The Reserve

27 November 2017 | SUBSCRIBE

// TETHER TROUBLES

Whilst Tether has struggled to prove it has fiat safely stored for every issued Tether, we can now know one thing with certainty: it has $31m less Tether after suffering an attack this week.

Interestingly, Tether was transparent and forthcoming about the issue - interesting because, the potential fraud and malpractice surrounding Tether is perhaps the most common concern I hear. There is wrife speculation the founders have - amongst other things - simply used it as a license to print money, issuing Tether as they please.

Efforts to validate the corresponding USD holdings have been less than ideal - how hard is it to get an auditor to validate you truly have access to distribute a certain amount of USD? Very, actually, when you are having your banking services withdrawn.

It highlights two issues: despite the transparent nature of some blockchains, there is a distinct lack of transparency in how the organisations issuing tokens are run and leveraging their cash stockpiles - far less transparency than traditional venture backers might expect for investing in early stage companies.

Second, if Tether is acting in good faith - which, there is certainly not indubitable proof that it isn’t - then, it is merely a good example of just how dependent crypto is on the real world to do, say, simple things like store money.

// MUST READS

A report by the Cardozo project highlights that not everyone thinks the SAFT is safe.
Issues at Bitcoin Gold (if you hold bitcoin, you probably hold bitcoin gold).
More detail on Ethereum 2.0 in video and words.

// PRICING SUMMARY

// DISASTER OF THE WEEK

Tether suffered a cyber attack in which $31 million was stolen, and created a temporary hard fork in an attempt to isolate the funds. Although the platform has been able to identify the hacker address and is working on preventing that thestolen tokens are being used, they still don't understand how this it occurred.Separately, there is still no proposed plan to deal with the $160m currently ‘locked up’ from the Parity hack 3 weeks ago.

// TRACTION

Stanford University’s cryptography group are proposing ‘bulletproofs’ for to reduce blocksizes.
Tobam launches Europe’s first bitcoin mutual fund. (In the FT, or bitcoin news).
Goldman Sachs backed blockchain solution successfully tracks equity swaps for 6 months with 100% success.
Approval of US Defence Bill would give departments the right to invest at will in blockchain (or other) technologies.
Blockchain energy pilot receives $8m in grants from Australian government.
A listed Chinese company is turning to a token issuance to fund its next casino.
Blockchain-based smart contracts system tested by the State Bank of India.

// ROAD TO REGULATION

Morocco will join the list of countries that have banned ICOs.
The Philippines moves one step closer to classifying digital currencies as securities, subject to the Philippines’ Securities Regulation Code.

// ICOS

Last week highlights:

Trade raised $10m for a blockchain trading platform.
Utrust raised $21m for a payment platform that allows merchant to accept crypto transactions but receive fiat.

Upcoming:

Bankera - November 27, 2017 - Regulated bank for the blockchain era.
Mytracknet - November 28, 2017 - Global lost and found network using blockchain technology to incentivise participants for their contribution.
Bitdegree - December 1, 2017 - Blockchain-powered online education platform with token scholarships & tech talent acquisition.