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UK Regulators Approve First Cryptocurrency Hedge Fund


on – Prime Factor Capital was the first crypto hedge fund approved as a full-scope alternative investment fund manager by the Financial Conduct Authority, according to Bloomberg.

Though approved by the UK watchdog, the firm will abide by European regulations. Under these guidelines the firm will be allowed to hold more than 100 million euros in assets under management. It is the first agency to be approved to invest exclusively in the cryptocurrency asset class.

The founders believe that by focusing on a single asset class, even one that carries market distrust, they will surge ahead of their global competitors and become the trusted authority in crypto investing.

“Most vehicles for investing in cryptocurrencies are outside the scope of regulators and that’s a big problem in a market that has such a bad reputation,” Adam Grimsley, Prime Factor’s chief operating officer, told Bloomberg.

Prime Factor is required to appoint a custodian under EU regulations to ensure and validate investors’ returns and the fund’s holdings. This custodian will act independently of the firm and also provide cash flow reconciliation.

The firm manages funds for professional and institutional investors including high net worth individuals, family offices, and private wealth managers, according to a company statement.

There is no information available publicly regarding the firm’s investment strategy. The team is comprised of former employees from Blackrock, Legal & General, Goldman Sachs, and Deutsche Bank.

On their website, company CEO Nic Niedermowwe published a report titled “The Fallacy of Uncollateralised Stablecoins,” in which he argued that uncollateralised stablecoins are problematic. He has also considered such subjects as the scalability of bitcoin.

The company did not respond to a request for comment.

Prime Factor Capital previously announced an equity financing round with Speedinvest, a European Fintech investor, and Entrepreneur First, a talent investor. (cointelegraph)

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ZenGo Demonstrates Proof-Of-Concept of a Keyless Wallet for Facebook’s Libra


on – The non-custodial crypto wallet solution ZenGo has created an open source project that purportedly provides proof-of-concept (PoC) for its ability to support social media giant Facebook’s virtual currency Libra, according to an official announcement by ZenGo on July 2.

According to the announcement, this proof-of-concept project shows that it is possible to perform Libra transactions on the Libra testnet blockchain. However, the findings are limited, as the report cautions:

“Obviously, this experiment is only based on a testnet and we will have to explore further once Libra makes its mainnet available. Additionally, there is no user interface in this PoC and it goes without saying that a proper UI is required for a usable product.”

The statement also briefly discusses Facebook’s announced native wallet, Calibra. According to the report, ZenGo views Calibra as a good custodial-based solution, but notes that users can’t have full control over their Libra — the slogan goes ’not your keys, not your Bitcoin’ — and are required to undergo a registration process with government-issued ID to use the wallet. ZenGo, on the other hand, uses a technique called the Threshold Signatures Scheme (TSS) which removes the need for private keys. ZenGo believes private key management is too complicated for the average user, so they developed the TSS to avoid custodial solutions and private keys entirely.

In layman’s terms, this is how ZenGo describes the cryptographic function of TSS:

“TSS removes the burden of the single atomic private key and splits the responsibility between multiple parties. Each of the parties generates its own secret and uses this secret to distributively sign a transaction without revealing the secret to the other parties.”

In April, ZenGo received $4 million in funding from investors, including South Korean tech giant Samsung.

As previously reported by Cointelegraph, Facebook does not intend to launch Calibra in India, due to its ban on cryptocurrencies. A recently-proposed bill in India called the “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019” suggests a jail sentence of up to 10 years for engagement in cryptocurrency operations within the country. (cointelegraph)

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Breez Reveals Lightning-Powered Bitcoin Payments App for iPhone


on – Breez, a non-custodial wallet and payment platform, is launching its services for the iPhone. This is the first payment project built on Neutrino, a bitcoin lightning network client, according to the company announcement.

Additionally, Breez has resolved the issue of how to dispute purchases and receive refunds, “so it’s suitable for every kind of purchase right down to a cup of coffee or paying back a friend,” said company founder Roy Sheinfeld, in a statement.

When a user — whether an individual or a merchant — installs the app, Breez automatically opens a payment channel to the Breez hub, which is connected to other Lightning nodes, allowing users to transact with anyone on the network.

Both parties cryptographically sign an updated balance sheet whenever a transaction is made to reflect the changing amounts of Bitcoin stored in the parties’ respected wallets. When the transaction is finished, the resulting balances are registered on the blockchain. In the event of a dispute, both parties can use the most recently signed balance sheet to recover their share of the wallet.

The project, now in beta, builds on the success of Breez’s open network for Android, which the firm says gained hundreds of users in just two months. The beta for iPhone will initially be running on Apple Developer’s TestFlight, the publishing platform for beta apps. Sheinfeld said developing an iOS product allows the company access to around 98 percent of mobile users worldwide.

This announcement is concurrent with a $500,000 investment from Recruit Strategic Partners and Fulgur Ventures. Breez spokesperson Nishal Ratanji views the investment as validating the company’s vision for a “Lightning Economy,” where transactions happen without the expense and hassle of intermediaries such as banks, credit cards, online payment processors, and other custodians.

“Bitcoin has the potential to make all other mediums of exchange  – including crypto and fiat currency – obsolete,” said Sheinfeld. “Unfortunately, until other technologies caught up with it, bitcoin was expensive, cumbersome and difficult to move.”

The company states the additional capital will help develop Breez’s point-of-sale Lightning app used by merchants to accept bitcoin payments. Yuki Tanaka, Vice President at Recruit Strategic Partners and investor in Breez, anticipates “rapid uptake” of the POS technology in markets such as Japan.

Breez’ technology has undergone testing in sandboxes and other multi-tiered environments, according to the company. (coindesk)

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Twitter Founder Jack Dorsey Expounds on Planned Crypto Team


on – Jack Dorsey, the founder of social media website Twitter and mobile payments provider Square, went into depth on his plans for his new team dedicated to improving the crypto sector at Square in an interview with The Next Web on June 14.

According to Dorsey, this initiative, Square Crypto, will add to the fiat payment company’s operations by providing an infrastructure for frictionless internet payments. Right now, he says that regulations and partnerships slow Square down — obstacles that he hopes to avoid in the future with an improved crypto infrastructure:

“Just from a business perspective, we don’t look like an Internet company today. An Internet company can launch something and it’s available around the world. Whereas with payments, you have to go to each market and pay attention to regulators. You need a partnership with a local bank. This is a very slow process in any new market.”

The team’s efforts to provide solutions for the crypto space will reportedly all be made open source. Dorsey says that security and currency efficiency are areas he hopes to tackle with the team, as well as potentially less prominent issues like code reviews, which Dorsey cites as a major issue for bitcoin (BTC).

The planned team will reportedly be a small group, comprised of a handful of crypto-literate software engineers and a single designer. Dorsey plans to work directly with the team. The first announced dev hire for the team was Steve Lee, a former director at Google.

Dorsey also touched on the role of including a designer, saying that better design could make the crypto space more accessible to the layperson:

“This designer will be tasked with doing educational tasks […] These will include making it easier for ordinary people to conceptualize using digital currencies like Bitcoin as an everyday tool for payment.”

As previously reported by Cointelegraph, Square recently saw a revenue high in BTC through its payment app Cash, an option made available to users in February 2018. According to its first quarter report for 2019, the company has made a net profit of about $830,000 through BTC in the quarter, with a total BTC revenue of $65.5 million. (cointelegraph)

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Hacked Crypto Exchange Zaif Resuming Full Services Under New Owner


on – Japanese cryptocurrency exchange Zaif, which was hacked for about $60 million last year, is under new management.

The exchange announced on its corporate website on Friday that, as of Monday, April 22, the firm will have signed over its business to publicly listed Japanese investment firm Fisco and full operations will be reinstated Tuesday.

The plan for the takeover was first aired in October 2018, and sees the exchange pass from its previous owner, Tech Bureau, to an existing crypto exchange owned Fisco. Friday’s post indicates that the deal cost Fisco 5 billion Japanese yen ($44.675 million).

In its September 2018 hack, Zaif lost approximately 7 billion yen ($62.5 million) in the bitcoin (BTC), monacoin (MONA) and bitcoin cash (BCH) cryptocurrencies.

Since then, Zaif said Friday, registration of new members has been suspended, while trading, depositing and withdrawing MONA has been on hold since October 10, 2018. As of tomorrow, those services will be reinstated.

As pledged previously, the exchange has now refunded users that lost holdings in the breach. The firm explained that holders of BTC and BCH were refunded in their original cryptocurrency, but, due to liquidity issues with the token, MONA holders received about 60 percent in the crypto and the remainder in Japanese yen for compensation at a rate of 144.548 yen per MONA.

As reported last November, cybersecurity experts at Japan Digital Design, a subsidiary of Mitsubishi UFJ Financial Group (MUFG), working in conjunction with other security firms, said they had found possibly revealing information on the Zaif hackers.

After investigating the outflow of monacoin from the exchange soon after the hack, Japan Digital Design said it was able to identify the “source” of the attackers. While the details of the findings were not disclosed, the team said it had shared this information with the authorities. (coindesk)

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