Day: March 17, 2018

Cryptocurrency thefts are nothing new these days. A lot of hackers have successfully attacked exchanges in the past The recent Coincheck exchange shows how easy it is and launder the money accordingly. It also highlights exchanges have work to do when it comes to fighting these problems.

Coincheck Hack Laundering Issues

It is safe to say laundering cryptocurrencies still poses a problem. Especially when dealing with large amounts, there are a fair few issues to take into account. The recent Coincheck hack, for example, shows how difficult this job can be. With $500m in stolen NEM to be cleaned up, there is a lot of work to be done. Doing so on the open market is pretty much impossible without raising red flags.

Most exchanges and the NEM Foundation keep close tabs on the stole funds. Doing so should effectively prevent the hackers from laundering the stolen funds accordingly. Even so, Nikkei reports how close to $80m worth of stolen NEM has been laundered through regular exchanges. That seems pretty much impossible, given all of the flagged addresses. Moreover, it is not mentioned with exchange has been used in this regard.

Converting NEM to BTC can only be done on a handful of exchanges right now. It seems more likely the funds were funneled through the darknet in many different ways. While the Tokyo Metropolitan Police Department has 100 officers on the case, very little progress has been made so far. The Coincheck hack still remains a mystery which goes by unsolved. Something will need to change in this regard sooner rather than later.

Cryptocurrency Theft Still Goes Unpunished

The bigger problem is how there have been dozens of exchange hacks in the past. Very few of those cases were ever solved. Coincheck’s incident is no different in this regard, as no suspects have been identified at this point in time. There are concerns North Korean hackers may be involved, but nothing has been confirmed at this point. This situation is unacceptable, as there is no improvement in sight as of right now.

Letting hackers go by unpunished is not the right way forward. Unfortunately, there are no real repercussions for thefts like these. While exchanges have flagged the stolen funds, it seems the hackers can still convert it to other cryptocurrencies without problems. Although no evidence has been provided by Nikkei or its “unnamed sources”, there is probably some truth to these claims. After all, tracking down cryptocurrency transactions still pretty difficult for most law enforcement agencies.

How all of this will play out, remains to be seen. The Coincheck hack needs to be resolved pretty soon. Affected customers will be reimbursed very soon as well. This will happen at nearly three times the current NEM price, which is rather interesting It seems the exchange will resume its trading activities in the near future as well. These are all positive developments, but people want to know who is responsible for this hack in the first place. Right now, it seems we will never know the truth, which is a big problem.

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There seems to be a growing demand for global securities issuance platforms and exchange opportunities. As of right now, few companies actually provide such services, which means we will see a fair few companies tackle this business model moving forward. Finhaven is one of those companies that may be worth keeping an eye on.

What does Finhaven Offer?

In a nutshell, Finhaven uses blockchain technology to make it easier, cheaper, and more secure for projects and companies to raise capital and trade tokenized securities. The latter aspect is particularly interesting, as anything related to securities will undoubtedly attract attention from the SEC at some point.

Even so, Finhaven will gladly explore these opportunities in combination with blockchain technology. More specifically, it wants to provide a global exchange that is in regulatory compliance. Its features include equity and debt issuance on the blockchain, tokenized securities, smart contract governance/settlement, and portfolio management tools. All of this is achieved through an intriguing mix of Bitcoin’s blockchain technology and the smart contract technology provided by Ethereum.

The decision to utilize two layers is pretty easy to explain. The Bitcoin blockchain is used to power the remittance layer of Finhaven, as investors will accumulate BTC as the return on their investments. The Ethereum smart contracts are used to issue the regulated security tokens, help secure portfolio wallets, and establish an audit layer which has an immutable record of all transactions. Bringing together the best of both worlds is pretty intriguing.

While Finhaven sounds like a powerful platform, a lot of people will be curious about its regulatory compliance. It seems the company will collaborate with regulators and the blockchain community to create a new token standard for regulatory compliance. Issuing securities on the blockchain is a double-edged sword right now, as the SEC is actively cracking down on anything related to securities. If Finhaven takes the proper steps in this regard, the future for this type of business venture may look pretty bright. Only time will tell how this situation unfolds, though.

For the time being, blockchain technology hasn’t made much of an impact in the capital markets. Whether or not Finhaven can be the catalyst to drive this change remains to be determined. The benefits of reducing costs, building a global capital marketplace, and converging intermediaries are certainly significant. At the same time, disrupting the current model of capital markets will not be all that easy.

It will certainly be interesting to see what it looks like when automated compliance and smart contract validation come together. Tokenizing securities seems to be the next logical evolution in the financial sector, even though the concept is very different from what people are used to. It’s always good to see new approaches to issuing securities; that much is evident.

A U.S. federal court has placed a restraining order on and frozen the assets of four alleged promoters of deceptive schemes involving cryptocurrencies at the request of the country’s Federal Trade Commission.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

US Court’s Order

The U.S. Federal Trade Commission (FTC) announced on Friday that a federal court has shut down “promoters of deceptive cryptocurrency schemes” at its request. The FTC is an independent agency of the U.S. government. Its goal is to promote consumer protection and prevent anti-competitive business practices.

The U.S. District Court for the Southern District of Florida has “halted the activities of four individuals who allegedly promoted deceptive money-making schemes involving cryptocurrencies,” the agency wrote, adding that:

These schemes falsely promised that participants could earn large returns by paying cryptocurrency such as bitcoin or litecoin to enroll in the schemes.

Furthermore, the federal court has “issued a temporary restraining order and frozen the defendants’ assets pending trial,” also at the FTC’s request.

According to the agency’s complaint filed with the court, the defendants violated “the FTC Act’s prohibition against deceptive acts by misrepresenting the chain referral schemes as bona fide money-making opportunities and by falsely claiming that participants could earn substantial income by participating in the three schemes.”

Bitcoin Funding Team and My7network

Three of the four defendants allegedly “promoted chain referral schemes known as Bitcoin Funding Team and My7network,” the FTC detailed. Thomas Dluca, Louis Gatto, and Eric Pinkston allegedly used websites, Youtube videos, social media and conference calls to promise “big rewards for a small payment of bitcoin or litecoin,” the agency noted, adding:

The defendants claimed that Bitcoin Funding Team could turn a payment of the equivalent of just over $100 into $80,000 in monthly income.

However, the FTC asserted that this setup would benefit only a few participants while the majority of them would fail to even recoup their initial investments. Furthermore, the two schemes’ participants “could only generate revenue by recruiting new participants and convincing them to also pay cryptocurrency.”

In Bitcoin Funding Team, participants must pay an initial bitcoin payment to an earlier participant and a fee to the scheme to be eligible to recruit new member and receive payments from them. In addition, “Promoters claimed participants could earn bigger rewards if they paid additional bitcoins,” the FTC described. Acting Director of the FTC’s Bureau of Consumer Protection, Tom Pahl, commented:

This case shows that scammers always find new ways to market old schemes, which is why the FTC will remain vigilant regardless of the platform – or currency used…The schemes the defendants promoted were designed to enrich those at the top at the expense of everyone else.

Jetcoin

The fourth defendant, Scott Chandler, promoted Bitcoin Funding Team “and another deceptive cryptocurrency scheme, Jetcoin,” the FTC alleged. This scheme “promised investors a fixed rate of return on their initial bitcoin investments as a result of bitcoin trading” in addition to a recruitment scheme, the FTC described, adding:

In a series of promotional calls, Chandler claimed Jetcoin participants could double their investment in 50 days. In reality, the FTC complaint alleges, the scheme failed to deliver on these claims and ceased operation within two months of launching.

What do you think of the federal court shutting down promoters of deceptive schemes involving cryptocurrencies? Let us know in the comments section below.

Images courtesy of Shutterstock and the FTC.

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The post US Court Shuts Down Promoters of Three Deceptive Crypto Schemes appeared first on Bitcoin News.

Mt. Gox trustee blamed for crypto market crash says all coins were sold without ‘affecting the market price’ #BREAKING

People who often rely on online payments and e-wallets will have come across the name Payza. This company was the first provider to let members use Bitcoin alongside traditional currencies. Payza is now adding support for Dash, one of the top privacy-oriented cryptocurrencies. It’s an interesting choice, yet the company feels it is the only choice as of right now.

Dash Support Comes to Payza

Most companies that have paid attention to cryptocurrencies are becoming aware that there are plenty of other currencies besides Bitcoin to keep an eye on. In fact, most altcoins can be quite valuable in their own way. It is only a matter of time until we see more altcoins make an impact. Payza has always tried to remain one step ahead of its competition, which makes its most recent development all the more interesting.

Even though people are well aware that Payza enabled Bitcoin support a while ago, the company is looking well beyond the world’s leading cryptocurrency as well. Because of their determination to offer a more competitive service, they have decided to integrate full support for Dash. Most cryptocurrency users will know Dash by now, as the currency focuses on privacy and a certain degree of anonymity for transactions.

With this new integration, Payza will let users hold and store Dash in their e-wallet accounts. It is only the second cryptocurrency to be supported by the company, which means Dash is a member of a very exclusive club right now. While storing funds in a third-party wallet which you do not control is not the most secure option, it will certainly introduce a degree of convenience which novice users will appreciate.

Moreover, as part of this integration, Dash holders will be able to exchange this currency to one of the other 26 supported currencies, including Bitcoin. All of this can be done through the Payza wallet itself, and the exchange process should be completed instantly. What’s more, there is no fee when depositing Dash into one’s Payza account, and withdrawal fees are kept to 0.000005 Dash. Receiving Dash, on the other hand, is subject to a 1.2% fee, which is still lower than Payza’s traditional fees.

Payza’s CEO, Firoz Patel, explained the decision as follows:

There are several reasons that we chose Dash to be the second cryptocurrency integrated into our platform, after Bitcoin. Dash boasts low network fees and fast transactions, two features that users look for in a cryptocurrency. Dash also has a vibrant and active community, especially in the developing world, which appeals to us as a company that also focuses on empowering underbanked populations. Finally, Dash is user-friendly and has a roadmap in place to further improve usability.

Integrating Dash into Payza was made possible thanks to BlockCypher. This company has been making waves in the blockchain industry over the past few years. It is expected that Payza will launch support for Ethereum and Litecoin in the near future as well, although no official dates have been announced as of yet. Additional currencies may follow later on, although we will have to wait and see which ones.

BTC is one of the assets traded by Jane Street Capital, a Wall Street firm that trades $13 bln in equities daily #NEWS

Monero vows to block the mining capabilities of Bitmain’s new Antminer X3 #NEWS

While most people know BitFury as a company involved in mining Bitcoin, it is also an active investor in blockchain technology. The company recently made a key investment in REGA, a firm specializing in insurance products on the blockchain. It’s a rather surprising turn of events, even though BitFury sees merit in the “crowdsurance” business model.

Bringing Insurance Products to the Blockchain

It is always interesting to see how different projects apply blockchain technology. While the potential of this technology has yet to be fully unlocked, there are quite a few use cases worth exploring. In the case of REGA, the company focuses on a concept known as “crowdsurance”. More specifically, they are bringing insurance products to the blockchain.

Doing so requires a lot of investment, and it seems Bitfury Group has taken somewhat of an interest in what this project has to offer. REGA will also sign an agreement with Bitfury to use the latter’s Exonum protocol to build a decentralized scoring solution. With the new solution, banks and insurance companies will become service providers for this new insurance platform.

The concept of crowdsurance is rather unheard of in the world of insurance products. Rather than take a more traditional approach, REGA wants people to “unite in communities” to provide a guarantee of compensation for unexpected loss. It’s a very noble approach, although its practical implications may leave something to be desired. There’s nothing wrong with using the “smarts” of the crowd in general, but providing insurance with this model is a different matter altogether.

That is where blockchain technology comes into the picture. With the blockchain, REGA can provide transparent qualities to revamp traditional insurance mechanisms. This makes Bitfury’s investment all the more important, as the company is showing an appetite for developing blockchain-oriented solutions and tools. One of its most recent products came in the form of a new blockchain analysis tool, which will certainly attract a lot of attention moving forward.

It seems REGA is focusing on quite a few markets for its crowdsurance projects. Right now, its three solutions center around pet owners, travel luggage, and athlete protection. There are quite a few opportunities in the insurance sector, and it will be interesting to see what the company has in store next. Since there are no traditional insurers to speak of, and no intermediaries or brokers, the company is heading down a rather interesting path.

All of the company’s products are backed by smart contracts, and processes are controlled and managed by in-house developed algorithms. REGA will also provide a solution to cover risks for its own and third-party products, which is something worth keeping an eye on as well. When Bitfury Group takes an interest – and a financial stake – in any company, one can rest assured that company will see some form or another of success sooner or later.

It has become apparent that smart contracts will help elevate Ethereum to a whole new level in the years to come. That can only happen if this technology is perfected and made more secure. BlockCAT may have come up with an interesting feature in this regard. More specifically, the Tabby Pay solution ensures funds can never be sent to the wrong wallet. 

What is Tabby Pay Exactly?

Although the name suggests something else entirely, Tabby Pay is a feature designed to make the transfer of Ether more safe and secure. As of right now, sending transactions to the wrong wallet address is still very problematic, as preventing user error is pretty much impossible at this stage. Thankfully, there are ways to counter most of these problems with innovative technology.

This is where Tabby Pay comes into the picture. The new payment solution, developed by the BlockCAT team, ensures user error can be prevented when dealing with Ether transactions. Anytime someone tries to send Ether to the wrong wallet, the payment itself can be canceled and the balance will be returned to the sender without any problems.

Whether or not this will make cryptocurrency more accessible in the long run remains to be seen. Even so, it is a remarkable development, assuming this concept works as advertised. Despite what experienced users may claim, it is still pretty easy to screw up cryptocurrency payments. Wallet addresses can be copied to one’s clipboard without noticing whether it is the correct one or not. If a transaction is sent to the wrong wallet, recovering the funds is pretty much impossible as of right now.

In fact, BlockCAT claims nearly all Ethereum users worry about sending ETH to a wrong address. That is quite worrisome, as it shows Ethereum’s chances of becoming an actual payment currency are hindered in this regard. Even basic transactions can be nerve-wracking for novice users, which is a problem that will need to be addressed sooner rather than later. It is easier said than done, though.

What Tabby Pay does is use a custom smart contract to ensure cryptocurrency payments are completed in a proper manner. There is a web-based UI with which users can interact. If a payment is sent to an incorrect recipient, the user can have the payment reversed. Up until now, it has been virtually impossible to cancel outgoing transactions, but with this smart contract, it seemingly becomes possible. More specifically, the recipient must confirm their receiving wallet. Failure to do so will result in the Ether being returned to the sender.

And no, we are not talking about rolling back the blockchain. Instead, Tabby Pay executes payments as a series of transactions. Canceling the entire payment will always be possible as long as the recipient can’t confirm the receiving address. It will be interesting to see how many people make use of this new feature in the future. Being able to bring more security to Ether payments overall can only be considered a good thing.

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Malicious applications mining cryptocurrency have become a lot more common in the past few months. It seems every criminal and their pet is working on some way to use other people’s computing resources to mine Monero or other currencies. Some app developers integrate this option to provide access to premium features. One such app made its way onto Apple’s App Store, but it has since been removed.

Apple Removes Troublesome Monero App

Malicious cryptocurrency mining has become quite popular over the past six months. In most cases, criminals will try to infect computers with malware designed to use their victims’ computer resources to mine various cryptocurrencies. This doesn’t mean they are mining Bitcoin, as Monero has proven to be a more than popular solution these days. We’ve seen an influx of Monero mining malware, which seems to mainly be targeting Windows users as of right now.

One exception comes in the form of a Mac app known as Calendar 2. Although this is a calendar application first and foremost, it also hijacks the user’s computing resources to mine Monero in the background. According to Apple, this particular app puts “heavy strain” on users’ devices, mainly in the CPU department.

Some users have even reported that the Calendar 2 app uses nearly all of their CPU power to mine cryptocurrency on behalf of an unknown individual. This is a very worrisome development, although one user pointed out that the malware in question uses a Monero miner. For now, it seems this application has been successfully removed from the App Store, although it is unclear whether additional malicious apps exist.

Even though the calendar functionality of this app works as advertised, there is an option to gain access to premium features. Those looking to enjoy such features but without paying can donate their CPU resources to mine Monero. With the app consuming a lot more CPU power than advertised, users have been eager to point out that this app essentially hijacks one’s computing resources.

Apple has now removed the app due to a “violation of the guideline 2.4.2”. More specifically, applications on the App Store should never purposefully drain a battery, generate heat, or put unnecessary strain on device resources. Since the app was removed, the developers of Calendar 2 have removed the Monero-mining feature altogether, as they are not certain why it was using so much CPU power in its current form. It now seems to be a matter of time until the app is reinstated without this feature.

Unfortunately, it appears we will see more and more applications of this type in the future. While the option to opt in was received well by users at first, not having an option to opt out has always been a pressing problem, for obvious reasons. As the Calendar 2 debacle goes to show, integrating this feature for the right reasons can still have disastrous consequences in the long run.