Kraken Recently Closed a $13.5 Million Crowdfunding Round!

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Just recently, one of the top regulated crypto exchanges Kraken, completed its crowdfunding round with $13,5 million raised. That way, Kraken pushed the company valuation towards $4 billion. The round of financing was done on an investment platform called Bnk To The Future and it gathered more than 2,200 participants.

Kraken, which is a regulated spot and futures crypto exchange, recently closed it’s funding round on an investment platform Bnk To The Future with a little more than $13,5 million raised. This turned out to be the most successful funding round on Bnk To The Future with more than 2,200 participants joining. Simon Dixon, the co-founder of Bnk To The Future told that Kraken sought the capital as a way to push it’s valuation past the $4 billion mark and fund new acquisitions.

For this funding round, Bnk To The Future created a Special Purpose Vehicle (SPV) for Kraken to receive equity indirectly from the plus 2,200 investors. That is known as a illiquid investment.

“The SPV then pools all the individual funders and acts as a single capital investor. This technique allows Kraken to bypass the SEC requirement that force it register as a public company under the 1934 Securities and Exchange Act,” writes CoinDesk.

This makes the investors not shareholders of Kraken and will realize a return only in three cases:

If Kraken starts an IPO; Gets sold to an organization; or if the exchange does a Management Buy-Out.

Originally, Kraken asked for $10,2 million in the first funding round. After four days, they saw that the market has a deep interest and extended it to a goal of $15,45 million. Even though it is reported that the funding round ended with $13,5 million raised, Simon Dixon said that they are still waiting for around 250 bank wires to go through. He expects somewhat around $14 million to be raised.

Massive Investments, Massive Perks

Simon Dixon revealed that the average investment was around $100,000, which is 10 times more than all the previous 120 funding rounds on Bnk To The Future. 60 percent of investors chose to stake fiat while the rest 40 percent chose to stake crypto. Usually, as Dixon described, they see a 70:30 ratio between fiat and crypto. He believes that this is because the crypto bull market which makes the prices rise. Another major factor on why so many investors chose to fund Kraken is because of the perks that Kraken offered.

“CryptoWatch Premium membership, the ability to leverage shares for margin collateral, priority service from our client support team, invitation to Kraken’s exclusive investor chat room, subscription to Kraken’s Daily Hash newsletter and OTC Daily report, bi-annual Kraken investor update, beta access to new Kraken products and features, limited edition Kraken swag, [and] 5% investment rebate in KFEE,” reads an e-mail which was sent to all the investors.

However, one Bnk To The Future client decided to “write down the numbers” and came up with a rather interesting statement:

“Your $1k investment bought you about 48 future shares (from 201.612.210 in total). If Kraken is really worth $4bn in the end you own 0,00002380808% of this pie. And that’s about the sum that you invested. But as you are in the “preferred share class” you get your investment back even if Kraken sells only for $112 million. Only if Kraken sells for more than 4bn we will make money.”

Additionally, Bnk To The Future has some pretty strict guidelines when it comes to registering on their platform. Investors need to either prove that they have incomes over $200,000 for the past two years, a combined income with a partner of $300,000 over the past two years, or have a net worth over $1 million. Needless to say, they all needed to pass KYC requirements.

Source:

https://www.coindesk.com/over-2000-investors-back-kraken-crypto-exchanges-13-million-crowdfunding

Image taken from Kraken.com

Bitcoin SV gets delisted from Binance and Shapeshift! Kraken might follow.

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Recently we reported about the #WeAreAllHodlonaut movement in crypto Twitter. It was caused by Craig Wright, Calvin Ayre (the BSV camp) and a Twitter figure with a nickname @hodlonaut. The BSV camp was threatening hodlonaut of suing him but failed to reach out to him due to his anonymous internet personality. The whole crypto Twitter got up to their feet and showed support for Hodlonaut by changing their profile pictures and nicknames to his. But it all went down when Craig Wright’s lawyers sent legal documents to Peter McCormack, who stepped in the battle and claimed that he is the person behind @Hodlonaut’s Twitter profile. Later, CZ from Binance threatened the BCV camp of delisting their coin, if they will continue this “nonsense”. Now it has played out to reality and Binance among with other high profile exchanges are delisting Bitcoin SV.

Craig Wright’s lawyers send a legal letter to Peter McCormack

Since this is crypto Twitter, everything is being put out in the open. This wasn’t an exception and once Peter received the letter, he immediately posted it on his profile:

The letter comes from a legal firm “SCA ONTIER” which is based in London, UK. As they state in the first sentence, they act for Craig Wright. Basically, they cite all the tweets in which Peter McCormack mentions that BSV along with Craig Wright is a fraud. They call it defamation and states that these actions by Peter are causing serious harm to Craig Wright. At the end of the letter, they have put the requirements that the “client” wants:

“(1)Your assurance that you will preserve all documents, including electronic messages, draft articles, notes, and any other electronic materials, that may be relevant to this matter;

(2)Your undertaking to delete all tweets and other online or other publications in which you alleged that our client had fraudulently claimed to be Satoshi Nakamoto;

(3)Your undertaking not to repeat those allegations, whether on Twitter or in any other form;(4)Your agreement to tweet an apology to our client in the terms below;

(5)Your agreement to join in a statement in open court in which you apologize to our client and acknowledge the falsity of the allegations.”

Also, they included a pre-written text for Peter to tweet out to his followers:

Peter McCormack sends a response

Being a kind of eccentric person on Twitter, Peter of course published his response to Craig’s lawyers. In the letter, he basically copied the content of Wright’s, but changed it into his benefit. He states that he believes that Craig is not Satoshi and repeatedly calls him a fraud. Also, like Craig, he included his six requirements for Dr. Wright:

“(1)He provides evidence which he is Satoshi, not the same nonsense he has published time and time again, if not then see points 2 – 6;

(2)His undertaking to delete all online publications where he fraudulently claims that he is Satoshi Nakamoto;

(3)His undertaking to not repeat these fraudulent claims;

(4)His agreement to write an apology to everyone in Bitcoin

(5)His agreement to join in a statement to an open court in which he apologizes for and acknowledges the falsity of his claims;

(6)His agreement to stop issuing bullying letters to people and to end this pursuit of Hodlonaut, who is a legend.”

Peter also included an apology letter for Craig to publish to everyone involved in Bitcoin:

Binance delists BSV

This tweet came as a cold shower to all the BSV supporters and quite possibly to Calvin and Craig as well. Now they go on and bash Binance of not being an honest broker. Calvin rhetorically asks, what could Craig Wright know that all the BSV bashers would be so afraid of? He calls this market manipulation and a media stunt against “the real Bitcoin”. Also, that the vast majority of crypto Twitter wants to censor Craig Wright.

These Twitter threads mostly consist of Hodlonaut supporters and a few BSV followers who doesn’t seem quite happy about how this situation has escalated. Many people are saying that if Craig is Satoshi, all he needs to do, is sign a message with the private key of the Genesis block, rather than going into court and proving his position.

But instead of stepping down, Calvin Ayre continues to fight even more. Now he is threatening Binance as a company and calls it “an unregulated criminal organization”.

It looks like this is might go on for a while. To be honest, this event could go down in history as the first legal action between individuals in the crypto community.

After Binance, comes Shapeshift and possibly Kraken

Not long after Binance posted their announcement for delisting BSV, Shapeshift CEO Erik Voorhees posted on his personal Twitter account that Shapeshift will follow, and delist BSV within the next 48 hours.

Shapeshift is a crypto-to-crypto exchange where you can exchange one cryptocurrency to another. However, it is not a traditional crypto brokerage.

In addition to Shapeshift’s claims, Kraken Exchange posted a poll on their Twitter account. The poll asks if Kraken should delist BSV as well. At the time of writing, there are 72% out of 64,442 votes, that say “Yes, it’s toxic”.

Bitcoin SV price

As expected, the price of Bitcoin SV (BSV) plummeted in a matter of days, going from $80 to $56, according to Coin Market Cap. This is the lowest price BSV has seen in this year. The only time BSV saw a similar price was when the coin launched at the beginning of November 2018, and at the end of November 2018, when it reached its all-time low – $37,47. Currently, judging by Coinmarketcap.com, Binance accounts as the second and fourth largest exchange for trading BSV with a combined daily volume of $39 million. Kraken on the other hand is in the 35th, 37th, and 39thposition and accounts for approximately $3,5 million.

Bitcoin SV is the top losing asset in the TOP 100 most popular coins.

One of the most popular crypto-personalities in the cryptocurrency community Anthony Pompliano has suggested all crypto exchanges to simultaneously delist Bitcoin SV on May 1stas a sign of solidarity behind the Bitcoin community. Also, he started a hashtag #DelistBSV.

Photo by rawpixel.com from Pexels

How to Short Bitcoin? A Beginners Guide

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In this article, we will overlook how to short Bitcoin. Most beginner traders think that you can only profit from cryptocurrency price increasing. The basic belief is that if Coin A goes up in price – you profit, but if coin goes down – you lose money. However, this is a very common misconception between underdeveloped financial instrument traders such as altcoin pairs in small exchanges or just inexperienced traders. This brief guide will teach you what is shorting and how you can short Bitcoin.

What is shorting?

The definition of shorting is borrowing any asset or security and selling it with a belief to later sell it for a lower price and after giving back the security keeping the sell-buy price difference. In the essence one is shorting if he believes that the price is going to go down, however, shorting can be used as a tool for hedging. Usually for borrowing assets from a broker for shorting you need to pay some interest, however, some brokers offer a shorting interest free marking it up in trading fees.

Example of shorting

John is grocery shopping at his local market and sees that bag of apples costs 100 USD. John thinks that the price is far from the real value of the bag. He goes to his friend`s house and borrows a bag of apples. Then he goes back to the market and sells his bag. A week later, he comes back to the market and sees that apples now cost 80 USD per bag. He buys a bag for 80 USD brings it back to his friend’s house. The total outcome of this is that John has earned 20 USD due to the fact that he sold the bag for 100 USD and bought it back for 80 which leaves him with 20 USD difference.

You can short Bitcoin on following exchanges

How to short Bitcoin on BitMEX

Lets image that you want to short Bitcoin. The steps that you need to take are as following:

  • Log in or create your own BitMEX account
  • Select your order type: Limit order will let you set exact buying/selling price, market order will execute trade at current market price, Stop market will place a stop-loss at market price when price reaches your target,  Stop limit will do a limit order with stop-loss, Trailing stop will execute order with set price limit from a floating point, take profit-limit will set an opposite order of your current position at your chosen price and amount, Take profit-market will place an opposite order of your current position at certain point and amount within market price.
  • Place your order and you are good to go! Remember to always adjust your margin.

Disclaimer: Always trade with cautions. This guide is for educational purposes only and is not financial advice. Any content displayed is not encouragement for any specific financial decisions e.g. shorting Bitcoin.

How to Choose the Best Crypto Trading Exchange

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At the moment cryptocurrencies are mostly used for speculation and trading. As you might already know, there is always a need for third-party interference to conduct trading operations. Exchange or a broker usually does the job as long as it is not an over-the-counter market. It is very important to choose the right exchange due to many scams, fraud, hacks, and poor performance exchanges. This article will explain to you how to choose the right exchange and will give you some of the best examples.

Is the exchange safe?

Before choosing any crypto exchange the most important thing is to understand whether or not the exchange is safe. Your funds can get stolen by hackers or scammed by fraudulent exchange owners. It is fundamentally important to choose a crypto exchange that stores its funds in cold storage so it is close to impossible for hackers to move large amounts out of the exchange. See picture of largest cryptocurrency exchange hacks below. You should also remember that funds stored on a self-owned hardware wallet is always safer than storing your funds on an exchange.


Crypto exchange hacks by size. Source: Insider PRO

What trading instruments is the exchange offering?

If you are willing to trade the mayor cryptocurrency pairs, then by this criteria almost every exchange will be suitable for you.  When it comes to mid and low cap altcoins you have to seek for specific exchanges. Also, you must check if the exchange is offering real cryptocurrency trading or derivative trading. Derivative markets usually come with bigger leverage and liquidity but their price usually does not reflect real bitcoin price and often makes different, not synchronized price moves.  

Other exchange specifics

A Very important thing to look for is trading volume and liquidity. For every trade you make, you want to be sure that there is another party willing to do the opposite trade. If the exchange does not have any liquidity you might be left with 10000000 dogecoins that you can not liquidate and tell everyone that you are a “Millionaire”. Usually larger the trading volume is the better. The issue that goes hand by hand with trading volume, is trading platform speed. Some platforms are perfect and run without any ease in moments of huge trading volume, some are just slow and clunky and takes you 5 minutes just to confirm a trade. Coughs *Kraken* Coughs. So it is just reasonable to choose the best volume/performance ratio exchange.

List of most popular exchanges

How to start trading in these exchanges?

You can start your crypto journey by registering and depositing funds in one of these exchanges:

BitMEX is a centralized next-generation crypto-coin trading platform, which supports highly leveraged trading via perpetual and fixed-date contracts. To start trading with BitMEX, click HERE.

HitBTC is centralized and it claims it is the world’s most advanced cryptocurrency exchange. Since 2013, HitBTC has been providing markets for Bitcoin, Ethereum, Litecoin, Dogecoin, Monero, USDT, and more than 300 cryptocurrencies in total. To start trading with HitBTC, click HERE.

Binance or Binary Finance is currently the world’s second largest cryptocurrency exchange, with around $6 billion in assets traded in an average seven day period. To start trading with Binance, click HERE.

Kraken, a centralized US-based cryptocurrency exchange operating in Canada, the EU, Japan, and the US, and “the world’s largest bitcoin exchange in euro volume and liquidity”. Kraken provides Bitcoin pricing to the Bloomberg Terminal. To start trading with Kraken, click HERE.

Bittrex is a secure, reliable, centralized and advanced digital asset trading platform developed for international customers and built on Bittrex’s cutting-edge technology. To start trading on Bittrex click HERE.

Kucoin is a centralized cryptocurrency exchange located in Hong Kong. It currently has 178 coins and 398 trading pairs. The most active trading pair on KuCoin exchange is META/ETH. KuCoin is live since 2014. To start trading with Kucoin, click HERE.

Photo by: goodfreephotos.com

What is a DEX (Decentralized Exchange)?

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A Decentralized exchange or DEX is a type of a pair matching that allows users to trade cryptocurrencies and place orders. It’s without an intermediary institution controlling their funds or managing the ledger. Crypto excites people because it is a way to trade value directly. Blockchain allows strangers to trust each other without the need for a central institution.

It is an amazing technology with the potential to change the way we think about trade and structure our economy. Ironically, you have to use a real currency i.e. euros, dollars, yens or any other to enter the crypto ecosystem. This entry is usually done through a number of centralized exchanges like Coinbase or Kraken. To enter a decentralized ecosystem, you have to trust a centralized institution. It manages your accounts, takes your information and is vulnerable to hacks and slowdowns.

Image source: altcoin.io and https://www.cryptocompare.com/exchanges/guides/what-is-a-decentralized-exchange/

Basic Components

There are two basic components when talking about DEXs – centralization, and custody.

Centralization alludes to where is the order routing, matching, and execution. As the term alleges, all action takes place on a specific server using exchange software. DEXs operate on a computer network. Either directly on the chain through the use of smart contracts, or through second layer networks or trusted nodes. Around 98% of transactions take place on centralized networks. This allows some to judge this aspect as one of the most negative concerning crypto infrastructure.

Custody means that the exchange holds the ownership of the accounts keys. If you have coins in a custodial exchange, you do not own them until you have transferred them to an external wallet. In an instance of a hack, slowdown or any technical malfunction there can be serious problems of securing your assets. A non-custodial exchange acts as a service provider. It allows users to keep their coins in private wallets. Also, it helps them do transactions using verified open source smart contracts. The vulnerable point of this system is the time when assets are not in users’ wallets. 

Benefits of a DEX

DEXs offer a number of benefits to crypto users. The main one is free and direct trades, generally representing the main idea and mission of crypto. Centralized exchanges usually gather quite an amount of user data, including name, address and even bank account number. In theory, DEXs use only blockchain information, requiring only a public address. In order to comply with government regulations, even anonymous exchanges have to gather user location data. Some DEXs have tried to pose as open source software providers not liable for their users’ actions. Most of DEXs are non-custodial, giving users the responsibility for the safety of their assets. Existing on a network of separate computers, DEXs are exponentially more secure against hacking. This also means less chance for them to go down.

Top ERC20 DEXs

As you can see in the chart below, IDEX currently is the most popular exchange. However, this chart only represents the exchanges that operate with ERC20 tokens. DEXs like Stellar, Binance, Tron, and Waves native ones aren’t in this chart.

Source: https://etherscan.io/stat/dextracker

The current situation of DEXs

At present DEXs still face a number of drawbacks, being intrinsically more complex than centralized. Even the first steps are not user-friendly and can demand technical knowledge like software installation and configuration. Users typically can only buy and sell their assets, lacking advanced tools like options and margin trading. Only small volume deals with popular coins can be done, meaning low liquidity. High latency time on order processing and cancellation can lead to price changes and price slipping. This allows malevolent users with fast connections to jump ahead and make transactions before anybody else with the same intent.

Major technical problems

There are still some major technical problems that need solving before a move to complete decentralization can happen. It seems that a hybrid model could emerge. It would be with benefits from both – centralized (speed, liquidity, advanced tools) and decentralized (security, anonymity) features. Solutions like 0x protocol, Atomic swaps and Lightning could make the transition even smoother. The role of regulation is still unclear and perhaps governments will still collect KYC information, making true anonymity unreachable. The technologies being developed for DEXs will undoubtedly create a trend of innovations in the crypto world. It will help us to get closer to the dream of fast, anonymous, secure and cheap coin trading.

Source:

https://en.wikipedia.org/wiki/Decentralized_exchange
https://blockgeeks.com/guides/decentralized-exchanges/
https://medium.com/trivial-co/thoughts-on-decentralized-exchanges-and-real-world-usage-of-their-own-tokens-d0a6a16f5d3d
https://www.coindesk.com/why-a-decentralized-crypto-exchange-is-seeking-a-securities-license
https://blog.coinmarketcap.com/2018/09/06/decentralized-exchanges-101-all-you-need-to-know/
https://hackernoon.com/the-state-of-decentralized-exchanges-235064446ab0
https://blog.0xproject.com/a-beginners-guide-to-0x-81d30298a5e0
https://www.investopedia.com/terms/a/atomic-swaps.asp
https://www.investopedia.com/news/understanding-smart-contracts/

Photo by pixabay.com

Kraken acquires London based Crypto Facilities

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On February 4th, Kraken, one of the most popular and secure exchanges in the crypto market, announced that they acquired Crypto Facilities. In a deal worth about nine-figures, Crypto Facilities is a London based regulated crypto trading platform which provides spot and futures trading. 

A pioneer in the industry meets a professional team

Crypto Facilities

Founded in 2014, Crypto Facilities is registered with the U.K. Financial Conduct Authority (FCA), and the deal was approved by the regulator. Crypto Facilities offer individuals and institutions transparent and secure 24/7 trading on a range of crypto derivatives. The service allows to operate with Bitcoin, Bitcoin Cash, Ethereum, Ripple and Litecoin. Crypto Facilities also is the number one cryptocurrency index provider. It calculates the CME CF Bitcoin reference Rate for CME Group’s Bitcoin futures.

Kraken

Founded in 2011, it is a European based exchange, with headquarters in San Francisco, that offers multiple fiat-to-crypto pairs. It is the largest Bitcoin in euro volume and liquidity. Margin trading is also available for specific trading pairs Kraken also requires users to create two factor authentication and PGP/GPG signing encryption for advanced security. Trusted by more than 4 million clients in over 190 countries, including professionals, institutions and authorities, Kraken delivers seamless trading in 20 digital assets and 70+ currency pairs, and offers the industry’s most popular advanced charting, trading and portfolio tracking tools through Cryptowatch.

The deal allows Kraken to offer Futures market within Europe.

“We are excited to introduce eligible clients to these industry leading futures and index products. Over the coming months, our teams will continue to enhance and expand these offerings. We’ve got great stuff in store for traders and institutional clients in 2019,”

says Kraken CEO Jesse Powell.


Additionaly, the acquisition of Crypto Facilities reinforces Kraken’s commitment to meeting client demand for innovative products and services. Eligible Kraken clients will gain access to futures on six cryptocurrency pairs, providing a highly efficient way to trade and hedge cryptocurrency in any market environment.

This huge deal has been the largest deal Kraken has had, not to mention the cryptocurrency space as a whole. This could be the largest deal ever made. Also, their developer count increased massively, says Jesse Powel: “The deal brings our total developer team to over 100, and will accelerate Crypto Facilities by enabling us to add more assets. We plan to launch more contracts in the medium-term and Kraken also has plans to launch more assets.”

Also, since February 4th, Kraken daily volume has increased by approximately $11 million, going from $32 million to $43 million. 

Source:

https://www.coingecko.com/en/exchanges/kraken
https://www.coindesk.com/crypto-kraken-acquires-crypto-facilities
https://blog.kraken.com/post/2089/kraken-acquires-crypto-derivatives-trading-platform-and-index-provider-crypto-facilities-in-nine-figure-deal-official-press-release/