CryptoAM: ICOs are Securities, Coinbase regulated, and ICO Ghostwriters

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Today, we bring you an edition of CryptoPM, the little brother of CryptoAM. Markets are looking green today! The fact we’re excited about 2% moves tells you a lot about what we’ve been through these past couple of weeks.

3 things you need to know:

One: SEC Chairman says ICOs are security offerings, Bitcoin is not a security. SEC Chairman Jay Clayton has reiterated that all ICOs are classified as securities under US law. Cryptocurrencies such at Bitcoin that are ,“replacements for sovereign currencies,” are, “not a security.”

  • More questions than answers: This still raises questions as to what tokens should be classified as post-ICO. What if a token is worked on by a decentralized team with no head. Who is legally liable for generating returns? What if it is a utility token which does not produce any returns? What a cryptocurrency, meant to replace a sovereign currency, was distributed via ICO?

  • Exchanges may be in hot water. Currently, US based exchanges like Bittrex trade tokens that were distributed via ICO. No cryptocurrency exchanges are regulated by the SEC, but it would seem by the SEC’s own definition, that these exchanges are trading securities in an unregulated environment, and that they will be regulated, “We regulate the offering of that security and regulate the trading of that security.”

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Two: Coinbase wants to become a regulated securities firm. Speak of the devil. Coinbase is in the process of acquiring three licences, a broker-dealer license, an alternative trading system license, and a investment advisor license. After that, Coinbase intends to seek approval from the SEC to offer blockchain based securities, a.k.a, security tokens.

  • What this means: 2019 has been predicted to be the year of security tokens. It seems that Coinbase is on track to ride that wave. As noted in the previous article, it would seem that many tokens today should technically be classified as securities under current US law. If the SEC does decide to enforce the law to its full extent, it seems that Coinbase will be in an advantageous position by being registered as securities firm.

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Three: High demand for ICO ghostwriters in China. Despite the Chinese ban on ICOs, and the ban from selling ghostwriting services on many Chinese sites such as Taobao, vendors are still fervently advertising ghostwriting services. One white paper can cost anywhere from $2500 to $8000. Some sites even offer to build out block explorers, create websites, and even run the ICO itself.

  • Borderline Fraud: There wouldn’t be a demand for this type of service if doing ICOs wasn’t profitable. This clearly shows how many unqualified ICOs are out there who will likely not come close to achieving anything written in their whitepaper. Even seemingly good projects have outsourced their white papers. Personally, I know a few projects that have contracted out every aspect of their ICO. Obviously, these are bad, bad investments. Stay vigilant and DYOR.

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Also in the news:

What I’m reading today:

Sentiment Analysis in Cryptocurrency

What is really driving the cryptocurrency market, is it the fundamentals of tokens? Considering Tron is #10 on CMC, I would say, no, at least not primarily. Is it the technicals? There is so much irrationality in this market, so many completely unpredictable pumps and dumps, and rampant manipulation. TA will not tell you the story of a coin. But what about sentiment? Sentiment, in my opinion, is the main driver of prices in this market.

Sentiment cannot be evaluated by reading the whitepaper. To get an idea of the general sentiment in the market and the sentiment of specific assets, you need to gather data from a wide range of sources. Below I’ll list some of those sources.

Obviously this isn’t everything you should look at, and to really make use of the data you will need to build your own tools. If you’re interested in learning how any of the listed sources can help you analyze sentiment, check out the linked article.

Around the corner:

Market Outlook:

Do I need to say it? Those of you who read everyday already know this, but we are playing the waiting game right now to see which way BTC breaks.

Good news: If you guys followed through and took out a long with me at 7.58k, we’re sitting in the green. We’re hovering between 7680 and 7720 right now, and the first level to break will likely tell us where we’re headed.

My thoughts: My bets are on another retest of 7.8k today, like yesterday. If we get rejected at that level again, markets will likely begin a trend back down to 7.4k.

Fear and Greed: Not much movement from the F&G index over the past day. Speculation is still very low, which is odd for a sideways trading market. Shorts are out in full however, which could make a break up very satisfying as it would bring significant buy pressure due to a short squeeze.

Here’s a reminder on what these criteria mean

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