This week’s summary of various cryptocurrency news and developments
“Biggest theft in crypto history”: Coincheck hacked for over $500 million in NEM
This week, popular Tokyo-based cryptocurrency exchange Coincheck was hacked. Notably, the exchange lost over 500 million NEM tokens, then worth over $530 million, as hackers managed to penetrate its hot wallet, which had all stolen funds in it. However, according to Nikkei Veritas, the exact amount of funds stolen won’t be known until officials conduct a detailed investigation. Per reports, only the exchange’s NEM wallet was compromised as it didn’t implement NEM’s multisignature smart contract system, which would have added an additional layer of security.
At press time, the hacker has moved 300,000 stolen XEM tokens to another address. Both addresses have now been flagged so exchanges or potential buyers know these are stolen funds that should not be accepted. Coincheck was notably not registered with Japan’s Financial Services Agency (FSA), an authority that regulates exchanges in the country.
NEM Foundation president Lon Wong, reacting to the theft now being described as the “biggest theft in crypto history,” stated that he opposes a hard fork. He stated:
- “As far as NEM is concerned, tech is intact. We are not forking. Also, we would advise all exchanges to make use of our multi-signature smart contract which is among the best in the landscape. Coincheck didn’t use them and that’s why they could have been hacked. They were very relaxed with their security measures,”
BitConnect hit with class action lawsuit after exchange and lending platform shutdown
As reported by DeepDotWeb, BitConnect recently shut down its lending and exchange platform after receiving two cease and desist letters from regulators. The company, believed to be behind what is seen as the most popular cryptocurrency Ponzi scheme in existence, was now hit with a class action lawsuit from disgruntled traders who collectively lost $771,000. The lawsuit, filed with the Southern District Court of Florida, alleges the company’s BitConnect Coin (BCC) was issued as an unregistered security, and claims things at the company weren’t as the company claimed they were. Namely, it alleges BitConnect used new people’s investments to pay off other investors, effectively making it a Ponzi scheme.
The lawsuit is filed on behalf of all investors who lost their funds in BitConnect, and names some of its promoters, including YouTubers such as Trevon James and CryptoNick. BitConnect is notably still pursuing its BitConnect X ICO and has vowed to launch a new exchange.
Payment processor Stripe will no longer support Bitcoin payments
Popular payment processor Stripe, which first enabled Bitcoin transactions back in 2015, recently announced it will no longer support Bitcoin payments in April. According to the company’s product manager, Tom Karlo, behind the move are Bitcoin’s increasing transaction fees that, last year, surpassed the $30 mark, and its long confirmation times. Fees have declined since the beginning of the year, but they are still relatively high. Karlo wrote:
- “This has led to Bitcoin becoming less useful for payments, however. Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.)”
The product manager added that, because of this, its clients have shown less desire to accept Bitcoin. Nevertheless, he noted Stripe is still optimistic about the future of cryptocurrencies, and specifically cited the Lightning Network. The company also revealed it could in the future integrate other cryptocurrencies such as Stellar, Bitcoin Cash, Litecoin, or Ethereum.
Bitcoin.org no longer mentions “low fees” and “fast transactions” on its homepage
Popular Bitcoin.org website recently removed the “low transaction fees” and “fast transactions” sentences from its homepage. The move was caused by the high fees and slow confirmation times on the Bitcoin network, as the community recently debated on whether the website was, or not, misinforming new users who were just getting into Bitcoin. According to Cobra-Bitcoin, one of Bitcoin.org’s owners, there are a lot of pages that still mention the cryptocurrency has fast transactions and low fees, and as such a lot of work still needs to be done to fully make the change. On Bitcoin’s Github, he stated:
- “Obviously we don’t expect some insanely low fee, but the current fees make it impossible for reasonable people to transact with each other. I don’t know what’s gone wrong, but I don’t think the correct solution is to change the site to focus on the “uncensorable” aspect. We’d have to go deep into lots of pages where low fees and “fast” transactions are mentioned and do translations for everything. Fees were supposed to come down with Segwit anyway.”
$4 million worth of IOTA stolen because of malicious seed generators
According to reports, malicious online seed generators were used to steal $4 million worth of IOTA tokens. To create an IOTA wallet users need an 81 character string that can be used to access it. There are ways to generate the string offline, but to simplify the process a lot of users take advantage of online seed generators. At least one, iotaseed.io, was used by hackers to collect “piles of seeds,” so they could then move money from the affected users’ wallets into their own. Simultaneously, the hackers launched a distributed denial of service (DDoS) attack against the network’s known fullnodes, which prevented users from recovering their funds.
The IOTA network itself wasn’t hacked, and privately-run fullnodes weren’t affected. The malicious seed generator has now been taken down and implies its original creators made the move after recovering it from the hackers who pulled off the heist.
Robinhood app to add zero-fee Bitcoin, Ethereum trading
Robinhood, an app popular with millennials that allows users to trade stocks, is jumping in on the cryptocurrency bandwagon next month. The company recently announced it plans on launching Bitcoin and Ethereum trading on its platform, while allowing users to add various other cryptocurrencies. Including Litecoin, Bitcoin Cash, and Ripple to their “watchlist.” The service, regulated by the SEC and the Financial Industry Regulatory Authority (Finra) promises instant transfers on cryptocurrency purchases for amounts of $1,000 or less, and will allow zero-fee trading. To begin with, it’ll only be available in California, Massachusetts, New Hampshire, Montana, and Missouri.
Robinhood’s co-founder and CEO, Vlad Tenev, told CoinDesk:
- “We’ve come to understand that cryptocurrencies as an asset have exhibited clear and underlying resiliency and have integrated themselves as part of a diversified and balanced portfolio. (…)We view entering crypto as a way to extend our user base and build our brand.”
Venezeuela reveals it will distribute the Petro through a token sale
This week, Venezuela revealed that its oil-backed cryptocurrency, the Petro, will be issued through a token sale. It will initially have a month-long presale, in which the Petro will be available to institutional investors for either cryptocurrencies or hard currency. The presale will see 38 million Petros being sold, and is expected to bring in $1.3 billion. Another 44 million Petros will be sold during a public sale, expected to bring in $2.4 billion. The remaining 18 million are going to go to the country’s government, and to a panel of advisors who helped with creating the currency.
Although the Petro is backed by oil, the currency won’t be exchangeable for the actual oil, and the funds raised from the token sale will be used to further develop its infrastructure and support other tech projects.
Australia’s Brisbane airport to roll out in-terminal cryptocurrency payments
According to a press release, the Brisbane airport in Australia will start accepting cryptocurrency payments within the terminal shopping areas. The cryptocurrency payment system, provided by TravelbyBit, a cryptocurrency travel firm, will allow travelers to transact using various cryptocurrencies, including Bitcoin, Ethereum, and Dash. Brisbane Airport Corporation’s (BAC) general manager of planning and development Roel Hellemons, stated the airport was the first to accept cryptocurrency payments in the world, and added that the move “makes sense.” He stated:
- “This is just the beginning for us as we hope to expand the digital currency option across the business.”
Bitcoin at $11,117 as the market struggles to regain momentum
Bitcoin is currently trading at $11,117 and is up by 2% in the last 24-hour period. Since it fell from its $19,200 high the cryptocurrency has been struggling to regain momentum and start growing again. While some very positive news have been appearing, various companies recently stopped supporting Bitcoin payments – including Stripe and Valve’s Steam – which may be stopping the cryptocurrency from surging. Its market cap is at $187 billion, while its market share is of 34.4% according to data from CoinMarketCap.
Ethereum maintains its position as the second biggest cryptocurrency, its token trades at $1,069
Late last year, Ripple (XRP) surpassed Ethereum and became the second biggest cryptocurrency by market cap. It then entered a steep correction, and Ethereum reclaimed its position, that is now being cemented by its $103.99 billion market cap. Ehtereum’s Ether token is trading at $1,069 and the cryptocurrency is up by 2.53% in the last 24-hour period.
Ripple’s XRP drops to $1.2 as controversy continues
This week, reports of Ripple selling nearly $100 million worth of its XRP token in the last quarter of 2017 sparked controversy, as various news outlets then started reporting on its adoption. As reported by Bloomberg, the company’s main product doesn’t rely on the XRP token, and various banks reportedly fear regulators will reject its use, and as such are considering not adopting it at all. At press time, XRP’s token is trading at $1.2 and the cryptocurrency’s market cap is at $46.4 billion.