Banking on Blockchain Update: December 7, 2018

Canada in Focus

Earlier this week, Coinsquare, Canada’s premier cryptocurrency trading platform, acquired BlockEQ for $12 million. BlockEQ is the leading cryptocurrency wallet on the Stellar network and will be used to help Coinsquare and its users further connect with the world of cryptocurrency.

Bitcoin, the largest digital token, has slumped as much as 10 per cent, reaching the lowest level since September 2017. Several other cryptocurrencies, including Ether, Litecoin and XRP, were hit even harder. The Securities and Exchange Commission plan to decide by February 27, 2019 whether to approve a proposed ETF from SolidX Partners Inc.

Cryptocurrency firms have added to BC Hydro‘s electrical load by almost 40 per cent, but only a fraction of that business has materialized so far. In recent years, BC Hydro was keen to attract and offer discounted rates on electricity for cryptocurrency miners . Some economists are now warning BC Hydro, saying they should be cautious about engaging with the crypto-mining industry as it brings few economic benefits to the communities where they set up.

Canada-based DMG Blockchain Solutions, a cryptocurrency management company, has announced the signing of a Mining as a Service (MaaS) contract with a blockchain company. The new customer will require DMG to host approximately seven megawatts worth of Bitcoin mining capacity for them.

On the World Stage

The story resonating around the world is clear: this week’s substantial drop in the price of bitcoin. It has fallen nearly 20 per cent in the last five days, causing it to reach a 15-month low. Major outlets, such as CNN, are indicating that a possible reason for the plunge is the uphill battle convincing the Securities and Exchange Commission (SEC) to approve more bitcoin EFTs.

Recently, the SEC ordered fund manager CoinAlpha Advisors LLC to pay a $50,000 USD fine following what it deemed to be an unregistered securities sale. The fund reached out to possible investors, raising more than $600,000 in the process. While CoinAlpha did file a “Notice of Exempt Offering of Securities,” the company was not eligible for an exemption and did not otherwise register with the SEC. As such, it effectively solicited securities investors in a breach of the law.

On a more positive note, Mastercard has filed a patent for a method of anonymizing transactions on a blockchain. The patent was filed to the United States Patent and Trademark Office and outlines the use of one or more intermediary addresses to hide the source and destination of funds on a blockchain transaction. The goal is to increase the anonymity of those associated with a blockchain address.

Finally, Facebook seems to be heading into the blockchain space. After speculation circulated among the crypto-currency community this past year, Facebook has issued a job advertisement to hire a blockchain software engineer. It remains unclear as to what specific project Facebook is working on, though it is now clear that they are now entering this market.