The state of South Carolina slapped a cease-and-desist order to a blockchain startup due to an alleged statute violation. The company is called ShipChain and is involved in freight product tracking using ethereum-based blockchain tech. It’s also a member of the Blockchain in Transport Alliance, which counts JD.com, FedEx, and other major companies in the shipping industry among its echelon.
To be specific, the order highlights that ShipChain continuously proffered investment opportunities to South Carolina residents via digital token despite the startup being unregistered to conduct such business. If the order passes, it will mandate ShipChain to cease “participating in any aspect of the securities industry in or from the State of South Carolina.”
The fledgling shipping business has 30 days to request a hearing on the case. When granted audience, the startup can dispute that the tokens offered do not qualify as an unregistered securities offering. The company writes on its website that customers can pay via tokens to book freights for shipping products. The tokens are the only form of payment that the platform acknowledge.
In Texas, a Bitcoin investment startup has also been hit with a cease-and-desist order earlier this month due to the company conducting business without being registered to the proper agency. The order outlined that the startup lured investors with blinding numbers that return on their investments is 100 percent guarantee in just 21 days with no risk whatsoever. This type of businesses are classic scams that are taking advantage of the growing popularity of blockchain and cryptocurrency.
The article, which many readers would assume was an earned media story due to its lack of disclosures, praised Shipchain as one of a “handful of blockchain platforms poised to do things even the Internet couldn’t accomplish.”
Here is the story of Longfin Corp., a fin-tech-ish company that was listed on Nasdaq on Wednesday and then announced on Friday that it was acquiring Ziddu.com, “a blockchain-empowered global micro-lending solutions provider,” causing its stock to go up by more than 1,200 percent and giving it a market capitalization of some $6.2 billion as of yesterday’s close. LongFin’s offering circular is a fun read — it describes its founder and chief executive officer, who also happens to be the controlling shareholder of Ziddu.com, as “a financial wizard” and “a true believer in disruptive technologies” who “believes that every piece of information is worth millions” — but even better is the press release describing the Ziddu acquisition:
Ziddu Coin is a smart contract that enables SME’s, processors, manufacturers, importers and exporters using cryptocurrencies across continents. Ziddu Coins are loosely pegged to Ethereum and Bitcoin. The importers/exporters convert offered Ziddu coins into Ethereum or Bitcoin and use the proceeds for their working capital needs. At the end of the contract, importers/exporters will realize their proceeds and pay back their funds through cryptocurrencies only. Depending upon the risk profile of the counterparty, the interest will vary from 12% to 48%.
A startup on the blockchain-based software platform Ethereum vanished on Sunday after raising $374,000 from investors.
Confido sold digital tokens to investors in an initial coin offering (ICO) on Ethereum from November 6 to 8. After reaching a peak market cap of $10.7 million on November 14, the company’s website and Twitter accounts suddenly disappeared on Sunday. An announcement by Confido founder and former eBay employee Joost van Doorn on the company’s subreddit stated that the company had run into a “tight spot” due to legal trouble with a contract. The announcement has since been removed from Reddit. Confido’s currency price plummeted to a fraction of a dollar by late Monday.
Confido’s price history. The cryptocurrency plummeted on Monday after all traces of the company unceremoniously vanished on Sunday. Source: CoinMarketCap
After Forbes uncovered misrepresentations in an investor deck by Canadian crypto venture capital firm NextBlock Global, the company has decided not to go forward with its public listing on the Toronto Stock Exchange and return money to existing investors.
The announcement was made publicly as well as in an email to “friends and investors” from CEO Alex Tapscott. The company was attempting a $100 million CAD ($78 million USD) raise after having already received $20 million CAD in a private offering.
“Today we announced that NextBlock Global will not be proceeding with a go-public transaction,” he wrote. “After careful consideration, we have concluded that the best course of action is to return to existing investors their capital in full and also to have them participate in any profits. As a young company, we have stumbled in our efforts to take our company public and we will work hard to rebuild the trust of those we have disappointed.”
Malicious code can go undetected, pushing up cloud prices
The processing power required for digital currency mining is being offloaded to unknowing website visitors
Multiple legitimate websites have been hacked to leech processing power from visitors’ computers, using them to mine cryptocurrencies.
Hackers have installed malicious code on sites belonging to schools, charities, file-sharing services and even CBS, according to scans.
Mining, in this sense, refers to the process of creating units of a digital currency like Bitcoin. The mining computers collect pending transactions (a block) and collate them into a coded puzzle. The first miner to find the solution announces it, and those transactions are validated and added to the blockchain. The miner then receives some currency as a reward.
Because only the first to solve the puzzle gets the prize, miners tend to use very powerful computers – or, in this case, a widely-distributed network.
“There’s a huge attraction of being able to use other people’s devices in a massively distributed fashion, because you then effectively take advantage of a huge amount of computing resources,” Rik Ferguson, VP of security research at Trend Micro, told the BBC.
A group of blockchain companies have decided that the uptick in scams on Slack is no longer tolerable.
Last week we reported on a surge in phishing scams related to token sales, and the blockchain industry was quick to take action. A group of companies led by Aragon have decided to withdraw from the popular messaging platform Slack – including Indorse, Cofound.it, OmiseGO, Streamr, Santiment, FOAM, Auctus, Golem, and Decentraland.
“We started the proposal for the migration to an open source messaging platform after realizing that the current situation was unsustainable. Slack was designed for the internal use of projects; Slack lacks the tools necessary to run public facing communities, including the fundamental features required for projects in the blockchain space. Migration to an open source platform will help us manage and govern our communities more efficiently and securely,” said Luis Cuende, co-founder of Aragon and Project Lead. “The situation has worsened considerably with recent Slack updates that remove unique usernames, allowing scammers to easily pose as project members and leaving users with no way of distinguishing fake accounts.”