TECHNOLOGY Bloomberg Businessweek July 29, 201918
ILLUSTRATION BY OSCAR BOLTON GREEN. FLATFISH: COURTESY ROYAL DUTCH SHELLexchangesbytradingbackandforthbetween
twoaccounts.Ina Mayreport,Bitwisesaidthat
95%ofBitcoinexchangetradingvolumelistedon
CoinMarketCap.comisfakeornoneconomicin
nature.“Incrypto,theriskis cryptoexchanges,”
saysJeffDorman,chiefinvestmentofficerofArca,
anassetmanagerthatinvestsincryptocurrencies
andotherdigitaltokens.
Regulatorsarescramblingtogetontopofthe
problem.OnJuly19,Bloombergreportedthatthe
CommodityFuturesTradingCommissionis inves-
tigatingBitMEX,lookingatwhethertheexchange
brokerulesbylettingAmericanstradeontheplat-
form.BasedintheSeychelles,BitMEXis notregis-
teredwiththeCFTC.BitMEXdeclinedtocomment
forthis article. InApril,New YorkAttorney
GeneralLetitiaJamesfiledcourtpapersalleging
thatentitiesrelatedtotheBitfinexexchangehad,
amongotherthings,lostmorethan$850millionin
commingledclientandcorporatefunds.Bitfinex
saidthefiling“isriddledwithfalseassertions”
andhasdeniedtheattorneygeneral’sclaims.In
Canada,authoritiesareinvestigatingthedisap-
pearanceofclientfundsatQuadriga.
TheU.S.SecuritiesandExchangeCommission○ Outsidetheblockchain,transactiondatais vulnerabletomanipulationCryptocurrency Trades
Don’t Always Add Up
THE BOTTOM LINE Williams’s control of the design studio makes
him unambiguously the second-most important person at Apple.
His elevation represents a long-term bet on Cook-style efficiency.countermand them. One former senior Apple
executive says he’s less worried about Williams’s
ability to carry out ideas from the design team than
he is about the managers reporting to Williams. The
new team leaders, longtime Apple hardware and
software design managers Evans Hankey and Alan
Dye, are a “step down” from Ive in terms of design
prowess, the former senior executive says, but
acknowledges that workflow may be simpler with
them running things. Before, “those people were
pseudo in charge, but not really in charge, because
Jony could overrule them.”
Outside Apple, Williams occasionally ven-
tures to his family’s beach house in Aptos, Calif.,
a 45- minute drive from headquarters, or appears
at a San Francisco gala with his wife, Melissa. ForWhen Bitcoin hit a 17-month high in late June, the
milestone was met with some skepticism. Big jumps
in a short period of time can signal that someone
is trying to artificially move the market, says John
Griffin, a finance professor at University of Texas at
Austin. “The extreme volatility suggests that manip-
ulation is rampant.”
While many cryptocurrency transactions occur
on public digital ledgers known as blockchains,
other trades take place on more than 200 global
crypto exchanges. Major exchanges that trade tradi-
tional assets, such as stocks, are heavily regulated.
Crypto exchanges mostly are not, and investors
have no way of knowing whether the trading vol-
ume and prices they report reflect real activity or
market manipulation.
Many exchanges routinely fake their volumes
to attract more coins and users, says Hunter
Horsley, chief executive officer of Bitwise Asset
Management, which runs crypto index funds in
San Francisco. One goal is to get listed higher
up in the rankings of CoinMarketCap.com, the
main site used by investors to keep tabs on global
crypto prices. Coin promoters have been known
to hire outfits to inflate their trading volumes onshareholders worried about the future, Williams’s
somewhat quiet public persona and lack of design
intuition may not inspire much excitement. Cook’s
inner circle includes a handful of other Jobs buddies
with more extensive product track records, includ-
ing marketing chief Phil Schiller and services head
Eddy Cue. But they’re all about Williams’s age, and
he’s 56—just three years younger than Cook.
“He’s the closest thing at the company to Tim
Cook, and you’ll get more of that,” a former senior
Apple executive says of Williams. “If you think
Cook is doing a good job, then it’s a good choice.”
—Mark Gurman○ The number of
cryptocurrency
exchanges worldwide200+