and most often reported type of public policy issue is how companies can use cryptocurrency and blockchain in business models within the current regulatory framework. The size of the United States economy and complexity of its regulatory structure on both a federal and state level can be stifling for private sector innovations.

Finally, the policy issue of how distributed ledger technologies might be utilized by the U.S. government itself is addressed by the legislation that has been introduced so far, particularly as other countries have focused an intense amount of time, effort, and money on cryptocurrencies and blockchain technology.

The table below shows how the three main public policy categories were determined, with eight of the bills seeking address the use of cryptocurrencies by terrorists, money launderers, or human / sex traffickers, nine of the bills address regulatory clarity for blockchain tokens, and finally, five of the bills focus on the use of blockchain technology by the U.S. Government.

Breakdown of U.S. Congressional Legislation on Blockchain and Cryptocurrency Policy Issues

Breakdown Of Public Policy Areas By Congress On Crypto And Blockchain

Summary of Public Policy Issues Addressing Blockchain and Cryptocurrency in the 116th Congress

Use Of Cryptocurrencies by Terrorists, Money Launderers and Human / Sex Traffickers

As with the creation of the Internet, concerns were raised that this was something only for illicit use. As the Internet has evolved, there is certainly the benefit of communication around the globe. Since the technological net is cast over the worlds population, those who are criminals, whether in terrorist organizations or part of the leadership of countries such as North Korea, ways that these criminals may keep their activities in the darkness are always a major concern.

Certainly, a disruptive technology that creates an entire new class of money with value that can be transferred over the Internet and not through traditional banking institutions, raises the spectrum of what could go wrong. This area has seen a total of eight bills addressing these concerns. One bill, the Verdad Act, addresses the concern of cryptocurrencies and the evasion of sanctions by countries, with two bills addressing the use of virtual currencies in human trafficking and three bills looking at prevention of terrorists or money launderers using these digital currencies. Finally, two separate bills look on the other side of the blockchain token, which is that these cryptocurrencies are tracked by the same technology that is used to verify the transactions, that cannot be altered. While the technology specifically was created to be unalterable in terms of the ledger and the design of this was to ensure there could not be double-spending of digital currencies and to create trust in the system, the benefit of having this history of transactions in a pseudonymous way - where although there is a degree of anonymity, the transactions can be traced back to the users.

Regulatory Clarity for Cryptocurrency and Blockchain Companies

This issue overall is the most painful for the United States. While the country is the worlds economic leader, disruptive technologies such as cryptocurrency and blockchain do not seem to have mixed well with the current regulatory environment. As a result, the concept of innovation flight is a top concern for the country. Additionally, the concerns with respect to how to protect consumers in what is still a Wild West atmosphere for an industry are have been top of mind. The state-by-state money transmission licenses is addressed to help provide clarity across the U.S. at the federal level, and the lack of clarity around taxation was addressed, until the most recent U.S. Treasury guidance attempted to provide better clarity for paying taxes on cryptocurrencies. Finally, the introduction of Facebooks new Libra Association and the idea of a global payments system administered in Switzerland led to some high-profile hearings in Congress, as well as a couple of bills specifically addressing the concerns of a large company introducing a financial product to the masses.

Use of Blockchain Technology in Government

There are five bills that specifically look to increase and explore the use of Blockchain Technology. The Blockchain Promotion Act of 2019 focuses on how government agencies can explore the use of blockchain. More specifically, two bills focus on specific uses of blockchain - one with the Export-Import Banks use of the technology and another with applying blockchain to Finding Orphan-disease Remedies With Antifungal Research and Development. Finally, the Rescue Act for Black and Community Banks - my personal favorite - looks to explore how blockchain technology could be used to increase the investment of low-income individuals to invest in startup or crowdfunded companies. This resonates with the hope of many entrepreneurs in the blockchain industry who believe this technology can help spread the wealth to diverse communities. Finally, a bill that is the only one of the 22 bills that became law this year was the National Defense Authorization Act of 2020, that includes a requirement for the Undersecretary of Research and Engineering at the Department of Defense to provide a briefing to Congress on how the U.S. military might look at and analyze blockchain technology.

Authors Note: As well as a Forbes.com Contributor, I am the Founder, President, and CEO of the Value Technology Foundation, a 501(c)(3) non-profit in Washington D.C. focused on increasing the Research and Development of Value technologies such as blockchain, cryptocurrency, and distributed ledger technology in the United States and other open, free societies. The research, table, and graph included in this article is a product of the Value Technology Foundations work thanks to the generous support of its donors.

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Crypto Legislation 2020: Analysis Of 21 Cryptocurrency And Blockchain Bills In Congress - Forbes

Whether youre new to cryptocurrency or an experienced trader with years of experience, our guides offer you insights, tips, and support.

Below, we take a look at our readers favourite cryptocurrency guides from 2019.

Our readers favourite cryptocurrency guide from 2019 was all about predicting Bitcoins future value. This guide covers how to use a stock-to-flow model as an effective analysis tool for future predictions.

According to the stock-to-flow model, traders could see Bitcoins price mooning around the next halving event. Discover what the model is, how to use it, and how it can inform your trading decisions.

This cryptocurrency guide has proved popular with our readers who are new to buying Bitcoin. With details about how to keep your Bitcoin secure, this guide explains what a private key is, how it works, and why its important that you never share your private key with someone else.

Your private key is essential for securing your Bitcoin. By losing it, or giving it away, you lose access to your wallet and by default your cryptocurrency. Whoever gains access to your private key would control your wallet and coins.

Read this guide to find out how to protect your private key.

Now that the cryptocurrency industry is well established, it seems that there are more newcomers than ever before. Whether they want to start trading or if theyre simply showing an interest in different coins, What is a cryptocurrency? still remains one of the biggest questions asked.

This guide gives you all the answers you need. It explains what a cryptocurrency is, provides a brief history of the industry, and gives an introduction to blockchain the underlying technology powering crypto.

If youre looking for a comprehensive introduction to cryptocurrency without a focus on specific coins, this is the guide for you.

If youre looking to get into trading or if youre looking to enhance your trading abilities, this cryptocurrency guide will help you on your way.

The ultimate key to trading is risk management and choosing the right time to buy, but using tools will help to inform your trading decisions.

Some tools help you to compare orders across exchanges to assess the overall confidence in the market. Take a look at which trading tools you should be using and how they can assist your trading performance.

The over-the-counter trading industry is one thats easily misunderstood. Thats why this is one of our most popular cryptocurrency guides. It explains the OTC procedure, how buy and sell orders are fulfilled, and what role escrow agents play in the trading process.

Discover whether or not OTC deals affect the price on exchanges, how the rate of discounts can be impacted, and whether or not the OTC market can give you any insights into market sentiment.

The post Top five cryptocurrency guides of 2019 appeared first on Coin Rivet.

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Top five cryptocurrency guides of 2019 - Yahoo Finance

This week, a group of congressmen put forth a new cryptocurrency bill labeled the Cryptocurrency Act 2020. The goal of the new legislation is to provide additional clarification on digital asset regulations. The bill has some wide-sweeping regulations that, if voted into law, could reshape the entire crypto sphere moving forward.

The Cryptocurrency Act 2020 was introduced by U.S. Representative Paul Gosar (R-AZ). The senator stated that it was his desire to attribute regulatory clarity to the market. Currently, much of the crypto space is vague in terms of regulations. Consumers and lawmakers are in a debate over what agencies are responsible for regulations of what types of cryptocurrencies.

The new legislation begins with a categorization of cryptocurrencies into three main groups. These groups are then used to determine what agency is responsible for the creation of regulations and enforcement.

The first class described in the new bill are cryptocurrencies. Cryptos include Bitcoin, Litecoin, and any other cryptocurrencies that dont fall under the current securities regulations. The bill classifies these tokens as any crypto that includes representations of United States currency or synthetic derivatives resting on a blockchain or decentralized cryptographic ledger.

The bill also states that any synthetic derivatives determined by decentralized oracles or smart contracts fall into this category. Interestingly, this categorization places reserve-backed digital assets such as stablecoins directly into the cryptocurrency category.

The next class of cryptocurrency described in the bill are crypto-commodities. These tokens are economic goods or services that markets treat with no regard for who produced the goods or services. A key aspect of these tokens is the fact that they contain some form of substantial fungibility. Fungible assets are interchangeable such as the US dollar. Basically, any two dollars are equal in value. Finally, these assets must reside on a blockchain or decentralized cryptographic ledger to fall into this classification.

The final type of coin described in the bill is crypto-securities. These tokens are any coin that fails the Howey Test. This class of crypto can include tokenized debt, equity, and derivative instruments that live on a blockchain or decentralized ledger. Security tokens are among the newest type of cryptocurrency. Thee tokens seek to bring integrated compliance into the market.

Interestingly, the bill differentiates between security tokens that include a synthetic derivative both operated and registered with the Department of the Treasury as a money services business in compliance with the Bank Secrecy Act. Additionally, these coins must adhere to the strict anti-money laundering, anti-terrorism, and screening requirements of the Office of Foreign Assets Control, as well as, the Financial Crimes Enforcement Network.

Aside from an attempt to clarify the market, the Cryptocurrency Act 2020 lays out what government agencies are responsible for each class of token. If passed, these agencies will gain regulatory control over the assets in their jurisdiction. Additionally, these agencies will be responsible for informing the public on the appropriate licenses, certifications, or registrations necessary to participate in these markets.

The three regulatory bodies mentioned in the bill include the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN). These groups would gain the sole authority over their respective digital asset types.

The new strategy would place those tokens deemed as cryptocurrencies under the regulations of the Financial Crimes Enforcement Network (FinCEN). For its part, FinCEN must maintain a public record of all licenses, certifications, and registrations required to create, issue, or trade digital assets.

Additionally, FinCEN would need to collaborate with the Secretary of the Treasury to enforce AML and KYC protocols in the market. Primarily, regulators want to develop a way to trace all cryptocurrency transactions. This final task could prove to be a real choir as many cryptocurrencies have privacy enabling features which would make this task almost impossible.

The bill keeps security tokens under the watchful eye of the Securities and Exchange Commission (SEC). The SEC recently began cracking down on what they considered illegal securities offerings from the 2017 ICO craze. As of late, the SEC prosecuted multiple firms such as Paragon and most recently, the startup Blockchain of Things Inc. (BCOT). Currently, the SEC assumes jurisdiction over any tokens that fail the Howey Test.

The Commodity Futures Trading Commission would gain jurisdiction of the crypto-commodities class. The group will need to develop the framework for these tokens from the ground up if the legislation passes. Analysts believe crypto-commodities are to see substantial growth over the next few years.

Many in the cryptocommunity point to the new legislation as a means to combat Facebooks developing digital asset, Libra. Ever since Facebook announced its goals to produce a stablecoin that will operate on its network, lawmakers have been in a rush to configure some form of framework to contain the companys potentially game-changing product.

In the past, multiple senators called for Libra to see categorization under securities. Earlier in the year, a group of bipartisan U.S. Senators proposed a bill that would place all stablecoins into the securities category. The bill the Token Taxonomy Act of 2019 would firmly place Facebooks latest crypto under the regulatory supervision of the SEC.

This latest development showcases just how far cryptocurrencies have come in the last decade. Now, lawmakers are scrambling to develop some way to maintain control over these decentralized currencies. In the end, you may find that the technology operates in a manner that makes enforcement of these regulations nearly impossible. For now, the cryptocommunity watches and waits as lawmakers scramble for options.

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A Look at The Cryptocurrency Act 2020 - Securities.io

XRP was not among the gainers as the cryptocurrency market attracted capital of up to $12 billion in a day.

The Ripple blockchains native asset slumped by up to 2.19 percent on Monday to establish an intraday low of $0.194. The downside move negated XRPs gains registered during the Sunday trading session by 1.38 percent. At the same time, it pushed the cryptocurrencys 24-hour adjusted performance down by 0.77 percent.

Ripples XRP token correcting lower after spending Sunday in a positive area | Source: TradingView.com, BitStamp

In contrast, other top coins were faring better. Bitcoin, the leading cryptocurrency, was up by 5.41 percent on a 24-hour adjusted timeframe as of 1300 UTC. The second-largest Ethereum was similarly trading 2.86 percent higher, showing little-to-no signs of upside exhaustion.

The intraday losses in XRP closely follow Ripples announcement of raising $200 million in a Series C funding round. The San Francisco firm, which offers blockchain-based cross border remittance services to banks and similar payment institutions, also valued itself at $10 billion after the fundraiser.

Nevertheless, the news did little to improve XRPs interim aspects. The token, whose value plunged by up to 52 percent on a year-to-date scale, registered a decent 3.86 percent gain on the day of the announcement. But it failed to extend the upside momentum and remained mostly flat during the sessions that followed later.

The move came as a shocker to analysts who had expected XRP to draw gains after Ripples high-profile fundraiser. CNBC Fast Money hostKate Rooney pointed out the tokens long-standing underperformance. She further reminded that Ripple, which remains the majority stakeholder of XRP, has swayed investors due to its quarterly XRP sell-offs.

Ripple also uses XRP as a so-called bridge currency for cross-border transactions, Ms. Rooney added. XRP had skyrocketed alongside Bitcoin two years ago. Its now down roughly 50% this year, while Bitcoin has actually rallied 80%.

Renowned crypto trader and market analyst Tone Vays also made serious remarks against Ripple in a recent interview. He said that he neither sees value in the company nor in its cryptocurrency XRP, adding that Ripple continues to dump XRP tokens on the rest of the token holders, which gives them an unfair and illegal advantage over other startups.

Against the ongoing FUD against Ripple, some still believe the company is a Silicon Valley unicorn in making.

Michael Arrington, a partner at Arrington XRP Capital a Seattle-based digital asset management firm, defended Ripple by bringing its investors psyche into the conversation. He recognized the companys ability to attract big names such as Tetragon, SBI Holdings, and VC firm Route 66 Ventures as its leading investors.

If youre perplexed as to why investors would aggressively invest in Ripple at a $10b valuation, the problem maybe you, said Mr. Arrington. Or you could just keep believing youre so smart and theyre so dumb.

Kevin Cage an XRP regular on Crypto Twitter said he will keep holding the cryptocurrency regardless of the FUD.

Too much potential upside to ignore, asserted Mr. Cage.

The XRP/USD pair was trading at 0.196 at the time of this writing.

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Why XRP Isnt Surging in Tandem With Rest of the Cryptocurrency Market - newsBTC

Hackers ransacked accounts belonging to the development team of an obscure blockchain earlier today,stealing $480,000 worth of an obscure token known as NULS.

The NULS team confirmed the attack in a tweet posted this morning. In total, two million NULS ($480,000) were taken.

Of that stash, the team reported that more than half a million tokens have beenliquidated via cryptocurrency exchanges. That amount equates to roughly $131,600.

The team plans to hard fork the blockchain in an attempt to permanently freeze the remaining NULS cryptocurrency.

At pixel time, the price of NULShas been pretty much unaffected by the incident, which was reportedly the fault of a security vulnerability in the 2.2 version of the software.

This might be due to its value already being down over 95 percent since its all-time-high even before the attack was disclosed.

NULS network participants are urged to update their node software to the latest version as soon as possible.

The response of the NULS team is reminiscent of how Ethereum core developers chose to handle the hacking of The DAO in 2016.

The DAO was a decentralized autonomous organization powered by smart contracts that operated similarly to a venture capital fund, but investor-driven.

Indeed, after hackers stole $40 million worth of Ether from The DAO, Ethereum devssplit the blockchain into two versions: one in which those affected by the hack could reclaim their funds (Ethereum), and another that continued to uphold the original version of the blockchain ledger (which became Ethereum Classic).

That particular hard fork has remained controversial to this day, with critics using it as proof of the centralization of Ethereums governance.

The NULS blockchain, however, is much less popular than Ethereum, so its unlikely this hard fork will causethat much of a stir.

Published December 23, 2019 14:05 UTC

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Hackers steal $480,000 worth of NULS cryptocurrency from its dev team - The Next Web

At the heights of last years so-called hash war, Bitcoin SV founder Craig Wright had threatened to crash rival cryptocurrency bitcoin to $1,000.

The threat itself came from the claim that Mr. Wright is Satoshi Nakamoto, the pseudonymous creator of bitcoin and that he holds billions of dollars worth of the benchmark cryptocurrency. Mr. Wright even sued people who refused to acknowledge him as the original bitcoin creator.

But the clock turned when he himself got sued for being 50 percent Satoshi. Ira Kleiman, brother of late Dave Kleiman who allegedly helped Mr. Wright mint the first batch of bitcoin, accused him of stealing Daves share of 1 million BTC.

The US court found Mr. Wright guilty. It ordered him to pay half of the BTC valued about $5 billion at the time of judgment back to Mr. Ira. Mr. Wright told the court that he and Late Mr. Dave had locked that bitcoin in a complicated trust. He said he could not retrieve the cryptocurrency anymore.

However, in an interview he gave later to Modern Consensus, Mr. Wright kept theorizing what Mr. Ira could do if he gains access to 1 million BTC.

They might have to convince Ira not to dump it, he told the interviewer. I cant convince him not to dump it. Ira has to do what Ira has to do. And it wouldnt have been me. And I dont need it. He does.

Mr. Wright never refuted the existence of the trust that apparently holds 1.1 million BTC. Nevertheless, he is adamant about not having any access to the private keys to those coins.

With a court order hanging by his neck, the market doubts that Mr. Wright might sell whatever bitcoin he currently holds (supposedly a large amount). He proclaimed after the courts ruling against him that Mr. Ira alone could tank the bitcoin market by $2-3 billion.

If youd left me alone, I would have sat on my f*cking money and you wouldnt have to worry, Mr. Wright said. And the biggest whale ever has to dump because he has to pay tax. Its not a transfer. Florida has an estate tax. Trust me. This is not an outcome I would have liked.

But to this date, Mr. Wright has not paid a penny to either Mr. Ira nor his legal counsels as ordered by the US court. In the last hearing held on December 18, Mr. Wrights lawyers played offense with Mr. Ira, questioning how he managed to pay $400,000 in cash for his home right after his brothers demise.

When Mr. Wright threatened to crash Bitcoin to $1,000 in November 2018, it appeared as he had a huge stash of the cryptocurrency. But since the court ruling, he is not making such threats.

In his latest interview with Bloomberg, Mr. Wright said he does not want to dump his Bitcoin fortune because the move would hurt many people in the industry.

The sum of all events leaves the market with two potential outcomes: Either Mr. Wright has about $3 billion worth of Bitcoin or he doesnt. If the controversial Satoshi has the money, he is bluffing about not having them. And if he does not have the money, he is straightforwardly lying.

The conclusion narrows down to one thing: that $3 billion-dump is not going to happen, after all. One bear at a time!

Continued here:
The $3 Bilion Bitcoin Dump Isnt Going to Happen - newsBTC

The VeChain Foundation updates the cryptocurrency community on the recent buyback wallet hack. Following the agreement of the Authority Masternodes, by way of voting, VeChain released a patch to freeze the majority of the hackers accounts.

A little over a week ago, the VeChain Foundation admitted to the theft of 1.1 billion VET tokens.

CEO, Sunny Lu was quick to reassure investors that the VeChain network is as secure as ever. But the incident did highlight a weakness in their internal practices.

In a Periscope broadcast, Lu explained the circumstances behind the hack. He said a member of the team, who is responsible for overseeing the buyback process, did not follow procedures when creating the buyback wallet.

Lu expanded on this by admitting a trojan infected machine, with keylogging software, enabled the hacker to obtain private key information. From there, the hacker transferred cryptocurrency assets out of the buyback wallet, into an account he controls.

Its caused by a mis-mangement action The responsible person, who did not follow compliance protocol, will hold the consequence of internal management actions.

The cryptocurrency community, as a whole, has praised VeChain for its quick response and transparent approach to the matter. And, by all accounts, it seems as though VeChains reputation remains intact.

During the last AMA session, a couple of weeks ago, I was just talking about one of the major challenges to VeChain, which is the internal management. And yesterday, unfortunately we just had a really big lesson.

Yesterday, the VeChain Foundation issued an update on the buyback wallet hack. Through the use of cryptocurrency data analysis tools, the Foundation has compiled a list of hundreds of wallets that have received stolen funds.

The relevant exchanges were approached with a blacklist of addresses, in order to prevent the stolen deposits from hitting the market.

However, the Steering Committee decided that more decisive action is needed, to stem the rot. On 18th December they passed a motion to contact all Authority Masternodes, with a view to issuing an emergency patch to freeze these accounts.

The Authority Masternodes voted in agreement with this. And as a result, the hacker has lost control over the majority of the stolen funds.

Currently, 469 addresses owned by the thief have been blocked by the Authority Masternodes, which froze about 727 million VETs.

In addition, the VeChain Foundation will continue working with exchanges, regarding the retrieval of the rest of the stolen funds.

Its a well-known fact that VeChain has ambitions to decentralize its platform. And plans are already underway to achieving this goal, for example, in the recent announcement of their decentralized governance model.

And while many in the cryptocurrency community have praised VeChain, and Sunny Lu, for a professional and decisive approach to the mistake, in reality, their actions highlight just how centralized VeChain is. Even despite Authority Masternodes voting to agree to the patch implementation.

After all, this means Authority Masternodes can potentially collude to control the VeChain network. And while that is an unlikely scenario, it still highlights the centralized power held by the Authority Masternodes.

Whats more, for an international supply chain solution to have true value, it must be impartial. The patch implementation demonstrates, rightly or wrongly, that VeChain Masternodes are not neutral.

See more here:
How VeChain Cryptocurrency Was Able to Track and Freeze $6.1M of Stolen Funds - newsBTC

Cryptocurrency has long been trumpeted and used as a tool to escape the hardships of abusive, inflationary financial regimes. Step forward an audacious plan to economically jailbreak the entire population of Zimbabwe with Dai.

Bitcoin use has soared in Zimbabwe over the past year, as the government has applied increasingly oppressive legislation on citizens in an attempt to prop up the failing economic system. A ban on foreign currency transactions sent LocalBitcoins use soaring, resulting in large premiums on BTC price in the region.

US Dollars are still transacted on the black market but this leaves a heavy reliance on cash, as digital payment methods are not accessible. For digital payments, citizens were using local mobile phone-based cash-in cash-out services. These were also banned in October, but reinstated after a public outcry.

But still, any payments in local currency are affected by increasing inflation, and the volatility of bitcoin makes it a less than ideal alternative.

Team Toast, developer of the decentralised and oppression resilient fiat-to-crypto gateway, DAIHard, has put forward a plan for the entire nation. A Blueprint for an Economic Jailbreak if you would,which they have published as The ZimDai Whitepaper.

Utilising the Dai stablecoin, DAIHard and Bis as its major tools, it attempts to overcome challenges such as user education and ease of use, state opposition, patchy and government-controlled internet connectivity, and funding issues.

The core of the plans revolves around recruiting a network of ZimDai agents. These agents could initially be anybody who can use cryptocurrency/Dai services with confidence, and use this to offer bank-like services to others.

Services would include inter-city transfers, international Dai to cash-in-hand for remittances from abroad, access to South African bank accounts, or simply education on how to set up and use the Dai stable cryptocurrency. Agents would charge a small commission for these services, but user would still be avoiding the huge fees charged by banks and other financial institutions.

The project is currently looking at a potential token sale to raise funds from the cryptocurrency community in order to put the plan into action and start recruiting agents.

Clearly, there is still much work to do. But at Christmas, it is nice to see a project using cryptocurrency for the good of others, rather than a desire for profit. After all, wasnt that a big part of the whole idea in the first place?

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Zimbabwe Could End Corruption With This Cryptocurrency Initiative - Bitcoinist

According to recent information, Chinas e-yuan will roll out in early 2020, and it will be very cautious, initially only focusing on consumer spending.

Recent reports regarding Chinas upcoming cryptocurrency claim that Beijing is preparing to launch the so-called e-yuan in early 2020. This will be the worlds first digital sovereign currency. However, the reports also indicate that China plans to be very tentative with its new coin and the initial rollout process.

The new technology is bound to be very disruptive, which is why China plans to take each step with extreme care, and initially focus on consumer spending.

As many are likely aware, there are many among the worlds largest monetary authorities that are currently studying cryptocurrencies. Some of them are even planning of creating their own versions of digital money. However, this time, the Peoples Bank of China is taking the lead, likely due to concerns about Bitcoin and Facebooks Libra.

Just like the space race from half a century ago, the world is in a rush to see who will be the first to gain the lead in the crypto space, with China currently being ahead of everyone else; especially the US. Of course, the country has been rather secretive and cryptic about its upcoming crypto.

But, earlier this year, in November, the Peoples Bank of Chinas head of digital currency research institute, Mu Changchun did give away a few hints. According to him, the e-yuan will come to the public via several commercial banks, including Ant Financial and Tencent. Both of them are the nations online payments giants.

While the new form of digital money will likely bring a number of benefits to its users, it will also greatly benefit the countrys government. Thanks to the underlying technology the blockchain, Chinas government will have the ability to follow all payments done with e-yuan at all times.

This will be very helpful to the countrys financial watchdogs, which would be able to detect criminal activities such as money laundering, tax evasion, and any other kind of fraudulent activity. As for the coins users, all payments and interbank settlements would become significantly more secure and efficient.

The new technology would also improve the situation in parts of China that were not previously covered properly. Not to mention the fact that it would help the countrys efforts to clean up as much as $341 billion of bad debt. It will also solve some of Chinas biggest problems, such as the practice of pledging the same asset for multiple loans. With distributed ledgers potential for storing and quickly retrieving this type of data, the country will become a lot more efficient at identifying and eliminating this type of fraud.

Finally, it will also be able to improve the situation for a lot of local businesses, which still trade discounted acceptance notes. Their digitization will also lead to a reduction of fraud, which will help businesses and the country, in general, move forward.

With blockchain and crypto still being unregulated and uncertain around the world, many have speculated whether or not Chinas decision to accept blockchain and launch e-yuan is such a good idea. Bitcoinist discussed this at length in one of their posts published around a month ago. However, there are some who support the move and believe that the new mechanism will allow Chinese yuan to be used in everyday transactions around the world, such as Circles CEO, Jeremy Allaire.

Do you think that Chinas acceptance of blockchain and its launch of a national cryptocurrency are a good decision? Let us know your thoughts in the comments below.

Images via Shutterstock

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How China's National Cryptocurrency Will Improve the Nation's Economy - Bitcoinist