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| November 15, 2018

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K-Pop Band Member Accused of Wearing Controversial T-Shirt

November 9, 2018 |

A popular South Korean boy band was set to appear on one of Japan’s biggest TV stations this week, but that appearance has been canceled due to a clothing choice one of its members may have made. Per the Guardian and CNN , K-pop group BTS was scheduled to be on…
Newser

Dem Gavin Newsom’s wild victory party in LA features controversial rapper Common

November 8, 2018 |

California’s Democratic Lt. Gov. Gavin Newsom topped off his gubernatorial win Tuesday night with a wild victory party at a Los Angeles nightclub, which included rapper and activist Common as the Governor-Elect’s opening act.
FOX News

EPA Allows Farmers to Keep Using Bayer’s Controversial Weedkiller

November 1, 2018 |

The EPA extended by two years its approval of XtendiMax, a version of the herbicide dicamba made by Bayer, which some farmers and researchers have blamed for damaging millions of acres of crops.
WSJ.com: US Business

Hawaii Supreme Court Says Yes to Controversial, Massive Telescope

October 31, 2018 |

After years of delay, including lengthy court battles and passionate protests from those willing to be arrested for blocking construction crews, builders of a giant telescope plan to move forward with constructing the $ 1.4 billion instrument on a Hawaii mountain that is considered sacred. The state Supreme Court’s 4-1…
Newser

Korean Crypto Exchange Sued for Controversial Token Schemes

October 10, 2018 |

Korean Crypto Exchange Sued for Controversial Token Schemes

A lawsuit has reportedly been filed in South Korea against a local cryptocurrency exchange over its price-pumping schemes involving token issuance. The suit alleges that Cashierest’s token which pays dividends and rebates transaction fees to investors violates the country’s capital markets law.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

The Lawsuit

South Korean law firm Aone filed a complaint with Seoul Central District Court on Oct. 5 against Newlink Co. Ltd., the owner of crypto exchange Cashierest, according to local media. Lawyer Kim Dong-joo at Aone’s Seocho branch explained that his firm is pursuing charges against the crypto exchange for deviating from the public interest in order to restore the health of the cryptocurrency market, Zdnet Korea conveyed.

Korean Crypto Exchange Sued for Controversial Token Schemes

The publication described one of the schemes used by the exchange as “Criminal pumping, the so-called ‘cage pumping,’ which induces price increases while restricting the withdrawal of cryptocurrency.”

Korean Crypto Exchange Sued for Controversial Token SchemesThe suit alleges that Cashierest has committed two illegal acts by issuing its “dividend coin [called] cap (CAP)” on the capital market, according to the news outlet. The first is a “violation of the securities issuance procedure,” as defined in Article 119 of the country’s Capital Markets Act. The other is a violation of Article 178 which prohibits unfair trading. The publication emphasized that the exchange engages in unfair practices to pump the price of its token.

Dividends, Trade Mining, Referral Mining

At the heart of the lawsuit is CAP, the exchange’s own token. First issued in August, the token has three features: dividends, trade mining, and referral mining. CAP’s whitepaper reads, “By possessing CAP, you can receive 100% of profits of Cashierest’s exchange charges. Regarding charges issued with each market (KRW, BTC, ETH, TUSD), the refund of charges will be 100% refunded in each applicable currency.”

Korean Crypto Exchange Sued for Controversial Token Schemes

Under the dividend section, Cashierest’s website explains that the coin “pays the first dividend in KRW,” adding that it also pays “100% of the Cashierest transaction fee revenue in KRW in proportion to the customer’s CAP reserves by two snapshots a month.”

Under the trade mining section, the website states that “The transaction fee is 100% refunded, and returns 70% of the transaction fee to the trader.” Trade mining has been called controversial and a scam. Binance CEO Changpeng Zhao, for example, said in July:

The cleverly masked selling of coins through enticing words like trade-mining… these models are simply scams to sell their coin(s), and not great innovations.

The last of CAP’s features is referral mining which allows referrers to receive 30 percent of the transaction fees paid to the exchange by their referees, the exchange detailed.

In April, news.Bitcoin.com reported on Cashierest having a computer system glitch that allowed customers to withdraw more coins than intended.

What do you think of this Korean exchange’s token schemes? Let us know in the comments section below.


Images courtesy of Shutterstock and Cashierest.


Need to calculate your bitcoin holdings? Check our tools section.

The post Korean Crypto Exchange Sued for Controversial Token Schemes appeared first on Bitcoin News.

Bitcoin News

Controversial Tweet Gets Elon Musk Sued

September 28, 2018 |

The SEC is suing Elon Musk over the Tesla CEO’s August tweet in which he said: “Am considering taking Tesla private at $ 420. Funding secured.” According to court documents filed Thursday, the SEC says that Musk had not even discussed “key deal terms, including price, with any potential funding source,…
Newser

CNN

Controversial high-speed rail station opens in Hong Kong

September 23, 2018 |

It has been heralded as a vision of the future. A $ 10.75 billion infrastructure investment connecting Hong Kong with China’s high-speed rail network.
CNN.com – RSS Channel – World

Trump Has Controversial Words About Hurricane Maria

September 12, 2018 |

With a powerful hurricane bearing down on the southeast coast , President Donald Trump on Tuesday turned attention back to the federal government’s response to Hurricane Maria in Puerto Rico a year ago, deeming it “incredibly successful” even though a recent federal report found that nearly 3,000 people died, the…
Newser

Transaction Fee Mining Exchanges: Highly Popular, Highly Controversial

September 1, 2018 |

Transaction Fee Mining Exchanges: Highly Popular, Highly Controversial

You might not have traded on Fcoin or Bitforex, but you’ve probably heard their names mentioned in crypto trading circles. These exchanges are at the forefront of a relatively new business model known as transaction fee – or trans-fee – mining. While innovative, the token model deployed by these platforms is not without its controversies.

Also read: How Coinmarketcap Incentivizes Exchanges to Report Fake Volume

What Exactly Is Transaction Fee Mining?

With a conventional cryptocurrency exchange, a maker and taker fee is levied on each side of the trade. The taker’s fee is typically higher, averaging 0.5-0.75%, while the maker (the person selling the asset, and thus providing liquidity) might pay closer to 0.25%. Ordinarily, this fee is deducted at the point of the trade being executed. It’s normally collected by the exchange in the form of ETH or BTC, or BNB if trading on Binance. Transaction fee mining exchanges take a markedly different approach.

Former Huobi CTO Zhang Jian Launches FCoin, Gaining Investments from Top Venture Capital Firms
Fcoin uses a trans-fee mining model

Transaction fees are the primary way by which exchanges make their money. Trans-fee mining exchanges flip that model by handing all of the fees back to traders in the form of a native token. In fact, during promotional periods – typically when launching the exchange – these platforms might even offer a rebate of greater than 100%. In other words, traders are technically profiting, in the form of native tokens, for each trade they made. It sounds too good to be true, and like all things that fall under this banner, it is. But first, let’s consider the upside to trans-fee mining.

Trans-Fee Mining Is a Good Way to Get Noticed

Fcoin didn’t invent trans-fee mining, but it was the first exchange to popularize it. The platform, under the guidance of former Huobi CTO Jian Zhang, rolled out its native token in early June. As Crypto Exchange Ranks (CER) reports, “as time went on, Fcoin’s trade volume started to fade, and the exchange slid down the ranks on CMC…On Aug 8, noticing the trend of rivals offering more than 100% trade fees reimbursement, Fcoin decided to implement their own 10% bonus.” As a result of this initiative, Fcoin’s volume leapt by some 7,000%, to over $ 2 billion, as can be seen below:

Transaction Fee Mining Exchanges: Highly Popular, Highly Controversial
Note the sudden increase in Fcoin’s volume in early August.

From the perspective of exchanges that have pioneered the trans-fee model – namely Bitforex, Fcoin, Coinex, Coinbene and Coinsuper – it’s proven an effective means of gaming the system. Cryptocurrency market aggregators such as Coinmarket Cap have long excluded zero-fee exchanges, as their data skews the rankings. But because exchanges like Bitforex and Fcoin technically charge fees, albeit with all tokens collected from this disbursed to the community, they can leap to the top of the charts, and in doing so, gain shed-loads of new inbound referrals.

The other benefit for the exchanges is that this system provides a means of bypassing an ICO. Rather than deal with the hassle and legal issues associated with holding a tokensale, they can simply distribute tokens to early adopters, with high frequency traders rewarded the most. Traders are still paying for these tokens, however, in the form of ETH or BTC that must be paid to the exchange in return for native tokens.

Trans-Fee Mining Is Ethically and Financially Dubious

“Honest Coinmarketcap” Claims to Provide Accurate Cryptocurrency DataTo go from “obscure exchange” to “top of Coinmarketcap” virtually overnight is certainly an effective way to get noticed. But there’s a difference between gaining recognition and being recognized for all the wrong reasons. The nature of trans-fee mining models, which incentivize early adopters, often using referral schemes, and whose tokens typically rocket in value before crashing hard, has all the hallmarks of a ponzi scheme. It is no coincidence that several of the exchanges using this model, including Bitforex, have been called out for reporting fake volume.

In a study conducted into the practice of trans-fee mining exchanges, CER found that 80% of the platforms it investigated promised to reimburse more than 100% in trading fees: Bitforex (120%), Fcoin (110%), Coinbene (130%), and Coinsuper (125%). In addition, Bitforex and Coinsuper promise to use 80% of transaction fees earned to buy back exchange tokens, while Fcoin and Coinex promise to redistribute trading fee revenue in the form of dividends.

Transaction Fee Mining Exchanges: Highly Popular, Highly ControversialCER concludes: “It’s obvious that the implementation of “trans-fee mining” likely leads to a huge ramp-up of trade volume, but charts suggest that such a pump is very unlikely to be the result of a natural influx of traders. Using trading bots to inflate volume, this could be someone eager to collect reimbursed tokens via “trade mining” and dividends distribution.”

Exchanges are entitled to adopt the token model they believe best serves their needs and those of their community. But traders should be cautious of the reported trading volume and promised dividends of this new breed of exchanges, whose operators will do whatever it takes to claw their way to the top of the heap.

What do you think of transaction fee mining exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock, and Crypto Exchange Ranks.


Need to calculate your bitcoin holdings? Check our tools section.

The post Transaction Fee Mining Exchanges: Highly Popular, Highly Controversial appeared first on Bitcoin News.

Bitcoin News

TSA chief defends controversial Quiet Skies surveillance program

August 14, 2018 |

At a gathering of corporate travel managers, the head of the Transportation Security Administration defended a once little-known program to target airline passengers whose travel patterns raise suspicions.

During an on-stage discussion before thousands of travel managers and in an interview, TSA…


L.A. Times – Business