A ray of glimmering hope for all you altcoin-investors out there: massive crypto exchange Coinbase is reportedly exploring listing at least “90 percent” of regulation-compliant digital assets on its Coinbase Pro platform. Coins Coinbase is mulling include sovereign-identity coin Civic, blockchain real estate coin Decentraland, smart contracts coin District0x, and sidechain coin Loom Network.
Many of these coins will only be listed “for customers to buy and sell,” and won’t be transferable to a digital wallet, the company said in a press release, meaning you won’t be able to take your DeepOnions on a yuletide shopping spree just yet. Neither can Coinbase “commit to when or whether these assets will become available.” So there’s a vote of confidence.
The SEC civil penalties party wears on
First the U.S. Securities and Exchange Commission came for the decentralised exchanges, and we wrote a 600 word news feature. Then it came for the ICOs, and we published an in-depth interview with an aggrieved CEO. Then it ordered crypto hedge fund manager CoinAlpha Advisors LLC to pay a $50,000 fine following an alleged sale of unregistered securities, and we wrote a snarky newsletter editorial (below).
CoinAlpha raised $600,000 for its digital assets hedge fund in October 2017. Though it made a gallant effort at compliance, requesting exemption from securities laws, the request fell flat and the sale was deemed to be in breach of said laws. Neither, according to the SEC’s order, did the fund run sufficient know-your-customer checks, letting some non-accredited investors—those not eligible for securities—slip through the net.
It’s a weird one, because on both charges CoinAlpha seems to have at least tried to not violate the law. Indeed, as well as filing for exemption, the fund had allegedly drafted in a "third party" to check its investors’ accreditation statuses. It clearly wasn’t enough. The fund has now been “unwound” and CoinAlpha has reimbursed all 22 of its investors.
As with previous SEC victims EtherDelta, Paragon, and Airfox, CoinAlpha reportedly cooperated with the SEC—though, as usual, pled neither guilty nor innocent—and only faces civil penalties. To wit, it is now obliged to register its tokens as securities, yet otherwise has been granted permission to continue its business. What a reasonable onslaught of federal securities laws violations charges this has turned out to be.
Least stable stablecoin?
Here’s one for the stablecoin fans out there. NuBits, a decentralised, algorithmically self-stabilising stablecoin, traded at a low of $0.04 over the weekend. It’s supposed to be pegged to $1, not 4 cents. Whoops.
Cornell professor Emin Gun Sirer parsed through the NuBit white paper for the benefit of those on Twitter, and found NuBit’s fatal flaw.
The actual offending passage he is referring to here (highlights his own):
Yep, it’s easy to see why NuBits maybe didn’t work out. Per Sirer: