“This Week in Crypto” Summary for October 11, 2019


Progress on the CSD, debit card and other new products.

Check out our weekly “This Week in Crypto” summary in our blog post or watch the full video here.

Crypto Market News Highlights

1) Algo Capital Loses Crypto Funds After CTO’s Phone Is Hacked

Kevin explains that Algo has a blockchain that is supposed to be one of the most advanced one’s out there, a team very present in the tech community, winners of the Turing award, and the CTO gets hacked, and was holding millions of euros in a crypto wallet on his cellphone.

As Kevin says every time with these type of stories: it’s all about the protocols. Protocols within the business and how the protocols actually are adhered to. Don’t open a crypto wallet that holds millions of euros on open WiFi. In this case the problem is not in the blockchain.

2) Class action suit against Tether & Bitfinex (market manipulation)

The class action suit is for over $1 trillion. Kevin thinks that they may win – but doubts that a judge would throw the biggest possible verdict in the history of the world in terms of punitive damages. They have a case, and Bitfinex/Tether are going to have a hard time winning any of these cases. Whether it’s a case put up by individuals or the government.

It would be amazing to set a precedent like the biggest damages ever set in a legal dispute against Tether, who probably doesn’t even have a fraction of what they’re supposed to have in terms of reserves.

Win or lose, they will have to disclose how they run their business, and that will probably lead to more lawsuits and more charges laid against them. Bad news ahead for both of these companies.

3) US SEC Rejects Bitwise Bitcoin ETF Proposal

Kevin was expecting a denial. In the initial ETF proposals, the SEC said that there is no way to ensure that there was some type of investor protection against volatility. No one solved that yet.

There needs to be enough historical data from a trusted source, so an ETF has somewhere to price from. They can’t take their prices from Binance. There is not enough price data, or volume on that price data, to have an accurate price discovery mechanism. There needs to be a way to address volatility, and to protect investors. Once these are solved, an ETF will be approved.

An ETF getting approved will do absolutely nothing for the market, just as Bakkt.

4) IRS Releases Guidance on Crypto Airdrops and Hard Forks

Guidance should always be taken with a grain of salt – it’s not enforceable. The IRS doesn’t create laws, they enforce them. This is only how they think this should be perceived by a judge in case something were to happen.

It’s good that they’re trying to help and releasing guidance, but until we get some legislation, or judicial precedent, it’s almost meaningless.

5) Binance reveals Alipay as a fiat on ramp, Alipay denies and will block all bitcoin transactions

This goes to show you that Binance has no one on their team that understands regulations/legality. Most residents in China aren’t allowed to buy Bitcoin. A China-based company that does a lot of business with the government doesn’t want anyone publicly buying Bitcoin when using their service.

Binance might get their first slap on the wrist from the Chinese government following this. We’ll have to see how this pans out.

Live YouTube Questions

Any further clarity on USA residents being part of the Airdrop Family? Or being able to purchase PARSIQ during the sale?

If the Airdrop is done during the primary issuance there might be an issue. If it’s done once tradability happens, that issue subsides because it could be tied into some type of promotion.

For primary issuances, it’s not trading, and would fall under the guide of SEC. In Montenegro we may be able to circumvent that, but for now, it’s difficult.

How is the CSD and Montenegro sandbox progressing?

We finished up CoinMetro’s application into the sandbox, and planning to submit it on Monday. We just had a call with the CSD developers, they’re finishing up a sprint right now and on Monday we’ll have more information,

We’re now 6 weeks into the development of the CSD, and we will start applying within the next two months, so that we hopefully have an approved application ready to go into the sandbox with the CSD as well in the next 3 months.

You mentioned that once in the sandbox, CoinMetro can list securities. Didn’t you need the CSD for this?

We need to wait for the CSD to show a complete capital market infrastructure, but because it’s a sandbox, we will perform basic settlement at CoinMetro until the CSD is available.

Because it’s a sandbox, we’re allowed to do this. Once the CSD is there, we will port over settlement to the CSD.

What’s next in terms of development releases?

TraM, Margin Posting, MAP – we haven’t explained the last one yet.

MAP is a lot of things in one. We also have a couple of passive income features that we’re putting together. The XCM locking mechanism and the conversion of fees is next up on the list as well.

Specifically for Montenegro, we are now thinking about ways to create some different types of very user-friendly derivatives or options that we may be able to add into that platform.

Are we getting market makers this month?

We’re working on it. They come with a cost, we have one ready to roll and the cost is roughly 5k a month. That’s not a huge cost, it’s 5% of our burn rate. But when you have a burn rate, you have a runway.

We’re simply waiting for ink on paper. We will then go ahead and push with this initial market maker. We’re already talking with 1-2 other as well. 

Also we’re in talks with our current liquidity provider on how we can finetune how we pull liquidity and how it’s displayed, so that it can help us in not just showing top of book.

Feedback on debit cards?

Last talk with the underlying provider was 2-3 weeks ago. Things are still moving. We’re waiting for more information from the printer so we can make the actual designs.

What’s new regarding the 33 currencies? (USD?)

Kevin should have an update likely before Wednesday next week.

What happened with the USD stablecoin?

Still working on that. Tech is done. Release schedule, likely after TraM.

Any word on incentives for holding XCM?

Lots of things are coming. The MAP project is specifically about how you can track all the different possible ways that you can use XCM and its utility, and you can actually see what you are doing and what everybody else is doing, and see where XCM sits inside our own ecosystem. If it’s liquid or not, how that affects supply, etc.

Reddit Questions

I remember in the old roadmap, there was something about a merger of CoinMetro and FXPig volumes/products. Still on the horizon?

It is. The goal is to eventually have tradability of all FXPig on CoinMetro. To get there, we need a desktop app. We’ll have to decide whether to white-label a desktop app, or create our own. Creating our own is definitely a project, and something we would do after MTF-licensing.

Have you decided who will be the next IEO?

In talks with one right now out of the Netherlands. We haven’t inked the deal yet, but over the next couple of weeks we should get there. Unique product backed by a lot of famous names. We’ll release more information as we get closer.

How’s funding?

Talking with three groups now, including the Brazilians. Still back and forth with the Brazilians. Moving quite fast with the other two groups, expecting some really good news in a very small window of time.

Tokenized securities will go through CoinMetro Direct, is LHV involved?

Tokenized securities in the sandbox will go through CoinMetro in Montenegro, which will be affiliated with CoinMetro in Estonia. LHV is not involved, there will be a bank in Montenegro for those who deal specifically with tokenized securities.

Once we obtain MTF-licensing here in Estonia, LHV would be involved – but at that point we don’t need their approval.

CoinMetro has a great support team, possibly best support in crypto. Have you got new staff trained up ready for scaling up?

Our support staff has maintained the same levels over the past few months. The support staff, but definitely Carlo, has played a role in making sure that we have a program for how to train new people as quickly as possible once they roll in.

Everybody on the team is mature enough to maintain the same level of support while helping newcomers when they come in. We don’t have any plans right now to hire new individuals, we can maintain the current level of support through several multipliers of our current client-base, and once we start to see the pickup in clients, then we will start to actively recruit as well.

“Kevin Explains Crypto” Term: Peercoin

It’s a coin that came out around 2013. It combines PoS (Proof-of-Stake) with PoW (Proof-of-Work). 

The PoS comes in with the more tokens you hold, the more you can dictate the next block, and PoW is used to mine those blocks. The idea is that there can be no monopoly.

Want to know more? Check for more details in the video below.

Listen to Last Week’s TWiC on the Go

Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!


Well, that’s it for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channel at 12:00 (UTC) for another round and make sure you submit your questions to the CoinMetro subReddit!

As always, we’re available to answer any questions you may have on our Telegram Group 24/7.