Tag Archives: cryptocurrency

andrew katz seaquake

Andrew Katz Seaquake Crypto Firm CEO Still Scamming

Andrew Ross Katz (aka Ross Katz), founder and CEO of Seaquake.io, a self-labeled “crypto trading firm” and “B2B service for cryptocurrency exchanges”, along with his partner, the firm’s Chief Financial Officer, Matthew Krueger of San Francisco, were first profiled by this outlet in September 2019 for their roles in defrauding a Family Office out of several hundred thousand dollars.  And, while Katz remains at large–he continues to target a growing list of other unsuspecting victims.

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Seaquake.io CEO Andrew Katz, A “Self-styled-Entrepreneur”
Photo from “Pay-to-Promote-Yourself” Blog Techbullion
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Andrew Ross Katz-“Crypto Entrepreneur” Mug Shot Photo April 2021 Arrest Florida
Case # 13-2021-CF-005707-0001-XX

The gory details of that incident and the series of blatant misrepresentations made by those individuals became a matter of federal court record when a federal lawsuit was filed in Florida’s Middle District Court, merely several weeks after the ink was dry on the investment agreement with Katz, Krueger and the assortment of Seaquake connected shell companies under their control. 

The supporting evidence to allegations of investor fraud made by the plaintiffs included investor documents executed by Andrew Katz, a smorgasbord of other evidence underscoring blatant misrepresentations and phony assertions made by Katz and Krueger as to their personal and professional backgrounds, the investment itself, along with an extensive file of email and other digital communications sent by Andrew Katz, and with copy to Krueger.

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Seaquake.io principals Andrew Katz (l), “CFO” Matthew Krueger (c), and CIO Dylan Knight

According to the court documents, within days after the investors wired funds to a Seaquake entity, they learned of a series of misrepresentations made by Katz and Krueger, and demanded the return of their funds. In response, Katz and Krueger stated “they had no obligation to provide any information to the investors or the attorney for the investors, and would not respond further.” Days later, Katz and Krueger transferred the investor funds to other Seaquake bank accounts and to personal accounts in their names, and to a corporate account in which Katz’s father, Ken Katz of Arvada, Colorado is the registered agent. After transferring the funds, Katz and Krueger proceeded to dissolve the corporate registration of the entity to which the investors had sent their funds.

The preponderance of the incriminating evidence led the federal court judge to conclude the defendants had ‘touched the third rail’ of federal civil statutes pertaining to investor fraud and securities fraud. To mitigate further harm to investors, the judge issued an emergency temporary restraining order (TRO) that put a freeze on the variety of corporate bank accounts held by the web of Seaquake corporate entities controlled by Andrew Katz and Matthew Krueger, as well as the known personal bank and brokerage accounts held by Andrew Katz and Matthew Krueger. Days later, Katz and Krueger moved the funds again, first to cryptocurrency platform Coinbase, and then to cryptocurrency custody and trading platform, Binance.*

In view of the brazen nature of the fraud perpetrated by Mssrs. Katz and Krueger, this financial industry- published a series of follow-on articles profiling the activities of this ‘enterprise’, as well as Katz’s sordid prior criminal history, including recent Orders of Protection issued against Katz, a litany of criminal arrests across four different states over multiple years on charges of harassment, aggravated assault, weapons charges, breaking and entering, and stalking. The most recent known arrest occurred in April 2021 and took place in Miami, Florida, when Katz was charged with 11 Counts, including multiple charges for assaulting a police officer:

Andrew Katz Arrested Again-In Florida 04-01-2022
MIAMI POLICE ARREST REPORT
State of Florida Miami-Dade County
Case 13-2021-CF-005707-0001-XX*
*Above Link to Criminal Court Data Base; Enter Defendant Name and DOB (12-17-1985)
  • FALSE IMPRISONMENT ( Bond: 5000 )
  • TAMPER/ WIT/ VIC/ 3D DEGREE FELONY ( Bond: 7500 )
  • RESISTING OFFICER WITHOUT VIOLENCE TO HIS PERSON ( Bond: 1000 )
  • RESISTING OFFICER W/ VIOLENCE TO HIS PERSON/ FIREA 3 CNTS ( Bond: 7500 )
  • ASSAULT/ AGGRAVATED/ POL OFFICER/ FIREFIGHTER/ INT 3 CNTS ( Bond: 7500 )
  • DEPRIVE OFFICER OF MEANS OF PROTECTION/ COMMUNICTN 2 CNTS ( Bond: 5000 )

The Florida court records are available at https://www2.miami-dadeclerk.com/cjis/casesearch.aspx Case Number: F-21-005706, F-21-005706 and Case Number 13-2021-CF-005707-0001-XX

A February 2022 conviction for assault charges in New York stemmed from his March 2020 arrest in which Katz assaulted his now estranged wife. Law enforcement sources have indicated there is now a subsequent warrant for violating the second Order of Protection, and a fugitive warrant issued in New York for his arrest. Katz failed to appear for sentencing on the assault conviction, then fled the jurisdiction, and supposedly abandoned a $100,000 cash bond. The Manhattan District Attorney’s Office would not comment or explain why those criminal records are sealed.  The New York Criminal Court records are also sealed.

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Great Track Record-For Arrests-Andrew Katz, Seaquake.io CEO

This platform also pointed to a conclusion by another expert that Seaquake principals committed SBA Loan Fraud relating to a forgivable PPP loan granted to the company in the midst of the pandemic crisis. Public records show that an application was processed and a loan received by Wyoming-registered Seaquake entity “Seaquake OPS LLC” that listed employees of the company which included Katz’s then-estranged wife, who was listed as “Creative Director”. According to informed sources, “she was never an employee, and never performed any work for the company”. When asked why that individual’s profile appeared on LinkedIn as “Creative Director” for Seaquake shortly before the loan application was submitted, the source stated “She had never created a LinkedIn profile for herself, any less one that would include a fictitious employment history.”  The corporate registration for the Wyoming-domiciled Seaquake entity that received the SBA PPP loan was dissolved four months after Katz and Krueger received the funds from the SBA. 

Cryptocurrency Meltdown Calls for a Re-Visit

As fortunes implode and the crypto industry becomes un-hinged, the cause and effect of scammers, charlatans, and Ponzi-style schemes

The intent of our editorial team has been to protect other investors from being duped by Katz and Krueger, and from any others advancing similar frauds against unsuspecting investors. In our expose, we also spotlighted several “legitimate” crypto and digital asset investment firms that, according to the Seaquake.io corporate website, have purportedly invested in the Seaquake enterprise without bothering to perform basic due diligence that would typically include interrogation of court databases and criminal background searches. 

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The crypto “investment firms” displayed on the Seaquake website include Percival Capital, operated by former Disney “Mighty Ducks” star turned world-famous crypto enthusiast and investor and aspiring political candidate Brock Pierce, along with industry investment firm Blockchain Founders Fund (“BFF”). 

The Seaquake website had (until recently) displayed Pierce and BFF Managing Partner Aly Madhavji as Advisors to the firm.  Other investors displayed include “SOSV ChinaAccelerator”, a China-based VC and PE firm, Sydney; Australia-based alternative asset investment firm “Artesian Ventures”, a firm called “ScaleX”, and a little-known investment firm “Red Spark”.  The latter is operated by a Stephen Gill, who resides in New York and Puerto Rico. Gill is also displayed as an Advisor to Seaquake. These actors either purposefully chose not to perform a scintalla of due diligence for their own reasons, or simply overlook the red flags before they deployed their respective investors’ capital to the Seaquake enterprise.  

Since April of this year, four different “pay-to-promote yourself” blogs have published “interviews” of Katz, each of which profiled him as a “crypto entrepreneur”. Each of those obscure blog platforms  (“TechBullion.com”, “Laptopsforless.com”, “ScoopIt.com”, and “VentsMagazine.com”) display purported interviews by “journalists” (who each use pseudonyms,) and showcase background information for Andrew Katz that among other “virtues”, includes him (i) “having worked as a securities industry trader and traded “billions of dollars”; (ii) that he “earned a Masters in Finance from Harvard University”, and (iii) that “Seaquake has been generating profits within fifteen months of being created in 2018.” 

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“Interview with Andrew Katz” in “pay-to-promote your image” blog
Bottom right image: New York Criminal Court Arrest Record Nov 2020

All very entertaining claims; yet all are false.

  1. Financial Industry Background. Securities Industry regulator FINRA has NO record of Katz ever being employed in the industry. He claims to have worked for EFG Bank as a trader, yet a senior HR executive for EFG Bank stated “we have no record of his employment.”

UBS, the other financial industry firm that Katz claims to have worked for stated “we cannot confirm (or deny) having employed him.

2. “Academic Pedigree” “Harvard Masters in Finance”. Harvard University records indicate Katz did attend an online course for 1 year and earned a Master of Arts, (not Finance); comparable to degrees offered by the online University of Phoenix. As to other academic credentials, during his youth, Katz did briefly attend “World Wide Association of Specialty Programs”. This ‘school’ is “in the business of serving desperate parents of troubled youths and specializes in improving the students’ aberrant social behavior..”

3. “Business Success“. The business he claims to be “generating profits since shortly after we were formed..”?  

Katz disputes this himself in documents obtained from the civil lawsuit in Florida. Katz submitted an affidavit stating “investors were told the business is a start-up, does not generate revenue [no fewer profits] and is not expected to until first raising several million dollars in development capital.”

4. “Industry Entrepreneur.” Katz and Co also maintain personal and company Twitter accounts; each of which falls into the realm that Elon Musk has used to walk back his bid to acquire Twitter; the percentage of phony Twitter accounts is exponentially greater than what Twitter has stated in corporate filings.  In this case, Katz’s personal Twitter account, @AndrewKCrypto (https://twitter.com/AndrewKCrypto) indicates his having 5346 followers. A simple interrogation discovered that all but ten of those followers are legitimate Twitter accounts. The rest are “bots” and all of those accounts are less than several months old, none have more than 5-10 followers; a classic ‘tell’ for those familiar with Twitter Inc.s failure to remove phony accounts.  The same seems to be true for the Seaquake company Twitter account (@_Seaquake_); the account boasts nearly 5000 “followers”, yet 98% of which Elon Musk would say are “Phony Followers! All Bots!”

MarketsMuse has made repeated attempts to contact each of the investors displayed on the Seaquake website. Earlier this year, Ali Madhavji of Blockchain Founders Fund indicated that “BFF has no involvement with Seaquake”, yet his firm’s name remains prominent on the front page of the Seaquake.io website. 

A representative of Percival Capital replied to us with a statement that “They [Seaquake] were not authorized to display Mr. Pierce on their website, and we requested them to remove that reference.” The Percival Capital representative did not dispute that Pierce and his firm are in fact investors. “SOSV” Managing Partner William Bao Bean stated that his firm is in fact an investor, but would provide no other information. Stephen Gill, nor any other individuals who seem to be affiliated with Red Spark or individuals associated with “Scalex” replied to a request for comment. 

Law enforcement officials from Arvada, Colorado, New York, Los Angeles, and Miami are all familiar with Katz. They are aware that he uses aliases “Ross Katz” and “Stark Katz”, and of the assortment of harassment charges stemming from abusive messages and death threats delivered via email and burner phone [“purportedly’’] sent by Katz, each in retaliation against a variety of individuals, including those who have filed charges against him. Knowledgeable officials have suggested that ‘the tone and tenor of the messages, the history of arrest charges, the serial nature of his actions, and other corroborating records makes it clear that he [Katz] is a dangerous individual who continues to commit brazen acts.’  Added one expert, “It doesn’t take a trained criminal profiler to conclude that this individual will continue to pose a threat to others until such time as someone from the law enforcement community or a regulatory agency takes proactive measures.”

Begging the question as to how it is possible that Katz and his accomplice Matthew Krueger remain at large.  Three former government prosecutors who are familiar with the matter expressed being “baffled” by the fact that Katz has been repeatedly arrested, but not successfully prosecuted and jailed. As to Katz’s current whereabouts, he was last sighted in April of this year, while mingling with Seaquake “co-founder” Dylan Knight at a Miami crypto industry conference. One individual who is known to be an acquaintance of Katz, and who requested anonymity, suggested that “he might be in a medical clinic and being treated Monkeypox.”  

*The above-referenced Federal Civil Litigation was “dismissed without prejudice” on a technicality after the presiding judge ruled that the Florida Middle District Court had “no personal jurisdiction” over the defendants. Despite plaintiffs submitting evidence that Katz maintained a voter registration in Florida and that one of the Seaquake entities was incorporated in Florida, the judge recommended to plaintiffs that they re-file their action in a different court. One attorney who is only tangentially familiar with the case stated “The statute of limitations is still open for such an action to be advanced in the State of Colorado or the State of California.

digitalassets-cryptocurrency-trading-fraud.

Another Cryptocurrency Trading Scam-Former NYSE Floor Broker Charged

In a scheme that reads much like the MarketsMuse story published in October profiling so-called digital asset firm Seaquake.io, whose principals Andrew Katz and Matthew Krueger fraudently claimed to be operating a high-frequency trading system for cryptocurrencies, Michael W. Ackerman of Ohio, and a former NYSE floor broker, was charged yesterday by the US SEC, the CFTC and the US Attorney for the Southern District of New York for defrauding investors out of $33million in the course of operating cryptocurrency trading scam.

Ackerman, much like Seaquake’s Katz and Krueger, provided investors with phony documents that claimed his firm’s two entities, Q3 Trading Club and Q3 I LP, operated a HFT trading firm that developed a “proprietary trading algorithm” for trading cryptocurrencies. As it turns out, Ackerman, along with with two other defendants charged in the case, used their investors’ funds to purchase homes, cars, jewelry and other personal items. One can only guess that Katz and Krueger of Seaquake stole Ackerman’s playbook for how to defraud investors, as Ackerman apparently first advanced his scheme in 2017 and continued until 2019 according to the charges.

While Katz and Krueger have not yet been hit with criminal charges in their cryptocurrency trading scam, the Ackerman timeline would suggest that the Seaquake operators, who still maintain a company website and are purportedly still soliciting investors, can expect an early morning knock on their doors sometime soon.

The Ackerman Q3 saga has been reported by multiple outlets.

SEC’s complaint

Michael Ackerman allegedly raised $33 million in a fraudulent crypto trading scheme. Further, Ackerman and his two partners misled investors by claiming they had developed an extraordinarily profitable crypto trading algorithm. One of the partners was a doctor. (CrowdFundInsider)

According to the SEC, around 150 investors, including many in the medical fraternity, lost money in the alleged fraud. The perpetrators floated Q3 Trading Club and Q3 I LP – two entities that enabled the digital currency investment offering.

The SEC also alleged Ackerman used most of the money raised from the hapless investors to buy jewelry, cars, and to purchase and renovate a house.

Moreover, he lied to investors about the profitability of his trading, the status of the funds and their safety.

He “doctored” computer screenshots of trading accounts to give a false impression that they held as much as $310 million.

“Ackerman exploited popular interest in digital assets as a means to obtain millions of dollars for his personal use,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

cryptocurrency bank license

Crypto Cool Kids Getting The Joke-Aim at Bank Licensing

What’s Next? CryptoCurrency Bank License; Crypto Cool Kids New Goal: Stay Inside Regulatory Goal Posts

Coinbase Inc. and another cryptocurrency firm talked to U.S. regulators about the possibility of obtaining banking licenses, a move that would allow the startups to broaden the types of products they offer.

Coinbase, which operates the largest U.S. cryptocurrency exchange, met with officials at the U.S. Office of the Comptroller of the Currency in early 2018, according to a person familiar with the matter. Meanwhile, ivyKoin, a payments startup, in recent weeks sat down with officials at the Federal Deposit Insurance Corp., this person said. IvyKoin President Gary Fan confirmed the meeting.

The discussions included other topics, such as the firm’s business models, this person said. The companies might not seek a bank charter, which would significantly ramp up regulatory scrutiny. Whether they do so will depend on whether they decide the benefits of becoming a bank outweigh the costs.

A federal banking charter would let the firms swap a hodgepodge of state regulators for one primary federal one. The companies would also gain the option of directly offering customers federally insured bank accounts and other services, rather than partnering with existing banks.

A Coinbase spokeswoman declined to comment on the meeting. She said the firm is “committed to working closely with state and federal regulators to ensure we are properly licensed for the products and services we offer.” An OCC spokesman declined to comment.

IvyKoin pitches itself as a payments platform for government-issued currencies and cryptocurrencies that uses “know your customer” technology to detect money laundering. In the near term, ivyKoin is working with banks rather than trying to become one, but it asked regulators about a banking license to understand what might be necessary if it decided to apply, Mr. Fan said.

At the meeting, they “talked about our business model, what we hope to accomplish, next steps for us, key risks and how we can help banks manage that,” he said. “Our experience was really positive and [regulators] actually encouraged the discussion.”

Evan Fisher prospectus.com
Evan Fisher, Prospectus.com

“The past 18 months has seen an explosion of interest in ICOs, too many of which are unconstrained and outside the goal posts of what makes sense,” said Prospectus.com’s Evan Fisher, a former sell side investment banking veteran now consulting fintech firms on ICO best practices. “And, having the proper documentation in place for both investors and regulators is the most important part of any successful fund raise.”

Fisher is experienced in helping startups frame their value proposition properly and stresses founders need to ensure that when regulators do start to take a closer look at ICOs and cryptocurrencies, that all the necessary documentation is on file and easily obtainable.

Keep reading via WSJ

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

 

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SEC Subpoena Smackdown: ICO Issuers & Enablers Get Pinned

An SEC subpoena is not exactly what any Issuer (or stock promoter) puts on the top of their birthday wish list. And, for crypto cool kids who are either already a member of the ICO Issuers Club, or who have applied to become part of the dapper dapp crowd that is floating digital coin or digital token offerings, its time to make sure that you have set aside real cash (or crypto-currency) for defense counsel fluent in engaging with the SEC.

According to multiple news outlets, the top US securities regulator has launched a series of cluster bombs in the form of SEC subpoena aimed at ICO Issuers and respective enablers. Included in the SEC’s ‘outreach” are  ‘consultants, advisors, promoters, and other actors who have played a role in helping blocktech start-up companies raise what industry experts believe to be billions of dollars through initial coin offerings. Of that figure, forensic investigators believe at least $200 million raised by several dozen ICO companies during the past year  has “gone south.”

As noted by investor document preparation firm Prospectus.com, “According to multiple news outlets, in recent weeks the SEC has sent subpoenas to dozens of blocktech companies and individuals who are involved in cryptocurrency, including crypto crowd thought-leader Patrick Byrne, the founder of Overstock.com and his company’s cryptocurrency-focused subsidiary, tZero. When Overstock announced in early November they would be launching an ICO, the company’s shares skyrocketed from the the mid $20’s to nearly $90 per share in a manner of days. When it was revealed this week that Overstock (NASDAQ:OSTK) was one of multiple companies that have received SEC subpoenas, its share price plunged 20% in two days.

“ICO Issuers are compelled to understand the term “Caveat Venditor”, lest they be moved to the top of the SEC’s ICO Subpoenas list.”

The targets of the initial coin offering crackdown subpoenas include potential SEC enforcement actions against companies that have launched ICOs, the cryptocurrency equivalent of IPOs, as well as their lawyers and advisers. The subpoenas reportedly include requests for information on how ICO sales and pre-sales are structured, according to anonymous sources to WSJ. The SEC is also requesting the identities of the investors who bought digital tokens, The New York Times found. The SEC declined to comment.

caveat-venditor-ico-issuersPeter Berkman, a Florida-based securities attorney and US Federal Bar Association member who also advises investor document preparation firm Prospectus.com, stated “Nobody should be ‘shocked’ that regulators are stepping up their scrutiny of ICOs given that many have the characteristics straight out of “Boiler Room 4.0.” There’s a cadre of bad actors and so-called promoters who are preying on the naivete of start-up entrepreneurs as well as the greed profile of unsophisticated investors,” stated Berkman.

There are steps that ICO issuers can take to stay inside the regulatory goal posts, or at very least, under the radar given that SEC rules for ICOs remain in the ‘forming stage. Attorney Berkman advocates ICO Issuers should be compelled to understand the term “Caveat Venditor”, unless they want to be moved to the top of the SEC’s ICO Subpoenas list. Prospectus.com thought-leaders were arguably early to opine that among other ICO compliance guidelines to follow, accredited investor guidelines should be embraced by ICO issuers. The firm has provided multiple crypto cool kids and start-up entrepreneurs with a best practice approach to raising capital in the course of advancing  digital token and digital coin offerings.

To continue reading via blog post at Prospectus.com, click here

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

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BlockTech Bid Repeats via Bloomberg: Its About Blockchain, NOT Bitcoin

(MarketsMuse fintech and blocktech curators extend our thanks to Prospectus.com LLC for the following contribution)-Bloomberg Intelligence reporter Jonathan Tyce wins the Valentine’s Day Award for Very Good Framing courtesy of his latest piece “Blockchain is Coming Everywhere, Ready or Not” –one of a series of articles by Tyce that puts the blockchain value proposition into proper perspective. Without suggesting there is any IP underlying the thesis advanced by Tyce,  the opening sentence speaks volumes to those who are crypto challenged and have the misinformed view that blockchain = bitcoin=all kinds of bad things, including but not limited to ‘investment bubble”, Ponzi scheme, “pump and dump” ICOs where the Issuer is now hiding in the ‘dark web’ or sun-tanning in Belize, and lastly, ‘one of the things that lets people create crazy currency that isn’t even fungible’. Bid repeats: Its all about the blockchain, blockhead. Not bitcoin. Welcome to BlockTech.

Without intending to invite the BloombergLP copyright cops to castigate this blog for infringement violations, this blog has posted a series of original articles themed with the same title of this post. With that disclaimer, we’ve responsibly stayed within the goal posts and merely excerpted select portions of Tyce’s piece to advance smart thinking and give credit where due…

The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services. Significant disruption and new business opportunities are on the menu. Four of the most-critical benefits from distributed-ledger technology can be encapsulated within trust, transparency, cost and speed. Where will the disruption occur?

Blockchain is now a familiar term to many, though in most cases, its meaning will be inextricably linked to bitcoin after a 10-fold price surge in 2017 valued the cryptocurrency at more than $180 billion.

This is only one strand of the story for Europe and globally. The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services.

For starters, huge improvements in efficiency and transaction speeds, cost savings and enhanced security are on the menu, with significant disruption and new business opportunities likely to follow.

Distributed-ledger technology

Putting the semantics to bed early, blockchain is the name designated to a string or chain of transaction records (blocks), cryptographically signed with “hashes,” or digital signatures. Though undoubtedly the most high-profile application of blockchain, the bitcoin network is just one example of how cryptocurrencies and other transactions can use this technology.

Blockchain is effectively the means to create tamper-proof records of data and transactions — whether that is a money transfer, vote cast, medical record or change of property ownership. It is just one of a variety of decentralized database technologies that exist across multiple locations. These are known as distributed ledgers, and it is within these so-called DLT technologies that great opportunity exists.

To continue reading, please visit Prospectus.com LLC blog

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

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Bitcoin Barista of the Day Award: BnkToTheFuture

When it comes to corporate monikers, MarketsMuse fintech curators are big fans of catchy names and have made it a New Year’s resolution to compile and share a weekly list of firms that earn special recognition within the burgeoning world of blockchain, bitcoin and crypto handles. And, the winner for the first week of 2018 is”BnkToTheFuture.” No, its not a futuristic bank run by Doc Brown and no, Marty McFly is not the crypto credit lending officer. Its a current generation “cool kids only investment bank” that appears to be based in Hong Kong and staffed by the now ubiquitous-to-the-industry line-up of slick looking folks from UK, HK and of course, Eastern Europe. Arguably, the management team can be considered blockchain industry pioneers given this firm was formed way back in 2011.

Our thanks for guidance to this “Global FinTech, Bitcoin and blockchain online investment platform” goes to TradersMag Senior Editor John D’Antona  who pushed this release to us, which is chock full of  mentions of ‘crypto industry celebrities’ who recently joined the firm’s advisory board. Our compliance desk loved the “About BnkToTheFuture” section of their press release; it conforms beautifully with global financial industry best practice protocols: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform.”  Below is an excerpt of the news story:

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Simon Dixon, CEO BankToTheFuture

BnkToTheFuture today announced its token sale advisory board, with executives from Civic, Smith + Crown, Abra, BitAngels, and more signing on to help BnkToTheFuture launch a tokenized secondary market and due diligence platform for equity tokens. BnkToTheFuture’s online investment platform already brings vetted deals to qualifying investors and has invested in many of the most valuable companies in the sector, and will now incorporate its BFT cryptocurrency token to reward due diligence, deal flow analysis and investor relations on prospective and current deals.

“Investors in today’s burgeoning ICO landscape are seeking more professionalism, accountability, and compliance, while equity investors are seeking greater liquidity and trading,” said Civic CEO and BnkToTheFuture Identity/KYC Advisor Vinny Lingham. “BnkToTheFuture provides this gap in service, and I’m excited to see this project grow through its next phase.”   The company’s press release includes: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform including BitFinex, BitStamp, Kraken, ShapeShift and over 100 others.”

Joining BnkToTheFuture’s advisory board alongside Lingham are Jonathan Smith, Civic Co-Founder and CTO; Bill Barhydt, CEO of Abra; Diego Gutierrez Zaldivar, CEO and Co-Founder of Rootstock (RSK), Michael Terpin, CEO of Transform Group, Founder of CoinAgenda, and Co-Founder of BitAngels; Sunny Ray, President of Unocoin; David Johnston, Chairman of Factom and Co-Founder of BitAngels; Li Huo, Director at Huobi; Adam Vaziri, Blockchain lawyer and Director at Diacol; Brian Lio, CEO at Smith + Crown; Matt Chwierut, Researcher at Smith + Crown; Tony Simonovsky, CEO of InsightCryp.to; and David Drake, Chairman at LDJ Capital. BnkToTheFuture will continue to list new advisors here.

Whether your company is a fintech startup that is planning a private placement offering, a crypto concern with a custom token offering that is seeking to raise capital from qualified or accredited investors via a Initial Coin Offering (ICO), or if you are fast growth firm setting the stage for an initial public offering (IPO), a properly prepared offering prospectus or offering memorandum is required by your investors and industry regulators that govern securities offerings. Issuers seeking affordable investor document solutions rely on experts at Prospectus.com.

“While building BnkToTheFuture’s advisory board for our upcoming token launch, we sought leaders in the blockchain industry and those who have been consistently involved advocating for Bitcoin from very early on to help guide our efforts to further develop a transparent platform compliant with regulatory requirements,” said Simon Dixon, CEO of BnkToTheFuture. “We’re confident that our advisory team of experts will be instrumental in this process.”

Already popular as an online investment platform with 45,000 qualifying investors and over $200 million invested in rounds listed on its platform including companies like Kraken, BitFinex, BitStamp, ShapeShift and others, BnkToTheFuture will incorporate blockchain technology to allow for the trading of equity tokens and will issue its own token, BFT, to support deal flow analysis, due diligence and investor relations on the platform. BFT will be available in a public token sale in February 2018.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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Crypto Hedge Funds: Greenwich Crowd Buying Into Bitcoin Trading

Crypto Hedge Funds Get Their Greenwich On. If the MarketsMuse curators have avoided bidding on and publishing tick-by-tick coverage of “crypto mania” and bitcoin bubblelicious bytes akin to our media industry brethren, its only because we were arguably a pioneer when, starting in 2014, we first started framing the bitcoin and distributed ledger evolution under the label fintech. OK, one of our editors was conflicted–having purchased a few bitcoins back when paying $100 for the cryptocurrency caused laughter from peers with CT license plates on their Teslas. What a difference a day makes (ok, lets call it a few hundred days).

Every famous hedge fund wonk, from Steven Schonfeld to “Stevie” Cohen, and tens of dozens of others have either carved out a crypto trading strategy or are planning to do so. After all, volatility is every trader’s elixir and now that CME, CBOE, NASDAQ and as of Dec 20 announcement, NYSE ARCA have all blessed bitcoin, the opportunity to trade crypto derivatives on a regulated exchange is impossible to resist for the ‘hedgies.” Even Thomas Peterffy, the hard-charging Republican and multi-billionaire founder of Interactive Brokers, has walked back on his earlier position in which he said he would not allow IB customers to trade bitcoin products; now they can when they post the required margin. Hey, Thomas’s membership fees at Mar-a-Lago are going up and if bitcoin trading can create a new commission silo for the “Professional’s Gateway to the World’s Markets”, it makes sense to get in on the action. (Breaking News: NYSE ARCA TO LIST 2 BITCOIN ETFS).

As reported by WSJ’s Dec 20 column, “Big Hedge Funds Want In On Bitcoin”-— Already, there are around 20 funds, managing a total of roughly $2 billion in assets, that solely or predominantly trade cryptocurrencies, as tracked by an index compiled by Chicago-based data group HFR. The asset total highlights how it has largely been smaller funds that have traded bitcoin, though HFR President Kenneth Heinz says the number of funds could double in size in the first quarter of 2018.

OK $2b is “Peanutsville” when it comes to the trillion dollar  hedge fund industry which deploys capital across multiple asset classes and strategies.  But, according to the WSJ story, as well as off-line conversations with HF titans,  lots of folks who might have been allergic to peanuts are now looking to put on spreads with LEAP style maturity dates.

Lest one  forget, a whole bunch of smarty pants types in VC land dismissed two twins by the name of Winklevoss for claiming to have been the brains behind Facebook. Even their lawyers laughed at them when they insisted on taking then private shares in FB instead of $50m in cash when Mark Zuckerberg offered to settle the ‘misunderstanding.’ The shares soon became worth $300m and the twins then parlayed some of that into buying up 1% of the bitcoin market. The Winklevoss boys were laughed at again when they were the first to file for a bitcoin-based exchange-traded fund (ETF).  As their initial $10m stake in bitcoin blossomed into $1 Billion (on paper), those twins also created what is viewed as the most robust electronic exchange in the bitcoin ecosystem and is arguably worth as much as $1b also–just because someone would likely pay that much to take over the system.

Evan Fisher of Prospectus LLC, a global consulting firm that provides hedge fund set up guidance, business plan writing services, preparation of investor offering documents and more recently, whitepaper writing and ICO offering documents, sums it up by saying, “The calculus for hedge fund players allocating risk to this new asset class is pretty simple, if their peers are diving in, they need to.”

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Bitcoin Price Surge in Advance of SEC Decision to Approve Bitcoin ETF

Speculators betting on the SEC approving the very first Bitcoin ETF listing helped push the price of the digital currency aka crytopcurrency to a record high in advance of a March 11 SEC meeting in which regulators are scheduled to determine whether the Winklevoss Bitcoin Trust ETF [proposed ticker NASDAQ:COIN] is fit for every day investors to purchase and trade on public markets.  In over-the-counter trading on Friday, the price of a single bitcoin soared to as high as $1,200 per bitcoin i Europe’s Bitstamp exchange, before easing to about $1,190. Aggregated bitcoin exchange prices pegged the price at closer to $1174. That put the total value of all bitcoins in circulation — or the digital currency’s “market cap”, as it is known — at close to $20 billion, around the same size as Iceland’s economy.

bitcoin-etf-sec-decision-marketsmuseThe bitcoin ETF is the brainchild of Harvard-educated investors Cameron and Tyler Winklevoss, the twin brothers who for years claimed to be the genius behind the creation of Facebook (NYSE:FB). The pair first submitted their initial offering prospectus for a bitcoin exchange-traded fund nearly four years ago. They have since modified the offering documents several times in an effort to appease securities regulators. If approved, everyday investors will have simple access to the cryptocurrency on a major exchange for the very first time, which would no doubt legitimize Bitcoin’s existence and according to some, likely push its value much higher.

Two other prospective bitcoin ETF issuers have more recently filed offering prospectuses with the Securities & Exchange Commission. SolidX Partners sought SEC approval last July for its bitcoin ETF, SolidX Bitcoin Trust , which also would be listed on the NYSE. In January, Grayscale Investments filed to list its own Bitcoin Investment Trust on the NYSE.

According to ETF Daily News, “A ten-day rally for the cryptocurrency has narrowed its gap with the precious metal to the smallest on record. Each asset has been touted as an alternative to regular currencies, because of constraints on their supply and the capacity they offer to sidestep governments.”

bitcoin-price-vs-gold-price

First invented in 2008, the price of a bitcoin has performed better than any other currency in every year since 2010 apart from 2014, when it was the worst-performing currency, and has added almost a quarter to its value so far this year.

Per ETF Daily News, many hurdles remain for the ETF to pass regulators’ tests. “The SEC is worried about Bitcoin’s safety, security, volatility, and shareholder protection. “Traditional financial players have largely shunned the web-based “crytpocurrency,” viewing it as too volatile, complicated and risky, and doubting its inherent value. ” On the other hand, some analysts say regulatory approval of a bitcoin ETF would make the currency relatively attractive to the often more cautious institutional investor market.

But despite potentially high returns, low correlations with other currencies and assets, falling volatility and increasing liquidity, there is scant evidence so far that most major players are considering investing in the digital currency.

“Bitcoin is just not liquid enough for us to even think about,” said Paul Lambert, fund manager and head of currency investment at Insight, in London.

“We manage billions and billions of dollars we’d need to be able to go into that market and trade in hundreds of millions of dollars at a time, and my sense is it’s not like that.”

 

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What’s Next? A Blockchain-Powered ATS for Equities

“What’s Next? Well, for those familiar with Patrick Byrne, the controversial and innovative founder of Overstock.com, one of the first online retailers to embrace the use of bitcoins, it should not be a surprise that Overstock’s chief honcho would ‘get the joke’ and realize its all about the underlying technology that powers cryptocurrency applications, known as distributed ledger. While bitcoin currency continues to encounter challenges in terms of mass embracement, the real grease that makes the makes the wheels turn is under the hood. With that, Overstock subsidiary “T0” (T-zero) is taking a page from both the industry consortium formed by R3 and the Senahill-backed Symbiont –both of which target institutional capital markets usage–and aiming it’s own sights on retail investors by setting to launch an equities-centric Alternative Trading System aka ATS powered by their own blockchain formula.

A distributed ledger is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, and/or institutions.
A blockchain is a type of distributed ledger, comprised of unchangable, digitally recorded data in packages called blocks.
Rob Daly of MarketsMedia (not related to MarketsMuse) provides the scoop..

Online retailer Overstock.com expects trading to begin on its blockchain-based alternative trading system before the end of the year, according to company officials.

The ATS will be operated by Overstock.com subsidiary TO as part of the company’s Medici Project, and it will only handle trades in the company stock, at least at first. So while it’s not an immediate competitive threat to the existing field of 13 U.S. stock exchanges plus several dozen ATSs, the initiative will be closely watched as a gauge of the potential of distributed-ledger technology in capital markets.

The ATS will write completed trades to its blockchain instead of routing them to the National Securities Clearing Corp., a subsidiary of Depository Trust & Clearing Corp., for clearing.

Overstock.com plans to prime the liquidity on the ATS through a new issue of corporate shares to existing shareholders the day before trading commences on the new trading venue.

judd bagley blockchain ATS
Judd Bagley

T0 officials plan to formally announce its partnership with a broker-dealer on Sept. 12. “For those who want to trade on the ATS, they will have to create an account with the broker-dealer,” said Overstock’s man-in-charge Judd Bagley, who declined to name the brokerage firm.

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Investors will be able to select from multiple “very vanilla” order types, which are still in development, he added. T0 may use a so-called maker-taker rebate model to encourage liquidity, but officials have not made a final decision.

The new trading venue is a mix of internally developed technology and the technology T0 acquired with its purchase of order-routing firm SpeedRoute in October 2015. T0 built its matching engine internally as well as the necessary interfaces to the rest of the U.S. equity marketplace.

The company, in conjunction with Bay-area consultancy PeerNova, also developed a proprietary blockchain architecture for the ATS instead of using Bitcoin, Ethereum, or Ripple.

To continue reading the story from MarketsMedia, please click here

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Goldman Sachs Wants Patent To Settle Trades in Bitcoin Tool

(TradersMagazine) Trading settlement and clearing could go the way of bitcoin, as white glove bulge bracket brokerdealer Goldman Sachs and fintech aficiondo has filed a patent for technology to settle securities in the cyber cryptocurrency.

As first reported in Bitcoin Magazine on November 19, the United States Patent & Trademark Office (USPTO) published Goldman, Sachs & Co.’s patent application 20150332395 or “Cryptographic Currency For Securities Settlement.” The patent described “ […] methods for settling securities in financial markets using distributed, peer-to-peer, and cryptographic techniques ” using a cryptocurrency named SETLcoin.

The application lists Paul Walker and Phil J. Venables as the inventors of the technology.

Walker is the co-head of technology at Goldman and a member of the Board of Directors of the Depository Trust and Clearing Corporation (DTCC).  Venables is managing director and chief information security officer at Goldman Sachs.

The patent application addresses chain of custody of an asset, counterparty risk and settlement through a cryptocurrency called SETLcoin. According to the patent application viewed by Bitcoin Magazine, SETLcoin ownership can be used to prevent fraud, including float fraud such as kiting.

Goldman Sachs and IDG Capital Partners co-led a $50 million strategic investment round in Bitcoin company Circle in late April of this year. This was the first publicly announced cryptocurrency investment by Goldman. However, as reported by CB Insights, Goldman’s investment activity into fintech startups has been intensifying.

Bitcoins Become Trading Firms’ Focus

MarketsMuse blog update profiles how the increasing interest in bitcoins is leading some investors in opening bitcoin financial services firms. Many believe that this move can help reduce the volatility and increases favorability of bitcoins.  This update is courtesy of the Wall Street Journal’s article, “Big Investor Involvement Could Boost Bitcoin“, with an excerpt below.

Some of the U.S.’s biggest proprietary traders and investors are testing the waters for a bigger move into bitcoin, giving a potential boost to the fledgling virtual-currency industry.

While still cautious of becoming exposed to “cryptocurrencies,” some of the firms, which trade with their own money on the.ir own behalf, say they see potential for big profits in trading bitcoin as more investors enter the market and financial-services firms use the currency to streamline transactions.

Their involvement could help reduce volatility in the market for bitcoin, which has struggled to gain legitimacy in part because of concerns about wild swings in its price.

Among the companies at the forefront of this move is DRW Holdings LLC, a high-frequency trading firm in Chicago founded by former options-pit trader Donald Wilson in 1992. DRW is a founding investor in a new bitcoin financial-services firm called Digital Asset Holdings that launched last month. Cumberland Mining & Materials LLC, a DRW subsidiary, has “begun to experiment with cryptocurrency trading,” DRW said.

To continue reading the article on bitcoin firms from the Wall Street Journal, click here.