eToro, a social trading and multi-asset brokerage company, recently announced the launch of eight new stablecoins and a new cryptocurrency exchange, eToroX. The new stablecoins would be pegged with the valuation of major fiat currencies.
Cryptocurrencies often face a lot of criticism from various groups of users because of their extreme volatility. The creation of stablecoins was motivated by the need to lend more stability to the price of tokens.
Lately, the emergence of new stablecoins has become a trend. JP Morgan Chase announced the launch of JPM Coin while Stasis launched a Euro-backed stablecoin last July. The trend did not stop there as a new stablecoin [Neutral Dollar], backed by other stablecoins also entered the market.
Most parties behind the creation and launch of these new stablecoins have been very vocal of their utilities. Yoni Assia, the CEO of eToro, is one of them and believes that eToro’s stablecoin will play a significant role in the market by bringing in much-required liquidity.
“Some exchanges have thin order books into fiat, although assets like Tether [USDT] are widely tradeable, they still suffer from high volatility because markets can’t provide sufficient liquidity. By issuing our own stablecoin we are therefore increasing liquidity.”
An influx of greater liquidity would reduce the overall volatility of the market. However, the entry of stablecoins alone isn’t a guarantee as stablecoins themselves have slipped in value in the past. Tether, the world’s largest stablecoin, dropped to $0.82 in October 2018.
Speaking to Crypto Briefing, Assia also dismissed concerns about high liquidity being linked to the greater adoption of eToro’s stablecoin among users. Assia remained confident and assured that this will not be an issue.
“eToro is very ROI [return on investment] orientated. We spend money where we can to promote the space and increase our brand awareness. Marketing generates interest in our products and attracts potential customers.”
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FLiK case: Utility tokens take another hit in case allegedly involving Rapper TI, claims prominent lawyer
Stephen Palley, a prominent lawyer at Anderson Kill, spoke out about the FLiK token case via his official Twitter handle. Notably, unlike most tokens in the space, FLiK made headlines because of its celebrity backing.
Towards the end of last year, it was reported that the US Rapper Clifford Joseph Harris Jr., who goes by the stage name T.I. and T.I.P., was sued for $5 million over the alleged failure of the token promoted by him and his partner, Ray Felton. The rapper was being sued by a group of 25 individuals who claimed that that they invested around $1.3 million in the tokens.
Additionally, there were allegations that the rapper used the raised money to increase the token’s value, following which the duo sold their holdings after the coin crashed. Other well-renowned celebrities such as Kevin Hart and Mark Cuban were also reportedly associated with this project.
On the recent developments surrounding the case, Stephen Palley stated,
“Utility tokens” take another hit in case allegedly involving rapper TI. Court says FLiK ICO tokens = securities under Howey Test, for motion to dismiss purposes. That they offered some functionality ≠ relevant given buyers’ expect of profits solely from efforts of others. 1/4″
The lawyer further stated that,”use of funds” was already determined by the defendants, “per the FLiK token whitepaper.” He went on to state that there was a time problem, adding that Federal Law rules that “unregistered sale” of security tokens were supposed to be reported within 12 months after the violation.
Even so, court says there’s a time problem — claims for unregistered sale of securities have to be brought within a year after the violation on which they are based, under federal law. Because this isn’t pleaded, these claims are dismissed with leave to refile. 4/4
— Palley (@stephendpalley) May 20, 2019
The lawyer concluded by tweeting,
“ps — form was never going to be exalted over substance, so none of this is a huge surprise. Also, this is a ruling on Rule 12(b)(6) motion to dismiss so the Court takes the allegations as true for purposes of ruling. The merits still have to be litigated.”
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