bitcoin Archives - Green Market Report

Debra BorchardtDebra BorchardtJune 30, 2020
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4min16570

Paragon Coin had big plans to become a cannabis bitcoin company and in a 2017 ICO (initial coin offering) the company raised $70 million. Fast forward to today and the company is facing a class action suit claiming that Paragon violated federal securities laws.

United States District Court Judge Jeffrey White granted the plaintiffs’ motion-in-part on federal claims. Yet, he also denied applications for state-level allegations that were filed by several non-California-based investors.

Paragon Coin originally faced a lawsuit filed against the brand and its owners Jessica VerSteeg and her husband Egor Lavrov for allegedly violating Securities law with regards to the Paragon Initial Coin Offering (ICO).

The lawsuit stated that approximately between August 15, 2017, through October 16, 2017, the defendants raised at least $70 million in digital cryptocurrencies by offering and selling unregistered securities in direct violation of the Securities Act. It also stated that on November 2, 2017,  Paragon ICO investors received an email updating them that during the Paragon ICO “crowd sale” they had collected 533 BTC and 8,092 ETH— worth approximately $7.3 million and $10.2 million, respectively, as of January 12, 2018. Unfortunately, these amounts did not include any of the cryptocurrencies they collected during the Paragon ICO “presale.”

Capital For Real Estate

At the time, the plaintiff was upset that some of the money raised was being used to acquire real estate even though it was stated that it would be a goal. In Paragon’s white paper it said, “[t]he lion’s share of the token crowdsale [sic] proceeds will be spent on real-estate acquisition.” The plaintiff expected that its investment would increase in value and now wants to be repaid what was invested. So, how much did Davy invest?

Plaintiff invested in the Paragon ICO on September 21, 2017, September 23, 2017,
September 28, 2017, September 30, 2017, October 3, 2017, and October 15, 2017, by transmitting 0.04095 BTC, 0.03975 BTC, 0.57855 ETH, 0.0231 BTC, 0.03495 BTC, and 0.04579484 BTC, respectively, to Defendants.

 

Paragon Settles in 2018

Paragon did settle in 2018 when the SEC said that Paragon raised approximately $12 million worth of digital assets to develop and implement its business plan to add blockchain technology to the cannabis industry and work toward legalization of cannabis. The SEC statement wrote that Paragon did not register its ICO pursuant to the federal securities laws, nor did it qualify for an exemption to the registration requirements.

Paragon’s Headaches Continue

Even though Paragon settled with the SEC, the investors are still upset as they apparently haven’t received anything.  However, Judge White notes that the lawsuit alludes to the company selling the tokens over the Internet. The judge added, “Plaintiffs concede there may be class members in all 50 states and concede that laws governing the state law claims at issue differ among jurisdictions in such a way that a true conflict exists.”

Cannabis Law Report said that, “While the suit argues that ParagonCoin claimed to have issued PRG from its headquarters in California, Judge White noted that “the ICO giving rise to plaintiffs’ claims and purchases of PRG tokens were conducted over the internet.”

“Plaintiffs concede there may be class members in all 50 states and concede that laws governing the state law claim at issue differ among jurisdictions in such a way that a true conflict exists,” the judge added.


William SumnerWilliam SumnerJanuary 23, 2018
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3min44730

Bit by bit and block by block, more and more cannabis companies are moving into the cryptocurrency and blockchain market.

Today SinglePoint, Inc. (SING), a full-service mobile technology provider that services the cannabis industry through its subsidiary company SingleSeed, announced a letter of intent (LOI) to acquire Bitcoin Beyond, a software platform that allows retail merchants to accept Bitcoin payments through an existing point-of-sale device.

Bitcoin Beyond was primarily developed to service the legal cannabis industry. With adequate banking services in short supply as well as United State Attorney General Jeff Sessions’ renewed pledge to crack down on the industry, many cannabis business owners are seeking alternative forms of payment, such as Bitcoin and other forms of cryptocurrency, to protect themselves from federal interference and the vagaries of everyday crime.

SinglePoint expects the acquisition, which is valued at $1 million, will help allow the company to provide business owners and consumers a full end-to-end retail experience. Built on a popular technology stack with encrypted merchant data and best security practices in mind, Bitcoin Beyond has been designed to easily integrate with existing POS frameworks and allows merchants to add means of payment like Bitcoin or SinglePoint’s own investment property Weedcoin.

“We are thrilled with this opportunity. Acquiring Bitcoin Beyond put us ahead of what we believe merchants have access to now. This platform has by far the easiest user interface we have seen in the market, and we are confident merchants will be quick to adopt this solution as it stands as the sole alternative to traditional options offered to the cannabis industry,” staid SinglePoint President Wil Ralston in a statement.

SinglePoint hopes to continue to expand into the blockchain market and is currently in negotiations to acquire another, yet unnamed, blockchain centric company.

SinglePoint Partners with “Shark” Kevin Harrington

Earlier this month, SinglePoint began expanding its cryptocurrency footprint when the company announced a partnership with serial entrepreneur and original Shark Tank “Shark” Kevin Harrington.

As part of the deal, Harrington will work with SinglePoint’s cryptocurrency division to promote SinglePoint’s bitcoin exchange and bitcoin payment platform. Harrington will also serve as the public face of the company’s national television campaign, which recently began production last week and is now in editing and post-production. The television ad campaign is set to air on major financial and news networks, such as CNN and Fox News.


William SumnerWilliam SumnerJanuary 19, 2018
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3min32470

Future Farm Technologies (FFRMF), a Canadian cannabis company with multiple projects throughout the United States, today announced that it entered into a definitive agreement with New England CCS to acquire a 51% stake in FlipCoin, a new cryptocurrency application and Point of Sale (POS) platform.

As cannabis dispensaries across the nation struggle to find adequate banking services under the onerous guidance of the Department of Justice and United States Attorney General Jeff Sessions, who has promised to crack down on the legal cannabis industry, more and more cannabis companies have begun turning towards cryptocurrencies as the solution.

“Under current US Federal law, dispensaries are un-bankable,” said Bill Gildea, CEO of Future Farm, in a statement. “As the industry has grown, an expensive problem for dispensaries has emerged. We believe the unique nature of cryptocurrencies – based on fast, secure, and proven blockchain technology – has the potential to be a game-changer by solving this multi-billion dollar problem.”

Similar to the credit card processing application Square, FlipCoin will allow cannabis dispensaries to accept cryptocurrencies such as accept Bitcoin, Ethereum, Bitcoin Cash, or Litecoin as payment. Expected to launch within the next three weeks, New England CCS plans to install the application within nine of its portfolio dispensaries and to white label the application for dispensaries around the world.

Soon FlipCoin will also become integrated with Coinbase, which is the largest broker exchange of Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and other digital assets with fiat currencies in 32 countries. With over 13 million accounts, Coinbase is also the most downloaded app in the Apple Store and is expected to continue to add more than 100,000 new daily sign-ups.

As part of the deal, Future Farm has agreed to issue 120,000 shares of its common stock to New England CSS and another 10,000 shares of its common stock to Derek Ross as a finder’s fee.

Future Farm is not the only cannabis company to join the blockchain club. Earlier in the week, mCig Inc. (MCIG), announced the website launch of its blockchain focused company OBITX Inc. Focusing on combining blockchain technology with real-world applications, OBITX plans on launching KRYP ATMs, which allows individuals to buy and sell cryptocurrencies as well as make cash withdrawals.


Jack SmithJack SmithDecember 27, 2017
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6min20930
One of the biggest stories of 2017 has been the rise of cryptocurrencies, such as bitcoin and Ethereum, and the technologies backing them up, including blockchain, a digital ledger system. As society gets more comfortable with blockchain, it appears poised to up-end various industries, including cannabis.
India Globalization Capital (IGC) has announced that it will utilize blockchain, as well as its team of technology and healthcare experts for product identification assurance in the cannabis industry. By doing this, it hopes to solve issues such as improper product labeling, where the product is coming from and other issues that may impede sales.
“We understand the unique challenges facing the cannabis industry and believe that our team has the expertise to be the first to create meaningful solutions to address these issues using distributed ledgers inherent in blockchain technology,” IGC CEO Ram Mukunda said in a statement.
Mukunda added that the NYSE-listed company would it would use blockchain for the rollout of one of its medical-trial ready products, Hyalolex, which is “aimed at reducing the buildup of beta-amyloid in Alzheimer’s disease,” according to the company.
Blockchain use
According to a 2016 Fortune article, blockchain appears poised to disrupt many industries, making transactions simpler and more cost-effective. It’s described as “a way to structure data” and allows “competitors to share a digital ledger across a network of computers without the need for a central authority.”
Citing data from a study published in the Journal of the American Medical Association, IGC claims nearly 70% of all cannabidiol products sold on the internet have problems with their labels. Some are over-labeled, while others are under-labeled, creating confusion.
IGC aims to provide blockchain-enabled solutions for both dispensaries and consumers, looking at both the consumer and enterprise portions of the market, something that has been an issue as legal cannabis consumption has increased.
IGC is the latest public company to catch the attention of bitcoin and blockchain-enthusiasts. After making the announcement yesterday, the Maryland-based company saw its stock jump more than 100%, giving it a market cap of just over $35 million.
In recent days, companies from all industries have attached themselves to the cryptocurrency craze in hopes of garnering investor attention to themselves.
Importance of Hyalolex
Used for patients with Alzheimer’s, Hyalolex is IGC’s leading product and it aims to use a two-part strategy to commercialize it.
Starting next year, the company hopes Hyalolex will move through FDA registered pre-clinical and clinical trials. In addition to these trials, IGC said it expects to license its formulation technology to licensed cannabis dispensaries around the country, including dispensaries in Washington D.C. and Maryland, with more states to come.
Alzheimer’s disease affects millions of people every year and has shown no sign of slowing down. According to data compiled by the Texas Department of State Health Services, more than 5.5 million Americans had Alzheimer’s disease in 2016, including 200,000 under the age of 65.
In 2016, Alzheimer’s and other dementia diseases are expected to cost the U.S. $259 billion in related costs, potentially rising to as much as $1.1 trillion by 2050.
In addition to Hyalolex, IGC has three other products ready for medical-trial: Natrinol, a natural substitute for Marinol used to relieve nausea, vomiting and appetite stimulation in patients who have AIDS and cancer; Caesafin, used to help alleviate seizures in dogs and cats; and Serosapse, used to help patients with Parkinson’s disease.

Chuck EpsteinChuck EpsteinNovember 15, 2017
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6min14970

Hindered by the inability for most cannabis industry companies to make daily cash transactions seamlessly in the existing financial system, a new company is launching a cryptocurrency-based system based on decentralized blockchain technology to design and implement a global, multi-level, non-cash transaction platform operating on autonomous PerksCoin (PRC) tokens.

The new crypto-currency platform will be funded via an Initial Coin Offering (ICO), akin to a Kickstarter, that begins with a private pre-sale that started November 10 followed by the public phase lasting from November 20 to December 18. This will be followed by a crowd sale that ends in January 2018. So far, the company said it has 290 participants signed for its pre-sale.

Operating since 2014, the company, CannaSOS Corporation, based in Toronto, said its system could “revolutionize” the way the cannabis industry manages both its financial and marketing transactions since its platform offers social, advertising and marketing capabilities that will address existing prohibitions against launching national ad programs using established online and offline media.

Since 2014, the company has been losing money, according to Daniel Cheine, co-founder and account manager at CannaSOS Corp., as it built up its cannabis industry databases. In July 2017, the firm began selling ads and that has reversed the trend.

In a white paper explaining the Global PTP Ecosystem, the company said “for marijuana users, doctors, publishers and canna enthusiasts to connect directly via a self-serving online marketplace. Advertisers can purchase advertising space, post sponsored articles, acquire business membership, and much more.”

Since 2014, the company said it has acquired over 315,000 registered members, 950 business pages, 4,800 marijuana strain database and 200 social groups. “Today, CannaSOS is a comprehensive social network and sophisticated advertising platform designed primarily for the cannabis industry. CannaSOS is a successful prototype of a global P2P ecosystem,” according to the company’s white paper.

Working with its partners, including CannaLogic, NaturePay, Pundi X, Spare, Icobox and Naurepay, the company said that within three months after the ICO is completed, its platform will be accessible at over 5,000 locations in the U.S., Canada, and parts of Southeast Asia.

The New Platform

On the financial side, the company said its proprietary PerksCoin Transaction Platform (PTP) is designed to be liquid, secure and transparent. In addition, it will guarantee security, transparency, and safety of all PRC token based transactions; act as a mediator/arbitrator between seller and buyer; support peer-to-peer PRC token sale, eliminating middleman and associated costs; and offer a “Secure Sale” feature to protect buyers from unverified sellers, minimizing fraudulent activity in the marketplace.

According to the company, PRCs are “a utility token available for use within the multi-level transaction platform developed by CannaSOS. PerksCoin token is not a security token, as it is not backed by any hard assets. PerksCoin tokens are set to run on decentralized blockchain technology, ensuring transparency and security of all financial transactions.” It also stressed that PRCs are not guaranteed to be liquid, guaranteed by a financial institution and that trading depends on the “consensus of its value between the market participants.”

Transactions on the platform will allow users to buy and sell PRCs, as well as use the tokens to buy and sell products and services within the participating business network.

In a white paper explaining the Global PTP Ecosystem, the company said the platform will allow “marijuana users, doctors, publishers and canna enthusiasts to connect directly via a self-serving online marketplace. Advertisers can purchase advertising space, post sponsored articles, acquire business membership, and much more.”

With PRCs as the core of its platform, the company is launching a global loyalty program with PRC token and PerksCoin Transaction System. In the white paper, the company said its “loyalty program can be used online and offline by canna retail and wholesale businesses. The system will integrate with any POS on the market and allow PRC tokens to be used as the main incentive medium.”

PRC tokens will operate on cryptocurrencies since they are secure, fast, have low transaction fees and no third-party interruptions. Payouts will be available in PRC, Bitcoin, and Ethereum.

Our platform is continuously evolving, and we are working hard on developing and implementing unique marketing features that will allow canna related businesses to promote their brands locally and globally. PerksCoin Transaction System will allow participants to engage PRC tokens as a method of payment for advertising on existing CannaSOS advertising platform,” the white paper said.


Mitchell ColbertMitchell ColbertOctober 13, 2017
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7min23140

Currencies can be backed by anything that has value. The earliest forms of currency were livestock and cowrie shells (the longest used currency in history), which pre-date metal coins. The first metal coinage was made in China around 1,000 B.C. and was made primarily from base metals (like copper or bronze) rather than precious metals (like silver or gold). In another 500 years, coins evolved to be made from silver and other precious metals. From there, the concept of money evolved further from things with actual value to things which had intangible value, and that was the birth of fiat currency, a currency backed by the faith that governments will make good on their debts.

That formerly unshakable faith in the governments of the world is quickly crumbling for many around the globe, and those skeptics of government fiat are turning to new currencies, backed by things much harder to corrupt than governments, data. Bitcoin was the first cryptocurrency to be backed by the blockchain, an unalterable, encrypted yet transparent digital ledger. Due to the “mathematical difficulty of tampering the unique IDs encrypted into each block in the chain makes Blockchain immune to fraud.”

Stop for a moment and take that in. We now have a currency that is immune to fraud, even livestock wasn’t immune to fraud (take the example of cattle rustlers). You may be wondering, if a blockchain is just a collection of encrypted data, where does the value come from? If you are wondering that, go ask the RIAA or the MPAA how valuable data is, and remember that so-called pirated data was so valuable that it got entire websites shuttered. Not only does the blockchain provide a fraud-proof source of currency, it also is highly valuable in today’s data-driven world, and likely to only become more valuable over time.

But not all cryptocurrencies are created equal, not all are supported by a blockchain, and some are backed by less conventional commodities. For example, take Cannabis Coin, a cryptocurrency backed by “pharmaceutical grade cannabis.”

While it may sound like a great idea at first, since there is a lot of money to be made in the thriving cannabis industry, this makes about as much sense as backing a currency in wheat right before prohibition was repealed. The cost of cannabis is artificially inflated because of the black market, once it becomes legal the price will plummet, as will the value of any currency backed by it. Historically, there are reasons why currencies are most often things like metal or shells that withstand the test of time, rather than things that were perishable or consumable. Think about it. Cakecoin is a lie, and a terrible idea.

To make matters worse, cannabis is still federally illegal, and if the federal government ever needed a red flag to go after a cryptocurrency I can think of nothing better than drugs, as an unfortunate legacy from The Silk Road. But really, backing a currency by something federally illegal is utterly illogical. Could you imagine a Ransomcoin, where users “mine” by doing ransomware hacks? What about a PiracyCoin, where each download also mined a fraction of the next block? There are reasons why those don’t have URLs, yet Cannabis Coin was seen to be a good idea.

Thankfully, Cannabis Coin is the only cryptocurrency that is actually backed by cannabis, though it has many copy-cats and admirers, but none foolish enough or bold enough to rely on cannabis for their value.

The Other “Cannabis” Coins

CannaCoin: Their website appears to be down, which is probably for the best.
DopeCoin: While it has some photos of cannabis plants and seeds all over the site, that is all it has relating to cannabis.
PotCoin: This is what DopeCoin wishes it looked like with a way better site layout and press releases. Also no mention of being backed by cannabis. PotCoin appears to be a cryptocurrency attempting to offer cannabis businesses a way to bank, but a lot about it is not clear.
HempCoin: My honorable mention for Hemp History Week. HempCoin has utterly nothing to do with cannabis and certainly not hemp, it appears to be vying for the same niche as PotCoin.



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