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Abacus Weekly Crypto Recap #14 | Crypto Under Fire As Tether Put In The Spotlight

The Abacus team is back at it again for their fourteenth weekly crypto recap. Their recurring column will bring you up to speed on the all the major crypto headlines you need to know about. 

The Abacus Crypto Recap is a weekly update focused on two polar yet symbiotic elements of cryptocurrency markets—adoption and regulation. Here’s all the major happenings for this past week in crypto.


Adoption And Free Enterprise 

As the world of crypto continues to mature, fraudulent or highly suspect entities like Tether are coming under increased scrutiny while giants like BlackRock ponder entering the market. Elsewhere, growing real world implementation of blockchain technologies is providing tangible use cases that may provide even more fuel for market speculation.


  • BlackRock Keeping Crypto Close: Goliath investment firm BlackRock, the largest entity of its kind in the world with roughly $5.7 Trillion in assets under management, has stated they’re keeping cryptocurrency under “close review…as an interesting development.” In an interview with Bloomberg, chief multi-asset strategist Isabelle Mateos Y Lago went on to say that while at present crypto wasn’t an “investable asset”, it was “clearly evolving very fast.” While BlackRock’s CEO Larry Frank called the cryptocurrency space an “index of money laundering” while speaking at the world economic forum last month, Mateos Y Lago contends that it’s quite notable that “…interest has persisted despite these repeated hacks…there is really something to it.”
  • Facebook Bans ICO Ads: After being accused as a source of mistrust during the 2016 U.S. presidential election, Facebook does not want to be caught in the middle of a scandal again. In a recent blog post, Facebook has announced they will not support ICO advertisements along with advertisements of other financial products. With an ever growing number of ICO scams coming to light, it makes sense that Facebook would take a step to protect its users from fraudulent activity. The exact post states, “there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
  • Coincheck Hack Leaves Crypto World Aghast: Japanese cryptocurrency exchange Coincheck is the latest victim of a massive hack that saw $534 MM worth of NEM stolen from users in the early hours of the morning on January 26th. The hackers reportedly gained access to a key which controlled a low security hot wallet that contained the funds, representing a glaring security flaw. Following the breach, the company halted all withdrawals. The NEM team responded by clearly stating a hard fork will not be coming in response to the hack, instead releasing NEM trackers which can accurately and automatically tag and trace the stolen funds. Essentially, any account that receives any of the stolen NEM will be flagged, making it very difficult for the hackers to convert the stolen NEM into other currencies of fiat because exchanges will be automatically alerted if the stolen funds enter their platforms. Japanese authorities including the nation’s Financial Services Agency have been informed of the hack. For their part, Coincheck has promised it will reimburse all users for the stolen funds using their own capital, earmarking the price at roughly the moment of the hack. Vulnerabilities like these call to attention the fact that a set of standards does not yet exist for exchanges to conform to, and for the moment highlight the importance of secure storage and best security practices.
  • Tether Scam May Be Coming To The Surface: Tether, which claims to back their tokens 1:1 with actual USD, remains a source of controversy as many in the crypto community have good reason to believe they either don’t back nearly as many tethers as they create, or they simply aren’t backing them at all. Indeed, the Tether team regularly releases massive batches of coins in the neighborhood of 100s of millions of dollars, without any transparency or clarity as to where the capital is coming from or which banking partners they use. To try and assuage concerns (or at least create some good PR), Tether had hired an auditing firm Friedman LLP to go over their books as part of public audit meant to appease worried investors. After many delays, it turns out that Friedman LLP has severed ties with Tether, with an official statement giving precious few details as per the specifics of why the relationship had come to an end. This latest blow calls to further attention the fact that Tether is quite likely one of the largest scams in blockchain, which if true could have horrifying consequences, being as how Tether is used a backbone of trading for many who believe it’s a stable place to park reserves and trade in and out of crypto. An audit of Tether should have been a very simple process of checking USD accounts and assuring that they correlated with the creation of new Tethers. The fact that this process was supposedly mired in what is likely fabricated complication, with the bogus statement from Friedman LLC stating, “Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame.” On top of this, it was reported that the CFTC subpoenaed Tether and cryptocurrency Bitfinex on December 6th. The news caused the price of Bitcoin to drop below $10,000.
  • Robinhood Stock Trading App To Launch Crypto Product: Beginning next month, Robinhood, a no-cost stock trading app, will allow users to trade BTC and ETH without transaction fees. The company is treating the no-cost trades as a promotion of sorts, hoping the news will bring a flood of new users onto its platform. According to Robinhood co-founder Vlad Tenev, “We’re planning to operate this business on break even basics and we don’t plan to profit from it for the foreseeable future. The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
  • Samsung Entering Bitcoin Mining Equipment Market: Korean electronics giant Samsung has entered the Bitcoin mining equipment space, with the company reportedly in the process of supplying BTC mining operation in China. This comes after reports of Samsung entering into an an agreement with Russian Bitcoin miner Baikal to supply equipment. While information remains scarce thus far, Samsung entering into this space is a good indicator of corporate acceptance, further bolstered by Samsung’s joining of the Ethereum alliance last may.
  • Cryptocurrency Comes To Brisbane Airport: Australia continues its crypto friendly stance with the recent announcement that the world’s first crypto friendly airport is coming in Brisbane. According to local media, the airport is working to ensure that the entire terminal is crypto friendly, with shops and restaurants accepting BTC, ETH, and Dash. According to Roel Hellemons, general manager of strategic planning and development, “Many people around the world have made money investing in cryptocurrencies and a lot of these people travel internationally, so it makes sense to offer a digital currency experience within our terminals.” The airport is using TravelbyBit as their payment system to facilitate transactions.
  • Weiss Ratings Lead To Backlash From Crypto Community: The Weiss ratings agency sparked headlines recently when they released their ratings of 74 different cryptocurrencies, granting none an A, and notably giving Bitcoin a C+. The company, which has been rating asset classes since 1971, has attracted the ire of many cryptocurrency evangelists who argue that the ratings system is questionable and lacking merit. The last such expression of angst involves South Korean investors launching a DDoS attack that shut down the agencies website, supposedly in response to Bitcoin investors being appalled by the C+ rating. If the recent activities of the active Bitcoin community on Reddit serves as any indicator, hardcore Bitcoin fans are feeling particularly defensive in light of many challenges the BTC network is facing. Martin D. Weiss, founder of the ratings agency, commented that, “All else being equal, as a cryptocurrency overcomes its individual challenges, it’s likely to be upgraded promptly.”
  • Canada Struggling To Meet Crypto Miner Demands: Canada’s Hydro Quebec energy company has been inundated with requests from miners looking to set up operations in the area in light of the low power costs. Even though the province has a power surplus, the utility is rethinking its strategy after 70 miners applied for power in just a week. Company spokesman Marc-Antoine Pouliot remarked that mining operations in the province are not sustainable, noting, “We are receiving dozens of demands each day. This context is prompting us to clearly define our strategy. We won’t be able to power all the projects that we’re receiving. This is evolving very rapidly so we have to be prudent.” The need for cheap and plentiful electricity in a country with lax cryptocurrency policies is quickly becoming a major struggle for large scale mining operations as their needs grow ever larger.
  • Soybean Shipment Becomes First Agricultural Blockchain Trade: The world’s first shipment of agricultural goods has been completed using blockchain technology. The trade of soybeans was facilitated via the Easy Trading Connect Blockchain platform (ETC). The company has created contracts and certificates to allow the international exchange of agricultural products. The shipment from the US to China involved many different entities, with one of them, the Louis Dreyfus Company, hailing the use of blockchain in trade for its reduction in time and cost. Robert Serpollet, head of operations remarked, “We noticed very significant efficiency gains far beyond what we expected.” Using the ETC platform, Shangong Bohi Industry purchased the soybeans from Louis Dreyfus Company with various banks providing credit certificates needed for sale acting as intermediaries. The gains in efficiency are so stark that Anthony Van Vilet from ING’s trade and commodity finance division remarked, “This is key as we operate in a business that has high volumes and very low margins. If not months, then in a year or at max two, I think the world in this space will look quite different.”
  • Stripe Payment Processor Turns Sour On Bitcoin: Mobile payment processor Stripe has announced it will wind down its mobile payment system for Bitcoin. Stripe customers are encouraged to walk away from using BTC for payments over the next three months, after which BTC will no longer be accepted. In a blog post on the topic, Stripe noted, “Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive.” They went on to clarify that in reality, high fees and transaction times have limited Bitcoin’s utility, though they remain optimistic about Bitcoin being used as an asset, noting: “Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange.”
  • Perth Mint To Launch Gold backed Cryptocurrency: Australia’s largest gold refiner has announced plans to develop a cryptocurrency backed by gold. Mr. Hayes, the company’s Chief Executive, stated, “I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings,”, adding, “And you’re seeing this massive flow of funds into the likes of Bitcoin at the moment because people are looking for something outside of the traditional investments.” He went on to say he feels that gold backed crypto gives the security of an alternative asset while using distributed ledger technology for faster transference, in essence providing for the best of both worlds. This news comes after Venezuela’s Petro claims to be backed by both petroleum and gold reserves.



Regulation And Government 

Governments the world over are feeling the pressure to enact regulations, or at the very least glean a better understanding of the rapidly evolving world of cryptocurrency as the market grows too large to ignore. Negative sentiment at the World Economic forum sees some world leaders grappling to deal with crypto. Meanwhile, countries like Australia and Bermuda continue to engender a crypto friendly environment in an effort to benefit from the massive growth potential provided by blockchain technology.


  • Texas Issues Cease And Desist To “Crypto Bank”: Regulators in Texas have issued an unconditional cease and desist to “cryptocurrency bank” AriseBank. Texas banking Commissioner Charles G. Cooper has implied that the business does not actually offer banking services, with a statement stating, “The Cease & Desist Order was based on the Commissioner’s finding that AriseBank violated Texas Finance Code Chapter 31 by using the term ‘bank’ in its name and marketing materials to imply that it is in the business of banking in this state.” Arise had previously gotten attention for an alleged partnership with Bitshares which further prompted many to presume AriseBank was a scam. The U.S. SEC has also gotten involved with Arisebank, issuing an asset freeze over the entity and its Cofounders Jared Rice Sr. and Stanley Ford. The SEC claims the pair “used social media, a celebrity endorsement, and other wide dissemination tactics to raise what it claims to be $600 million of its $1 billion goal in just two months.” Further clarifying, “AriseBank falsely stated that it purchased an FDIC-insured bank which enabled it to offer customers FDIC-insured accounts and that it also offered customers the ability to obtain an AriseBank-branded VISA card to spend any of the 700-plus cryptocurrencies. AriseBank also allegedly omitted to disclose the criminal background of key executives.” In a final statement, the SEC notes, “This is the first time the Commission has sought the appointment of a receiver in connection with an ICO fraud. We will use all of our tools and remedies to protect investors from those who engage in fraudulent conduct in the emerging digital securities marketplace.”
  • Crypto Regulation Expected To Be Top Priority For G20: The European Central Bank has stated that it expects cryptocurrency to be high on the agenda for this year’s summit in March. The statement comes after France’s economic minister Bruno Le Maire vowed to make Bitcoin a large topic at the meeting, urging discussion regarding global regulation. World leaders have been releasing statements about crypto over the past few months as agencies scramble to come up with a solution. U.K. prime minister Theresa May and US Treasury secretary Secretary Mnuchin have recently expressed the need for consolidated standpoints. Given the borderless natures of cryptocurrency and blockchain technologies, the regulatory challenge calls for a perhaps unprecedented level of global cooperation/coordination if the true goal is to create enforceable and easily implementable guidelines.
  • South Korea Launches Cryptocurrency Task Force: Authorities in South Korea have created a task force in conjunction with the Korea Financial Intelligence Unit to oversee crypto exchanges and ensure businesses in the space are compliant with existing regulations. Authorities are also requiring six major banks that work with exchanges in the country to report to the task force. The South Korean government continues to allocate resources to the monitoring and enforcement of cryptocurrency with the goal of creating a far more stable and regulated environment. This latest news comes after controversy that arose following reports of South Korean officials selling Bitcoin right before announcing a ban that later turned out to false.
  • Governments At Davos Not Too Hot On Crypto: The cryptocurrency climate at the ongoing World Economic Forum in Davos is apparently rather dour, with economist and Nobel Prize winner Joseph Stiglitz remarking that cracking down on “secret” Bitcoin use cases would “regulate it out of existence”, further remarking, “We have a good medium of exchange called the dollar. We can trade in that. Why do people want Bitcoin? For secrecy.” His ire was met with support from Swiss National Bank chairman Thomas Jordan, who remarked in a speech, “There is an important principle: Similar activities should be similarly regulated…and Bitcoin and other cryptocurrencies have some characteristics of other investment instruments…You can’t, on the one hand, heavily restrict cash and on the other hand permit fully anonymous instruments that to a great extent can be used for all manner of transactions.” JP Morgan CEO Jamie Dimon was also in attendance, though he claimed that he “can’t answer” when asked about crypto, further stating, “I’m not a skeptic!”
  • Russian Crypto Bill Requires Officials Declare Assets: According to Russia’s chairman of the State Duma Committee on Financial Markets Anatoly Aksakov, there is a current bill being drafted that would require government officials to declare their cryptocurrency investments. The final version of the bill is expected to be released by July 1st 2018. The bill seems to stem out of a technicality that considers cryptocurrency property, with Askakov remarking “all property owned by a State Duma MP has to be declared, [including cryptocurrency].” The news comes after South Korea announced a similar measure following market manipulation by government officials.
  • Kansas Issues Crypto Warning: Kansas’s Security Commissioner has issued a warning regarding the risks of investing in cryptocurrency and ICOs. The warning reminds investors that these investments are not insured by the government, further clarifying, “Investors should go beyond the headlines and hype to understand the risks associated with investments in cryptocurrencies, as well as cryptocurrency futures contracts and other financial products where these virtual currencies are linked in some way to the underlying investment.” The statement joins the ongoing barrage of similar warnings originating from governments all over the world, signalling a major shift in the way that cryptocurrency is being perceived, as it has continues to enter the mainstream.
  • ICE Cracking Down On Illicit Crypto Use: The U.S. Immigration and Customs Enforcement (ICE) is reportedly working to expose illegal transactions from drug traffickers using cryptocurrency. The ICEs Deputy Assistant Director Greg Nevano has stated the agency is seeing increasing use of cryptocurrency for drug trading. He went on to say, “In support of its diverse financial investigative efforts ICE uses undercover techniques to infiltrate and exploit peer-to-peer cryptocurrency exchangers who typically launder proceeds for criminal networks engaged in or supporting dark net marketplaces.” He went on to say the agency is using “complex blockchain technology exploitation tools” to analyze transactions.
  • China Continues Towards National Digital Currency Path: China’s Central Bank is reportedly still considering its own digital currency, though it may not necessarily use blockchain technology. Fan Yifei, Vice Governor of the People’s Bank of China (PBoC) published on op-ed piece on the topic stating that the Central Bank’s token will be very different than a typical decentralized cryptocurrency, with central management and issuance, saying, “CBDC will still be the central bank’s liability to the public. The nature of this liability will not change just because of the physical form of cash going digitized. Therefore, we must ensure the central role of PBoC in issuing CBDC. According to Mr. Yifei, transactions in this currency would only be visible to the central bank, which will function as a third party overseer. He concluded the article by stating that smart contract functionality will be a difficult issue, as since this new currency will legally act as the equivalent of the yuan, current laws specify that Chinese yuan can only be used in pricing, circulation, payment and storage, which may make it difficult to add additional functionalities.
  • Wyoming Trying To Become Blockchain Powerhouse: A grassroots group known as the Wyoming Blockchain Coalition has been gathering attention in trying to pass legislation that would see blockchain technology openly embraced in the United State’s least populated state. Wyoming already has zero income tax and strict privacy laws which has made it an increasingly popular alternative to Delaware for companies wishing to incorporate. One of the bills in consideration would exempt tokens issued on a blockchain from Wyoming money transmitter and securities law as long as it fits the definition of a utility. The bill would also see exchanges exempt from broker/dealer regulations. Of the other bills introduced, perhaps the next most interesting involves a bill that would allow filings and official company records to exist on a blockchain, which could eventually eliminate the need for deeds, titles, and receipts.
  • Bermuda Considers Blockchain Land Registry: Bermuda is considering moving its property deeds onto a blockchain. Premier David Burt, speaking at the World Economic Forum, said the country was trying to shift away from the older systems, stating, “Bermuda has an old school deeds-based property system. What we are going to do is transfer our registry to the blockchain. Clearly it needs to be transparent so people know what’s there and be secure, and that way we know who owns what at any point in time”, further adding “the thing is to make more efficiencies inside of our economy.” This announcement comes after news in November of Bermuda creating a task force to create an appropriate regulatory environment to support blockchain technologies.
  • Russia Considers Miner Identification System: Russia is preparing a bill to regulate cryptocurrency mining which would include a system to identify miners in Russia, perhaps by monitoring electricity consumption, so they can be taxed. The bill is expected to be submitted to the State Duma by February 1st. Some, like Adrei Koptelov, director of the Center for Economic Research at the Synergy University, argue, “It is virtually impossible to distinguish between what consumes electricity, a mining farm or household heater, and the means of private virtual networks allow you to encrypt traffic.” Interestingly, The Ministry of Communication is apparently considering special benefits for Russian miners, with a statement claiming,” For starters, the miners will be given two years of tax holidays with compulsory accounting. Then they will be obliged to pay profit [income] tax, but they will not pay VAT”, though there seems to be some disagreement as Deputy Finance Minister Alexei Moiseev stated that his ministry “does not see the need for tax holidays for miners.”
  • Philippines To Release Crypto Regulations: The Philippines Securities and Exchange Commission is creating new cryptocurrency regulations covering the issuance and registration of cryptocurrency. SEC commissioner Emilio Aquino stated, “We want to come up with our own set of regulations. You have to be extra careful how investors in this new space are protected.” The regulations are expected to be finalized at the end of the year. Some more provisions may see ICOs having to register with the country’s SEC as it considers cryptocurrencies to be securities. The SEC in the Philippines has already issued 4 cease and desist orders against ICOs citing security regulations.



The world is struggling to find its footing in the ever volatile and violent crypto landscape. As mainstream media moves beyond Bitcoin, new market participants are becoming more astute as scandals such as Tether and AriseBank begin to be made public. The U.S. government seems to be taking especially swift action after sitting on the sidelines for months, with what appears to be an effort to create a tangible regulatory framework. This stands in stark contrast to the ban in China or even the swift set of trading regulations brought about in South Korea. We are likely in phase 1.5 of mainstream adoption wherein international law and government policies will begin to shape the future of the blockchain industry and cryptomarkets as a whole. The regulations that come out of the current frenzy of activity will portend the next evolution of blockchain technologies, as mainstream corporations and investment banks will have a framework to confidently enter the cryptocurrency arena.

Abacus is a cryptocurrency advisory and independent product development firm specializing in ICO strategy and cryptocurrency investment products. Through our content we aim to provide a voice of reason in the often overzealous world of crypto-markets.

Email to discuss your ICO, chat cryptomarkets or just say hi!


Zachary Gian is a cryptocurrency news writer and editor from Paris, France. He has always been passionate about technology and innovation since a young age, and loves to share his passion with others. He firmly believes in the blockchain and in digital currencies and is enthusiastic about their development.

One Comment

  1. Rando Anom Rando Anom

    In this article you wrote

    “The fact that this process was supposedly mired in what is likely fabricated complication, with the bogus statement from Friedman LLC stating, “Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame.”

    But that statement was NOT from Friedman LLC.
    And even though I agree Tether is probably a scam at least get the basic facts straight. I feel you are barely trying to report on any of this and mostly regurgitating headlines from better news sites.

    Keep publishing this “guest’s” articles crypto-A. He really helps with the whole “credibility thing”

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