This week’s summary of various cryptocurrency news and developments:
Cryptocurrency complaints surged this year, just like its userbase
A recent report published by student loan market LendEDU revealed that cryptocurrency-related customer complaints, the majority of which against Coinbase, filed with the U.S. Consumer Financial Protection Bureau (CFPB) surged this year. According to the report, a total of seven cryptocurrency-related complaints had been filed with the CFPB in 2016, while this year the number has surged to 277, and keeps on rising. LendEDU believes it might reach 425, meaning the surge is of nearly 6,000%. That said, the CFPB receives hundreds of thousands of complaints every year, and as such the number related to cryptocurrencies remains miniscule. Moreover, although Coinbase did receive a huge number of complaints, it now has over 10 million users and has had a rough time dealing with the huge user influx it received this year.
BTC-e’s return is seemingly plagued by scams and tech problems
Last week, DeepDotWeb reported on one of the oldest Bitcoin exchanges, BTC-e, being back online after being taken down following the arrest of a Russian national in Greece. A Bitcointalk account associated with the exchange then started rolling out updates on its situation, and revealed that the Russian national wasn’t connected to the exchange, and that it still controlled 55% of user funds, despite the seizure. It added that the exchange is to reimburse the remaining 45% by issuing a Bitfinex-like token.
The exchange didn’t issue these tokens yet, but has now started giving users their Bitcoin Cash. Various users have complained about not being able to either log on to their accounts, access their funds, or properly manage their two-factor authentication (2FA) settings, according to CoinDesk. Moreover, the exchange itself has warned users about phishing attempts, as bad actors are trying to take advantage of the situation and steal user credentials.
— Rajat Sharma (@digiworxat) August 30, 2017
Australia to have 2,900 new Bitcoin ATMs
According to CryptoCoinsNews, a partnership between two FinTech firms in Australia could mean the country will have 2,900 new ‘two-way’ Bitcoin ATMs in the future. The joint-venture, between blockchain startup DigitalX and ATM developer Stargroup would essentially revolve around updating existing ATMs’ software to support Bitcoin buy and sell options. Data from CoinATMRadar revealed that there are currently 16 Bitcoin ATMs in the country, meaning the number would surge to nearly 3,000 if the joint-venture goes forward.
China has banned ICOs
Financial news site Caixin recently reported on a notice issued by a working group led by China’s central bank, the People’s Bank of China (PBoC), that said Initial Coin Offerings (ICOs) will be banned from the country. The notice described ICOs as an unauthorized fundraising tool that can involve financial scams, and as such no organization or individual can raise funds through an ICO. A list of 60 major platforms that are to be inspected by local financial regulatory bodies was also revealed.
Furthermore, organizations that raised funds through ICOs need to return investors their funds, in order to protect their interests and properly deal with the risks. Two of China’s largest ICO platforms – ICOage and ICO.info – already suspended their services. To remain compliant, Chinese exchanges removed ICO tokens issued by organizations and individuals based in China.
Bank of Russia issued a warning against ICOs
Russia’s central bank, the Bank of Russia, published a public notice this week on its stance toward ICOs, citing a number of inquiries related to their rising popularity. The Bank of Russia warned that exchanging cryptocurrencies and participating in ICOs is risky due to “sharp fluctuations”, and that at this point it won’t greenlight any cryptocurrency exchanges, nor would it approve its tech for infrastructure purposes. The notice read:
- “Given the high risk of circulation and use of cryptocurrency, the Bank of Russia considers it premature to admit cryptocurrencies, as well as any financial instruments nominated or associated with crypto-currencies, to circulation and use at organized trades and in clearing and settlement infrastructure on the territory of the Russian Federation for servicing transactions with crypto-currencies and derivative financial instruments on them.”
Bitcoin at $4,251.87 following reports of China shutting down Bitcoin exchanges
Bitcoin’s price tumbled after China’s ban on ICOs, but quickly recovered afterwards. It crashed again, however, after financial news website Caixin reported that sources close to China’s internet financial risk rectification work group stated that the country will ban domestic cryptocurrency exchanges. This would mean that Chinese citizens wouldn’t be able to use the Chinese yuan to buy Bitcoin, or vice versa. There are reasons to believe Caixin’s report is authentic, as a recent tweet from the People’s Daily, the Chinese Communist Party’s official newspaper, says the same thing.
Chinese supervisory authority has decided to close local virtual currency exchanges, involving "currency line", "coins" and "Bitcoin China". pic.twitter.com/xnvpAsGRUJ
— People's Daily,China (@PDChina) September 8, 2017
However, when contacted by news outlets, Chinese exchanges revealed that they hadn’t been contacted by authorities on the matter, and have been operating normally. On Twitter, cnLedger clarified that right now fake news are circulating on social media, and that in the worst case scenario cryptocurrencies will survive, just like Google, Facebook, and Twitter did after being banned from China.
Lot's of false news. Don't believe them unless they're confirmed or verified. Up to now, no exchange is forced to close, no body is arrested pic.twitter.com/puCQVBJH5u
— cnLedger (@cnLedger) September 6, 2017
Think of the worst case scenario: China banned Google, Facebook & Twitter years ago. They're doing fine. And they ain't even decentralized
— cnLedger (@cnLedger) September 9, 2017
At press time, one Bitcoin is worth $4,251.87, and the cryptocurrency’s market cap is of $70.3 billion. Bitcoin’s dominance is at 47.4%, according to CoinMarketCap.
IOTA’s price crashed after past cryptographic vulnerabilities were revealed
IOTA, a $1.5 billion cryptocurrency, has seen its value plummet in the last few days, after researchers from Boston University and MIT Media Lab’s Digital Currency Initiative (DCI) revealed that they found “cryptographic vulnerabilities” in its hashing function. The vulnerabilities were explained by DCI Director Neha Narula in a Medium post, and revealed that researchers were concerned when they found that IOTA developers created their own hash function, something security experts caution against. Peter Todd even said it was “completely insane.”
— Peter Todd (@petertoddbtc) September 7, 2017
According to Narula, bad actors could have used the vulnerability to steal user’s funds, or even destroy them. These were revealed to IOTA’s team before they were brought to the public, and developers issued a patch to address the problem last month. IOTA founder David Sønstebø stated that the vulnerabilities do not “represent valid attacks on the IOTA cryptocurrency.” Nevertheless, Narula’s post spread rapidly through social media, and led to IOTA’s value plummeting by 15%. At press time, According to CoinMarketCap, one MIOTA is worth about $0.56.