Ethereum Development Studio ConsenSys Invests in an Iceland-based E-money Startup
The crypto market rebounds slightly as the majority of top 100 digital assets post gains. ConsenSys, Crowberry Capital, and Hof Holdings have invested $2 million in an e-money startup led by a former executive of Iceland’s central bank. A recently published report shows that UK crypto startup raised £200 million in venture funding in 2018 compared to £52 million in 2016 and £19 million in 2017.
It’s another mixed day of losses and gains as Bitcoin registers a slight 0.76 percent gain while its next rival by market cap, XRP, gained 1.14 percent in the last 24 hours. Tether is the only other top 10 cryptocurrencies in the red while the rest have recorded losses ranging from 0.13 percent to 3.89 percent.
Chainlink is up 25 percent in the last 24 hours to trade at $0.45. IOST is up 14 percent followed by Revain at 10 percent. On the upside, the market has added just less than $1 billion in the last 24 hours.
E-Money startup raises $2 million from ConsenSys, Crowberry Capital, and more
Iceland-based startup Monerium announced via a blog post on Jan. 11 that it has raised $2 million in a seed funding round led by Nordic VC fund, Crowberry Capital, with the participation of Ethereum development studio ConsenSys and Hof Holdings.
Among other key members who played a crucial role in rebuilding Iceland’s financial services after the 2008 financial crisis, Monerium is led by Jon Helgi Egilsson, the former chairman of the country’s central bank.
The startup aims to “asset-backed, redeemable, and regulated e-money on blockchains through a licensed institution” and will use the funds to accelerate the development of Monerium’s services.
Before the seed funding, the startup had already completed and submitted an application to become a fully regulated financial services company in the European Economic Area through a wholly owned subsidiary company.
“Monerium has a clear vision to bridge fiat money and blockchains. It was when working with ConsenSys shortly after the launch of Ethereum, that we first identified e-money as a key catalyst for mainstream blockchain adoption. This investment, and the continued partnership with ConsenSys – alongside the backing from Crowberry Capital and Hof – is a clear indication that we are on course to achieve our goals,” commented Sveinn Valfells, CEO of Monerium.
The startup has grown to fourteen people spread across Iceland, the U.S, UK, and Sweden.
“In Iceland in 2008, a centralized financial system collapsed and almost caused a systemic economic meltdown. The ‘too-big-to-fail’ banking institutions were a single point of failure for deposits, lending, and payments. When compared to blockchains, the centralized banks which caused the crisis, are rooted in opposite philosophies of how we organize institutions and societies. They represent different worldviews and different risks to customers, investors, and society,” said Egilsson.
U.S Congressman says cryptocurrencies should be regulated by the CFTC and FTC instead of the SEC
U.S Congressman Darren Soto claims that the majority of cryptocurrencies should not fall under the regulation of the securities regulator. Soto made these remarks on Jan. 10 in an interview with financial news channel Cheddar.
The Congressman says that cryptocurrencies should fall under the jurisdiction of the Commodities and Futures Trading Commission (CFTC) and Federal Trade Commission (FTC) – rather than classed as securities and fall under the eye of the Securities and Exchange Commission.
Soto, a Democrat, argued that applying federal laws could intensely hurt the market. He added that a cryptocurrency should be regarded as securities only if it truly fits the bill of a security.
“We’ll be saving the SEC for true securities, knowing predominantly that these are commodities and currency transactions. The [CFTC and FTC] are agencies with a lighter touch and we have grown consensus among the industry that they’d be appropriate for the majority of these types of cryptocurrency transactions and the nature of these assets,” outlined Soto.
Soto made the remarks as he wants the United State to take a proactive approach to crypto regulation and follow the footsteps of smaller countries such as Malta and Barbados.
“We have sometimes taken for granted that the U.S. dollar is the foundation of the world economy, and how that creates stability and advantage […] As cryptocurrency becomes more utilized, that advantage could go away… [we] need to make sure we are aggressive and a fertile place for cryptocurrency transactions and for technology companies to be here,” he said.
The CFTC has deemed cryptocurrencies such as Bitcoin to be commodities while the SEC has regarded tokens sold via initial coin offerings (ICOs) to be securities. The Internal Revenue Services (IRS) regards cryptocurrencies to be property.
UK crypto businesses raise £200 million in funding in 2018
2018 will be remembered by many as the year when Bitcoin’s price tumbled more than 70 percent but UK based crypto businesses have other memories about the past year.
Cryptocurrency businesses in the UK broke records last year when they managed to raise £200 million ($225 million) in venture funding, according to data published by Pitchbook and London & Partners. This indicates that the industry is still in a healthy state despite the downturn.
UK crypto companies raised £51.96 million in 2016 and the figure subsequently fell to £19.11 million in 2017 despite a bull market. Bitfury raised £61 million last year in a series funding round led by UK based TradeIX.
The chief executive of Digital Securities Exchange (DSX) Mike Romanov sees the Brexit as an opportunity for the Land of the Queen to draft its own rules for cryptocurrency trading and help grow the sector.
“Britain is already looking at how it can maintain its dominance in financial services post Brexit, even as some major players abandon ship ahead of March next year,” argued Romanov.
The report further states that technology companies in other cities received twice the funding as those received by companies in Berlin, Paris, or Stockholm.
“These figures demonstrate that London is going from strength to strength as a global hub for technology, innovation, and creativity. The fantastic success of our tech sector is rooted in our city’s openness and our diverse, international talent pool,” commented Rajesh Agrawal, London’s Deputy Mayor for Business.
Volatility is not over yet, says SFOX
Volatility has not yet come to an end, said SFOX in an article published on Forbes on Jan. 9. According to its website, “SFOX is a cryptocurrency prime dealer for large-scale investors such as funds, family offices, and high-net-worth individuals, with over $9 billion in transaction volume to date.”
The analysts believe that the volatility will continue for some time but will be mild.
Danny Kim, Head of Growth at SFOX said, “The cryptocurrency community has been lacking the data that serious investors need to put market movements into context and make informed decisions. We hope that by breaking down the key drivers for 2018, and continuing to provide these analyses every month, we can contribute to the ongoing maturation of the crypto industry that we saw throughout 2018.”
SFOX said that volatility increased in three phases in the last year. The Bitcoin Cash hard fork and SEC settlements were fingered as the key drivers for volatility in the last phase. Other key drivers include crypto theft and price manipulation.
Civic CEO says Bitcoin could fall below $3,000
Vinny Lingham, a cryptocurrency commentator and the founder and CEO of blockchain identity management firm Civic said that Bitcoin could soon test the $3,000 level or even go lower than that. His latest comments come only two months after he warned investors against buying Bitcoin before it reaches or surpasses $6,000.
Lingham made these remarks in an interview with financial news channel Cheddar.
“I think it is a good chance we are going to retest 3,000 as a low and there is a good chance it will probably break through that ー if it hits that low. The market is definitely trying to find a bottom, and I don’t think we’ve found one yet,” said Lingham.
Lingham expects Bitcoin to trade between the $3,000 and $5,000 range before breaking out or breaking down.
“The reality is, it will probably trade sideways between $3 -$5,000 for another month or two while it’s trying to find which way to go and when it finds direction it will be a breakout or a breakdown,” he predicted.
The massive sell-off on Jan. 10 is canceling the gains made since the beginning of the year.
Bitpay CCO says 2017 $20,000 Bitcoin price and 2018 bear market were ‘an anomaly’
Sonny Singh, the Chief Commercial Officer (CCO) of Atlanta-based Bitcoin payment service provider Bitpay said that the $20,000 Bitcoin price in December 2017 and the volatility of 2018 were ‘an anomaly.’ He admitted that the demand and usage of Bitcoin were low last year. However, he also said that the price of Bitcoin could potentially rise in 2019 despite the continuing trend of the bear market.
Singh made the statements during a lively conversation on a Bloomberg tech show with Bloomberg’s Stephen Gandel.
Gandel kicked the show by pointing the massive price drops that began in late 2017 and Bitcoin’s recent drop to less than $4,000.
“It’s been a terrible week for bitcoin. A huge breaking thing is that there is this concept that bitcoin was some kind of port in a storm. That it would be a safer asset because inflation would hurt the dollar and stocks. But we didn’t see that. Damage is one of the main reasons people were buying it for an investment,” he said.
He also suggested that the stocks and Bitcoin are intrinsically connected because their prices fell at the same time.
Singh immediately came to the industry’s defense and suggested that crypto market is still in a healthy state despite the not-so-flattering developments of 2018.
“Everything built last year was a little overvalued and overhyped. Yet usage is now starting to catch up a little bit, but again new products are launching. Last year was a total anomaly, but I think you are going to see how these new products launch,” Singh said regarding the low usage of Bitcoin last year.
Another crypto firm lays off staff since the turn of the year
The effects of the bear market of 2018 have crossed over into the new year as another crypto company has cut its staff to save costs.
Blockfolio a California-based crypto portfolio tracking app that recently raised $11.5 million in venture capital funding has terminated the contracts of its nine employees.
Edward Moncardo, the CEO of the startup confirmed the layoff and said his company has trimmed its headcount from 41 to 37. Its affiliated company, DataBlock has also parted ways with five employees.
Moncardo blamed the bear market as the reason for job cuts and revealed that the company started restructuring in December. “Laying people off is awful and it’s a difficult decision to make,” he said.
A source close to the startup said that they had more people than they actually needed and pointed out that their competitor is managing with a small team.
The source was quoted saying “We didn’t need 40 people. Look at delta.app [a competitor] – they have like a dozen people. Why did Blockfolio need to grow like that?”