Kraken is Offering Preferred Shares, Raises $6.8 Million in a Day

The United States-based cryptocurrency exchange Kraken has begun to offer preferred shares to accredited investors.

As announced by the exchanges, it has partnered with investment platform Bnk to the Future to allow any registered investor to buy its shares. Interested investors can purchase the stocks with a minimum amount of $1,000 till June 20th.

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As seen on the fundraising page, Kraken has already raised $6.8 million, as of press time, surpassing the minimum investment goal of $6.2 million within a day of listing. So far, 326 investors participated in the fundraising as the company is aiming to raise $10.2 million.

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Kraken is one of the longest-operating cryptocurrency exchange on the globe which lists 24 digital currencies, offering 74 trading pairs. According to the company, it has handled $85 billion worth crypto trades in 2018, a year when the market went down significantly.

Bother to disclose financials?

Though the San Francisco-based exchange is offering its shares to both large and small investors, it did not mention publically how it will utilize the raised funds, neither did it published its financial reports.

This is not the first attempt by the crypto exchange to gather funds from the public as last year it sought funds from its prominent clients, keeping its valuation at $4 billion. Then the minimum investment amount was set at $100,000.

The long reigned bear in the crypto market has made massive dents on established crypto-related businesses. Similar to Kraken, many other digital asset exchanges were also forced to seeks funds via different means.

Earlier this year, Bithumb’s operator received $200 million from a Japanese blockchain fund while the controversial crypto exchange Bitfinex recently raised $1 billion by distributing native tokens in a private sale.

Meanwhile, Kraken is also focusing on its business expansion and has acquired the futures trading startup Crypto Facilities for an undisclosed amount.

Itiviti Adds Frederic Villain as Head of Agency Trading Sales Asia

Itiviti, a trading technology and service provider has unveiled its latest executive appointment. The move will see an emphasis on Itiviti’s Asian operations, culminating in the addition of Frederic Villain as Head of Agency Trading Sales Asia.

His mandate as the Head of Agency Trading Sales Asia will be to help steer and ultimately grow Itiviti’s regional market share while ensuring customer satisfaction.

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The move is tendered with immediate effect, with Mr. Villain being based out of Itiviti’s Singapore office, per a company report. In this capacity, he will be responsible for managing regional client relations, defining and executing Itiviti’s regional sales and account management strategies.

According to Ofir Gefen, President APAC, Itiviti, in a statement on the appointment: “We’re thrilled to have Fred back on our team. His experience, solid systems knowledge and strong business acumen with a keen sense for what really matters to customers will be great assets as we are raising our targets for Asia, and specifically for our initiative to support former Bloomberg SSEOMS clients when migrating their platforms.”

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The appointment of Mr. Villain also reflects Itiviti’s desire to focus on Bloomberg’s Order Management System SSEOMS, namely it’s migration capacity. Prior to joining Itiviti, he worked at Boomberg, overseeing it’s SSEOMS for the Asia-Pacific region.

His tenure also so him work in sales, implementation and account management, all with an emphasis on the APAC region, which should be an asset in his new role at Itiviti.

A fifteen career also included a strong background in fintech, as well as a string of roles in such segments as marketing, sales, implementations and account management for global financial software vendors. He has also held roles previously at Ullink and FIS/Sungard.

“I’m truly proud to become part of Itiviti and contribute to our further growth as a full-service trading technology and infrastructure provider to Asian financial institutions,” reiterated Mr. Villain.

“I’m sure that our Asia customers will be just as glad to see Fred at Itiviti as we are about him joining our team. Fred will be instrumental for our continued success in the Asian markets and for executing our overall strategy in the sell-side OMS space. Bloomberg’s departure from this market has left clients looking for credible, long-term options and through this recruitment and more to follow, Itiviti is positioned as the default migration path for SSEOMS users,” explained recentlyadded CEO of Itiviti, Rob Mackay.

NYSE Arca Wants to List a Bitcoin and T-Bill-Backed Fund

The Chicago-headquartered stock exchange NYSE Arca has applied for a rule change with the Securities and Exchange Commission (SEC) to list shares in a proposed Bitcoin investment fund.

According to the May 20 filing, the stock and options exchange is planning to establish a trust named the United States Bitcoin and Treasury Investment Trust which will be managed by Wilshire Phoenix Funds. The sole purpose of the investment trust would be to invest in Bitcoin and short-term US Treasury securities.

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“NYSE Arca, Inc., proposes (1) to amend NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares) to provide for issuance and redemption of such securities for the underlying commodity and/or cash, and (2) to list and trade the shares of the United States Bitcoin and Treasury Investment Trust under NYSE Arca Rule 8.201-E, as proposed to be amended,” the filing stated.

The Chicago-headquartered exchange also elaborated that it would appoint Coinbase’s custody arm to provide custodial service for the trust’s crypto investments. A tie with Coinbase will also provide up to $200 million insurance coverage, which the crypto exchange bought to protect the funds stored in its wallets from any attack.

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“According to the Registration Statement, the Trust has obtained insurance for the bitcoin held by the Trust, through the Bitcoin Custodian,” the filing added. “Currently, the Bitcoin Custodian, either directly or through an affiliate, procures fidelity (also known as crime) insurance to protect the organization from risks such as theft of funds.”

“Specifically, the fidelity insurance coverage program provides coverage for the theft of funds held in hot or cold storage and provides a limit excess of $200,000,000.”

Not Ready for Bitcoin ETF Yet

It is to be noted that the recent filing is a separate move from NYSE Arca’s existing push for a Bitcoin-backed exchange-traded fund (ETF) along with asset-manager Bitwise.

Meanwhile, the SEC is reluctant to approve a Bitcoin-backed ETF as last week it delayed the decision date for Bitwise’s application followed by a similar decision for Cboe’s application.

NYSE Arca Wants to List Bitcoin and T-Bill-Backed Fund

The Chicago-headquartered stock exchange NYSE Arca has applied for a rule change with the Securities and Exchange Commission (SEC) to list shares in a proposed Bitcoin investment fund.

According to the May 20 filing, the stock and options exchange is planning to establish a trust named the United States Bitcoin and Treasury Investment Trust which will be managed by Wilshire Phoenix Funds. The sole purpose of the investment trust would be to invest in Bitcoin and short-term US Treasury securities.

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“NYSE Arca, Inc., proposes (1) to amend NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares) to provide for issuance and redemption of such securities for the underlying commodity and/or cash, and (2) to list and trade the shares of the United States Bitcoin and Treasury Investment Trust under NYSE Arca Rule 8.201-E, as proposed to be amended,” the filing stated.

The Chicago-headquartered exchange also elaborated that it would appoint Coinbase’s custody arm to provide custodial service for the trust’s crypto investments. A tie with Coinbase will also provide up to $200 million insurance coverage, which the crypto exchange bought to protect the funds stored in its wallets from any attack.

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“According to the Registration Statement, the Trust has obtained insurance for the bitcoin held by the Trust, through the Bitcoin Custodian,” the filing added. “Currently, the Bitcoin Custodian, either directly or through an affiliate, procures fidelity (also known as crime) insurance to protect the organization from risks such as theft of funds.”

“Specifically, the fidelity insurance coverage program provides coverage for the theft of funds held in hot or cold storage and provides a limit excess of $200,000,000.”

Not Ready for Bitcoin ETF Yet

It is to be noted that the recent filing is a separate move from NYSE Arca’s existing push for a Bitcoin-backed exchange-traded fund (ETF) along with asset-manager Bitwise.

Meanwhile, the SEC is reluctant to approve a Bitcoin-backed ETF as last week it delayed the decision date for Bitwise’s application followed by a similar decision for Cboe’s application.

White-Hat Crypto Hackers Ranked Up $32,150 in Rewards in 7 Weeks

Are you a malicious hacker looking for a path to redemption? It turns out that you can get paid for using your sweet skills to save the world–so-called ”white-hat” hackers have managed to rank up $32,150 in profits by identifying and fixing security flaws in popular crypto networks and services in the last seven weeks alone.

Hard Fork reported yesterday that at least 15 blockchain-related companies (including Coinbase, TRON, Brave, Augur,Omise, and EOS) distributed financial rewards to these white-hat hackers working through HackerOne, a bug bounty platform, between March 28th and May 16th.

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Omise reportedly paid out rewards for the most fixes (6) over this period. Augur and Brave came in second place with three bounties paid each.

Source: TheNextWeb

Many of the rewards are for pithy amounts–the majority of Omise’s payments, for example, were for around $100 each. But some of the rewards can be quite large–both the Aeternity Network and Block.One (the company behind the EOS network) distributed a reward of $10,000 to a hacker for a single bug.

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TRON paid out a $3100 award to the hacker who found that the network was vulnerable to being bombarded with malicious smart contracts, a flaw that could have completed dammed transactions on its blockchain.

For a Hacker Trying to Make a Profit, It’s Good to Be Bad

Off of the platform, white-hat hackers can be a little less ethical. In some situations, the bounty paid on each bug found is determined by the hacker who finds it; sometimes, hackers who find bugs will hold the findings hostage in exchange for a ransom; if the company doesn’t pay up, the hacker may reveal the bug to the world.

And of course, other hackers are not interested in helping with fixing problems in crypto networks at all. Earlier this month, 7000 BTC (worth $55 million at press time) was stolen from cryptocurrency exchange Binance after hackers discovered and exploited a vulnerability in its infrastructure.

Binance runs its own bug bounty program that awards white-hat hackers with up to $100,000 for a single vulnerability.

First Derivatives Sees Growing Profits, Revenues During Latest Filings

First Derivatives (FD) has announced its preliminary financial results for full year ending February 28, 2019. During this period, the consulting firm and software provider to trading companies, notched an uptick in key financial areas and metrics, namely double digit rises in profits and revenue.

In particular, FD garnered a revenue of £217.4 million ($276.3 million) during the full year ending February 28, 2019. This constitutes an increase of 16.8 percent year-over-year when compared to £186.0 million ($236.4 million) in the year prior.

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By extension, revenue from First Derivatives’ software license swelled by 28% during the FY ending February 28, 2019. “Customers across a wide range of end-markets are waking to the transformative power of Kx technology to unlock data, drive value and secure their own long-term success,” explained Seamus Keating, Chairman of FD on the latest financials.

The latest filing corroborates a Q4 fiscal report back in November, which also experienced a strong growth in license revenue. The group’s Kx technology has been a consistent boon to its client base as well, which is reflective in FD’s growing revenue chain.

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Finally, FD’s fintech revenue was once again a source of optimism, surging by 17.0 percent in the FY ending February 28, 2019 to £166.7 million ($211.9 million). This trend was driven by an expansion of services provided to clients and new contract wins including the Canadian Securities Administrators, BitMEX and a major Japanese bank.

According to Mr. Keating, “Our investment programme has helped to deliver a number of important new contract wins, as well as OEM and partnership agreements that will provide a solid platform for growth in the years to come. As we look ahead, we are excited by the growing pipeline of opportunity across our business and are confident of achieving another year of strong organic growth.”

Profits also pointed higher

Profit margins were also higher in the FY ending February 28, 2019. The latest figures came in at £16.7 million ($21.2 million) after tax, representative of a jump of 17.0 percent from £12.1 million ($15.4 million) in the year prior.

In a previous filing, FD had predicted FY ending February 28, 2019 consensus revenue would come in at £213.0 million with an adjusted EBITDA of £38.5 million. These figures were surpassed by 2.0 percent and 1.0 percent respectively.

Bitcoin on the Brain: BTC Dominates Internet Searches in the West

A new analysisby Consensys on crypto-related internet search data has revealed that most western countries–knowingly or unknowingly–consist of Bitcoin maximalists.

In a study that compared search data on the terms “Bitcoin”, “Ethereum”, “Blockchain”, and “Cryptocurrency”, it was revealed that more than 67 percent of searches in Canada, Sweden, the US, the UK, Venezuela, Australia, France, and Nigeria were for the word “Bitcoin.” Brazil led the pack with 88 percent Bitcoin search dominance.

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The study also revealed that in much of the East, interest in cryptocurrencies seems to be a bit more evenly distributed. In Japan, only 28 percent of searches went to BTC; 30 percent were for Ethereum, and 39 percent were for blockchain, while the remaining 3 percent were for cryptocurrency. Taiwan, South Korea, and Russia show similar demographics. However, India’s data was more similar to that of the United States.

The Method to the Madness

Consensys theorized that this more even distribution of searches may be indicative of different levels of awareness of the crypto and blockchain spheres. “Countries in Asia like Japan and South Korea lead the world in interest for both ‘Blockchain,’ and ‘Ethereum,’ and fittingly are developing a clued-in populous at the forefront of the blockchain ecosystem,” the report said.

Although data was not available for China, “In Taiwan, perhaps the closest we’ll get to search data from China, blockchain and Ethereum are growing fast in search dominance and outrank even Bitcoin.”

The report also presented theories as to why Bitcoin remains of primary interest in other parts of the world. For example, “Venezuela, in the midst of major political upheaval, has seen a huge spike in search interest regarding Bitcoin as its Bolivàr currency continues to fall.”

Bitcoin dominance in the US and the UK, on the other hand, seems to be driven by brand name recognition. The results in these countries “[exhibit] a brand name bias with these numbers, suggesting that the technology isn’t understood until a ‘brand’ like Bitcoin or Ethereum introduces the concept to households.”

Meanwhile, market cap data on Bitcoin dominance shows that financially speaking, Bitcoin comprises 57 percent of the cryptocurrency market as a whole.

IRS Prioritizes Issuance of a Crypto Tax Guideline

The United States Internal Revenue Services is working on the issuance of tax guidance for cryptocurrencies, according to a May 16 letter.

The letter was issued in response to an inquiry made by 21 representatives in Congres, asking to provide specifics on the crypto taxation.

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The response letter by the IRS Commissioner Charles P. Rettig clarified that the tax agency is working on the tax guidance on priority.

“I share your belief that taxpayers deserve clarity on basic issues related to the taxation of virtual currency transactions and have made it a priority of the IRS to issue guidance,” Rettig wrote.

The tax agency also outlined that the instructions will cover an array of issues including “acceptable methods for calculating cost basis, acceptable methods of cost basis assignment, and the tax treatment of forks.”

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In addition, digital currencies are considered as property and the existing property tax laws are applicable for cryptocurrency transactions, according to the taxman’s letter addressed to Congressman Tom Emmer.

However, no timeline was provided for the issuance of the guidelines as the tax commissioner only mentioned that it will be published “soon.”

A much-needed guideline

In response to Rettig’s letter, Rep. Emmer stated: “I am glad to hear of the IRS’ plans to issue guidance on this important issue…Taxpayers deserve clarity on several basic questions regarding federal taxation of these emerging exchanges of value. I look forward to seeing their forthcoming proposal, and working together to serve the American taxpayers.”

Many crypto-related companies in the country are also pushing for specific crypto tax laws as the rules are still murky. Finance Magnates earlier reported that these crypto-related issues have also become a priority among the lobby groups.

Rep. Emmer, who is a part of the Congressional Blockchain Caucus, also introduced three bills to support cryptocurrencies and blockchain as a whole.

ASIC Flags Trading Provider Dartalon Ltd, as Crypto Scams Rise

Despite the best efforts of financial regulators, scams within the foreign exchange (forex) and cryptocurrency industries continue to target consumers. This Tuesday, the Australian Securities and Investments Commission (ASIC), has flagged another entity operating in this space – Dartalon Ltd.

The Australian regulator has flagged Dartalon Ltd, which also goes by the name of GFC Investments because it believes that the entity could be involved in a scam and specifically warns consumers to not deal with this business as it doesn’t have the necessary licence and authorisation to be offering financial services in Australia.

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Specifically, the Aussie watchdog said in its warning published today: “The business listed below has made unsolicited calls or sent emails about investing, financial advice, credit or loans and does not hold a current Australian Financial Services (AFS) licence or an Australian Credit licence from ASIC.”

ASIC states that the following URL, https://gfcinvestment.com, belongs to the entity, and therefore, residents of Australia should not use any of the services provided by the website.

According to the website, GFC Investments is a trading provider established in 2012. The website allows individuals to trade forex, contracts-for-differences (CFDs) and cryptocurrencies via its online platform.

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Dartalon Ltd, which is the owner and operator of the website, is located at: Suite 305, Griffith Corporate Centre, 1510, Beachmont Kingstown, St. Vincent and the Grenadines.

Crypto Scams are on the Rise

Sometimes, financial scams are easy to identify. However, scammers are now able to create a legitimate looking website for little cost and reach potential victims through more channels than ever, such as social media.

Because of this, scams in the FX and crypto industries still remain a real threat. As Finance Magnates reported this morning, the Financial Conduct Authority (FCA) said that UK residents lost approximately £27 million ($34.4 million) to forex and cryptocurrency-related scams in the 2018/2019 fiscal year.

This Tuesday, the British regulator revealed that authorities received 1,834 scam reports last year, an increase of almost four-fold on the prior 12 month period. However, the FCA did not give a breakdown of the makeup of the scams.

Earlier this month in its annual report, the Autorité des marchés financiers (AMF) said that there had been a switch in scammers’ preferred asset class, with the number of crypto-related complaints skyrocketing in 2018. Conversely, there was a huge decline in the previously large number of forex-related scams.

Risk Management and AI are Getting Closer, But Not Close Enough

With the advent of the 21st century and the launch of The Matrix (documentary), artificial intelligence has grappled the minds of humanity for almost 20 years. Thanks to incredible advancements in the machine learning space, we are now hearing about applications like full self-driving, flawless medical diagnostics, photography and many more.

Yet today we will focus on whether and how AI technologies can improve the lives of brokers, and more specifically, the dealing desk department. With applications such as sentiment analysis, algorithmic trading, chatbots, cascading of payments providers and many others, the dealing desk departments of brokers have been looking for the next breakthrough in the industry.

Whether or not that will come today, this year, or next, we don’t know, but acceding to one leading provider of risk management technology, machine learning is far from solving the complex needs of dealing desk departments.

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Looking for the Holy Grail

The undoubtful cultural impact of The Matrix birthed the simulation theory and matrixism – a religious movement that peaked out in the early 2000’s. Humanity’s conviction that AI dominance of some form is going to change our lives is gathering more speed every day, turning the terms “machine learning”, “neural networks” and AI into magic buzzwords.

While such technologies are powerful IT tools in the right hands, they also attract sensational media headlines. This can cause confusion and mistrust among non-tech customers.

Speaking to Sydney-based Fintech company, Tapaas, which has done extensive research into the area, we aimed to find out more about the upcoming changes to the risk-management department driven by AI tech.

The Tapaas platform already provides its international subscribers with powerful data-analytical tools to help brokers make smarter and faster decisions while minimizing their exposure to risk.

Tapaas co-founder, Dave Hall says they spent over a year trialing whether ML could be used for client profiling based on their sizeable historical trading database.

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“We explored various approaches, including linear and non-linear ML techniques but it was difficult to get sustained, meaningful signals above the noise of the variability of trading and market data,” Hall said.

There are many factors that impact trade and quote data, including short and longer-term trends in market conditions, world events, and changeability in trader behavior over time.

“We found that ML on raw trade and market data did not provide consistent profit-enhancing results that we could confidently sell to customers,” said Hall.

Trading Behaviour Profiling

As a result, Tapaas has taken a pivot away from ML for now and invested in refining their Trading Behaviour Profiling, Classification and Labelling tools.

“Our tools can identify whether clients are range traders, news-event traders, day traders or even scalpers operating in short periods of high volatility. Our algorithms are highly specialized and more effective than the broad brush strokes of ML,” Hall explained.

Dealers can use this significant data together with statistical behavior analytics to precisely classify clients and trade accordingly. The company is not focusing on autopilot, yet it is allowing brokers to optimize the number of skilled dealers and risk managers who can effectively manage risk for much larger volumes of trading accounts and trading flow.

While AI may help Netflix recommend our next movie, if the algorithm is wrong, we can simply choose something else. It won’t cost us anything. But as a broker, if your AI signal is only 50% accurate, it could cost you everything.

For the time being, the Tapaas experience shows brokers are probably better off using analytical tools, which allow them to apply their real intelligence instead of something artificial.