Crypto Market-Maker Altonomy Receives $7 Million in Funding from Polychain Capital
Altonomy, a New York-based cryptoasset trading, advisory, and asset management company, has completed a $7 million fundraising round from Polychain Capital, a leading hedge fund and venture capital firm.
Co-founded by Ricky Li, a former Manager of Research and Product at the CME Group, Altonomy has also received funding from 7 Blocks.
Additional Capital Will Allow Altonomy to Have More Inventory
Commenting on how the additional capital could help Altonomy’s business operations, Li said:
As a liquidity provider for altcoins, more funding will allow us to have more inventory, taking larger exposure and managing risk more effectively.
Li added that the extra funding would allow Altonomy’s trading desk to provide better services – as the platform would not need to “put constraints” on customers at settlement.
Funds May Be Used to “Source Liquidity for Customers”
As a long-time user of Altonomy’s trading services, it was an easy decision for us to invest in their business when the opportunity became available.
Carlson-Wee, a former Product Manager and Head of Risk at Coinbase, also mentioned that the additional funding would help “source liquidity for customers, regardless of token type, order size, market cap, or whether the asset trades on centralized or decentralized exchanges.”
According to Coindesk, Li had suggested to investors in January 2019 that they “liquidate enough ETH so they would have at least two years of runway.” However, Li is now anticipating that cryptocurrency prices may continue to recover – after enduring a long bear market that lasted throughout 2018.
Altonomy Introduces Cloud Service for Crypto Mining
In addition to providing crypto trading and asset management services, Altonomy introduced a new product last year, called the AltMiner. According to Li, AltMiner’s cloud service allows Altonomy’s bigger investors to mine various cryptocurrencies.
Altonomy’s management claims that the AltMiner has a “superior return profile” with the “newest generation of miners, low electricity costs and a secure hosting site.”
During an interview with CryptoGlobe in May 2019, Lee explained how Altonomy’s crypto trading services were developed and their potential benefits.
One of Altonomy’s main services, called electronic execution, allows mining firms, investment companies and crypto exchanges to “enter and exit positions as an outsourced execution desk.”
As a high-frequency market-maker, Altonomy also provides liquidity for various tokens to several crypto spot and derivatives trading platforms.
Following last week’s attack on bitcoin and Facebook’s libra, experts have voiced their opinion on whether US President Donald Trump could realistically impose a ban on cryptocurrency.
Not a Fan of Bitcoin
On July 11, President Donald Trump published a series of tweets attacking bitcoin and digital currencies, while championing the dollar.
President Trump’s comments come in the midst of growing concern over Facebook’s libra, as political regulators around the world scramble to enact policies to deal with the rise of digital currencies.
Members of the crypto community have questioned the impact of the US President taking an unfavorable stance towards bitcoin. Some crypto pundits predicted the tweets would be good for the price of BTC and ultimately increase exposure to cryptoassets. However, others worry that political influence may lead to a crackdown on cryptocurrency usage.
Scenarios for Banning Crypto
Alex Kruger, economist and market analyst, published a tweet thread examining the legality and possibility of President Trump banning bitcoin.
According to Kruger, It would be almost impossible for the US government to outlaw bitcoin as a technological instrument. Aside from the Herculean task of eradicating a decentralized, digital technology, bitcoin is code, which is protected under the first amendment.
However, that same protection is not extended to third-party operators, including cryptocurrency exchanges.
Kruger quoted Abra CEO and Founder BIll Barhydt, who explained in a Forbes article how the government could target fiat onramps to exchanges,
“You can’t prevent people from holding ones and zeroes on a device in their pocket. That ship has sailed. We already know that. The question is: What can they do at the edge of the network — the onramps and offramps, the places where they exert control over the banking system, the exchanges, [and the] stablecoins.”
The US government could prevent retail investors from having access to crypto-assets through exchanges and prevent banks from allowing transfer of funds. Users would still be able to buy crypto through alternative channels, but the current ease of investing would be severely hampered.
Unlikely, But Not Impossible
President Trump could also issue an executive order banning citizens from dealing in bitcoin, similar to the one he issued against the Petro. While there is a precedent for this route, Kruger claims the order could be easily overturned by Congress,
Ultimately, Kruger believes that it is unlikley the President or Congress would move to ban bitcoin, and it would be difficult to enact fool-proof policy. However, it’s worth considering the political landscape as regulatory concerns mount over Facebook’s libra.
Just last week, a copy of a bill reportedly drafted by the House Financial Services Committee surfaced online, under the title “Keep Big Tech Out of Finance.” The bill would put an end to Facebook and other large platforms from issuing digital currencies without incurring a severe penalty.
The same could be extended to bitcoin in the event the government finds crypto-assets no longer tolerable for the general public.
Facebook has been grilled today at a Senate Banking Committee hearing over its cryptocurrency project Libra. As part of the hearing, a representative for the social media giant claims the firm has been in contact with a Swiss agency to oversea data protection and user privacy.
However, it has emerged that the firm has not been in contact with the Federal Data Protection and Information Commissioner (FDPIC) at all.
Senate Hearing Casts Doubt on Facebook’s Cryptocurrency Efforts
The head of Facebook’s cryptocurrency project, Libra, stated during today’s US Senate Committee hearing that the firm had secured a partnership with Swiss authorities to help deal with issues relating to data protection and privacy:
“For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner (FDPIC) will be the Libra Association’s privacy regulator.”
However, according to a report in CNBC, the FDPIC has had no contact whatsoever with the social media company. The publication reportedly contacted the agency for comment on their work with Libra. Hugo Wyler, the FDPIC’s head of communication, responded:
“We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra.”
He went on to state that the agency is expecting contact from Facebook soon with the “concrete information” necessary for the agency to provide legal advice and supervision. Wyler added that the FDPIC was following the ongoing public debate into the social media company’s financial ambitions.
CNBC reports that, when contacted, a Facebook spokesperson said the company was yet to contact the Swiss agency. The publication also took the liberty of contacting the other Swiss agency named by Marcus earlier today. The Swiss Financial Markets Supervisory Authority (FINMA) confirmed that the company was indeed in contact with them with regards its cryptocurrency project.
Facebook’s Libra has dragged issues surrounding Bitcoin and other crypto assets right to the front of policymakers’ discourse since it was detailed in June. Last week, President Donald Trump expressed his distaste for the the cryptocurrency industry via Twitter and also warned Facebook that it would need to seek out relevant banking licences if it wanted to offer the kind of services it detailed last month.
A common critique that has reemerged since the likes of Trump and US Treasury Secretary Steven Mnuchin recently started commenting on cryptocurrencies is that all they do is enable crimes such as money laundering and drug dealing. However, some more astute lawmakers finally seem to realise that the technology could represent a threat to US global hegemony.
Facebook currently plans to launch Libra in 2020. However, given the amount of regulatory backlash Facebook has been faced with since it was first detailed, this date seems overly optimistic now.
Number of IBM Blockchain Patents Surge 300% In One Year
The number of blockchain patents that IBM owns has surged by as much as 300% in a little less than a year. With other major corporations getting seriously involved in the industry, this goes on to show that the interest in the field is steadily increasing.
IBM Dominates Blockchain Patent Ownership
Multinational information technology company International Business Machines (IBM), is leading the blockchain patent ownership across the US, data shows.
Apparently, the company owns around 108 blockchain-related patents, which marks an increase of more than 300% compared to last year. Other recognizable names include Bank of America with 53 patents, MasterCard with 43 patents, Intel with 35 patents, and so forth.
The multinational computing giant recently added to its stack a new application on March 5th. According to the documents published with the United States Patent and Trademark Office, IBM now aims to target network security using blockchain-based technology.
Per the application:
Low security may allow open access to the event logs while high security may significantly restrict access to the event logs. Protecting the monitored system from hackers gaining access to alter the event logs may require a new type of security configuration.
IBM’s Foray Into Blockchain Technology
To say that IBM is stepping into the field of blockchain-based technology is an understatement. The company has been spending substantial resources for quite some time now.
Last August, Bitcoinist reported that the company is spending an estimated $160M on blockchain projects every year. In 2018, IBM was chosen by the Government of Australia as a central technology partner for the upcoming 5 years. The deal was worth $740 million and it covers technology services which include IBM’s blockchain technologies and automation solutions.
In March this year, the company announced the launch of its Blockchain World Wire in a large selection of different markets.
IBM Blockchain World Wire represents a real-time global payments network designated for regulated financial institutions. It launched in 72 countries and it includes 44 banking endpoints and 47 currencies.
It’s Not Just IBM
As outlined above, MasterCard is also high up the race for securing blockchain-oriented patents.
One of the more interesting applications that it had filed is for increasing the speed of cryptocurrency transactions based on the growing demand for them.
But it’s not just financial and technology companies that seek protection over intellectual property rights associated with the blockchain industry.
Earlier in April, Nike Inc., one of the world’s leading and most popular shoe manufacturers filed a trademark and service application which seeks protection over the “Cryptokicks” brand. Given that the document’s basis for filing falls within section 1B, this means that it’s based on the company’s bona fide intention to use the trademark with commercial applications.
What do you think of the growing demand for blockchain-oriented patents? Don’t hesitate to let us know in the comments below!
Global Crypto War Is Heating up – Iran Next in Line With Its Own Gold-Backed Coin
Control of the U.S. dollar and the global financial system that depends on it gives the American government an incredibly powerful tool in shaping international affairs. As such, it is not surprising that its geopolitical rivals around the world will try to exploit the invention of cryptocurrency to take the USD down a peg. The latest example comes from Iran that now wants to create a digital token backed by gold.
On Saturday, July 13, Tehran-headquartered Mehr News Agency reported that the country’s first cryptocurrency issued under permission of the Central Bank of Iran (CBI) is set to be unveiled. This was according to an announcement by an official from the Iran Chamber of Commerce, Industries, Mines and Agriculture, a non-profit institution established to facilitate economic growth and development in the country.
The official, Shahab Javanmardi, said that the indigenous digital coin will be mined by a consortium of private Iranian IT firms in accordance with the agreement of the CBI and also called on the government to issue regulations for the country’s crypto mining sector. He claimed that “the Iranian cryptocurrency is backed by gold but its function is similar to foreign rivals.” Furthermore, he revealed that “the domestically encrypted money is to ease optimal use of Iranian banks’ frozen resources.”
Iran has reportedly been preparing to launch its own cryptocurrency for a long while now. Last July state-controlled media also claimed that a large number of homegrown Iranian tech companies were developing such a project in cooperation with the CBI. At the same time, the Iranian government has also made it harder on its own citizens to mine and trade cryptocurrency, with limited success.
Tools for Bypassing American Sanctions
Cryptocurrencies sanctioned by the government or even directly issued by central banks are not a new concept. Various countries around the world have floated the idea or claimed to have tested it in some capacity. Sweden, for example, is known to be probing the creation of an e-krona, its version of central bank digital currency (CBDC), with the help of private blockchain development companies. However, while the Scandinavian country is considering the move due to its ability to support a transition to a cashless society and other economic factors the Iranian goal for its own crypto is very different.
By imposing economic sanctions on other nations the U.S. can deter them from taking actions it disapproves of or even brings an enemy country to its knees without firing a shot. Iran has been on the receiving end of various American sanctions for decades now and the development of local cryptocurrency needs to be seen in this context. Simply put, the main purpose of any Iranian digital asset will be to bypass the established banking and financial system in order to evade economic sanctions.
The prime example of a cryptocurrency created specifically for bypassing financial sanctions is the Venezuelan petro. Like the purported Iranian token, it is also a resource-backed digital asset, just with mainly oil instead of gold. When president Nicolás Maduro introduced the petro to the public on TV back in December 2017, he stated that it would the country to “advance in issues of monetary sovereignty”, and make “new forms of international financing” available to Venezuela.
In reality, these promises have failed to materialize so far and many consider the petro nothing more than a scam run by a corrupt government. It was of course also not helped by the U.S., which used all its powers to target the oil-backed coin. American citizens were forbidden from investing in it, and earlier this year the Treasury Department imposed sanctions on a Russian bank which was the primary international institution financing the petro’s launch.
Washington Must Lead International Crypto Race
All of these new crypto developments are not taken lightly in the U.S. which knows the power it may lose if they actually come to pass. Just a few days ago the Foundation for Defense of Democracies (FDD), a right-wing think tank based in Washington, DC, has published a report warning American policymakers about this threat.
The FDD paper details that Russia, Iran, and Venezuela have initiated experiments that their leaders admit are tools to offset U.S. financial coercive power. It claims that the petro serves as a case study for other regimes to learn what not to do and that Russia and Iran are strong allies in a plan to develop a digital currency that could be used for trade outside the SWIFT financial messaging system.
The report also focuses on America’s main trade war rival, China. It explains that the country is wary of the ever-present threat of sanctions against its officials. While China is less threatened by sanctions than other adversaries at the moment, the FDD notes that displacing American influence in the global financial system is a Chinese national priority. It warns that Chinese engagement may be the biggest variable in sanctions resistance efforts. “China’s buy-in, if it involved moving its trade onto a blockchain platform outside the conventional system, would be a game-changer.”
The think tank finds that technology has created a potential pathway to alternative financial value transfer systems outside of U.S. control. “Washington, therefore, must understand the benefits and threats posed by new financial technologies, maintain the integrity of global finance, and cultivate the expertise and influence to lead in what is becoming an international crypto race.”
This may help explain the Trump Administration’s recent interest in cryptocurrency.
What do you think about Iran issuing a crypto backed by gold? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.