Is there an Uber IPO conspiracy?

On By mehranmuslimiblogIn UncategorizedLeave a comment

I ask this question, because there are rumours floating around that suggest the US government and General Motors (GM) are in cahoots to suppress Uber’s $120 billion IPO and promote Lyft.

I first came across the idea via a CCN article by Nicole Grinstead. She has provided an excellent infographic explaining the race between Uber and Lyft, or should I call it a battle, that has been ongoing since Lyft launched in 2012. It shows that in 2015, Lyft got a major influx of investment from China, and in the following year it entered into a partnership with GM. This was intended to improve their share of the ride-sharing market, and advance GM in the autonomous car sector. However, in August 2016, Lyft’s former Chines partner bought Uber China, ending the relationship. In December 2018, Lyft filed for an IPO with the SEC, and later the same day, Uber also filed for an IPO. And so the battle lines were drawn.

The Lyft-Uber IPO battle

Now they are embroiled in an IPO race that is happening in Japan as well as the USA, mainly because the largest investors in Uber and Lyft are based in Tokyo. Lyft is much smaller than Uber, and it is estimated that its IPO will take place this week. Lyft’s co-founder John Zimmer recently claimed that he isn’t worried about beating Uber to an IPO. Maybe, Grinstead writes, that’s because he knew that Lyft’s victory in the rivals’ race to debut on the stock market was guaranteed. She also remarks that if Lyft can get to an IPO first, it will have an advantage over Uber and could topple Uber from its place as market leader.

More competition for Uber

However, Uber faces bigger issues than the Lyft IPO. In February, Daimler and BMW announced their additional $1.13 billion investment in their joint venture to compete with ride-hailing companies. BMW CEO Harald Krueger made a statement outlining a five-prong plan to offer services ranging from ride-hailing and vehicle charging to parking and car-sharing, or in his own words, “To form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously.”

US government and GM in possible conspiracy?

But let’s get back to the conspiracy. As Grinstead says, “GM’s 9% ownership of Lyft could provide cause to suspect a government conspiracy to promote FUD about Uber.” Furthermore, while the US government sold the last of taxpayers’ GM shares in 2013, the government’s 2009 bailout of GM could be said to indicate that the government now wants to ensure GM’s ongoing profitability. And as Grinstead also remarks, GM and the government have been linked in sufficient conspiracies before now to make interference in the Uber IPO not beyond the realms of possibility. Grinstead concludes by saying, “Evidence to support this conspiracy is anecdotal at best. Nonetheless, if Uber is facing secret government opposition, it may be the biggest hurdle standing between them and $120 billion.”

All you have to do is follow the money, because in the end that is what it is all about for the government, GM and the two competitors — Lyft and Uber.

 

JP Morgan still has Cryptophobia

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

It may have seemed that with the announcement of the JPM Coin, the banking giant had overcome its ‘cryptophobia’. However, I cam across a story last week that indicates it is still some way from showing crypto the love.

Cryptoraves, a company that is working on the tokenization of social media, had its bank account shut down last month by JP Morgan, without any explanation whatsoever.

In the long run, JP Morgan told them they were working in a “prohibited industry.” But that is as much information as Cryptoraves could wring out the stone that is the bank.

Cryptoraves was surprised to receive a letter saying, “After a recent review of your account, we have decided to end our relationship with you.” That is like ending a relationship by text. It is rather harsh, all the more because it doesn’t provide any reason for the break-up. Who wants a bank that treats its customers like this?

And is Cryptoraves really operating in a “prohibited industry”? Go to its website and the first thing you see is that you can get “FREE TOKENS.” People use the tokens to boost their credibility on social media. For example, a Twitter user can request free tokens and send them to other Twitter users. The tokens have no actual value, therefore they are not securities in the regulatory sense.

Cryptoraves has published an assessment of where it thinks the issue with JP Morgan arose: “We did send two wire transfers to Gemini to buy ETH and LOOM in order to cover future blockchain fees. We suspected that these transactions flagged our account, but the Chase rep would not confirm this. They would not give us a reason for the closure. We called the number in the letter and the agent told us to visit a branch for these details. Visiting our branch resulted in no other details except when our branch rep pressed the agent (yep as the primary course of action, our rep called the same phone number), they said we were operating in an ‘prohibited industry’. I guess JPM’s own blockchain department didn’t get the memo?”

Furthermore, Cryptoraves had had a 15-year relationship with the bank and praised its service. There is a suggestion that the timing of the account closure is connected to the launch of the JPM Coin, but that may just be a bit of a conspiracy theory. What is clear though is that banks are still making it difficult for crypto-related companies and crypto owners, especially when something as innocuous as a transfer can result in your account being closed.

Hollywood pushes fake news to the masses about bitcoin

On By mehranmuslimiblogIn BitcoinLeave a comment

It would seem that nobody in Hollywood understands cryptocurrency, or Hollywood doesn’t care about what it says about cryptocurrencies, it just wants to make money, in dollars, not bitcoin.

Why am I talking about Hollywood? Because Hollywood has just released the film “Crypto” starring Kurt Russell, who you may remember from “Escape from New York,” “The Hateful Eight” and a whole host of other box office favourites. Or, perhaps you think of him as the husband of Goldie Hawn!

The film, which I have not seen yet as will only released in the US on 12th April, pushes a bitcoin for money laundering narrative. It is an approach that the mainstream media has been pushing to the public for some time. It’s the ‘only dodgy people use crypto’ story. It is a bit of a tired story as well, but that didn’t stop the scriptwriters from taking it up and running with it.

According to IMDB, “Crypto” is a crime thriller about a Wall Street banker who gets caught up in a global money-laundering conspiracy involving the Russian mafia and is described as a cyber-thriller. Well, that’s original; bad Russians yet again. And now bad Russians with bitcoin — even more dangerous! The movie’s tagline is “fear is the ultimate currency,” which gives us a further clue about what to expect.

Needless to say, and I have sympathy with this, the crypto-supporting community is not best pleased about the approach Hollywood has taken in this film; its members were hoping for something better. As Samantha Chang notes at CCN,“the trailer has been viewed more than 312,000 times in 24 hours — presumably by crypto fans who recognize that having Hollywood make a bitcoin-centric movie signals that crypto has become mainstream.”

Panned on YouTube by crypto community

They were so deeply disappointed that they have left numerous messages on YouTube, and as you may guess, they are not over-enthusiastic:

“Yes,… it’s here. The dumbest film ever made about something that the writers don’t understand.”

“Russia bad. Crypto bad. Smart people bad unless working for government. Thanks Hollywood, for yet another original plot.”

“I imagine there will be a ten minute tense standoff while they wait for the block chain to verify a transaction. Good times.”

“I like Kurt Russell but I wish I could give this more than one “thumbs down”. It is a movie written by people that do not understand crypto at all — just misinforming the masses.”

I have to agree with the last one, because that sums it up nicely. Great actors — lousy plotline. Try to do better Hollywood.

JP Morgan surprises us with a stablecoin

On By mehranmuslimiblogIn Bitcoin, BlockchainLeave a comment

When JP Morgan announced the launch of its very own stablecoin, the industry was somewhat shocked. Was this not the big bank that loathed cryptocurrencies? The move got people excited, both in traditional banking and in the crypto community. But is the JPM Coin really as big a deal as everyone seems to think it is.

Naturally, the industry pricks up its ears when JP Morgan speaks, and any of its previous explorations of the blockchain have produced similar interest. As Ben Jessel, head of enterprise blockchain at Kadena remarks, “In the last few weeks, blockchain innovation managers’ phones across Wall Street investment banks have been ringing with executives inquiring about JP Morgan’s stablecoin and how they should be responding.”

That’s because enterprise blockchain technology has been the way that big companies have sought to harness blockchain technology to meet their needs as large organisations. JP Morgan’s move has made others question what to do next — is this the time to jump in and be first in the fast-follower line?

Initially, the JPM Coin seems exciting, because it suggests that Wall Street is beginning to “blur the lines between institutional banking and the brave new world of cryptocurrency,” as Jessel suggests. But the reality is not so simple.

Faster, cheaper settlements

JP Morgan’s stablecoin seeks to solve two problems in financial markets today: the expensive and inefficient process of settlement and the volatility involved in holding money in cryptocurrency. Settlement is expensive for banks for a number of reasons: first, payments are rarely made in real-time, which means that in many cases funds that should be paid are not actually made available until the end of the day. For the banks, this means billions of dollars can be tied up and can’t be used.

Blockchain speeds the process up, making the process less expensive for banks and reducing the liquidity trap, i.e. funds being tied up in the process of settlement.

JP Morgan’s stablecoin neatly connects the dots between the aspects of settlement and volatility management by providing digital cash that can be used and enabling the ability to redeem the coin at a stable rate. This may sound like a big deal, but in fact all it means is that any counterparty would be paid by JP Morgan issuing a digital certificate. At its most fundamental, JP Morgan is promising to credit the account of a user when presented with a digital certificate that has a redemption value of a dollar.

Having said all this, JP Morgan’s new ‘Coin’ is not an insignificant development. Don’t forget, this is an industry where they still use fax machines, so in that context, the JPM Coin is actually a pretty big deal.