Law enforcement requests sent to Switzerland-based cryptocurrency exchange ShapeShift rose 175 percent in the second half of 2018, according to a new Compliance Transparency report published by the exchange Jan. 18.In a blog post accompanying the report, Shapeshift outlines that it typically receives requests from law enforcement agencies for data including crypto addresses (in or out of the Shapeshift system), transaction IDs, identity information (names, emails, IP addresses), cryptocurrency or crypto asset information and more. ShapeShift emphasizes that in most cases it is not informed of the details of the investigation or probe for which the data is being gathered.The report reveals that Shapeshift received a total of 44 subpoena requests in Q3 and Q4 2018 — a 175 percent increase as compared with a combined total of 16 in the preceding two quarters. These break down as 6 subpoenas in Q1, 10 in Q2, 19 in Q3 and 25 in Q4.2018 law enforcement requests sent to ShapeShift. Source for data: ShapeShiftIn terms of geographic jurisdictions, the highest number of requests over the year came from United States-based agencies — accounting for 18 out of a total of 60 global inquiries. Among these, 6 came from the FBI, 5 from the Securities and Exchange Commission (SEC), 3 from state level authorities, 2 from the Department of Homeland Security (DHS) and 1 from the Commodities and Futures Trading Commission (CFTC).German agencies accounted for the second-highest number of inquiries by country — issuing 8 requests — followed by the United Kingdom, with 6, and France, with 4.ShapeShift claims it is usually able to provide the requested information within a 1-2 week time frame, and that it complied with every verified request it received in 2018. As the exchange notes, the uptick in its law enforcement inquiries over the year correlates with that seen by other exchanges. As previously reported, subpoenas to crypto exchange Kraken increased three-fold in 2018, as compared with the preceding year.ShapeShift’s blog post takes pains to emphasize that its experience with law enforcement is typical, citing TechCrunch founder Michael Arrington’s statement when his $100 million crypto hedge fund was probed by the SEC in March 2018: “We received a subpoena. Every [crypto] fund I’ve talked to has received one…”As reported last fall, ShapeShift was prompted to refute allegations of facilitating money laundering, after being implicated in a Wall Street Journal report that claimed $9 million in ill-gotten funds had been funnelled through its platform.As a non-custodial platform, Shapeshift historically did not impose user identification requirements on traders — although this is now changing since the platform began to evolve a mandatory membership model in September. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
Major cryptocurrency payment service provider BitPay has reported $1 billion in transactions this past year, according to a press release Jan. 16.According to the report, the company also set a new record for itself in terms of transaction fee revenue. Among major new customers this past year, BitPay named Dish Networks, HackerOne, and the State of Ohio.BitPay also reported that its B2B business has grown by almost 255 percent from 2017.Despite a massive crypto decline in 2018, BitPay’s CEO and co-founder Stephen Pair argued that the firm saw growth over the year because its product is “cheaper and quicker than a bank wire from most regions of the world.”While BitPay is reportedly still focuses on Bitcoin (BTC), the service reports that it has also added settlement support for other cryptocurrencies, namely as Bitcoin Cash (BCH), and stablecoins USD Coin (USDC), the Gemini dollar (GUSD) and Paxos Standard (PAX).In April, BitPay secured $40 million in a Series B funding round that included major crypto and IT industry players such as Tencent co-founder Alvin Liu and Christopher Klauss Family Office, Founder of Internet Security Systems (ISS), a firm acquired by IBM in 2006.In late 2018, BitPay’s CEO claimed that he expects mass Bitcoin adoption to come in three to five years. In November, BitPay’s chief commercial officer, Sonny Singh, predicted that Bitcoin’s price will soar to between $15,000 to $20,000 by the end of 2019.Also in November, Cointelegraph reported on research from blockchain data firm Chainalysis stating that the use of Bitcoin for commercial payments has fallen significantly in 2018. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
Popular cryptocurrency payment processor Bitpay has released figures showing that the company maintained strong performance during 2018, despite the downturn in the market. For example, while other ventures had to downsize recently, Bitpay’s staff increased by 78 percent from the previous year.
Also Read: Binance Launches Euro and Pound Fiat-to-Crypto Platform in Jersey
B2B Business Grew Almost 255% YoY
Bitpay has announced strong performance for the payment processing platform in 2018, after more than seven years in operation. During the year, the service reportedly processed over a $1 billion in payments for a second year and set a new record for transaction fee revenue by adding new customers. The company’s B2B operation also reportedly had a record year as it grew almost 255 percent from the previous year.
“Bitpay’s B2B business continues to grow rapidly as our solution is cheaper and quicker than a bank wire from most regions of the world,” said Stephen Pair, co-founder and CEO. “To process over $1 billion for a second year in a row despite Bitcoin’s large price drop shows that Bitcoin is being used to solve real pain points around the world.”
The company reports that its headcount has grown by 78 percent in 2018, with new hires in the fields of engineering, support, and compliance, bringing the total close to 80 employees. Bitpay also raised $40 million in Series B funding bringing its total raised capital to over $70 million.
Over 1.5 Million BCH and BTC Wallets
The Copay wallet, Bitpay wallet, and other wallets using the company’s Bitcore Wallet Service (BWS) have reportedly sent billions of dollars in value in BCH and BTC in 2018. In total, users have created over 1.5 million wallets to date using Bitpay and Copay.
The company also reports it set a record for reducing payment error rates, with the dollar volume lost falling from over 8 percent (in December 2017) to well under 1 percent of its total dollar volume processed.
“The adoption of support for Payment Protocol wallets has made a big difference for our merchants. Merchants are now able to easily accept Bitcoin payments in a simple easy way without any support issues. This was our biggest request by our enterprise merchants”, said Sean Rolland, Head of Product of Bitay. “Bitcoin has the network effect around the world and we are still extremely bullish on Bitcoin and the Bitcoin ecosystem,” he added.
What do these figures show about the wider ecosystem in 2018? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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Cryptocurrency exchanges have closed 2018 with “record transacting volumes,” according to a report by research firm Diar published Jan. 14.In its report, Diar notes that both the number of trades and the trade volume have increased on major crypto exchanges in 2018, compared to 2017 figures. The firm predicts that 2019 will see lower figures for spot markets than in 2017, despite the likely increase in the variety of traded cryptocurrencies.According to Diar’s data, the combined trade volume of the USD markets on major United States crypto exchange Coinbase increased by 21% in 2018 versus 2017. Over the same period, exchanges Kraken and Bitfinex saw increases of 192% and 50% respectively.In addition to growing trade volumes, Coinbase reportedly registered a 14.1% increase in the number of trades: from 82.7 million deals in 2017 to 94.4 million in 2018.Diar has also analysed the results of Bitcoin (BTC) mining activity throughout the year. According to the research, BTC miner revenues reportedly surpassed $5.8 billion in 2018. In January alone, miners earned $1.2 billion. However, the monthly figure has slumped by 83 percent over the year, resulting in a combined revenue of $210 million in December.At the beginning of 2018, a number of mining pools led by application-specific integrated circuit (ASIC) manufacturer Bitmain, together with the ViaBTC pool, which the company has invested in, held control over 53 of Bitcoin network’s hash power. These same pools started 2019 with only 39 percent of the network’s hash rate.Diar highlights that the power shift from few major mining pools to a larger number of smaller ones is an important factor in ensuring the network’s security from potential attacks:“Unknown miners closed December having solved a whopping 22 percent of the total blocks up from 6 percent at the start of last year. The Bitcoin network is currently less likely to experience an attack given the fact the BTC.com controlled pools have lost dominance over the network.”As Cointelegraph reported in December, Diar found that institutional investors have shifted towards higher liquidity over-the-counter (OTC) physical BTC markets. In 2018, Coinbase reportedly saw a 20 percent increase in BTC trade volume during OTC markets hours, while Grayscale’s Bitcoin Investment Trust saw a 35 percent drop in volumes compared to the same period in 2017. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
2018 witnessed a significant uptick in the number of initial coin offerings (ICOs) authorized by the United States Securities and Exchange Commission (SEC) to sell securities to large-scale investors, according to financial news channel MarketWatch, Jan. 11.MarketWatch reportedly compiled its data for 2018 by searching the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system for keywords such as “coin,” “ICO,” “token,” “initial coin offering” and “saft.”Their research reportedly found 287 results for evidently ICO-related fundraisings that were accepted by the agency to offer securities under what is known as a Form D exemption.Form D is essentially a short registration form in which a company discloses essential information for prospective investors in its securities issuance. The form is notably much shorter that the lengthy reports that are required ahead of sales of a non-exempt security to U.S. investors. Form Ds can also reportedly be filed post-factum, up to 15 days after the first sale has taken place.Exempt securities are notably limited for sale to so-called accredited investors only — defined in the U.S. as either individuals with a net worth of over $1 million, or who have consistently made $200,000+ per year in income, or as enterprises with over $5 million in assets.According to MarketWatch, the 287 ICOs registered in 2018 under a Form D exemption had a combined declared value of $8.7 billion — considerably higher than in 2017, during which 44 ICOs reportedly registered for the exemption, at a combined declared value of $2.1 billion. 287 represents an over 550 percent increase from 44, with the ICOs’ combined total value rising over 314 percent on the year.MarketWatch’s data found that Form D filings peaked in Q2 2018 — during which 99 ICOs were allegedly registered — with 87 in Q1, and lower numbers of 53 and 48 in Q3 and Q4 respectively.As reported, cryptocurrencies’ status under the overlapping jurisdictions and requirements of various U.S. regulatory authorities remains a complex and much-debated topic. Just this week, a Florida congressman proposed that most cryptocurrencies should not be regulated by the SEC, arguing that applying federal securities laws to crypto “can be very intense and hurt the market unless it is truly a security.”The CEO and co-founder of Goldman Sachs-backed crypto finance company Circle has this week claimed that more clarity over how to define various crypto assets would “unlock a lot of market activity, and also clearly enable the growth of a market for crypto-based securities.”In a recent official announcement, the SEC has declared that cryptocurrencies are one of the agency’s top examination priorities for 2019. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
According to public records obtained from Washoe County, home to one of the marriage epicenters of the world in Reno, Nevada, the region saw over 950 blockchain recorded marriages in 2018. Moreover, about 250 miles away in Elko, Nevada, county officials are recording birth certificates using blockchain technology.
Also read: Connecticut Software Engineering School Receives $10,000 BTC Donation
Blockchain Recorded Marriages Are On the Rise in Nevada
Reno, Nevada, otherwise known as “the biggest little city in the world,” saw a significant number of blockchain recorded marriages last year. It’s well known throughout the world that getting married in Reno or Vegas is extremely easy and, unlike other states, individuals can obtain a license without any blood tests. According to records gathered last December, the county of Washoe saw over 950 marriages that were registered into the Ethereum (ETH) blockchain. The executive from a firm called Titan Seal, Phil Dhingra, told the local Reno Gazette-Journal that the documents are cataloged into the ETH blockchain because “[ETH] has computing power that makes it hard to hack.”
Reno is a popular location for people getting married in a quick and easy fashion.
Dhingra also explained that typically a traditional marriage certificate can take 10 business days to process and the blockchain-backed certificates take less than 24 hours. Hunter Halcomb, a Washoe County systems technician, says individuals are using this system because lots of people come to Reno to get married. Furthermore, unlike paper certificates, owners can reuse them as many times as they want without having to order a new seal every time the document is used. In addition to Washoe, the county of Elko has been testing birth certificates that are filed on a blockchain. Counties in Nevada have been testing the technology for records ever since Senate Bill 398 was introduced and eventually passed. The new law incorporates smart contracts into the state’s electronics records law and any blockchain-related transactions are currently recognized by the state.
Other Government Agencies Are Still Not Keen on Digitally Recorded Certificates
Blockchain recorded certificates is not a new concept as the idea has been tested many times in the past. In 2014 the first blockchain recorded wedding hosted by the startup Bitnation saw the marriage of Joyce and David Mondrus get officially recorded into the BTC chain. The event was dubbed the “Blockchain Marriage” and took place on Oct. 5 at the Coins in the Kingdom bitcoin conference at Disney World.
The ‘Blockchain Marriage’ hosted by Bitnation and Jeffrey Tucker saw the marriage of Joyce and David Mondrus get officially recorded into the BTC chain.
Other types of certificates have been filed into the BTC chain as well, as schools like Holberton New Haven, and MIT in Boston use the blockchain to log academic certifications. There is also a few platforms that specialize in blockchain-based data certification like Blockcerts, Stampery, and Blocksign. Last year, Bitcoin.com’s web portal launched a notary service on top of the Bitcoin Cash (BCH) blockchain.
Meanwhile, Halcomb emphasized there are some drawbacks to digitally recorded certificates in Nevada at the moment. For example, the Social Security Administration has been friendly towards this type of documentation, but digital certificate acceptance with entities like the department of motor vehicles in certain areas can vary, the Washoe County systems technician noted.
What do you think about the amount of blockchain-based wedding certificates in Nevada? Let us know what you think about this subject in the comments section below.
Images via Shutterstock, Coins in the Kingdom, and Pixabay.
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Cryptocurrency exchange Kraken has received nearly three times more law enforcement inquiries in 2018 than in 2017, the exhange reported in a tweet Jan. 5.According to data displayed in the weet, in 2018 the exchange received 475 law enforcement inquiries from global government agencies, while in 2017 there had been only 160. Still, 2017 numbers were already considerably higher than the previous year, when there were only 71 inquires.Annual Law Enforcement Inquiries Received by Kraken – Source: Kraken tweetThe tweet further highlighted the prevalence of United States agencies among the inquiries, stating “you can see why many businesses choose to block US users.” The exchange reported that 315 of the 475 inquiries in 2018 came from U.S. government bodies.Inquiries by Country of Inquiring Agency – Source: Kraken tweetAs Cointelegraph reported at the beginning of December, Florida-based United American Corp. (UnitedCorp) has purportedly filed a lawsuit against Bitmain, Bitcoin.com, Roger Ver, and Kraken.The suit filed alleges that the defendants jointly used unfair methods and practices to manipulate the Bitcoin Cash (BCH) network for their benefit and detriment of UnitedCorp and other BCH stakeholders.Also in December, Japanese police reported that there has been a significant uptick in reports from cryptocurrency exchanges about suspicious transactions. The increase reports occured after a bill came into force obliging the exchange to report such activity. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
One of the great benefits of the Bitcoin Cash (BCH) network is that miner fees have been consistently inexpensive for well over a year. A typical BCH network fee in 2018 has been lower than most blockchain networks and the median average each day has not surpassed a U.S. penny in 10 months.
Also read: Four Cryptocurrency Hotspots That Saw Tremendous Growth in 2018
Bitcoin Cash Transaction Fees Stay Low
The BCH network continues to truck along in 2019 and with it comes the cheap and lightning fast transactions supporters talk about all the time. Over the last 10 months, the median average for daily BCH miner fees has not risen above a penny. Typically, a transaction of 236 bytes or less costs the sender around $0.001 to $0.008 on the Bitcoin Cash blockchain. Fees were a touch higher during a three month period (December 2017, January and February 2018) when the BCH price touched record highs. However, this was before the BCH hard fork in May, which bumped the block size from 8MB to 32MB. During the BCH stress tests in the first week of last September, the Bitcoin Cash chain processed millions of transactions per day.
When Millions of Transactions Per Day Were Mined — BCH Fees Did Not Budge
On Sept. 1 miners processed 2.2 million transactions in 24 hours, which was followed by the next day’s 1.37 million transactions and the 1.67 million confirmed on Sept. 4. These records shattered BTC’s milestones back in December of 2017 when the BTC chain processed a little over 400,000 transactions per day that month. Although, at that specific time the BTC mempool was severely clogged with unconfirmed transactions and network fees for BTC were anywhere between $25-50 per transaction.
On Sept. 1 miners processed 2.2 million transactions in 24 hours.
Now one would think fees would have started to increase when the Bitcoin Cash network processed millions of transactions per day, but the BCH median average network fee for all three stress test days was roughly $0.001 per transaction. BCH miners also mined several large 4-8MB blocks, but they also processed a 9, 10, 13.5, 15.2, 23.15MB blocks that week as well.
A typical Bitcoin Cash network fee over the last 10 months has been less than a cent and the median average each day has not surpassed 2/3 of a U.S. penny.
BCH Network Fees With Exchanges and Wallets May Differ
Some people still may be paying too much per BCH transaction, if their wallet’s fee settings are set incorrectly or the wallet client does not let the user customize the network fees. If you think your wallet is sending BCH transactions with a high network fee rate, check the wallets settings and set the fee to “low” or “economy,” instead of “high” or “priority.” Some wallets like Electron Cash allow users to create a customized fee (satoshis-per-byte) so they can set the miner fee to whatever they desire. If a wallet doesn’t allow you to change the fees to a lower setting, then you might want to move the funds to a wallet that does allow custom fee settings. With the ability to customize the fee settings, a BCH wallet user can send incredibly small micropayments across the network.
Bitcoin.com Wallet fee settings.
When a crypto newcomer withdraws BCH from an exchange, they might assume the Bitcoin Cash network is slow and fees are more expensive than the median rate because of the exchange’s method of operations. If it takes too long to withdraw BCH from a trading platform this is not the network’s fault at all, as the exchange is entirely in charge of releasing the funds. Further, when depositing BCH on an exchange, most of them will not let a customer trade the funds until a number of onchain confirmations have completed.
Electron Cash wallet fee settings.
Another issue with exchanges is that they usually don’t let customers change the network fee and will sometimes make the customer pay the highest network fee. None of these issues are inherent with the BCH network and have everything to do with leaving funds in the hands of a third party and not having full control. However, there are some exchanges that use low fee settings and in extremely rare occasions some trading platforms will let customers customize the fee.
Low Fees Allow for More Innovation and Global Participation
All year long, BCH network fees have been incredibly inexpensive, which has allowed for all types of innovation. This includes the opcodes added last May and the use of OP_Return transactions with metadata. A wide variety of applications were released during the second half of 2018 that leveraged OP_Return transactions and the new opcodes and the low fees have made things much easier for developers and end users. Low network fees have inspired users to create representative tokens, upload written text, books, and all kinds of files using the BCH chain’s security. BCH network fees that are less than a cent also make it uncomplicated to send microtransactions and support crowdfunding charities like Eatbch in South Sudan and Venezuela. If there is a whole ton of small amounts of micropayments, then it can really add up for people in need. Bitcoin Cash fans believe that inexpensive fees will help push adoption forward and over the last year the network fees have been very low even when processing 4X the number of transactions that other networks have recorded.
What do you think about the low fees on the Bitcoin Cash (BCH) network? Let us know what you think about this subject in the comments section below.
Images via Shutterstock, Bitinfocharts.com, Fork.lol, Pixabay, Electron Cash, and the Bitcoin.com wallet.
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Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.The ICO market data is provided by ICObench, based upon the projects’ announcements recorded in ICObench database, which includes over 5,100 ICOs since August 2015.In 2018, 2,284 initial coin offering (ICOs) reached their conclusion and investors could choose, on average, among 482 token sales opening every day of the year. During 2017, the corresponding values were just 966 and 91 ICOs respectively.However, the economic results are less impressive: The total amount raised in 2018 was almost $11.4 billion, against little more than $10 billion during 2017, with a mere 13 percent growth.A balance of the general trend of the ICO market during 2018 is, in fact, double-edged. With ICOs in March 2018 collecting almost $1.75 billion, the first half of the year marked the highest point of growth since the beginning of the upward trend that started in late spring 2017, although June 2017’s data is an anomaly, as seen below. On the other hand, the closing months of the year recorded a radical downturn, such as in November 2018, which brought in just $0.36 billion, making it the worst result since May 2017.Both trends mirror the volatility of the whole crypto market during 2018, especially of Ether, given that Ethereum is the platform the majority of the ICOs issued on their token, with 84.29 percent of the projects, against 1.25 percent raised on Stellar and 0.55 percent on NEO.Ether achieved its historical highest price on Jan. 13, 2018 (almost $ 1,352), while the lowest level of the year was touched on between Dec. 14 and 15 (around $84, with a loss of about 94 percent of its value). The ICO market seems to react to the trends of the underlying cryptocurrency in slightly volatile ways. In view of the funds raised, the spread between the picks of March and November 2018 is about 79 percent.Considering the data from a medium- and long-term perspective, the funds gathered by ICOs at the end of the year are still far above the level at the beginning of 2017. Even considering only the first 15 days of December — the data available as of press time — in January 2017, the capital raised by ICOs amounted to about 1.8 percent of the funds available during the last month of 2018, while Ether capitalization accounted then for about 9 percent of the December 2018 level.More ICOs, fewer resourcesThe number of new ICOs listed by ICObench during the year followed the trend already shown before considering the funds raised: March 2018 recorded the highest number of new projects entering the database (528), while the number of incoming ICOs has fallen slightly since the end of the summer, with the lowest recorded figure being in October, when there were 213 new listings. In this case, however, the decrease is less evident than the decline of the amount of capital amassed: Therefore, quite a large number of ICOs are still competing for shrinking resources.As a result, the average amount of funds collected by a single ICO during 2018 is smaller than during the previous year — $11.52 million, against $24.35 million in 2017. Moreover, the differences in size in terms of the actual results of each ICO remains relevant, even if the divergence between the amount of capital raised by the ICOs decreased, especially with a rise in the average size of the smallest ICOs: The least successful ICO that ended during 2017 with a positive result (more than $1) raised $420, while the worst result for 2018 was $761.More significantly, the range between the ICOs that can be viewed as being medium-small to large on the basis of the funds gathered lessened, ranging from $1.49 million to $40 million in 2018, while the range was from $1.4 million to $45 million during the previous year.Deviation from the average values is higher among the projects positioning themselves in the highest ranking, i.e., the 5 percent of the sample of ICOs reaching the largest amount of funding. In this case, 2017’s distribution data was partially distorted by the record achieved by a single project, the new blockchain EOS, which ended its year-long ICO in June that year and gathered almost $4.2 billion — which is, until now, the largest ICO in the history. EOS aside, the 2017’s best performer amassed $258 million, while 2018’s best result was $575 million.During 2018, the top 5 percent of the sample by capitalization (41 ICOs) accounted for about 31.7 percent of all the funds gathered. Among this leading group, 10 ICOs reached $100 million or more — concentrating about 16 percent of all the capital available in the market during the year. In 2017, the same percentile (21 ICOs) accounted for more than 63 percent of all the funds. However, this data falls to 21.6 percent if EOS’s value is not included in the sample. ICOs become (a little more) spread worldwideIn 2018, ICO promoters were still choosing to establish their headquarters in a rather small number of countries: At the end of the year, the United States, Singapore and the United Kingdom were the countries hosting the largest number of ICOs since 2015, and these three were also the countries with more new ICOs ending during 2018. In the last year, the U.K. overcame Russia in the general ranking, while Germany reached the eighth position, overtaking Canada and the Netherlands — the latter of which exited the top 10.Considering the whole sample of ICOs indicating a precise localization in their white papers, the spatial concentration decreased from 2017 to 2018: Today, the 10 countries with the largest number of ICO headquarters account for 59 percent of all the projects launched since 2015 while a year ago, this value was about 75 percent.Concentration, however, remains very high, as seen in the economic indicators. ICOs hosted by the top 10 countries account for about 78 percent of the capital gathered, and the projects establishing their headquarters in the U.S. alone amassed almost 32 percent of the funds. In 2017, these values were even higher: 90 percent and 61 percent, respectively.Taking into account the economic data about new projects ending during 2018, the dynamic among countries is similar to the trend in the ranking by hosted ICOs. The rise of Estonia (from 11th in 2017 to seventh one year later) and Lithuania (from 21st to 14th) demonstrates the dynamism of Eastern Europe. Still regarded as a part of the Old Continent, Gibraltar rose by 4 positions (from 15th to 11th), thanks to the activism of the local administrators and businesses in promoting the British overseas territory as a new safe harbor for blockchain-based companies.Looking to Asia, the decrease in the ranking of mainland China (from 10th to 12th) is compensated for by the stronger rank acquired by Hong Kong, which went from the 12th to the ninth place. Finally, the increasing weight of some Caribbean tax havens — such as the Cayman Islands, which rose from the ninth to sixth position, and the British Virgin Islands, from 29th to eighth — stresses the relevance for ICOs concerning issues such as regulations and taxes.ICO by industry: A strong core and ascending applicationsConsidering the distribution of the projects fueled by ICOs during 2018, the industries that attracted most investment are the sectors closer to the development of the core of the blockchain economy: platforms allowing the interaction among networks of users, smart contracts, internet-based products, and other types of infrastructure relating to some IT network environment. These accounted for about 30 percent of the funds gathered during the year.On the other hand, the fintech sector, which includes both banking and financial investment, amassed $4.4 billion, and new blockchains attracted investment of more than $4.2 billion. However, many of the planned 1,111 new cryptocurrencies didn’t complete their ICOs with an economic success.Other industries that achieved positive results during 2018 were positioned in the IT sector and included such businesses involved with software, big data or artificial intelligence. However, some relevant investments were aimed at applications in other sectors, such as business-oriented services, with $2.4 billion (7.4 percent) in funds raised, and entertainment- and media-related industries, with $2.1 billion (6.4 percent).The presence of other sectors further away from IT or high-tech industries is of little significance: Manufacturing accounted for about 1.3 percent, which includes the manufacturing of electronic devices, while projects in businesses based on education or art together weighed in at about 1 percent.A comparison with 2017’s industry distribution is rather difficult due to the overwhelming weight of EOS’s ICO, as that year, new blockchain enterprises accounted for 40.6 percent of the various sectors. However, it is likely that we can recognize both a stable trend of growth involving core industries and a rising role of some fields of application that are closer to final users.Raising expectations clash with realityThe sum of all the hard caps (HC) set for the token sales ending during 2018 was five times higher than the target aimed for by ICOs in 2017, with $83 billion against almost $15 billion.Even stronger was the rise in the planned soft cap (SC) goals. In 2018, these were 12 times the cumulative value planned during 2017, amounting to $13.7 billion in comparison with $1.1 billion in the previous year. As a result, the projects ending during 2018 saw the establishment of a narrower gap between HC and SC than was the case during 2017: Cumulative HC exceeded the lower threshold by six times while the ratio was more than twice that during 2017, which had a cumulative HC set 13 times the amount of the cumulative SC. In spite of raising expectations, the market didn’t answer to such optimistic figures. The envisaged HC for 2018 was, in fact, 173 percent higher than the actual average market capitalization of Ether during the year. Looking at the actual funds raised, at the end of 2018, ICOs attracted about 23.7 percent of the average value available on the Ethereum ecosystem during the year, while the value with regard to 2017 was more than 47.8 percent.Considering the total funds raised by the 2018 ICOs that specified both the soft cap and hard cap in their white papers, little more than 11 percent of the cumulative envisaged HC was achieved, while 45.5 percent of the cumulative SC was. During 2017, ICOs reached 17 percent of the hard cap set, and 97 percent of the envisaged soft cap.The increasing number of projects competing for capital during 2018 represented a strong barrier to entry, as only 43.3 percent of the ICOs could gather at least $1 (compared with 57.6 percent in 2017). However, the performance of the token sales in 2018 that passed the first step was a good deal better than during 2017, as 19.2 percent of the projects at least achieved their soft cap — compared to 9.6 percent a year ago.In spite of the larger number of ICOs launched during the year, the gap between the total number of token sales ending during 2018 and the few that achieved a hard cap is quite similar to the success funnel recorded during 2017. In the last year, only 6 percent of ICOs were able to achieve their hard cap, while 6.7 percent did so in 2017.2018 recorded the summit of the rally experienced by the ICO market starting from mid-2017, and a subsequent decreasing phase that seems far from finished as of press time. Little more than five year ago, Mastercoin was the first project using an ICO to finance itself. The ICO market is therefore too young to interpret last year’s data as a first cycle that could repeat itself in the future on a larger scale (such as the many “deaths” of Bitcoin demonstrated) or as a signal of a dramatic change in market perspectives.As a matter of fact, more and more critics are blaming the reliability of ICOs or some of their typical promotion tools, while attention is now focusing on alternative ways to finance the crypto industry, such as security token offerings (STOs) or other possible traditional investment vehicles.Even so, the picture at the end of 2018 allows some hope with regard to a recovery of the ICOs’ perspectives: Even after a dramatical downsizing, the market is still larger than at the beginning of the upward trend in 2017, and the fact that a concentration in both localization and industries is decreasing is perhaps a signal of a wider adoption.Besides, in 2017-18, the “ICO-bonanza” allowed for the birth or development of many businesses, offering the promoters of token sales a wide range of high quality services, from strategic advice to marketing, from legal services to start-up incubators. The industry today is, therefore, more complex, robust and structured than a year ago, and this could be a relevant advantage in terms of promoting the next, more sustainable, wave of growth of the ICO market. window.fbAsyncInit = function() FB.init( appId : ‘1922752334671725’, xfbml : true, version : ‘v2.9’ ); FB.AppEvents.logPageView(); ; (function(d, s, id) var js, fjs = d.getElementsByTagName(s); if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = “//connect.facebook.net/en_US/sdk.js”; js.async = true; fjs.parentNode.insertBefore(js, fjs); (document, ‘script’, ‘facebook-jssdk’)); !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘1922752334671725’); fbq(‘track’, ‘PageView’);
According to China Judgements Online, a database of Chinese court documents, half of all lawsuits pertaining to cryptocurrencies were filed last year, highlighting an increase in fraudulent activity despite China’s regulatory crackdown. The database indicates that at least 202 cryptocurrency scams were promoted via more than 3,000 different platforms.
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Half of All Chinese Crypto Lawsuits Were Filed Last Year
China Judgements Online, a website that publishes Chinese court documents, has estimated that 202 cryptocurrency scams were operational in China during 2018.
The website found that the scams were promoted across more than 3,000 different platforms and noted a significant increase in the number of pyramid schemes ostensibly associated with cryptocurrency over the last two years.
According to China Judgements Online, approximately half of the 406 lawsuits relating to cryptocurrency that have been filed in China since 2014 were filed last year. The data highlights the increase in fraudulent activity pertaining to virtual currency following the highly publicized cryptocurrency boom of 2017, despite China’s regulatory efforts.
China Advocates Caution Regarding Crypto
Chinese officials have continued to promote caution regarding cryptocurrencies in recent months, emphasizing concerns that an unbridled cryptocurrency market could lead to systemic risk throughout the domestic economy.
Li Lihui, the head of the state-backed National Internet Finance Association – a self-regulatory organization that collaborates with the People’s Bank of China and “relevant ministries and commissions” – recently emphasized concerns pertaining to the transparency of stablecoins while speaking at an event hosted by Tsinghua University.
“On the platform of the virtual currency exchange, the market value of [stablecoins] is hundreds of millions of dollars. But some stable currency accounts are not transparent enough, and there is no authoritative supervision, there is a risk of trust,” Lihui stated.
Do you think that the number of lawsuits pertaining to cryptocurrencies in China will continue to increase in 2019? Share your thoughts in the comments section below!
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