Category Archives: Cryptocurrency

Little-Known Cryptocurrency Hedge Fund Seeks $200 Million in SEC Filing – CoinDesk

A little-known, newly established hedge fund is seeking to raise $200m to invest in cryptocurrencies,according to regulatory filings.

The bid byCryptocurrency Fund LPto raise the moneywas revealed in a Form D submission to the US Securities and Exchange Commission (SEC), dated July 10. The funding effort has a minimum contributionthreshold of $100,000 fromaccredited investors, who have at least $5m net worth.

The filing represents the latest bid to attract large-scale investors to funds built around cryptocurrency markets. In recent weeks, several existing investors in the space have moved to build similar efforts, including a$100m bid to build an ICO-focused fund that has raised roughly a third of that amount to date.

Yetin the case of Cryptocurrency Fund LP, the big-ticket fundraise objective stands in contrast to the relatively scarce amount of availableinformation about the company.

Public records show that the filing was submitted by CEO Pavlo Savchuk, withthe venture itself being registeredin Las Vegas, Nevada, on June 26. An associated firm, Cryptocurrency Capital LLC, lists Timofii Melnyk and Oleksii Yeharmin asprincipals. Cryptocurrency Fund LP has also made few statements to the public about its investment plans.

The companypublished a short post aboutblockchain assetson Medium, dated the same day that the fund was registered in Nevada. Its website further states that a white paper related to the initiative can be downloaded, but in a phone interview, Savchuk told CoinDesk that it's not publicly available because of pending regulatory approval.

The CEOsubsequentlysaid that, besides filing with the SEC, the fundis also obligated to obtain a license from the National Futures Associates, a self-regulatory organization for the futures industry. Until then, they are not allowed legally to present offering policies to any potential investors, he added.

Savchuk, according to hisLinkedIn profile,worked as a foreign trade manager for Ukraine-based Gresa Group, which makes renewable energy production equipment, between 2013 and 2015. He further served as a securities trader for New York-based T3 Trading Group between March and May of this year, his profile states.

Mystery man image via Shutterstock

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Chamber Of Digital Commerce Implores FASB To Examine GAAP Standards For Cryptocurrency – ETHNews

Newscryptocurrencies and tokens

In early June, the Chamber of Digital Commerce submitted a letter to request that the Financial Accounting Standards Board (FASB) consider a project to address digital currencies. The FASB will conduct preliminary research and discuss digital currency at a public board meeting.

The Financial Accounting Standards Board (FASB) will perform pre-agenda research on accounting standards for digital currency, and plans to discuss the topic at a public board meeting, on a date to be announced.Based on the presented research, the Board will decide whether to add digital currency accounting to its technical agenda and create an official project. The open meeting will be available on the FASBs YouTube channel.

The FASB is the primary organization that establishes and improves generally accepted accounting principles (GAAP) in the United States. The private, non-profit organizations input on digital currency accounting standards could help shape cryptocurrencys nebulous regulatory environment.

In early June, the Chamber of Digital Commerce petitioned the FASB, appealing for a project to address the accounting for digital currencies. Perianne Boring, president of the Chamber of Digital Commerce, authored the letter.

There is currently no authoritative literature under accounting principles generally accepted in the United States (U.S. GAAP), which specifically addresses the accounting for digital assets, including digital currencies. Although use and acceptance of digital currencies as a method of payment are not yet widespread, the increasing volume of transactions using digital currencies indicates the current need to develop accounting guidance addressing the recognition, measurement, presentation, and disclosure of digital currencies and related transactions.

Boring notedfour potential methods for cryptocurrency accounting: Accounting Standards Codification (ASC) 305 Cash and Cash Equivalents, ASC 825 Financial Instruments, ASC 350 Intangibles Goodwill and Other, and ASC 330 Inventory. For a myriad of reasons, she explainedthat digital currency does not fit neatly into any one of these existing classifications. Instead, Boring suggestedthe creation of a new-subtopic altogether.

Digital currencies are unique and unlike any other asset currently addressed in U.S. GAAP. Developing a new sub-topic would allow the standard setter to provide guidance that best represents the economic characteristics of digital currencies.

Authoritative accounting guidance should promote greater investor confidence as well as cryptocurrency research & development. At present, the FASB is also assessing whether to overhaul accounting standards for intangible assets. Its possible that cryptocurrency could receive some attention under this consideration.

For now, the Chamber of Digital Commerce has highlighted a mission critical issue while continuing to raise awareness about blockchain technology.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles.

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China’s Central Bank Testing Prototype Cryptocurrency – Crowdfund Insider

Over a month ago, speculation abounded on whether China was developing its very own cryptocurrency to essentially digitize RMB. Now we know quite certainly that the Central Bank of China has developed and is currently testing a cryptocoin.

Although there have been no official statements from China, according to several reports online, the Peoples Bank of China has been slowly testing its cryptocurrency through mock transactions between commercial banks within the country. The plan would be to eventually launch the digital currency alongside Chinas primary currency RMB (aka yuan). Some of the key benefits of having a fiat cryptocurrency for China include: making it easier forpeople in more rural areas that dont have access to traditional banks toreceive financialservices which would in turn lower transaction costs; greater oversight over other digital currencies like Bitcoin and Ether; as well as the reduction of corruption, fraud, and counterfeiting.Yao Qian, the Deputy Director of the Science and Technology Department at Chinas central bank recently authored an extensive report detailing many of the ways China could benefit from digital currencies.

One of the fears highlighted by some experts is the fact that by having a central digital currency, commercial banks could be undermined and lose customers. Chinas goal, though, is to integrate the digital currency into the existing banking system by allowing commercial banks to operate cryptocoinwallets for the central coin. The mock transactions between commercial banks would be a good place to test the planned integration.

Cryptocurrencies have been making headlines recently; mostly on account of the extreme volatilityinvolving the price of coins like Bitcoin and Ether as well as the many Initial Coin Offerings (ICOs) that have raised ridiculousamounts of money within a few hours and even minutes. With much of the news focused on only one aspect of the cryptocoin market, its easy to lose sight of the technologys many other uses. The central idea behind cryptocurrencies is decentralization; allowing people anywhere in the world to transact instantly with zero transaction costs.

The fact that a country as large as China is developing and prototyping a cryptocoin, even though it will likely be controlled and restricted by the central government, speaks volumes to the technologyspotential. China is not the only one getting involved, however. Last month, Singapore made headlines as well when it announced it had successfully digitized its currency. Canada, England, and Russia are also experimenting with cryptocurrencies. Hopefully, more countries will follow suit.

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China's Central Bank Testing Prototype Cryptocurrency - Crowdfund Insider

Why a messaging start-up is making its own digital currency instead of going public – CNBC

Unless you've been under a rock, you've likely read a lot about ICOs (initial coin offerings) in the last few weeks. These are offerings by companies starting their own variant of blockchain-based digital currencies.

This year has not only seen the explosion in the price of bitcoin itself but also the second and third most popular cryptocurrencies Ethereum and Ripple.

More interesting, there's been a rise of many additional cryptocurrencies such as Steem, Dash, AntShares and Dogecoin. In fact, if you measure bitcoin's market capitalization as a percentage of the market capitalization for all cryptocurrencies, it's currently at 45.5 percent, down from 94 percent a year ago.

The value of all cryptocurrencies now is $88 billion, which is actually down from $114 billion a few days ago.

New ICOs have raised $500 million so far this year. One community that is showing great interest in becoming part of the trend of launching a new cryptocurrency is start-ups.

Last week, Thai fintech start-up Omise raised $25 million in an ICO to develop a decentralized payment platform. The company had already raised $20 million in traditional VC funding.

Rahul Sood's esports betting company Unikrn is launching its own cryptocurrency called UnikoinGold as the way to place esports bets on its platform. Unikrn has raised $10 million from Mark Cuban, Shari Redstone's Advancit Capital, Elisabeth Murdoch's Freelands Ventures and others.

However, social messaging company Kik has bigger plans for its upcoming ICO. In a recent talk given by Kik founder and CEO Ted Livingston, he explained that Kik saw its ICO of a currency called Kin as a potential alternative exit for them.

Like the Omise and Unikrn examples, Kik has also raised traditional venture capital money more than $120 million, including $50 million from Tencent most recently valuing the company at $1 billion. Kik's ICO will help bring it more money. Kik will sell 10 percent of its Kin currency (half to institutional investors and half to retail investors). Kik will keep 30 percent of Kin and 60 percent of Kin will be overseen by a nonprofit Kin Foundation aimed at making Kin a popular cryptocurrency. That foundation will give away 20 percent of its stock of Kin every year to developers and others who help build out the economy for Kin.

Kin will be used as the currency on the Kik social network for things like emojis, stickers, hosting and participating in group chats, building apps like bots, etc. However, the stated goal is for Kin to also be used as currency outside of the Kik app.

Even if stays confined within the Kik community, Kik has 15 million monthly active users. It's currently ranked in the 60s in terms of popularity on the App Store. That community alone will make the currency among the more popular cryptocurrencies.

But here is what's interesting, Livingston said that, if all goes well, this ICO could be Kik's liquidity event. Up until now, Kik has been thinking it had to translate its popular youthful community chat service into ad dollars in order to make a successful business similar to what Facebook has done. The problem is that Facebook and Google continue to suck up more and more of the ad dollars that are getting spent in the space.

Livingston said in the talk that the penny dropped for him when he saw Snap's S-1 IPO filing in February. Here was a young Facebook competitor seemingly doing everything right and yet still failing in its growth of its ad-based revenue. If Snap was failing, Livingston thought, what hope did Kik have of building a better ad mouse trap?

Yet, he thought, if Kik could develop a cryptocurrency that became a self-sustaining economy and Kik owned a big chunk of that supply limited currency the value of that stake in Kin could end up being more valuable than the potential exit valuation for Kik as an ad-based business in an IPO or through an acquisition. Luckily, one of Kik's earliest investors was Fred Wilson of Union Square Ventures, also a big investor in the cryptocurrency space. He agreed with Ted.

Can you name the fourth most popular cryptocurrency? It's Litecoin and has a market cap of $2.5 billion. If Kin got that kind of valuation and with an established community of 15 million monthly active users, it could be a currency worth more Kik's 30 percent stake in Kin would be worth $750 million, almost equal to the valuation of Kik's last round. If Kin became as valuable as Ripple the third most popular cryptocurrency today Kik's stake would be worth $2.5 billion.

Livingston pointed out that, in this kind of scenario, an exit via M&A or an IPO would be unnecessary for Kik. Its existing backers could simply convert their shares into Kin and liquidate them. Kik could stop trying to win advertiser dollars, if it wanted. It could simply focus on developing the community's use of Kin and helping Kin proliferate outside of the Kik ecosystem.

In this scenario, according to Livingston, "we just step back and watch it continue."

Will it work out this way? Possibly for some lucky start-ups but certainly not for all. The world likely doesn't need 1,000 different cryptocurrencies. The current gold rush mentality with ICOs will probably only get bigger in the months and years to come but will probably also meet the inevitable bust of the dot-com era.

But some cryptocurrencies will endure especially ones with strong use cases and/or communities supporting them. It's intriguing to imagine if some ad-dependent companies like Kik will opt to stop competing with Facebook and Google on a battlefield they can never succeed at and go for an alternative cryptocurrency path to value creation.

Kik is truly breaking new ground with its ICO. It will be intriguing to see if it causes other unicorns to follow its lead.

Commentary by Eric Jackson, sign up for Eric's monthly Tech & Media Email. You can follow Eric on Twitter @ericjackson .

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Disclosure: CNBC parent NBCUniversal is an investor in Snap

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Why a messaging start-up is making its own digital currency instead of going public - CNBC

Cryptocurrencies Are Getting Crushed – Bloomberg

The cryptocurrency Cassandras are starting to look right.

The sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20 percent from its peak of $3,000, reached June 12. Smaller rivals such as ethereum and ripple are getting hit even harder.

When when we look for signs of excess in the market, I look at bitcoin and to me that looks pretty scary, Richard Turnill, global chief investment strategist at BlackRock Inc., said during a midyear outlook presentation in New York on Tuesday.

Whether the virtual currencies were caught up in an asset-price bubble was debated as the market capitalization of the sector soared this year, raising skepticism from pundits including tech billionaire Mark Cuban. Backers such as Ripple Chief Executive Officer Brad Garlinghouse, whose money-transfer company is tied to the third-largest cryptocurrency by market value, said he isnt convinced.

"I would be surprised if there was a major crash," Garlinghouse said in an interview at Bloombergs New York headquarters Monday. "Could we see digital assets continue to double or triple or quadruple from where we are today? That wouldnt surprise me at all."

Digital coins are currently worth around $80 billion, down from a market capitalization of $100 billion on Friday and $115 billion on June 14, according to data from Coinmarketcap.com.

This weeks slump coincides withinitial hearings in the trial of the former head of Mt. Gox, the bankrupt Japan-based bitcoin exchange that imploded in 2014 after losing hundreds of millions of dollars worth of bitcoin. Chief Executive OfficerMark Karpeles pleaded not guilty in Tokyo on Tuesday to charges of embezzlement and inflating corporate financial accounts.

The turbulence may be far from over, too, as rival bitcoin enthusiasts are set to adopt two competing software updates at the end of July. This has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the market.

Read more on the dispute between bitcoin developers

Volatility is nothing new for cryptocurrency buyers, who have faced losses in recent months as exchanges grapple with outages and poor performance, struggling to keep up with the volume surge that has swept the market amid speculation about the potential for widespread adoption of virtual assets and blockchain technology.

"It is easy to look at the appreciation that we have seen this year and conclude that we are witnessing a bubble, said Martin Garcia, vice president of sales and trading at Genesis Global Trading. While I understand that the prices we are seeing now a more than a little frothy, I think that we are in the very early stages of the development of an entirely new asset class."

Read more from our TOPLive Q&A with Martin Garcia

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Cryptocurrencies Are Getting Crushed - Bloomberg

The Rise and Potential Fall of Cryptocurrency ICOs – The Merkle

With so many cryptocurrency ICOs taking place right now, something will need to change. It appears the entire cryptocurrency ICO scene is turning into a bit of a joke. Useless tokens are created which offer no real value to users, yet people are still throwing money at them. It is very unsettling.

There arepositive and negative sides to the entire cryptocurrency ICO sector. The positive element comes in the form of giving people a way to raise enough funds to create new products and services. Although not all of these concepts will succeed, using an ICO is the quickest and less cumbersome way of raising the necessary money right now. It creates a slew of new opportunities, which may also be its downfall.

To put this latter part into perspective, one could make the argument a lot of dumb money is poured into cryptocurrency ICOs. Most of these investors do not even take the time to read a projects website or white paper. All they want is instant gratification and see the value of their tokens go up by 1,000% in a week or less. Sustaining such a bubble will not be possible for much longer.

As a result, we now see a lot of prominent ICO tokens decline in value as soon as they hit an exchange. Not because people are selling at a profit, but mainly because these investorshave no patience. In fact, it has become almost cheaper to buy ICO tokens after a Bittrex listing compared to partaking in the ICO itself. Even with lucrative bonuses for early investors, there is no real reason to buy into ICOs right away. Once again, another sign of the cryptocurrency ICO bubble about to pop.

To make matters even worse, we now see people spending money on joke ICOs which offer no inherent value. Some people still believe even vaporware can be turned into something valuable, though this is rarely the case. In fact, anyone can create their own ERC20 tokens in an hour or less and post the smart contract address to the whole world. Regardless of what the tokens may be used for, there will always be people actively investing in these ICOs.

Not too long ago, we touched upon the concept of the Useless Ethereum Token. It was believed this joke ICO would not receive any money whatsoever. Things have turned out quite differently. The projects smart contract address has seen nearly 20,000 transactions since it was revealed to the public. People are actively sending money to it, although no one knows why exactly. Most of these transactions are for 0.01 ETH. However, thousands of those small transactions still add up over time.

The cryptocurrency ICO ecosystem is showing a lot of signs of becoming a bubble. Billions of dollars have been invested in projects with no actual demo or prototype. The code for these projects has never been vetted by third parties in manycases. Lots of people will lose money due to investing in ICOs. Doing your own research when it comes to cryptocurrency ICOs has never been more important than it is today.

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The Rise and Potential Fall of Cryptocurrency ICOs - The Merkle

Secret millions for cryptocurrency trader – SFGate

Photo: KAREN BLEIER, AFP / Getty Images

Secret millions for cryptocurrency trader

An unknown cryptocurrency trader turned $55 million of paper wealth into $283 million in just over a month.

The only clue about this person or persons, beyond a virtual wallet with an ID code, surfaced on a June 11 Instagram posting, in Indonesian, in which someone boasted about the 413 percent profit accumulated this year from ether, the digital money of the Ethereum blockchain.

I get many private messages asking how much ether I have, the post read, alongside photos that purported to be the hardware powering a mining operation, but looked lifted from another website. One of the cool things about Ethereum is that all wallets around the world are transparent and open for everyone to see. And this is my wallets savings.

Hidden identities are a popular feature of the twilight world of virtual money. Now that the total value of cryptocurrency, such as bitcoin and ether, soared June 6 to more than $100 billion, approaching the market value of McDonalds Corp., concerned regulators say it might be time to link wallet IDs with actual humans.

Secrecy persists from the days when Ross Ulbricht, going by the name Dread Pirate Roberts, used bitcoin to launder money and traffic in narcotics, activities for which he started serving a life term at the Metropolitan Correctional Center in New York.

Thats not to say that the person in Indonesia or any other entities are doing anything illegal. But opacity may be worsening jagged price movements. The value of ether, for example, rose from about $8 a unit at the start of the year to crest at $400 in June before settling around $250 now. A lack of transparency could also be stifling the mainstreaming of online money, according to draft legislation issued by the European Parliament in March.

The credibility of virtual currencies will not rise if they are used for criminal purposes, the draft said. In this context, anonymity will become more a hindrance than an asset for virtual currencies and their potential future popularity.

Pseudonymity has always been a big part of the markets allure. Upending traditional ways of doing business was the lodestar for Ethereums inventor, 23-year-old Vitalik Buterin. He released his software in 2015, not long after dropping out of Canadas University of Waterloo.

One of its more important features is that you dont have identities tied to this, said Spencer Bogart, head of research at venture firm Blockchain Capital. This financial privacy is an important characteristic.

Ether, the second-most-popular cryptocurrency after bitcoin, is used to pay for applications or programs that run on the Ethereum blockchain, a secured list of transactions that can be shared. That allows for the use of smart contracts, or pieces of computer code that make the terms of such agreements operate automatically. The blockchain has the potential to reshape business and finance by enabling immediate settlements of activities such as bank transfers and securities trades.

Tom Metcalf is a Bloomberg writer. Email: tmetcalf7@bloomberg.net

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Secret millions for cryptocurrency trader - SFGate

Is Solar-Powered Cryptocurrency Mining the Next Big Thing? – Investopedia

Cryptocurrency mining is a difficult and costly activity. Miners must pay to build rigs capable of vast amounts of processing power, and then the rigs themselves must be powered with large quantities of electricity. It's all a careful balance between how much the operation costs and how much profit it is able to generate. (See also: What Happens to Bitcoin After All 21 Million are Mined?)

With mining operations for Ethereum, one of the leading digital currencies on the market today, taking up the same share of electricity as that of a small country, miners have to be careful that they aren't spending more than they are making. Because of that, some mining operations have begun to look to solar-powered rigs, set up in the desert, in order to reduce mining costs and make the largest profit possible. (See also: Chinese Investment in Bitcoin Mining is Enormous.)

Mining operations with the tools and resources to be able to set up solar-powered rigs in the desert are finding that it is a good investment. Once you have paid for the solar panel system itself, the cost of mining is virtually free. Getting rid of a hefty electric bill which typically weighs down mining operations leaves more room for profit.

The Merkle recently documented a mining operation focused on Bitcoin in this manner. The setup has been running successfully for almost a year and currently uses 25 separate computing rigs. The process has been so profitable, in fact, that the miner running the operation plans to increase the number of computers to 1,000 this fall.

In the case of this particular desert miner, the individual mining rigs cost about $8,000. This cost has included all solar panels, power controls, batteries, and the Antminer S9 ASIC processor. When fully operational, each miner brings in a profit of about $18 per day.

Of course, a cheap mining operation is only part of the equation. In order for miners to make a tidy profit, the price of the cryptocurrencies they are generating must remain high.

In the case of the mining operation in question, Merkle suggests that Bitcoin prices must stay above $2,000 in order for the operation to be profitable. Considering that the price of most cryptocurrencies is highly volatile, and that drops of 205 or more have occurred in many individual days, this keeps a certain element of risk present in any mining operation.

It seems likely that more and more miners will turn to areas in which renewable energy is easily accessed. Iceland has already become a popular destination for Bitcoin miners thanks to its fast, virtually limitless internet. Miners looking to move to the desert should be cautious for other reasons, though: mining in the heat can cause rigs to break down more easily.

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Is Solar-Powered Cryptocurrency Mining the Next Big Thing? - Investopedia

Cryptocurrency ATB Coin Offers Investors a Crypto-Lottery for the $20.000 Grand Prize. Only 2 Days Left! – CryptoCoinsNews

This is a sponsored story. CCN does not endorse, nor is responsible for any material included below and isnt responsible for any damages or losses connected with any products or services mentioned in the material below. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned below.

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Being the one cryptocurrency combining the newest technologies, ATB Coin has all chances to overcome well-known inefficiencies within government central banks and other cryptocurrencies. Join ATB Coin, invest now in cryptocurrency of the future!

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Cryptocurrency ATB Coin Offers Investors a Crypto-Lottery for the $20.000 Grand Prize. Only 2 Days Left! - CryptoCoinsNews

National Science Foundation Awards $450k for Cryptocurrency Incentive Study – CoinDesk

A Princeton University researcher has receivedmore than $400,000 in federal funding to study mechanism incentivesand their applications to cryptocurrencies like bitcoin.

The study project, "Duality-based tools for simple vs. optimal mechanism design and applications to cryptocurrency", is being led by Seth Weinberg, an assistant professor of computer science at Princeton. The grant, worth $450,000, was awarded on 28th June by the National Science Foundation. The project is set to begin in September and will last until August 31, 2020, according to the NSF.

As theorganization's website explains:

"A secondary focus of this project is to apply these theoretical foundations to resolve cryptocurrency incentive issues arising within Bitcoin, an emerging cryptocurrency. While bitcoin has remained largely immune to traditional security breaches, numerous incentive issues have been discovered which could undermine its future security if not properly addressed."

Though cryptocurrencies constitute only part of the research study its primary focus is the design of algorithmic mechanisms and the theoretical incentives at play its the latest instance of a projectthat involves the tech receiving federal backing.

In mid-2015, the NSF awarded $3m to theInitiative for Cryptocurrency and Contracts (IC3), a research effort involving academics from Cornell, the University of Maryland and the University of California Berkeley. The NSF has also moved to back cybersecurity-related research that involves blockchain.

Image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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National Science Foundation Awards $450k for Cryptocurrency Incentive Study - CoinDesk