cryptocurrency
George Popescu Steps Down From Lampix
May 13, 2019George Popescu is stepping down from Lampix, the augmented reality lamp company he founded, according to an announcement. Lampix raised $14.2 million through its sale of PIX tokens in a 2017 Initial Coin Offering (ICO). PIX sold at a price of 12 cents each but the value has since plummeted by more than 95%.
Popescu will be replaced by Salvatore Buccellato, who has been the Chief Revenue Officer since the summer of 2018.
“As outgoing CEO I am really proud to have taken Lampix from an idea/prototype to the successful manufacturing of the Lampix commercial development kits,” Popescu said in a published statement. “I strongly believe that it is good practice for companies to regularly have new CEOs who bring new ideas, new resources and a fresh outside vision to the company. During and after the full transition I will of course remain involved with the company as needed.”
Lampix was profiled in deBanked’s November/December magazine issue as a poster child for the murky world of crypto fundraising. At the time, Popescu was involved in several other ICOs in addition to Lampix. Among them was Restart Energy (which raised $30 million), Opiria, First Blood, AirFox (which later settled charges with the SEC for selling unregistered “securities”), and DropDeck Technologies, whose user funds were lost due to a software bug that also affected numerous other companies. Popescu was also advisory board chairman to Gatecoin, a Hong Kong-based crypto exchange which closed on March 20, 2019 following a 2016 hack.
Signature Bank Partners with trueDigital
December 4, 2018
Today, Signature Bank unveiled a proprietary digital payments platform for its commercial clients, according to a statement released by the bank. The platform, called Signet, is designed to allow Signature Bank’s commercial clients to make real-time payments in U.S. dollars, every hour of the year.
“The ability to transmit funds between approved, fully vetted commercial clients of the bank at all times is very valuable, especially in light of the increasing speed and frequency at which they conduct their business,” said Joseph J. DePaolo, President and Chief Executive Officer at Signature Bank. “Signature Bank has made a commitment to invest in its technology infrastructure, and the Signet Platform is indicative of this investment,”
This commitment by a bank to embrace technology is consistent with other banks of late. Chase and PNC have partnered with OnDeck’s ODX to streamline their online lending processes and other banks have partnered with fintechs recently as well.
“The partnership between trueDigital and Signature Bank will quickly prove to be extremely beneficial and revolutionary for clients globally as they will now be afforded the opportunity to make instantaneous USD payments to one another in real-time at no cost per transaction,” said Sunil Hirani, Founder of trueDigital.
The new Signet platform uses blockchain technology and can be used to make payments across a wide variety of industries, initially focusing on power, shipping, real estate, auto and digital assets where costs, delays, operational risks and counter-party risks are significant, according to a trueDigital statement.
The platform is not designed for a very small company as transactions made on the Signet platform require a minimum account balance of $250,000. Also, the companies exchanging money must both have an account at Signature Bank.
The New York State Department of Financial Services has approved the Signet platform and deposits held on the platform are eligible for FDIC insurance, up to the legal insurable amounts defined by the FDIC.
Signature Bank is a New York-based full-service commercial bank with 30 private client offices throughout the New York metropolitan area. This year, the bank opened a full-service private client banking office in San Francisco. Signature Bank’s specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing. trueDigital is a New York-based fintech company that provides solutions to financial markets by utilizing blockchain-based technologies.
ICO Settles With SEC, Must Return Millions to Investors
November 16, 2018
A Boston based startup that raised $15 million in funds via an Initial Coin Offering (ICO) must return the money to token purchasers and pay a $250,000 fine, the SEC announced. AirFox, who must make those payments in accordance with an SEC settlement, introduced a plan in 2017 to provide free data to mobile phone users in return for eyeballing advertising. The SEC was careful to note that they had not accused AirFox of fraud, but rather of failing to register their tokens as securities.
Since the ICO, the value of AIR tokens have dropped by 94%.
1st Global Capital’s Activities Spilled into Cryptocurrency and ICOs
September 14, 2018Curious details are emerging in the wake of the 1st Global Capital bankruptcy and subsequent SEC charges. Among them is that $161,000 of company funds were used to purchase cryptocurrency.
Many of those purchases were made in February of this year for a total of $92,492. The cryptocurrency market has slumped since then. Bitcoin, for example, is down 35%.
In May, less than three months before 1st Global filed Chapter 11, a purchase of $61,000 in cryptocurrency was addressed to TraNexus Ireland LTD. TraNeXus is an Ireland-based travel technology blockchain company that is currently raising capital via an Initial Token Offering (aka an Initial Coin Offering, ICO). “TraNexus is committed to changing the way people travel and revitalizing the travel and tourism industry by making travel easier, greener, more valuable and more fun,” the company says of itself in a recent press release. 1st Global Capital owner Carl Ruderman is something of a vanguard in the global tourism business whose acumen includes ownership of Elite Traveler magazine.
Separately, 1st Global is alleged to have funded a $40 million merchant cash advance to an auto dealership in California. Though it remains unconfirmed, industry insiders say it wasn’t even a 1st position deal and that the dealership had multiple advances.
On Wednesday of this week, the SEC served a subpoena on a JPMorgan Chase in Miami demanding all documents and payments related to 1st Global, Ruderman, and his companies.
Two-Thirds of Daily Crypto Trade Volume May Be Fake
August 27, 2018
Two-thirds of daily trade volume in cryptocurrency is faked, according to research published this month by the Blockchain Transparency Institute (BTI). This translates to $6 billion a day, according to the report. What this likely means is that the exchanges themselves are quickly buying and selling cryptocurrency to give the illusion of high activity on the exchange when, in fact, there may be relatively little.
The advantage of creating this illusion is to make it more attractive for actual cryptocurrency investors to buy on a given exchange, which is how the exchange makes money – from taking a percentage of each transaction. This practice of buying and selling to oneself (or to colluding parties) in an effort to mislead others, is called “wash trading,” and is illegal.
The report states that “over 70% of the CMC top 100 is likely engaging in wash trading by at least 3x their stated volume.” Given that most cryptocurrency exchanges are not regulated, this alleged wash trading may not come as a surprise to many. But if this is accurate, the magnitude of this fake trading is significant. Coinbase and Binance were not suspected to be wash trading, according to the report.
The exchanges that are considered to be accurate by the report typically have a volume/user to unique visitor ratio of around between 2% and 5%, whereas suspect exchanges ratio ranged from 10% to over 655,000%.
Sylvain Ribes, a Cryptocurrency investor and writer who is cited in the report, wrote in a March 2018 Medium blog post of his surprise between the differences in trading volume among exchanges.
“Where I had expected mild differences between currencies, I found ridiculously massive discrepancies between exchanges,” Ribes wrote. “Not the kind that can be easily hand-waved away (‘oh well, their users must behave differently’), but the kind that can only be explained by some figures being overstated as much as 95%.”
As Ripple’s XRP Drops, Legal Trouble Builds
August 15, 2018
Ripple’s cryptocurrency, XRP, has dropped by about 90 percent from a high of $3.84 per token in January of this year to $0.29 today. When XRP hit its high of $3.84, Ripple co-founder Chris Larsen briefly became one of the richest men in the world because of his sizable ownership of the currency, his share then worth about $59.9 billion. But that status was short-lived, along with Ripple’s upward trajectory.
Of course, the decline of XRP is not unique in the world of cryptocurrency. Bitcoin has also had a dramatic decline in value throughout 2018.
Along with the decline in value of the XRP coin, Ripple has been plagued with lawsuits.
In May, XRP investor Ryan Coffey sued Ripple Labs and its CEO Brad Garlinghouse in a class action suit for allegedly engaging in the sale of unregistered securities. The company and Garlinghouse was said to have made at least $342.8 million through XRP sales that were created out of thin air.
In June, XPR investor Vladi Zakinov filed a class action lawsuit against the same defendants for the same thing. He alleged that the XRP token is a security controlled by Ripple.
And in July, XRP investor David Oconer sued Ripple Labs and Garlinghouse in a class action suit for essentially the same thing. Also in July, Plaintiff Avner Greenwald sued the defendants with similar charges.
The May lawsuit was transferred from state court to federal court by the defendants, Ripple and Garlinghouse. Plaintiff Coffey appealed this, but on August 10th, a California judge denied Coffey’s appeal and said that the case will remain in federal court.
This is advantageous for the defendants because it allows these similar class action lawsuits to be consolidated into one, according James Chareq, an attorney and partner at Hudson Cook who is very familiar with class action cases. Moving from state to federal court increases efficiency and reduces legal fees, he said.
Ripple Sued Again for Alleged Sales of Unregistered Securities
July 5, 2018Ripple Labs Inc. and the company’s CEO, Bradley Garlinghouse, were sued again last week, according to a complaint dated June 27 and filed in San Mateo County, CA. The plaintiff is California resident David Oconer who alleges, in a class action suit, that Ripple and Garlinghouse “promoted, sold and solicited the sale of XRP.” XRP is Ripple’s digital asset. Furthermore, the suit contends that the defendants “raised hundreds of millions of dollars through the unregistered sale of XRP, including selling to retail investors, in violation of the law.”
As Ripple has made efforts to distinguish itself as separate from XRP, including a recent logo change to XRP, the plaintiff Oconer asserts in the lawsuit that Ripple and XRP are, in fact, very much intertwined.
There is a community movement for a unique #XRP symbol. We agree! XRP is independent of Ripple. Submit your idea now. #XRPCommunity https://t.co/ZnfVMiK9i2
— Ripple (@Ripple) May 10, 2018
Ripple has faced a barrage of recent lawsuits that make similar allegations. One lawsuit filed in May by XRP investor Ryan Coffey was recently transferred from state court to federal court. It is now pending in the California Northern District Court under Case #4:18-cv-03286.
Facebook Reverses Cryptocurrecy Ad Ban
June 27, 2018
Back in January, Facebook decided to ban all ads for cryptocurrencies. Yesterday, the social media giant changed its mind. In a post on its blog yesterday, the company stated that it will now “allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings.”
The official new policy read: “Ads may not promote cryptocurrency and related products and services without our prior written permission.”
“Advertisers wanting to run ads for cryptocurrency products and services must submit an application to help us assess their eligibility,” Rob Leathern, Facebook’s Product Management Director, wrote in the official blog post. “[This includes] any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business. Given these restrictions, not everyone who wants to advertise will be able to do so. But we’ll listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time.”
The January ban, also laid out in an official company blog post, said: “Ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or cryptocurrency.”
Facebook acknowledged in yesterday’s company blog post that the wording of its January ban was “intentionally broad” as they continue to work to better detect deceptive and misleading advertising practices.
