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Bitcoin News Roundup 31.12.17

This week’s summary of various cryptocurrency news and developments:

New developments:

Bitcoin exchange executive kidnapped, found alive and safe three days later

According to various reports, a 40-year-old analyst at cryptocurrency exchange EXMO, Pavel Lerner, was dragged into a black Mercedes-Benz by men wearing dark clothes and balaclavas in Kiev, Ukraine, after leaving his company’s offices on December 26. At the time it was revealed the exchange was doing everything it could to help find Lerner, and three days later it he was found “safe” in a “state of major stress.” His current whereabouts are unknown, but according to Ukrainian interior minister adviser Anton Gerashchenko a $1 million Bitcoin ransom was paid for him to be released. This is notably the first cryptocurrency-related kidnapping case in Ukraine, according to Gerashchenko.

Per EXMO, Pavel Lerner won’t be providing any official comments in the coming days, as he is currently recovering from the incident. A statement reads:

  • “At the moment he is safe, and there was no physical harm inflicted on him,” the statement said. “Nevertheless, Pavel is currently in a state of major stress. Therefore, he will not provide any official comments in the coming days.”

A different version of the SegWit2x hard fork launched, with little support

SegWit2x (B2X) was a hard fork that was planned during the New York Agreement, following the activation of SegWit earlier this year. Its goal was to increase the blocksize to 2 MB on the Bitcoin blockchain, it was led by Jeff Garzik, and was ultimately called off due to the lack of community consensus. A new, different SegWit2x hard fork, to which we’ll use the moniker B2x, was recently launched. For one, B2x’s network isn’t secured using SHA-256, as it uses X11 encryption. It has a 2.5-minute blocktime, instead of Bitcoin’s 10-minute blocktime, tts difficulty will be recalculated after each block, and its website advertises a 4 MB blocksize, Notably, developers are said to be seizing the coins airdropped to wallets belonging to Bitcoin creator Satoshi Nakamoto. Questions about its team have also been raised.

This led various cryptocurrency organizations to shun the hard fork, as most wallet services aren’t supporting it, and its developers are having to promote their own mining pool. Some, such as popular hardware wallet manufacturer Trezor, said it appears to be a “premined scam.”

Cryptocurrency exchange Poloniex imposes new customer identification requirements

Poloniex, one of the oldest cryptocurrency-only exchanges, is imposing new customer identification requirements to its users holding legacy accounts. The move, according to the exchange, is part of its commitment to comply with relevant laws as a registered money services firm. In the first quarter of 2018, Poloniex will announce a deadline, after which legacy account holders who haven’t verified their identity will see their trading, depositing, and lending features disabled. Margin position will be given an 8-week grace period in which they can be reduced, and will then be closed.

Users who upgrade their legacy accounts and become verified will see their withdrawal limits go from a maximum of $2,000 per day to $25,000.

World affairs:

Israel working on national cryptocurrency, the digital shekel

According to the Jerusalem Post, Israel’s financial ministry and central bank are currently exploring the possibility of issuing a national cryptocurrency, the digital shekel. The currency would equal the physical shekel in value, and would use blockchain technology for fast, instant transactions. It would be made available over a smartphone, while being stored in a digital wallet. It’s set to be issued by the country’s central bank, but according to reports will be peer-to-peer, and won’t have a centralized authority overseeing transactions.

The cryptocurrency’s development is still in its early states, and currently doesn’t have a public timeline. Per an official cited by the Jerusalem Post, the digital shekel would make it “more difficult to evade taxation.” He added:

  • “You can imagine that instead of giving you a piece of paper saying the Bank of Israel on it, I can send you a piece of digital code that was issued by a central bank.”

South Korea isn’t banning Bitcoin but “will consider” shutting down exchanges

This week various reports claimed South Korea was banning Bitcoin as Reuters published an article stating the country’s government was to enforce new regulations and close down cryptocurrency exchanges. Clarifying the issue, several local media news outlets pointed out that Hong Nam-ki, minister of South Korea’s Office for Government Policy Coordination, said regulators will consider shutting down cryptocurrency exchanges, if their proposed regulations fail to calm down what the government claims to be “irrationally overheated” cryptocurrency markets in the country.

According to BusinessKorea, the minister stated the government is “planning to consider every possible measure in the future, including the shutdown of exchanges.” According to CCN, South Korea has also started to conduct onsite inspections of cryptocurrency exchanges, following the hack of a local exchange Youbit.

India’s government compares cryptocurrencies to Ponzi schemes

India’s Ministry of Finance recently issued a statement cautioning potential investors against virtual currencies like Bitcoin, citing a “lack of intrinsic value,” and the fact that cryptocurrencies “aren’t backed by any assets.” Per the statement, Bitcoin and other cryptocurrencies have been gaining value due to “mere speculation.” Notably, a part of the statement even compares cryptocurrencies to Ponzi schemes. It reads:

  • “There is a real and heightened risk of investment bubble of the type seen in ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”


Bitcoin falls to $12,666 as Christmas crash continues

A few days before Christmas, Bitcoin’s price started to plunge from its then all-time high of over $19,000. The cryptocurrency managed to somewhat recover a few times, but the bearish market managed to go on, so much so the cryptocurrency is currently down by 14% in the last 24-hour period, as its price is now at $12,666. Its market cap is of $213 billion, as its dominance has fallen to 38%. The cryptocurrency ecosystem’s market cap is of $559 billion, per CoinMarketCap.

Ripple surpasses Ethereum and becomes second biggest cryptocurrency

While Bitcoin has been struggling, Ripple (XRP) recently surged by a whopping 30% in the last 24-hour period, to $2.37 per token. The cryptocurrency’s market cap is of $91.7 billion, above Ethereum’s $67 billion. This made Ripple the second biggest cryptocurrency by market cap, something that has in the past happened in one of Ripple’s pumps.

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