Daily Archives: March 6, 2017

Weapons of war should be allowed | Letter – The Courier-Journal

Posted: March 6, 2017 at 2:52 pm

Subscribe today for full access on your desktop, tablet, and mobile device.

Let friends in your social network know what you are reading about

The Second Amendment is not about guns, Instead, it is about the inalienable right to self defense.

Try Another

Audio CAPTCHA

Image CAPTCHA

Help

CancelSend

A link has been sent to your friend's email address.

A link has been posted to your Facebook feed.

CJ Letter 1:56 p.m. ET March 6, 2017

Weapons(Photo: Czanner, Getty Images/iStockphoto)

The Fourth Circuit Court of Appeals recently found that the Second Amendment does not apply to weapons of war. I beg to differ. In our founders day, the musket was a weapon of war and a firearm widely used outside of war.Like most people today, our founders knew that technology would advance. Clearly, they believed that one day tyrants could rise again. This was the single most important aspect of why the founders established the Second Amendment. No modern day judge could possibly reach any other conclusion unless influenced by self-ideology. The Second Amendment not only covers AR-15s and AK-47s, but bigger more powerful semi automatics. Killers can always kill when they are facing unarmed victims, but this is not so for the armed citizen facing soldiers with semi-automatic weapons, for revolvers, shotguns and bolt action rifles are limited against such firepower. The Second Amendment is not about guns, Instead, it is about the inalienable right to self defense, a right that should never be defined by any man or woman, but protected by the oaths of statesmen, who have pledged to uphold that right.

Mark Damon Milby

Pekin, Indiana47165

Read or Share this story: http://cjky.it/2mwYPeE

3:46

3:28

4:00

1:53

2:18

6:56

7:28

3:15

3:05

3:51

3:38

3:12

2:41

3:38

2:31

3:22

3:45

1:33

1:56

3:24

3:03

3:39

3:14

3:37

3:56

3:01

2:19

4:36

2:58

1:47

0) { %>

0) { %>

Read more:
Weapons of war should be allowed | Letter - The Courier-Journal

Posted in Second Amendment | Comments Off on Weapons of war should be allowed | Letter – The Courier-Journal

Iowa: Attend Second Amendment Day at the Iowa State Capitol! – NRA ILA

Posted: at 2:52 pm

All Second Amendment supporters are encouraged to attend Second Amendment Day at the Iowa State Capitol tomorrow, March 7. Second Amendment advocates will have the opportunity to meet with legislators and other pro-gun Iowans, in addition to watching the floor proceedings as the House of Representatives consider House File 517, the omnibus bill which would make many pro-gun reforms for Iowa gun owners. Further details can be found below. Also, please click the Take Action button below to contact your state Representative and urge them to SUPPORT HF 517!

Second Amendment Day Tuesday, March 7, 2017 Iowa State Capitol 1007 E. Grand Avenue Des Moines, IA 50319

10:00am-10:45am: Presentation and Speakers, Room 102 10:45am-12:00pm: Lobby Time 12:00pm: House of Representatives vote on HF 517

HF 517 covers a diverse range of important issues for gun owners. Included in HF 517 are the following pro-gun reforms:

Please stay tuned to your email inbox andwww.nraila.orgfor further updates on this bill as it advances through the Iowa Legislature.

See more here:
Iowa: Attend Second Amendment Day at the Iowa State Capitol! - NRA ILA

Posted in Second Amendment | Comments Off on Iowa: Attend Second Amendment Day at the Iowa State Capitol! – NRA ILA

Arizona Passes Bill to Lift Infringements on Second Amendment Rights – Bearing Arms

Posted: at 2:52 pm

On Wednesday, the Arizona Senate passed Senate Bill 1122, which prohibits local governments from requiring background checks for private party transfers. The billis considered to be a legislative repercussion against the city of Tucson. In the past, Tucson has destroyed every gun it seized, something gun-rights activists says could violate state law.

Because of Tucsons position on guns, Arizona Attorney General Mark Brnovich sued Tucson under a state law that allows the state to pull funding from local governments whose policies contradict those of the states. In other words, Tucson has one option: repeal the ordinance or face significant funding shortages. Losing state funding would cost the city of Tucson $170 million.

The Tucson city council refused to repeal the ordinance. While the issue plays out in court, the council has decided to pause the gun destruction program.

According to Brnovich, gun control is a state-level issue, not a local issue.

SB 1122 is being considered the legislative remedy to the Tucson problem.

From guns.com:

This is over-wrought, he said Tuesday during session. This does not allow local cities or counties to do any type of a background check for any exchange of property including cars. This is being decided before the state Supreme Court right now so lets not rush it. We should not be deicing for a city whats best for the public safety of its citizens.

The case Farley referenced pits Tucson against the state over its destruction of seized or surrendered firearms. The policy preempts state law which requires such firearms be sold, though a court decision in favor of Tucson would quash SB 1122, Farley said.

The city of Tucson is arguing that gun regulations are a matter of local control, he said. I think we should wait to see what the court decides before we make any more laws that could be invalidated.

Author's Bio: Beth Baumann

Continued here:
Arizona Passes Bill to Lift Infringements on Second Amendment Rights - Bearing Arms

Posted in Second Amendment | Comments Off on Arizona Passes Bill to Lift Infringements on Second Amendment Rights – Bearing Arms

First Amendment Foundation will grade legislators on Florida’s open government laws – Tampabay.com (blog)

Posted: at 2:52 pm

WEST PALM BEACH Soon after the Sept. 11, 2001, terrorist attacks, the Florida Legislature debated a bill that would exempt from public access all information about crop-dusting operations.

But most operators are actively broadcasting that information in search of clients. And their registration numbers are painted right on their planes' tails.

"How do you exempt something that is clearly visible?" Barbara Petersen asks. The bill never became law.

Because of Florida's Government in the Sunshine Law, the state's records and meetings are more accessible than in most states. But the Legislature has, year in and year out, instituted, or considered instituting, numerous exemptions. The body, on average, imposes up to a dozen a year; the grand total, as of early February, was 1,119.

Keeping an eye on those efforts is Petersen, president of Florida's First Amendment Foundation, a Tallahassee nonprofit open-government advocacy group. It's supported by newspapers and broadcasters as well as numerous lawyers and just plain citizens. Its mission is to help all of the above. Whether it's a powerful news outlet or a property owner wanting to see the paperwork for the road that was rerouted in front of his house.

Bills already proposed for this session would let elected officials talk in private and block information about college executive candidates.

Where does your legislator stand?

Starting with the 2017 legislative session, which begins Tuesday, the Florida Society of News Editors plans to make it easier to find out.

Each year FSNE completes a project devoted to Sunshine Week, a nationwide initiative to educate the public about the importance of transparent government. This year's project will focus on a "scorecard" to track the foundation's priority list of public records exemptions. FSNE members will create a permanent scoring system to grade legislators on their introduction of bills and their final votes.

The Palm Beach Post, as part of an annual project by the Florida Society of News Editors, will report on a legislative "scorecard." Legislators will be graded by the Foundation for how they voted for and, in some cases, introduced exemptions.

Reporters from Florida newspapers will establish a final scorecard when the session ends and interview lawmakers about their decisions related to public record exemptions.

Florida's Legislature established public records laws as early as the early 20th century, created the Government in the Sunshine Law in the late 1960s, and in 1992 established a "constitutional right of access."

In each legislative session, hundreds of bills are submitted to create exemptions. Some years, a lot pass. Some years a few pass. Petersen recalled a year where about 20 were voted in.

"The vast majority of the bills we track are justified, and we take a neutral position on them, or we work to make them such that we're neutral," Petersen said.

And, she told one politician in a letter, "We agree that the requirements of our famed Sunshine Law can be an inconvenience for government officials at times. But the right of Floridians to oversee their government and hold it accountable for its actions a right imbedded in our constitution far outweighs such minor annoyances."

She also said that the Sunshine Law "is not a partisan issue. That's a misperception. Everyone thinks Republicans hate the law and Democrats love the law. That's not true. We have friends and detractors on both sides of the aisle."

Petersen keeps busy writing sponsors of bills the foundation opposes.

She wrote state Rep. Bob Rommel, R-Naples, to oppose HB 351, which would exempt personal identifying information of applicants for president, provost, or dean of a state college and would close meetings related to executive searches.

And she wrote state Rep. Byron Donalds, also R-Naples, about HB 843, which, in an elected body of at least five members, would allow two of them to discuss public business in private "without procedural safeguards such as notice or a requirement that minutes of such discussions be taken." She said the bill "invites pernicious mischief by our elected officials."

Sometimes Petersen and other public records advocates win. Sometimes they don't.

In 1981, 6-year-old Adam Walsh was abducted from a Broward County mall and killed. The slaying was a watershed for how authorities respond to child abductions and made the boy's father, John, a crime fighting advocate and longtime television host.

In 1996, four newspapers sued under the state's open records laws. Their argument: Police in Hollywood couldn't reasonably claim the exemption that the case still was active after 15 years. Even as the Walshes and the Broward County State Attorney filed emergency motions to block the release, saying it would jeopardize the case, a judge agreed with the newspapers and the police released more than 10,000 pages of documents. They suggested drifter Ottis Toole killed the boy, but Hollywood police were unable to build a strong enough case to charge him.

Even today, the case remains officially unsolved, although an investigator working with the boy's parents made a powerful case in 2011 of what the newspapers said in 1996: Toole was the killer.

And in February 2001, auto racing legend Dale Earnhardt Sr. died when his car slammed into a wall on the last lap of the Daytona 500. Authorities later blocked news outlets' access to autopsy photos, which were public record, and the outlets were permitted only to have an expert review the photos. They used that analysis to raise questions about how racing's governing body, NASCAR, handled Earnhardt's death.

During the legal battle, the Legislature passed a law exempting autopsy photos, saying they feared ghoulish images would make their way to the Internet. Newspapers argued they never do that and not giving them the photos removed their ability to question autopsy results. The ban has survived legal challenges.

Not everyone sees the Sunshine Law as untouchable or as always a good thing.

In 2015, Gulf Stream, east of Boynton Beach, was swamped by hundreds of public records requested from a resident who then sued when the town of about 900, with a paid office staff of six, was unable to keep up. In 2016, legislation fizzled that would have removed the requirement that government agencies pay attorney fees if they lose a public records suit. Opponents said while the intent to save small entities such as Gulf Stream was admirable, such bills would have a chilling effect on people afraid that if they sought public records and lost in court, they'd be stuck with a huge legal bill.

Similar legislation is up again this year, and again the foundation opposes it. But not Keith Rizzardi.

"In normal circumstances, the Sunshine State's public records law is a model for ensuring the disclosure of information to the benefit of an informed citizenry," Rizzardi, a law professor at St. Thomas University School of Law in Miami, wrote for the law review of the Stetson University College of Law in Gulfport.

"Experience shows that the abnormal is occurring. Lacking sufficient boundaries to prevent misuses of the law, the efficiency of our bureaucracy is compromised, and taxpayers are the victims," said Rizzardi, who worked with Gulf Stream on its case.

The professor also cited a case in Polk County in which a requester "sought to obtain the health insurance information for Polk County school employees, spouses, and children. To many, the request appeared to be a shocking invasion of privacy, but under the Florida Constitution, the right to privacy is subordinate to the right of access to public records. Indeed, the broad request, and the resulting litigation, eventually expanded to include 11 Florida school boards, and the government was compelled to respond."

First Amendment Foundation will grade legislators on Florida's open government laws 03/06/17 [Last modified: Monday, March 6, 2017 11:13am] Photo reprints | Article reprints

Link:
First Amendment Foundation will grade legislators on Florida's open government laws - Tampabay.com (blog)

Posted in First Amendment | Comments Off on First Amendment Foundation will grade legislators on Florida’s open government laws – Tampabay.com (blog)

The first amendment in a digital age #UseYourOwnVoice – Lariat Saddleback College

Posted: at 2:52 pm

Saddleback College President, Tod Burnett, introducing the Associated Student Government and other affiliates to the stage for the #UseYourOwnVoice event in the quad. (Colin Reef/Lariat)

Saddleback College presents part one of a four part series called Understanding the First Amendment in the 21st Century or #UseYourOwnVoice yesterday Feb. 28, 2017 in the quad.

The main purpose of this event was to inform and educate students and faculty on how the application of the first amendment has changed since the onset of technology and social media. With the help of Associated Student Government, the Pre-Law Society, Academic Senate, Classified Senate, and Dr. Tod Burnett, Saddleback College president, a panel of students were given the chance to express any concerns, feelings, and questions they had to a panel of Saddleback College professors.

The panel of Saddleback College professors included political science professors Kendralyn Webber and Christina Hinkle, mathematics professor Frank Gonzalez, and Journalism professor Mike Reed.

A Panel of Saddleback College students and professors take the stage to discuss applications of the first amendment in the digital age of technology. (Colin Reef/Lariat)

In order to understand the first amendment, said Mike Reed, we must first analyze the nine areas of unprotected speech that most people either forget or fail to realize exist.

The student panel prepare to ask questions in regards to first amendment application in the digital age. (Colin Reef/Lariat)

The digital age has given rise to many pressing questions when correlating them to first amendment freedoms. One main reason for this is the Supreme Court and its establishment in relation to freedoms of press and speech were created nearly 50 years ago.

They were created way before the implementation or creation for that matter, of the Internet, World Wide Web, and smartphones. The emergence of Google and other tech giants like Apple as well as social media platforms has propelled us into a new age of communication. This makes it hard for the present generation to establish grounds for proper first amendment rights seeing as many need revaluation or a complete overhaul.

The role of the Supreme Court (which some regard as too slow) still works because it gives authority, the right to fundamentally break down protected speech and reflect on all of the consequences, said Christina Hinkle, Its important for us to utilize the tools we have been given (Internet) to further educate people on these proceedings and make proper provisions.

For many people the Internet has made it harder for interpersonal communication to take place. This is due in part because of the lack of education on the first amendment. Nowadays, many people assume news is genuine just from a glance or a gloss-over. These immediate reactions have made it possible for people to actually widen the gap and increase a polarization of opinions.

Interpersonal relationships have become media popcorn for some people, said Kendralyn Webber, Its almost as if its not about you know but what you google.

In too many ways this has become the normal way of projecting facts, opinions, and information. Although we may be in a confusing place as far as communication goes, having events in the community like #UseYourOwnVoice on college campuses helps to bridge the unknown and further educate people on our unalienable rights.

For more information, visit Saddleback Colleges upcoming events and learn more about the #UseYourOwnVoice series.

Link:
The first amendment in a digital age #UseYourOwnVoice - Lariat Saddleback College

Posted in First Amendment | Comments Off on The first amendment in a digital age #UseYourOwnVoice – Lariat Saddleback College

First Amendment applies to Trump, too – Bradenton Herald

Posted: at 2:52 pm


Bradenton Herald
First Amendment applies to Trump, too
Bradenton Herald
After reading Mr. James Frazier's Feb. 28 letter to the editor Trump's scorn of media disturbing, I have a question: Is the letter rhetoric or is he saying everyone is protected by the First Amendment except the president of the United States ...

Read the rest here:
First Amendment applies to Trump, too - Bradenton Herald

Posted in First Amendment | Comments Off on First Amendment applies to Trump, too – Bradenton Herald

Justice Dept. drops Playpen child porn case to prevent release of Tor hack – ZDNet

Posted: at 2:51 pm

(Image: file photo)

Justice Dept. lawyers are asking a federal court to drop a case against a dark web child porn site because it says it cannot reveal how it used a browser exploit to target thousands of unsuspecting visitors to the site.

A court filing posted late on Friday in Washington state said that because the government is "unwilling to disclose" how it carried out the hacks, it has "no choice but to seek dismissal" of the case.

"The government must now choose between disclosure of classified information and dismissal of its indictment. Disclosure is not currently an option," said the filing.

However, the government's attorneys are asking the case to be reopened once the exploit is no longer classified.

The case, proven to be of the most controversial indictments in recent history, focused on Jay Michaud, a school administrator from Vancouver, WA, who was arrested in July 2015 for viewing child porn images.

Michaud was accused of accessing over a hundred threads on Playpen, a dark web site accessible over the Tor anonymity network, which hosted child abuse imagery for thousands of users.

Feds discovered the server was hosted in the US, and obtained a search warrant that seized the server.

But instead of pulling down the website, the FBI continued to run the website for almost two weeks, as part of efforts to discover the identities of others who accessed the site.

The FBI used a "network investigative technique" -- a hacking tool that in any other hands than the feds would be considered malware -- to deanonymize the users of the Tor browser, a widely used app for easy access to the dark web, during its 2015 investigation into the website.

Little is known about the hacking tool, but it was known to be able to gather real-world information on Playpen visitors, such as IP addresses -- details of which should have been protected by Tor.

But the government refused to reveal the full source code of the exploit in court, and so the judge tossed out the evidence, rendering a significant set-back to the government's case.

Given that the Tor browser uses much of the same code as Firefox, it's long believed that the vulnerability is a zero-day flaw affecting the browser.

In May, Mozilla filed a brief in the Playpen defendant's case asking the FBI to privately disclose the flaw in order to fix the bug that it says would affect the security of "hundreds of millions of users."

A judge is expected to rule on the case in the coming weeks.

Read more:
Justice Dept. drops Playpen child porn case to prevent release of Tor hack - ZDNet

Posted in Tor Browser | Comments Off on Justice Dept. drops Playpen child porn case to prevent release of Tor hack – ZDNet

8 privacy tools that will keep you safe online – Techworm

Posted: at 2:51 pm

For any internet user, safeguarding sensitive and confidential information has become a high priority, as internet these days are becoming a less private place with several individuals, corporations, and even governments in some cases, tracking your activities to collect users information and metrics.

Also, it is very easy to track a user because of the IP, the unique address that we all use to connect to internet that makes online privacy a big concern. However, if you wish to keep your personal information private, you can use a VPN or proxy tool to help you. It covers everything from secure web browsing to secure file erasing.

Lets have a look at the privacy tools below:

1. Tor Browser

The Tor network (short for The Onion Router, which describes its multi-layered privacy technology) offers you an anonymous window to the Web. By far, the Firefox-based Tor Browser is the quickest and simplest to start using it.

Tors network of bouncing your traffic through multiple relays makes it nearly impossible to track a users identity or activity. You can access almost every website anonymously, including .onion addresses, which are only accessible while connected to Tor. Its also useful for accessing geo-blocked sites that block IP addresses from specific countries. Tor is available for Windows, Apple Macs and Linux.

2. CyberGhost VPN

CyberGhost allows users to connect to a VPN (virtual private network) and access the internet anonymously. The service is built for users who just want secure, private access when connected from public or untrusted networks. It re-routes your internet traffic to hide your location and identity. The privacy software has six elements: anonymous browsing, unblocking streaming sites, protecting your internet connection, torrenting anonymously, unblocking websites and choosing which VPN server to use

CyberGhost VPN is available as a free ad-supported app, as well as a paid-for edition that provides enhanced performance and more features. The free version should be perfectly adequate for daily or random use. However, it runs much more slowly than the paid-for premium service. The CyberGhost VPN client supports Windows XP, Vista, and 7.

3. Tails

Privacy has become a major issue in this age of mass surveillance and tracking by marketers (anonymous tracking for targeted content is acceptable). If you are someone who needs to keep the government and marketing agencies out of your business, you need an operating system thats created from the ground up with privacy in mind.

And, nothing beats Tails for this purpose. Its a Debian-based Linux distribution that offers privacy and anonymity by design. Its a distro whose aim is solely to keep the identity of the user completely opaque. It routes its traffic through Tor, designed to avoid your outward-bound data from being intercepted and analysed. According to reports, Tails is so good that the NSA considers it a major threat to their hacking activities.

4. Ghostery

Ghostery is a privacy and security-related browser extension and mobile application, which is distributed as proprietary freeware. You can simply install the privacy software and allow it to do its job. Ghostery also tells you exactly what each company is looking at and likely to do with your data. It is definitely a must-have for those who do wish to share every click with marketers. Its available for Mozilla Firefox, Google Chrome, Microsoft Internet Explorer, Microsoft Edge, Opera, Apple Safari, iOS, Android and Firefox Mobile.

5. GnuPG

GNU Privacy Guard (GnuPG or GPG) is a free software, and its the open source version of the venerable PGP (Pretty Good Privacy) tool. GnuPG allows you to encrypt and sign your data and communication thats effectively unbreakable. It features a versatile key management system as well as access modules for all kinds of public key directories. It is a command line tool with features for easy integration with other applications.

6. KeyScrambler

KeyScrambler is the most useful method that encrypts every single key that you entered or type deep into the Windows kernel to prevent it from being intercepted by keylogging software. The positioning and timing of encryption key allow it to be much more challenging and burdensome for key-loggers to split or defeat KeyScramblers protection.

If you worry about keylogging or doubt that you are being logged whenever you type, this free privacy software is a good way to frustrate the watchmen.

7. Wise Folder Hider

Designed for Windows XP onwards, Wise Folder Hider is freeware that can quickly and safely hide not only the files/folders on local partitions or removable devices but also USB drives or the files/folders on USB drives. The hidden files/folders will be safely hidden no matter whether the drive is accessed in another operating system on the same computer or reinstalled on another computer. The only way to access hidden files/folders/USB is to enter the valid password(s) correctly. Its double password protection can ensure the absolute safety of your files/folders/USB.

8. AntiSpy for Windows 10

While Windows 10 is the most personal version of Windows, Microsofts attempts at knowing you better have alerted many privacy activists. AntiSpy for Windows 10 allows you to disable advertising IDs, SmartScreen filtering, whether apps can access your camera and so on.

Source: TOI

Visit link:
8 privacy tools that will keep you safe online - Techworm

Posted in Tor Browser | Comments Off on 8 privacy tools that will keep you safe online – Techworm

New dark web scheme lets wannabe cybercriminals get in on ransomware – for free – ZDNet

Posted: at 2:51 pm

The service offers step-by-step instructions on building ransomware.

A new dark web scheme could allow any wannabe cybercriminal to grab a piece of the ransomware pie for free -- on the condition that any ill-gotten profits are split 50/50.

Ransomware -- a form of malware which encrypts a victim's files and demands a ransom to restore them -- has boomed in the last 18 months. A number of ransomware-as-a-service affiliate schemes allow even the most technically illiterate cyber thief to cash in on a form of crime which cost businesses over a billion dollars last year.

But while these schemes are sold to users for a fee -- be it a one-off payment, or as part of a subscription based service -- this new ransomware operation is providing malicious software to affiliates for free in exchange for a big slice of any successful scores.

The move represents another evolution in ransomware which could make it an even more dangerous threat, because criminals may be tempted to download it and launch a ransomware campaign as they don't need to part with their cash to do so.

"The simplistic and straight-forward design of Dot ransomware enables just about anyone to conduct cybercrime," warn Fortinet researchers, who predict Dot will soon become a big threat to businsesses.

"Although we haven't seen this ransomware in the wild, with the advertisements being made accessible on hacking forums, it's only a matter of time until people start taking the bait."

This particular scheme appeared during mid-February and offers users Dot ransomware. All the user needs to get started is to access to the download via the Tor browser and to register a Bitcoin address -- Bitcoin being the number one method of extorting ransoms.

Once this is done, the authors of Dot provide a guide to getting started, including recommendations of which file types to use to distribute ransomware, as well as recommendations for what ransoms to charge in which countries in order to maximise returns.

The authors even go so far as to provide a dashboard for users to keep track of the number and status of infections. The core of the malicious software service appears to be designed to look as if it's like any other form of legitimate set of software tools.

Dot's authors attempt to position the ransomware as like any other software service.

Offering Dot as a free, commissioned-based service has advantages for both the authors and their affiliates; the ransomware writers have an easy way of spreading their malicious software -- complete with with ongoing significant returns from successful infections -- while the would-be criminals get their hands on ransomware without having to pay.

However, the author has coded Dot to ensure that a technically literate user can't rewire the program to take all the payment for themselves.

Victims are infected with Dot via malicious attachments, which will encrypt their files when run and open a ReadMe HTML, informing them they need to pay a Bitcoin ransom in order to regain access to their data.

See the article here:
New dark web scheme lets wannabe cybercriminals get in on ransomware - for free - ZDNet

Posted in Tor Browser | Comments Off on New dark web scheme lets wannabe cybercriminals get in on ransomware – for free – ZDNet

The Cryptocurrency Funds Have Arrived, And They’re Bringing Wall Street Money – Seeking Alpha

Posted: at 2:50 pm

If 2013-2016 was the era of venture investment in bitcoin and blockchain startups - VCs put north of a billion dollars to work, peaking at $290M in the first half of 2016 - then 2017-2020 will in hindsight be seen as the Wall Street era. The startup equity investors have come and - in the absence of unicorn valuations or breathtaking growth - they're starting to move on. But now the bitcoin and cryptocurrency funds have arrived, and they've brought public markets investors with them.

Just about every week I'll discover a new investment fund that gives investors liquid exposure to the cryptocurrency asset class. At latest count, there are at least 5 exchange-listed bitcoin investment products, 3 U.S.-based ETFs under review by the SEC, and hedge funds that cover just about every cryptocurrency asset type and investment strategy. By my estimate, these funds represent roughly 5-10% of the $24B in total that's now invested in cryptocurrencies.

For clarity, I define a cryptocurrency fund as a pool of professionally managed capital, available to outside investors, where the majority of AUM are invested in publicly tradable cryptocurrency assets. Examples of such assets include bitcoin, ethereum, and the 500+ altcoins and 50+ digital tokens listed on Coinmarketcap. Thus venture capital funds who invest in shareholder equity of blockchain startups don't qualify.

I've sorted the different funds into three broad categories and wanted to give a description of each category along with some prominent examples. They are:

Disclaimer: Please consider this information as strictly educational and not meant to represent specific investment advice or recommendations.

1. Publicly traded funds

These funds follow a buy-and-hold strategy and usually focus on a single asset. For now, all of them are bitcoin-only, although I expect publicly traded ethereum funds to come online perhaps as early as this year.

A management fee is charged for the service, which ranges from 1.5-2.5% per year. As more funds enter the space, fees will likely decrease, perhaps to below 1% which is what most vanilla ETFs charge. You may wonder why anyone would invest in a public bitcoin fund when you can just buy bitcoin and hold it yourself, but you could ask the same of gold. The biggest gold ETF - the SPDR Gold Trust - manages $35 billion USD. That's double the bitcoin market cap - all in one ETF. The attractions for investors are varied, from ease of access to peace of mind to lighter regulatory regimes. The consistent price premium of Grayscale's Bitcoin Investment Trust (OTCQX:GBTC) shares over the NAV of its bitcoin holdings is more evidence that such vehicles are desired.

Within the cryptocurrency universe, there are roughly two types of such funds: ETFs and ETNs (what are also called asset backed notes). The main difference is that an ETF's value is collateralized by an equivalent value of its underlying benchmark asset and allows an investor to redeem their ETF shares for the asset.

An ETN doesn't allow redemption and doesn't make the same guarantees about how much e.g. bitcoin it actually holds. An ETN is better thought of as unsecured debt that roughly tracks the price of its benchmark asset but has looser reporting and compliance requirements. Because of these differences, ETNs are a bigger credit risk, and we've already seen this risk manifest when KNC Miner filed for bankruptcy. KNC Miner was the guarantor of the COINXBT and COINXBE ETNs on the Nasdaq Nordic, and the bankruptcy filing forced trading to a halt. Two weeks later, the investment firm Global Advisors stepped in and became the new guarantor and trading was allowed to resume.

Examples of bitcoin ETNs include BTCETI (which is co-listed on the Gibraltar Stock Exchange and the Deutsche Borse) and the above-mentioned Global Advisors' COINXBT and COINXBE.

Thus far no bitcoin ETFs have been approved. There are three U.S.-based funds under review by the SEC. They are, in order of their filing:

GBTC is a hybrid, in that it's currently an ETN which is filing to become an ETF. While it has filed for a $500M IPO on NYSE Arca to become an ETF, it is currently traded on the U.S. OTC exchanges and doesn't allow redemption of shares into bitcoin.

The only ETFs with bitcoin exposure are Ark Investment Management's ARK Innovation ETF (NYSEARCA:ARKK) and ARK Web x.0 ETF (ARKW), but these hardly count as official cryptocurrency ETFs because both hold less than 0.3% of their portfolio in GBTC.

Bitcoin IRA is an interesting outlier in that it's a public bitcoin investment fund, available to any investors who have or want to open an IRA, a type of U.S. retirement savings account. They allow the redemption of bitcoin, but the company is not listed on any publicly traded exchange. You must contact them directly to invest. Bitcoin IRA charge a 15% one-time upfront fee of any money invested.

Finally, while the publicly traded funds are all bitcoin, the ethereum funds are coming. One example is the EtherIndex Ether Trust which filed in July 2016 with the SEC to be listed on the NYSE Arca, but has seen little activity since. Here are my notes on its filing. I have seen some other ethereum-based efforts and I expect at least one will be approved for public trading this year.

2. Private buy-and-hold funds

These differ from public investment funds in that they usually have restrictions either on investment size (e.g., $100K USD and above) or status (e.g., accredited investors only). They're not listed on publicly traded exchanges, without the attendant regulatory requirements and investment disclosures, and you can't use investment software like Bloomberg to obtain quotes and place trades. But otherwise the strategy and product and fees are similar: they offer investors comparatively simple and safe exposure to cryptocurrency and charge an annual fee for the service.

The best known example is probably the Pantera Bitcoin Fund. Pantera Capital is a blockchain investment firm which has multiple funds. One of them specializes in equity investments of blockchain startups. The one relevant for our discussion is a private bitcoin buy-and-hold fund which has over $100M in AUM and charges 0.75% annual management fee and a 1% fee for redemption.

An ethereum example is Grayscale's Ethereum Investment Trust, which has not formally launched but will be a private product that provides qualified investors access to Ethereum Classic.

DLT10 Index is an interesting example of a private buy-and-hold fund which offers a proprietary basket of 10 publicly traded cryptocurrency assets. The index is a mixture of leading cryptocurrencies and digital tokens, with a preference for enduring assets.

3. Hedge funds

Last we have cryptocurrency hedge funds. A hedge fund is a pool of lightly regulated capital that invests in whatever it likes within some broad strategic parameters. They have active trading strategies including e.g., leveraged trading, price arbitrage, and algorithmic trading. In addition to charging a management fee comparable to the above two types of funds, they also charge a performance fee that in this space can range from 15-45%. The performance fee is only paid out when the hedge fund beats an agreed-upon benchmark, such as the price of bitcoin. So if a hedge fund can generate better returns than simply owning bitcoin, they're paid very well for doing so. This benchmark outperformance is called alpha.

Known cryptocurrency hedge funds include:

I believe the above-mentioned funds are all actively seeking outside investment. Coinfund.io is an example of a cryptocurrency hedge fund which is no longer taking outside investors. They focus on digital token investment, what are often called ICOs, and host a knowledgeable and active community chat on Slack.

A final interesting example is the TaaS fund (Token-as-a-Service), which will exist on the Ethereum blockchain and in March will sell up to $100M of their tokens via the ICO process. The fund will keep some proceeds to fund operations and invest the remainder in a proprietary mixture of bitcoin, altcoins, and other digital tokens. Token holders will receive an ongoing percentage of trading profits.

The hedge fund space - of the three categories - is likely to see the most growth and proliferation because of its light regulatory touch, the speed to market, and the chance for fund managers to make outsized profits in a still volatile and developing asset class.

The next 3 years are a window of opportunity for starting and investing in cryptocurrency funds

We've entered a golden era of professionally managed money moving into liquid cryptocurrency assets. The risks that prevented Wall Street investor types from entering the market earlier - lack of liquidity, regulatory uncertainty, China trading centralization, lack of sophisticated financial products - are now reduced enough that those hungry for returns have taken the lead and others are starting to follow.

There's no better time to start a fund or raise one, and there's no better time to take a cryptocurrency position if you manage money, especially when you consider the past price performance of cryptocurrency assets and research that proves bitcoin's lack of correlation with existing asset classes. An approved U.S. bitcoin ETF will only add fuel to the growing fire.

In the coming years, the above-mentioned three funds types will expand and evolve: Hedge funds will grow larger and develop more exotic trading strategies, increasingly blending cryptocurrency with mainstream asset classes like equities and commodities. Private funds will diversify from one cryptocurrency asset to multiple assets and seek listing on exchanges. Finally, publicly traded funds will expand from bitcoin to ethereum and then cryptocurrency indexes, and fees will likely come down as competition grows.

Thanks for reading! A number of people read drafts of this essay and I'm grateful for their feedback. I look forward to your comments and questions.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long bitcoin and altcoins but do not have a personal investment in any of the funds mentioned here.

Read the original:
The Cryptocurrency Funds Have Arrived, And They're Bringing Wall Street Money - Seeking Alpha

Posted in Cryptocurrency | Comments Off on The Cryptocurrency Funds Have Arrived, And They’re Bringing Wall Street Money – Seeking Alpha