Bitcoin Daily: Fidelity To Offer Bitcoin Trading; Bitfinex Plans $1B Token Sale

Sources have told Bloomberg that Fidelity Investments will launch its own crypto trading platform within a few weeks.

Fidelity Digital Assets was created in October, and will soon offer over-the-counter buying and selling for bitcoin. But unlike other platforms, Fidelity will only serve institutional customers.

“We currently have a select set of clients we’re supporting on our trading platform,” Fidelity spokeswoman Arlene Roberts said in an email. “We will continue to roll out our services over the coming weeks and months based on our clients’ needs, jurisdictions, and other factors. Currently, our service offering is focused on bitcoin.”

In other news, the Federal Trade Commission (FTC) has announced it has taken legal action against a backpack creator accused of running a fraudulent crowdfunding scheme.

Douglas Monahan, operating through his company, iBackPack of Texas, allegedly raised more than $800,000 from consumers through four crowdfunding campaigns, falsely claiming the funds would be used to develop products including the “iBackPack” that would incorporate batteries for charging laptops and phones, cables and a Bluetooth speaker. Instead, Monahan spent most of the money on personal expenses and efforts to try to raise additional funds.

“If you raise money by crowdfunding, you don’t have to guarantee that your idea will work,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a press release. “But you do have to use the money to work on your idea—or expect to hear from the FTC.”

Bitfinex is looking to raise as much as $1 billion during its initial exchange offering (IEO).

According to CryptoVest, the sale of the LEO token comes as the firm is dealing with liquidity issues due to the fact that it has been unable to access funds because of the activity of Crypto Capital, the payment processing company.

And that’s not Bitfinex’s only issue. The company has been accused by the New York State Attorney General of covering up missing funds — $850 million worth — by dipping into the reserves of Tether.  Now the firms’ parent company, iFinex, is fighting back. In a lawsuit filed on May 5, iFinex said, “This is backwards: the Attorney General should not be afforded the drastic remedy of a preliminary injunction, or an order requiring the Respondents to address blunderbuss document demands, without establishing the basis for its authority to even regulate in this sphere.”

The company added that the injunction “is hugely disruptive because it freezes in place over $2 billion of the Tether’s reserves, prohibiting any investment of any kind into the indefinite future. This massive regulatory overreach has no corresponding benefit,” according to court documents.