Besides examining agency spending and performance, the Government Accountability Office also has its eye on distributed ledger technologies.
GAO’s five-year strategic plan released in February identified blockchain and cryptocurrencies as technologies that have the ability “potentially transform” society.
Agencies considering using blockchain to improve government processes must develop policies and procedures that address risk, change management and training as part of their strategy, GAO Director of Financial Management and Assurance Asif Khan said. “Blockchain is so customizable and versatile so you need to clearly think through the needs in your environment,” he said at May 2 KPMG Future Ready Government event.
“We find people who are interested in blockchain because it is a buzzword,” Khan said. But with more experimentation and proofs of concept, “the word will get out as to how people can adopt blockchain within their own [agencies],” he said.
Agencies need risk-based policies and procedures for the blockchain projects. For instance, Khan said, agencies must have a game plan for what happens if the ledger is hacked and the chain can no longer be accessed for a specific project.
Change management and training enter the picture when blockchain starts making processes more efficient and eliminating redundancies. “Peoples’ roles are going to shift, so change management is necessary to show how [the project] will be implemented,” Khan said. “Each person needs to be trained on what their roles are in the environment.”
GAO itself is interested in using blockchain to verify information at the source level for its reports, but the idea has not gone beyond the discussion phase, Kahn said.
The Treasury Department’s Bureau of Fiscal Service, however, already has seen benefits from a blockchain proof of concept that inventoried employees’ computers and phones. However, it remains to be seen whether blockchain will be able to live up to the hype, said Craig Fischer, program manager for that agency’s Office of Financial Innovation and Transformation.
“The next step is [to] understand what this [type of project] means when it is moved to into an operational environment in the federal government,” Fischer said. “When you have a network that spans and effects several agencies, it could be useful, but we need to determine what the architecture for that would look like.”
Jihan Wu Loses Control of Bitmain as IPO Documents Indicate Profit Figures Were Hyped
Bitmain has dominated ASIC manufacturing since it was founded in 2013. One man has been at the forefront of this domination, leading the company into the giant that it is today; Jihan Wu. However, it may not be so for much longer, with a Chinese publication revealing that a recent reshuffle has demoted the renowned crypto campaigner to the role of a supervisor from his previously held Director role in the board.
The news come after the Financial Times unearthed the fact that the figures reported for the profitability of the firm had almost been doubled in earlier reports by the firm. Documents circulated during the funding rounds and those submitted during filing for IPO show contrasting figures, with Bitmain failing to give an explanation for the difference.
Wrong Time For Cracks As IPO Looms
According to the report by Sanyan Blockchain, Wu is no longer able to influence corporate decisions at the Beijing-based ASIC manufacturer. The publication reported today, November 13, that the firm had undertaken a reshuffle recently and lots of positions had been redistributed. One of these was Wu’s who was allegedly demoted from Director to a supervisor, the report stated citing an unnamed source.
The report quoted Tian Yangang, a lawyer representing the privately-held firm, who reportedly stated to local media that after being relegated to a supervisor, Wu’s voting rights had been revoked. Wu therefore has less influence on the corporate decisions and on the direction the firm takes going forward. This is despite being the co-founder of the multibillion-dollar firm and the second-largest individual shareholder of Bitmain at 20.25 percent. The other co-founder, Micree Zhan, is the largest shareholder at 36 percent.
The report comes after another one by The Financial Times revealed that Bitmain’s profitability figures had been scaled down for its IPO listing compared to its funding rounds. During the $400 million funding round in April, the firm had indicated that the 2017 profits stood at $1.25 billion. In yet another funding round four months later in August, the figure was amended to $1.1 billion. However, in its IPO filing one month later in September, Bitmain revised the figure again to $701.4 million, almost half the original figure.
After FT reached out to Bitmain to inquire on the discrepancies, the firm stated:
Please refer to our IPO prospectus for appropriate figures.
The other involved parties, the auditor KPMG and the bank leading the IPO, China International Capital Corp. declined to comment on the figures.
Bitmain has filed to list at the Hong Kong Stock Exchange, aiming to raise $500 million at a valuation of $18 billion. This valuation has risen incredibly in just the past one year, buoyed by the increasing popularity of cryptocurrencies.
In September last year, Bitmain was reported to be valued at $1 billion during a funding round led by Sequoia Capital. It then went up astronomically to $14 billion mid this year, and is now valued at $18 billion, at least according to the IPO prospectus. According to some of the early investors in the firm, it’s expected to be valued at $40 billion within three years.
Cryptocurrency Mining Farms In China Shut Down For ‘Strict’ Tax Inspections
Cryptocurrency mining operations in the Chinese provinces of Xinjiang and Guizhou were suspended so the government could conduct “very strict” tax inspections and real-name registration checks.
Power to the mining farms was shut off on November 5, sources told local daily Cong News. As a result, the mines lost about 1 million yuan (or roughly $143,700) a day during the period of “rectification.”
“Joint enforcement actions examined the mine’s tax information, funds, and customer information,” Cong News reported. “It is understood that the tax inspection of the mine is very strict.”
Mining Farms Required To Sign Pledge
The tax inspection is now complete, but it’s unclear if power to the mining farms has been restored yet.
“It is understood that the mines, including business licenses, state-of-the-art power supply procedures, and employee Social Security, are officially complete,” Cong News noted.
The mining farms were required to sign an agreement promising that their mining data centers will implement “higher standards for the company’s business real-name system,” as mandated by China’s Public Security Department.
The farms also agreed to not provide services to any customers that do not comply with these rules.
Did the Shutdown Affect Bitmain?
It’s unclear how this shutdown affected Bitmain, which recently deployed 90,000 S9 Antminer rigs to the coal-rich region of Xinjiang ahead of the Bitcoin Cash hard fork, which is scheduled for November 15.
Bitmain — the world’s most valuable cryptocurrency company — is making moves to maintain its market dominance amid reports that its smaller rival Bitfury is considering an initial public offering in Amsterdam or London as early as 2019.
The move would make Bitfury the first major crypto IPO listed in Europe, as CCN has reported. The Amsterdam-based blockchain startup could seek a valuation of $3 billion to $5 billion.
In September 2018, Bitmain filed for an initial public offering in Hong Kong, with a potential valuation of up to $3 billion. Bitmain — which is valued at $10 billion — is on track to post $10 billion in revenue by the end of 2018.
$700 Million Bitcoin Mining Farm Being Built
Meanwhile, crypto mining firm Coinmint plans to invest up to $700 million to build the world’s largest bitcoin mining center in Upstate New York, with a 435-megawatt capacity.
Coinmint has already invested $50 million so far to convert a 1,300-acre Alcoa aluminum smelting plant in Massena, New York.
— VTOS FOUNDATION (@VTOSFOUNDATION) June 7, 2018
The new crypto mining farm is projected to create an estimated 150 new jobs, and is expected to be fully operational by June 2019.
The old Alcoa plant shuttered in 2014, but Coinmint signed a 10-year lease on the property, signaling its confidence that despite bitcoin’s recent slump, it believes cryptocurrencies are here to stay.
“As long as bitcoin networks exist, we anticipate mining to be profitable,” said Coinmint CTO Prieur Leary.
Exit Scam? Crypto Exchange Delists High-Profile Tokens & Users Allege Sell-Off
Between September and October, Liqui.io delisted 25 token pairs. A shrill Reddit user believes that signs point to an exit scam in progress.
Liqui.io has been delisting alot of their coins lately. Including some of their top 10 volume coins like BAT. Meanwhile they give customers just 15 days to withdraw after delisting (approx a month after announcement) to withdraw the coins. People that are on vacation / hodling / sick are likely to miss their announcements. It seems like this short announcement time has a reason: Liqui already started to liquidate 300k USD++ assets!
BAT was in the first batch of 13 tokens delisted. The post gives an address of 0xcc5570e7d39BA1738333782Fb0C5623fb6a6b1f2 and alleges that this address belongs to Liqui and that they are therefore laundering pilfered balances from clients who did not withdraw or liquidate their positions.
If this address is actually associated with Liqui, then it would seem that at least the assertion that they are liquidating the tokens would is correct. The move to eliminate Basic Attention Token came just weeks before news that Coinbase was listing the token and trading picked up, driving the price. At the time of the announcement, the BAT price was around 16 cents, whereas by the time Liqui saw fit to move over 1.4 million of the tokens, the price had risen all the way to more than 24 cents.
As noted by the Reddit post, Liqui’s 290,000+ users were only given 29 days total to withdraw their funds. If 1.4 million of the tokens remained on the exchange, it would seem prudent to extend that time. A possibility is that the exchange itself was participating in trading of BAT and the resulting balance is a result of their trading.
Liqui never mentions that they are trading against clients anywhere in their literature, so this would seem to be amoral at best. If they had been taking fees denominated in the tokens being traded, rather than the markets being used, then it would be also possible that these were leftover exchange fees. CCN has reached out to Liqui for comment regarding this matter and we hope to gain some insight.
Liqui’s blog on the subject of the BAT delisting tells users that it will be “unable” to process withdrawals. The trouble is, we see clearly on the blockchain that they in fact had many tens of thousands of BAT sitting around.Once the withdrawal deadline has been reached (October 13, 2018 at 12: 00 UCT), withdrawals will be disabled and the asset will be fully decommissioned. From this point forward, we will be unable to process withdrawals of impacted assets. It is imperative that customers withdraw delisted tokens by the withdrawal deadline. Please note that this deadline also applies to previously delisted assets, such as VET, EOS.
A similar situation occurs with SONM, which was put on the chopping block on October 20th and fully eliminated on November 11th. Again, we see a strong market upward pressure in SNM, meaning that Liqui was able to sell the tokens left on its exchange for more than they were worth at the time of the delisting announcement.
In the case of SNM, over 2.3 million tokens were sent to Binance. The Ethereum blockchain notes that as a result of these deposits, Liqui subsequently brought back a total of more than 34,000 Bancor Network Tokens, worth over $1 each. Also acquired were around 4.1 million DNT tokens worth $0.024 each, for a sum asset acquisition of around $120,000 between the two tokens. Other delisted tokens were treated in a similar way, probably accounting for the Reddit user’s math adding up to over “300k USD.”