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.

“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.

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).

“The BCSC has developed a Cryptocurrency Intelligence Program (CIP) which identifies unlicensed money services businesses in the form of independent cryptocurrency brokers’ use of peer-to-peer (P2P) sites, online forums and classified advertisements, and darknet markets (DNM) to engage in unlicensed money services businesses (MSB) activity.”

ICE states that “a large portion” unlicensed MSBs operating with cryptocurrency on darknet markets and P2P marketplaces are engaged in the laundering of narcotics proceeds.

The agency adds that it has increased its training and cyber analytics capabilities for “cyber investigations targeting darknet illicit marketplaces where fentanyl and chemical precursors are often sold.”

Darknet markets have been a target of numerous ICE enforcement actions in recent years, with ICE agents receiving “advanced darknet training” since at least September 2019.

ICE partnered with the U.S. Drug Enforcement Administration in mid-2017 to conduct a year-long nationwide investigation targeting darknet vendors, leading to over 35 arrests. ICE also executed a week-long internationally coordinated action during October 2016.

The revelation of ICE’s Cryptocurrency Investigations Program amid increasing efforts to crack down on darknet activity globally.

On Feb. 25, the government-owned Austrian Institute of Technology announced it had partnered with French blockchain security company NIGMA Conseil to collaborate on blockchain forensics.

The companies are working to provide blockchain forensics services to governments and businesses, including dark web scraping and wallet clustering.

Weekly Cryptocurrency News Update

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

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.

Iranian Cell Calls For The Use Of Cryptocurrency

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].”

Lawsuit Alleging Ripples XRP Moves Forward

A United States federal district court has decided to allow a lawsuit alleging that Ripple’s XRP crypto asset is an unregistered security.

Court documents filed on Feb. 26 reveal that Judge Phyllis Hamilton of the Court of the Northern District of California ruled to only partially grant Ripple’s motion to dismiss the lawsuit against it.

The lawsuit in question was initiated in August 2019 by XRP investor Bradley Sostack, who alleges that the firm misled investors and sold XRP as an unregistered security in violation of federal law.

Binance’s CZ Overtakes Bitmain Co-founder In New Hurun Rich List

While China now has more billionaires than the United States and India combined, Binance CEO might have more money than any crypto person, a new report says.

Binance CEO Changpeng Zhao has overtaken a co-founder of cryptocurrency mining giant Bitmain in the latest Hurun Global Rich List, an annual ranking of the world’s biggest billionaires published Chinese media Hurun Report.

Issued on Feb. 26, the new Hurun Report’s list of 2,816 global billionaires includes six individuals who made their fortune from blockchain and crypto industry.

South Korean Tax Policy Association Proposes Two Step Tax On Cryptocurrencies

Wooden house figurine and money bag with a dollar symbol. Budget, subsidized funds. Mortgage loan for purchase housing, construction or modernization. Tax, building maintenance.

South Korean tax experts have advised the Korean government to apply a low-level trading tax on cryptocurrency profits before subjecting citizens to a transfer income tax, according to a Business Korea report. The Korean government is expected to announce its tax reform plan in late 2020.

The low-level trading tax was recommended because there is a lack of legal infrastructure to enact transfer taxation.

During a seminar on Feb. 21, members of the Korean Tax Policy Association advised the South Korean government to enact this two-step plan, arguing that taking a deliberative approach to implementing a cryptocurrency income tax will be most effective.

Explained: Confidential Transactions

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.

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

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

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.

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.

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.

Binance co-founder and CEO Changpeng Zhao explained in a tweet sent earlier today that one of the market data pushers experienced an issue, but the matching engine did not, so no funds or data were lost. He also said in a separate message that futures trading is continuing normally since it employs a separate matching engine.

In an attempt to compensate users for the market disruption, Zhao also promised to waive the trader margin interests for today. In his latest update as of press time, he said that the issues are nearly resolved and that users will have 30 minutes to cancel their orders before normal trading resumes.

This is just the latest issue experienced by Binance users this month. On Feb. 17, Binance released a separate report on performance problems. In the report, the firm admits that it did not anticipate the volume of users who recently started using its platform. The paper reads:

“Last week was a tough one. […] We had a number of performance issues, which negatively impacted the accessibility of our platform.”

Per the report, Binance’s trading platform was unable to manage all users and keep market data, orders and balances up to date. The firm promises to solve these issues soon, and encourages users who were damaged by the performance issues to contact the exchange’s support.

Some Twitter users expressed concern and fear that Binance may have fallen victim to a hack, but there is no evidence suggesting that this is the case. In fact, the performance issues recently reported by the exchange and its users add further credibility to the cause being a simple technical problem.

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.

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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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.

Weekly News Overview: Cryptocurrency

Ukrainian Regulations States That Mining Does Not Require Governmental Oversight

Ukrainian’s powers stated that crypto mining does not require regulatory activity from governmental oversight bodies or other third-party protocols.

In its legal article on virtual assets published on Feb. 7, the Ministry of Digital Transformation of Ukraine specified that mining does not necessitate directives by state authorities as this activity is measured by the protocol itself and network members.

Internet Surges 300% In North Korea Over The Past 3 Years

North Korea’s internet use saw a 300% surge over the past three years, as the country’s regime has continued to rely on cryptocurrencies for various activities.

Misuse of crypto and blockchain technology is among the primary tactics for the country to generate revenue as well as transfer and use illicitly obtained funds, a new study says. Blog

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

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.

Blockchain Education Is Becoming Popular Than Ever Before

As blockchain weaves its way deeper into the world economy, more American universities are teaching the technology, offering more courses and expanding delivery methods.

Kevin Werback, a professor and blockchain club mentor at the University of Pennsylvania, told Cointelegraph, “Even if they aren’t pursuing a career in the area, most students aren’t confident they can figure it out on their own. Blockchain is just so darn weird.”

US Intelligence Community Sees Crypto As A Threat

The United States intelligence community is seeking a researcher to model risk scenarios for how and why the dollar could lose its global supremacy, and how best to respond. The role was advertised on Feb. 14 by the Office of the Director of National Intelligence (ODNI).

The successful candidate will be tasked with evaluating threats to the dollar’s status as world reserve currency — most notably cryptocurrencies and the rise of major new economies such as China and India.