Chinese Crypto Giant Huobi Launches Billion-Dollar Blockchain Fund

Huobi Labs, a blockchain incubator that is part of the Huobi exchange, has signed an agreement with Tianya Community to build a “Global Cultural and Creative Blockchain Lab” in Hainan Province, China, alongside the launch of a billion-dollar industry fund that aims to back the blockchain industry globally.

Under the background of the “new era of Chinese socialism characteristics,” the government has given Hainan Special Economic Zone a new mission of economic reformation. President Xi Jiping, personally planned, deployed and promoted the national strategy.

Huobi To Support National Strategy

Huobi China will support the national-level strategy and will use its technology, resources, talents and capital in the global blockchain industry to contribute to Hainan Special Economic Zone development and explore the construction of an international free trade port, the company announced on its website.

This year, the Huobi Group will:

1. Move Huobi China headquarters (Not Huobi Global, Nor Huobi Pro) to Hainan in the Hainan Ecological Software Park.
2. Build 10 global blockchain labs in collaboration with top global industry companies.
3. Build a global blockchain research institute with the world’s top universities.
4. Build a 40,000-square-meter blockchain incubator.
5. Create a billion-dollar global blockchain industry fund.

Huobi Seeks Government Partnership

Huobi was among China’s biggest cryptocurrency trading platforms prior to crippling domestic regulations that effectively curtailed the industry. After closing its Chinese trading platform in October, Huobi founder Leon Li summed up China’s curtain call as a “watershed moment” for the industry before launching Huobi Pro, its international trading platform headquartered in Singapore.

Huobi’s recent announcement to offer its own token, dubbed “Huobi Token” (HT), is another step in the former Chinese exchange giant’s diversification strategy, which includes an expansion into major cryptocurrency markets in South Korea and Japan.

The utility token is based on the Ethereum blockchain’s ERC-20 standard and will be capped at 500 million tokens. ‘Huobi Token, short for “HT”, is a token system based on Blockchain launching and management,’ the firm explained in a post on its website.

Philippines Legalizes Cryptocurrency in Economic Zone of CEZA

The Philippine government is welcoming nearly a dozen cryptocurrency companies to operate in a special tax-friendly economic zone situated in close proximity to a number of neighboring countries.

According to a Reuters report, the Philippines will legalize the entry of  top 10 blockchain and cryptocurrency companies to operate in the Cagayan Economic Zone Authority (CEZA), a government-controlled economic zone that is within an hour’s flight away from the likes of Hong Kong, China, and Taiwan.

The government aims to woo cryptocurrency companies to operate out of the economic zone with tax benefits to help generate employment opportunities locally, Cagayan Economic Zone Authority chief Raul Lambino told Reuters.

Notably, the official confirmed that the government will also license – in effect legalize – the cryptocurrency firms in the special zone.

The companies will also be allowed to operate exchanges, offer initial coin offerings (ICOs) and engage in cryptocurrency mining within the zone, he added, stating:

We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans…They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange.

There is a caveat, however. Any exchange of fiat money into cryptocurrencies or vice-versa should be conducted beyond Philippines’ borders to avoid infringing the country’s laws.

To aid in bringing jobs to those companies, the economic zone’s regulator is also considering establishing a new financial technology university in the economic zone with a specific focus on blockchain technology, Lambino added.

The embracive stance follows newly introduced rules by the CEZA in February which allowed cryptocurrency companies to legally establish offices and facilities in the special zone. To gain a license, companies must invest at least $ 1 million in the zone over two years and pay up to $100,000 in licensing fees.

Meanwhile, in the mainland, the Philippines’ central bank was previously known to be reviewing the applications of a dozen operators vying to register and launch cryptocurrency exchanges in the country as recently as December. It remains to be seen if these operators have since switched tact to register in the economic zone instead.

The Philippines became one of the earliest nations in the world to publish regulations for cryptocurrency exchanges in early 2017. The deputy director of the central bank, appearing in a televised interview in October 2017, lauded the ‘pioneering regulation’ and said bitcoin, as a monetary instrument, is “fast, near real-time and convenient”.

Telegram ICO Hits $1.7 Billion After 2nd Funding Round

The Telegram ICO has now raised a total of at least $1.7 billion, public documents show.

According to offering documents filed with the US Securities and Exchange Commission (SEC) and dated March 29, the second round of Telegram’s much-hyped initial coin offering (ICO) raised $850 million in a sale that began on March 14.

The filing reports that 94 investors contributed to the funding round, placing the average individual investment at approximately $9 million. The previous funding round, which occurred in January and also raised $850 million, attracted 81 investors for an average individual investment of $10.5 million.

Both rounds of the Telegram ICO have been reported to the SEC under Rule 506(c) of Securities Act Regulation D, which allows unregistered securities issuers to raise an unlimited amount of money as long as they restrict contributions to accredited (i.e. wealthy) investors, file a simple report with the SEC, and require investors to submit to a predefined vesting period before selling their stakes.

The $1.7 billion Telegram has currently raised exceeds the $1.6 billion the firm was reportedly targeting in February.

However, Telegram has been notoriously opaque in both the development of its new blockchain protocol and the handling of the ICO, so it is unclear whether this marks the conclusion of the firm’s token sale or founder Pavel Durov will seek to raise more cash for the project in the near future.

This opacity has scared many big-name investors away, including renowned cryptocurrency hedge fund Pantera Capital.

The company claims that the Telegram Open Network (TON) — whose native token is called “Gram” — will be a revolutionary “third-generation blockchain” that has the network capacity to process 1 million transactions per second at virtually no cost. However, many blockchain developers have raised serious questions about the practicality of TON’s proposed system.

As CCN reported, quantitative analyst Aaron Brown estimated that the TON could reach a $200 billion market cap in five years — a best case scenario — but that current investors are likely overpaying for the Gram tokens.

Bittrex Will Remove 82 Tokens Due to Lack of Liquidity in Small Cryptocurrencies

Bittrex, one of the largest cryptocurrency exchanges which also powers UpBit, South Korea’s second biggest exchange operated by Kakao subsidiary Dunamoo, has stated that it will remove 82 tokens from its trading platform.

Token Removal

“Occasionally, there are circumstances that lead Bittrex to remove a coin’s wallet or market from the Bittrex Exchange,” said the Bittrex team. “We will be removing the wallets included in the list below on March 30, 2018. Once these wallets are removed, we will no longer be able to recover these coins. Users must withdrawal their coins before March 30, 2018, in order to keep them.”

The Bittrex team also stated that several cryptocurrencies have broken blockchains that have disabled users from withdrawing their balances.

“The coins marked with an asterisk (*) have broken blockchains or wallets that will not allow withdrawals,” said Bittrex, referring to cryptocurrencies like CRYPT.

On leading trading platforms, it is difficult for exchanges to sustain a stable order book if a cryptocurrencies does not have enough liquidity and demand from users of the platform. Lack of liquidity leads to price manipulation, which can be initiated with funds as little as $50,000, as shown in the recent study done by cryptocurrency trader Sylvain Ribes.

By using a method called slippage–a process of selling $50,000 worth of a particular cryptocurrency on a trading platform to measure its impact on the price–, Ribes evaluated the liquidity of digital assets on major exchanges like OKEx and GDAX. While GDAX had a slippage of less than 1 percent, on OKEx and other cryptocurrency-only exchanges with low market cap or volume cryptocurrencies, each sale of $50,000 led to a 2 to 10 percent drop in the market value of cryptocurrencies.

“A bit of wash trading and artificial volume inflation is to be expected in a thoroughly unregulated market. What I did not expect was the magnitude of the fraud,” said Ribes. “Many pairs, albeit boasting up to $5 million volumes, would cost you more than 10% in slippage, should you want to liquidate a mere $50k in assets,” he added.

Wash trading and price manipulation is common on major trading platforms with small cryptocurrencies or low-volume cryptocurrency pairs. The US Securities and Exchange Commission (SEC) recently warned investors against pump and dump schemes that are often seen in the cryptocurrency market.

“Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams. These frauds include ‘pump-and-dump’ and market manipulation schemes involving publicly traded companies that claim to provide exposure to these new technologies,” SEC’s statement read.

SEC’s Involvement

Earlier this month, the SEC requested cryptocurrency exchanges to either de-list ICO tokens or register with the agency in order to continue providing support for tokens. For US-based cryptocurrency exchanges like Bittrex, it is mandatory to register with the SEC before processing trades involving tokens.

Throughout next few months, many major exchanges will likely de-list or remove small cryptocurrencies that are prone to pump and dump schemes, and market manipulation.