UPDATE (8th January 05:55 BST): This article has been updated with additional information.

The US Securities and Exchange Commission (SEC) has filed a motion for entry of default in its ongoing case against the now-defunct cryptocurrency startup GAW Miners.

The filing alleges GAW Miners and ZenMiner, two firms mentioned in the SEC’s suit filed last month, have failed to respond to an official complaint.

Notably, the filing does not mention CEO Josh Garza, who was charged with securities fraud tied to the issuance of the firm's Hashlet mining contracts and the operation of a Ponzi scheme after a months-long investigation ended in December.

The SEC's case against GAW came months after the firm collapsed amid growing scrutiny and suspicion that it was operating fraudulently.

According to the 6th January filing, a response to the SEC’s complaint by GAW Miners and ZenMiner was due by 28th December. 

The SEC said in its filing that next steps may include a request for an entry of default judgment and court time to determine damages against the companies, writing:

"Accordingly, following entry of default by the Clerk, the Commission will file a Motion for Entry of Default Judgment with supporting memorandum and exhibits, and may also seek a further hearing to determine the amount of damages against both GAW Miners and ZenMiner pursuant to Fed. R. Civ. P. 55(b)(2)."

SEC attorney Kathleen Shields wrote in an attached declaration that "neither GAW Miners nor ZenMiner has filed an answer or otherwise responded to the complaint as of today".

GAW Miners has been the subject of default entries in the past. A case filed by a Mississippi-based utility firm ended with default judgment of roughly $346,000 after the firm failed to respond to the suit.

Garza's defense attorney, Marjorie Peerce, declined to comment when reached.

The motion for entry of default can be found below:

Motion for Entry of Default

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A developer, entrepreneur and lecturer based in Tel Aviv, Gideon Greenspan is the founder and CEO of Coin Sciences Ltd, the company behind the MultiChain platform for private blockchains. Maya Zehavi is head of Business Development for Coin Sciences, and the co-founder and COO of TRST.im.

Here, Greenspan and Zehavi argue that provenance, or ownership, is becoming one of the favored use cases for enterprises experimenting with blockchain tech, and that it could become the industry's 'killer app'.

2015 may have been the year that financial institutions embraced blockchain technology, but as we move past the hype and the inevitable slump, it's best to focus on what today's blockchains can actually accomplish.

One of the main appeals of blockchains among enterprises is the notion of a value network, where parties can transfer custody of valued assets in an auditable manner without relying on intermediaries.

The recognition that these assets don’t necessarily have to be currencies, but that they can be any kind of financial instrument, has opened up new possibilities for innovation.

Yet, the technology as it stands today has limitations that are yet to be resolved. Privacy on blockchains is probably the largest hurdle for adoption, because by default every transaction on a blockchain is visible to every user of that chain.

Other problems relating to regulation and legal definitions will also need to be resolved, so it will take time for the full breadth of use cases to develop.

Common denominator

In 2015, most of the use cases we've seen with concrete proofs-of-concept focused on post-trade settlement, trade finance, payments and remittance. The common denominator is that these business processes harness blockchains as a provenance protocol.

Much has been said about the blockchain as an ownership layer. But what exactly does that mean?

It means that blockchains represent ownership of an asset in terms of control over the data relating to that asset. In other words, only the current owner can authenticate a transaction that would cause that asset to be transferred to another owner.

This is provenance expressed in protocol form. The word "provenance" is derived from the French "provenir" which means "to come from", and is used to describe the custodial chronology of an object.

Provenance is one of the backbones of economies, whether it relates to artifacts or real estate. There has always been a need to authenticate that a party actually owns an asset prior to any business dealing involving that asset, to ensure that the asset is "true" rather than stolen or faked.

In the past, trusted third-parties have traditionally played this role.

However, blockchains can streamline this function by serving as the infrastructure for registering and authenticating asset ownership between untrusting parties with common interests.

But that’s not to say that blockchains can make all the intermediaries in the financial system go away. For example, even in an all-blockchain world, some may find themselves issuing tokens representing the assets to be transacted, offering anonymization services or acting as chain administrators.

Time will tell if and how existing financial players can adapt to these roles.

Tracking ownership

Regardless of how this plays out in the traditional financial sector, the past year has made it clear that tracking of ownership on a blockchain has been one of the most immediately feasible applications.

Even on the bitcoin blockchain, we've seen startups that focus solely on provenance, such as Everledger, Colu, Ascribe and Monegraph, gain significant attention.

The tokens that blockchains track can also be used as digitized representations of the documents that accompany financial transactions.

If we were to deconstruct the business processes of trade finance, we'd see that many relate to the ordering and processing of shared documents between a group of untrusting parties.

The same can be said for post-trade settlement and collateral management. And where 'smart contracts' have been used, they often act as computations that initiate and control these same changes in state.

If we were to look beyond finance, a blockchain can also be used to manage data in a more general sense, providing a full audit trail of that data's origin in both time and place. Thus, a blockchain can act as a provenance protocol for data across disparate semi-trusting organizations.

Coming advancements

In the past year, we’ve even seen interest in using blockchains within a single enterprise, because they act as highly robust and resilient distributed databases, with the added bonus of an incontrovertible internal audit trail.

As blockchain technology matures, more properties relating to provenance can be introduced.

Today, we already have permissioned blockchains in which there is an explicit assignment from one party to another of the ability to connect, issue, send and receive assets, confirm transactions and administrate the blockchain.

One can consider this as another type of provenance, in which the 'good' changing hands is a permission relating to the blockchain itself.

In the future, assets on a blockchain will have more properties to authenticate and track, not only regarding their origins, but also how particular entities are permitted to hold and interact with them. Again, these properties will be assigned by particular sources.

It might well be that, as a distributed ledger, blockchain tech's 'killer application' is as a provenance protocol that can accommodate different types of entities as they’re created, shared and used by multiple participants.

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Blockchain API provider Gem has closed a $7.1m Series A funding round, the company has announced.

The round was led by Pelion Venture Partners, with KEC Ventures, Blockchain Capital, Digital Currency Group, RRE Ventures, Tamarisk Global, Drummond Road Capital, Tekton Ventures, Amplify.LA, Danmar Capital and angel investor James Joaquin participating.

The investment brings the total for the Californian startup to $10.4m, with previous rounds raising $3.3m over the last two years.

As part of the deal, Ben Dahl, partner at Pelion Venture Partners, will now sit on Gem's board of directors.

Since launching a multi-signature API for bitcoin developers, Gem says it is now expanding its API to develop a modular platform for blockchain applications that can be applied across multiple industries.

"We believe blockchain technology will transform how people and companies interact," says Micah Winkelspecht, Gem's CEO and founder. "It will underpin entire industries and one day produce a blockchain economy that will form the underlying architecture of our daily lives."

As part of today's announcement, Gem said Scott Kriz, CEO of Bitium, has also been appointed to the board of directors.

Money image via Shutterstock

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A financial innovation lab operated by management consulting firm Accenture has added a blockchain startup to its latest class.

Accenture's 2016 FinTech Innovation Lab London, the company announced yesterday, will include 15 startups. Crowdaura, which uses blockchain technology as a mechanism for issuing securities via crowdfunding, is the sole blockchain startup to be included in the class.

The selected startups will spend 12 weeks working with Accenture staff and executives from a variety of major financial institutions including Bank of America, Deutsche Bank, HSBC and Société Générale.

Richard Lumb, head of Accenture's financial services unit, said that the firm is "incredibly excited" to welcome the new class of startups to the accelerator.

"They offer some exciting innovations and have demonstrated exceptional creativity in what has been a record breaking year for applications from more than 30 countries, confirming that London is very much the centre of Europe’s thriving FinTech community," he said in a statement.

Crowdaura is the second blockchain-oriented startup to work within an Accenture-run startup accelerator. Last summer, Hong Kong-based remittance startup Bitspark took part in Accenture's FinTech Innovation Lab Asia-Pacific 2015.

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AccentureCrowdfundingLondon

A bitcoin wallet startup based in India has raised $1m in Series A funding from a group of angel investors.

Zebpay, which offers a mobile app for buying and selling bitcoin, said that it drew support from a group that includes textile industry veteran Amit Jindal; Claris Life Sciences vice chairman Arjun Handa; and engineer and developer Nagendra Chaudhary.

According to a report by the Times of India, Handa and Jindal invested roughly $450,000 and $150,000 during the round, respectively. The firm plans to use the money to fund its bitcoin wallet as well as additional blockchain-based services.

In a statement, co-founder Saurabh Agrawal pointed to growing support for the technology among governments entities as evidence there are opportunities for Zebpay to expand its offerings.

Agrawal said:

"Governments worldwide have acknowledged the fact that blockchain technology has potential to disrupt current financial systems and are exploring ways to benefit from it."

Jindal told the Times that he invested in the long-term vision of the firm – a move that he said comes during a time when knowledge of the technology is still developing in India.

"It is still an attractive investment destination because one or two years down the line, the prospect of cryptocurrency is promising," he said.

India image via Shutterstock

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Bitcoin exchange Bitstamp has partnered with precious metal traders Moro & Kunst to provide its customers with the option to purchase gold using US dollars.

The service is being advertised as a withdrawal option for exchange users, as Bitstamp users can purchase gold directly from the firm's website (see image below), choosing from bars ranging between 1–1000 grammes.

After ordering, gold shipments are labelled with a certified tracking number and expedited delivery in two to five days, according to the company.

On Bitstamp's website, gold prices are quoted in US dollars and updated every five minutes.

"We want to introduce a bitcoin/gold trading pair and this is first step in doing so. We think that clients that are long in bitcoin would prefer to take advantage on bitcoin's volatility if they trade it against alternative store of value – gold," said Nejc Kodrič, Bitstamp's CEO.

The firm told CoinDesk it plans to expand the service soon, potentially offering gold storage at Moro & Kunst's vaults in Vienna or Ljubljana, and eventually introducing direct convertibility of gold and bitcoin.

Notably, similar services ran into problems in the US last year, with the Financial Crimes Enforcement Network (FinCEN) having ruled that tokenising commodities such as precious metals classes a business as a money transmitting business (MTB). This places extra regulatory and licencing requirements on a business, as well as costs.

However, Bitstamp told CoinDesk that the gold-buying service is only available currently in the EU, adding that all 28 member countries are covered, including the UK.

Gold image via Shutterstock

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