Crypto News Weekly 02.11.18: Crypto Space Race, Coinbase Raises $300M, Oyster Exit Scam, Bitcoin Trader Faces 5 Years in Jail

Coinbase raises $ 300m for future expansion

One of the leading cryptocurrency exchanges, Coinbase, has just announced it has raised $300 million in a new private funding round, giving it an $8 billion current valuation. The funds were said to be for expanding their operations worldwide and speeding up the process of listing new trading pairs on the exchange.

Coinbase has also announced it is acting as asset manager to a new Bitcoin-focused investment fund of $500 million that is due to be launched before the end of the year. Competition in this sphere is intensifying as illustrated by the owners of New York Stock Exchange, ICE, entering the space in the next few weeks with the launch of their crypto trading platform Bakkt.

Coinbase was also recently in the news after axing 15 remote members of their support team to bring the functions back to actual physically located offices for more effective teams and also denying rumors that it is going to IPO soon.

Crypto’s race into space heats up

Consensys, the major Ethereum startup and development agency, has just bought an asteroid mining company called Planetary Resources. The company has been going for more than ten years, and its main business direction is to mine asteroids to provide supplies for rocket travel outside of the earth’s orbit.

In the same week, Texas-based VC SpaceFund has announced its own security token offering to allow investors to participate in future speculative space projects. They have partnered with Smart Valor and will operate under Swiss regulations. Initially, the project will only be open to US accredited investors, but they hope to open the token sale to non-US ordinary investors after further work with the Swiss financial authorities.

Oyster fraud leaves project in chaos

Crypto project the Oyster Protocol has been thrown into grave chaos after the founder and original author of the protocol seemingly opened a previous backdoor in the code to mint new tokens outside of the normal process, sold them on Kucoin for approx $400,000 and promptly exited. 

The move came just ahead of new Kucoin limits on cashing out for people who have not passed the KYC process and at present the true identity of Bruno Block is not public, but the current management team of Oyster headed by William Cordes has said it will be making his identity known soon. In a long, rambling post and exchanges from Bruno, he admitted taking the money to provide security for him and his family ahead of what he described as the upcoming and last recession the world would see. He also accused the project and all cryptocurrencies of being Ponzi schemes, and announced he had sacked everyone and would carry on working on his own.

The remaining team is picking up the pieces, which at one point saw the token price drop from the mid-twenty cent mark to three cents and then back up again to its previous levels. The team said they are reporting the matter to the relevant authorities.

American Bitcoin trader faces 5 year jail sentence

A 21-year-old American, Joseph Campos, is now looking at a five-year jail sentence and an  $823,000 fine for selling Bitcoins through his website from 2015 to 2016. In a deal with the US Justice department, he agreed to plead guilty to charges of operating an unlicensed exchange and not following any KYC or anti-money laundering procedures. Initially, the accused was buying Bitcoin from an American exchange until he was blocked, and then started buying from a Hong Kong exchange adding up to 5% margins in transactions that purchased in total over $ 3.29 million of Bitcoin for resale.