After years of waiting for the government to put in place regulations to govern the industry, crypto and blockchain industry leaders have come together to establish a lobbying group whose goal will be to push for the implementation of these policies. Based in Washington D.C, the group brings together some of the biggest names in the industry, including startups like Coinbase and crypto-focused VC firms like Polychain Capital. Known as The Blockchain Association, the group aims to become the voice of the industry in D.C and to work with the regulators from the inside, helping shed light on the developments in the industry and influencing the policy-making process.

The Inside Man

The crypto industry has for a long time been perceived as anti-government, perhaps largely because of its promise of taking the power away from a few entities and giving it to the people. However, many industry leaders have continuously sought to involve the government in their operations and have called for the implementation of regulations to govern the industry. The Blockchain Association is the latest effort by the industry to work with the government, with the group hiring a former Senate aide, Kristin Smith to lead the charge. Smith was the aide to former Maine Senator, Olympia Snowe, before taking over the blockchain lobbying duties for the bitcoin-friendly online retailer, Overstock.com.

As revealed by The Washington Post on September 11, some of the founding members of the new lobby group are Coinbase, fintech startup Circle and crypto-focused VC firms Digital Currency Group and Polychain Capital. Protocol Labs, the company behind decentralized storage startup Filecoin is also among the founding members.

The industry is not looking to circumvent the set regulations, Coinbase's Mike Lempres told the Post. Instead, it's been awaiting regulations for the longest time to weed out the scammers and promote healthy competition, Lempres, who is the chief legal and risk officer stated.

THE BLOCKCHAIN ASSOCIATION IS AN EFFORT TO GET THE PREEMINENT COMPANIES IN THE SPACE TOGETHER SO POLICYMAKERS KNOW THEY'RE HEARING FROM COMPANIES THAT WELCOME REGULATION WHEN IT'S APPROPRIATE. WE'RE NOT COMPANIES LOOKING TO GAME THE SYSTEM, BUT TRYING TO DEVELOP A LEGAL AND REGULATORY SYSTEM THAT'LL STAND THE TEST OF TIME.

The group's first priority will be working with regulators and lawmakers to establish regulations that will govern the application of the U.S tax laws to cryptos. This has been one of the most contentious issues in the industry, with the IRS's current application of the tax law being deemed prohibitive by many crypto users. The contention hasn't been made any better by the different regulatory authorities that have issued different classifications of cryptos; the IRS as a property, the SEC as a security and the Financial Crimes Enforcement Network as a currency.

Earlier this year, the Winklevoss twins announced an industry initiative to self-regulate which was officially launched a month ago. Known as the Virtual Commodities Association, the body has picked up new members over the last month as more crypto companies seek to become compliant with the set laws and to become actively involved in the formulation of new ones. Among the body's founding members are crypto exchanges Bitstamp, Bittrex and Bitflyer USA.

Since yesterday's update, the cryptocurrency markets have produced a strong bounce over the last 24 hours. Of the top ten cryptocurrencies by market cap, Ethereum, and Monero were the day's top gainers – both of which have posted gains of over 15% in the last 24 hours.

BTC Tests $6,500

In the last 24 hours, BTC has gained by roughly 3% – with current prices testing resistance at the $6,500 USD area as of this writing.

Looking at the daily chart, the stochastic RSI appears poised to break above the 20 threshold – signaling that more bullish action may ensue should BTC be able to produce and hold a strong break above the $6,500 area.

Bitcoin Cash Gains 7% in 24 Hours

BCH produced gains of approximately 7% in the last 24 hours, bouncing off a new low for 2018 of $410 yesterday to now be trading for roughly $455.

The bullish move for BCH coincided with a roughly 5% gain over BTC – with BCH currently trading for around 0.07 BTC after bouncing off 0.066 BTC yesterday.

Ethereum Shorts and Longs Continue to Test Record Highs

Of the top ten cryptocurrencies by market capitalization, Ethereum has produced the strongest gains during the last 24 hours of price action. As of this writing, ETH is trading for $205 – up more than 18% from yesterday's lows of roughly $170.

The number of open ETH/USD short positions is currently testing the all-time high area of 240,000 for the second time since the record was established just three days ago.

The number of ETH/USD longs appears to be retracing to test the area of September 5th's prior all-time high of roughly 330,000, after yesterday establishing a new record of approximately 360,000.

An article written by Nicholas Krapels – an American academic who has lived in China since 2011 whilst working towards his PhD in Chinese politics at East China Normal University, has criticized mainstream media narratives pertaining to Chinese regulatory actions regarding cryptocurrencies.

Mr. Krapels states that "Last week, many minor statements fomented a mountain of fear, uncertainty, and doubt regarding cryptocurrency's future in China. On Tuesday evening, Wechat blocked a few crypto-oriented news official accounts. Late in the evening the next day, Beijing's Chaoyang District banned public venues from holding crypto-related events."

Mr. Krapels asserts that "the way Western media portrays events in China" heightened and exaggerated concerns pertaining to the events, adding: "That situation is only made worse when crypto influencers like Danhua Capital Managing Director Dovey Wan tweets out pictures of the primary source of the Beijing district ban in Chinese along with misleading English comments, 'The new China crypto BAN is now official'." Mr. Krapels likens such to "post[ing] […] an official English notice […] on Weibo […] from the NYC police banning handguns in Manhattan and then claim in Chinese, 'America's BAN on handguns is now official'."

Chinese Government Had "No Direct Involvement" With Wechat and Chaoyang District's Respective Actions

Mr. Krapels asserts that "the national government has had no direct involvement with any of these actions," emphasizing that "So far, a single district in Beijing and a development zone in Guangzhou have explicitly called for venue bans."

"Wechat and Alipay, corporations not the government, voluntarily self-regulated the blurry edges of their ecosystem that facilitated illegal behavior such as coordinating pyramid schemes and averting capital controls," he added.

The article states that "Most casual observers of Chinese politics do not understand that rarely, if ever, does the Chinese Communist Party issue bold black-and-white proclamations," adding that "By design, Chinese law maintains a grey area, a Hegelian nuance that provides for innovative creativity while at the same time attempts to ward off destructive tulipomania and outright scammers."

As such, Mr. Krapels states that one must "read between the lines" in order to "find true regulatory intent."

Bitcoin and other cryptocurrencies tend to attract a lot of attention. Not all of this attention is positive, and financial experts often condemn Bitcoin for having no real value or future. The following list of individuals is ranked by their "clout" in the world, even though virtually all of these opinions will fall on deaf ears in the end.

#4 Themis Trading Group

This particular group has not been too involved in voicing opinions on Bitcoin and alternative cryptocurrencies. That suddenly came to change a few days prior to CME Group launching its Bitcoin futures. As there is no official template or regulation for such investment vehicles, it seems the financial firm was convinced CME Group "caved in to client demand." Moreover, Themis Trading LLC claimed Bitcoin was an instrument subject to plenty of fraud and manipulation.

#3 Severin Cabannes

In the financial world, most service providers tend to not look beyond the traditional financial offerings. Given the lack of regulation surrounding Bitcoin in the US and other countries, that is not entirely surprising either. Severin Cabannes, the deputy CEO at Society Generale SA, is one of the people in the "Bitcoin is in a bubble" camp.

In a way, that statement was not entirely incorrect either. Late last year and early 2018 generate unsustainable values for Bitcoin and other cryptocurrencies. With all prices crashing down in spectacular fashion, it would appear any bubble concerns regarding Bitcoin have evaporated. That doesn't mean there will be no further price increases or new all-time highs.

#2 Tidjane Thiam

Similar to Cabannes, Tidjane Thiam holds a high position at Credit Suisse Group AG. One does not become a major financial group's CEO by taking unnecessary risks or jumping on every single bandwagon as the opportunity presents itself. Even so, claiming Bitcoin is only designed to "make money" and nothing else is rather shortsighted first and foremost. There are numerous use cases for Bitcoin and other cryptocurrencies worth exploring.

#1 Jamie Dimon

Everyone has heard the comments uttered by JPMorgan Chase CEO Jamie Dimon over the past 18 months. He was one of the first to claim Bitcoin is a major bubble, although that was the least offense of his comments to date. In further interviews and presentations, Dimon went as far as calling Bitcoin owners "stupid" and how the government would "eventually crush this scheme."

While those comments seem to be on the bitter side of the spectrum, they also highlight a clear lack of understanding how Bitcoin or other cryptocurrencies work. That is not uncommon in the world of finance these days, unfortunately, although it remains doubtful any positive changes will be made in this regard moving forward. As JPMorgan & Chase postponed its Bitcoin trading desk plans, it seems unlikely the bank will ever revert its stance on this new form of money.

A Japanese actress and singer has helped the Tokyo Metropolitan Police Department raise awareness on cybersecurity issues, including cryptocurrencies. She reportedly took on the role of a cybersecurity manager in an event hosted by the department where participants learned about cybercrime countermeasures.

Rie Kitahara.Japanese actress and singer Rie Kitahara, formerly associated with the idol girl group Ngt48 and former member of Akb48 and Ske48, has helped the Tokyo Metropolitan Police Department raise awareness of cybersecurity issues, including those related to bitcoin and other cryptocurrencies, according to local media.

The Tokyo Metropolitan Police Department, Shinjuku Ward, hosted an event on August 26, where Kitahara tried to educate participants about measures against cybercrime. She assumed the role of the department's cybersecurity measure manager for the day.

Approximately 1,700 guests, parents and their children attended. They learned about email phishing and fake websites that try to steal personal information and how to protect themselves from these security threats. Asahi TV described:

Participants learned about the importance of countermeasures, such as a PC hijacking simulation experience and quizzes on cybersecurity. Last year, the number of cases with cybercrime victims reported to the Metropolitan Police Department was 13,101 which has been decreasing overall, but the damage of unauthorized access to [steal] virtual currencies such as bitcoin is increasing.

Japanese Phishing Emails on the Rise

In January, crypto exchange Coincheck was hacked and 58 billion yen (~US$522 million) worth of the cryptocurrency NEM was stolen. It was later revealed that the hack may have resulted from emails sent to the exchange's employees to spread viruses.

In July, news.Bitcoin.com reported that the number of cases involving phishing emails in the Japanese language rose to at least 1,500 last fall.

The Council of Anti-Phishing Japan has issued warnings regarding cryptocurrency phishing several times. "We are working to raise awareness of the public not to immediately click the URLs indicated in the email," Kaori Uemura, a spokeswoman for the council, told news.Bitcoin.com. She added that recipients should reach out to a legitimate contact at the crypto exchange supposedly sent the email to verify its authenticity.

Cooperating with Crypto Exchanges

In order to fight crypto-related cybercrime, the Tokyo Metropolitan Police Department has been cooperating with ten of the country's largest crypto exchanges. They are SBI Virtual Currencies, Bitflyer, Bitpoint Japan, GMO Coin, Bittrade, Quoine, Bitbank, Btc Box, Money Partners and Coincheck.

According to App Times, the exchanges have agreed to "mutual cooperation, cybercrime reporting notification, criminal investigation cooperation, information sharing, [and] measures to prevent widespread damage."

For every problem that smart contracts solve, they seem to introduce another. In a week in which EOS has made news for all the wrong reasons over a RAM vulnerability, a code auditor has revealed the prevalence of smart contract bugs. Security firm Hosho, which has forged a new partnership with community managers Amazix, has found that one in four projects contains critical vulnerabilities.

$1 Billion Is No Guarantee Against Bugs

25% of All Smart Contracts Contain Critical Bugs$1 billion. That's the amount raised by the projects whose smart contracts Hosho has audited. The security company claims to have audited more smart contracts than any other industry player. Despite the significant human and financial resources at their disposal, many of these projects would have been crippled had they neglected to have their code thoroughly scrutinized. A quarter of the projects Hosho has audited were found to have critical bugs, and some 60% of all projects they saw had at least one security issue.

Ethereum, the ICO economy's go-to launchpad, has been the worst affected, with stories abounding of exploitable code that's led to hundreds of millions of dollars of ether being stolen or locked up. While smart contract platforms such as Stratis are pushing the availability of debugging deployment suites and professional decompilers that come with using C#, Ethereum's Turing-complete system leaves greater margin for error. Identifying and eliminating all potential security holes is a Sisyphean task, and one which even experienced Solidity developers struggle with. Enlisting the support of a third party specializing in smart contract audits, while not foolproof, is the best bet against shipping bug-filled code.

Smart Contract Testing as a Service

While it is industry practice to have smart contracts audited ahead of a tokensale, projects that have yet to raise funds may be tempted to cut corners and skimp on this task. Doing so can prove fatal, however, with the worst bugs leading to wallets being drained, or buffer overflow exploits being manipulated to alter account balances. Several Ethereum-based projects have been forced to conduct token swaps after screwing up their first attempt at a smart contract.

In EOS land this week, all energies have been focused on patching a RAM exploit that's recently been detected. It allows a malicious user to "install code on their account which will allow them to insert rows in the name of another account sending them tokens. This lets them lock up RAM by inserting large amounts of garbage into rows when dapps/users send them tokens."

Amazix, the preeminent community management and consultancy firm within the token economy, has now partnered with Hosho to offer its clients smart contract auditing. "In the absence of industry standards, we see smart contract auditing and penetration testing to be essential components of good security in blockchain systems," said Amazix CMO Kenneth Berthelsen. "In our view, there are no better qualified people to do this than Hosho engineers."

Proponents of cryptocurrencies see smart contracts eventually infiltrating everything from insurance to dispute resolution. Before that can happen, developing trust in the code that governs them will be crucial.

Stockholm IT Ventures AB (SITV), a Swedish technology company specialized in cryptocurrency production, announced that its subsidiary, Blocktrade Technology Ltd. (BTT), has signed a software license agreement with Valens Bank, an offshore private bank based in Germany that eases deposit of cryptocurrencies such as BTC, BCH, ETH, or LTC. The agreement reportedly stipulates that Valens bank will be using the BTT Crypto Trading Toolbox exclusively for Crypto Fund Trading.

SITV to Expand Digital Financial Services

It is reportedly the second time that Valens Bank, which provides banking services and multi-currency current and share dealing accounts, pre-paid credit cards, stock broking facilities, cryptocurrency wallet and other financial services worldwide, has made an agreement with Stockholm IT Ventures for the purpose of expanding SITV into digital financial services.

"It's an exciting time to partner with Stockholm IT Ventures and Blocktrade Technology's innovative approach to the crypto space," Torben Pedersen, the Director of Valens Bank said in a press release statement. "We are confident that this software will offer great value to clients and give pro-traders the market edge all are looking for. We have made a thorough due diligence of the BTT software in live trading situations and are amazed by its performance," he was quoted saying.

BTT to Approach Institutional Investors and Banks

An official launch of the product is expected for September for the clients of Valens Bank, in the meantime, the partners will reportedly work together diligently the next few weeks to integrate the back-end mechanics. "We are proud to deliver our first license deal with Valens Bank. The agreement is perfectly in line with Blocktrade Technology's strategic goals and approach for Institutional investors and banks who aim to offer great returns on investments," Fredrik Waijnstad, the Managing Director Blocktrade Technology said. Mr. Waijnstad continued, for his company "this agreement is yet another proof of concept and what we believe to be one of many high value deals to come this year." Blocktrade Technology will receive a yearly license fee of 1.5 % on deployed capital into the trading program set forth by Valens Bank.