U.S. Regulator Gets Hundreds Of Complaints About Coinbase

Bitcoin Exchange Sees Complaints Soar and Many Customers Say They’re Not Getting Funds When Promised


The most popular online exchange for trading digital currencies is generating a surge in customer complaints this year even as investors are lured by a dramatic rise in prices.


The U.S. Consumer Financial Protection Bureau has received at least 293 complaints about Coinbase Inc., according to data reviewed by Bloomberg. That compares with about six complaints for all of 2016, and makes Coinbase the biggest recipient of CFPB virtual currency complaints this year. The website has struggled to keep up with spiking volume and longer transaction processing times as the value of bitcoin and other cryptocurrencies soared to record highs.


More than a third of the grievances came from individuals who were unable to access their money when promised. Many people also complained about other transaction or service problems. Accusations of fraud represented less than 15 percent of the complaints.

“The funds were supposed to be transferred to my checking account within three-to-five business days,” one customer complained to the CFPB in May. “I need the money.”

Megan Hernbroth, a spokeswoman for San Francisco-based Coinbase, declined to comment on the CFPB complaints.


Since the beginning of 2017, the CFPB has received more than 250 complaints under the “virtual currency” category. About 60 percent of those were directed at Coinbase, while many of the others were aimed at PayPal Holdings Inc. and large banks.


Coinbase, which was founded in 2012, said in June that it’s working to improve customer support. The exchange has grappled with a slew of performance issues, including outages, slow load times and a flash crash in ether, the second most valuable virtual coin.


“Over the past few months, we’ve seen an unprecedented increase in the number of customers signing up to use Coinbase,” wrote the company’s co-founder and CEO, Brian Armstrong, in a June 6 blog post. “As a result, our systems have been pushed to the limit. This has caused many customers to have a negative experience.”

On its support page, Coinbase says transaction timing can vary depending on a customer’s location and payment method, and U.S. bank transfers can take up to five business days.

LendEDU, a New Jersey-based student loan marketplace, pointed out the increase in virtual currency complaints this year, in a report earlier this week.


Cryptocurrency startups have been overwhelmed with unusually high volume as the price of bitcoin has skyrocketed almost fivefold this year. This month, the debate over how to speed up transactions became so contentious that bitcoin split in two.


The CFPB, which didn’t respond to multiple requests for comment, started accepting complaints about virtual currencies in 2014, warning consumers about unclear costs, scams and lost funds. Three years later, the Securities and Exchange Commission saidthat cryptocurrency exchanges and companies that raise money through the sale of digital assets must adhere to federal securities laws, signaling a clampdown on the recent surge in virtual coin offerings.

It’s About To Become Even Easier To Issue Blockchain-Based Coins

By Camila Russo Startups have been ditching venture capitalists and raising millions of dollars in minutes by issuing digital tokens in what have become known as initial coin offerings. One company says that process is about to become even easier. A Toronto-based firm called Polymath Inc. wants to be a one-stop shop for issuers of tokens that have similar properties as financial securities.


The platform, which the proprietors say doesn’t require advanced technological knowledge, guides users through every step — from creation, to fundraising, to secondary-market trading — while complying with ever stricter regulations, according to a beta version seen by Bloomberg. If a platform such as Polymath gains steam, it could magnify the consequences of the booming world of token sales, which has spurred the rise of more than 800 coins. The digital fundraisers have given entrepreneurs greater access to capital and opened the tech-startup scene to a broader investor base, while also providing plenty of opportunities for fraud. The ease at which companies could issue tokens has the potential to raise the already high levels of skepticism surrounding the offerings.


In less than two years, companies have raised almost US$2 billion in ICOs, with token prices doubling in a week, and often falling just as fast. Companies have been able to rake in millions with little more than a white paper and a website. Bitcoin, the biggest cryptocurrency, has more than tripled in value this year, raising concern of a bubble. “The reason most securities aren’t on the blockchain is because it’s a daunting task; it’s opaque, expensive and hard to do, so we’re trying to break all that down to bite-size steps,” Polymath Chief Executive Officer Trevor Koverko said in an interview. Koverko said he had tried to tokenize his private equity fund and realized how hard it was, so decided to build a platform to do that instead. “We’re aiming to be the interface between financial securities and the blockchain.” Most tokens issued in ICOs are application tokens, or tokens made to be used inside an application. They’re largely based on the Ethereum network, as that blockchain-based platform facilitates building these types of tokens.


A tiny fraction of the approximately US$160 billion cryptocurrency market are securities tokens (only US$50 million according to Polymath). Unlike application tokens, securities tokens represent a stake in a company or fund and directly benefit from earnings or capital appreciation, much like shares do. Polymath, with advisers including Ethereum co-founder Anthony Di Iorio and Bitcoin Foundation board member Bruce Fenton, is betting securities tokens will end up dwarfing application tokens to become a US$10 trillion market in 10 years. The closely held company officially launches Oct. 1, and said it has a handful of prospective ICOs lined up.


Securities tokens will help ease concern about the overvaluation of tokens sold at ICOs, Koverko said. “There’s a lot of excitement and hope, but not a lot of tangible assets,” Koverko said. “We’re going to bring a new era where tokens represent real assets. I think that is what this eco-system needs.”


Origin: http://business.financialpost.com/entrepreneur/its-about-to-become-even-easier-to-issue-blockchain-based-coins

Wirex Is Launching Contactless Debit Cards For Cryptocurrency Wallets In Q4

Wirex, the bitcoin wallet, banking, and debit card provider today announced that it is launching a new type of card in Q4 of this year. The new card will be a contactless plastic Visa for use with their cryptocurrency banking platform.


Wirex’s digital wallet apps and prepaid plastic Visa cards are used by customers around the world to instantly convert between bitcoin and national currencies, including British pounds, US dollars, and Euros.


Wirex serves 800,000 customers in more than 130 countries and is in the process of obtaining an e-money license in the United Kingdom. The company has offices in London, Tokyo, and Kiev.


This month, the team has also released a new version of its web application and redesigned and simplified their website.


Earlier this year, Wirex received a £2.4 million investment from Japanese institutional investor, SBI Group, which is part of the R3 consortium and runs Japan’s biggest fintech venture capital fund. SBI is also a major investor in Ripple.


Origin: https://www.cryptoninjas.net/2017/08/30/wirex-launching-contactless-debit-cards-cryptocurrency-wallets-q4/

SEC Warns Against Fraud And Scam in The ICO Sector

New technology can lead to new scams, the regulator has warned.


Investors need to watch out for fraudsters when investing in initial coin offerings (ICO), the US Securities and Exchange Commission (SEC) has warned.


Virtual coins or tokens are created and shared using distributed ledger or blockchain technology, and these can be sold in an ICO.


Developers, businesses, and individuals increasingly are using ICOs — also called coin or token launches or sales — to raise capital, and the SEC said while this may provide fair and lawful investment opportunities, “there may be situations in which companies are publicly announcing ICO or coin/token related events to affect the price of the company’s common stock.”


It warned: “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams.”


The SEC recently issued several trading suspensions on the common stock of certain issuers who made claims regarding their investments in ICOs or touted coin/token related news.


“A trading suspension is one warning sign of possible microcap fraud (microcap stocks, some of which are penny stocks and/or nanocap stocks, tend to be low priced and trade in low volumes). If current, reliable information about a company and its stock is not available, investors should consider seriously the risk of making an investment in the company’s stock,” the SEC said.


It also warned investors to watch out for companies that claim their ICO is “SEC compliant” without explaining how it complies with securities laws; and firms trying to raise capital where the business is “described in vague or nonsensical terms or using undefined technical or legal jargon”.


In other words, investors need to do proper research before backing a new project and be aware that information blogs, social networks, and company websites could be intentionally misleading.

Moscow Stock Exchange Welcomes Crypto-Currency Trade

A trader at the Moscow Stock Exchange speaks on a telephone at his desk with a view of Red Square. Qualified investors will soon be able to buy and sell crypto-currencies and related products like ETFs on the Moscow Exchange. Russia is moving quickly to legitimize digital money, perhaps at some point in 2018. Putin has his reasons. (Photographer: Andrey Rudakov/Bloomberg)
Got Bitcoin? You can soon trade digital currencies against paper currency on the Moscow Stock Exchange. If you’re a qualified investor, that is. In doing so, Russia would be the first stock exchange to make crypto-currency a new investable asset. They’re not there yet. But wheels are in motion.


Russia’s Deputy Minister of Finance, Alexei Moiseyev, told Rossiya 24 on Tuesday that the exchange regulator will only allow for qualified investors to trade in crypto-currency in order to avoid large money laundering operations. Qualified investors in Russia need to have at least six million rubles in personal assets or 200 million rubles for investment firms. “We really need to be able to track deals and transactions in these currencies,” Moiseyev told Kommersant.


Not that putting it up on the exchange would stop Russian money laundering or payment for illegal services in digital money. But the move in Russia this week indicates that the country is going full steam ahead in adopting block chain technologies to build up its know-how and national usage of digital money. Tuesday’s announcement by the Finance Ministry official marked a significant change in the views of Russian regulators from just a year ago.


“Recognizing the extraordinary popularity of crypto-currencies among Russian users, some of the Russian regulators are lobbying a permissive rather than a prohibitive approach to the new technology,” says Anar Babaev, co-founder of ICOBox in Moscow. “They are cautiously moving towards adopting new laws to embrace blockchain and make it a national priority,” he says. ICOBox helps companies with standardized tools for conducting the ICO process, which is like the IPO of the crypto-currency and the blockchain developers world. Everyone is trying to get their heads around how this works, and where to install the sprinkler systems in case this bitcoin-inspired party ends in a blazing inferno.


Russia has gone from total rejection and strict enforcement policy against the issuance and circulation of crypto currency, to moving towards legalization of them with its admission to the city’s central trading floor. Russia’s exchange is small, trading under a trillion dollars daily and making it the smallest of the BRIC exchanges.


Find me on Twitter at @BRICBreaker

Executive At Investment Banking Group “Citi” Says That State-backed Cryptocurrencies Are Key To The Adoption of Blockchain Technology

Morgan McKenney image via CoinDesk archive

Citi Speaks: State-Backed Cryptocurrency Key to Blockchain Adoption

Ethereum Based Cloud Token Set To Decentralize The Cloud – Set To Hit Exchanges on 21st of September

In Dublin, Ireland, on July 25, 2017, Cloud With Me launched the pre sale of Ethereum based cryptocurrency, Cloud Token. This is the first Initial Coin Offering to enable purchases via credit card, bank transfer, and cryptocurrency.

(Cloud With Me https://cloudwith.me/) was founded in 2015 by Gilad Somjen and Asaf Zamir, to provide SMEs with a simplified onboarding solution for cloud server installation, removing the need for technical expertise. The (Cloud Token ICO crowdsale https://token.cloudwith.me/) will fund the global deployment of a GridNode infrastructure – The framework for building the decentralized “Crowd Cloud”.

Millions of devices worldwide will be able to contribute redundant computing power to the cloud, including laptops, phones, computers, and even Internet of Things (IoT) connected devices, such as washing machines. Anyone who undertakes the operation of a GridNode and contributes to the Crowd Cloud will receive a continuous income.

The decentralized structure will create a commoditized environment, reducing the cost of cloud services, the risk of network outages, and providing a higher level of data security and privacy.

“We’re driving meaningful evolution that enables millions of people to access the power of professional cloud services at a fraction of the cost and in undeveloped countries. The goal is to create a decentralized peer to peer cloud based ecosystem that will enable millions of people globally share, operate and get the financial benefits from any cloud service and application directly between them in a trusted and efficient manner; from music to social insurance and investment services, in a wholly secure and private environment.”

  • Asaf Zamir, co-founder and Chief Technology Officer.

Unlike most ICOs, the tokens can be be used immediately after closure without enduring a 12 to 18 month waiting period for a product to be build. The tokens can be used to purchase online services from Amazon Web Services (AWS) and Microsoft Azure with a 50% discount. Cloud Tokens can also be exchanged for BTC, ETH, and USD in the Cloud Wallet.

  • Token sale target: Hard cap at USD 300 m
  • Token price: 1 Cloud = 10 USD
  • Trading Begins on 21st September

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Company name: Cloud With Me
Press contact email address: icosupport@cloudwith.me
Link: https://token.cloudwith.me/