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Bitcoin News Roundup for Feb. 14, 2020

With bitcoin holding above $10,000, we’re joined by CoinDesk senior reporter Leigh Cuen to discuss developments and implications in the case alleged against Larry Dean Harmon.

For early access before our regular noon Eastern time releases, subscribe with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica or RSS.

Today’s news:

Bitcoin Closing on Daily Golden Cross That Could Bring Boost to 2020 Price Rally

Iran Concerns May Be Driving Trump Administration’s Talk of New Crypto Rules

Today’s show features a brief interview with CoinDesk senior reporter Leigh Cuen on her story:

US DOJ Calls Bitcoin Mixing ‘a Crime’ in Arrest of Software Developer

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For early access before our regular noon Eastern time releases, subscribe with Apple Podcasts, Spotify, Pocketcasts, Google Podcasts, Castbox, Stitcher, RadioPublica or RSS.


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SEC Karate-Chops Steven Seagal Over Promoting Cryptocurrency Touted as the Next Gen Bitcoin

The U.S. Securities and Exchange Commission (SEC) has charged actor Steven Seagal for unlawfully promoting a cryptocurrency investment scheme claiming to be “the next generation of bitcoin.” Seagal failed to disclose that he was being compensated in cash and crypto by Bitcoiin2gen, or B2G, for marketing its token offering, such as on Twitter and Facebook.

SEC Charges Stevel Seagal for Unlawful Crypto Promotion

The SEC announced Thursday that it has settled charges against Hollywood actor and producer Steven Seagal over his promotion of a cryptocurrency investment product. The SEC explained that Seagal “touted on social media a security that was being offered and sold in an initial coin offering (ICO) without disclosing that the issuer was paying him for the promotions.

” The offering was conducted by Bitcoiin2gen, also known as B2G. Noting that the actor violated the Securities Act, the Commission elaborated:Seagal failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions, which included posts on his public social media accounts encouraging the public not to ‘miss out’ on Bitcoiin2gen’s ICO and a press release titled ‘Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2gen.’

SEC Karate-Chops Steven Seagal Over Promoting Cryptocurrency Touted as the Next Gen Bitcoin

“The SEC’s order finds that Seagal violated the anti-touting provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Seagal agreed to pay $157,000 in disgorgement, which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty. In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years,” the agency clarified.

Steven Seagal for ‘the Next Generation of Bitcoin’

Steven Seagal earned his net worth as a big action movie star of the 1980s and 90s. He appeared in more than 50 films, including Above the Law, Hard to Kill, Out for Justice, Under Siege, and Out of Reach. Seagal’s net worth is now $16 million, according to celebritynetworth.com. The 67-year-old currently lives in Moscow, Russia. President Vladimir Putin presented a Russian passport to him in 2016.

SEC Karate-Chops Steven Seagal Over Promoting Cryptocurrency Touted as the Next Gen Bitcoin
Steven Seagal charged by the SEC for promoting cryptocurrency without disclosing that he was being paid to do so.

According to the SEC’s order, from about Feb. 12 to March 6, 2018, Seagal touted the B2G cryptocurrency investment opportunity on his Twitter and Facebook accounts. At the time, he had approximately 107,000 followers on Twitter and 6.7 million on Facebook. While he was not running the ICO, Seagal allowed his pictures to be used on Bitcoiin2gen’s official website and marketing materials. He additionally received payments for participating in a webinar with potential investments.

Bitcoiin2gen described its B2G tokens as “the next generation of bitcoin,” the SEC wrote. Its marketing materials say “Bitcoiin – 2nd Generation. Bigger and better than the original.” The company claimed that the funds raised would be used to “build an ‘ecosystem’ that would allow users to trade B2G tokens, provide wallet staking, and trade altcoins and fiat currencies, all ‘on a secure, comprehensive platform,’” the SEC described, noting:

Participants in the ICO invested bitcoin, U.S. dollars, euros, or made payments via credit card in exchange for B2G tokens.

SEC Karate-Chops Steven Seagal Over Promoting Cryptocurrency Touted as the Next Gen Bitcoin
Bitcoiin2gen’s marketing material showing Steven Seagal as the official ambassador, endorsing “the next generation of bitcoin.”

The SEC further pointed out that Bitcoiin2gen’s press release included a quote from Seagal stating that he endorsed the token offering “wholeheartedly.” Noting that these promotions came six months after its DAO Report warning that cryptocurrencies sold in ICOs may be securities, the SEC emphasized that “in accordance with the anti-touting provisions of the federal securities laws, any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, clarified:

These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased. Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.

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Bitcoin bull Anthony Pompliano doesn’t want to buy XRP

  • Anthony Pompliano set Bitcoin apart from all other blockchain projects because he believes it holds more value than the rest. 
  • He anticipates a bright future for the tokenization of traditional assets.

In an interview with CNN’s Julia Chatterley, Anthony Pompliano, CO-founder of Morgan Creek Digital Assets, was asked if he would ever buy XRP or TRX. The “Off the Chain” host clearly stated that he would buy neither of the tokens. He also set Bitcoin apart from all other blockchain projects because he believes it holds more value than the rest. 

NO, BECAUSE I ULTIMATELY DON’T THINK THAT THEY HAVE THE SAME VALUE THAT THESE OTHER ASSETS HAVE. MY BELIEF IS THAT STOCKS – WHAT GIVES THEM VALUE? – GDP, REVENUE, PROFITS ETC. EVERYTHING THAT MAKES THOSE VALUABLE, THAT DOESN’T CHANGE. YOU’RE JUST CHANGING THE TECHNOLOGY FORM FACTOR OF WHICH YOU WILL BUY THAT ASSET.

ALL OF THESE OTHER ASSETS THAT ARE ‘UTILITY TOKENS’, EITHER THEY’RE UTILITY IN TERMS THAT THEY GIVE YOU ACCESS TO SOMETHING SO THEY’RE NOT REALLY AN INVESTMENT, OR ITS MORE I GET UTILITY OR SOME [BETTER] SERVICE IN EXCHANGE.

RIPPLE THE SOFTWARE COMPANY IS DIFFERENT THAN XRP, THE TOKEN. I THINK THAT PART OF THE PROBLEM IS THAT RETAIL INVESTORS HAD BELIEVED THAT BY BUYING XRP THEY HAVE EXPOSURE TO FINANCIAL PERFORMANCE OF RIPPLE. THAT’S OBVIOUSLY NOT TRUE… IF RIPPLE IS SUCCESSFUL THAT DOES NOT NECESSARILY MEAN THAT XRP ENDS UP BEING SUCCESSFUL.

I AS AN INVESTOR ACTUALLY WANT TO OWN EQUITY IN THE SOFTWARE COMPANY BECAUSE THERE’S PROFITS, THERE’S ASSETS, REVENUES ETC. I DON’T WANT TO OWN AN ASSET THAT MAY OR MAY NOT BE THERE IN THE FUTURE AND DOESN’T HAVE UNDERLYING UTILITY OR VALUE DRIVER THAT I CAN POINT TO AND SAY I HAVE CONFIDENCE THAT THAT’S GOING TO LAST.

Pompliano also believes that apart from Bitcoin, tokenized securities are the second most interesting crypto investments. He sees a bright future for the tokenization of traditional assets. He concluded the interview by admitting that roughly half of his net worth is in Bitcoin though specific numbers weren’t disclosed.

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Analyst Who Projects Bitcoin Boom to $1,000,000 Warns BTC Halving Headaches Incoming

A crypto analyst known for applying the stock-to-flow ratio to Bitcoin says the leading cryptocurrency is facing a number of headwinds as the 2020 halving approaches.

The halving, which happens about every four years, will slash the supply of new BTC entering the market in half this May.

The pseudonymous analyst known as PlanB says Bitcoin’s supply schedule is strongly linked to the price of BTC. He was the first to apply the stock-to-flow model to BTC, which tracks the circulating supply of an asset against the amount of new supply hitting the market. Often used to track the price of gold and precious metals, PlanB says the ratio is strongly correlated with Bitcoin’s past price movements and shows BTC hitting a high of $1,000,000 within a decade.

But with the halving on the horizon, PlanB now says Bitcoin has a number of issues to overcome, including regulatory uncertainty in the US, hacks and concerns about large sales of BTC from crypto hackers and the seemingly never-ending fallout from the collapse of the crypto exchange MtGox.

“2020 Bitcoin halving will not be an easy ride:

– US/Mnuchin: draconian anti-btc laws
– Craig Wright: legal and patent FUD
– Hacks: like 2016 halving (DAO, Bitfinex)
– MtGox and PlusToken selling narrative
– Miner death spiral and futures FUD
– Forks”

Stock-to-flow skeptics say the advent of Bitcoin derivatives could prevent Bitcoin from rising this time around. They also point to the fact that Bitcoin has only gone through two halvings in the past, saying there’s too little data to confirm their impact on Bitcoin’s price.

Ethereum creator Vitalik Buterin is also not a fan of stock-to-flow. He says it’s part of a crypto culture of “post-hoc rationalized bullshit” analysis that includes tying Bitcoin’s price to global events like the coronavirus.

Despite the fear, uncertainty and doubt, PlanB says his model shows the price of Bitcoin is right where it should be. He likens Bitcoin’s stock-to-flow ratio to a drunk walking his dog, and says although the price of BTC may wobble higher and lower than the predicted price of BTC, it can’t stray too far and always falls back in line.

It won’t be too long until we see how the stock-to-flow model holds up. PlanB says he expects Bitcoin to hit $100,000 by the end of 2021.

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