Token Reporter covers the world of cryptocurrency, token sales, and early stage startup funding. It is edited by John Biggs, formerly of the New York Times, Gizmodo, and TechCrunch.

TokenReporter: Some news

Welcome to a new edition of TokenReporter. This week I have some interesting news.

Sponsors

Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.

MetaCert - After eradicating phishing on Slack in 2017 for the crypto world, MetaCert is now protecting over 1 million Crypto enthusiasts from phishing scams worldwide. Install their new email security service for iPhone.

HypeHop.com is an experimental video site that pays you cryptocurrency for watching videos. It’s no-strings, and simple. 

  1. Pick a video that interests you.

  2. Enter your BTC address.

  3. Keep your eyes on the screen and enable your webcam. Watch. That’s it.

Want to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com


Ahoy,

Just wanted to let you all know that I am now editor-in-chief of The Block, a new crypto/fintech site produced by Mike Dudas. The Block is a great site with some great reporters including Larry Cermak and Frank Chapparo and if you want to learn more about crypto without suffering through flame wars and hype, this is the place to go.

I took the job for a single simple reason: I want to pull crypto out of the enthusiast gutter. As it stands, too many services and sites offer very little in the way of valuable information. I hope we can remedy that. This shouldn’t change anything about TokenReporter or HypeHop as I still love the operational side of the ecosystem and hope I can keep building.

Best,

JB


Good

2019 Will See More Institutional Players in Crypto, Says PwC Leader

Henri Arslanian, the PricewaterhouseCoopers (PwC) fintech leader for Asia, has predicted that more institutional players will enter the crypto industry in the next year.

In an interview with Bloomberg, Arslanian said that “there’s a lot of exciting things that the crypto ecosystem is looking forward to in 2019.”

“A lot of elements are changing at the global level. If you look at 2018, a number of jurisdictions provided more regulatory clarity than have before. Countries from Hong Kong to Switzerland, Gibraltar to Malta…I expect many of those to take place as well in 2019,” said Arslanian.

Arslanian declared that he expected “many more big banks” to enter the space along with institutions. Undeniably, his predictions fall on fertile ground. Big players are already taking interest in crypto. Despite murmurs of a possible delay, early 2019 is scheduled to see the launch of Bakkt, a Bitcoin futures trading and custody platform created by the Intercontinental Exchange (ICE). Moreover, the world’s second-largest stock exchange, Nasdaq, plans to roll out Bitcoin futures in the first quarter of 2019.

Bad

Crypto Mining Malware Hit 4,000 Percent in 2018, McAfee Reports

Cryptocurrency hackers were busy in 2018, but it wasn’t with launching ransomware attacks. The McAfee Labs Threats Report December 2018 has shown a massive increase in crypto mining malware activity this year. After a temporary slowdown in Q2, the growth of coin miner malware returned to unprecedented levels in the third quarter. In fact, it rose by over 4,000 percent in 2018.

According to the report, crypto-criminals are using new cryptojacking malware and primarily target those who use “routers or IoT devices such as IP cameras or video recorders as crypto miners.” The choice of IoT devices may come as a surprise given their low CPU processing power. Still, the growing volume of the devices and their “lax security” make them easy targets for hackers.

WSJ Reveals Crypto Projects Show Signs of Plagiarism and Fraud

The Wall Street Journal has just revealed the results of a study of hundreds of crypto projects. Their findings are more than a little disturbing.

The WSJ took a close look at white papers of 3,291 projects that announced an initial coin offering (ICO) from ICOBench.com, Tokendata.io, and ICORating.com. The analysis of these documents showed that 16 percent (513) of the documents plagiarized content and promised implausible returns. If this wasn’t enough, they also listed fake team members to boost their credibility. In an attempt to lure investors, more than 2,000 whitepapers contained enticing language, such as “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk, and little risk.”

Ugly

Biotech Billionaire Philip Frost Settles with SEC over Crypto Penny Stock Scam

Dr. Philip Frost, a billionaire and a CEO of Opko Health Inc., has just agreed to a proposed settlement with the Securities and Exchange Commission (SEC).

Back in September, the SEC charged a group of 10 individuals and 10 associated entities for running classic pump-and-dump schemes that defrauded investors and generated over $27 million from unlawful stock sales. Frost, Opko Health, and the Frost Gamma Investments Trust were accused of “violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws.” 

Without actually admitting or denying the allegations, Opko agreed to an injunction from certain violations of the SEC Act of 1934 and a $100,000 penalty. The company also promised to perform certain undertakings related to the Exchange Act. Moreover, Frost will need to pay $5.5 million to the SEC and is permanently barred from participating in offerings of penny stocks, with certain exceptions.

News

Bithumb Acquitted of Charges in $355,000 Hacking Lawsuit

South Korean court has just set an arguably dangerous precedent, ruling in favor of a crypto exchange Bithumb over an investor in a lawsuit filed by the latter.

Ahn Park had sued the exchange for his loss of $355,000 in an alleged hack on Nov. 20, 2017. In the suit, Park faulted Bithumb’s negligence and inadequate security safeguards for the theft. He claimed the exchange failed to protect his assets and that Bithumb’s support team did not fulfill its obligations as a “financial services” firm.

In his ruling, the judge stated that due to the volatile nature of cryptocurrencies, it “is not reasonable to apply [Korea’s] Electronic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of [South Korean regulator] the Financial Services Commission.” Also, he added, “We cannot enforce a high level of security like a bank.”

The ruling must have come as a relief for the exchange which otherwise could have faced an onslaught of similar lawsuits from other investors. It’s worth noting that recently Bithumb had gone through a major hack that resulted in a theft of tokens worth $30 million. Although the company recovered the tokens worth $13 million with the help from industry peers, a startling $17 million is still missing.

TokenReporter: done is better than perfect.

Earn BTC Right Now

These videos, hosted on HypeHop, can earn you 50 cents per view. Please head over and check them out!

GoBambino - The Simplest Way to Plan Kids' Activities

CoinSwitch - Crazy Easy Exchange Access

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Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.

MetaCert - After eradicating phishing on Slack in 2017 for the crypto world, MetaCert is now protecting over 1 million Crypto enthusiasts from phishing scams worldwide. Install their new email security service for iPhone.

HypeHop.com is an experimental video site that pays you cryptocurrency for watching videos. It’s no-strings, and simple.

  1. Pick a video that interests you.

  2. Enter your BTC address.

  3. Keep your eyes on the screen and enable your webcam. Watch. That’s it.

Want to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com

The short story

I’ve written a lot here about how you have to do startup basics, like figure out what problem your coin solves, or why you’d want a blockchain - who has the need that having an immutable ledger solves a real problem they have? But one of the things I haven’t talked a lot about is the ability to execute, to ship.

There were some ICOs that raised huge amounts of money, and then didn’t do anything. There have been crowdfunding campaigns that didn’t ship, or shipped partially and gave up. What’s the story here? Momentum is a big indicator for success. It isn’t how much you raise, or how many people you get in your telegram channel, or whose fancy TV interview you go on. It’s, “Can you ship? Can you do the thing you said you were going to do?” The pressure to execute can be enormous, especially if you’re seeking perfection every time. If you can’t allow yourself to do something with less than perfection, it can cripple you and prevent you from doing anything at all.

Look for the people who make snap decisions based on some informed context, as opposed to people who are paralyzed until deep research has been conducted. Look for the people who are able to go ahead on smaller amounts of investment rather than not doing anything until a few millions have been raised. The goal out to be to prototype something even without the cash flow, prove it fills a need, then go for the cash infusion and build, build, build.

That is, if you raise tons of money and are slow to deliver, chances are, you’re not really committed to what you’re trying to make. And if you aren’t, why should anyone else be?

Perfect is the enemy of good. “Done” is good.

What’s stopping you?

A little news

The Winklevii have their own exchange, named Gemini, and they’re out pushing for regulations, saying that cryptocurrency’s growth has been impeded by negative press that associated it with criminals, and by a misperception that Bitcoin is totally anonymous. They’re trying to create crypto’s version of FINRA, and are running advertising suggesting that crypto needs the same safeguards and consumer protections as other financial institutions.

A Swiss watch is a thing of mechanical beauty, whose price can run to the absurd… but what if you made it a cold storage wallet? A. Favre & Fils have made this mashup, with the intention of making a watch that’s future-thinking.

“I am very excited about this new piece and the vision it creates for the Swiss watchmaking industry. I am particularly proud of the great board of advisors we can count on for this very innovative project we are working on. Our team is composed by luxury watchmaking experts and a world-class board of advisors including Stephen Urquhart, Ex-President and CEO of Omega for 17 years and Oliver Bussmann, former Group CIO of UBS and SAP and one of the most influential blockchain expert”, comments Laurent Favre, A. Favre & Fils CEO. “We have developed this first timepiece with the idea of offering something useful for the crypto-community, not simply something to spend their money on.”

Bitcoin’s price as of this moment is 3,679 USD. That’s where we’ve arrived after a 9% drop last Thursday. For perspective, the price was at 3,122 back in December. Some people were encouraged by the idea that it would break 4,100, but that hasn’t taken place. I suspect that the price isn’t going to go up anytime soon, but don’t take my word for it.

disclosure: I own about $300 worth of bitcoin.

Even with that negative slope on the crypto’s price, that isn’t deterring NYC. The New York City Economic Development Corporation’s Blockchain Center in Manhattan will open Thursday. The center will offer coding classes and lectures to promote awareness and adoption of blockchain, the distributed ledger technology. There’s some indication that the city may also start testing the use of blockchain technology in the fall.

Disclosure

We will run advertising in the newsletter and if would like to appear at the beginning or end of this newsletter please email joanna@cabalpartners.com We do not expect that we will run a token sale to fund this newsletter but Victor or I may run our own token sales later in the year.

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This material has been prepared at your request by Cabal Partners, LLC (“Cabal Partners, LLC”). This material is subject to change without notice. This document is for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) Cabal Partners, LLC is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, and (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently. Cabal Partners, LLC does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein. You may not rely on the material contained herein. Cabal Partners, LLC shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of Cabal Partners, LLC except for your internal use. This material is being provided to you at no cost and any fees paid by you to Cabal Partners, LLC are solely for the provision of investment management services pursuant to a written agreement. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a client of Cabal Partners, LLC and (ii) the terms contained in any applicable investment management agreement or similar contract between you and Cabal Partners, LLC.

The Update

Earn BTC Right Now

These videos, hosted on HypeHop, can earn you 50 cents per view. Please head over and check them out!

GoBambino - The Simplest Way to Plan Kids' Activities

CoinSwitch - Crazy Easy Exchange Access

IP Exchange - IP addresses for hire

Sponsors

Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.

MetaCert - After eradicating phishing on Slack in 2017 for the crypto world, MetaCert is now protecting over 1 million Crypto enthusiasts from phishing scams worldwide. Install their new email security service for iPhone.

HypeHop.com is an experimental video site that pays you cryptocurrency for watching videos. It’s no-strings, and simple.

  1. Pick a video that interests you.

  2. Enter your BTC address.

  3. Keep your eyes on the screen and enable your webcam. Watch. That’s it.

Want to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com

The short story

It’s kind of amazing that we’re still talking about BitCoin in 2019. It’s been through so many ups and downs, and survived repeated crashes. It keeps on going. But we’re still saddled with the libertarian, anti-authoritarian, crypto-is-only-good-for-censorship-proof-use-cases beliefs that make it easy for hucksters and hangers-on and to surround it, and discredit it. I feel like we need to talk more about the optimistic, interesting uses for it.

We should be talking about low-cost money transfers at faster settlement speeds. Intermediaries have taken fees for this for so long, and it’s another potential area to change the norm. Mobile phones caused long distance fees to mostly go away, Crypto should make money transfer fees go away.

We should be talking about person to person transactions that don’t require the bank to take days to grant access to your money, or being able to make travel arrangements more easily. We should be talking about money that’s identity theft-resistant, or is accessible to a wider range of people, like M-PESA has been. We should be thinking about micro-financing, and how it helps the large number of people who don’t have a bank as a normal part of their lives. We are limited by the things we’ve come to think of as normal: the dominance and stability of the dollar/pound/euro, the presumption of everyone having a banking institution, the notion that it’s normal to have to wait to get access to your money.

ICOs

BitTorrent is preparing an ICO through Binance. BitTorrent is the protocol and filesharing platform (BitTorrent Sync, for example) that enables downloading or creating a personal file cloud that can take advantage of many users sharing small bits of the data and then reassembling it on the client side into the intended file. Justin Knoll, who invented it, wants to tokenize it on the TRON blockchain for media consumption. It’s essentially a way for content creators to make a peer to peer offering to their viewers, and accept payment. TRON purchased BitTorrent (the company) which is why they’re doing this on their chain. It aligns with BitTorrent, which has always been about decentralized data. The whitepaper is a good read.

Stacktical sets out to convert service level agreements (SLAs) to smart contracts. When the SLA isn’t upheld, you earn tokens. Likewise, get rewarded in tokens for meeting the SLA. With a public ledger, it’s meant to be easy to see which service providers live up to the reliability you’d like. The whitepaper is here.

The Good, Bad, and the Ugly

Good

Bitcoin Turns Ten on Anniversary of Genesis Block

January 3 marks the 10th anniversary of the Genesis Block or Block 0. On this day ten years ago, months after the controversial publication of “Bitcoin: A Peer-to-Peer Electronic Cash System,” Satoshi Nakamoto started mining the first-ever Bitcoin block.

Looking back, this decade is undeniably full of ups and downs. There is much to celebrate. As of Sunday, January 6, investing.com’s list shows that there are 2,534 cryptocurrencies. Growing interest in cryptocurrencies has prompted several countries to turn crypto-friendly. Regardless of whether you’re a crypto enthusiast or a critic, you have to agree, Bitcoin already made history.

Bad

Iran Declares Telegram Crypto Aspirations an Act against National Security

Once again, the Iranian government is cracking down on the popular messaging app Telegram, calling its native token Gram a threat to national security.

According to a report by Teheran Times, the state criminalized aiding Gram cryptocurrency. Iran’s Secretary of Criminal Content Definition Task Force Javad Javidnia claims that Telegram’s activities pose a serious threat to the financial system. Thus, any use of Gram is going to be treated as a “disruption to the national economy.”

Back in May, Iran’s judiciary banned the app, accusing it of causing widespread unrest in the country. At that time, Telegram was the most popular social app in Iran and boasted 40 million active users — nearly half the country's population.

Ugly

Fraudulent Website Uses Former New Zealand PM to Promote BTC Scam

Former New Zealand Prime Minister John Key has been targeted by crypto scammers, who used his image to promote Bitcoin and a fraudulent company called “Crypto Revolt.”

According to a report in Stuff, it's not the first time John Key has had his image stolen for such a purpose. In 2017, Key was featured on a fake NZ Herald website along with a fictional Bloomberg interview full of misleading claims about his investments in Bitcoin.

Apparently, the so-called celebrity endorsements are scammers’ latest weapon of choice. They are using images of other influential figures, such as TVNZ presenter Hayley Holt and New Zealand’s Prime Minister Jacinda Arden.

Georgia State Senator Reports to Jail for Lying about “Stolen” Crypto Mining Equipment

Michael Williams, a Republican state senator of Georgia, turned himself over to authorities after he was accused of insurance fraud.

According to the court documents, in May of 2017 Williams allegedly falsely reported the theft of computer servers that were used to mine cryptocurrency from his campaign offices. The mining equipment was valued at $300,000.

After an investigation, Williams was charged by a Hall County grand jury on three counts: false report crime, false statement, and insurance fraud for having filed a false insurance claim concerning the case.

News

NYSE Operator’s Bakkt Raises $182.5 Million Funding Round

The Intercontinental Exchange’s (ICE) digital assets platform Bakkt celebrated New Year’s Eve with an important announcement. The first round of funding raised $182.5 million from a number of influential partners and investors. In the post, Bakkt CEO Kelly Loeffler pointed to the start-up’s current work with the Commodity Futures Trading Commission.

“At an industry level, regulatory approval for physically delivered and warehoused Bitcoin will establish and amplify the voice of U.S. authorities as the digital asset market evolves globally,” explained Loeffler. “We have filed our applications, and the timing for approval is now based on the regulatory review process.”

Bakkt’s (postponed) launch date is just around the corner. The platform is scheduled to go live on January 24.

Chilean Court Rules to Keep Crypto Exchanges’ Bank Accounts Open

The anti-monopoly court known as the Tribunal de Defensa de la Libre Competencia (TDLC) has ordered the banks to reopen the accounts of Chilean cryptocurrency exchanges, reports Diario Financiero.

The TDLC decision is a response to the Supreme Court’s ruling issued in early December which determined that Chilean banks were not obligated to provide services to digital currency exchanges. At that time, the financial institutions suspended a number of bank accounts belonging to Chilean crypto exchanges Buda, OrionX, and CryptoMKT. The TDLC verdict is undeniably a huge win for the crypto industry in Chile.

Filipe Larrain, Chilean Minister of Finance, promised crypto regulation. The finance ministry is working with the country’s Central Bank and Council for Financial Stability to develop a balanced framework for the fintech sector.

TokenReporter: The Unexpected Benefit of the Cryptocurrency Crash

The Update

This week I invited guest writer Vsem Yenovkian to comment on crypto pricing. In a stirring and in-depth look, he shares why he’s sill bullish although all signs point towards bear.

Earn BTC Right Now

These videos, hosted on HypeHop, can earn you 50 cents per view. Please head over and check them out!

GoBambino - The Simplest Way to Plan Kids' Activities

CoinSwitch - Crazy Easy Exchange Access

IP Exchange - IP addresses for hire

Sponsors

Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.

MetaCert - After eradicating phishing on Slack in 2017 for the crypto world, MetaCert is now protecting over 1 million Crypto enthusiasts from phishing scams worldwide. Install their new email security service for iPhone.

HypeHop.com is an experimental 

Want to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com


The Unexpected Benefit of the Cryptocurrency Crash

by Vsem Yenovkian

What a difference a year makes.

This time last year Bitcoin and its cryptocurrency brethren were on an unprecedented surge. Prices skyrocketed, millions were made, and even your grandmother was asking about investing in this new moneymaker. But that was then. Today it’s more realistic to see Bitcoin hitting $2,000 than going back to the heights of $20,000.

But is that such a bad thing?

Well, yes if you’re a cryptocurrency investor you’ve probably lost your shirt and then some. But if you’re someone who believes in the fundamentals of cryptocurrency and what it stands for, this crash definitely has its benefits.

While the surge last year was great from a profit point of view, it was actually detrimental to the overall cryptocurrency world. For starters, any time that much money is involved it’s going to bring out all sorts of unscrupulous characters looking to capitalize on the craze. True to form the number of ICO’s that ended up being complete scams skyrocketed along with the price surge in 2017.

Even putting aside the outright criminal activity, there was still a flood of ICO projects that entered the market, many with no actual product or long-term plan behind them. The entire industry was being diluted by these capitalizing latecomers.

This wasn’t why cryptocurrency was created in the first place.

See, lost in all the craziness of the last year was the original vision for why Bitcoin was created. It was never intended to be a form of investment, something you buy in hordes and cash out when you’re ready to retire. It was created to be an alternate, digital, form of currency. Something you use to buy-and-sell as you would fiat money. This is what got the original community interested in the first place, especially coming off of the financial crash of 2008. People loved the idea of having currency that wasn’t cash, wasn’t centralized, and wasn’t tied into the health of an unreliable economy structure. Bitcoin, and cryptocurrency, was going to modernize money.

And it was on track to achieve this…until 2017.

Before the price surges, the hype, the Lambos, and investments people were using cryptocurrency for its intended purpose. Merchants were accepting cryptocurrency as a form of payment and everything from cars to vacations to food was purchasable with cryptocurrency.

This all changed when the prices shot up in 2017. Suddenly people were no longer using cryptocurrency to buy anything because it made more sense to hold onto an appreciating asset. Why spend 5 Bitcoin to buy a car today when you can probably buy that car for 1 Bitcoin in a month? Now, with the price drop, we’re seeing the opposite effect. Merchants are hesitant to take on a depreciating asset and many have phased out taking cryptocurrency altogether.

However it’s not all bad news for cryptocurrency advocates. The price drop is also weeding out the phony and flimsy ICO projects. The market decline has created a filter effect where its no longer worthwhile for companies to launch an ICO haphazardly. This filter effect is making it more likely that an ICO enters the market with a viable product and strong long-term plan behind it.

Does this mean all the projects out there now are all legitimate and guaranteed to be successful? Unfortunately not, but the ones left standing after the crash are a stronger group than the ones that were around at the beginning of the year.

For many in the tech world the cycle that cryptocurrency has gone through over the last year or so is eerily similar to the dot-com boom/crash from 20 years ago. Back then, websites that had no value or product were being given ridiculous valuations just for being on the internet. Similarly many ICO’s were being given ridiculous valuations just for existing as cryptocurrencies over the last year.

When the dot-com market eventually came crashing down many were doubting the future of the internet itself. We know now that this was an overreaction to a necessary market correction. We know that the dot-com crash was actually a good thing for the viability of the internet as a whole and e-commerce specifically. By weeding out the websites that added nothing of value, it left room for the Amazon’s of the world to thrive.

It’s left to see whether this cryptocurrency crash will have the same effect on the industry. The effect of reduced ICO’s is already a big win and a strong start for true cryptocurrency advocates. If we ever see a stability in prices and merchants being willing to accept cryptocurrency as a payment method again then the future will be even stronger.

The people who lost a ton in the last year may not like hearing this but if this crash causes cryptocurrency to return to its intended roots, we will look back on it being the turning point in this currency revolution. A stronger, better, and more stable cryptocurrency rising from the ashes will truly be something more significant than a bunch of people buying sports cars from a one-time fad.

We can only watch and see what direction this goes into from here.

TokenReporter: Inside BCT

The Update

I’m a consulting editor for The Block now and I wanted to share one of the coolest stories I’ve edited in a while. Enjoy!

Sponsors

Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.

MetaCert - After eradicating phishing on Slack in 2017 for the crypto world, MetaCert is now protecting over 1 million Crypto enthusiasts from phishing scams worldwide. Install their new email security service for iPhone.

HypeHop.com is an experimental 

Want to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com


Two identities, one man: the story of $800 million hedge fund fraudster Boaz Manor who led the alleged $31 million Blockchain Terminal ICO

BCT looked good on paper. 

It had an all-star team, a product that promised to give Bloomberg a run for its money – the aptly-named Blockchain Terminal, and funding to run a massive ICO campaign. The founder, a mysteriously well-capitalized investor, was zealously dedicated and he had gathered a community of investors that were champing at the bit to grab a piece of future riches.

It was the perfect product for the next generation of traders. Geeky enough for gearheads and familiar enough for Wall Streeters, the BCT was supposed to bridge the gap between enthusiasts on an exchange and hard-charging professionals. And it almost did.

In reality, many ex-employees said, BCT was a scam and that founding investor, a bearded Canadian with a quiet demeanor, was not who he claimed to be. In fact, they said, he was a known financial criminal. Those employees requested to speak anonymously, citing fear of reputation risk and physical danger.

Riding the initial coin offering wave, which took financial markets and media by storm at the end of 2017, this founder convinced large investors in Asia and Australia to pour millions into a token sale aimed at building out their terminal device. The firm shipped out dozens of the terminals to well-known crypto hedge funds. But the product itself, like the company, was a facade, according to former employees and investors.

At the heart of the venture is a man once jailed for running one of the most notable financial frauds in Canadian history: Boaz Manor. Working under the pseudonym Shaun MacDonald, Manor tricked BCT employees, investors, and potential customers and, in the process, created the definitive grift of this nascent crypto tech bubble.

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