The CFTC has defined Bitcoin as a commodity and it has been revealed that BitPay was hacked last year. Here are the cryptocurrency highlights of week 38:
- Private blockchains are about to become mainstream as nine of the world’s largest financial institutions have partnered up to set up industry standards for using the technology behind Bitcoin in banking. Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, JPMorgan, State Street, Royal Bank of Scotland, and UBS are all part of this unique partnership that is being led by startup company R3. David Rutter, the CEO of R3, is well known on Wall Street with 32 years of experience and also as the former CEO of ICAP, a leading market operator.
- Also IBM is working on a new blockchain project. The technology corporation has announced that it will soon be releasing its own open source version of blockchain software. The software will be adapting “smart contract” technology, the ability to create secure online contracts originally introduced by Ethereum. IBM is, however, not the first company to consider “smart contracts”. Overstock.com and symbiont.io Inc both introduced (separate) blockchain based trading platforms featuring this technology last month.
- The U.S. Commodity Futures Trading Commission (CFTC) has defined digital currencies as a commodity. The CFTC officially ordered the unregistered Bitcoin options trading platform to cease illegally offering Bitcoin options. “In this order, the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities.” The order will also have implications for other unregulated exchanges that offer Bitcoin derivatives like options, futures and swaps. The CFTC will likely focus its attention on these platforms next. It has been reported that exchange Bitfinex has already received an email regarding this.
- The leading Bitcoin payments processor BitPay has been the victim of a successful hack attack. Specifically Atlanta’s Bitpay lost 5,000 Bitcoins (worth about $1.8 million) as a result of a Phishing hack. The hack took place in December 2014, with the target of the hack being BitPay CFO Bryan Krohn. Clearly, Bitpay does not care much about being transparent regarding these kinds of events. The details were only revealed because BitPay is suing its insurer, Massachusetts Bay Insurance Company (“MBIC”), as it rejected BitPay’s insurance claim.
- The price of Bitcoin is currently almost two percent lower than one week ago, trading at an exchange rate of roughly $231 per coin. In the meanwhile, the price of Ethereum is reaching record lows, now trading just below $0.90 per ETH.