After facing some instability in the sub-US$9,000 region, Bitcoin (BTC) and the combined cryptocurrency markets have now been able to climb higher, signaling the market’s strong bullish trend is still in firm control.
At press time, BTC is trading up over 5 percent at its current price of US$9,847, up from daily lows of US$9,130.
Over the past week, BTC has faced some resistance around its current price levels, but its latest upward move appears to confirm that the crypto’s bulls are once again ready to begin pushing its price significantly higher.
Data from CoinMarketCap.com shows that the crypto market capitalization reached a high of approximately US$303.42 billion Friday, its highest since June 13th, 2018. That brought the market’s net bottom-rebound to as much as 196 percent, including a 143 percent gain on a year-to-date basis.
Should Facebook’s New Cryptocurrency be Regulated?
On Tuesday, Facebook formally announced plans for Libra – a cryptocurrency platform the social network behemoth plans to release in 2020. And it has been met with mixed reviews.
Like Bitcoin, Ethereum and other cryptocurrencies, Facebook said Libra will be a virtual coin built on blockchain technology – a digital ledger that facilitates and validates transactions.
The effort, announced with 27 partners as diverse as Mastercard and Uber, could face immediate skepticism from people who question the usefulness of cryptocurrencies and others who are wary of the power already accumulated by the social media company.
However, unlike other cryptocurrencies, which can carry volatile swings in value, Libra will behave like a fiat currency in that each Libra will be backed by a reserve of real assets – similar to how the U.S. dollar was backed by gold until 1971.
But given Facebook’s recent privacy issues, some are voicing concerns about the social network branching into currency.
Facebook isn’t the only company with a stake in Libra’s future. Several big-name corporations, like Visa, MasterCard, PayPal, Uber, Lyft and eBay, invested in the venture and are part of the Libra Association – an organization based in Switzerland that will develop and manage the cryptocurrency.
Reuters reports that the US House Finance Committee is calling for hearings. Committee Chair Rep. Maxine Waters (D) said that she believes work on the proposed cryptocurrency should be halted until officials have thoroughly investigated the matter.
Facebook says it plans to fully cooperate and provide testimony in the hearings but said it was not planning on halting development of Libra.
QuadrigaCX Plot Thickens
It’s looking more and more like QuadrigaCX founder Gerald Cotten ‘mismanaged’ the digital-asset exchange before he died, with cryptocurrencies from clients ending up at rival marketplaces in his personal accounts.
The latest report from Ernst & Young (EY) – the accounting firm that’s overseeing the bankruptcy process for Quadriga Fintech Solutions Corp. – is beginning to paint a clearer picture of the Vancouver-based firm that lacked financial reporting and operational controls. EY has uncovered data that says QuadrigaCX was run primarily by a founder (Cotton) whose actions ultimately led to its collapse, leaving hundreds of customers owed millions in cash and cryptocurrency.
EY found Cotten had established a margin trading account that traded numerous cryptocurrencies, which generated “substantial losses” for the exchange, due to the high fees associated with them. As a result of the losses, Quadriga liquidated a significant portion of the cryptocurrency to satisfy the shortfall, which reduced Quadriga’s remaining inventory.
“Quadriga’s operating infrastructure appears to have been significantly flawed from a financial reporting and operational control perspective,” the June 19 report said. “Activities were largely directed by a single individual, Mr. Cotten, and as a result typical segregation of duties and basic internal controls did not appear to exist.”
The report also claims that Cotten, who died in India last December, transferred customer crypto off the Quadriga platform into competitor exchanges and into his personal accounts. Quadriga customers’ funds were purportedly used to provide for Cotten’s assets, which included a private jet, luxury vehicles, investment holdings, gold and silver coins, a personal yacht, and several properties in Nova Scotia and BC. The assets, now expected to be liquidated, are worth a collective $12 million.
Quadriga filed for creditor protection at the beginning of 2019. It was revealed at that time the exchange owed customers over $200 million, most of which was stored on the deceased CEO’s encrypted laptop. EY was appointed to oversee the search for the missing money. In May, efforts to recover the $200 million in lost cash and cryptocurrency resulted in only $28 million of recuperated assets, nearly all of which was in the form of cash.
