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FACEBOOK’S LIBRA ASSOCIATION SHRINKS
Resistance to Facebook’s libra plans strengthened last weekend, as eBay, Stripe, Mastercard and Visa all backed out of the Libra Association prior to its inaugural board meeting this week. Facebook officially unveiled the initiative’s 21 founding members at the meeting, down from the 28 that were part of the consortium when it was first announced in June and further away from the 100 members it hopes to have on board for libra’s planned launch in 2020.
Politicians share these corporations’ doubts. U.S. Congressman Warren Davidson said libra will need to be regulated as a security if it’s ever launched due to the centralization involved in its development, and he suggested Facebook should follow Cash App’s lead by integrating bitcoin into its platform instead of creating its own currency.
IRS BITCOIN BUST
The U.S. Attorney’s office announced Wednesday that it had taken down the world’s largest dark web child pornography site with the help of the IRS Criminal Investigation division. IRS-CI agents traced bitcoin transactions to people worldwide who were uploading and downloading material on the Welcome to Video site and identified the site administrator. Jong Woo Son was indicted by a federal grand jury and is currently in custody in South Korea.
“You now deal in cryptocurrency, again thinking this will make you anonymous, but our agents have once again proved there is nowhere you can hide,” IRS-CI Chief Don Ford said. “We will not stop in our pursuit.”
The IRS is also upping its oversight of less sinister cryptocurrency transactions by adding a new question about them on form 1040, following up on the new guidance it issued last week.
CRYPTO MARKETS
Bitcoin dipped below $8,000 again briefly this week, with market sentiment declining and short sellers making their influence felt. “With volumes still quite low relative to this summer, shorts are incentivized to keep pushing prices lower until they hit resistance,” Arca CIO Jeff Dorman said.
Plus, a breakdown of why litecoin fell so far in September after its August halving.
Source: Messari. Prices as of 4:00 p.m. on October 18, 2019.
CLASH IN CHINA
Binance launched its P2P trading platform earlier this month with the hope that it would trigger a new wave of bitcoin adoption in China, where exchanges have effectively been banned since 2017. But Alibaba-owned payment platform Alipay isn’t on board. "If any transactions are identified as being related to bitcoin or other virtual currencies, Alipay immediately stops the relevant payment services," Alipay tweeted.
ENTERPRISE
London-based blockchain startup Fnality announced plans to launch the Utility Settlement Coin (USC), partnering with a consortium of some of the world’s biggest banks, including Barclays, Credit Suisse and UBS. It will be a financial services tool fully backed by cash accounts in central banks with a mission to serve the growing digital marketplace.
Also, TradeLens, a blockchain platform co-owned by IBM and shipping conglomerate Maersk, landed two top-five ocean carrier lines to use its service this summer and is now expecting a bigger year in 2020.
ELSEWHERE
Inside Facebook’s Botched Attempt to Start a New Cryptocurrency [Wall Street Journal]
Fed Drags Feet as Digital Money Challenges Central Banks [Bloomberg]
Texas Bitcoin Mining Startup Gets $50 Million From Peter Thiel to Steal China’s Crypto Crown [Fortune]
It’s not ‘Bitcoin the Musical,’ but blockchain technology is coming to Broadway [Fast Company]
