April 2, 2018
by Sharon Moran
In a press release dated March 31, 2018, fintech startup Covesting announced that the development of their revolutionary trading platform is nearly complete. Currently, the platform is open to 200 beta testers, and testers were provided with 0.2 ETH to explore the platform. Beta testers will provide feedback and report bugs, and Covesting is hopeful that “beta testing will help it achieve the highest quality standards and deliver the best results.”
Covesting team members have backgrounds in fintech, trading, investment banking, blockchain and AI and have worked at some of the world’s leading investment banks-Saxo Bank, JP Morgan, SEB Bank, and more.
From their website, “Covesting is incorporated in Gibraltar because one of our primary goals is to ensure that we are operating in a regulated environment and ahead of the curve when it comes to following industry best practices. Covesting is heavily focused on providing a secure, and legally compliant platform in the Cryptocurrency industry and we realize how vital it is to establish ourselves in a location in which the industry has support from its government and service providers.”
The choice to operate outside of U.S. is probably a good one given the chaotic, conflicting nature of the cryptocurrency landscape. The SEC has created an unfavorable environment for foreign-based ICOs to the extent that many companies don’t allow U.S. residents to participate in their ICOs. Furthermore, I believe the IRS has misclassified cryptocurrency as property. Also, I think that there is a high likelihood in the next few years that this decision will be amended or reversed completely.
In the U.S., cryptocurrency regulation is markedly very different depending on the state. New York, a state which includes the city known as “the capital of the world” with New York City being globally recognized as the capital of finance, is unfriendly to cryptocurrency. New York state created and mandated the use of a BitLicense, the first bitcoin-related license which serves as a restrictive barrier, although somewhat limited in reach as it’s required mainly for cryptocurrency exchanges.
The amendment to Sec. 13303 of H.R.1. bill eliminated any confusion about buying and selling one cryptocurrency for another as qualifying as a type of like-kind exchange, yet this bill passed 3 months AFTER the very first atomic swap took place between Decred and Litecoin. This is a clear indication that U.S. legislative efforts can’t keep pace with advancements in blockchain technology, a very promising indication for the future of cryptocurrencies.