Goldman Sachs Contemplating Their Entrance Into the Cryptocurrency Industry

Goldman Sachs CEO David Solomon has disclosed in a French newspaper that the company is doing extensive research on tokenization.

In interview with French newspaper Les Echos on June 27th, CEO David Solomon claimed that the group may eventually take part in the crypto disruption of finance.

He further said the bank could absolutely follow JPMorgan Chase in launching a cryptocurrency. Hence the bank’s carrying out extensive research on asset tokenization as well as stablecoins.

When asked about potential involvement with Facebook’s Libra cryptocurrency project, the CEO declined to comment on the matter. However, he said he found the concept rather interesting. He further added that tokenization and stablecoins are the direction in which the payment system will go.

Notably, when asked whether Goldman Sachs will follow JPMorgan Chase in launching its own virtual currency, Solomon stated:

“Assume that all major financial institutions around the world are looking at the potential of tokenization, stablecoins and frictionless payments.”

Nonetheless, he believes it’s too early to say which platform might ultimately win out.

As for crypto regulation, Solomon predicted that regulations will change in response to virtual currencies given that regulators around the world are carefully observing payment flows. However, he doesn’t think new players in the crypto space will cause banks to close. He added:

“Admittedly, they will have to evolve, because the trades linked to the payment flows will become less profitable. But there are many other reasons why banks must remain innovative, otherwise they will disappear.”

Solomon has pointed out as well that tech giants such as Facebook would like to avoid the regulatory constraints that banks face, making it more likely that they would try to enter into partnerships rather than become financial institutions themselves.

Meanwhile, earlier this week reports suggested that JPMorgan Chase is set to begin piloting its own cryptocurrency by the end of this year.

Dubbed the JPM Coin, it will initially run on top of Quorum – the private version of Ethereum the bank developed in conjunction with EthLab – and could be used to settle a fraction of transactions between clients of its wholesale payments business in near real time. The bank revealed earlier that it is currently starting trials of the coin with clients.

Cryptocurrency Exchange Bitrue Falls Prey to Hack – Will Refund Users

Singapore-based cryptocurrency exchange Bitrue has suffered a major hack, losing around $4.2 million in user assets, mainly 9.3 million XRP and 2.5 million Cardano (ADA) from its hot wallet.

The exchange platform revealed the news in an official statement published on Twitter, stating that the hack had been identified at around 1 AM local time on June 27.

At the time of the breach, the stolen funds would have been worth over $4.5 million in XRP and $237,500 in ADA.

The exchange further explained that a single hacker initially exploited a vulnerability in the Risk Control team’s 2nd review process to access the personal funds of about 90 users,  and consequently used that to access the exchange’s hot wallet and steal the assets.

According to exchange, the hack had been quickly detected and the hacker’s activity suspended. In addition to that, Bitrue said it was working with the Huobi, Bittrex and ChangeNOW exchanges, which it credits with helping freeze the relevant transactions and associated accounts.

Following the hack, the platform issued a statement saying that user funds are insured and anyone who lost cryptocurrency would be refunded.

“First of all, please let us assure you that this situation is under control, 100% of lost funds will be returned to users, and we are reviewing our security measures and policies to ensure this does not happen again.”

In another tweet, Bitrue revealed it is currently conducting an emergency inspection of its systems and plans to return to live functionality again as soon as possible. It is expected that log-in and trading support re-launch sooner than withdrawals, which will remain offline for a longer period.

Early this year, Bitrue said it was also affected by a 51-percent attack on the Ethereum Classic cryptocurrency in which a hacker had tried to withdraw 13,000 ETC but claimed the attempted theft had been stopped by its system.

In order to remain transparent, the exchange has provided the public with a link which can trace the flow of funds on the XRP block explorer and has disclosed that it was working closely with the Singaporean authorities in identifying the perpetrator.

Prior to this attack, a reported total of seven crypto exchanges suffered large-scale hacking attacks within the first six months of this year, including the $40 million hack of top crypto exchange Binance.

LedgerX Receives Approval to Offer Derivatives Settled in Bitcoin

The U.S. Commodity Futures Trading Commission (CFTC) has approved U.S.-based regulated crypto derivatives and clearing platform LedgerX LLC’s application looking to establish itself as a designated contract market, according to an announcement on June 25th.

Following the approval from the CFTC, LedgerX can now operate as a designated contract market (DCM). The company will offer retail investors spot and physically-settled derivatives contracts that pay out in bitcoin (BTC).

Unlike the cash-settled bitcoin futures listed by the Chicago exchanges Cboe and CME; in physically settled futures the buyer receives the underlying commodity when a contract expires, rather than the fiat equivalent.

In addition to that, registration as a DCM will require that the platform maintain compliance with all applicable provisions of the Commodity Exchange Act (CEA) and CFTC regulations.

“LedgerX has requested that the CFTC amend its order of registration as a DCO, which limits LedgerX to clearing swaps, to allow it to clear futures listed on its DCM.”

Up until now, LedgerX has catered mainly to institutional investors with at least $10 million in assets who were willing to expose their portfolios to notoriously volatile digital assets.

LedgerX CEO Paul Chou has stated upon the approval that “the license will allow retail to directly invest, and they will represent the majority of the market. Retail investors are the ones that drove Bitcoin to this level.”

LedgerX initially applied for a DCM license that would allow it to launch the new futures product in April. Co-founder Juthica Chou said at the time:

“We’ve long had the goal to expand the range of customers we can serve beyond our institutional base — it’s the natural next step for us. Omni, by interfacing with our existing institutional liquidity pool, will offer retail customers a top tier experience from day one.”

The DCM application came on top of the platform’s already existing Swap Execution Facility (SEF) and Derivatives Clearing Organization (DCO) licenses.

Although no specific timeline has been provided for when LedgerX might start to offer futures, Juthica Chou disclosed that the platform was seeking to be the first provider of this product in the U.S. She further stated that she believes the company is better positioned as opposed to its competitors, and the company wishes to be there to serve customers of all sizes.

Meanwhile, LedgerX is the second company to receive approval to offer physically settled bitcoin futures. Similarly, other platforms such as Intercontinental Exchange’s Bakkt, Seed CX as well as ErisX have plans to enter this market.

Whilst Bakkt has previously announced that it would be testing its own physically-settled bitcoin futures contracts in July, an exact launch date has yet to be disclosed. Likewise, Seed CX and ErisX have not yet announced when they would launch their futures products.

Real Estate Deal via Blockchain Platform by TechCrunch Founder Michael Arrington

Propy, a blockchain based real estate platform, has completed the sale of a $1.6 million San Francisco property entirely on its platform. The property was owned by the venture capital fund CrunchFund, co-founded by Michael Arrington.

This follows news of Propy’s most recent sale of a $2.4 million duplex in San Francisco, which is the platform’s highest cost transaction to date.

Propy is a real-estate blockchain-based platform that allows buyers, sellers, their agents, and escrow agents to close a traditional real estate deal entirely online. All purchase offers, payments and deeds are uploaded to an immutable blockchain.

The real estate platform closed its first deal in 2017, and its first US transaction in Vermont 12 months ago. In addition to that, they have globally assisted in some form in over 60 real estate transfers, including the auctioning of a 17th century Italian mansion and UNESCO site on its blockchain platform.

Respectively, the median price of a house sold on the platform is around $1.5 million, however the value of the houses is steadily increasing. In addition to that, approximately 20 realtors have closed deals on the platform, although 3,000 have signed up.

Arrington, founder of TechCrunch, whose most recent venture is into blockchain capital investments and management with his $100m firm – Arrington XRP Capital – believes that the traditional real estate process is arduous, outdated and unnecessarily lengthy process, full of risks such as wire fraud, and all sellers and buyers struggle with overly complex interactions. Therefore, it is implied that the digitization of the transactions would facilitate the entire process and in the long run, blockchain would help significantly increase market transparency and solve principal-agent issues.

Prior to this, Arrington purchased a $60,000 apartment in Kiev through Propy, using Ethereum and smart contracts to settle the deal.

Propy CEO Natalia Karayaneva has stated that “when it comes to expensive property or other expensive goods, these normally already have digital presentation of ownership, that’s why blockchain is applicable to space.”

Karayaneva believes that in 2-3 years time the majority of real estate transactions will be entirely digitized. Currently, the company is working with county governments in order to provide technology that automatically and immediately reports the transfer of title deeds.

“We don’t want to work against them. Either we help them or will eliminate them,” she said.

Meanwhile, the venture capital arm of the U.S. National Association of Realtors (NAR) has recently invested an undisclosed amount in Propy through its REACH accelerator program. Previously, the platform raised $15.5 million via an initial coin offering (ICO) in 2017.