Troubles at Exchanges, Investments Continuing, and R3CEV Exploding from Within. Cryptospace News, May 8 – 14


Bitcoin and related issues, positive and not-so-positive news from exchanges and platforms, new investment in the industry, and possible contradiction in the midst of interbank umbrella — all in ForkLog’s traditional weekly overview.

Bitcoin Price

Last week was pretty calm for bitcoin. Its price, one the background of relatively small trade volume, has stabilized in the corridor between $450 and $460.

A week ago, bitcoin’s behavior was mainly dependent on the hype around Craig Wright, who later rejected to prove he was Satoshi Nakamoto, and thus disappointed the community. However, as it turns out, his revelations don’t matter at all: on Monday, bitcoin reached $463 for a short while, but on Tuesday it dropped to $450, and then to $448. The cryptocurrency spent the rest of the week dancing around $455.

Some experts believe that, unless game-changing applications are developed for bitcoin, it will hardly experience anything serious. Some others believe that implementation of solutions like Lightning Network or Segregated Witness, which became much closer now, may positively influence the price.

The day when mining reward halves is drawing nearer. However, currently the community may enjoy a rare period of lull and price consolidation. Bitcoin is traded around $454 at the time of writing, having lost only 0.11% of its price in 24 hours.

Segregated Witness, Lightning Network, and Scalability Issues

Apart from the forthcoming reward halving, lots of community members are waiting for Segregated Witness’s implementation. Even though Peter Wuelle’s solution was officially presented back in April, Bitcoin Core continues its testing unwilling to make thoughtless steps. Eric Lombrozo of Bitcoin Core decided to settle the matters and shed some sunlight on the project’s progress and expected time of SegWit implementation.

A meeting with Lightning Network’s team in Kyiv became another landmark of the week. ForkLog couldn’t ignore such event and sent our reporter in the field. The detailed article on the protocol’s advantages and its global implications for bitcoin is already available. Enjoy!

Meanwhile, none other than Vitalik Buterin, founder of Ethereum, decided to join bitcoin scalability debate. He stated that the community would be much happier if protocols become independent.


Ethereum itself, being the second cryptocurrency next to bitcoin in terms of market cap, remains an item of interest. Its tokens, Ethers, became a part of investment portfolio of Gemini founders, the Winkelvoss brothers. They refused to be more specific about the amount, but one would hardly be wrong in the assumption that it is higher than average.

Their investment came to light shortly after their exchange joined the ranks of Ethereum-trading platforms. Another Ethereum ‘newcomer’ is Kraken. Ethereum’s popularity forced it to commence ETH trading via so-called Dark Pools. The exchange stated it is currently the only company offering such service. Minimum bid for dark pool comprises 50 BTC / 2,500 ETH.

Meanwhile, Poloniex has announced its support for the Ethereum Foundation’s DAO token crowdsale. Notably, on Friday, when the announcement was made, the crowdsale managed to raise 5.91million ETH, the amount has abruptly grown to 9.62 million in around 24 hours, which is comparable to what had been raised since the campaign’s start this April.

Exchanges and Platforms

On Saturday night, it became known that Hong Kong-based exchange Gatecoin might have been hacked. Currently the exchange is not operational, and its losses, according to unconfirmed reports, may be as high as $2 million. Something like that has already happened this month – earlier ShapeShift experienced similar problems, though its losses turned out to be not as harsh, and comprised around $230,000.

Team of decentralized market OpenBazaar brought more positive news by publishing their first roadmap, according to which the project intends to become the world leader in free trading. Indeed, as seen from the roadmap, there are truly big things to come.

Meanwhile, Denmark-based CCEDK has announced it will re-launch as a portal for their fintech exchange OpenLedger and an information hub for investors. They also intend to launch news services, including asset issuance, marketing support and escrow services, and merge trading volumes of both platforms.

Australia’s cryptocurrency exchanges may also await some changes, as the local government has supported the recommendations as to regulation of such platforms. This would entail enforcement of AML regulations and anti-terrorism laws in their regard. Amendments to relevant laws are expected to be introduced in a short term.

Trouble at R3CEV?

R3CEV has found itself in the middle of a peculiar story this week. According to media reports, the consortium intends to establish a subsidiary company, and wants to raise $200 million from member organizations in exchange for a share therein. The project in question is to be established as a part of Corda, a financial solution for banks based on distributed ledger technology.

The very idea is hardy controversial. Business models like that are a very popular solution. However, the situation has brought some controversies to the surface. According to Finextra (their feature was deleted shortly after the publication, but Google’s cash does not forget), there was something that had seriously troubled the consortium members. The thing is that hey won’t own the very product, as R3 lab isn’t a part of an enterprise to be established.

One of the insiders even called the contradictions an explosion within R3, and added that some major banks were not happy about the approach. According to the same source, the banks are currently weighing their next moves.

R3CEV’s business model has been widely criticized, so it would be interesting to know how it all ends. The consortium’s top management have provided no comments in this regard so far.

News of Investment

Two more bitcoin/blockchain companies have raised funds this week. Thus, blockchain startup Fluent engaged in optimization of logistics and supply chains for companies, has raised $1.65 million. Japan-based TechBureau, which operates Zaif exchange and blockchain platform Mijin, has raised $6.2 million. Their two projects will now be merged.

Japan’s SBI Holdings was one of TechBureau’s investors. This week, SBI has announced its plans to become a key player in fintech ecosystem. For that purpose, it intends to build a network of startups, and support them via their venture investment wing SBI Investment.

ForkLog Exclusives

This week, ForkLog talked with Valery Vavilov, CEO at BitFury, one of the leading fintech companies. Vavilov told us about the group’s recent reorganization, their recently launched project on land title registering in Georgia, and, most certainly, about the company’s plans for the future.

Another project that our readers could find out about is Cryptonomica launched by the Center for International Arbitration and Cryptography. The organization is a permanent arbitration court registered in London. The project’s co-founder Maxim Baryshnikov told about what the project actually is, and what it has to do with blockchain.

We also talked with Eugene Zolotoy, CEO of Smolensk-based mining equipment manufacturer 51ASIC. The conversation was extremely interesting, and it features lots of interesting details on the company and its plans. The latter may, however, be affected by possible ban of cryptocurrency in Russia.

Meanwhile in Russia

Eugene Zolotoy has also expressed his hope that cryptocurrencies will evade banning; however, he confirmed that in case it still happens, he would consider moving his business abroad.

One of those intending not to let this happen is Alexei Bragin, board member at and ReactOS coordinator. On May 22, he will participate in primaries for future parliamentary elections in Russia. He states his basic purpose is to defend science and small business, and to promote new technologies. He also states he would be defending Bitcoin. More about Alexei’s intentions can be found in our material.

The bill set to penalize bitcoin operations is hardly fine: it still will be submitted to the State Duma, however, there are several contradictions the government has failed to settle. The Ministry of Justice refused to approve it, as the new revision of the bill does not take their comments into account. As a result, the parties have signed minutes of the consensus meeting concerning the bill.


Contrary to traditional ending of an overview, we invite you to look into the near future. Next week, Ukraine’s capital of Kyiv will host Fintech Week 2016. Meanwhile Prague will host Blockchain & Bitcoin Conference Prague on Thursday, May 19.


Have a positive weekend!

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