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Big Four Firms ‘Have No Choice’ But to Offer Crypto and Blockchain Services
Cue the Big Four
When it comes to tax audit and consulting, four firms come to mine. Nicknamed the “Big Four”, Deloitte & Touche, KPMG, PricewaterhouseCoopers (PwC), and Ernst & Young (EY) have dominated the professional services industry since the turn of the 21st century.
Now, with pressure on each firm to deliver or risk falling behind, they are beginning to focus on cryptocurrencies and blockchain.
Not only is this a smart move, it’s necessary. According to Jeanne Boillet, global assurance innovation leader at EY, moving into the blockchain and cryptocurrency space is a “no-brainer” because “[they] have no choice.”
Hopping on the bandwagon
However, EY isn’t alone. All of the Big Four firms are now offering blockchain-related services to customers in some form or another whether that is with cryptocurrency tax advisory, blockchain consulting, or audit services.
For PwC, the firm has hired over 400 experts to help fine-tune its blockchain-related services as they begin “devoting significant resources” to feed the needs of clients in the space.
There is definitely demand
It’s not that the top management of Big Four firms actually see a future with blockchain and cryptocurrencies (well they may), but rather that their clients are coming to them absolutely confused on how to deal with the opaque regulations surrounding the industry.
Specifically in audit, volatility makes it much harder to appraise the values of cryptocurrencies in comparison to traditional currency. In addition, verifying who actually owns the cryptocurrencies can be difficult.
With the Big Four firms at the helm, guiding their clients forward, businesses can begin to focus on other areas like development and growth rather than wasting time complying with regulations.
Tether Regains Dollar Parity
Out of turmoil
Tether has had a rough couple weeks as a sort of bank run has occurred on the stablecoin. On October 15th, the token, which is supposed to be pegged 1:1 to the U.S. dollar, fell all the way down to $0.85 on some exchanges.
This devaluation occurred as Tether holders were rushing to cash out of the stablecoin. Investors have always questioned the integrity of Tether, but never had an option to choose another stablecoin.
During the past month, exchanges have ramped up their adoption of alternative stablecoins. Faced with more options, investors fled from Tether, creating a supply surplus in the market. The spread between supply and demand broke Tether’s parity with the Dollar.
Economics of stablecoins
Stablecoins, like Tether, rely on economic theory to maintain a constant price. It is all about an equilibrium between supply and demand.
As crypto grew, Tether only had to deal with a surplus in demand. This imbalance is easily fixed by Tether minting additional tokens. October was the first time Tether had a major imbalance toward the supply side. This causes a slightly more difficult problem. To fix this issue, Tether must redeem its tokens for dollars and burn the tokens.
Tether is once again a buck
Tether had to redeem a total of $890 million in tokens during the month of October. Normally when it redeems tokens, it puts them in a treasury wallet until more tokens are demanded.
During October, Tether’s treasury wallet grew to a point where Tether had to burn tokens in the wallet. It decided to burn 500 million USDT on October 24th.
Finally, two weeks after dropping to its $0.85 low, Tether is back to $1.
Bitstamp Sold to Belgian Investment Firm
A little about Bitstamp
Bitstamp is a cryptocurrency exchange based in Luxembourg. Founded in 2011, Bitstamp is considered one of the older cryptocurrency exchanges in the industry.
At the time of this writing, Bitstamp ranks as the 40th largest exchange by daily volume by CoinMarketCap. In the last 24 hours, about $60 million of crypto has traded hands on Bitstamp.
On Monday, Bitstamp reportedly sold 80% of its equity to Belgian investment firm, NXMH. The price of the deal was not disclosed but is rumored to be around $400 million.
Nejc Kodrič, who founded Bitstamp in his garage with about $1,000, made a pretty good return on investment. Kodrič will remain as the CEO of the exchange and retain 10% ownership.
The founder commented on the synergy with the investment firm:
“We were very much aligned—where we see the industry going and what the company wants to be. They’re willing to help us along the way, and help us with our global expansion.”
60% of Americans Think Cryptocurrency Donations Should Be Treated Like Fiat
U.S. Election day is just around the corner as midterm candidates fight for their seats in Washington one week from today.
However, prior to election day, some crypto supporters believe cryptocurrency donation limits are in need of an update.
That’s because according to the Federal Election Commission in 2014, Bitcoin can only be accepted as an “in-kind” contribution with a limit of $100. Meanwhile, citizens can spend upwards $2,700 in fiat per election on their favorite candidate’s campaign.
Now, a new survey by Clovr revealed that after asking 1,023 eligible voters whether or not they saw this difference as unfair, 60% of respondents agreed.
Though the Federal Election Commission didn’t come around to change the rule this year, if John McAfee runs for president in 2020 like he said he would, they better be ready.