Crypto Exchange Gate.io Removes StatCounter Service Following Report of Security Breach

Crypto exchange Gate.io has removed web analytics tool StatCounter from their website following a breach report by cybersecurity firm ESET, according to an official blog post published today, Nov. 7.

The company has reported that they immediately removed StatCounter’s traffic stats service after receiving a security notice by ESET about suspicious behavior. Gate.io claimed they subsequently scanned the website with 56 antivirus products, and “no one reported any suspicious behavior at that time.” However, the firm still changed its traffic tracker, also reporting that “users’ funds are safe.”

On Nov. 6, Slovakia-based cybersecurity firm ESET published a security report claiming that hackers had successfully breached major web analytics tool StatCounter, targeting Bitcoin (BTC) exchanges that use the traffic analytic service. According to ESET researcher Matthieu Faou, the attackers compromised the StatCounter platform — which is reportedly used by more than two million other websites — by modifying the JavaScript (JS) code on each page of the website.

The hackers managed to add a piece of malicious code containing “myaccount/withdraw/BTC,” which intends to replace the destination address of a Bitcoin transfers by crypto exchange users with an address belonging to the attackers.

Modified script at www.statcounter[.]com/counter/counter.js. Source: WeLiveSecurity

According to Faou, who is reportedly the first to detect the “supply-chain attack,” this Uniform Resource Identifier (URI) “myaccount/withdraw/BTC” has been solely valid on crypto exchange Gate.io, allegedly “the main target of this attack.”

Now-ranked the 38th top crypto trading platform by daily trade volume as of press time, the exchange is quite popular in China with a rank of 9,382 in terms of in-country traffic, while its global rank amounts to 33,365, according to SimilarWeb traffic data and analytics tool.

In the conclusion to his report, the ESET researcher stated that the recent security breach again demonstrates the fact that external “JavaScript code is under the control of a third party and can be modified at any time without notice.”

As reported by Cointelegraph earlier this year, JS has been one of the major tools of hackers implemented in cryptojacking. According to the analysis, JS-based browser add-ons and extensions are “extremely vulnerable to hacking attacks” and often used for hidden mining by deploying users computing resources. For example, in mid-October, researchers found a crypto-mining malware that hides itself behind a fake Adobe Flash update.

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Report: North Korea-Sponsored Hacks Comprise 65 Percent of Total Crypto Stolen

Hacker group “Lazarus,” reportedly funded by North Korea, has stolen a staggering $571 million in cryptocurrencies since early 2017, a study conducted by cybercrime company Group-IB reveals. Key takeaways from the study were published Tuesday, Oct. 16, alongside the full annual report, entitled “Hi-Tech Crime Trends.”

The report, dedicated to hacks in 2017 and 2018, identifies the allegedly state-sponsored hacker group Lazarus as responsible for $571 million of the $882 million total in crypto that was stolen from online exchanges during the studied time period; almost 65 percent of the total sum.   

Out of fourteen separate exchange breaches, five have been attributed to the group, among them the industry record-breaking $532 million NEM hack of Japan’s Coincheck this January.

The report states that hackers target cryptocurrency exchanges using mostly “traditional” methods, including spear phishing, social engineering, and malware:

“After the local network is successfully compromised [through downloaded malware], the hackers browse the local network to find work stations and servers used working with private cryptocurrency wallets.”

The report, which also includes a cybercrime forecast, predicts the number of attacks on exchanges to increase in future, as an alternative to traditional targets such as banks.

Group-IB further indicates that Initial Coin Offering (ICO) platforms are prime targets for hackers, revealing that 10 percent of total funds raised from token sales in 2017–2018 were stolen. A majority of illicit activity targeting ICOs was reportedly conducted through phishing methods, with Group-IB estimating that large phishing groups have the capacity to steal around $1 million a month.

Additionally, Group-IB suggests that mining pools could prove an easy target for 51 percent attacks by state-sponsored hackers. Attempts at such attacks, albeit with limited success, are said to already be on the rise.

U.S. experts have previously alleged that North Korea is “increasingly” turning to crypto as a tactic to circumvent sanctions, claiming that the country’s government is hiring people to “launder” cryptocurrencies via multiple wallets and exchanges, as well as so-called mixing services, with the aim of obtaining sanction-free U.S. dollars.

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Report: Hong Kong Stock Exchange Eyeing Blockchain Firm Acquisitions

Insider sources have suggested that the Hong Kong Stock Exchange (HKEX) is eyeing takeovers in the blockchain and other tech sectors, according to a Bloomberg article published September 21.

Bloomberg cites “people with knowledge of the matter” as saying that the exchange is considering a change in strategy due to stalling trading links with exchanges in China, citing worsening U.S.-China trade relations as a further cause for concern.

The sources reportedly told Bloomberg that HKEX CEO Charles Li has met with “at least three investment banks” to discuss diversifying the exchange’s model, including a possible set of takeovers in the “data, analytics and blockchain sectors.” Due to the sensitivity of the matter, Bloomberg’s sources asked to remain anonymous.

They reportedly suggest that Li has been looking to the venture capital arms of U.S.-based stalwart exchanges CME Group Inc. and Nasdaq Inc. “as possible models,” with Bloomberg noting that Nasdaq saw 19 percent of its 2017 revenue from data products and 13 percent from market technology.

By contrast, Bloomberg’s data indicates that HKEX generated almost 100 percent of its 2017 revenue from clearing and trading fees.

Bloomberg’s sources further allege that potential technology acquisitions were “the focus” of two recent key HKEX meetings — a strategy discussion with senior managers on September 10, and a board member meeting on September 12. They report that the exchange is due to launch a three-year strategy plan starting in 2019, of which the details are currently under discussion.

Banny Lam, head of research at CEB International Investment Corp., told Bloomberg in an email that:

“The strategy is in the right direction but it is not easy to achieve the targets. HKEX needs to maintain a momentum of growth by exploring new businesses.”

According to Bloomberg, HKEX has “struggled to integrate” its 2012 acquisition of London Metal Exchange, and the article cites an unnamed HKEX advisor as saying that there are “industry concerns” surrounding the success of future deals.

As previously reported, within China itself, blockchain has been making inroads into the very infrastructure of major stock exchanges. Earlier this summer, the world’s fourth-largest stock exchange, the Shanghai Stock Exchange (SSE) released plans to adopt the technology for use in securities transactions.

The Australian Securities Exchange (ASX) is also planning to implement blockchain to replace its current system for processing equity transactions, a switch that is currently slated for spring 2021.

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US Treasury Releases Fintech Report, Discusses Issues Relevant to Cryptocurrency

The U.S. Treasury Department released its highly anticipated report that examines the current monetary system, discusses cryptocurrency, and proposes sweeping changes that would cut regulatory inefficiency and incubate new technologies.

The report, which is titled “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation” was drafted under Treasury Secretary Steve Mnuchin and addressed to President Donald Trump.  The report does not directly provide any recommendations or conclusions on cryptocurrencies, but the technologies are mentioned.

Cryptocurrency-Related Issues

The report covers a broad range of issues, many of which are highly relevant to the cryptocurrency industry. The Treasury Department acknowledges the escalation of cryptocurrency and blockchain technologies, noting the rapidly progressing nature of the economy.

In a section titled “Digitization of Finance and the Economy,” they note that parallel to the rise of mobile and digital banking, complimenting technologies like cryptocurrencies and distributed ledger technologies are “poised to impact innovations in financial services.” They elaborate on this, saying:

“Technology developments that are poised to impact innovation in financial services include advances in cryptography and distributed ledger technologies, giving rise to blockchain-based networks.”

The Treasury also notes that blockchain and distributed ledger technologies are being examined by the Financial Stability Oversight Council, which was founded after the 2008 financial crises with the goal of guiding federal regulators on important issues.

Importantly, the Treasury makes it clear that the government wants to support new innovations, and to develop regulations that incubate growth within emerging industries, saying:

“Support of innovation is critical across the regulatory system — both at the federal and state levels…Treasury supports encouraging the launch of new business models … to pursue innovative technologies to lower costs, improve customer outcomes, and improve access to credit and other services.”

A do no harm approach by the government is critical for cryptocurrencies and will ultimately lead to greater success and adoption. The report acknowledges that current regulatory frameworks may be outdated and updates to it are necessary in order to allow solutions that offer benefits to consumers, saying:

“The financial regulatory framework is not always optimally suited to address new business models and products that continue to evolve in financial services … Financial regulation should be modernized to more appropriately address the evolving characteristics of financial services of today and in the future.”

Regulatory Efficiency

The U.S. Treasury discusses technologies that could streamline payment systems, and importantly mentions the development of regulatory sandboxes that allow for innovation in order for the U.S. to stay competitive with places like the U.K., Singapore, and Hong Kong.

The sandbox method, which entails the government keeping a watchful eye on emerging industries, but not harming them with regulation, is popular in many countries, and most people see it as the best way to regulate the cryptocurrency industry.

Arizona has been on the forefront of cryptocurrency adoption and was the first state in the United States to offer a sandbox environment for fintech companies, which will allow companies to test their products and services for up to two years with as many as 10,000 customers before needing to apply for licensing.

This allows cryptocurrency and blockchain companies to actively develop and test products without working around regulatory requirements.

The report recommends creating a sandbox regulatory environment in the U.S., stating:

“Internationally, many countries have established ‘innovation facilitators’ and various regulatory ‘sandboxes’ — testing grounds for innovation…While replicating this approach in the United States is complicated by the fragmentation of our financial regulatory system, Treasury is committed to working with federal and state financial regulators to establish a unified solution that accomplishes these objectives — in essence, a regulatory sandbox.”

The Treasury report concludes that the United States must “stay abreast of developments in technology and to properly tailor regulations in a manner that does not constrain innovation.” And that U.S. regulators “must be more agile than in the past in order to fulfill their statutory responsibilities without creating unnecessary barriers to innovation.”

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KPMG Report: US Blockchain Investment in 2018 to Date has Outstripped 2017’s Total

Fresh analysis from KPMG shows that blockchain investment in the U.S. in the first half of 2018 has exceeded the overall total seen in 2017, according to its biannual “The Pulse of Fintech” report released today, July 31.

KPMG is one of the world’s largest auditing firms, collectively known as “The Big Four” — alongside Deloitte, Ernst & Young and PwC.

KPMG suggests that blockchain tech is “moving beyond experimentation” to draw “significant” attention from investors in the first two quarters of 2018, noting that investments were typically more focused on experienced firms and consortia that sought additional rounds of funding, rather than on market entrants.

The report singles out peer-to-peer (P2P) payments firm Circle’s $110 million round led by mining hardware giant Bitmain and $77 million for crypto wallet Ledger in France as among the “good-sized” funding rounds in Q1 2018. It highlighted that the U.S. has already seen total investment in blockchain outstrip the annual total posted in 2017.

Other key blockchain takeaways from the report include the fact that the banking consortium R3 has expanded its mandate to include insurance companies, while major insurance consortium B3i has reorganized in order to commercialize its outputs. New blockchain consortia have continued to “crop up,” in particular those that are focused on developing blockchain-powered supply chain management solutions.

As regards initial coin offerings (ICOs), KPMG notes that the industry continues to flourish “despite” high-profile blanket bans on the fundraising model by countries such as China. The report draws attention to Cayman Islands-based EOS developer Block.one completing its year-long token sale in Q1 2018 to raise an industry record-breaking $4 billion.

The report also highlights impressive investments in U.K.-based challenger bank Revolut ($250 million this April), which added an option to transact in crypto in December 2017, and brokerage app Robinhood, “which raked in one of the largest deals in the first half of 2018” — $363 million in May to expand its crypto trading platform U.S.-wide.

In the wider fintech landscape, KPMG indicates that U.S.-based fintech firms have seen a surge in venture capital (VC) funding — exceeding $5 billion in the first half of 2018. Across VC, private equity (PE) and mergers and acquisitions (M&A), global fintech performance has been “exceptional,” exceeding the 2017 annual total and ”well on pace to exceed 2015’s peak.”

A report released by Crunchbase news in February anticipated that global VC fundraising for blockchain-based companies is well on track to exceed 2017 figures, noting at the time that the U.S. was ahead of other countries in investment figures.

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Bitmain Made $1.1 Billion in Profit in Q1, Filing for IPO ‘Very Soon’: Report


After posting eye-popping returns in 2017, the recent bear market has some cryptocurrency firms battening down the hatches amid declining returns. Don’t count industry giant Bitmain among them.

Citing an email obtained from a source close to the China-based firm, Fortune reports that Bitmain — best known for manufacturing bitcoin mining equipment — raked in $1.1 billion in profit during the first quarter of 2018. Conservatively, the company expects to earn $2 to $3 billion in profit for the fiscal year.

Remarkably, those figures place Bitmain nearly on par with chipmaking giant Nvidia, who reported a net income of $1.2 billion during the first quarter and has a ~$150 billion market cap.

It also marks a significant increase since last year when Bitmain said that it brought in $1.2 billion in profit and $2.5 billion in revenue — much less than the $3 to $4 billion originally estimated by analysts.

The email also confirmed that Bitmain is in the final stages of preparing to hold an initial public offering (IPO) on the Hong Kong Stock Exchange (HKEX). While the date of this listing has not yet been announced, the firm said that it will go public “very soon.”

As CCN reported, Bitmain is holding another round of financing before the IPO despite having just closed a $400 million round earlier this year. The firm is said to be seeking to raise as much as $1 billion at a $14 billion valuation, a ~16.5 percent increase from its previous funding round.

The firm has been using this new capital to finance a massive expansion, both of its business interests and its physical operations. In addition to purchasing major stakes in EOS creator Block.one, cryptocurrency trading firm Circle, and web browser Opera, Bitmain has placed a heavy emphasis on carving out a significant share of China’s booming artificial intelligence (AI) market.

Bitmain has further been expanding geographically, opening new mining centers in Quebec and the U.S. The company also moved into a 20,000 sq. foot office space in Silicon Valley while concurrently tripling the size of its Israel-based development center.

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$1 Billion Chinese Blockchain Fund Denies Report of Government Pull-Out

A $1 billion Chinese blockchain fund launched in April has denied a report that local government will pull out its originally planned funding support following a recently leaked recording involving a former partner of the fund.

A news report from China Business Journal on Thursday said the Hangzhou city government has required Xiong’An (or Grandshores) Blockchain Fund to stop promoting itself by using the name as a government-backed fund.

The report said the local government has decided it will not pour in new capital anymore, making a notable withdrawal from the original plan made in April where the government agreed to back 30 percent of the fund. So far the government has allocated 30 million yuan (or around $4 million) for the project, the report said.

Citing an anonymous source close to Li Xiaolai, a well-known Chinese crypto investor and a former managing partner of the fund, the report indicated the government’s decision came after a recording of Li’s private meeting was leaked early this month which brought negative impact on the company and the government.

Yet, in the report, Li responded that the fund “is not suspended.” And he further clarified to CoinDesk that by saying that he means the government has neither suspended Grandshores’ operations nor pulled out its future funding support.

Hours later on Thursday night, Grandshores Blockchain Fund also issued a statement to deny the report, saying they have not yet received any kind of suspension notice from the government.

As previously reported by CoinDesk, Li resigned from his role as the fund’s managing partner on July 9 following the leak of a recording where he took aim at various individuals and companies in the industry with vulgar languages.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Chinese Research Institute Report Finds Blockchain Can Enhance Financial Services

A Chinese scientific research institute and value-added Internet service provider Tencent Holdings have jointly released a July 24 report emphasizing the impact of blockchain on the transformation of traditional financial services.

The Academy of Information and Communications Technology, a scientific research institute under China’s Ministry of Industry and Information Technology (MIIT), and China’s Tencent Holdings’ report includes eight core conclusions of blockchain implementation in the financial sector.

According to the report, blockchain technology will further enhance “the transparency of financial transactions, strengthen the flexibility of system operation, and automate processes, thus affecting the record keeping, accounting and payment settlement methods of financial services. The study further comments:

“In addition to digital currency, the characteristics of the blockchain can play a big role in the fields of payment and settlement, supply chain finance, securities trading, insurance, and credit reporting.”

During the process of applying blockchain, the report notes, it is necessary to differentiate between the “coin” application and the “chain” application, presumably a reference to blockchain tech’s basis for most cryptocurrencies:

“For the ‘coin’ application, the financial risk should be strictly guarded. For the ‘chain’ application, it should be legally regulated.”

Earlier this week, three major Chinese telecom operators launched a blockchain research group for building a “next-generation telecommunication network.” China will also lead an international research group on the standardization of the Internet of Things (IoT) and blockchain technology, as Cointelegraph reported July 18.

China has also recently downplayed blockchain tech, as the head of the international department of the China Banking and Insurance Regulatory Commission warned against “mythologizing” blockchain technology in mid-July.

As China was the first country to institute blanket a ban on Initial Coin Offerings (ICO) and exchanges, Cointelegraph reports that the country has some difficulties with the decentralized and liberal freedoms that comes from blockchain and cryptocurrencies.

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Over 500 BTC Belonging to Iranians Seized by US Government: Report

Over 500 BTC Belonging to Iranians Seized by US Government: Report

Finance

According to the head of Iran’s Blockchain Association, over 500 BTC belonging to Iranians were confiscated by the U.S. government last year, and the number is still rising. He explains that Iranians are unable to take action through proper channels from within their country due to Iran’s legal status of cryptocurrency.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Iranians’ 500 BTC Seized by US Government

Sepehr Mohammadi, the president of Iran’s Blockchain Association, told Ibena news outlet last week:

Last year, a remarkable volume of bitcoins which belonged to some Iranians were confiscated for unspecific reasons by the federal government of the United States, and the process of confiscation is still continuing.

Over 500 BTC Belonging to Iranians Seized by US Government: ReportHe admitted that the exact number of confiscated BTC “is not clear, but it is expected to be over 500 bitcoins, worth approximately 25 billion tomans ($5.77 million)” at the time, the publication quoted him.

“Some people believe that this confiscation is because bitcoin owners were circumventing U.S. sanctions,” Mohammadi added.

Over 500 BTC Belonging to Iranians Seized by US Government: ReportRecently, news.Bitcoin.com reported that the government of Iran is considering using cryptocurrencies to evade long-held U.S. economic sanctions. Mohammad Reza Pour-Ebrahimi, the chairman of the Iranian Parliament’s Economic Commission, said in an interview with Mizan news agency on July 15 that digital currencies are among the major mechanisms that Iran can use to the evade the sanctions. He noted that the Iranian parliament will soon discuss this issue.

Legal Challenge

Mohammadi further explained to Ibena the challenges Iranian citizens face to recover their cryptocurrencies:

The owners of confiscated bitcoins are unable to take legal action against the U.S. inside Iran as cryptocurrencies are banned in the country. The association is looking to take international legal action, but they have not yet found a legal expert in anti-money laundering law who will handle the case.

Over 500 BTC Belonging to Iranians Seized by US Government: Report
Central Bank of Iran.

In April, the Central Bank of Iran (CBI) banned banks and financial institutions in the country from dealing with cryptocurrencies. The CBI claimed that “All cryptocurrencies have the capacity to be turned into a means for money laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money.”

Nonetheless, Pour-Ebrahimi told Ibena in May that even though “few people in Iran are cryptocurrency users,” according to his data, “more than 2.5 billion dollars has been sent out of the country for buying digital currencies.”

What do you think of the US government seizing Iranians’ BTC? Let us know in the comments section below.


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Report: Blockchain Spending to Hit Nearly $12 Billion By 2022

A new report published by the International Data Corporation expects spending on blockchain solutions to increase annually at a growth rate of nearly 75 percent through 2022.

Dubbed the “Worldwide Semiannual Blockchain Spending Guide,” analysts at the firm expect total spending on projects in the blockchain industry to hit $11.7 billion in 2022 alone, compared to the $1.5 billion expected to be spent in 2018. The report further added that “blockchain platform software will be the largest category of spending outside of the services category and one of the fastest growing categories overall, along with security software.”

This spending trajectory is largely expected to be led by the financial sector, with banks being early adopters of the technology. The report explains that data shows a total of $552 million was spent on blockchain by the financial sector alone in 2018. The distribution and services sector is not too far behind, having invested a reported $334 million.

Further, the report covers developments in the blockchain industry for eight different regions across the globe with the potential addition of China as a ninth in forthcoming reports.

As the scope of the analysis currently stands, the United States delivers more than 36 percent of worldwide spending on blockchain technology with cross-border payments and settlements being the most popular use case for the technology. A total of $193 million has reportedly been spent on this field.

Looking ahead, Jessica Goepfert, program vice president for the International Data Corporation, said certain use cases for blockchain technology are not going away anytime soon, saying:

“We continue to see the greatest spending and growth for blockchain around lot lineage and asset and goods management … Manufacturers want to ensure products arrive where they are supposed to arrive. Retailers and wholesalers seek assurance around the validity and quality of the products they are selling. And consumers are demanding greater transparency from providers.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO Rules

The Daily

The United Kingdom has what it takes to become a true leader in the crypto space, according to a new report covered in today’s Bitcoin in Brief. Also in The Daily, the British Crown dependency of Jersey has adopted new requirements for ICO projects to better protect participating investors, Malta now has a two-way bitcoin ATM, and Hong Kong has been promised thousands of crypto payment terminals.   

Also read: Blackrock Probes Market, Coinbase to List Securities, Bitpay Gets a Bitlicense

Britain Set To Become Crypto Economy Leader, Report

The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO RulesThe United Kingdom is in a good position to be a leader in the crypto economy and the implementation of blockchain technologies, according to a new report quoted by the British press. Britain has all the required resources, the authors claim, as well as industrial and governmental will to become a global hub for the technology by 2022. The analysis has been conducted by Big Innovation Centre, DAG Global and Deep Knowledge Analytics.

The gap between the traditional financial system and the crypto economy in the UK will close, DAG Global CEO Sean Kiernan believes. “The UK is a major global financial hub and in recent years has become a fintech leader as well. At the same time, it is starting to demonstrate significant potential to become a leader in blockchain technologies and the crypto economy,” he said, quoted by The Guardian.

The research, carried out in coordination with the parliamentary group on blockchain, has taken into consideration the £500m (~650 million) worth of investments into UK blockchain companies made in 2017-18 to conclude that the United Kingdom has the potential to become a world leader in the digital and crypto ecosystem within the next few years. “We are still at the early stages of the blockchain industry’s development and the huge impact it undoubtedly will have in Britain and globally,” said Birgitte Andersen, chief executive of Big Innovation Centre.

Jersey Introduces Requirements for ICO Projects

The Financial regulator of Jersey, one of the Channel Islands, has taken measures to protect investors participating in Initial Coin Offerings (ICOs). In a guidance note released this month, the Jersey Financial Services Commission (JFSC) provides basic definitions of cryptocurrencies, digital tokens, and token sales. It recognizes that their use “has risen dramatically” but also warns about the associated risks like high levels of price volatility, loss of funds through cyber-attacks, the high number of scams and pump-and-dump schemes.

Nevertheless, the JFSC states that most ICOs are unlikely to be regulated. Instead, the Commission places some conditions on the issuers of coins under the Island’s statutory instrument governing capital raising, the Control of Borrowing Order, noting for instance that a consent from the JFSC is required to establish a Jersey company. In granting such consent, regulators say, the JFSC may choose to impose certain conditions on the respective entity. Jersey-based ICO issuers are also required to be incorporated as a Jersey company and administered through a trust and company service provider licensed by the JFSC under the Financial Services Law.

The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO Rules

The Commission classifies digital coins in two major categories – security and non-security tokens. The latter have been divided into “utility token” – “a usage right or the right to access a product or service”, and “cryptocurrency token […] designed to behave like a currency, being a store of value and medium of exchange.”

The document also lists a number of requirements that apply to ICO issuers and describes certain procedures and processes that should be followed in order to mitigate and manage the risks for retail investors. Companies are expected to apply anti-money laundering and counter-terrorist financing measures as well as inform investors about the risks.

In recent years, the British Crown dependency, situated off the French coast of Normandy, has attracted many startups from the crypto space. In the summer of 2015, the Government of Jersey released a consultation paper on cryptocurrencies, becoming one of the first jurisdiction in Europe to address the regulatory challenges in the fintech industry.

Malta Acquires Two-Way Crypto ATM

Malta, another crypto-friendly European destination, has reportedly acquired its first two-way automated teller machine exchanging cryptocurrency with fiat. Last week, a company called Moon Zebra launched the ATM located at the Quicklets offices, on Tower Road in Sliema. It operates Monday through Friday, 9 am – 6:30 pm.

The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO RulesThe new BATM offers users the opportunity to buy and sell two cryptocurrencies, bitcoin (BTC) and litecoin (LTC). Moon Zebra claims this is the first device offering two-way transactions with cash. Another teller machine supporting purchases of cryptocurrency strangely disappeared last year. According to Coinatmradar, two other devices are also operational not far from Moon Zebra’s ATM, but both are buy only machines. One of them offers BTC, and the other supports BTC and LTC purchases.

The launch of the new BATM comes after the island nation took another step towards becoming one of the most crypto-friendly nations in Europe. Recently, the parliament in Valletta adopted three laws designed to introduce clear regulations for the country’s growing crypto industry. It’s been reported that the largest crypto exchange by trade volume, Binance, is considering a project to launch a “decentralized bank” in Malta. The favorable business climate has attracted other large crypto businesses to the island, including the Chinese exchange Okex and the Polish Bitbay.

Hong Kong Promised 5,500 Crypto POS Terminals

The Daily: Report Sees UK as Crypto Leader, Jersey Adopts ICO RulesThe Indonesian startup Pundi X is working to build a network of 5,500 POS terminals in Hong Kong supporting payments in a number of cryptocurrencies, the South China Morning Post reported. The devices will be able to connect not only to crypto wallets but also with other traditional payment methods like Visa, MasterCard, and Apple Pay.

According to Pundi X CEO, Zac Cheah, Hong Kong is the ideal place to test the payment network. His company has ambitious plans to introduce up to 100,000 crypto POS terminals in Southeast Asia by 2021. Recently, a chain of restaurants in Hong Kong installed crypto point-of-sale devices in partnership with the Indonesian startup. Pundi X claims that in the last six months 25,000 of its terminals have been ordered by businesses in Japan, Singapore, South Korea, and Switzerland.

What are your thoughts on today’s news tidbits? Tell us in the comments section below.


Images courtesy of Shutterstock, Moon Zebra.


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How Coinmarketcap Incentivizes Exchanges to Report Fake Volume

Exchanges

Bitforex, a cryptocurrency exchange that scarcely scraped the top 100 by trading volume until recently, has been accused of generating false trades on a mammoth scale. Crypto Exchange Ranks, which pulls in open source data from exchange APIs, has published a report in which it accuses Bitforex of creating fake volume and Coinmarketcap (CMC) of being complicit in the scam.

Also read: Powerful Cryptocurrency Firms on the Road Towards Becoming Banks

Bitforex, Coinmarketcap and the Case of the Fake Volume

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume
Everything about Bitforex looks off – including its logo

Fake trading volume, defined as buy and sell orders designed to artificially create the impression of demand, are a running motif in the cryptocurrency world. For as long as anyone can remember, various exchanges have been accused of wash trading and inflating their volume. It’s the equivalent of a half-empty airliner placing its passengers in window seats to give the impression that the plane is full. Creating fake volume may sound like a relatively minor transgression, but it can have major ramifications for traders.

“Cooking the books” by falsifying activity lures traders into signing up for an exchange that may be untrustworthy, insecure, and far less liquid than it looks. Any exchange that is willing to create false volume may have few qualms about committing more egregious crimes against its users. Until recently, Bitforex was a little-known exchange, languishing around 70th in the world by trade volume. It now stands at 12th according to data provided by Coinmarketcap, with 24-hour volume of $227 million.

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume

Crypto Exchange Ranks calls out Bitforex

In a detailed and compelling blog post, Crypto Exchange Ranks outlines its case for Bitforex having generated fake volume. Aside from the fact that Bitforex’ trade volume has multiplied by almost 100x in recent weeks, and now stands at more than 10x that of established exchanges like Kraken and Kucoin, there’s its modest social media presence that includes less than 2,000 Twitter followers. The Singapore-based exchange does have 65,000 Telegram followers, but much of this can be attributed to the usual spate of bots coupled with airdrop token chasers.

How Coinmarketcap Incentivizes Exchanges to Report Fake Volume
Bitforex’ claimed trade volume according to its website

Bitforex claims in its Twitter bio to be licensed in the EU, but there is no evidence to support this; in fact its website states that the platform is licensed in the Seychelles and Philippines. The site also includes such bold claims as having 1.8 million users, to be attracting 15,000 new users a day, and to have amassed $1.5 billion of trade volume, taking it as high as number five on Coinmarketcap’s exchange rankings.

Bit Who?

Crypto Exchange Ranks isn’t buying Bitforex’ claims, writing “We see that the number of UU [unique users] of BitForex is 29K. In turn, Kucoin has 889K unique users. Kraken has 666K unique users. KuCoin’s number of UU is 30 times higher than that of BitForex, Kraken’s number of UU is higher by 23 times.” It concludes:

As we have already discovered through SimilarWeb, the exchange receives the bulk of the new traffic through the referral source — CoinMarketCap; thus, the platform immediately attracts attention. Here’s the explanation: creating and implementing marketing and communication strategies and building a community in an organic way is more expensive than forging trade volumes.

While CMC is unlikely to be abetting Bitforex, in publishing the exchange’s figures without question, it is unwittingly complicit in the deception. Other crypto comparison sites have been less eager to report the sort of inflated figures produced by the likes of Bitforex, regardless of what the data pulled by API might say. With its shoddy web design, poor English, and almost certain fake volume, Bitforex does not inspire confidence. But until Coinmarketcap makes a stand against blatantly falsified volume, exchanges will be incentivized to cheat the system and lure in gullible traders eager to try out the next big platform.

Do you think Bitforex’ trading volume is real? Let us know in the comments section below.


Images courtesy of Shutterstock, Coinmarketcap, and Bitforex.


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