#Blockchain In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

In the Daily: Token Delistings, Paybear is Savvy, Revolut and Hackers

In this edition of The Daily, crypto exchange Upbit is preparing to delist four tokens, while several projects have accused Kucoin of suggesting market making services to pump their volume and avoid delisting. Also, crypto payment processor Paybear has rebranded to Savvy, and British online bank Revolut is hiring hackers to test its systems.

Also read: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

Upbit Marks Tokens for Delisting

South Korean crypto exchange Upbit has added several tokens – blocktix (TIX), salus (SLS), salt (SALT) and wings (WINGS) – to a category of digital assets that can be delisted in the future. The trading platform provided the reasons for its decision in an announcement published on its website.

The company explained for example that Blocktix, a project to build an event ticket sales platform, has not launched any working products for a long time and is not developing. Similar conclusions have been drawn regarding Wings Dao, a crypto price forecast service, and Salus, a proof of stake coin whose low liquidity exposes it to manipulation.

The salt token has been added to the list due to an inspection launched by the U.S. Securities and Exchange Commission. SEC is investigating the connection between Salt Landing Holdings Inc. and Shapeshift CEO Erik Voorhees, as well as the possibility of fraud in the distribution of the tokens during the 2017 initial coin offering.

Upbit now expects to receive clarifications from the projects and if they are not satisfactory, the exchange will proceed with the delisting of their tokens.

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

Kucoin Accused of Blackmailing Coin Projects

Four token projects have reportedly been asked by crypto exchange Kucoin to pay up to $180,000 in fees for volume-boosting services. After their daily trading volumes fell into the bottom 18 percent on the Hong Kong-based platform, Jibrel, Encrypgen, Publica, and Unikrn were told there’s a quick way to recovery, The Block reported, quoting different sources.

Talal Tabbaa, COO of Jibrel, told the outlet that the startup was advised in an email how to improve the volume of its crypto to avoid the risk of being delisted. “Then they recommended market making firms that would help us reach the minimum daily volumes they set for projects. I was honestly shocked at the requests they were making,” he added.

The market makers were supposed to help the project reach a minimum trading volume and remain listed on the exchange. Tabbaa believes that was a proposal to conduct wash trading. “I’m 100% sure. Whenever there’s a guarantee, you know there’s something wrong,” he noted. His company turned down the $180,000 offer.

The team of another project, Encrypgen, was also told how to increase its trading volume through a marketing campaign promoted by Kucoin and allegedly offered at a price of $90,000 in BTC. After the CEO of the company David Koepsell refused to pay for the service, Kucoin eventually delisted its token.

Payment Processor Paybear Rebrands to Savvy

Crypto payment processor Paybear, a company based in the Swiss canton of Zug, has changed its brand name to Savvy. The startup claims to be working with over 3,000 merchants. It now offers an updated version of its core merchant API called Savvy Merchants and a new Savvy Wallet with support for multiple cryptocurrencies. The company, which also says it has already processed over $10 million worth of transactions, is currently expanding its offering into the consumer market. That strategy is part of Savvy’s plans to invest into other areas that demonstrate how cryptocurrencies can be spent and used.

Revolut to Hire Hackers

U.K.-based fintech startup Revolut is planning to improve its cyber security with the help of a team of hackers who will be tasked with breaking into its systems. The plan is to expose potential weaknesses in order to prevent real cyberattacks, data breaches and fraud, The Independent reported.

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

According to Paul Heffernan, the online bank’s chief information security officer, the team consisting of five computer experts will monitor security operations and browse the dark web for potential threats. “One of the responsibilities of this team is to come in and just hack all of our own systems for us,” Heffernan explained. The specialists will be hired in the next three months.

What are your thoughts on today’s news tidbits? Tell us in the comments section.


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#Blockchain Thailand Greenlights Japanese Exchange to Operate 4 Crypto Businesses

Thailand Greenlights Japanese Exchange to Operate 4 Cryptocurrency Businesses

The Thai government has issued four licenses to a new crypto exchange. Prior to this, only existing exchanges that were in business before the country’s crypto regulation took effect were approved. The first licensed new exchange in Thailand is a subsidiary of a regulated Japanese exchange, Bitpoint.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

New Crypto Exchange Licensed

Japanese corporation Remixpoint Inc. announced on Thursday that its Thai subsidiary, Bitherb Co. Ltd., has obtained four different crypto-related licenses to operate in Thailand. The announcement concurs with the information posted on the website of the Thai Securities and Exchange Commission (SEC). Remixpoint also operates Bitpoint Japan, one of 17 government-approved Japanese exchanges.

With the new licenses, Bitherb can legally operate as a crypto asset exchange, a digital token exchange, a crypto asset broker, and a digital token broker. Currently, it is the only company approved to operate as a digital token broker in the country.

Thailand Greenlights Japanese Exchange to Operate 4 Cryptocurrency Businesses

Bitherb is a crypto exchange and management company co-founded by Bitpoint Japan and Asia Herb Association Bangkok Co. Ltd. The latter owns 60.5552 percent of Bitherb while the former owns 39.4446 percent. The president of Bitpoint Japan, Oda Genki, also serves as an officer of the new Thai entity. Bitpoint also operates in other countries including Hong Kong, South Korea, Taiwan, Malaysia, and Panama.

Japanese Exchange Approved to Operate 4 Cryptocurrency Businesses in Thailand

Four Licenses

The Thai SEC’s website lists all companies that have been approved to operate crypto-related businesses in Thailand. The country enacted its crypto regulation in May and subsequently approved four companies that had been in business before the regulation took effect. Two companies were rejected.

Licenses have been granted to companies in five categories to date: crypto asset exchanges, digital token exchanges, crypto asset brokers, digital token brokers, and crypto asset dealers. Four companies have been approved to operate both crypto asset and digital token exchanges: Bitcoin Co. Ltd., Bitkub Online Co. Ltd., Satang Corp. Co. Ltd. and now Bitherb. Licenses to operate as a crypto asset broker have been granted to Coins Th. Co. Ltd. and Bitherb. Meanwhile, only Bitherb has been approved as a digital token broker and only Coins Th has been approved as a crypto asset dealer.

Thailand Greenlights Japanese Exchange to Operate 4 Cryptocurrency Businesses
Licenses Bitherb has obtained from the Thail SEC and the finance ministry.

The Thai SEC launched a website last month called “Siang Soong” which means “high-risk” to help educate the general public about cryptocurrencies and tokens. Rapee Sucharitakul, Secretary-General of the Thai SEC, said that “Digital assets are useful as funding tools … and as a medium of exchange.” However, he added that it is a high-risk asset suited for people with the knowledge and understanding of the technology and not necessarily for general investors.

What do you think of Bitpoint getting four different crypto licenses to operate in Thailand? Do you think many more exchanges will follow suit? Let us know in the comments section below.


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#Blockchain Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning

Digital asset holders and organizations have been donating funds to a number of well-known universities. These days a slew of popular colleges like Stanford, MIT, Cornell, Puget Sound, and Princeton all accept digital currency donations or have high-net-worth crypto backers funding these schools. On the flip side of higher education, many of the world’s prestigious universities also offer elective courses that teach blockchain technology.

Also Read: University of Michigan Endowment Backs Crypto Venture Capital Fund

Universities See an Increasing Trend of Cryptocurrency Donors

One growing trend has been the way in which the digital currency ecosystem is fueling education through cryptocurrency donations and backers. For instance, during the first week of January 2019, entrepreneur Mike Novogratz donated some of his cryptocurrency profits to Princeton’s Bridge Year Program. The initiative allows students to get sponsored by schools so they can live and study abroad for nine months in areas like China, Bolivia, Senegal, Indonesia, and India. The CEO of Galaxy Digital is a member of Princeton’s class of 1987 who earned a degree in economics.

“Proud to put some of our crypto winnings (2017) to a good cause. A year living in a different culture can change your life for the better. Build bridges, not walls,” Novogratz told his 114,000 followers on Twitter.

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning
Cryptocurrency projects and colleges across the globe have a meaningful relationship. San Fransisco firm Coinbase says “students are flocking to classes on cryptocurrency and blockchain.”

Then there’s the list of Stanford’s corporate donors who help fund the school’s engineering section. Stanford’s endowed faculty chairs and fellowship organizations include the Ethereum Foundation, Vechain, and Omisego. During the first week of 2019, Holberton School in New Haven received $10,000 worth of BTC from the Scroll Network’s founder Nathan Pitruzzello. Back in November 2017, the Echolink Foundation donated $50,000 worth of BTC to UC Berkeley. In 2014, the co-founder and vice chairman of Blockchain, Nicolas Cary, donated $10,000 to the University of Puget Sound. Cary’s donation of 14.5 BTC used Bitpay to facilitate the transfer, which would be worth $58,000 today, but the gift was turned into fiat immediately.

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning
Many schools that have received donations or have endowments invested in crypto-related funds coincidentally have more than one class on cryptocurrencies and blockchain.

The Largest Endowment Funds in Higher Education Are Investing in the Cryptocurrency Ecosystem

Furthermore, universities with huge financial endowments are hedging with cryptocurrency funds as well. Last May, sources familiar with the matter explained that Ivy League school Yale had invested in the cryptocurrency fund Paradigm. Yale’s endowment is the second-largest in higher education and Paradigm is backed by Pantera Capital’s Charles Noyes and Coinbase cofounder Fred Ehrsam. Moreover, on Feb. 21, public documents revealed that the endowment of the University of Michigan has backed a cryptocurrency investment fund supervised by Andreessen Horowitz. Yale and the University of Michigan are not the only endowments investing in cryptocurrency related ventures, as MIT, Stanford and Harvard are knee-deep in digital asset funds as well.

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning
The Ethereum Foundation, Vechain, and Omisego have all backed Stanford University’s engineering school.

42 Percent of the Globe’s Top 50 Universities Offer Crypto Courses

Tech publication The Information’s research report says that many Ivy League schools are invested in at least one or more crypto related investments. Moreover, a great majority of the universities that have endowments invested in digital assets or have received digital asset donations offer cryptocurrency-related courses. Most of these schools also provide students with academic credits for courses on smart contracts and blockchains. Both the Holberton School in New Haven and Boston’s MIT offer students graduate certificates that are processed using the BTC chain.

Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning
Cornell and Stanford lead the pack with more than 8 elective classes on cryptocurrency and blockchain technology.

Because of the level of innovation involved, higher education and crypto technology go hand-in-hand, and trends over the last few years have shown how they share a symbiotic relationship. This has led to 42 percent of the globe’s top 50 universities offering at least one accredited course that teaches blockchain-related research. A Coinbase research study details that because schools are offering these lessons, students are becoming interested in learning about the digital currency ecosystem. For instance, the report explains that David Yermack, the finance department chair at New York University Stern School of Business, created a blockchain course in 2014 and 35 students registered for the lesson, which is a few less people than many of the school’s traditional electives. The study reveals that by the spring of 2018, Stern had to move the class to the largest auditorium because students registering for the course spiked to 230.

What do you think about school endowments getting involved with cryptocurrency funds and backers donating large sums of digital assets to universities? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Stanford, Coinbase Reports, Twitter, and Pixabay.


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#Blockchain State Treasurer: Ohio Companies Now Paying Tax in BTC

Ohio Companies Now Paying Tax in BTC, Says State Treasurer

Treasurer in the U.S. state of Ohio Robert Sprague has revealed that at least two companies have paid their taxes using bitcoin since the state launched its cryptocurrency payment platform in December. Sprague did not disclose details pertaining to the amount or companies involved, citing confidentiality.

Also read: Liechtenstein Bank Creates Cryptocurrency Trading Platform for Institutional Investors

State to Review BTC Tax Payments

Speaking at a forum organised by the Ohio State Associated Press on Feb. 19, Republican politician Robert Sprague said: “We’re reviewing how [the program] might be either curtailed or might be expanded, and what our counter-party risk is with that vendor.”

Ohio became the first U.S. state to accept cryptocurrency as a means of payment for taxes late last year. Sprague told journalists about his experiences with the BTC payment option on the state platform ohiocrypto.com, established in December by Josh Mandel whom he succeeded in January.

State Treasurer: Ohio Companies Now Paying Tax in BTC

According to the new treasurer, Ohio doesn’t actually receive or hold bitcoin, but Bitpay, the company hired by the state to process the bitcoin payments, converts the virtual currency into fiat money before it is sent to the Ohio treasury.

Bitpay takes 1 percent commission on the transaction as payment. Companies intending to pay taxes in crypto will typically have to register and create accounts on the state’s tax payment platform and submit details about their tax obligations, including tax period and the outstanding amount.

When the project was launched three months ago, Sprague indicated that the move would help to improve the ease of doing business in Ohio and attract new business. “We applaud the pilot that makes Ohio more business-friendly and sets us up as a leader in cryptocurrency. We will evaluate both currency and counter-party risk once we enter the office to see about the future,” Sprague was quoted as saying on cleverland.com. Lawmakers in Ohio are looking to turn the state into a major centre for cryptocurrency and the blockchain industry.

British Lawmaker Lobbies for Payment of Bills in Crypto

In the United Kingdom, member of parliament Eddie Hughes proposed in December that taxpayers should have the option to pay council tax and utility bills in cryptocurrencies such as BTC. The 50 year-old conservative legislator for the Walsall North constituency said the move would place the country at the forefront of digital currency adoption in Europe.

State Treasurer: Ohio Companies Now Paying Tax in BTC

“You’re either ahead of the curve or you’re behind the curve, and our country is in an interesting position right now – we need to be seen as a progressive country,” Hughes said at the time. “We are at a crossroads and we’re about to determine our future – one in which taking the lead in this field could prove very beneficial.”

Regulators throughout the world have complained that cryptocurrencies are risky, and repeatedly alleged that they help to fuel money laundering and terrorism while placing investor funds at the mercy of fraudsters. Their alarmist entreaties have ramped up pressure on governments to act, with many promulgating a series of regulations ostensibly designed to safeguard the public and prevent the risk of financial instability.

What do you think about paying taxes in BTC? Let us know in the comments section below.


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#Blockchain BTC-e Operator Alexander Vinnik Terminates His Hunger Strike

Alexander Vinnik Terminates His Hunger Strike

The alleged operator of the infamous BTC-e exchange, Alexander Vinnik, has terminated his hunger strike more than 80 days after he started the protest against his detention in Greece. Vinnik’s condition is serious and he needs specialized medical attention to recuperate.

Also read: Cryptocurrency Exchange Exmo Opens Branch in Turkey

Russia’s Ombudsman Visits Vinnik in Hospital

The Russian-born IT specialist took the decision to temporarily stop the hunger strike after meeting with Russia’s ombudsman Tatyana Moskalkova. She visited him on Thursday in a Greek hospital, where he is placed under doctors’ care, and later shared the news with journalists.

Moskalkova told Russian media that Vinnik looks absolutely exhausted by the hunger strike and requires professional medical care. “From the last conclusion of the doctors in February, it is quite clear that he needs emergency help, otherwise he may die,” she warned.

BTC-e Operator Alexander Vinnik Terminates His Hunger Strike
Alexander Vinnik and Russia’s High Commissioner for Human Rights Tatyana Moskalkova

Alexander Vinnik has been in detention since July 2017 when he was arrested in Thessaloniki on a U.S. warrant. Prosecutors in the United States believe he is one of the owners of BTC-e and accuse him of laundering between $4 billion and $9 billion through the crypto trading platform, including funds presumed stolen in the Mt Gox hack.

The Russian national went on hunger strike on Nov. 26, 2018 to protest prison conditions and violations of his rights to a fair trial as well as what he believes is an unlawful detention. The Greek constitution states that citizens should not be in preliminary detention for more than one year. As an exception, the court may extend the period by another six months.

Vinnik Kept in Prison Longer Than the Law Allows

Alexander Vinnik has been in prison for 18 months, waiting for the decision of the Greek judiciary on three extradition requests. Besides the Unites States, he is also wanted in his native Russia and in France, where he is accused of various other crimes.

Quoted in a press release, Tatyana Moskalkova promised to work with the Greek Ministry of Justice and the Ministry of Healthcare towards his return to the Russian Federation. She believes there are both legal and moral grounds for such a decision.

BTC-e Operator Alexander Vinnik Terminates His Hunger Strike

“Firstly, because he is a Russian citizen, and secondly, because there’s a criminal case against him that’s being investigated in Russia. It is impossible to complete it with a fair decision if he is in another country,” Russia’s human rights commissioner said.

Another possible violation was exposed by Russian media in January. Greece has handed the U.S. phones and computers confiscated from Vinnik after his arrest, RIA Novosti reported, quoting documents issued by the prosecutor’s office in Thessaloniki. That happened despite a decision by the Supreme Court in Athens that the data storing devices, which were later returned to Greece, can be transferred only in the case of an extradition.

Where do you think Alexander Vinnik should be extradited? Share your thoughts on his case in the comments section below.


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#Blockchain Report: ‘The State of Stablecoins’ Maps the Growth of Fiat-Pegged Cryptocurrency

Report: The State of Stablecoins Maps the Growth of Fiat-Pegged Cryptocurrency

A new report published this week shines a light on the stablecoin ecosystem. Authored by George Samman and Andrew Masanto in conjunction with Amazix, the report traces the rise of digital currencies against a backdrop of high inflation in 16 countries. The report claims these conditions will create a need for fiat-pegged digital currencies that aren’t beholden to the volatility of local currency in inflation-hit nations.

Also read: Company Evades SEC Penalty Despite Illegally Issuing Security Tokens

Making the Case for Stablecoins

“Sixteen countries today face annual inflation rates of more than 20%, whereas other economies face hyperinflation – like Venezuela, where inflation hit 80,000% in 2018,” begins the report by Samman and Masanto. It continues: “The high volatility of today’s cryptocurrencies hinders their usefulness. Average citizens need a way to protect their money, a way to send money to/receive money from their families in other countries, and merchants need a stable means of exchange in which to do business. The stablecoin market emerged to fulfill those needs.”

40 cryptocurrency and stablecoin companies were surveyed during the creation of “The State of Stablecoins 2019.” The wide-ranging report makes a number of conclusions regarding the nascent stablecoin economy:

  • Developed nations with “stable” fiat currencies will not be early adopters of stablecoins – instead developing nations with high inflation will drive adoption.
  • While most stablecoins are currently tethered to the USD, in the future it is expected that a diversified basket of tokenized assets will become the norm.
  • The next step in stablecoin evolution is for them to be integrated into decentralized banks that will serve the needs of people in emerging markets, especially authoritarian regimes .

Ethereum Dominates the Stablecoin Trade

The 82-page report reveals the extent to which the Ethereum network dominates for stablecoin issuance and trade volume. 68.4 percent of the stablecoin projects surveyed are built on Ethereum, although some expressed a desire to migrate to another blockchain or to their own native network. Ethereum-based coins include DAI and USDC. Stellar ranked a distant second in the survey, with just 7.9 percent of projects built on its chain.

Demonstrating the extent to which most stablecoins are highly centralized, more than one third of the projects surveyed viewed regulations favorably. Just 13.2 percent of projects did not view regulations favorably, insisting that self-governance and complete decentralization were more important.

Amazix, the community management firm that co-sponsored the report, quotes Reserve CEO Nevin Freeman as saying: “The stablecoin market has made significant strides in the past year, but there is still much work to be done. What’s needed is greater coordination amongst projects, and greater focus on the application of stablecoins to solving real-world problems in the places where they are needed the most.”

Report: ‘The State of Stablecoins’ Maps the Growth of Fiat-Pegged Cryptocurrency
Countries that have suffered a currency crisis at some stage

While focused on digital currencies, “The State of Stablecoins” also highlights the dangers of reliance on fiat currency, listing dozens of countries that have experienced a currency crisis since the 1980s. The report signs off with no less than 24 findings, including the assertion that “The holy grail of stablecoins is to become the decentralized central bank for the internet. However, in order for this to be achieved and for a global reserve currency to emerge the internet needs to be truly decentralized.”

Do you think citizens of inflation-hit nations might turn to stablecoins? Let us know in the comments section below.


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#Blockchain Coinbase Reveals Its Procedure for Handling Contentious Forks

Coinbase Reveals How the Exchange Manages Contentious Forks

On Feb. 20, the San Francisco-based cryptocurrency exchange Coinbase gave the public an inside look at how the company deals with contentious forks. Coinbase engineer Breck Stodghill specifically discussed how the trading platform dealt with the Bitcoin Cash (BCH) split on November 15, 2018.

Also read: ‘Bitcoin Killer’ Onecoin Is Ashes But Investigations Continue to This Day

Replay Attacks, Protection, and ‘Dust Mixing’

Over the last few years, cryptocurrency enthusiasts have gotten used to the idea of forks and subsequent blockchain splits ever since the Ethereum network bifurcated in 2016. Since then there have been a few other notable splits that affected the crypto ecosystem. Coinbase has explained in a blog post written by developer Breck Stodghill that the company believes networks should be able to fork as it’s an “important tool for innovation in the ecosystem.” The only thing is, some forks – specifically ones that don’t have replay protection – can pose “unique security risks” for exchange customers.

Coinbase Reveals Its Procedure for Handling Contentious Forks
An example of a blockchain split.

The Bitcoin Cash network fork in November was one of those instances as the upgrade was contentious in the eyes of an “opposing subgroup.” In order to protect users who held BCH on Coinbase prior to the fork, the company created its own replay protection strategy to mitigate replay attacks. When a cryptocurrency splits in half there are two chains with identical transaction histories, addresses, and balances. Essentially, without replay protection transactions can be double spent by malicious actors and other types of transaction errors can happen.

“To overcome this unique problem, we implemented our own replay protection by using a strategy called “dust mixing,” thereby ensuring that all customer funds are isolated to a specific chain and not vulnerable to replay attacks,” explains the Coinbase developer.

Coinbase Reveals Its Procedure for Handling Contentious Forks
One example of a replay attack is the possibility of interception. At some point, an attacker watching the chain state can sees someone’s transaction data, copies it and re-uses it on the alternate network. Since there is no replay, the transmitter can also suffer from replay vulnerabilities just by making errors on their own by sending both currencies at the same time without splitting them.

When the fork took place, Coinbase utilized the dust mixing technique in order to be sure the firm’s hot wallet and customers’ funds were kept safe. One way to separate two identical chains is by using transaction inputs that only exist on one of the ledgers. When the BCH chain diverged into two, new outputs were created and formed within the miners’ reward. These coinbase rewards are different and separate the mirrored chains going forward.

“Dust mixing refers to the practice by exchange operators of including at least one small chain-isolated input to each newly generated post-fork transaction,” Stodghill’s post details. “At the time of the BCH/BSV fork, we obtained a BCH coinbase reward from a miner. We used the coinbase reward to generate a large set of chain-isolated dust outputs. For each newly generated post-fork BCH transaction, we make sure to include at least one input that is guaranteed to be isolated to the BCH chain (i.e. a descendant of a BCH coinbase reward).”

Coinbase continued by adding:

Any leftover change outputs of Coinbase generated BCH transactions are added back into the pool of chain isolated outputs in our hot wallet and can be used as an input to subsequent transactions to produce additional dust outputs required to service BCH sends off our platform.

Coinbase Reveals Its Procedure for Handling Contentious Forks
How Coinbase used “dust mixing” for replay protection during the BCH/BCV chain split on November 15, 2018.

Contentious Forks Can Lead to Big Exchange Losses

Hard forks are a part of the way blockchains upgrade but contentious forks can lead to splits and subsequent replay attacks if no protection is added by cryptocurrency developers. Back when the Ethereum network fork surprised everyone in 2016, former Coinbase executive Charlie Lee stated that the Ethereum Foundation advised the exchange not to use replay protection. Reports at the time detailed that trading platforms like Coinbase, Yunbi (40,000 ETC) and Btc-e all lost thousands of ETC and ETH during the chaos. On Aug. 6, 2016, Coinbase CEO Brian Armstrong told the cryptocurrency developer Peter Todd that the exchange lost approximately 17,500 ETC ($40,000 at the time) from replay attacks.

In its blog post about the BCH/BSV split, Coinbase explains that the company wants to continue creating an open financial system with a trusted reputation. Founded in 2012 by Armstrong and Fred Ehrsam, the exchange hasn’t seen any major breaches, unlike many of the other trading platforms created back then. As for hard forks, Coinbase says the firm’s engineers are always working around the clock to find solutions to issues like blockchain splits. “Our security focused approach to hard fork management is a direct result of that mission,” the San Francisco company concludes.

What do you think about the way Coinbase dealt with the contentious BCH fork that took place last November? Let us know what you think about this subject in the comments section below.


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#Blockchain Indian Trade Association Nasscom Calls for Fast Crypto Regulation to Drive Growth

Indian Trade Association Nasscom Calls for Fast Crypto Regulation to Drive Growth

The Indian National Association of Software and Services Companies (Nasscom) has released a report that calls for regulatory certainty, particularly in areas such as cryptocurrency. The lack of legal clarity and the crypto banking ban have hindered investments in this sector, hurt crypto exchanges, and driven investors out of the country, according to the association.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

Regulatory Certainty Needed

At Nasscom’s flagship Technology and Leadership Forum held from Feb. 20-22 in Mumbai, Vice President Sangeeta Gupta unveiled key highlights from a report jointly developed by Nasscom and management consulting firm Avasant. It details the current state of India’s blockchain industry, including cryptocurrency.

Asserting the “Need for regulatory certainty” for the blockchain and cryptocurrency industry, the report suggests that “A proactive, consultative and defined regulatory approach to blockchain will boost the blockchain ecosystem growth in the country,” noting:

Industry participants in India are constrained due to the cautious regulatory approach taken with respect to specific elements of blockchain, such as cryptocurrency and digital assets.

Indian Trade Association Nasscom Calls for Fast Crypto Regulation to Drive Growth

Nasscom is a non-profit Information Technology industry association which describes itself as “the apex body for the 154 billion dollar IT BPM industry in India, an industry that has made a phenomenal contribution to India’s GDP, exports, employment, infrastructure and global visibility.” Among Nasscom’s initiatives listed on its website is “Liaisons with government and industry to influence a favourable policy framework.”

The association’s report emphasizes:

India needs to act fast and work consultatively with the key stakeholders in the crypto/blockchain community and provide regulatory certainty and clarity around blockchain technology (specifically around cryptocurrencies and digital tokens).

VC Investments Hindered

Despite VC investments pouring into the blockchain ecosystem globally, India has seen less than 0.2 percent of global investments, Nasscom detailed.

Indian Trade Association Nasscom Calls for Fast Crypto Regulation to Drive Growth

“Investment through VC firms or ICOs in the blockchain ecosystem in India has been considerably low (totaling to USD 8.5M) due to the uncertain policy and regulatory environment in the country,” the report claims, elaborating:

Some of the initial, sizeable investments in India were on crypto exchanges such as Unocoin and Zebpay, which have now disabled trading through fiat currency due to an RBI directive … A restrictive regulatory environment in India is limiting the investment opportunities from both domestic and global investors into Indian start-ups.

In addition, the report notes that the lack of regulatory certainly has driven India-based investors and startups to establish operations overseas in countries such as Malta, Singapore, the U.K., and Switzerland “to limit their exposure to regulatory risk associated with the use of digital tokens or assets in India.”

Lack of Regulation Hurt Crypto Businesses

While the Indian government has a favorable view of blockchain technology and is even considering introducing a national digital currency, the report describes that it has been “hawkish on cryptocurrencies.”

Indian Trade Association Nasscom Calls for Fast Crypto Regulation to Drive Growth

Citing that there is “No explicit legal framework around ICOs or digital tokens/crypto-assets,” coupled with the government not considering cryptocurrency legal tender and the banking ban by the central bank, the Nasscom report concludes:

While there is no formal regulatory framework governing crypto exchanges, preventing access to formal banking channels has led to the shutdown of prominent crypto exchanges in India.

What do you think of Nasscom calling for fast crypto regulation in India? Let us know in the comments section below.


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#Blockchain In the Daily: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

In the Daily: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

In this edition of The Daily, Canadian exchange Quadrigacx has transferred its remaining crypto funds to the court appointed monitor Ernst & Young. In Germany, the federal securities regulator Bafin has authorized an STO. Also, Beam has found a new investor and Rakuten plans to integrate cryptocurrencies into its mobile app.

Also read: Sirin Labs Smartphone, Middle East Cbx Exchange, IPC’s Connexus Cloud

Quadrigacx Sends Cryptocurrency to Ernst & Young

Troubled crypto exchange Quadrigacx has transferred its cryptocurrency holdings to the court appointed monitor Ernst & Young. According to the second report issued by EY, which is dated Feb. 20, the digital assets will be held in cold storage pending further order of the court. The transfer has been authorized by the judiciary.

Quadrigacx, which is operated by the Vancouver-based company Quadriga Fintech Solutions Corp., was shut down at the end of January. The platform lost access to as much as $190 million of cryptocurrency held in offline cold wallets after the death of its CEO, 30-year-old Gerald Cotten, in December.

In the Daily: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

Ernst & Young notes that on Feb. 6, the day after the initial order was granted, Quadrigacx inadvertently transferred a certain amount of cryptocurrency into cold wallets that its team was then unable to access. According to Quadriga’s management, the transaction occurred due to a platform setting that resulted in an automatic transfer to the cold wallets.

The report states that Quadrigacx’s remaining digital funds have been successfully transferred into cold storage wallets controlled by the monitor on Feb. 14, 2019. They include approximately 51 BTC, 33 BCH, 2 BTG, 822 LTC, and 951 ETH. In related news, Coinbase CEO Brian Armstrong has shared his team’s own findings of what happened to the defunct Canadian exchange.

Bafin Approves Tokenized Bonds From Bitbond

The securities regulator in Germany has approved the plan of online credit company Bitbond to carry out a security token offering (STO), the crypto startup recently announced. The approval from the Federal Financial Supervisory Authority (Bafin) opens the door for private investors who want to participate in the STO.

In the Daily: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

Bitbond will offer a token-based bond called Bitbond1 (BB1) at €1 each. The offering has an issue volume of €100 million ($113 million) and the first financing round is scheduled to start on March 11.

The term of the bond will be 10 years and the issuer promises an annual interest of 4 percent on the invested capital, 1 percent each quarter. Investments can be made in bitcoin core (BTC), ethereum (ETH), stellar lumens (XLM) and in euros.

Recruit Invests in Beam

The developers of Mimblewimble-based cryptocurrency Beam have received financing from the Japanese corporation Recruit, which specializes in human resources. The company has made the investment in Beam Development Limited through the RSP Blockchain Tech Fund which was established in November 2018. The announcement details that Beam is an Israel-based “provider of blockchains that consider the confidentiality of user information.”

In the Daily: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

Recruit further notes that it’s interested in supporting promising startups with the aim of discovering new technologies and new business models. The company also points to the rapid increase in settlement and exchange services and the great expectations for the implementation of crypto technologies in corporate activities.

Rakuten Pay to Support Cryptocurrencies

Japanese online retail giant Rakuten has announced plans to add support for cryptocurrencies in its mobile payments app. Digital currencies will be introduced with the upcoming update of Rakuten Pay which will be released next month. The overhaul will also bring support for payment cards, barcodes, and QR code payments. Last year Rakuten acquired a crypto exchange called Minnano Bitcoin and the expectations are that its features will be integrated into Rakuten Pay.

What are your thoughts on today’s news tidbits? Tell us in the comments section.


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#Blockchain Company Evades SEC Penalty Despite Illegally Issuing Security Tokens

Company Evades SEC Penalty Despite Illegally Issuing Security Tokens

The U.S. Securities and Exchange Commission (SEC) has decided not to impose a penalty on a company that had issued security tokens without its approval and without qualifying for an exemption. The company raised approximately $12.7 million.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

No Penalty

The SEC announced on Wednesday that it did not impose a penalty on Gladius Network Llc even though the company has been charged with conducting an unregistered initial coin offering (ICO). The agency wrote in its order:

The Commission is not imposing a penalty because of the significant steps Gladius took to remediate the violation.

Company Evades SEC Penalty Despite Illegally Issuing Security Tokens

The order details that Gladius conducted the ICO in late 2017 after the SEC warned about security token offerings in its DAO report. The Washington D.C.-based company raised approximately $12.7 million worth of ether “to finance its plan to develop a network for renting spare computer bandwidth to defend against cyberattacks and enhance delivery speed,” the agency explained. The ICO was neither registered with the SEC nor qualified for an exemption.

Self-Reporting

Gladius, a Nevada Llc, “self-reported to the SEC’s enforcement staff in the summer of 2018, expressed an interest in taking prompt remedial steps, and cooperated with the investigation,” the SEC detailed.

Noting that the Commission “has been clear that companies must comply with the securities laws when issuing digital tokens that are securities,” Robert A. Cohen, Chief of the SEC’s Cyber Unit emphasized that “Today’s case shows the benefit of self-reporting and taking proactive steps to remediate unregistered offerings.”

Company Evades SEC Penalty Despite Illegally Issuing Security Tokens

According to the SEC, Gladius has agreed to return funds “to those investors who purchased tokens in the ICO and request a return of funds, and register its tokens as securities pursuant to the Securities Exchange Act of 1934.” The company will also file a periodic report with the SEC. “Gladius consented to the order without admitting or denying the findings,” the SEC wrote.

In contrast, the SEC imposed penalties on two companies in November last year for similar registration violations. Carriereq Inc. (Airfox) and Paragon Coin Inc. were ordered to pay $250,000 civil money penalty each to the SEC for transfer to the general fund of the United States Treasury.

A ‘Terrible Example’

After the SEC’s announcement, Gabor Gurbacs, Director of Digital Assets Strategy at Vaneck and its subsidiary MVIS, commented:

This is actually a terrible example. The guy did an unregistered offering. Self-reported it. No penalties. Miraculously got away with it. No-one knows why … It’d be much more useful from regulators to establish a safe-harbor for tokens with specific parameters.

Vaneck has a proposed rule change filed with the SEC for the Vaneck Solidx bitcoin exchange-traded fund (ETF) which will be listed and traded on the Cboe BZX Exchange. It was filed on Jan. 30 and published in the Federal Register on Feb. 13.

Do you think the SEC should have imposed a penalty on this company? Let us know in the comments section below.


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