Telegram’s Pavel Durov Is Using Bitcoin to Bypass Russian Sanctions

<br /><br /> <br /><br /> Telegram CEO Pavel Durov is battling against Russian security forces, after they implemented a block on Monday, April 16, 2018, on the messaging app when it refused a court order to “grant state security services access to its users’ encrypted messages,” according to Reuters.The move was initiated by Alexander Zharov, head of the Russian watchdog organization Roskomnadzor, who has blocked 18 sub-networks and various IP addresses belonging to both Amazon and Google in the process. “We have currently informed both companies that a significant number of IP addresses located in the clouds of these two services have fallen under the block due to the court ruling,” Zharov commented. He further stated that Telegram has potentially been used by terrorists to “coordinate attacks” on both Russia and its neighbors. But as the skies darken and defense seems like a lost cause, Durov is refusing to give up, as Telegram customers received the following notification early this morning:“For the last 24 hours Telegram has been under a ban by internet providers in Russia. The reason is our refusal to provide encryption keys to Russian security agencies. For us, this was an easy decision. We promised our users 100% privacy and would rather cease to exist than violate this promise.”Durov has since taken to his account on VK — a Russian social network — to explain that he is offering bitcoin grants to both companies and individuals alike that run proxy servers and virtual private networks (VPNs). He says he’s “happy to donate millions of dollars” from his personal stash to illustrate and assist this cause, noting that both VPNs and proxy servers work against the hindrances set in place by Russian authorities. Proxy servers operate by acting as connective tissue between clients and other servers. Normally, these clients seek information or resources from outside servers and thus link to a proxy server, which decides the best way to simplify and control the complexity of their incoming data. In addition, proxy servers offer anonymity to their users, and can be utilized to bypass blocks on certain IP addresses. A VPN extends a private network across a public one and allows users to send and receive information without disclosing their identities. According to Durov, both systems require third-party funding, and he’s urging players with money to get in on the game alongside him.As the last 24 hours have shown, in their ongoing war on progress, Russia’s supervisory authorities are willing to block millions of IP addresses of cloud hosting without regard for losses of extraneous projects. While Russia only accounts for 7 percent of Telegram’s users, Durov called the recent ban “unconstitutional” and commented that threats to privacy and principles are more important than the numbers.“Even if we lose the entire [Russian market], Telegram’s organic growth in other regions will compensate for this loss within a couple months,” Durov mentioned. “However, it is important for me personally to make sure we do everything we can for our Russian users.”<br /><br /> <br /><br /> This article originally appeared on Bitcoin Magazine.

Dow Jones Group Teams Up with Brave Software to Test Basic Attention Token

Dow Jones Group Teams Up with Brave Software to Test Basic Attention Token

In a collaborative effort to test the Brave platform and its digital advertising token, the Basic Attention Token (BAT), the Dow Jones Media Group has joined up with the Brave Software team.


On April 18, 2018, the two organizations announced that they will experiment with blockchain technology in the realm of digital advertising and media publication. This entails testing the Brave browser’s digital advertising platform and its native currency, BAT, across the Dow Jones Media Group’s brands, which includes Barron’s, the Wall Street Journal and MarketWatch.

Created by JavaScript inventor and Mozilla co-founder Brendan Eich, the Brave browser and Basic Attention Token work in sync to offer an alternative revenue model for digital publishers and advertisers alike. Both BAT and Brave are meant to reduce fraud from bot-generated advertising views, generate more equitable revenue for publishers and give consumers the chance to monetize their attention by being paid per ad view in BAT.

With the partnership, the Dow Jones Media Group is indicating that Brave’s overall mission, to deliver innovative, efficient advertising, resonates with the financial powerhouse.

“Our partnership with Brave is an exciting and innovative step for Dow Jones Media Group,” Daniel Bernard, Senior Vice President of Barron’s, said. “As global digital publishers, we believe it is important to continually explore new and emerging technologies that can be used to build quality customer experiences.”

Per the partnership, Brave browser users will have access to premium content on and from the MarketWatch newsletter “on a first-come, first-serve basis,” according to the press release. In addition, both Barron’s and MarketWatch will join the likes of the Washington Post, the Guardian and Vice to become verified publishers on the Basic Attention Platform.

“We’re thrilled to be partnering with Dow Jones Media Group to provide Brave users with premium content via Brave and the Basic Attention Token,” said Eich in a statement. “Our new model reconnects users and publishers without compromising privacy. We look forward to our users enjoying Barron’s and MarketWatch premium newsletters.”

The partnership is another notch in the project’s belt. In mid-March, the Washington Post announced that it would begin accepting BAT as a certified publisher.  

This article originally appeared on Bitcoin Magazine.

Blockchain-Friendly Malta Attracts Another Blockchain Company

Blockchain-Friendly Malta Attracts Another Blockchain Company

Blockchain-based, equity fundraising platform Neufund, whose technology allows tokenization of shares and fundraising on the blockchain, is announcing that it will establish a strong presence in Malta and support Malta’s rapidly expanding blockchain ecosystem.


Neufund, a startup headquartered in Berlin, is the latest of many blockchain companies that have established a presence in the Mediterranean island nation, attracted by the promise of crypto-friendly regulations. Last week, cryptocurrency exchange OKEx announced that it is expanding its operations to Malta. In late March, Binance, the largest cryptocurrency exchange by trading volume, also announced plans to move operations to the cryptocurrency-friendly EU member state.

“[Virtual currencies] will form the base of a new economy in the future,” said Joseph Muscat, Prime Minister of Malta, in a recent speech.

“There is huge interest in the blockchain industry from all across the globe and it has the potential to be even more beneficial to the Maltese economy than igaming,” said digital economy parliamentary secretary Silvio Schembri.

An authority called the Malta Digital Innovation Authority (MDIA) will be created to regulate companies that operate on blockchains and to promote Malta as a destination for these companies.

Malta is not the first European nation to promote itself as a blockchain haven and try to attract capital and talent with crypto-friendly regulations, but the fact that Malta is a member of the EU could make it more appealing than, for example, Switzerland’s “Crypto Valley.”

“Looking at Malta’s vision and progress in creating a complete blockchain ecosystem, we have decided to engage our know-how and offer support in building the blockchain future of this progressive thinking EU member state,” says Zoe Adamovicz, CEO and co-founder of Neufund. “Together with Malta’s Government, we want to kick-start the creation of crypto-friendly laws with Malta’s DLT [Distributed Ledger Technology] framework initiative already serving as a great foundation.”

“We are impressed by the deep understanding and openness shown by Malta’s Government that serves as a great example to regulators all over the world being a live example that actions and official statements speak louder than words,” added Adamovicz.

Schembri added that stable and integrated markets require the long-term vision of sustainable and inclusive growth, and Neufund shares Malta’s view on how to create an ideal ecosystem for investments. “We are pleased to be accompanied by companies such as Neufund in becoming the [blockchain island],” he said.

This article originally appeared on Bitcoin Magazine.

Op Ed: Cryptocurrency Advertising Continues to Face Scrutiny

Op Ed: Cryptocurrency Advertising Continues to Face Scrutiny

Public interest in cryptocurrency has led to a rush of recent advertising, mostly on social media and the internet. Much of that advertising has focused on driving consumer interest in contributing money to an Initial Coin Offering or ICO. Unlike other forms of private investment, which are off limits to all but wealthy, accredited investors, interest in cryptocurrency extends beyond Wall Street to Main Street investors and this has regulators worried. Where some see opportunity, regulators see potential fraud and abuse.


The ads that seem to have regulators most concerned are celebrity endorsements. Within the last year, DJ Khaled, Floyd Mayweather, Evander Holyfield, Paris Hilton and Jamie Foxx have all endorsed a particular ICO or cryptocurrency on social media, often in ways suggesting the potential for wealth and riches. And not all of those ICOs have gone on to success. In fact, as discussed below, the one pitched by Holyfield was shut down by the U.S. Securities and Exchange Commission (SEC).

The risks to Main Street investors has prompted regulators to rush onto the scene and begin closely monitoring efforts to market cryptocurrencies to consumers. Below are some of the more significant developments over the past several months, as well as thoughts about what may lie ahead.

SEC Targets Celebrity Endorsements

One of the earliest shots across the bow came from the SEC. While the SEC isn’t exactly known for targeting celebrity endorsements on social media (the FTC usually does that), it issued a statement on November 1, 2017, urging consumers to be skeptical of celebrity-endorsed ICOs and warning endorsers that they “must disclose the nature, scope, and amount of compensation received in exchange for the promotion.” Failure to do so, said the SEC, would violate the anti-touting provisions of the federal securities laws.

Traditionally, the SEC’s tool of choice for targeting so-called “pump-and-dump” schemes, anti-touting laws, curtail the ability of paid promoters to influence the price of a security through endorsements. Case in point: the anti-touting provision of the Securities Act of 1933 makes it unlawful to “give publicity to … any … advertisement … or communication which … describes [a] security for a consideration received or to be received … without fully disclosing the receipt … of such consideration and the amount thereof.”

This is similar to the FTC’s “material connection” rule: “when there exists a connection between the endorser and seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.” But notice that the SEC version goes a step further and requires disclosure of the amount of compensation received by the endorser.

SEC Obtains Court Order Stopping ICO

Two months after the SEC’s statement, Evander Holyfield endorsed an ICO for AriseBank on Twitter.

Weeks later, the SEC obtained an injunction to stop the ICO from going forward. According to the SEC’s complaint, AriseBank and its co-founders falsely told potential investors that AriseBank was FDIC insured and also concealed information about the criminal backgrounds of key executives. In announcing the injunction, the SEC called AriseBank “an outright scam.”

So far, the SEC has not pursued any enforcement action against Holyfield himself. It will be interesting to see if that holds true. If Holyfield received any “consideration,” or payment, for his endorsement, including any AriseCoin, he could face potential exposure under federal anti-touting laws.

Facebook, Google and Twitter Restrict Cryptocurrency Ads

On January 30, 2018, the same day that the SEC announced the AriseBank injunction, Facebook announced a new policy on cryptocurrency ads: “Ad must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as … coin offerings, or cryptocurrency.”

Google followed suit, announcing in mid-March that it would phase out all cryptocurrency and ICO ads by June 2018, and, shortly after Google’s announcement, Twitter confirmed that it too would begin prohibiting most types of cryptocurrency advertising. Based on reporting by Reuters, Twitter’s policy will prohibit advertising of ICOs and token sales, and will also prohibit ads by cryptocurrency exchanges and wallet services not listed on a major stock exchange.

With Facebook, Google and Twitter effectively shutting the door on cryptocurrency advertising, the opportunity to reach Main Street investors has diminished, but it certainly has not disappeared. Private networks, targeted electronic and print ads, and word-of-mouth are still powerful means for reaching consumers, and government regulators like the SEC are likely to shift their focus to these areas in the near future.

FTC Shuts Down Cryptocurrency Chain Referral Scheme and Creates Blockchain Working Group

More recently, the FTC has gotten in on the action, shutting down an operation that recruited participants in a so-called “Bitcoin Funding Team.” The concept of a funding team sounds a bit like an ICO but, according to the FTC, it was nothing more than a chain referral scheme. A recruit would make a cryptocurrency donation, which would then be paid to “upline” team members, and the recruit would make money as additional recruits joined the team.

Bitcoin Funding chart

Despite the obvious differences between the alleged scheme and a legitimate ICO, this case is nevertheless noteworthy because it shows that the FTC is likely to become a key regulatory player in this space. The SEC and FTC will almost certainly share jurisdiction over cryptocurrency advertising going forward. Typically, the FTC focuses on advertising claims and practices (including endorsements) that could be deemed false, misleading or deceptive. But where the product being endorsed is a security (as the SEC alleges cryptocurrency is), the SEC has jurisdiction to investigate and pursue a claim under the anti-touting laws.


When it announced the Bitcoin Funding Team case, the FTC also announced that it had formed an internal Blockchain Working Group aimed at preventing fraudsters from capitalizing on the excitement and confusion surrounding cryptocurrencies to bilk consumers. This is significant because it foreshadows potential specific guidance for cryptocurrency advertisers.

Looking Ahead

Notwithstanding the significant curtailment of cryptocurrency advertising, two things are very clear. First, consumers remain extremely interested in cryptocurrency, and advertisers will find a way to reach them. Second, regulators will not view recent advertising bans on Facebook, Twitter and Google as victory; to the contrary, they will almost certainly redouble their efforts to smoke out and pursue those who are using consumer interest to perpetrate fraudulent schemes.

As the industry matures, however, expect to see continued focus on advertising practices. This will inevitably focus on endorsements and whether any material connection between the endorser and the product was properly disclosed, but it will also touch on issues like claim substantiation (are the specific claims in the ad true and by evidence?), deception (has material information been omitted?), and disclosure (does the ad clearly and conspicuously disclose any material terms or limitations?).

Until specific guidance is published, if ever, advertisers should proceed cautiously and should absolutely avoid: (i) paid endorsements that fail to disclose the amount of the payment, (ii) claims that that a currency or product will be a good investment or low-risk, (iii) imagery or depictions suggesting wealth, and (iv) any other element that could be deemed misleading or deceptive.

This is a guest post by Neil Austin, Co-Chair, Advertising & Marketing Practice at Foley Hoag LLP. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

This article originally appeared on Bitcoin Magazine.

Salon Joins With AdLedger and IBM to Trial a Blockchain Approach to Ad Tech

Salon Adledger IBM

A digital media pioneer, liberal news and commentary site Salon launched in November 1995 just as online news was starting to get its teeth. This was back when the internet was still ramping up. Publishers and advertisers had a simpler relationship then.


Despite its wonders, the internet has made advertising models increasingly complicated. Where advertisers and publishers once had a one-on-one relationship, today’s ads go through a series of intermediaries before they reach their target audience. This opens the door to high-tech fraudsters who do things like siphon money away from advertisers by spoofing them with fake impressions. The problem has gotten so bad that, by some estimates, one third of paid-programming impressions are not viewed by actual people.

Striving to find a solution, Salon is teaming up with IBM and nonprofit AdLedger to participate a proof-of-concept permissioned blockchain for programmatic ad buying. The hope is that blockchain technology will squash out fraud by bringing transparency to the ad-tech supply chain, giving advertisers clarity in regards to where their ad dollars are going.

“This proof of concept will not only help publishers like us regain more control over our inventory, but will also illuminate where inefficiencies exist within the long and complex supply chain,” said Ryan Nathanson, chief operating officer of Salon Media Group, in a press release announcing the project on April 18, 2018.

AdLedger, a non-profit research-and-development consortium, is using the trial as way to educate its members about the potential of blockchain technology and also to begin forming rules and standards around putting ad tech on the blockchain. Salon will participate in the trial project as a publisher, while IBM is taking the dual role of advertiser and technology provider. Salon and IBM are both members of the AdLedger consortium.

The project itself is being built on Hyperledger Fabric, an open-source framework for permissioned blockchains, based partly on code contributed by IBM.

“To be clear, the goal is not to develop production-ready software; the goal is to really expose the potential of blockchain and show our members what it can do so they feel comfortable putting those rules and standards into place,” Christiana Cacciapuoti, executive director at AdLedger, told Bitcoin Magazine.  

As she explained, at its core, the proof of concept will be an actual ad campaign that is run on the blockchain with the goal of helping the teams work out how blockchains should be implemented in the the digital media industry. The teams will be looking to answer questions like which consensus algorithm makes most sense, what data needs to be hashed onto the blockchain, and what things are better handled off chain.

“As an advertiser, we know better than anyone that the current digital advertising system is broken,” Chad Andrews, global solutions leader of advertising at IBM, said in a statement. “We believe that blockchain can help our advertising dollars go further by eliminating unnecessary intermediaries, and combining disparate sources of data and reconcile immediate metrics based on measurement KPIs tied to campaign delivery.”

The project should launch in the next few weeks, Cacciapuoti said, with the ad campaign running for at least a month so the data collected is statistically significant. Eventually, the findings will be published in a white paper.

This article originally appeared on Bitcoin Magazine.

Crypto Reluctance Leads Nowhere Says Lithuanian Central Bank

The central bank of Lithuania has begun talks with commercial banks and virtual currency traders on their attitudes towards cryptocurrencies. Though she acknowledges the risks, Jekaterina Govina, fintech strategy coordinator at the Bank of Lithuania, says: Blind denial, reluctance to understand and to work with the cryptocurrency world leads nowhere. Usually conservative on the matter of cryptocurrencies, the central bank of Lithuania has gathered representatives from the banking sector, virtual currency traders, those involved with<br />Read More<br />The post Crypto Reluctance Leads Nowhere Says Lithuanian Central Bank appeared first on