Weekly News Overview: Cryptocurrency

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Bitcoin Under 1k Is Possible

Bitcoin dipped below $4000 today, for the first time since the depths of crypto winter — and one veteran market analyst believes it could have even further to fall.

Crypto markets have been in freefall following the announcement of travel bans yesterday between the U.S. and Europe, and ongoing volatility in all financial markets.

Veteran trader Peter Brandt — who is famous for correctly predicting the market crash from the all time high — today tweeted an answer that no one wanted to hear in response to an inquiry about the new ‘bottom’ for Bitcoin due to coronavirus.

Brandt said that if he looks at the Bitcoin chart “without bias” the new bottom is potentially “sub-$1,000”. That’s almost 80% below the current price, which is just under $5000.

Travel Bans Around The World Crippling Crypto

In the United States, President Trump announced new travel restrictions today in response to the spread of the COVID-19 coronavirus. The Commander in Chief signed a Presidential Proclamation suspending the entry of most foreign nationals who have been in certain European countries during the 14 days prior to their scheduled arrival to the U.S.

These countries include Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland. The United Kingdom is exempt.

Huobi Releases New Mobile App

Huobi Group is a global blockchain company founded by Leon Li in 2013. Currently, the crypto exchange has an accumulative turnover that exceeds USD $3 trillion and offers its services to users from more than 170 countries.

Huobi Group has officially announced the launch of its new mobile application, Huobi Lite. Per a March 10 announcement, the new app will allow anyone to trade major cryptocurrencies on Android and iOS without fees or commissions.

Robinhood Crypto And Stock Trading App Is Down For A Second Monday

After experiencing a major outage last week, major stock and cryptocurrency trading app Robinhood is troubled again.

Robinhood encountered another technical outage on Monday, causing its platform to halt trading services, according to a March 9 tweet by Robinhood’s support team.

The firm announced earlier on the day:

“Trading is currently down on Robinhood and we’re investigating the issue. We’re focused on getting back up and running as soon as possible and we’ll update the status page with the latest.”

Subsequently, Robinhood has partially restored trading, noting that they are working to get the platform back up and running fully. According to online reports, the platform was partly functional after just an hour of downtime.

COVID-19 Plagues Crypto Conference

There has been a rapid escalation of the COVID-19 coronavirus outbreak worldwide. Two major crypto conferences in the US have been affected by the epidemic so far.

“Bitcoin 2020”, originally scheduled for March 27 and 28 in San Francisco, has moved to Q3 of 2020. The Chamber of Digital Commerce also postponed next week’s “DC Blockchain Summit 2020” conference. The rescheduled dates are not yet confirmed, according to the announcements on March 6.

Travel Bans Around The World Crippling Crypto

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In the United States, President Trump announced new travel restrictions today in response to the spread of the COVID-19 coronavirus. The Commander in Chief signed a Presidential Proclamation suspending the entry of most foreign nationals who have been in certain European countries during the 14 days prior to their scheduled arrival to the U.S.

These countries include Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland. The United Kingdom is exempt.

Meanwhile, India announced it would suspend visas for most foreign visitors arriving between March 13 to April 15, and close the country’s land border with Myanmar. Air India has already cancelled flights to Italy and South Korea, the two countries outside China most affected by the outbreak.

Other countries, from Australia to Saudi Arabia, are also looking at tightening travel restrictions.

Worldwide travel and tourism has seen a huge drop in numbers since the coronavirus outbreak was first reported in China in December. The Blockchain community has not been exempt, with the earliest disruptions to the industry beginning when the virus first spread from Wuhan.

Chinese government officials extended the nation’s largest holiday, the Lunar New Year, which annually causes one of the country’s biggest domestic migrations. Many workers in the Chinese crypto industry were unable to go back to business right away, and the price of Bitcoin may have suffered as a result.

The imposition of travel restrictions, which were meant to stall the spread of the disease, were just the first in a long line of consequences to the outbreak.

Crypto conferences in Asia were the first to see the effects of COVID-19. TOKEN2049, a major crypto event held annually in Hong Kong, was originally scheduled for mid-March 2020. It will now be taking place on October 7–8, 2020. Hong Kong Blockchain Week 2020, also scheduled for March, was pushed to September.

While some event organizers are hopeful that travel restrictions will be lifted by the end of 2020, others are not so optimistic. Italy’s upcoming EDCON has been cancelled, and no new dates have been announced for South Korea’s Nitron Summit 2020.

With the new measures in place by the United States, major crypto conferences on both sides of the Atlantic may soon announce postponements or outright cancellations. India’s Crypto Bulls Roadshow, who originally planned to speak at Consensus 2020 in New York, has not released a statement at this time. However, they will presumably face challenges both leaving India and entering the U.S.

Though the restrictions may seem severe to those in the crypto community, health experts argue that they are necessary to protect the sick and elderly, who are most at risk from COVID-19.

Attendees at the ETHLondon hackathon from Feb. 28 until March 1 became aware of their possible exposure to the pandemic when Zhen Yu Yong (Zen) tweeted on March 11 that he had been diagnosed with coronavirus. Zen, who is the co-founder of TorusLabs, was present in both London and the Ethereum Community Conference from March 3 to March 5 in Paris.

Uncertainty as to what measures officials will impose in response to the coronavirus outbreak may be what’s leading the charge behind a number of major crypto sell-offs. On Feb. 26, the price of Bitcoin dropped almost 6% after $150 million of the cryptocurrency was liquidated on BitMEX.

COVID-19 Plagues Crypto Conference

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There has been a rapid escalation of the COVID-19 coronavirus outbreak worldwide. Two major crypto conferences in the US have been affected by the epidemic so far.

Bitcoin 2020”, originally scheduled for March 27 and 28 in San Francisco, has moved to Q3 of 2020. The Chamber of Digital Commerce also postponed next week’s “DC Blockchain Summit 2020” conference. The rescheduled dates are not yet confirmed, according to the announcements on March 6.

Bitcoin 2020 has assured all attendees that their tickets for the conference will automatically be valid for the rescheduled event. They have also asked all registered participants to wait until updated details are announced before requesting a refund.

With the Bitcoin halving in May fast approaching, Bitcoin 2020’s goal was to gather the top Bitcoin community speakers and supporters together in one place. They hoped to learn and discuss Blockchain technology’s upcoming milestones, and determine whether the technology’s current trajectory will allow it to reach its full potential, according to the post.

The DC Blockchain Summit is inviting both government officials and Blockchain industry influencers as keynote speakers. The event is organized by The Chamber of Digital Commerce, an organization that promotes the acceptance and use of digital assets and Blockchain-based technologies.

The Paris Blockchain conference, initially scheduled for the end of March has been rescheduled to the end of this year. A number of cryptocurrency-related conferences across Asia were also reportedly delayed due to the spread of the virus.

Weekly News Update: Cryptocurrency

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ICE Reveals Cryptocurrency Intelligence Program

The United States Immigration and Customs Enforcement (ICE) has revealed the existence of a Cryptocurrency Intelligence Program (CIP) in the agency’s 2021 budget proposal.

The proposal states that the CIP seeks to identify unlicensed capital flows taking place across peer-to-peer (P2P) marketplaces, online forums, and darknet markets. The CIP was developed by ICE’s Bulk Cash Smuggling Center (BCSC).

Lloyd’s New Insurance Offering Covers Crypto Held in Hot Wallets

Insurance giant Lloyd’s of London now provides a new type of liability insurance policy to protect cryptocurrency in hot wallets that is lost by theft.

Lloyd’s new offering was developed by Lloyd’s syndicate Atrium together with crypto will-focused firm Coincover, with limits from as little as £1,000 ($1,275), Lloyd’s announced on March 2. The policy is also backed by an array of other Lloyd’s insurers, including TMK and Markel, all of whom are members of Lloyd’s Product Innovation Facility.

SC Rules In Favour Of Crypto Trading In India

The Supreme Court on Wednesday struck down the curb on cryptocurrency trade in India put up by the RBI.

ETNow reported quoting:

“SC rules curb on crypto currency trade illegal,” the report said while adding that the order lifted ban on trading in virtual currency, cryptocurrency and bitcoins.

Bitcoin, the most valued cryptocurrency in the world, was down 0.39 per cent at $8,815. The market cap of the currency stood at $161 billion.

The Reserve Bank of India had virtually banned cryptocurrency trading in India as in a circular issued on April 6, 2018, it directed that all entities regulated by it shall not deal in virtual currencies or provide services for facilitating any person or entity in dealing with or settling those.

Whistle-Blower Outs “Wolf Of Kyiv” For Bitcoin Scam

A whistle-blower has revealed the existence of a 200-employee Ukrainian Bitcoin (BTC) trading scam that netted $70 million in 2019.

The whistle-blower outed the scam by providing footage and internal company documents to Swedish newspaper Dagens Nyheter, which reported the news on March 1.

The scam predominantly targets investors based in Australia, New Zealand and the United Kingdom by using fake news articles advertised on Facebook and some mobile game platforms.

Bitfinex to Delist Nearly 50 Cryptocurrency Trading Pairs

Bitfinex, the 11th largest cryptocurrency exchange by daily trading volume, will remove dozens of cryptocurrency trading pairs later this week.

According to a March 2 blog post, Bitfinex will remove 46 crypto trading pairs on Friday, March 6 due to low liquidity on the platform.

The cryptocurrency exchange noted that the delisting of the trading pairs is a common measure that is expected to improve liquidity on Bitfinex platform and lead to a “more streamlined and optimized trading experience for our users.”

Whistle-Blower Outs “Wolf Of Kyiv” For Bitcoin Scam

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A whistle-blower has revealed the existence of a 200-employee Ukrainian Bitcoin (BTC) trading scam that netted $70 million in 2019.

The whistle-blower outed the scam by providing footage and internal company documents to Swedish newspaper Dagens Nyheter, which reported the news on March 1.

The scam predominantly targets investors based in Australia, New Zealand and the United Kingdom by using fake news articles advertised on Facebook and some mobile game platforms.

The stories feature interviews with celebrities who purportedly made a killing by investing in crypto — including Gordon Ramsey, Hugh Jackman and Martin Lewis.

The whistle-blower claims that the scam is being perpetrated by Ukrainian company Milton Group from two floors of an office building in Kyiv. The offices are kitted with professional telephone and client management systems.

After responding to the ads, victims would be contacted by call-center workers promising extraordinary returns from cryptocurrencies, foreign currencies and commodities. Fake account statements detailing profits are used to entice further investment from the scam’s victims.

Jacob Keselman, the CEO of Milton Group stated that the allegations against it are “incorrect” in a phone interview with Dagens Nyheter. Keselman describes himself as “the wolf of Kyiv’’ on his Instagram profile.

The whistle-blower claims to have been a part of the scams “retention” team, where he was expected to make 300 calls each day.

He was tasked with “squeez[ing] the money” from clients until their “last cent,” and was remunerated on a commission basis.

The operation reportedly poses under many different business titles, including contacting victims under the guise of offering scam recovery services after they have already been duped. If receptive, victims are encouraged to install software on their computer that allegedly steals their online banking information.

The scam also impersonates national tax authorities, posting letters demanding that prospective victims settle fabricated tax debts.

The organization reportedly netted $70 million in 2019, and Dagens Nyheter noted that many victims have been duped out of their life savings.

Internal documents reportedly show employees gleefully recounting having “f***ed” investors, including a note on a customers’ account that states, “Getting f***ed every month for at least 1,000 EUR. Gets pension on the 20th/works every Tuesday.”

The Guardian contacted 16 British victims of the scam, who recounted receiving an onslaught of phone calls after responding to ads. A victim identified as Teresa stated:

“You get bombarded by all of these different companies. I don’t know if any of them are the same. They were calling all day, every day, all through the weekends […] Sometimes you’re on the phone to one company and the phone is buzzing with a call from another.”

Dagens Nyheter spoke to one 67-year-old Swedish victim who claimed that she can no longer pay her rent or buy food. Internal documents revealed her file, which contained a note stating, “Sold her home to pay, no money, crying.”

February saw the cybersecurity firm ThreatFabric identify several sophisticated Remote Access Trojans (RATs) targeting cryptocurrency wallets and exchanges.

The RATs include ‘Cerberus’, which targets Coinbase users by stealing 2-Factor Authentication (2FA) codes for the Google Authenticator app.

Lloyd’s New Insurance Offering Covers Crypto Held in Hot Wallets

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Insurance giant Lloyd’s of London now provides a new type of liability insurance policy to protect cryptocurrency in hot wallets that is lost by theft.

Lloyd’s new offering was developed by Lloyd’s syndicate Atrium together with crypto will-focused firm Coincover, with limits from as little as £1,000 ($1,275), Lloyd’s announced on March 2. The policy is also backed by an array of other Lloyd’s insurers, including TMK and Markel, all of whom are members of Lloyd’s Product Innovation Facility.

“It is a new type of liability insurance policy with a dynamic limit that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed asset even if this fluctuates over the policy period,” the announcement detailed.

Matthew Greaves, an underwriter at Atrium, noted an increasing demand for insurance for cryptocurrencies due to the popularity of such assets. David Janczewski, CEO of Coincover, commented:

“As the crypto-asset market heats up again at the start of 2020, a new wave of crypto-curious customers are standing by at the ready to jump in, having previously been put off by the lack of adequate protection against theft and loss. With this innovative new policy, we can remove these barriers and broaden the appeal of crypto.”

Lloyd’s is not new to cryptocurrency insurance. Back in August 2019, Lloyd’s began to insure the crypto custody platform Kingdom Trust.

Most recently, news broke that blockchain security firm and crypto wallet service BitGo was planning to provide crypto insurance through Lloyd’s. Within the partnership, Lloyd’s is set to insure up to $100 million of assets held by BitGo or BitGo Trust Company.

The Winklevoss’ Gemini Exchange also launched an insurance company to cover up to $200 million for its institutional-grade crypto custody service, Gemini Custody. This is reportedly the largest amount for any cryptocurrency custody service in the world.

Iranian Cell Calls For The Use Of Cryptocurrency

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This week an Iranian general called for a unique way to bypass the sanctions on his country enforced by the United States.

Saeed Muhammad, commander of the Islamic Revolutionary Guard Corps, called for Iran to use cryptocurrencies to evade the economic sanctions. According to the Telegram channel of Coinit.ir, a crypto news organization based in Iran, the general addressed a crowd on Feb. 26 (translated from Farsi):

“We are demanding the creation of a more sophisticated mechanism to bypass sanctions. To circumvent sanctions, we must develop solutions such as the exchange of products and the use of cryptocurrencies with our partnerships [in other countries].”

The people of Iran have seen the value of their currency drop significantly in the wake of the sanctions imposed by the Trump administration, following the withdrawal of the US from the Joint Comprehensive Plan of Action in 2018.

Sanctions have effectively isolated Iran from foreign trade and investment and the use of cryptocurrencies has been on the rise ever since as a way to circumvent them. Bitcoin has been described in interviews as one of the only ways to get money in and out of the country.

Iranian President Hassan Rouhani’s administration announced it would launch a national cryptocurrency back in 2018. More recently, Iran’s Ministry of Industries, Mining and Trade issued more than 1,000 cryptocurrency mining licenses to domestic operations.

Earler this week the intergovernmental Financial Action Task Force added Iran to a blacklist of countries not complying with anti-terrorism financing requirements.

Explained: Confidential Transactions

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Confidential Transactions keep the amount and type of assets transferred visible only to participants in the transaction (and those they choose to reveal the blinding key to), while still cryptographically guaranteeing that no more coins can be spent than are available.

This goes a step beyond the usual privacy offered by Bitcoin’s blockchain, which relies purely on pseudonymous (but public) identities. This matters, because insufficient financial privacy can have serious security and privacy implications for both commercial and personal transactions. Without adequate protection, thieves can focus their efforts on high-value targets, competitors can learn business details, and negotiating positions can be undermined.

Confidential Transactions (CTs, the general idea of which was proposed by Adam Back on BitcoinTalk in 2013) aims to make the content of a transaction private — as Greg Maxwell explains in a 2017 talk, the amounts transacted are often more valuable to spies: if you wanted to spend 500 sats on a coffee but broke up a 1 BTC UTXO to do so, the barista would now know that you owned at least 0.999995 BTC (which could be problematic for your security if coins hit new highs in dollar value).

With CTs, both the receiver’s address and the amount transferred are hidden from any observers, in such a way that only parties to the transaction (and those they share it with) are aware of the value sent/received. For this to work, a cryptographic technique known as a Pedersen commitment is used.

I’m not a cryptographer, and it would be a waste of everyone’s time for me to try to explain how they work. I’d recommend this outstanding primer by ecurrencyhodler, or Maxwell’s initial investigation. Suffice it to say, a Pedersen commitment functions similarly to a regular commitment scheme, but allows for some mathematical manipulation that enables the verification of data without it being divulged.

Why is this important? Remember that, in order to work, the Bitcoin ledger needs to be balanced (inputs need to match outputs). That’s straightforward enough when every transaction is made public and nodes can verify it. Given that the purpose of Confidential Transactions is to redact amounts from the blockchain, however, a more creative approach is needed (the Pedersen commitments, paired with a few other tools) to ensure no one’s playing central bank and secretly printing off more money.

Crypto Appears On The Popular TV Show: The Simpsons

One of the newest episode of “The Simpsons” aired has just featured Jim Parsons of Big Bang Theory as a guest star to explain cryptocurrencies and how a blockchain works.

In the song and dance predicts cryptocurrency to be the future money, the animated ledger states: “Each day I’m closer, to being the cash of the future. Not in your wallet, I’m in your computer!

At the end of Jim’s talk, there is a subliminal message on screen. It further explains how cryptocurrencies work, part of which says:

“Using the word “cryptocurrency” repeatedly while defining cryptocurrency makes it seem like we have a novice’s understanding of cryptocurrency. Well that is a total pile of cryptocurrency. In this system, rules are defined for the creation of additional units of cryptocurrency. They can be generated by fiat like traditional currency or just thrown around randomly or all given to LeBron.”

The crypto community welcomed the episode. Altcoin Daily account has commented:

“The Simpsons did it! Cryptocurrency explained to Lisa by the great Jim Parsons on #TheSimpsons! It’s the money of the future! Bullish!”

Some comments to the tweet also pointed out that the Simpsons has a reputation for predicting the future over the years. Ten years ago it showcased Donald Trump as the president of the U.S., and more recently guessed the Game of Thrones series finale.

Gemcoin Founder Confesses To Fraud

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Steve Chen, the mastermind behind the $147 million Gemcoin cryptocurrency scheme, has admitted to wire fraud and tax evasion in a plea agreement.

The 62-year-old Southern California resident agreed that he and other co-conspirators fraudulently promoted a cryptocurrency called Gemcoin (or Gem Coins) that helped fleece $147 million from 70,000 victims.

Chen, also known as “Boss,” reported an income of $138,000 in 2014 which is a far cry from the $4.8 million he now admits to pocketing that year. Chen used the proceeds to buy homes and pay for a gambling habit, authorities said.

Between July 2013 and September 2015, Chen ran a multi level marketing scheme to promote U.S. Fine Investment Arts, Inc. (USFIA) which rewarded investors first with points, and then with Gemcoins.

These virtual coins were supposedly backed by gems mined by the company and could be traded on the USFIA platform.

While the value of the coins supposedly increased based on the company’s gemstone sales, in reality, the USFIA did not own or operate any gemstone mines. Instead, USFIA bought gemstones from commercial suppliers and assigned grossly inflated prices.

Nick Hanna, US Attorney stated earlier “Mr. Chen’s promises to investors were as worthless as his non-existent mines and phony digital currency. This case should remind all investors that trappings of success may convey legitimacy, but everyone should exercise extreme care when considering giving hard-earned money to any outfit promoting trendy products and extravagant profits.”

Chen has agreed to pay back $1,885,094 in back taxes for 2014 as well as pay a civil fraud penalty and interest.

He’s facing a sentence of 10 years in prison, a fine of at least $500,000, and he’s required to pay “full restitution” to all the victims.

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