Metrics

Total Market Cap: $454 billion (+5% w/w)
MC 7-Day Range: $51 billion (-45% w/w)
Bitcoin Dominance: 40.0% (+6.0 w/w)

Summary

  • Leaked Emails Between IOTA and MIT Media Lab Shocks No One, Positions Unchanged
  • Circle Acquires Poloniex For $400M USD, Looks To Become Fully Regulatory-Compliant Exchange

IOTA Email Leaks

IOTA ($IOTA) calls itself a “next generation blockchain” for the Internet-of-Things industry (connected devices). Transactions on IOTA are stored on a distributed ledger protocol called the “tangle", IOTA’s name for their Directed Acyclic Graph structure. A node must contribute to validating transactions if it wants to send one itself, thus theoretically the more transactions that are sent the higher the network scales. Fees are zero and no "mining" rewards are given as all tokens ever have already been generated.

Last year in December, IOTA rocketed up the charts from a steady (“”)$1-2 billion USD market cap to $14 billion at its peak, or $5.05 /token, and thenceforth became a perpetual top-10 token. IOTA currently sits right at the tail end at #10, with a $5.5 billion market cap.

On Saturday, an IOTA community blog published the full contents of an email exchange between MIT Media Lab researchers and the IOTA Foundation, the background of a security vulnerability making the rounds last year in September. For both sides of that debate you can read MIT Media Lab’s stance as well as the IOTA Foundation’s stance. The Hacker News reception of the email leak has been generally on the side of MIT and Ethan, the lead researcher uncovering the vulnerability, whereas the Reddit reception has been on the side of IOTA (here are possible reasons for the discrepancy). The IOTA Foundation officially responded and called for the retraction of the MIT report. Cryptographers fired back.

Market speculation, practical use, and corporate partnerships aside… one thing we can hopefully all agree on is to never roll your own crypto. (Looking at you Telegram).

Circle Acquires Poloniex

Poloniex is a US-based cryptocurrency exchange known for offering margin trading & lending as well as a trading live-chat box (the “Trollbox”). On Monday, Poloniex announced that they were being acquired by Circle for a rumored $400 million USD. The reception is very positive so far as Circle is a well-funded startup backed by big names, including Baidu and Goldman Sachs, with multiple product offerings (Pay: p2p payments, Trade: OTC brokerage, Invest: passive crypto investing, Centre: interoperable payment network) as well as an emphasis on legal compliance.

Circle’s immediate plans are to address Poloniex’s scalability issues around “customer support…, risk, compliance, and technical operations” which has been a common problem for most crypto exchanges since the 2017 run-up. A more interesting rumor from a leaked acquisition slide is that Circle has plans to “begin the process of registering [Poloniex] with the SEC and FINRA as a Broker / Dealer”, with the SEC giving tacit assurance that they would “not pursue any enforcement action for prior activity”. With Poloniex’s wide offering of tradable coins, the implication is a new regulation-friendly fiat onramp to coins not on the current consumer-friendly offerings via Coinbase/Robinhood/Square (BTC, ETH, and LTC).

The steady consolidation continues for crucial financial infrastructure, and we will continue to see a more seamless experience between the “traditional” and “crypto” worlds. (Here’s a rant about UX of wallets.)

Leaked slide:
circle poloniex leaked slide

See you guys next week —


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