Korean Exchange Youbit May Avert Bankruptcy – Members Have 3 Options

Featured

South Korean exchange Youbit filed bankruptcy last week but has now come up with additional options to pay back its members. The exchange is asking them to vote between three options.

Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales

Youbit’s Bankruptcy Filing

Youbit exchange’s operator Yapian Co. Ltd filed bankruptcy on December 19 after the platform was hacked, as previously reported by news.Bitcoin.com.

A notice on the exchange’s website explains that each member will be allowed to withdraw “approximately 75% of the balance at 4:00 am on December 19.” The exchange added that “The rest of the unpaid portion will be paid after the final settlement is completed.” However, “cash and coins deposited after 4:00 pm will be 100% refunded.”

The news of Youbit’s bankruptcy sent shockwaves through the Korean crypto markets, prompting the government to step up its regulatory measures to prevent similar problems from occurring in the future. Following a meeting on December 20 to discuss cryptocurrency regulation, the regulators announced:

The bankruptcy of the virtual currency exchange Youbit following the recent hack is expected to cause financial losses for users. It is necessary to pay special attention to the risk of virtual currency speculation and to be vigilant about virtual currency trading participation.

Then on December 27, Youbit offered its creditors additional ways to be paid back and asked them to vote between three options. The voting period ends on December 31.

Options 1 and 2

The first option is to proceed with the bankruptcy filing. Citing that this option is expected to take between 1 and 3 years, Youbit described:

All assets of the company will be frozen as it is, and the court will appoint a bankruptcy trustee to handle the actual bankruptcy proceedings.

The second option is restructuring/rehabilitation, which the company can apply for in court. Should the court decide after an audit that creditors can better recoup their assets if the company continues to operate rather than go bankrupt, the rehabilitation process will ensue, Youbit explained.

In this case, creditors will be paid with the revenue generated by Youbit over time. The company estimates that this process may take three to ten years, adding that:

The withdrawal of your assets will be suspended for more than one year as the rehabilitation process proceeds.

Most Popular Option – Acquisition

The third option offered by the company is “merger and acquisition,” which involves “a plan to hand over ‘Yapian’ to another company.” Youbit claims that it “is currently generating a significant amount of revenue,” therefore it can be acquired by “a company that is considering a new virtual currency exchange.”

After the acquisition, the exchange will be run by new executives, Youbit noted, adding:

The plan will be made so that the members’ principal will be compensated as much as possible, but it will be treated as a dividend payment plan for a certain period. It is expected that the withdrawal and transaction service will be reopened soon after the acquisition is confirmed.

On December 29, Youbit announced that about 97% of its members have so far voted for this option. Once the voting period has ended, and if this option is chosen, the company and its legal team will start discussing how to proceed in early January.

Which option do you think is best for Youbit’s creditors? Let us know in the comments section below.

---

Images courtesy of Shutterstock and Youbit.

---

Need to calculate your bitcoin holdings? Check our tools section.

Source link

source http://bitcoinswiz.com/korean-exchange-youbit-may-avert-bankruptcy-members-have-3-options/

Israel Government Considering National Cryptocurrency

Following in the footsteps of Russia and Dubai, Israel is considering offering a national cryptocurrency – a digital shekel – which would correspond in value to physical shekels.

According to the sources close to the Finance Ministry, Israel’s black market is approximately 22 percent of the country’s gross domestic product. A digital currency, registered with the government of Israel, would make black market transactions less possible.

Additionally, per the news source, the government is considering legislation that would substantially reduce the amount of physical cash in the economy. For example, one suggestion would be a law against paying wages in cash.

The process for the creation of the digital shekel is just getting underway, however. The government has offered the ‘Economic Arrangements Bill,’ which, if passed would create a separate panel for the Bank of Israel to consider creating the digital shekel.

The addition of the physical cash laws is the result of a failure by the Knesset to pass legislation of the same ilk two years ago. The pressure for digital currency adoption is high, as recent comments from the Israeli Prime Minister indicate.

Colu, an Israel-based Blockchain wallet application, has been assisting the Israeli government in pursuing a digital currency. Mark Smargon, VP Blockchain Colu told Cointelegraph:

“The Israeli regulators have been looking into digital currencies for a while, we were even part of this conversation. If this initiative becomes a reality, Colu will be happy to collaborate…as we believe digital currencies are the future of money.”

–AltcoinToday.com

Photo via Getty Images

Source: Cointelegraph

Related

Source link

source http://bitcoinswiz.com/israel-government-considering-national-cryptocurrency/

Cryptocurrency Market Recovering After Massive Correction

The cryptocurrency market is getting back on its feet after a brutal day yesterday. The majority of coins have risen by 10-20% over the last 24 hours after more than a 30% fall on Friday, Dec.22.

The total digital currency market capitalization went from $650 bln to $430 bln yesterday and has now rebounded to $585 bln.

Bitcoin went from the all time high of over $20,000 to as low as $11, 970 in just a matter of days. By press time it has partially retraced its losses and is now traded at around $15,500.

Ethereum, the second largest cryptocurrency, lost almost $30 bln in market cap yesterday, but has largely recovered. Its market capitalization is now $72 bln. It now trades for around $720 on European exchanges and as high as $906 on South Korean markets.

Bitcoin Cash experienced the greatest price volatility of all major digital currencies over the last 48 hours. The price fell from $3,909 to $1,970 but at press time is back to $3,400.

The extreme market turbulence came days after the alleged insider trading at Coinbase, one of the biggest cryptocurrency exchanges.

Good news vs. bad news

It’s been an extremely volatile week for the entire digital currency industry. Following CBOE’s Bitcoin futures trading start on Dec. 10, the CME group launched a futures product of its own. Trading at CME opened Dec.17, roughly when Bitcoin’s volatility began to increase.

On Dec. 20 Litecoin creator Charlie Lee sold or donated all his Litecoins, ostensibly to avoid “conflict of interest.” However, some have questioned his motives, since just a week earlier he predicted a multi-year bear market which would see the price of Litecoin drop as low as $20.

Ok, sorry to spoil the party, but I need to reign in the excitement a bit…

Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy!

— Charlie Lee [LTC] (@SatoshiLite) December 11, 2017

Joining major institutions like CBOE and CME in their Bitcoin agenda, Goldman Sachs announced its plans to set up a cryptocurrency trading desk on December 21. It will be opened by the end of June 2018.

What prompted the latest dip in the entire market is yet unknown. Charlie Shrem, a founding member of Bitcoin Foundation, believes that the market has already seen similar price movements and there is no reason to panic.

“There is nothing new under the sun” – Same thing happens every year (https://t.co/qaNwMLJH3k) pic.twitter.com/sJQqGLb2wp

— Charlie Shrem (@CharlieShrem) December 22, 2017

Source link

source http://bitcoinswiz.com/cryptocurrency-market-recovering-after-massive-correction/

Recently launched WeRaise offers ICO promotion services

World’s Largest Bitcoin Exchange, Bitfinex, Threatens Critics With Legal Action

Bitfinex, the world’s largest Bitcoin exchange by daily trading volume, has vowed to pursue legal action against critics including the anonymous blogger “Bitfinex’ed.”

Stuard Hoegner, Bitfinex’s in-house counsel, stated:

“To date, every claim made by these bad actors has been patently false and made simply to agitate the cryptocurrency ecosystem. As a result, Bitfinex has decided to assert all of its legal rights and remedies against this agitator and his associates.”

Kyle Samani, a partner at Multicoin Capital, stated that Bitfinex had made a critical mistake by initiating a lawsuit against Bitfinex’ed and other potential “bad actors” in the cryptocurrency space.

Bad decision

Over the past few months, Bitfinex’s involvement with Tether, the US dollar-backed cryptocurrency, has been questioned, given that a long-promised third party audit on the USD reserve of Tether was never performed. Critics such as Bitfinex’ed claimed that not all of the Tether issued are backed by US dollars. Tether (the company) shares many of the same owners as Bitfinex.

Charlie Lee, the creator of Litecoin and former executive at Coinbase, also urged Bitfinex to conduct a third party audit on Tether, to put an end to the controversy.

There’s a fear going on that the recent price rise was helped by printing of USDT (Tether) that is not backed by USD in a bank account.

I urge @bitfinex and @Tether_to to perform a 3rd party audit to prove their reserves. Please do the right thing. Thanks.

— Charlie Lee [LTC] (@SatoshiLite) November 30, 2017

A third party audit would be beneficial for both Bitfinex and the cryptocurrency sector, as it would calm many investors who fear that Bitcoin’s price is being manipulated. It would also reassure holders of Tether that the cryptocurrency is backed by a USD reserve.

However, as Samani noted, instead of performing a third party audit, Bitfinex chose to pursue legal action against its critics.

As a crypto exchange, when you’re accused of being a fraud, you have 2 choices:

1) produce bulletproof audits and *demonstrate* (not just say) a commitment to transparency

2) threaten your accuser with litigation@bitfinex chose #2

Bravo @Bitfinexed.https://t.co/YCfaKQSjAE

— Kyle Samani (@KyleSamani) December 5, 2017

Reserve of ether

Several analysts and experts have recently questioned the USD reserve of Tether. Tim Swanson, the founder at OfNumbers and a risk analyst for Blockchain firms, stated that a serious problem could emerge in the short-term if Tether is not backed by USD by a 1:1 ratio.

“Is there anything backing this? If these aren’t backed 1-to-1, then what is the contagion risk if one of these exchanges goes down?”

Given that Bitfinex remains as the largest cryptocurrency exchange in the global market and Tether has evolved into a $813 million cryptocurrency, Bitfinex and Tether should conduct a third party audit to prove their solvency in the upcoming months. Failure to do so will continue to ignite more controversy within the global cryptocurrency community, which is not beneficial for any party involved.

Attacks against Bitfinex

On November 19, Bitfinex revealed that the exchange was targeted by a coordinated attack designed to disrupt the market. The Bitfinex emphasized that both fiat and cryptocurrency withdrawals are functioning as normal, and that the exchange is solvent, after several inaccurate reports circulated in online Bitcoin communities.

The company also encouraged the cryptocurrency market to request for evidence before drawing any conclusion in regards to the insolvency of Bitfinex.

Bitfinex is solvent and both fiat and crypto withdrawals are functioning as normal. We are seeing increasing FUD which we believe is a co-ordinated attack to create a market disrupting event 1/2

— Bitfinex (@bitfinex) November 19, 2017

Currently, the stance of the Bitfinex team is to defend the exchange and its trading platform against “bad actors” in the cryptocurrency sector and inaccurate allegations.

Funny money?

Tether has previously come under criticism for claiming that their tokens aren’t money at all. The “legal” section of Tether’s website states:

“Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers.”

The company responded, saying they cannot legally guarantee redemption for dollars, even though they have every intention of honoring redemption requests:

“Our Terms of Service have been carefully picked apart by various malcontents and twisted to suggest that Tethers would not be redeemable for currency on some bizarre, malicious whim by Tether. That is untrue. While we reserve the right not to redeem for any particular customer, as we must, we will not do so for no reason. We have a duty to try to ensure that our service is not being used by persons from sanctioned countries, that is otherwise on a sanctions list, or that has some background check problem. In short, redemptions will not be unreasonably denied, but we reserve the right to selectively deny redemption and creation of Tethers on a case-by-case basis.”

Source link

source http://bitcoinswiz.com/worlds-largest-bitcoin-exchange-bitfinex-threatens-critics-with-legal-action/

SEC Isn’t Done with ICOs, Likely to Take “More Actions” Against Them

Get Trading Recommendations and Read Analysis on Hacked.com for just $39 per month.

The U.S. Securities and Exchange Commission (SEC) has yet to show its hand regarding potential oversight of bitcoin, other cryptocurrencies, and initial coin offerings (ICOs).

Speaking at an accounting conference on Monday, SEC Chairman Jay Clayton stated that the commission believes that, under federal securities laws, there is “very little distinction” between “handing people a piece of paper that says ‘stock’” and asking investors to put money in bitcoin and ICOs, according to a Wall Street Journal report.

The report notes that Clayton stopped short of stating that the commission is planning to issue formal guidance on cryptocurrency and ICOs, but he did issue a stern warning to brokers that they must abide by KYC/AML regulations, no matter how bitcoin is classified.

“Your responsibilities on knowing your customer are the same as if someone shows up and plunks a bag of cash on your desk,” Mr. Clayton said.

Clayton and other SEC officials have been eying the cryptocurrency ecosystem with concern for some time. In September, SEC Co-Director Steven Peikin stated that whenever an asset or technology becomes the subject of industry hype, “roaches kind of crawl out of the woodwork and try to scam money off of investors.”

Indeed, the commission has already begun to step up enforcement of securities laws within the cryptocurrency ecosystem. Monday morning, the SEC announced that it had filed charges against the operators of PlexCoin, an ICO that allegedly defrauded investors by promising returns of more than 1,300 percent in less than a month.

The PlexCoin charges are the first brought as a result of an investigation conducted by the SEC’s new Cyber Unit, a task force which launched in September to combat a range of threats, including misconduct perpetrated through ICOs and other schemes involving blockchain technology. Clayton hinted that it will not be the last.

“As long as they ignore the securities laws, they’ll see more actions,” he said.

Significantly, Clayton’s comments come just days before the first bitcoin futures contracts begin trading on a regulated U.S. exchange. The launch of this product is expected to trigger a flurry of applications to create a Bitcoin ETF — applications that the SEC will broad authority to approve or reject.

Featured image from Shutterstock.

Source link

source http://bitcoinswiz.com/sec-isnt-done-with-icos-likely-to-take-more-actions-against-them/