Cryptocurrencies, ICO and blockchain, a week in review

Bitcoin CME Futures and reliable source of data:

According to bitcoin.com article, CME uses two different criteria to determine whether a bitcoin exchange is eligible as a source for bitcoin pricing data.

First, the bitcoin exchange has to publish a price consistently or it will not be a reliable source of data.

Second, the bitcoin exchange also needs to have trading fees and cannot be a zero trading fee platform. This is important because platforms with no trading fees are susceptible to trading bots that can create fake volume.

What can we learn from CME’s criteria?

Cryptocurrency exchange with no trading fees, should alert you. Remember, if it seems too good to be true, it probably is.

We should also be concern, since fake volume may contribute and support the volatile prices the cryptocurrency market is currently seeing.

SEC and CFTC Chairman Statements on Cryptocurrencies and ICOs:

According to the sec statement, please bear in mind the following:

A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.

If you choose to invest in these products, please ask questions and demand clear answers.

Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds.

According to the sec statement, by and large, the structures of initial coin offerings that the sec have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of the federal securities laws. Generally speaking, these laws provide that investors deserve to know what they are investing in and the relevant risks involved.

According to the CFTC statement, virtual currencies are unlike any commodity that the CFTC has dealt with in the past. In addition, market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. Investors should be aware of the potentially high level of volatility and risk in these markets.

Moreover, CFTC Launched Virtual Currency Resource Web Page, which was designed to educate and inform the public about cryptocurrencies. In addition, in the very near future more guidelines will be published in order to protect the public (i.e. Virtual Currency “Actual Delivery” in Retail Transactions).

Company Halts ICO After SEC Raises Registration Concerns:

According to the press release, a California-based company selling digital tokens to investors to raise capital for its blockchain-based food review service halted its initial coin offering (ICO) after being contacted by the Securities and Exchange Commission, and agreed to an order in which the Commission found that its conduct constituted unregistered securities offers and sales.

FCA (UK) warning

The head of one of Britain’s leading financial regulators has warned people to be ready to “lose all their money” if they invest in Bitcoin.

Australia

RBA governor Philip Lowe says bitcoin is a ‘speculative mania’.