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Welcome to Crypto Bytes, a short briefing on some of the week’s developments in the crypto currencies world.

If you would like to discuss any of the points we raise below, please contact me or one of our other lawyers.  

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Claire Cummings

020 7585 1406
claire.cummings@cummingslaw.com
www.cummingslaw.com


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Gates Foundation partners with Ripple and Coil

One of the goals of the Bill and Melinda Gates Foundation is to establish financial services for the world’s poorest communities.  In furtherance of this goal the Gates Foundation has entered into a deal with Coil to focus on the implementation of the Interledger Protocol, which enables payments across different networks.  In addition, the Gates Foundation has partnered with Ripple to provide affordable and reliable payment services to those without access to financial services.  Through this partnership, the Gates Foundation funded the development of Mojaloop, which is an open-source software that uses Ripple’s Interledger Protocol to make payments between distant parties easy and affordable.  With the inclusion of Coil, the Gates Foundation hopes that Mojaloop with will be even better and more effective in providing financial services to the poor and unbanked populations.  (Source: “Bill & Melinda Gates Foundation Bets on Ripple and Coil to Bring Financial Services to the Poor”, 22 October 2018, available at https://blokt.com/news/bill-melinda-gates-foundation-bets-on-ripple-and-coil-to-bring-financial-services-to-the-poor).


 

TeamBlockchain’s Take  

It is interesting to note that Gates has made many statements criticising digital assets such as bitcoin.  For example, in May of this year, Gates told CNBC that he believes “Bitcoin and ICOs, I believe completely [they're some] of the crazier, speculative things" and that "as an asset class, you're not producing anything and so you shouldn't expect it to go up."  In that same CNBC interview, Gates did praise the use of blockchain and its ability to remove the need for third-party intermediaries such as banks and its ability to keep a secure and permanent transaction record.  Therefore, despite Gates’ concern and criticism of digital assets themselves, he recognises the benefits afforded by blockchain technology and its possible uses in helping the poor and unbanked.


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Glassdoor publishes report on state of the blockchain job market

Even with regulatory uncertainty and price volatility, bitcoin and blockchain have gained a lot of interest in the past year and employers are keen to utilise this new technology.  Glassdoor, one of the world’s largest job and recruiting sites, has published a report on the state of the blockchain job market.  Some of the key findings of the report are (i) there was a 300% increase in block-chain related job openings, (ii) the median salary for blockchain-related job openings is nearly 62% higher than the US median salary of about $52,000; and (iii) most blockchain jobs are technical as evidenced by the fact that 19% of all blockchain job listings were for software engineers.  (Source: “The Rise of Bitcoin & Blockchain: A Growing Demand for Talent”, 18 October 2018, available at https://www.glassdoor.com/research/rise-in-bitcoin-jobs//). 

 

 

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CryptoCompare Report Reveals Only 16% of Cryptocurrencies Are Decentralised

In its Crypto asset Taxonomy Report, CryptoCompare found that the majority of the cryptocurrency and blockchain projects are actually still centralised and only about 16% of cryptocurrencies are fully decentralised.  The report noted a trend that, despite decentralised cryptocurrencies such as bitcoin, there is now a trend of utility tokens that run on private servers and only 9% of these tokens are considered decentralised.  The report further states that tokens from ICOs are just 7% decentralised and most are considered securities using the standards by the Swiss financial market supervisory authority.  (Source: “CryptoCompare Report Reveals Only 16% of Cryptocurrencies Are Decentralisd”, 18 October 2018, available at https://bitcoinexchangeguide.com/cryptocompare-report-reveals-only-16-of-cryptocurrencies-are-decentralized//).


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Crypto M&A surges over 200% in 2018

CNBC has reported that cryptocurrency and blockchain-related M&A activity has increased by over 200% in 2018 thus far.  The total number of deals in the sector is expected to be 145 by the end of 2018 and 115 are already closed as of October 15.  CNBC has stated that the majority of the deals are relatively small (less than $100 million) and are global in nature.  (Source: “In the ‘Opportune’ Bear Market, Crypto Merger & Acquisitions Surge Over 200% in 2018”, 20 October 2018, available at https://www.astracoin.com/blog/financial-markets/in-the-opportune-bear-market-crypto-merger-acquisitions-surge-over-200-in-2018).   


 

Cummings’ Take  

As the cryptocurrency market continues to grow and develop, we are likely to see much more M&A activity.  With bitcoin trading at about 50% lower than at the start of the year, prices of other digital assets and services have fallen, creating an opportunity for buyers.  As noted in the article, it is perceived that M&A deals are often perceived to be the fastest way to grow in the crypto asset space. With the rapid development of technology in the crypto space and the decreased pricing, there is an opportunity for investors to explore and experiment with cryptocurrencies and digital assets at a price that makes the potential crypto investor more comfortable.  


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Facebook and cryptocurrencies

In January of this year, Facebook CEO Mark Zuckerberg stated that “[t]here are important counter-trends to [the rise of Big Tech] — like encryption and cryptocurrency… I’m interested to go deeper and study the positive and negative aspects.” In addition, Facebook has created a formalized group dedicated to studying blockchain. There is speculation that Facebook could use blockchain to build coin incentives for e-commerce, make micropayments for services and content creators, banking apps, exchanges and identity tech.  (Source: “FaceCoin: Here’s What Facebook Could Build In Blockchain And Cryptocurrency”, 4 October 2018, available https://www.cbinsights.com/research/facebook-blockchain-cryptocurrency/.)    


 

TeamBlockchain’s Take      

Encouraging users to spend more time on Facebook every day thus generating even more advertising income, Facebook could reward their loyal users by giving them FREE tokens to encourage the adoption of Facecoin and achieve global scale so in time challenge banks and even become a global currency!

The biggest bank in the world is JP Morgan with a market value $360Billion, Facebook's market capitalisation is $420Billion.  JP Morgan has net cash of $25Billion Facebook has $130Billion.  JP Morgan has 61m clients in the USA, Facebook had 261m people using Facebook in the USA in September alone and now have over 2.2 billion accounts worldwide. With more than six million advertisers and 65 million businesses that have Facebook pages, Facebook already have the type of scale and global reach many challenger banks would die for!  Food for thought…


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Fieldfisher and TeamBlockchain launch Blockchain and Crypto Telephone Surgery to offer rapid bespoke legal advice to businesses in the cryptocurrency and digital payment platforms sector

International law firm Fieldfisher and consultancy TeamBlockchain have launched a Blockchain and Crypto Telephone Surgery for companies looking for expert professional guidance on cryptocurrency and digital payments.   Focusing primarily on issues affecting tokenisation and distributed ledger financial technologies (fintech), the surgery will also offer advice and insights on the wider fintech universe.  Fieldfisher partners and TeamBlockchain consultants will give advice on different regulatory and legal issues in the context of specific industries, supported by relevant, real life examples of how organisations are using blockchain and the increasing role of cryptocurrency in digital business.  Surgery sessions will last between 40 minutes, in the form of one-on-one appointments or small group discussions, as clients prefer. Sessions will be interactive, enabling participants to get a better understanding of the subjects under discussion.  Clients will be asked to provide some prior briefing on their sector of interest, objectives and concerns in order to maximise the benefits they receive from surgery appointments.  This type of consultative support has proved helpful for professional advisors and their clients, who want to be more active in the cryptocurrency and blockchain sectors but lack the in-house skills to realise their ambitions. 
 
Fieldfisher and TeamBlockchain's experts are independent advisors who provide clients with honest, pragmatic advice on a range of fintech issues day-to-day.   These surgeries are designed to provide, swift, tailored advice on an as-need, no obligation basis, with follow-up support available as required.  The cost of each surgery is £500 +VAT and includes a pre-briefing, phone consultation and follow-up materials. For more information, please contact one of the Surgery Team: claire.cummings@cummingslaw.com; tim.bird@fieldfisher.com; and jonny.fry@teamblockchain.net.


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Request for reader feedback and requests

If there are any topics you’d like to see covered in future editions of Crypto Bytes or if you have any feedback on this or past Crypto Bytes, please contact Claire Cummings at Claire.Cummings@cummingslaw.com.


 
 

 


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Cummings

Tel: + 44 20 7585 1406
Mob: + 44 7734 057 327

Cummings Law
42 Brook Street
London Greater London W1K 5DB
United Kingdom

www.cummingslaw.com

19 12 2018

 
 

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