Blockchain Shipping Giant 300cubits Throws the Towel with its TEU Token

Andres Chavez
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Blockchain Shipping Giant 300cubits Throws the Towel with its TEU Token

One of the world’s pioneers in the use of blockchain technology for international shipments, 300cubits, is calling it quits regarding its TEU token because, allegedly, a lack of business. The company explained the situation via a statement published in the last few days.

The statement read that “the transaction volume through the system have been far from commercial. Only a couple hundred containers have gone through the system, which, although may seems plenty among the shipping blockchain projects, is not sufficient to keep the system going commercially.”

TEU is a word play derived from Twenty foot Equivalent Unit, which is usually the go-to unit of measure in the shipping world. The asset was initially issues via an Initial Coin Offering (ICO) in the early part of last year, and it was dubbed as the medium of exchange for 300cubits’ Booking Deposit Module.

Booking Container Space

The clients of the platform would use the tokens to book container space with fellow participating shippers. The idea behind the project was that the TEU token would hold value of some kind by solving booking issues that have surrounded the container industry for quite some time. Clients would not be inclined to cancel orders and the probabilities that shippers would overbook their ships would be lessened.

The first trials were performed at the end of the Q1 in 2018, and by the month of July of that same year, the system was up and running. However, the developers’ dreams did not materialize, as interest was low and there were not many completed transactions.

Among the companies that tested the TEU token were Sealand (a Maersk firm,) Cosco (based in China,) and Swiss enterprise MSC, per the published statement. It was also reported that 300cubits was in talks with several other major actors in the container shipping industry.

Regulatory Reasons

According to 300cubits, most of the obstacles were of the regulatory variety, as it often happens with digital assets. As it turns out, numerous potential clients preferred to stay away because of the uncertainty surrounding the authorities’ treatment of the token.

In the same vein, other reasons why the project did not come to fruition were liquidity and volatility, and several potential clients were scared off. Traits such as immutability and anonymity, which happen to be two of the most commonly advertised benefits of the blockchain technology, were seen as problematic by the market.

As a result of the latest decision, the company will proceed to burn at least three quarters of the total TEU supply; now, they plan to continue to do so the moment they receive them from customers, per the statement. The Hong Kong-based firm will not quit in its pursuit to deploy a blockchain solution, however.

Introducing Blockchain Solutions

The shippers and the New York Shipping Exchange (NYSHEX) have introduced solutions for booking no-shows. The NYSHEX happens to offer enforceable freight pacts.

Whilst 300cubits’ TEU token was not particularly successful, that does not mean that the blockchain technology has failed in the shipping industry, quite the contrary in fact. The approach is being used, but in different ways. For example, two heavyweights, IBM and Maersk, worked together to develop TradeLens, which is a system based on the blockchain that shows real-time shipping data being shared between two or more parties in a supply chain.

By Andres Chavez

European Central Bank Becomes Flexible in Its Position on Cryptocurrencies

Willmen Blanco
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European Central Bank Becomes Flexible in Its Position on Cryptocurrencies

The rapid development of cryptocurrencies could modify current ECB’s position on the issue. The ECB continues to assess the relevance of a European stablecoin pegged to the euro.

The president of the European Central Bank (ECB), Mario Draghi, adopted a criterion of greater openness toward cryptocurrencies than that shown so far by the authorities in Europe. This is clear from the views expressed by the senior official in a letter sent to the Member of the European Parliament (MEP) Eva Kaili.

In the missive, dated September 26th, 2019, Draghi said that the European System of Central Banks (ESCB) is assessing cryptocurrencies and stablecoins (tokens pegged to the price of other assets). This is part of an effort to consider the implications of these financial technologies in monetary policy, as well as in the security and efficiency of payments. However, he acknowledged the future potential of cryptocurrencies as a means of payment.

Draghi believes that until now stablecoins and cryptocurrencies have had limited implications in these areas and are not designed to be suitable substitutes for fiat money. However, he considers that, given the rapid pace of technological development and the evolution of the business model, this evaluation may be subject to changes in the future.

In mid-September there was a worldwide meeting of central banks, attended by representatives of Facebook’s stablecoin project Libra. The emissaries for this and other projects that include collateralized tokens of global circulation answered the doubts expressed by the officials of 28 central banks present at the meeting.

The information disclosed at that time showed the concern that financial regulators feel about the possible risks of stablecoins such as Libra to financial stability.

Benoît Cœuré, Chairman of the Committee on Payments and Market Infrastructures (CPMI) and convener of the meeting, had stated in a previous forum that the Libra cryptocurrency was a “call to attention” for the ECB. Even at a previous worldwide meeting of finance ministers, the representative of France, Bruno Le Maire, had stressed that Libra cannot be allowed to operate in Europe.

In his letter Draghi mentioned Facebook’s stablecoin project Libra, but with rather a different tone. He said that Libra could have a global adoption potential for retail and wholesale payments. Besides, he stressed that the project is receiving the support of large technology companies.

Moreover, he mentioned that the ESCB is cooperating with its peers in the G7 stablecoins working group. There they have acknowledged that it necessary to optimize the current system of cross-border payments and the access to payment services. In this sense, he reiterated that the association continues reflecting on the pros and cons of issuing a “digital form of the euro,” that is, a stablecoin supported by the European Union currency that is available to the general public.

In the opinion of the European Central Bank, the key issue for a digital currency of that financial institution is not technology but its usefulness in terms of costs and benefits to the public. Draghi mentioned that regulatory, systemic and political issues should be addressed before advancing any potentially global initiative, such as stablecoins.

By Willmen Blanco

Cryptocurrency Companies Must Comply with Anti-Money Laundering Law

Willmen Blanco
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Cryptocurrency Companies Must Comply with Anti-Money Laundering Law

The Central Bank of Paraguay received a parliamentary proposal to encourage discussion. The use of cryptocurrencies is not prohibited in the South American country.

It is expected that, by late 2020, a new law regulating cryptocurrencies in Paraguay’s financial system will be ready, according to the deputy of the Patria Querida Party (PPQ) Sebastián García.

The congressman confirmed that he had sent the regularization proposal to the highest authority of the Central Bank of Paraguay (BCP), José Cantero, in order to encourage discussion about the cryptocurrency ecosystem. The intention is to refine a measure either through an organic law or a new legislative framework, said García.

According to the parliamentarian, companies operating with cryptocurrencies in Paraguay are expected to adhere to the Law against Money Laundering. In his opinion, the objective is to add this means of payment to Paraguay’s financial system formally.

Due to the difficulties experienced by several mining and cryptocurrency exchange houses to operate in the market, it was sought to mediate from the Science and Technology Commission of the Chamber of Deputies of Paraguay. For that reason, both Secretariats of State and representatives of the private sector were summoned.

The deputy specifically talked about Cripex, a cryptocurrency exchange house operating internally, which has not yet legalized its access to the banking sector due to problems with some banks. This situation has forced it to receive money in the form of cash and transfers from electronic wallets.

It should be noted that the use of cryptocurrencies is not prohibited in Paraguay. However, there is no specific regulation controlling and monitoring this ecosystem, so Bitcoin users trade it at their own risk.

Preventing Money Laundering

García stressed that after the proposed dialogue with the parliament, the representatives of the private sector joined in a consolidated petition to be considered “obligated subjects” according to Law No. 1015. The objective is to prevent and suppress unlawful acts intended to legitimize money or goods.

He commented that, both at the public hearing and at the technical table created after the hearing, the parliamentary body proposed short-term solutions and some measures to be adopted in the medium term.

In the legislator’s opinion, the most immediate solution is that Bitcoin mining companies and cryptocurrency exchange houses are considered “obligated subjects” under that law.

He considers that, “in the medium term, Paraguayans should see a law that regulates crypto assets more broadly. By late 2020, there could be adequate regulation of cryptocurrencies,” he stated. He added that he did not know if the Central Bank of Paraguay is already evaluating a regulatory framework for crypto assets.

Legal Status of Cryptocurrencies

It should also be noted that the first government agency addressing the legal use of cryptocurrencies was the Secretariat for the Prevention of Money and Property Laundering (Sepreland). In fact, in May 2018, it reported that Bitcoin was an unregulated and highly risky payment method. However, it said that the State would not intervene in the development of this technology.

In early 2019, the Central Bank of Paraguay highlighted that Bitcoin has no legal course in the territory, so it is not controlled, supervised or regulated by the government, so they urged users to be cautious when trading cryptocurrencies.

By Willmen Blanco

SEC Ruling on Block.one’s ICO Leads to Divided Opinions in the Ecosystem

Willmen Blanco
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SEC Ruling on Block.one’s ICO Leads to Divided Opinions in the Ecosystem

The fine of USD 24 million represents only 0.6% of Block.one’s ICO proceeds. According to Shapeshift’s CEO, it is “sad” that in the ecosystem they were expecting a higher fine.

Among the recent events in the cryptocurrency and blockchain ecosystem, perhaps the one that has raised the most dust was the U.S. Securities and Exchange Commission’s (SEC) ruling that the team behind EOS’s Initial Coin Offer (ICO), Block.one, will have to pay a fine of USD 24 million for making its sale as an unregistered offer of securities.

This figure has provoked diverse reactions in the ecosystem, mainly due to the percentage of Block.one’s ICO proceeds that it represents. The estimated proceeds were about USD 4,000 million, so the amount of the fine is only 0.6% of that amount.

For some analysts of the cryptocurrency ecosystem, that link between the punishment and the company’s proceeds only encourages more companies to enter the ICO world, disregarding U.S. legislation. The economic profit margin with respect to risks seems to reinforce that idea.

Against the SEC and Block.one

Among those who have expressed a negative view of the SEC’s decision is Nic Carter, co-founder of Castle Island Ventures. For Carter, the U.S. agency’s ruling shows a lack of protection for investors on the part of the government.

Carter posted on Twitter that the lesson to learn from this situation is that the government will not protect investors or demand disclosure from issuers. The analyst considers that future ICO promoters will be all right, since it “would suffice them to set aside 0.6% of their profits to deal with possible SEC sanctions.”

For his part, the cryptocurrency and blockchain expert Mike Dudas reacted sarcastically to the fact. He posted on Twitter that he would “finalize his ICO documents in order to make an unregistered security offer. The current rate for openly violating Federal Securities laws is 0.59% of the proceeds.”

Austin Hill, co-founder of Blockstream, is of the same opinion, since he claimed to have advised many people not to pursue ICO because of “ethical risks” that endanger uninformed investors.

In a Twitter post, Hill asserted, in mockery, that his advice should have been to discard the ethical aspect. “Profit as much as you can as quickly as you can, take the money abroad and budget 2% to bribe regulators in the form of sanctions.”

In Defense of Block.one

Not all the members of the ecosystem think that what happened between Block.one and the SEC is something negative. For example, the CEO of the Shapeshift exchange house, Erik Voorhees, considers the approach of those who say that the fine should have been higher “sad”.

For Voorhees, this view is contrary to that of Bitcoin’s creator, Satoshi Nakamoto, which gave rise to the entire cryptocurrency ecosystem that exists today.

For his part, José Antonio Bravo, Spanish economist and tax advisor, also published on the subject in the social network. According to his vision, it is part of the business to have access to a “reasonable” fine, have the ability to “make good lobbying policies” in terms of regulatory institutions and “go ahead.

By Willmen Blanco

Mainnet of BitTorrent File System Based on Blockchain Technology Is Launched

Willmen Blanco
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Mainnet of BitTorrent File System Based on Blockchain Technology Is Launched

The BitTorrent file system offers decentralized storage of information. This new system could offer more flexibility and privacy than centralized services.

The BitTorrent File System (BTFS) launched its mainnet on October 1st, as announced by the CEO of the decentralized gaming platform Tron, Justin Sun.

The BitTorrent File System will allow users to upload, transfer, download, and store files on other people’s computers using a peer-to-peer (P2P) network. This would be something like the combination of Google Drive and The Pirate Bay.

For the creation of the BTSF, Tron took the InterPlanetary File System (IPFS), a platform for decentralized file storage, and integrated it with BitTorrent. Sun states that about 3,000 BTFS nodes, which consist of the computers that help maintain the network, have been added to BitTorrent client list, as occurs in blockchains with decentralized systems.

Many may be wondering why not just use Google Drive or Dropbox as these alternatives are cheaper. Sun indicates that there are two reasons for that, the first of which is flexibility. He explains that the BTFS provides a more flexible storage service at the same time as it ensures the security of the files by keeping the user’s data safeguarded in a decentralized manner.

The second reason is that the BitTorrent File System (BTFS) offers users more anonymity than centralized services. On this point, Sun added that each host (node) on the network only stores a small part of a given user’s file, which ensures security of storage.

Sun commented that in the near future the BitTorrent token (BTT) would be integrated into the BTFS. This token will allow users to pay for BitTorrent File System (BTFS) services and would complete the BitTorrent blockchainization, prior to the launch of a new service, BitTorrent Speed, which adds a way to accelerate downloads by paying with BTT.

Despite all this, things do not seem to be going as well as expected for BTT holders. For example, Binance, one of the world’s largest exchange houses, removed on October 1st the parity between BTT and Bitcoin, which means that Binance users will no longer be able to trade directly between these two currencies.

To make matters worse, BTT was removed because there was little trading volume on the platform, which indicated a lack of interest in the token on the part of traders. This may be due to the fact that the price of BTT has collapsed since it was launched at the end of January of this year. Currently, it is priced as low as USD 0.0004, and its steadily declining price is a disincentive for anyone to use it, since people could lose their money while holding it.

In addition to the above, the BTFS is in the face of fierce competition from other services. For example, Filecoin, a long-awaited service designed for the same purpose, announced last week some dates for the launch of its test network and its mainnet Alphanet. The race has already been established, but it is uncertain who will manage to monopolize the market first.

By Willmen Blanco

US Cryptocurrency Trading and Investment Companies Join to Rate Cryptocurrencies

Willmen Blanco
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US Cryptocurrency Trading and Investment Companies Join to Rate Cryptocurrencies

The group includes Coinbase, Circle, Grayscale, Kraken, Anchorage, Bittrex, Genesis and Cumberland DRW. Ecosystem companies are on uncertain ground regarding how legislation will affect them.

The companies that use Bitcoin have been fighting in recent years against vague U.S. regulations and in favor of more accurate definitions of cryptocurrencies.

The sharp changes in the prices of Bitcoin and other cryptocurrencies, which reached their highest values throughout 2017 only to fall back to the ground last year, prompted regulators from all over the world to fight for legislation to protect potential buyers. However, there are still doubts as to whether certain cryptocurrencies are securities, which leave ecosystem companies on uncertain ground regarding how the legislation will affect them in the future.

However, Bitcoin trading and investment companies such as Anchorage, Bittrex, Circle, Coinbase, Cumberland DRW, Genesis, Grayscale and Kraken have joined to create the Crypto Rating Council in order to make better decisions on which digital assets can and cannot be traded on their platforms.

The system will use a set of several dozen yes/no factual questions, which are derived directly from the case law and guidance of the U.S. Securities and Exchange Commission (SEC), as posted by Coinbase on its blog to announce the Council.

Apart from that, the release adds that the Crypto Rating Council is also working hard to focus its framework on objective, repeatable and fact-driven questions about different assets that can be answered consistently by technical experts over time.

The Crypto Rating Council explains that the result of this analysis is a score that makes it easier for the members to synthesize the analysis of many tokens and make their own independent business decisions about whether or not they should support a given asset.

The system will give Bitcoin and other similar tokens a score ranging from one to five. A score that is close to one would mean that the Council’s independent analysis suggests that the asset has few or no characteristics consistent with traditional securities.

The Council added that they expect some ratings to change over time and will be willing to accept and consider comments from asset issuers whenever they want to share additional information or clarifications that may affect an asset’s rating.

Bitcoin, along with its main rivals Litecoin (LTC) and Monero (XMR), received a rating of one, while ether (ETH), the second-largest cryptocurrency by value, received a rating of two.

Ripple’s XRP, one of the most controversial digital tokens, received a rating of four.

The group plans to add more members and assets in the following months. It may also develop similar tools for non-U.S. jurisdictions.

One of the reasons for the creation of the Crypto Rating Council was the need for a better understanding of the value of cryptocurrencies. These companies came together to rate the main crypto assets and decide on the best ones to trade on their platforms.

The questions that they include in their analysis are expected to be answered consistently over time. They also make use of asset issuers’ comments and clarifications to better assess the value of cryptocurrencies.

By Willmen Blanco

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