Bitcoin price dived with bearish moves and retested the key $3,540 support area against the US Dollar.There is a crucial declining channel in place with resistance at $3,585 on the hourly chart of the BTC/USD pair (data feed from Kraken).A break above the channel resistance and $3,600 could spark more upsides in the near term.On the downside, the main supports for buyers are near $3,540 and $3,500.Bitcoin price is consolidating above key supports against the US Dollar. BTC buyers are eyeing the next bullish break above the $3,600 resistance area in the near term.Bitcoin Price AnalysisThere were a couple of rejections noted near the $3,600 resistance in bitcoin price against the US Dollar. The BTC/USD pair declined recently and broke the $3,570 and $3,550 support levels. The price even broke the 61.8% Fib retracement level of the upward move from the $3,538 low to $3,635 high. However, the decline was protected by the key $3,540 support area. A low was formed near the $3,534 and later the price bounced back above the $3,550 level.Buyers pushed the price above the 23.6% Fib retracement level of the recent decline from the $3,632 high to $3,534 low. However, there is a strong resistance formed near the $3,585 and $3,600 levels. The 100 hourly simple moving average is also near the $3,585 level. More importantly, there is a crucial declining channel in place with resistance at $3,585 on the hourly chart of the BTC/USD pair. Besides, the 50% Fib retracement level of the recent decline from the $3,632 high to $3,534 low is at $3,583.Therefore, a break above the $3,585 and $3,600 resistance levels is a must for an upside acceleration. The next key resistance is near the $3,630 level, above which the price could rally towards the $3,700 level. An intermediate resistance is $3,655 and the 1.236 Fib extension level of the recent decline from the $3,632 high to $3,534 low.Looking at the chart, bitcoin price seems to be facing a strong resistance near $3,600. There are two possible scenarios, first, the price breaks the channel resistance and trades towards the $3,630 and $3,655 levels. Second, it declines once again towards the $3,540 support. If there are more losses below $3,540, the next major support can be seen near the $3,500 level.Technical indicatorsHourly MACD – The MACD is slightly placed in the bullish zone, with a few positive signs.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is placed nicely above the 50 level, with a minor bearish angle.Major Support Level – $3,540 followed by $3,500.Major Resistance Level – $3,585 and 3,600.
Archives for February 14, 2019
The total crypto market cap seems to be struggling near the $118.0B and $119.0B resistances.EOS price started a downside correction and declined below the $2.85 support level.Binance Coin (BNB) is performing nicely and it is currently up around 2.5% to $9.20.Bitcoin cash price is currently consolidating above the $122 support level.Tron (TRX) price broke a key support and settled below the $0.0250 level.The crypto market is facing an uphill task, with bearish moves. Therefore, there is a risk of bearish reaction in bitcoin (BTC), Ethereum (ETH), Binance coin (BNB), BCH, ripple, EOS, TRX and ADA.Bitcoin Cash Price AnalysisBitcoin cash price struggled to stay above the $125 resistance level and later declined against the US Dollar. The BCH/USD pair moved below the $124 level and tested the $122 support. The pair is currently consolidating above the $122 support, with the next immediate support at $120.If there is a fresh upward move, the price could face a strong resistance near the $125 level. On the downside, a break below the $120 support level might spark heavy bearish moves in the near term.EOS, Tron (TRX) and BNB Price AnalysisEOS price rallied recently and traded towards the $2.95 and $3.00 resistance levels. Later, it started a downside correction and traded below the $2.85 and $2.80 support levels. The next key support is near $2.75 and $2.72, where buyers are likely to emerge.Tron started failed to stay above the $0.0270 and $0.0265 support levels. TRX price declined recently and broke the $0.0255 and $0.0250 support levels. The price is currently trading near the $0.0240 level, with an immediate support at $0.0235. The main resistance is at $0.0255 (the previous support level).Binance coin (BNB) performed really well in the past few days and rallied above the $8.00 and $9.00 resistance levels. BNB even traded above the $9.50 level and later corrected lower. The price is currently trading above $9.10 and it seems like it could revisit the $9.50 resistance in the coming sessions.Looking at the total cryptocurrency market cap hourly chart, there was a downside correction from well above the $120.0B level. The market cap declined below the $118.0B support and tested the $115.0B support. It is currently consolidating in a range, plus facing a strong resistance near the $118.0B and $119.0B levels. As long as the market cap is below the $118.0B and $119.0B levels, there is a risk of a downside reaction. On the downside, a break below the $115.0B support could spark bearish moves in bitcoin, ETH, tron, litecoin, EOS, ripple, stellar, litecoin and other altcoins in the near term.
Ripple price is currently trading well below the $0.3045 and $0.3070 resistances against the US dollar.There is a major bearish trend line formed with resistance at $0.3070 on the hourly chart of the XRP/USD pair (data source from Kraken).Recently, there was a break below a connecting bullish trend line with support at $0.3000.The pair could correct a few points in the short term, but there are chances of a sharp drop to $0.2940 or $0.2910.Ripple price continues to trade in a bearish zone against the US Dollar and Bitcoin. XRP/USD might dive towards the $0.2900 area before starting a fresh upward move.Ripple Price AnalysisAfter trading as high as $0.3094, ripple price traded below the $0.3070 support against the US Dollar. The XRP/USD pair declined steadily and traded below the $0.3050 and $0.3040 support levels. There was a break below the 61.8% Fib retracement level of the last wave from the $0.2941 low to $0.3094 high. It opened the doors for more losses below the $0.3000 support. Later, there was a break below a connecting bullish trend line with support at $0.3000 on the hourly chart of the XRP/USD pair. The pair tested the $0.2970 swing low and later started trading in a range.The price is currently trading well below the $0.3045 resistance and 100 hourly simple moving average. The recent low was $0.2971 and it seems like the price might correct higher in the short term. An initial resistance is near $0.3030 and the 50% Fib retracement level of the last drop from the $0.3094 high to $0.2971 low. However, the main resistance is near the $0.3070-0.3080 area. More importantly, there is a major bearish trend line formed with resistance at $0.3070 on the same chart. The 61.8% Fib retracement level of the last drop from the $0.3094 high to $0.2971 low is also near $0.3047 to act as a resistance. Therefore, if there is an upside correction, the price could face a strong resistance near $0.3045 and $0.3060.Looking at the chart, ripple price seems to be trading in a bearish zone below the $0.3060 resistance. If sellers gain control, there is a risk of a downside thrust below the $0.2970 low. The next support is at $0.2945, below which the price could drop towards the $0.2900 area. As long as the price is trading above the $0.2900 support zone, it is likely to bounce back above $0.3060 and $0.3100.Technical IndicatorsHourly MACD – The MACD for XRP/USD is slowly moving in the bearish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is currently just below the 50 level, with a bullish angle.Major Support Level – $0.2940Major Resistance Level – $0.3060
ETH price struggled to stay above the $121 and $119 support levels against the US Dollar.This week’s followed major bullish trend line was breached with support at $121 on the hourly chart of ETH/USD (data feed via Kraken).There is a new connecting bearish trend line in place with resistance at $121 on the same chart.The price could revisit $121-122 resistance zone, where sellers are likely to reemerge.Ethereum price is pointing a few bearish signs against the US Dollar and bitcoin. ETH/USD is now at a risk of an extended decline towards the $117 or $114 support level in the near term.Ethereum Price AnalysisIn the past few days, we saw range moves in ETH price below the $124 and $125 resistances against the US Dollar. The ETH/USD pair failed to break the $125 resistance and it recently declined below the $121 and $119 support levels. The decline was such that there was a spike below the $117 level and the 100 hourly simple moving average. More importantly, this week’s followed major bullish trend line was breached with support at $121 on the hourly chart of ETH/USD. The pair traded close to the $115 support and later bounced back sharply above $117.Buyers were able to take the price above the 50% Fib retracement level of the recent decline from the $125 high to $115 low. However, the previous support levels near $121 and $122 are acting as hurdles for buyers. Besides, there is a new connecting bearish trend line in place with resistance at $121 on the same chart. The price also struggled to clear the 61.8% Fib retracement level of the recent decline from the $125 high to $115 low. At the moment, it seems like the price might jump above the $121 level, but upsides are likely to remain capped. If buyers struggle to push the price above the $122-123 zone, there could be a fresh decline.Looking at the chart, ETH price is somewhat struggling below the $122-123 resistance zone. Having said that, the price needs to clear the last swing high at $125 to continue higher in the near term. If not, there is a risk of more losses below $119 and $117 in the near term. The main supports for a major decline is around the $114 and 115 levels.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD could move back in the bullish zone, but there are many negative signs visible.Hourly RSI – The RSI for ETH/USD jumped higher after testing the 40 level and it is currently just above 50.Major Support Level – $117Major Resistance Level – $125
Over 150 people bought pizza with bitcoin this week by using the Lightning Network.
The crypto payments startup Fold, which launched the web-based Domino’s portal on Wednesday, basically makes fiat pizza purchases on behalf of hungry lightning users. Fold product lead Will Reeves put it this way:
“We’re trying to make bitcoin fun again and illustrate that lightning is at a point where it is mainstream-ready.”
The Fold web app plans to integrate lightning for all its shopping options over the next six months, including Starbucks, Whole Foods, Dunkin Donuts, Target and Uber. Since these aren’t official partnerships, the crypto startup places orders on users’ behalf and converts payments to fiat to offer a seamless experience. It remains to be seen how this will factor into the company’s revenue model once the lightning options are out of beta. (A request for comment from Domino’s was not returned as of press time.)
“The average purchase was $25,” Reeves said of the Domino’s experiment. “Since the average lightning payment is usually less than $5 so this was able to stretch the Lightning Network to higher value payments for the first time at volume.”
According to 1ML, the overall network set new record highs this week with more than 26,588 payment channels able to facilitate $2.4 million, a 39 percent increase compared to last month. Reeves said orders came in from every state across the U.S.
“It was pretty evenly spread across the country, which was great to see,” he said.
After the Fold lightning integration, Reeves said the startup plans to launch mobile versions of the Fold app for both Android and iOS. This seven-person startup, which is incubated by venture studio Thesis, is currently raising a Series A funding round and looking to diversify its retail brand offerings.
Reeves said Fold currently serves 1,500 monthly users, facilitating roughly 35,000 total bitcoin transactions since launching the first version of the app in 2014. Until now, the largely bootstrapped project was funded by a small seed round from Boost VC. Looking forward, Reeves said the plan is to partner with crypto wallet startups for direct integrations.
“The largest barrier to conversion was setting up a new lightning wallet,” Reeves said, adding there were roughly 1,500 orders but only a 10 percent conversion rate because people struggled to use lightning-enabled bitcoin wallets.
“We’ve learned a lesson that in order to grow the lightning ecosystem we not only need the best products, but the best education as well,” Reeves said. “We will incorporate that into our plan going forward.”
Beyond wallet integrations, Reeves said Fold is also partnering with the custody solutions startup Casa, for a direct integration with the Casa browser extension so that hardware node owners can also use it to buy pizza.
The Fold team is hardly the only one pushing lightning toward mainstream adoption.
February 2019 also witnessed the launch of Koala Studio with its lightning-powered chess game, allowing users to wager with tiny amounts of bitcoin. Plus, lightning users have already completed 3,536 jobs through the bitcoin-centric freelance job site LND Work.
Meanwhile, Square CEO Jack Dorsey said during a recent podcast that his company’s Cash App will integrate lightning capabilities sometime in the future. The diversity of projects related to this protocol makes Reeves even more bullish for the possibilities in 2019.
Speaking to the partnership with Casa, Reeves said:
“We’re looking forward to working that team to spread lightning to the rest of the world.”
Domino’s Pizza image via Shutterstock
- The world’s largest crypto exchange, Binance, is flush with massive profits from its operations in 2018, estimated from buybacks of its BNB token to total $446 million.
- Although Bitcoin is trading at a loss over the last 12 months, transaction volume has been steadily increasing over the last year, so Binance has been busy.
- “To date, even in this bear market, we still run a profitable business,” Binance CFO Wei Zhou told CNBC in a phone interview Wednesday.
Binance is looking good in 2019.
Awash with cash from its 2018 operations, the world’s largest cryptocurrency exchange flexed some half a billion dollars in profits from last year’s business, using net proceeds to buy back its proprietary exchange token BNB in amounts and at prices that led one cryptocoin industry publication, The Block, to estimate Binance’s 2018 profits at $446 million for the year:
“So far, Binance has had six quarterly BNB burns, in which it destroyed a little over 10.8 million BNB. Every burn is done based on BNB price on the day of the burn, which means that if the BNB totals are multiplied by the price of BNB on the day of the burn, we can get a USD equivalent of 20% of the profits. Binance’s profit is simply five times the USD equivalent of each burn, if the firm is staying true to its whitepaper commitment.”
This Is What It’s Like To Use Private Currency
This is what deflationary currency looks like. It’s generous. It gives back to the people that use it instead of slowly, quietly stealing from them. Fiat currencies have been abused since ancient times by those who wield absolute control over them to siphon away wealth from their captive market of currency users.
Regular token buybacks and burns to harden up the tokens in everybody’s wallets and share back some of the wealth of its incredible success is Binance treating its customers well.
This is a sign of the era of free market finance, in which customers will have innumerable choices for banking, and private money entrepreneurs will face low barriers to entry for startups with something valuable to bring to the industry.
This is an economy in which corporate and consumer interests are more aligned, incentivizing companies like Binance not to leech off their customers’ money which would scare them away, but to pump up their customer’s money with token buybacks and regularly schedule burns to distribute back the burnings evenly into everyone’s BNB tokens.
Buyers and Sellers Have Been Keeping Binance Busy
It’s a good look for Binance.
Remarkably Binance has only been in existence for a very short time, since it was established in July 2017, but has swept into the burgeoning crypto industry as a major player in facilitating liquidity, raising $15 million in its initial coin offering (ICO) selling its tokens.
Although the crypto market bubble wrought devastating financial losses for the last person holding the hot potato in December 2017, and has spent the last year in steady decline, transaction volume has steadily increased over the last year.
So a lot of people are spending their bitcoin and other cryptos, cashing out, or moving to another asset class, betting the cryptocurrency market may continue to depreciate, but there are plenty of people lining up to buy bitcoin and other currencies off them, including people facing national currency crises as well as first-world savers and investors.
BNB Coins Turned $1 into $80 in 18 months
Raising $15 million through the ICO, the total market cap of Binance Coin (BNB) today is in excess of $1.2 billion. There are lots of examples of money lost in the private digital coin economy, but there will continue to be new opportunities and great success stories happening in this space.
Those who bought BNB turned $100 into $8,000 in under two years. Again, this is what it can be like to do business with private currency. These regular burns of BNB coin to pump up the value of the ones people are holding are the work of a private currency company that cares about keeping its currency strong for those who use it.
It’s the opposite of what central banks like the Federal Reserve do, weakening their fiat currencies like the U.S. Dollar every year as a matter of policy, to make people have to get rid of their ever-weakening dollars as fast as possible for anything else: to pay their bills, to buy business equipment, supplies, and consumer goods – even a margarita maker – rather than keep their wealth in decaying cash, and if there’s any left to save, swap it for stocks or land.
This constant pressure of monetary expansion realigns the economic incentives of the entire economy in a fundamental way, because capital markets are the backbone of the modern economy, the fuel that powers the engine of capitalism.
Because the central bank is constantly creating and lending out new money at artificially-low interest rates while devaluing the rest of the currency, people come to rely on cozying up to the central bank for some of the relentless flow of credit.
This doesn’t, however, keep people using fiat currencies as a matter of enticement through value proposition, but as a matter of necessity for damage mitigation from the weak currency policies of the Federal Reserve and other socialist central banks.
Featured Image from REUTERS / Darrin Zammit Lupi
Since the crypto markets witnessed a large price swing last Friday, they have been gradually drifting downwards, with Bitcoin (BTC) expressing some levels of stability in the low-$3,600 region. This stability may not last long however, as BTC short positions are rapidly dropping while long positions climb, which may signal that bulls are getting overly confident.Most cryptos have dropped slightly today, with EOS and TRON being the worst performing major cryptocurrencies, dropping 3.5% and 2.5% respectively.Bitcoin (BTC) Short Positions Plummet as Crypto Markets DropAt the time of writing, Bitcoin is trading down slightly at its current price of $3,620. Last Friday, the cryptocurrency surged from $3,400 to highs of $3,700. Although this price surge was certainly positive for investors, BTC has not been able to garner a significant amount of buying pressure at its current price levels.Despite this fact, there is an interesting trend that is currently occurring, where open short positions against BTC are plummeting as long positions begin to climb.Lucid TA, a popular cryptocurrency trader on Twitter, recently spoke about this trend, concluding that it is “concerning.”“Current movement in longs/shorts is concerning. Mass exodus from short positions while longs continue to climb… $BTC,” Lucid noted.Current movement in longs/shorts is concerning. Mass exodus from short positions while longs continue to climb… $BTC pic.twitter.com/eG9rb5uLTg— Lucid TA (@Lucid_TA) February 14, 2019Many traders and analysts view long and short positions as contrarian indicators, which may signal that Bitcoin will soon see a drop.Another important thing to consider is that Bitcoin is currently facing strong resistance at its 50-day Moving Average, which currently exists around $3,630.Chonis Trading, a popular cryptocurrency analyst on Twitter, spoke about the importance of this resistance level, noting that it has been a level of resistance ever since Bitcoin dropped in January.“$BTC – The MA50 holds firm resistance after several reattempts to break above after failing to hold support in January. The blue line MA100 rapidly falling through $4k and has also resisted #bitcoin daily candle close since early September…”$BTC – The MA50 holds firm resistance after several reattempts to break above after failing to hold support in January. The blue line MA100 rapidly falling through $4k and has also resisted #bitcoin daily candle close since early September… pic.twitter.com/ZfXi1zAKyl— Chonis Trading (@BigChonis) February 14, 2019Most Cryptocurrencies Drop Today, but Analyst Claims Ethereum Classic (ETC) May be BullishAlthough Bitcoin has been stable, most major cryptocurrencies are trading down today.At the time of writing, Ethereum is trading down marginally at its current price of $122. Ethereum has been able to maintain most of its recent gains and is only down slightly from its weekly highs of $124.EOS and TRON have both dropped significantly today and are both trading down 3.5% and 2.5% respectively.Ethereum Classic (ETC), is trading flat today, but Ezbrah, a cryptocurrency analyst on Twitter, recently noted that ETC may soon see a price surge towards $4.8, which is significantly higher than its current price of $4.13.“$ETC… hard to justify being bearish on etc right now,” he concisely stated.$ETCEven hard to justify being bearish on etc right now lol pic.twitter.com/T0U6kYdNJR— ezbrah (@ezbrahBTC) February 14, 2019NEM is one of the few cryptocurrencies that is trading up by a sizeable amount today, as it is currently trading up over 4% at its current price of $0.043. NEM is up significantly from its weekly lows of $0.0368.Featured image from Shutterstock.
The cryptocurrency market held above $120 billion heading into Thursday evening, but could Bitcoin be setting up investors for a post-Valentine’s Day heartbreak?
Bitcoin and the rest of the top 5 cryptocurrencies had a pretty boring 24-hour period. The notable moves happened at the opposite end of the market cap spectrum, with Steem gaining 3% and NEM, 2%. Of the top 10 non-stablecoins, only Bitcoin Cash saw any positive movement, with a less than 0.2% global gain.
As we reported earlier today, Bitcoin SV is now available for withdrawal at Coinbase. In a related note, Waves Platform is making Bitcoin SV balances available and will be adding a trading market as well. The question is whether the newly available Bitcoin SV poses a risk to the coin’s price.
Bitcoin Cash believers at the time of the hard fork who held BCH in either place have been waiting some time for their Bitcoin SV. They’ve long since missed the peak of more than $200. The market at large has advanced into scarier and scarier bear territory.
While the Bitcoin Cash price has occasionally dipped under $100, it’s largely comfortable in some type of competition with Ethereum. Bitcoin SV, on the other hand, has experienced a classic wind-down. Now millions of new holders have the ability to dump on BSV. Will they do it, or will the greater availability of the token have an opposite impact on its trading?
Let’s look at the coins individually.
Bitcoin Price Remains Disturbingly Quiet
Bitcoin held onto a global price above $3,600 by press time, but Coinbase had it well into the $3,500s. The divergence between markets can be seen in the following chart, which shows both Coinbase and Bitfinex. We like to study both. Coinbase is good to measure the sentiment of retail investors, while Bitfinex is a preference of many “pro” traders.
As we see, although Bitfinex is posting a higher per-token price for Bitcoin, its percentage-wise losses have been greater over the same period.
The global price was floated by some extremely higher prices, all the way up to greater than $4,200. Bitfinex was far down the list, not nearly the highest. Out of touch with reality? A bit.
And we must warn: markets that deliberately list extremely higher prices for Bitcoin or other crypto assets are often suspicious, to say the least.
Ethereum Pares Earlier Gains
Ether did a bit better than Bitcoin on Coinbase, gaining almost 4% early in the day.
It lost it moving into mid-day trading, but holders probably aren’t upset just yet. Overall daily volume topped $3 billion. One wonders what a bull run will look like for Ether in terms of volume. If Ether can sustain its current levels until the next shake-up in the crypto markets, and propel from there, it will make a lot of holders who anchor its economy happy.
Bitcoin SV Faces Potential Dump
Bitfinex offers one of the few reputable fiat markets for Bitcoin SV. It’s early to tell, as millions of Coinbase users have day jobs and haven’t even accessed their BSV balances yet, but a big dump could be on the horizon.
For its part, Craig Wright’s pet coin had only lost a little more than 3% in the 24-hour period.
Steem Outperforms the Crypto Index
While BSV lost 3%, Steem gained about that much. Steem is one of the tokens that isn’t often traded against the dollar, although it arguably should be, given its high exposure to “regular people” via the Steemit blogging platform.
Morning trading steamed ahead into a price of over 30 cents for Steem. If Steem had a supply anywhere near the size of Ripple (XRP), it would be in competition for XRP’s place on the market capitalization chart.
Featured Image from Shutterstock. Price Charts from TradingView.
According to a recent survey, advertising executives found the word “blockchain” to be the most overrated word used in 2018. The crypto-associated buzzword beat out “AI” and “Programmatic” for the top spot.The survey, conducted by MediaPost, also covered words that the executives deemed to be important during 2018. Ironically (for anyone with the slightest clue about blockchain technology), the number one word in this regard was “transparency”.2018: Year of the Blockchain?A survey conducted by MediaPost’s pay-per-view sister publication, Research Intelligencer, has found that the word “blockchain” was the most overrated word heard by advertisers in 2018. The purpose of the study, according to the publication, is to…“… measure how the rest of the industry thinks, including ad agencies, and also to find out what words or terms have been given too much weight.”The survey asked 120 marketers and 181 agency executives for their views on both the most important and the most overrated words of the last year. Of the advertisers, almost one third (31%) named “blockchain” as number one. Meanwhile, fewer of the agency executives felt that the name given to the system by which data is stored in cryptocurrencies such as Bitcoin was the worst offending buzzword (21%).Coming in tied for second after “blockchain” was “AI” and “programmatic”. These two words suitably irked enough of the advertisers over the twelve month period to relegate “crypto” to number three.… And the Most Important Word of 2018 Was?Along with the most overrated, the advertisers were also asked to give the word they felt was the most important during 2018. Funnily enough, at least for those in the know about public blockchains, the word that rose to the top for most was “transparency.”Transparency important, blockchain not: Can ad execs not see the wood for the trees?Of course, many folks reading this will not need explaining why there is a clear irony here. However, we will spell it out for our less frequent readers.A blockchain is a distributed database. By virtue of it being distributed, any single network participant can look at the entire thing. There are no secrets on a blockchain.Criminals have been brought to justice thanks to investigation into their use of the most successful blockchain to date – Bitcoin. In fact, a whole sub-industry of blockchain forensics firms is emerging to plough through the data stored on public blockchains for various purposes.However, the technology is not quite there for such disruption. But the hype certainly is. Examples like Long Island Iced Tea and Kodak’s use of the “blockchain” in late 2017 highlighted that there was definitely a tendency to throw the word in where it was not needed or relevant. It is highly likely that the advertising executives surveyed were overwhelmed by uninspiring ideas dressed up as revolutionary innovation last year and this inspired the answers to the survey.That said it is we will see the use of blockchains to bring greater transparency to just about every industry on the planet in the future. There are already examples from as disparate sectors as the UK beef supply chain and JP Morgan’s new dollar-backed-digital-token. Related Reading: Will the Blockchain Technology Revolutionize the Travel Industry?Featured Images from Shutterstock.
A group of lawyers from some of Canada’s top law firms convened in a court in Halifax, Nova Scotia, today to secure the right to represent creditors in the ongoing QuadrigaCX litigation. By the end of the hearing, though, the presiding judge wouldn’t make a decision on which firm would play counsel for QuadrigaCX’s clients, though he promised a decision within the week.
“The decision to delay appointment of representative counsel is a sound one. The Court needs to be able to select the right firm that can present Canadians across the country with expertise and in a cost-effective manner. Most users are in British Columbia and Ontario and so firms with solid representation there would be key, so that customers from those provinces have access to the process,” Christine Duhaime of Duhaime Law told Bitcoin Magazine.
During the session, the Honorable Justice Michael Wood heard testimonies from the four law firms that creditors have turned to for counsel, namely, Bennett Jones LLP; Osler, Hoskin & Harcourt LLP; McInnes Cooper LLP and latecomer Goodmans LLP.
Jack Julian, a reporter for Canadian news outlet CBC, live-tweeted the courtroom proceedings, tallying up a total of 18 lawyers who were present at the hearing. One of these, Maurice Chiasson, represented QuadrigaCX while another represented Ernst & Young, the firm that has been appointed monitor over the case; the rest represented some 200 clients affected by the exchange’s inability to honor withdrawals. These clients reportedly have $50 million CAD tied up in the exchange in the aftermath of the death of its founder and CEO, Gerald Cotten. The $50 million CAD represented today is just a piece of the $250 million CAD debt that the exchange owes its customers.
“Justice Michael Wood says all contenders are ‘eminently qualified’ to be representative counsel. They all claim to represent similar numbers of clients with similar total losses. He says he ‘won’t be flipping a coin’ and will have to analyze the submissions closely,” Julian tweeted.
One of the firms, Goodmans, which Julian says has a client with a $1 million claim on the exchange, suggested creating a “steering committee” of seven individuals, which would consist of two lawyers from the other three law firms competing for representation and one from Goodmans. The committee would then be in charge of appointing legal counsel for the affected creditors. Justice Wood ultimately dismissed this proposal, saying it would amount to the firms having to “duke it out,” tweeted Julian.
According to Julian, Raj Sahni, an attorney for Bennett Jones, lambasted the use of online chat rooms as “completely inappropriate” for disseminating information in this case. In the fallout after Cotten’s death, Reddit (particularly the subreddit QuadrigaCX2) has become a hotbed of activity for QuadrigaCX customers to swap information, air grievances and cook up what most would consider conspiracy theories.
To cut through the noise and give this information legitimacy, one firm, Miller Thomson, suggested curating a website that would aggregate creditor information and answer questions these affected users have in public or private.
The proceedings highlighted that most of the creditors are individuals with fewer than $50,000 CAD in the exchange. These affected users are already down significant capital, and the legal counsels stressed the importance of making this process as frictionless as possible to mitigate legal costs for the already cash-strapped creditors. The monitor, Ernst & Young, has proposed a $100,000 CAD cap on fees beginning today, which would exclude fees calculated to this point.
Even as lawyers are seeking to expedite the counsel appointment process to the capital benefit of their representatives, it became apparent early on that Justice Wood might not reach a decision today. The case is murky and unconventional, he said, and Julian tweeted that the robustness of each law firm contending for legal counsel hasn’t made “life any easier” for the judge regarding his decision.
“Wood says this [is] an odd situation. We don’t have secured and unsecured creditors, third party suppliers, employees etc. Only clients. So it’s unlikely there will be parties clamouring for changes on the next court date of March 5,” Julian wrote.
After a midday recess, the court reconvened and Justice Wood revealed that he would not decide on representative counsel today, as choosing between the four will be difficult.
At the end of the hearing, the court also addressed a number of outstanding issues in the case, including the absence of $30 million CAD worth of bank draft notes that QuadrigaCX claims that it is owed by its payment processing partners. QuadrigaCX is making haste to secure these funds as most of the $300,000 CAD it has in its possession for legal fees are nearly depleted.
“The Court learned today that the advisors are almost out of the money allocated, having spent $250,000 in fees in a short time. It remains unclear how additional funds will be secured because there was only $300,000 set aside that was a secured debt to Mr. Cotten’s widow, approved by the three new directors, the Court heard. I think they will have to solve the cash crunch soon by securing banking relationships quickly to deposit the over $20M in bank drafts they said they have,” Duhaime commented to Bitcoin Magazine.
As monitor, Ernst & Young commented that it was close to reaching deals with some of these nine processors, though the firm was vague on the progress it has made toward decrypting Gerald Cotten’s hardware, which allegedly holds the keys to the company’s inaccessible cold storage, or in retrieving the $460,000 CAD that QuadrigaCX “inadvertently” sent to one of its cold wallets on February 6, 2019.
Bitcoin Magazine recently broke news that multiple QuadrigaCX users have reported receiving deposits from Robertson Nova Consulting Inc., a company, CBC claims, that Gerald Cotten’s widow, Jennifer Robertson, presides over as president, secretary and director. Bitcoin Magazine’s sources commented that email addresses appearing to belong to Robertson were listed on the reply-to lines of deposit confirmations. The same sources also told Bitcoin Magazine that they had received mass amounts of cash, at times amounting to thousands of dollars, in the mail as part of the withdrawal process.
With additional notes from Jessie Wilms