Chinese Police Investigating Trading Platform EtherDelta

Local police in China are reportedly investigating cryptocurrency token trading platform EtherDelta, months after the U.S. Securities and Exchange Commission (SEC) charged the platform’s founder Zachary Coburn.

“EtherDelta is involved in a major scam in China, police officially take legal action against it,” Dovey Wan, a partner at cryptocurrency investment fund Primitive, tweeted on Wednesday

Wan has said that Coburn sold EtherDelta to a group of Chinese buyers, who later issued exchange token EDT and it turned out to be an “exit scam.”

In November 2018, the SEC charged Coburn for operating an unregistered securities exchange. The regulator said at the time:

“Almost all of the orders placed through EtherDelta’s platform were traded after the Commission issued its 2017 DAO Report, which concluded that certain digital assets, such as DAO tokens, were securities and that platforms that offered trading of these digital asset securities would be subject to the SEC’s requirement that exchanges register or operate pursuant to an exemption.” (Negative)

Seychelles Stock Exchange Lists Tokenized Security

Seychelles’ stock exchange (MERJ) has just listed a tokenized security for trading, becoming the first in the world to do so.

The exchange, MERJ, is licensed by the Indian Ocean nation’s Financial Services Authority as a securities exchange, clearing agency and securities depository (CSD), and is launching the token to represent its own equity.

MERJ said it will follow the listing by offering 16 percent of the tokenized shares in a public offering later in 2019. The exchange is also in discussion with “several companies” over potentially listing their tokenized shares on its platform.

Edmond Tuohy, CEO of MERJ, said:

“MERJ has fully leveraged its end-to-end ecosystem to deliver the world’s first publicly listed securities token. We are combining the best of the old world and the new to provide a key piece of missing infrastructure for the growth of digital assets.”

MERJ said it is using the ethereum blockchain to record the share register ownership, saying that, currently, “it is the best supported protocol for these purposes.”

Now seen on MERJ’s listings page, the tokenized security takes the ticker symbol “MERJ-S” and is currently trading at $2.42, with a stated market cap of $21,015,781.

More widely, MERJ also has plans to cut costs for investors and issuers by using blockchain technology to streamline a number of securities markets processes, including issuance, shareholder registers, compliance, distribution and voting.

Founded in 2013, MERJ says that being licensed as an exchange, clearing house and CSD, it’s well placed to “deliver on the many benefits of tokenization.”

“Whether they’re issuing tokenized or traditional shares, companies are not going to want to go to a jurisdiction that doesn’t meet high international standards because it will attract greater scrutiny from global regulators,” said Tuohy. “We’ve spent three years working with our regulators to build a robust and compliant framework for issuers wanting to leverage the benefits of distributed ledger technology within a publicly listed environment.” (Positive)

ECB Says It Plans to Use More On-Chain Data to Monitor Crypto Assets

The European Central Bank (ECB) has issued a new report indicating that it plans to use more on-chain data to better monitor the crypto markets.

Titled “Understanding the crypto-asset phenomenon, its risks and measurement issues,” the report reveals that the ECB has already built a system that uses “high-quality” aggregated data available online in its efforts to analyse “the crypto-asset phenomenon” to identify and monitor how the financial technology might affect monetary policy and the risks it potentially poses to market infrastructures, payments and financial stability.

However, using available data in this way has limits to its value. The report explains that this data leaves “gaps and challenges,” such as the exposure of financial institutions to crypto-assets and payment services that use layered protocols.

It lists, among others, derivatives and investment vehicles’ exposure to digital assets, financial firms moving into custody and other services, and payments platforms using cryptos as potentially having implications for financial policy and stability.

Going forward, the ECB plans to go into more granular detail for its analyses of crypto assets, and “will continue to work on indicators and data by dealing with the complexity and growing challenges encountered in analysing on-chain and layered protocol transactions.”

It will further seek new data sources for information on links between crypto assets and regulated firms.

Regarding off-chain transactions – transactions conducted off the blockchain and later aggregated back on-chain in fewer transactions – the ECB said it will work on increasing the “availability and transparency” of reported data and the methods used to provide it, “harmonising and enriching the metadata and developing best practices for indicators on crypto-assets.” (Neutral)