Weekly News Overview: Cryptocurrency

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.

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

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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:

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

As of press time, Robinhood app is still experiencing issues with equities, options and cryptocurrency trading, according to Robinhood’s status page. According to the website, Robinhood has already identified the issue and implemented necessary measures to fix the problem, while those trading services are experiencing “degraded performance.”

The latest outage on Robinhood follows a major technical problem that happened last week. As reported by Cointelegraph, the day-long outage on March 2 purportedly caused Robinhood users to miss out on the biggest one-day point gain in the Dow Jones history, with users apparently planning to start a legal class action against Robinhood.

According to a report by CNBC, a Robinhood client based in Florida filed a federal class lawsuit on March 4. The plaintiff, Travis Taaffe, reportedly alleges that Robinhood breached its contract by failing to “provide a functioning platform,” causing traders to be unable to transfer money while stock markets surged.

Jesse Eberle is a former bond broker at brokerage firm Tradition Securities & Derivatives, who was one of the Robinhood traders that suffered from the outage last week. He noted that the platform started the brokerage war when Robinhood launched zero-fee trading back in 2014. Eberle, who has been a Robinhood user for 20 months to date, predicted that the company will eventually lose the battle as people will shift to more reliable platforms.

While some reports claim that Robinhood founders said that they would compensate investors impacted by the outage on a case-by-case basis, the company’s customer agreement outlines that Robinhood will not be responsible for outages on the platform.

The 44-page document reads:

“Although considerable effort is expended to make the Website, App and other operational and communications channels available around the clock, Robinhood does not warrant that these channels will be available and error free every minute of the day. I agree that Robinhood will not be responsible for temporary interruptions in service due to maintenance, Website or App changes, or failures, nor shall Robinhood be liable for extended interruptions due to failures beyond our control, including but not limited to the failure of interconnecting and operating systems, computer viruses, forces of nature, labor disputes and armed conflicts.”

A group of Robinhood clients that were unhappy about the technical outage brought together to create a twitter account in response to the damaging downtime. As of press time, the account has amassed over 7,400 followers.

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.

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.

Bitcoin To Hit $100K In 2025, Says Justin Sun, Founder Of Tron

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Justin Sun, the founder and CEO of Tron (TRX), the 15th biggest cryptocurrency by market cap, is investing in a number of cryptos other than Bitcoin (BTC).

In a Feb. 23 interview with CNN, Tron CEO said that he is a long-term believer in cryptocurrencies and owns a stake in many altcoins, including the two largest coins after Bitcoin — Ether (ETH) and XRP.

When asked whether Sun has its crypto portfolio diversified, the Tron CEO answered:

“I own a lot of XRP and Ethereum, too. I’m like a long-term believer of the crypto so I want all crypto assets to succeed. So that’s why I own a lot of other different cryptos as well.”

As a major believer in crypto, Sun is bullish on the price of cryptocurrencies and confident that cryptos like Bitcoin are the future of money. In the interview, Tron CEO predicted that Bitcoin will cross $100,000 mark in 2025, emphasizing that other cryptocurrencies will follow the trend.

Justin Sun’s $100,000 Bitcoin prediction in his own words:

“I definitely believe Bitcoin will pass $100K in 2025. I believe we can achieve this price before 2025. At the same time, I think a lot of other crypto projects like Tron, Ethereum and XRP will also see the bull market.”

In line with his bullish stance on crypto, Tron’s Justin Sun claimed in the interview that he invests all of his money to crypto. However, Sun still converts his crypto in fiat currencies like the United States dollar. In the interview, Tron CEO said that he only withdraws crypto to fiat when he needs to spend money in his daily life.

The news comes about a month after Sun had his charity lunch with Berkshire Hathaway chairman and known Bitcoin critic Warren Buffett. On Jan. 23, Tron CEO met with Buffett to finally have a long-awaited luncheon after postponing the event for medical reasons previously in 2019.

In the latest interview, Tron CEO revealed that he didn’t exactly try to convince the famous billionaire investor that crypto will massively surge in the coming years. Instead, Justin Sun was trying to explain some crypto potentials to Buffett as he wanted him to understand basic fundamentals of blockchain and crypto such as instant crypto transactions.

Tron CEO also outlined that Buffett was “very open” to new technologies like crypto and blockchain, noting that the the known investor accepted Bitcoin and TRX from him. However, Buffett has claimed that he doesn’t own any cryptocurrency and doesn’t plan to invest in any crypto in a Feb. 24 interview with CNBC. In the interview, the billionaire investor reiterated his negative stance on crypto, arguing that cryptos have “zero” value and don’t produce anything.

In another CNBC interview in 2018, Buffet predicted that crypto will come to a “bad ending,” declaring that Bitcoin is “probably rat poison squared.”

Weekly News Overview: Cryptocurrency

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Email Extortion Scam Targets Googles AdSense

A new extortion scam targeting website owners serving banner ads through Google’s AdSense program has begun circulating the Internet. The malevolent scheme demands Bitcoin (BTC) in exchange for preventing an attack, which would purportedly lead to the users’ AdSense account suspension.

The email-based extortion scheme was reported by security news and investigation blog KrebsOnSecurity, on Feb. 17. The blog post detailed that some site owners received a message as their site had been spotted by the malicious program as one seeking revenue from publishing an ad.

Coinbase Pitches Crypto As A Solution For Racial Discrimination

To mark Black History Month, Coinbase has launched an advertising campaign with the pitch that cryptocurrencies can help tackle racial injustice in the financial sector.

As part of the campaign, the exchange published a blog post on Feb. 13 with the results of a survey it conducted in the United States and United Kingdom.

The crux of Coinbase’s survey centers on the notion that blockchain and cryptocurrencies, as trustless technologies with pseudonymous functionality, would be more color-blind than traditional financial services.

Gemcoin Founder Confesses To Fraud

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.

Binance Pauses Trading To Fix Technical Issues

Major cryptocurrency exchange Binance halted trading on its platform to resolve an unexpected technical issue with its infrastructure.

An announcement published by Binance on Feb. 19 notes that, due to unscheduled system maintenance, the exchange suspended most of its activities. More precisely, as of press time, it is not possible to perform “deposits, withdrawals, spot trading, margin trading, P2P trading, lending, redemption, as well as asset transfers from sub-accounts, margin accounts, futures accounts, and fiat wallets” on the platform.

In a statement shared with Cointelegraph, Binance reassured its users that partner exchanges such as Binance.US were unaffected and that trading activity will resume shortly.

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.

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.

Follow XcelToken Plus to keep up with the current happenings in the crypto world.

Coinbase Pitches Crypto As A Solution For Racial Discrimination

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To mark Black History Month, Coinbase has launched an advertising campaign with the pitch that cryptocurrencies can help tackle racial injustice in the financial sector.

As part of the campaign, the exchange published a blog post on Feb. 13 with the results of a survey it conducted in the United States and United Kingdom.

Based on a sample of 5,126 respondents, Coinbase’s data appears to indicate that just one in three Black Americans perceive the financial system as equally accessible to people of all ethnicities.

Moreover, twice as many Black Americans reported that they had been negatively impacted by their race or gender within the traditional financial system — 48% as compared with 24% of White Americans.

This negative experience ostensibly translates into an increased receptivity to cryptocurrencies — 70% of Black Americans responded that they were interested in learning more about crypto, as compared with 42% of White Americans.

As one voice in support of crypto’s being equitable financial instrument, Coinbase cites Vernon Johnson, co-founder and chief technical officer of blockchain startup Yup.

“Many cryptocurrency transactions are pseudonymous and don’t require the disclosure of your real-world identity, which may ease some of the apprehensions about racial discrimination in Finance 1.0. It becomes much harder to perceive racial identity in a world where people’s real identities are obfuscated.”

Johnson adds that, with cryptocurrencies, access to financial services relies solely on individuals’ digital reputation and transaction history — dispensing with the need for in-person meetings or the disclosure of identity documents.

However, as Know Your Customer rules continue to be tightened across countries — Coinbase itself requires photo I.D. for registration — this hard and fast line between crypto and traditional finance when it comes to pseudonymity is arguably eroding.

Indeed, the crypto space itself is also prone to its own biases. As reported on Cointelegraph, the vast majority of Bitcoin community engagement is male and can often be tone-deaf regarding the lack of women taking part in the space. In 2018, only 3 of the 88 speakers at the North American Bitcoin Conference were women, while the conference after-party was held at a strip club.

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Email Extortion Scam Targets Googles AdSense

A new extortion scam targeting website owners serving banner ads through Google’s AdSense program has begun circulating the Internet. The malevolent scheme demands Bitcoin (BTC) in exchange for preventing an attack, which would purportedly lead to the users’ AdSense account suspension.

The email-based extortion scheme was reported by security news and investigation blog KrebsOnSecurity, on Feb. 17. The blog post detailed that some site owners received a message as their site had been spotted by the malicious program as one seeking revenue from publishing an ad.

The message appears as a warning, wherein the cybercriminals demand $5,000 worth of BTC to deter the attack.

“Very soon the warning notice from above will appear at the dashboard of your AdSense account undoubtedly! This will happen due to the fact that we’re about to flood your site with huge amount of direct bot generated web traffic with 100% bounce ratio and thousands of IP’s in rotation — a nightmare for every AdSense publisher. More also we’ll adjust our sophisticated bots to open, in endless cycles with different time duration, every AdSense banner which runs on your site.”

The user who shared the message with KrebsOnSecurity said that their recent AdSense traffic statistics had detected a substantially increased invalid traffic. Google ostensibly called the scam a classic threat sabotage, where a fraudster tries to trigger an enforcement action against a publisher by sending invalid traffic to their inventory.

The news came on the heels of Google’s new policy regarding its ads, wherein the team behind AdSense said that it will stop showing ads before invalid clicks happen. “This year, we’re enhancing our defences even more by improving the systems that identify potentially invalid traffic or high-risk activities before ads are served. These defences allow us to limit ad serving as needed to further protect our advertisers and users,” Google explained.

Previously, Google took a hard line on decentralization and cryptocurrency. The most prominent example of hostility from Google occurred in June 2018, when the company announced that it would ban all crypto-related advertising in accordance with an update to its Financial Services policy.

Most recently, Google blacklisted keywords mentioning Ethereum (ETH) on its advertising platform, Google Ads. Google confirmed that “Ethereum” had been blacklisted as a keyword “regardless of the nature of the service that is being promoted.”

The leading cryptocurrency has been gaining popularity among criminals around the world. Earlier in February, two letter bombs exploded in the Netherlands and an anonymous criminal asked for a Bitcoin payment to prevent future attacks.

In Thailand, Singaporean Mark Cheng was kidnapped and tortured for a $740,000 ransom in BTC. After transferring all his available funds of $46,000, he allegedly made a daring escape as his captors prepared to murder him.

U.S. Think Tank Contradicts Need For Federal Digital Currency

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Conservative United States think tank the Heritage Foundation argues that instead of launching a central bank digital currency (CBDC), the government should ensure that the public can use the currencies they prefer, including private ones.

In a commentary piece published on Feb. 12, the Heritage Foundation notes that Facebook’s Libra global stablecoin project “is just the latest reminder that providing money does not have to be a centralized function of government.” The report answers to the idea that the public sector must ensure that sovereign currencies stay at the centre of each nation’s financial system.

The report argues that the principle of monetary sovereignty that member of the U.S. Federal Reserve’s Board of Governors Lael Brainard spoke about in February should be replaced with the concept of consumer sovereignty.

The Heritage Foundation cites the popular concerns that stablecoins and cryptocurrencies heighten the risk of crime and fraud, and notes that “the government does not need to create its own digital currency to protect people from these problems.”

The report also cites concerns that the Federal Reserve should not compete with the private sector. The central bank allegedly competes with private banks with its real-time payment tool, which Cointelegraph reported is expected to be a threat to private banks. The paper argues that a CBDC would also be a type of competition detrimental to the private sector.

Per the report, direct government control over every person’s account is part of the goal of such efforts. According to the Heritage Foundation, “this level of government control simply is not compatible with economic and political freedom.”

As Cointelegraph reported earlier this month, Brainard also said during the aforementioned talk that the institution is more open to the idea of central bank digital currency than previously. Yesterday, Congressman Bill Foster questioned a Federal Reserve official on U.S CBDC progress and was told that the institution is not yet sure whether deploying such a digital currency is a good idea.