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Binance Drops Out of CryptoCompare’s Top 10 Exchanges

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Binance

Binance

Binance has sunk to 12th in the top ten cryptocurrency exchanges, according to the latest list published by London-based crypto data provider CryptoCompare.

In what is the second edition of the list of top ten exchanges from CryptoCompare, with the first being published in June of this year, Binance has fallen from 8th to 12th, despite being the second-largest exchange in the world in terms of volume. CryptoCompare’s list takes far more aspects into account than just volume, including legal aspects, data transparency, security, the presence of negative reviews about the platform, and the effectiveness of monitoring trading activity, among others.

The top ten now includes the likes of Gemini, itBit, Coinbase, Kraken, Bitstamp, Liquid, OKEx, Poloniex, bitFlyer, and Bitfinex. CryptoCompare co-founder and CEO Charles Hayter attributed Binance’s hack in May as the main factor in its falling position. “Our new benchmark includes a category that takes into account recent hacker attacks. Since Binance was recently hacked, this affected the security component.”

Gemini has taken the top spot on the list, as it places security as a top priority on its platform. “Security has been a key Gemini pillar since inception and protecting our customers’ cryptocurrency is a priority as we build the future of money,” said Jeanine Hightower-Sellitto, managing director of operations at Gemini. The new data also found that only 8% of exchanges use a custody provider to store user assets, and only 4% of exchanges offer third-party insurance in the event of a hack, with Binance offering neither.

>> Grayscale Files to Become First SEC Reporting Crypto Fund

Binance was hacked for the second time back in May, with hackers making off with approximately  7,000 Bitcoin, which was valued at around $40 million USD at the time. The breach was isolated to just one wallet, which contained 2% of the exchange’s entire Bitcoin holdings. The source of the hack remains unknown, and the funds were not relocated.

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Crypto Criminals Take in $4.3 Billion in 2019, CipherTrace Reports

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cryptocurrency

cryptocurrency

Cryptocurrency criminals have taken in an estimated $4.3 billion USD in 2019, according to CipherTrace.

CipherTrace, a cryptosecurity company based in Silicon Valley, has released its Q2 2019 Cryptocurrency Anti-Money Laundering (AML) Report, which is a detailed overview of major cryptocurrency thefts, scams, and fraud around the world. The firm’s Q1 report estimated that cybercriminals illicitly obtained more than $1.2 billion USD in cryptocurrency during the first three months of the year alone. To put the severity of these figure in context, last year’s total figure for crypto theft was $1.1 billion USD.

“These thefts only represent the losses that are visible. CipherTrace estimates the true number of crypto asset losses was much higher,” the company’s report notes. Included in the total figure is $850 million USD that iFinex—the company that operates the Bitfinex exchange and the stablecoin Tether—allegedly defrauded from its customers by handing over the funds to a Panama-based “bank” called Crypto Capital.

Exit Scams

One of the most worrying threats to investors in cryptocurrency is the prevalence of “exit scams,” whereby scammers launch a new cryptocurrency based on a promising concept, then they raise the money from investors through an Initial Coin Offering (ICO) before mysteriously disappearing with investors’ funds. One of the most well-known involves QuadrigaCX, the cryptocurrency exchange in Canada that saw its founderthe only person with access to customer fundsmysteriously pass away in India, leaving investors unable to access their invested funds.

Pyramid Schemes

The world of cryptocurrency is also rife with pyramid schemes, with CipherTrace reporting that the biggest single loss of 2019 was the PlusToken scheme, which claimed to have developed a high-tech trading bot that yields 10% interest per month for investors. According to CipherTrace’s report, the PlusToken platform reportedly recruited over 100,000 users and raised over $189 million through membership fees between May 2018 and March 2019. The amount of money held by PlusToken is rumored to be over $2.9 billion.

>> Coinbase UK Drops Support for Zcash: Why? We Don’t Know!

How are the Authorities Responding?

Due to the intangible nature of cryptocurrency, cyber frauds are incredibly difficult for authorities to crack down on. However, in one significant example, the Financial Action Task Force (FATF) announced a new “travel rule”—which the G20 gave its full support for in June—that requires transactions between exchanges to include personal information about the sender and receiver of funds, much like international bank transfers.

Cryptocurrency regulation has now become a priority, particularly given Facebook’s announcement that it will launch its own currency Libra, and with political figures becoming increasingly concerned with blockchain’s potential for global financial disruption.

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Coinbase Earned About $2 Billion in Trading Fees Since 2012

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Coinbase

Coinbase

Over the years, crypto exchanges have become the most important part of the entire ecosystem, and among the many exchanges, Coinbase is definitely one of the most influential. It has grown into one of the biggest exchanges in the world and the exchange of choice for millions in the United States, the most important market for any business.

Solid Numbers

The company’s Chief Executive Officer Brian Armstrong recently spoke at Vanity Fair’s New Establishment Summit and stated that the company has notched up $2 billion fees since its inception. The company was established in 2012, and over the years, it has become an integral part of the crypto space.

The event took place on Wednesday, October 23, and Armstrong spoke at length about the way the company goes about its business. While it is true that Coinbase has been a profitable business for a long time, the company remains focused on innovative technology. In addition to the transaction fees it has generated since its inception, the exchange has also managed to remain profitable since as far back as 2017.

Armstrong stated that the company invests the profits in the business. He said, “Most of these profits we’re plowing back into the business to create new products. I sort of think of us as the anti-unicorn unicorn. I want Coinbase to be a company of repeatable innovation.”

>> Bitcoin Sinks to Five-Month Low Following Zuckerberg Testimony

It is particularly important to note that the company remained profitable during a period that coincided with the crypto slump of 2018 and perhaps goes to show that it is a highly resilient business. That was not all that Armstrong. He also spoke about Facebook’s troubled crypto project Libra and stated that the United States should embrace innovations of all kinds. However, the main headline from the discussion was the eye-popping figure in transaction fees that Coinbase has managed to earn since 2012, and it is almost certain that it is going to earn much more in the future.

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Is Coinbase Launching an Initial Exchange Offering (IEO) Platform?

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Coinbase

Coinbase

The cryptocurrency exchange Coinbase has shown interest in the launch of an initial exchange offering (IEO) platform.

The huge surge in popularity that Bitcoin and other cryptocurrencies have enjoyed over the course of the past few years is due to a lot of factors. One of the most important ones is the various crypto exchanges which made it possible for millions of people to easily buy and sell these tokens.

Key Details

Among the hundreds of crypto exchanges that have been established over the years, Coinbase has proven to be one of the most influential. In a new development, Coinbase has announced that it is exploring the possibility of establishing its own initial exchange offering platform.

Over the years, the exchange has gone on to become one of the most popular exchanges in the United States and in other places. Moreover, it has been known for being at the forefront of innovation. During a conference in Asia, the company’s chief of institutional sales in Asia, Kayvon Pirestani, spoke about Coinbase’s plans. During the discussion, Pirestani stated that IEOs have proven to be an exciting new opportunity in the crypto space, and the company is considering getting in on the action at some point.

>> Facebook Libra Must Follow US Rules, Says Treasury Official

As everyone knows, the initial coin offering (ICO) has become a problematic way of raising money for crypto projects since, over the years, plenty of unscrupulous characters have indulged in scams. Hence, IEOs have now emerged as the preferred means of raising money for a project. When it comes to an IEO, the exchange reviews the projects and then gives the go-ahead for a listing.

The whole process takes place in such a way that investors are protected from any scam. In such a situation, it is only natural for an exchange like Coinbase to get into it. The company has the reputation, the infrastructural advantage, and the leverage of a large user base to make it into a success. It remains to be seen when the company announces the launch.

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Facebook’s Libra May Cause Banks to Cut Financing to the Company

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Libra

Libra

Ever since the potential launch of Facebook’s Libra was announced by the social media behemoth, the company’s cryptocurrency project has lurched from one problem to the next. Regulators from different parts of the world had voiced their concerns about the Libra cryptocurrency, and even the President of the United States slammed Facebook in one of his famous tweets.

New Trouble?

In a new development, it has now emerged that if Facebook (NASDAQ:FB) does not take care of the regulatory issues with regards to Libra, then banks might refuse to provide services to the company.

There have been fears from central banks that Libra might try to become a replacement of fiat currency, and today, the CEO of a major bank spoke about the possibility of not providing banking services to Mark Zuckerberg’s company. Ralph Hamers, the Chief Executive Officer of ING, has stated that banks might consider that step if Facebook does not comply with all the regulatory issues. He stated that if the company does not comply with regulatory frameworks, then there is the risk of criminal activity. In such a situation, banks will probably have no other option but to pull the plug.

>> Bitfinex Wants to Subpoena Former Bank Exec Over Missing $880 Million

Hamers said, “Then we can take measures and exit the client, or not accept the client, so those are discussions you would have to have.” As everyone knows, banks are bound by stringent regulatory frameworks, and it is highly unlikely that they are going to be able to do business with a company that enters the financial system without the proper checks.

It is an understandable degree of caution from ING, and it remains to be seen if more banks come up with such statements with regards to Libra. However, it should be reiterated that Facebook had earlier stated that it is going to launch the crypto token only after meeting all the regulatory requirements.

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Binance Hack | Hackers Make Off With $40 Million in BTC

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Binance Hack

Binance Hack

According to Bloomberg, major cryptocurrency exchange Binance has suffered another hack. This time the hackers withdrew 7,000 Bitcoin, which values approximately $40 million USD. This is the second major breach the exchange has faced, the first being an incident in March 2018.

A notorious issue in the crypto-space, hacks have claimed $1.7 billion USD in 2018 alone.

Binance Hack

Via a post on its website, the exchange said that the hack occurred through a single transaction in a “large scale security breach.”

It furthered that the hackers used a “variety of techniques” including phishing and viruses to gather large quantities of user data. The exchange also warned that there may be additional accounts that are yet unaccounted for but have been affected.

Detailing the hack, Binance said:

“The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that.”

The hack was isolated to one wallet—Binance’s BTC hot wallet—which holds 2% of the company’s entire Bitcoin holding. It furthered that all other wallets are secure and unharmed.

The post went on to say the following:

“The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time […] We must conduct a thorough security review. The security review will include all parts of our systems and data.”

Binance Hack Security Review

This security review will take about a week, during which all deposits and withdrawals are suspended. Trading remains active, however, to allow investors to change their positions.

>> Ethereum Price Jumps 8%: CTFC Approving Futures Trading Soon?

As the news is fresh, the company is still unsure whether or not the hackers still control some accounts and could “use those to influence prices in the meantime.” Traders will be fully covered and no user funds affected, as Binance will use its emergency insurance fund called the Secure Asset Fund for Users.

Bitcoin dropped 3% in early morning trade upon the news. It has since pared those losses, however, and is currently up 0.17%, selling for $5,937 USD.

Does the Binance hack affect you? Are you concerned?

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Facebook Libra to Be Pegged to Multiple Currencies as Stablecoin

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Libra

Libra

One of the biggest disruptions to the crypto space this year has been the announcement of Libra from the tech giant Facebook (NASDAQ:FB) back in July. The white paper published by the company about its cryptocurrency resulted in a lot of chaos and eventually led to turmoil in the crypto market as lawmakers expressed their doubts about Libra quite vehemently.

Key Updates

The company was asked to clarify several aspects of the Libra project to United States senators. In a report by one of the leading business publications, the company told Senators yesterday that the token is going to be a form of stablecoin. Unlike a traditional cryptocurrency, it is going to be backed by an algorithm, a currency, or even a commodity.

According to reports, the currencies that are going to be used to back Libra are going to consist of major currencies. Some of the currencies that will be backing Facebook Libra are the Singapore Dollar, the United States Dollar, the Euro, and the Japanese Yen, among others. The inquiry was put in place by Mark Werner, the Democratic Senator from Virginia. The company apparently put forward the list of fiat currencies that are going to back up its cryptocurrency.

>> Bitcoin Could Fall Below $10,000 Mark as Altcoins Gain

That being said, Facebook did eventually clarify that the final list of currencies that are going to back Libra is going to be finalized by the Libra Association. The Libra Association is made up of a range of entities and companies that are part of the entire project. That being said, the company went on to state that the digital currency is only going to be offered in regions after all regulatory concerns with regards to the digital currency have been cleared. It went on to state that Libra will only be offered after appropriate permission has been awarded by those in charge of the region.

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CME Sees Second-Best Month for Bitcoin Futures Trading

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CME

CME

January was the second-best month for CME’s Bitcoin futures trading since its 2017 launch, averaging 10,800 contracts, 69% greater than the average daily volume in 2019. Last month also saw new options on Bitcoin futures picking up pace. Since launch, 466 options contracts, or 2,300 equivalent Bitcoin, have traded—nearly 40% as blocks, showing signs of institutional interest, CME said. It also registered a record monthly average of 56 large open interest holders (entities that hold 25+ contracts).

The Chicago Mercantile Exchange (CME) launched its Bitcoin futures options last month, with US$2.3 million traded on the first day alone, eclipsing the slow start made by rival exchange Bakkt, which is headed up by the parent company of the New York Stock Exchange, the Intercontinental Exchange (ICE). Both platforms were launched with the intention of increasing institutional investment in cryptocurrencies, essentially trying to make the trading of digital assets more mainstream.

Bakkt, which was one of the most eagerly awaited arrivals to the crypto world last year, has hugely underwhelmed since its launch in September, particularly in comparison with CME. The strong start to CME futures options has helped drive a resurgence in Bitcoin (BTC) value. After plummeting to $6,860 earlier in the year, the world’s leading cryptocurrency bounced back and is currently staring at a 3-month peak of over $10,200.

>> Ethereum (ETH) Almost Doubled This Year: Here are the Major Triggers

CME also revealed that it has seen a total trading volume of over US$100 billion since its launch in December 2017, which is an overwhelming endorsement of institutional interest in crypto trading. Tim McCourt, Group Managing Director of CME, also said that the exchange operates the most liquid Bitcoin derivatives markets in the world, which is an indication of market maturity, something that institutions generally look out for and could be a factor in driving higher trading volumes in future.

CME Group also reported its Q4 earnings today of $544.4 million or $1.52 per share. Analysts had expected the company to earn $1.54 per share, while revenue for the quarter fell 8.1% to $1.14 billion from $1.24 billion last year.

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Swiss Digital Exchange to Launch Initial Digital Offering Next Year

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Swiss Digital

Swiss Digital

Swiss stock exchange firm Six Group’s cryptocurrency trading platform Swiss Digital Exchange has announced that it will be launching an initial digital offering (IDO).

The firm has already organized a group of financial institutions across the globe that will support the IDO. The IDO, which will take place next year, will be similar to a traditional IPO but the shares will be in the form of digital tokens offered on the SDX platform.

Investors to Help Build SDX Business

Thomas Kindler, the CEO of SDX, indicated that the consortium of institutions includes investors from the banking sector and market infrastructure, as well as developers. He said the IDO aims to raise capital as well as legitimizing the technology. He added that the focus is to get investors who can help the business and assist in validating the technology off the ground.

The CEO did not disclose who the members of the consortium are or how much SDX wants to generate. He only confirmed that SDX will be the majority equity holder. Already, five big investors and close to 10 small investors have shown interest in taking part in the IDO.

SDX to Introduce Own Security Token

The company plans to introduce its SDX security token deviating from the original plan to tokenize conventional banking assets and real estate assets. Issuance of the SDX token will be on a blockchain platform built through R3’s Corda Enterprise. Regarding the security tokens, the CEO said that they are considering having a two-phased approach. The first will involve the international group of investors, and the other involves the firm’s issuance.

>> Tether Becomes the Most Used Cryptocurrency in the World

The firm announced last week the launch of the prototype version of its digital assets exchange and central securities depository (CSD). The full launch of the CSD will be in the fourth quarter of 2020 rather than the originally scheduled summer of 2019. The firm indicated that the prototype aims to demonstrate the future of financial markets. The CEO indicated that key elements consist of customization and integration of the security token to the firm’s current connectivity.

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UPbit Loses $49 Million Worth of Crypto in Major Hack

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UpBit

UpBit

UPbit, a South Korean-based crypto exchange, has lost 342,000 worth of ether (ETH), accounting for approximately $49 million USD, in a hack earlier today.

UPbit Says Investors Assets Are Safe

The exchange has suspended its deposit and withdrawal service after confirming in a statement that the assets had been stolen from the Upbeat Ethereum hot wallet to a previously unknown wallet address. UPbit has said that it will cover the losses but added that it may take at least two weeks before the exchange’s services are fully functional again. Any remaining cryptocurrency in the exchange’s hot wallet has been transferred to a hardware-based cold wallet storage system that is not internet accessible.

UPbit said in its statement: “At approximately 13:06 on November 27th, 2019 (KST), 342,000 ETH was sent from Upbit’s Ethereum hot wallet to an anonymous wallet address-0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029. We took immediate actions to protect your assets, and no investors’ assets were lost.”

An Inside Job?

The nature of the hack has led some speculators to believe that it may have been an inside job. Cointelegraph reporter Joseph Young tweeted, “The ‘hacker’ timed when UPbit was making crypto transfers to its cold wallet (other alts like TRON, etc.). Hence, I think the probability of it being an inside job is higher than external breach.”

In today’s statement, UPbit said that it deemed the 342,000 ETH transaction to be the only suspicious transaction on the ledger, despite there being several other major transactions with more than $100 million USD worth of multiple cryptocurrencies having been sent out from the exchange today. While the ETH, TRX, and BTT transactions were transferred to an unknown wallet, subsequent Stellar (XLM), OMG, and EOS transfers were made from UPbit to crypto exchange Bittrex.

>> Binance Launches Tezos (XTZ) Margin Trading: Key Points to Watch

UPbit was initially launched as a partnership between Bittrex and South Korean app maker Dunamu, which is backed by messaging giant Kakao.

This is not the first such instance of UPbit getting caught up in suspect activity, Last year, the exchange was accused of fraud by South Korean authorities, but a subsequent audit found no evidence of illicit activity.

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