Blockchain Bites: Ripple’s MoneyGram Pump, OKEx’s Bitcoin Cash Plan, Bitcoin’s Birthday

Ripple has invested over $50 million in remittance firm MoneyGram over the course of the firms’ working relationship. Forbes published an investigation detailing the byzantine corporate structure Binance may have created to avoid U.S. regulations. Ether grew as a share of Genesis Capital’s total loan book. 

Top shelf

No offenses

Investors who say they lost around £100,000 ($130,000) in an alleged cryptocurrency Ponzi scheme will not see remuneration after bringing their claims to the police. According to an investigation by the Metro newspaper published Tuesday, a number of investors said they had invested in a cryptocurrency project called Lyfcoin on promises of hefty returns, but had not received their money back. West Midlands Police dropped the case, however, saying none of the evidence provided took the case “further forward” and, the Metro said, “no offenses had been committed.”

Funding remittance firm

MoneyGram has received over $52 million for providing “market development fees” for blockchain payments firm Ripple, since the firms struck a working relationship. In Q3 2020, Ripple invested over $9.3 million in the remittance firm, following a $15.1 million injection made the previous quarter, according to Moneygram’s latest financial report. MoneyGram has described the market development fees as compensation for providing liquidity to Ripple’s On-Demand Liquidity (ODL) network – its payments product using the XRP cryptocurrency to send money across borders.

Byzantine Binance

Binance Holdings Limited created a corporate plan for profiting from the U.S. market while avoiding the country’s regulatory scrutiny, Forbes reported Thursday, citing a 2018 document it obtained. The leaked presentation outlines a web of U.S.-compliant entities that would funnel revenue to Binance, which is currently unregulated to operate in the U.S. The Forbes article included a screenshot of a slide but not the entire deck. Binance CEO Changpeng “CZ” Zhao disputes the reporting, claiming the draft came from an affiliated third party. U.S. affiliate Binance.US operates under a corporate structure similar to the proposed network, according to Forbes. Binance.US CEO Catherine Cooley has long refused to discuss Binance.US’s ownership.

Huawei’s DC/EP hardwar

China’s digital yuan looks closer than ever to launch with the news that Huawei will be supporting the central bank digital currency (CBDC) on an upcoming range of phones. Announced on Huawei’s Weibo channel Friday, the Mate 40 line of devices will feature a built-in hardware wallet with “hardware-level security, controllable anonymous protection, and dual offline transactions,” the tech giant said. In recent weeks, a public trial in the city of Shenzhen saw 10 million digital yuan given away to residents in a kind of lottery. The Mate 40 was announced in October and will be the latest flagship from Huawei, along with the Pro and Pro Plus models, according to TechRadar.

Ether shares

Genesis Capital saw the share of bitcoin in its loan portfolio drop as the share of ether loans increased to 12.4% of its total loan book this quarter. According to the lender’s report, this was mainly due to liquidity mining on DeFi protocols such as Compound, Aave and Uniswap. DeFi interest rate arbitrage drove Genesis – which is wholly owned by CoinDesk parent company Digital Currency Group – clients to borrow ETH and stablecoins to “lever up liquidity mining strategies,” the company wrote. Total trading volume in the third quarter was $4.5 billion, down from $5.25 billion in the second quarter but up by 285% from the third quarter last year. 

Quick bites

“That most people still hate bitcoin isn’t a bad thing,” writes Dylan Grice of Calderwood Capital. The Economist gives an introduction to bitcoin by comparing it to a posh London club known primarily for turning away Mick Jagger at the door.

Citing high gas fees and slow blocktimes, Audius said it will migrate part of its system to Solana’s blockchain from an Ethereum sidechain. Staking and governance functionality will remain on Ethereum. (CoinDesk)

A margin change in FTX’s TRUMP future’s contract indicates traders are factoring in President Donald Trump’s diminishing chances of reelection come Nov. 3. (CoinDesk)

OKEx, still paralyzed by founder’s arrest, details plans for a bitcoin cash hard fork. (CoinDesk)

Market intel

Hashrate & fees

The average price of a transaction on the Bitcoin blockchain is now  0.00086764 BTC (~$11.66), the highest since June 2018. This represents a 573% increase over the past 12 days. The spike in fees comes amid a rally to yearly highs to $13,800, and as the networks number of unconfirmed transactions ticked up 1,800% reaching highs not seen since December 2018. “In other words, the mining power dedicated to approving transactions and mining blocks has gone down amid the price rally, boosting waiting times and network congestion,” CoinDesk’s Omkar Godbole reports. 

At stake

Happy birthday, Bitcoin

Tomorrow marks the 12th anniversary of Bitcoin’s white paper.

Published by pseudonymous developer Satoshi Nakamoto to a small cadre of cryptographers, the eight-page conceptual proof for a fully decentralized, peer-to-peer electronic cash system has since sparked a monetary revolution.

In the intervening years, Bitcoin has been called many things: a scam, a Ponzi scheme, dead on arrival, a joke, a tool for criminals, rat poisoned squared, a currency for geeks – and did we mention dead?

While pundits are wont to predict Bitcoin’s death, the simple ledger has remained and has even breathed new life into how societies think about money, financial access and the nebulous concept of “trust.”

Heads are turning. Yesterday, The Economist published an ode to Bitcoin saying, “Even people who are hostile to Bitcoin will concede that its technology is fiendishly clever. It is essentially a way of accounting for who has spent what. Instead of a central exchange to keep score, and to verify payments and receipts, it uses an electronic ledger that is distributed across the entire system of bitcoin users.”

Wishing Bitcoin a happy birthday, cybersecurity firm Halborn produced a video with a number of celebrities wishing it well. (It’s a bit bizarro, but well-meaning.)

In a cameo appearance, Wu-Tang Clan’s RZA said, “Ya know Bitcoin was created by the anonymous Satoshi Nakamoto doin his thang. I wanna say one thing about this – If you don’t know about it, you better know about it, because yo… at the end of the day scientists can create something, son, but the value on everything is what we put on it. The Bitcoin revolution has started.”

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