U.S. lawmakers repeatedly pressed Facebook’s top blockchain executive to halt development of the Libra cryptocurrency during a contentious hearing on the project Wednesday.
They didn’t get far.
David Marcus, the CEO of Facebook’s subsidiary Calibra, reiterated his promise that Libra would not launch until regulators’ concerns were fully addressed. But he stopped short of committing to freezing technical work on the project, much to the chagrin of House Financial Services Committee members.
The committee’s chairwoman, Rep. Maxine Waters (D-Calif.), had previously called for a moratorium, and it was one of the first things she brought up in the hearing, asking the Facebook executive:
“Will you stop dancing around this question and commit here in this committee … to a moratorium until Congress enacts an appropriate legal framework to ensure that Libra and Calibra do what you claim it will do?”
Marcus responded with roughly the same talking point he’s been using for weeks.
“I agree with you that this needs to be analyzed and understood before it can be launched … and this is my commitment to you. We will take the time to get this right,” he said.
Rep. Carolyn Maloney (D-N.Y.) raised the issue during her turn to question Marcus. He started to give a similar answer to what he said earlier, but before he could finish, she cut him off.
“I take that as a no,” she said.
Maloney then asked Marcus if he would at least promise to do a small pilot test of Libra, involving no more than 1 million users and overseen by the Federal Reserve and the Securities and Exchange Commission (SEC), before fully launching the currency. Again, he demurred, saying only that he would commit to working with regulators.
Not that a pilot would be her preferred outcome. “I don’t think you should launch a new currency at all,” Maloney said.
Like the previous day’s Senate Banking Committee hearing, Wednesday’s panel was wide-ranging, with lawmakers grilling Marcus on everything from money laundering to financial stability to whether Libra should be regulated as an exchange-traded fund (ETF) or a bank.
Rep. Brad Sherman (D.-Calif.), perhaps crypto’s loudest Congressional critic, suggested that Libra was somehow more dangerous to America than 9/11.
Comparatively sober colleagues wondered if the project would become “systemically important,” Beltway-speak for “too big to fail.”
The Republicans on the panel were less hostile but nevertheless asked pointed questions.
Rep. Sean Duffy (R.-Wis.), for example, complimented Marcus for Facebook’s innovation but asked if Libra would ban controversial speakers like Milo Yiannopoulos or Louis Farrakhan from using the platform, as Facebook has done in its flagship social network.
“Personally, I believe we shouldn’t be in the business of telling people what they can do with their money,”
AOC weighs in
Rep. Alexandria Ocasio-Cortez (D-N.Y.), the young lawmaker known for her social media savvy and socialist economic positions, brought an interesting bit of monetary history into the discussion.
She suggested that the Libra currency would be a digital version of scrip, a type of private money that corporations once used to pay employees. (Coal miners and loggers, for instance, were paid in scrip they could use to buy goods at the company store.)
Marcus, a former president of PayPal, said he was not familiar with the term.
Ocasio-Cortez also questioned the governance of this aspiring global currency. “Were the members of the association democratically elected? Who picked them?” she asked Marcus.
He replied that the membership is open, subject to certain requirements.
“So we’re discussing a currency governed by private corporations,” Ocasio-Cortez went on. “Do you believe the currency is a public good? Do you believe Libra should be a public good?”
Marcus answered that “it’s not up to me to decide.”
Inside the basket
Marcus also provided more detail than before about the makeup of the basket of fiat currencies that would back Libra.
He told the lawmakers (several of whom were concerned about Libra’s threat to U.S. financial dominance) that the reserve will “mainly” be backed by the U.S. dollar. The Facebook executive later specified that it would be 50 percent dollars, with euros, British pounds and the Japanese yen also included in the collateral.
Regarding Libra’s collateral, Rep. Katie Porter (D-Calif.) seized on another historical comparison: the wildcat banks of the early 19th century, which issued their own notes purportedly redeemable for gold and often failed to deliver on their promises to pay noteholders.
“How is it fundamentally different from wildcat banking?” she asked Marcus.
“A very important difference is the one-to-one reserve,” he said.
Porter then asked what’s to stop the Libra Association from swapping out the reserve from 50 percent greenbacks to, say, 100 Venezuelan bolivares.
Marcus answered that the Libra Association would be regulated. By whom, Porter asked. Marcus said it would be an oversight group of the Group of Seven (G7) nations that he’d mentioned Libra was working with several times before.
The first part of the hearing wrapped up around 18:45 UTC. After Marcus, a panel of expert witnesses, including former Commodity Futures Trading Commission chairman Gary Gensler, is scheduled to testify.
ING to develop a cryptocurrency custodial platform
- The bank said that it sees “increasing opportunities” with regards to crypto.
- The project is reportedly being controlled from its Amsterdam offices.
According to a recent report by Reuters, major Dutch bank ING is currently working on a custodial platform that will enable their clients to store digital assets like cryptocurrencies. The firm stated that it sees “increasing opportunities” with regards to crypto – both asset-backed and security tokens.
ING bank aims at providing its users with a compliant way to access the sector. As per Reuters’ sources, the project is being controlled from its Amsterdam offices. However, it is still in its early stages. Additionally, the bank is also working on developing other blockchain initiatives. Not all banks are sharing ING’s enthusiasm. Another major Dutch institution,
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.
US court dismisses case against FTX worth $150 million
The U.S. court is said to have dismissed the case worth around USD 150 million against the cryptocurrency derivatives exchange FTX. It was said the suit was made due to market manipulation and unlicensed securities sales, but the court has not found any solid grounds to continue with the lawsuit.
The company called Bitcoin Manipulation Abatement LLC filed the suit for the sale of unlicensed securities in the U.S. and market manipulation.
It was said in the report that:
Defendant Alameda Research LLC’s motion to dismiss Bitcoin Manipulation Abatement LLC’s Amended Complaint in the above-captioned action came on regularly for hearing before the Court on February 13th, 2020. After considering the papers submitted by the parties and the argument of counsel, the Court finds that plaintiff has failed to comply with the requirements of Fed. R. Civ. P. 9(b) or 8(a)(2), and that dismissal is warranted under Fed. R. Civ. P. 12(b)(1) and 12(b)(6). Accordingly, Alameda Research LLC’s motion to dismiss is granted, and the Amended Complaint is dismissed in its entirety with prejudice.
In a reaction to the news infamous CZ (the CEO of Binance) said:
A market maker from a smaller futures exchange tried to attack @binance futures platform. NOONE was liquidated, as we use the index price (not futures prices) for liquidations (our innovation). Only the attacker lost a bunch of money, and that was that
It was clear that something went on but as always these things are hard to prove. This is not the first case of its kind but it is important that Binance had security measures in place to keep its customers safe.. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.
Cryptocurrency Is Still the World’s Best Performing Asset Class This Year
As the year and decade come to an end, cryptocurrencies once again outperform other major asset classes.
Despite trading significantly down from their record highs of late December 2017, large-cap cryptocurrencies had a phenomenal year and remain one of the greatest investment success stories of the decade.
Cementing themselves as the world’s leading asset class for yearly performance, cryptocurrencies have risen well above annualized returns of the U.S. equities, commodities and bond markets for 2019.
Ryan Alfred, President and co-founder of Digital Assets Data said large-cap crypto assets possess significantly higher returns versus traditional markets for this year.
“Looking back at the performance of the top ten large-caps (Bitwise 10) in comparison to other major asset classes, we can see their special signature,” Alfred said.
Crypto versus traditional assets
As seen in the chart above, research provided by Digital Assets Data shows how this year’s performance of the top 10 cryptos by market capitalization fared against other major asset classes such as gold, oil and equities.
Of course, 2019 didn’t start out that way. Back in February, the top 10 crypto began a fairly dismal run, resting well below all other traditional asset classes when viewing their return on investment figures. However, sentiment began to pick up significantly in March and by mid-year, cryptocurrencies were far out ahead of other the other assets.
That gap has begun to narrow as stocks, bonds and commodities begin to increase their lead. Yet cryptocurrencies remain significantly ahead
Much of this rally is courtesy of bitcoin (BTC). The world’s first cryptocurrency is currently up 100 percent since the year began. Meanwhile, Ether, the world’s second-largest crypto is up 35 percent year-to-date, though XRP is down 25 percent from where it traded on Jan. 1.
The big picture: Crypto’s success story
In the year before the decade began, the world was in the throes of a financial crisis. Since then, stocks have rebounded. From its March 2009 market meltdown lows to now, the S&P 500 has gained a respectable 369 percent. Similarly, the Dow Jones Industrial Average has also had a good run, up 326 percent in that same time period.
However, BTC has blasted those figures, rising well above a staggering 12 million percent (yes, you read that correctly) over a one-year-shorter time frame, beginning March 2010. That’s when the price of 1 BTC was around $0.05, data taken from Messari shows.
Crypto’s success can likely be attributed to its most defining characteristics: high volatility and liquidity, allowing market participants to quickly and easily trade between digital and fiat currencies.
Lorenzo Pellegrino, CEO of Skrill, a cross-border payments platform utilizing crypto, said digital assets resembled a nascent market. Prices bouncing around in a frantic manner enable the asset class to outperform all others based on irrational sentiment and low barriers to entry.
“As it (crypto) matures we should start to see increased stability and the core fundamentals will become more apparent,” Pellegrino said.