TFU | Oct. 1-7

Leading Off

A U.S. House bill proposed establishing a working group to define blockchain and recommend possible governmental use cases; TD Ameritrade and Virtu are backing regulated digital currency exchange ErisX; Circle is buying SeedInvest in a move that could bring crypto assets to equity crowdfunding; Coinbase is reportedly approaching new funding and an $8B valuation; and German challenger bank N26 launched in the U.K.

 

In the News

House bill wants to define blockchain.  The proposed “Blockchain Promotion Act of 2018” (H.R. 6913), proposes creating a common definition of blockchain for government and forming a working group to study the technology. One sponsor, Doris Matsui (D-CA), said the bill would also “recommend opportunities to leverage the technology to promote new innovations.”

WSJ highlights bots’ role in crypto market manipulation.  The Wall Street Journal explores how unscrupulous actors can use software to manipulate cryptocurrency markets; and why it is a “growing concern for regulators” and a cause of continued market volatility. Last month, a report from the New York Attorney General cited automated trading programs as a key “source of price manipulation.”

Circle to acquire SeedInvest.  The cryptocurrency and money transfer firm agreed to buy the New York-based equity crowdfunding platform in a deal which could allow companies to acquire cryptocurrency funding and issue crypto security tokens, all through Circle’s platform. The acquisition is subject to regulatory approval.

Coinbase is nearing an $8B valuation.  According to Recode, the crypto exchange is finalizing a deal with investment firm Tiger Global for a funding round of up to $500M, which would value the company at $8 billion. The transaction “would make Coinbase one of the highest-valued startups in the U.S.”

TD Ameritrade backs new crypto exchange.  The brokerage firm is partnering with high speed trading giant Virtu to back cryptocurrency exchange ErisX. ErisX hopes to appeal to brokers by bringing digital currencies closer to traditional asset classes by placing them on a regulated exchange and enabling more complex instruments.

IBM wins new patent for blockchain-based security. The U.S. Patent and Trademark Office (USPTO) awarded a patent to IBM for a blockchain system capable of monitoring and logging “events on the network, including potential intrusions.” IBM’s idea would make it possible for firms to “monitor attempted intrusions on the distributed network, using node consensus to flag any irregularities.”

Europol teams up with U.K. bank cyber alliance. The EU law enforcement agency has signed a memorandum of understanding to tackle cyber threats to the financial services sector with the Cyber Defence Alliance, a coalition of U.K. banks and law enforcement bodies. Under the MOU, the parties will share best practices and information, and will cooperate on projects.

South Korean Policy Chief calls for legalization of ICOs.  National Policy Committee Chairman Min Byung-Doo called for the legalization of initial coin offerings (ICOs) during the 8th plenary session of the National Assembly. Min stressed that ICOs should have a regulatory framework that will prohibit “fraud, speculation, and capital laundering.”

N26 enters U.K. market.  The German challenger bank launched a limited version of its app in the U.K., with a wider rollout planned for later in the month. N26, which is backed by Tencent, Allianz and Peter Thiel, also has plans to expand to the U.S. in the first quarter of 2019.

Brex achieves unicorn status.  Just two years since its founding, the credit card provider has raised $125 million in Series C venture funding, valuing the company at $1.1 billion. Brex extends credit to startups based on the amount of money in their corporate bank accounts, a market typically overlooked by traditional credit card issuers.

Introducing WSJ Coin.  The Wall Street Journal created its own cryptocurrency as part of a documentary aimed at understanding what drives the crypto market. The documentary found that one of the industry’s main issues is proving its legitimacy in spite of numerous bad actors.

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