Coming Collapse of Major Crypto Exchanges? Bitcoin to $2950?
The Future of Blockchain: Asset-Backed Token (ABT) ICOs
Exchanges Under Regulatory Fire While Tether Plunges 6%
UPDATE: Binance suspends Tether withdrawals: https://www.coindesk.com/binance-suspends-tether-withdrawals-after-disavowing-delist-rumor/
I am writing an urgent article on the state of major crypto exchanges and potential SEC regulatory action that by all the market indications is highly likely to come much sooner than I would have expected. Most major exchanges such as Binance and Bittrex seem to operate as unregistered broker/dealers of securities. By all accounts, both are very likely to have investors who are both U.S. citizens and not accredited investors.
While a ‘softer’ solution may well be reached, I believe that the SEC is liable to scrutinize and eventually shut down and/or freeze the assets of some of the major exchanges which would have a massive impact on the cryptospace. Regardless of their approach, regulation and enforcement is coming in full measure, and most likely sooner than expected given the recent headlines.
In addition, the Stablecoin Tether has just plummeted 6% to $0.94 at the time of this writing. Tether is supposed to be pegged at $1. Cryptocurrencies across the board on exchanges such as Binance that are heavily pegged to tether have suffered 7–8% drops in price. A 6% drop in Tether is almost unprecedented. Crypto investors have bought billions of dollars worth of Tether this year as a way to peg their crypto investments to the dollar without having to move back into fiat which stems the hemorrhaging in the cryptospace as valuations have tanked.
The average cryptocurrency has lost more than -85% of its value with the tenth best performing crypto in 2018 down -77%. In an upcoming piece, I project the price of bitcoin could easily lose another 50% if not more from current levels based on a number of fairly predictive metrics that, when taken together, have had a high degree of accuracy since 2011 in foretelling major trends in the price of bitcoin. If bitcoin were to correct -87%, the amount it corrected in its prior bear market, bitcoin would be at $2950.
Other serious issues have reared up. From what is publicly available, Tether is closely tied to BitFinex, a global crypto exchange. BitFinex ended its relationship with Noble Bank, its banking partner. The amount of U.S. dollars required to back the Tether’s USDT token supply were reportedly deposited in the same bank. Later, reports started to surface that Tether had no money to back its total supply, with many of them calling the stablecoin project a scam. A strong connection between the chiefs of BitFinex, Tether and Noble Bank was also found, especially at the time when the Noble bank became a strong point of concern for the Puerto Rican regulators. Reportedly, regulators issued a warning to the firm.
The question is whether Tether has funds to support its USDT supply or not. With billions of dollar equivalents on the line, the result could be catastrophic. The question can be answered with a clear and transparent audit. Against the promises made in their original whitepaper, the Tether team has not conducted a proper financial audit. It had however hired a legal firm, which already had a business relationship with Tether and Noble Bank, to perform an inspection. No results have been published.
As a consequence of these latest quakes, retail investors are exchanging their Tether holdings for Bitcoin and other top coins over the last 24 hours causing the price of bitcoin to spike several percent while the value of Tether has dropped several percent.
But just as ominous for exchanges such as BitFinex, the following article https://bitcoinexchangeguide.com/sec-shuts-down-1broker-as-crypto-community-says-binance-and-bitmex-are-next/ says, “Binance and BitMEX, however, at least maintain a semblance of banning American users. Users with American IP addresses are often prohibited from participating in the platform, for example.”
Yet it seems evident that a number of U.S. citizens who trade on Binance and other major exchanges are not properly regulated, ie, are not accredited investors. Some don’t have an American IP address because they do not live in the U.S. For those who live in the U.S., a simple Virtual Private Network service (VPN) is an easy way to get around the restrictions. The SEC may take action against such exchanges in the coming weeks to months even though they are located outside the U.S., and is one of the primary reasons why we launched Hansecoin http://www.hansecoin.com. It is not just the world’s first asset backed token (ABT) platform, bringing fractional ownership into hard assets such as real estate, but it is an ICO in regulatory compliance that is backed by hard assets.
The pointless number of vapid go-nowhere business vaporware in the ICO space which probably covers the vast majority of the 6000+ ICOs launched to date must end. A full blown regulatory response is urgently needed. Such would likely cause the current correction to decimate crypto valuations. But it is what the cryptospace needs just as post dot.com vetting was necessary back in the early 2000s.
We at Hansecoin fully back all regulatory measures thus have been working closely with regulators here in Estonia to insure we remain compliant at every step of the way. It is the world’s first asset backed token (ABT) platform that is compliant with regulations. The first Use Case is backed by real estate. The ABT is the logical next step in the evolution of the ICO in terms of capital raise.
With the Hansecoin ABT platform, multiple investors will be able to own a piece of the capital gain potential and yield of a hard asset such as real estate, some land, an apartment, or an entire apartment complex. The asset provides a floor to the price and increases stability versus speculative tokens and coins.
The tokenisation platform will embrace and follow regulations, and when secured, projects all across the EU may deliver underlying yields 7 to 11.4% or higher, potential capital gains, and provide bonuses and access to future project tokens at an attractive discount versus those joining after the Vesting Period. There is a revolutionary future in its application across multiple asset classes. Notably, this tokenisation approach may become a template for asset backed token projects.
The reliability of blockchain technology enables effective fractional ownership of the fruits of an asset via a highly efficient distribution of value while greatly enhancing liquidity in what has traditionally been a fairly illiquid market. Blockchain, when done properly, provides a solid foundation where a far more efficient capital employs real contractors, builders, architects, interior designers, mortgage banks, attorneys, accountants, property appraisers, and experienced realtors and sales agents to all work together to develop land into liveable homes and apartment complexes.
Consequently, it comes as no surprise that the blockchain space is exponentially growing at breakneck speeds across many industries. We at HanseCoin have built a robust superstructure that will allow any hard asset to be tokenised. Additional asset backed projects will be added to the platform as it can be scaled up and eventually white labelled. Further, our platform allows investors to diversify their risk by pegging their investment to the euro, thus stemming the hemorrhaging of steep and often catastrophic losses crypto investors have endured in 2018 in bitcoin, ethereum, and virtually all other cryptocurrencies. Peak-to-trough, the flagship ethereum cryptocurrency has lost -88% of its value.
First Asset Backed Use Case
Our initial project comprises of 6.6 hectares of land with space for 214 apartments across 28 houses including a decent site kindergarten and nursery, just 15 minutes from Tallinn’s city center, and has been permitted with building designs and projects approved and relevant infrastructure already built. The next step is construction; the land is thus “shovel ready” to be developed. A capital raise of 6.6 mil euros of construction capital to complement senior debt will be conducted via the issuance of the first round of ICO tokens in the fall of 2018.
Outside the cryptospace and blockchain hype, what remains when the fog lifts? Shovel ready land that is being transformed into residential property. Even if the cryptospace and bitcoin were to go to zero, or regulatory burdens were to become too onerous, the foundation of our project remains intact. From here, additional projects will be added thus the whole platform is scalable and the tokenization approach is suitable for white labeling.
Ultimately, fractional ownership of real estate alone is an untapped multi-billion market. Subject to applicable regulation, fractional ownership should enable a real estate owner to split up their home or property investment and sell off incremental equity stakes. The real estate equity can then be freely traded until, one day, when the property is sold, the owner and equity investor can both enjoy any gain in the property’s value.
But our asset backed tokenization platform does not end with real estate. Other hard assets will also be tokenized. Several such projects await in our queue and should materially impact the value of HanseCoin.
Due to substantial private interest, our project starts with a private sale. If and when suitable, it will become publicly available for sale. Private sale participants will receive bonuses which we will detail in our telegram. Please join today for timely updates: https://t.me/HanseCoin
We’re going into a new era. Buckle up!
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