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SunnyJuly 17, 2018
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7min00

July 17, 2018

3 min read


While it hasn't bounced back to its $20,000 value from a year ago, Bitcoin saw a jump of 4 percent to $6,623 based on the news that asset-management BlackRock has set up a working group to look into cryptocurrencies and blockchain,  according to CNBC.

Several other massive investment institutions have made similar moves to BlackRock, leading many experts to believe that investor confidence — and crypto value — will rise. Here are some industry insiders who say you should be investing in crypto and why.

1. Regulation is coming and that’s a good thing.

"The SEC’s announcement that cryptocurrencies like Bitcoin are not securities is a welcome development and will allow for additional mainstream investment. Individuals and businesses can now purchase cryptocurrencies knowing that they are not purchasing a security." — Kevin Barry, Founder and CEO of Myntum

Related: An Easy Guide to 'Crypto-Mining' the Market

2. Cryptocurrency is open 24/7.

"Banks and Wall Street are open Monday through Friday until 4:00 PM, whereas cryptocurrency exchanges never close. The 24/7 ability to access and trade digital currency is an important and often understated long-term benefit in the space." — Patrick Gray, CEO of HashChain Technology

3. Traditional investments are getting riskier.  

"With continued U.S. interest rates tightening, it is sure to put downward pressure on gold and traditional safe-haven assets. Crypto could be the one non-traditional investment that performs well in 2018/2019." — Ray Youssef, CEO of Paxful

Related: Why I Left Goldman Sachs and Wall Street Glory for Crypto

4. The potential for growth is massive. 

"Cryptocurrency adoption is currently 0.2 percent and has been doubling by 100 percent a year. At this rate, the potential and opportunity over the next ten years is vast. Despite some downturns, that kind of growth potential and growth rate shouldn't be overlooked." — Patrick Gray, CEO of HashChain Technology

5. Diversify yourself. 

"Cryptocurrency helps to diversify asset classes, which has been influential for countries that have suffered from hyperinflation such as Venezuela and Zimbabwe." — Dean Anastos, CEO of BlockChain Developers

Related: 14 Things You Need to Know About Bitcoin

6. It’s a bear market. 

"Cryptocurrency is this year's bear market, offering investors an opportunity to purchase cryptocurrency at only a fraction from where it was trading at the end of last year. Currently, Bitcoin is 70 percent off of its highs. Historically, Bitcoin has seen drops over 80 percent and came back seven times to achieve all-time highs. There is a good chance that this will occur again." — Dean Anastos, CEO of BlockChain Developers

7. There's been tremendous institutional buy-in.

"Major corporations and financial institutions have been investing heavily in cryptocurrencies. These are significant steps taken by some of the most influential companies in the world and a testament to how favorable general public opinion is getting." — Patrick Gray, CEO of HashChain Technology

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SunnyJuly 17, 2018
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8min00

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Banking the blockchain is still a beast.

In fact, even nine years after bitcoin birthed blockchain into the world, gaining the support of traditional financial institutions can still be so difficult that not even a fresh round of venture capital, a marquee endorsement from one of the biggest technology companies in the world, and a coveted position on one of the most valuable blockchains proved enough to win support from one federally insured bank.

While today still marks the official launch of a new cryptocurrency exchange, Stronghold, built directly on the Stellar blockchain and complete with its own digital asset called a stable coin, the launch last night made a sudden, last-minute change.

The San Francisco-based startup last week announced a $3.3 million investment, has the firm endorsement of IBM, which says it wants its clients to use the token, and was billing itself as one of the first venture-backed entities on the Stellar blockchain to become an “anchor,” meaning it can hold cryptocurrency deposits and issue credits.

But during research for this story, Forbes learned that the federally insured Signature bank, which both IBM and Stronghold were expecting would custody the U.S. dollars that back the crypto-tokens, had gotten “cold feet,” as one IBM representative put it, and would no longer be providing the service.

“Signature has declined to be mentioned in the release as a result of the language around stable coin,” said Jesse Lund, the head of IBM’s blockchain services. A stable coin is a cryptocurrency designed to avoid the fluctuations of most blockchain assets by tying them to baskets of other assets, or in this case, a more stable fiat currency. “I don’t know any more details.” 

How Stronghold got here is a case study in how difficult it can be to break into the $273 billion cryptocurrency market, even with a significant support structure.

As recently as last week, Lund says, his team at IBM took a phone call from Signature, and there was no immediate reason for concern. But when Forbes reached out to the New York-based company to get further details, a representative explained that while the bank “has a banking relationship with the company,” it would not be dealing with stable coins.

“Signature Bank was never part of a plan to custody the funds,” the representative said. The company declined to share further details.

While cryptocurrency startups have long had difficulties opening bank accounts to hold the revenues they generate, this instance is unusual in that at least some of the services that were denied the firm included holding U.S. dollars that backed the cryptocurrency itself.

Not to be deterred, Stronghold says its launch of a stable coin backed by U.S. dollars, is proceeding in partnership with Prime Trust, a Nevada-based trust company and qualified custodian dealing with cash stocks, bonds, cryptocurrencies and real estate.

“We are working with Stronghold and acting as trustee for them,” confirmed Prime Trust CEO, Scott Purcell. “As well as providing other services.” In particular, the trust that holds most of its funds at US Bank is performing anti-money-laundering services for Stronghold, helping create the tokens, and working with customers to move funds into trust via ACH, wire, check, and cryptocurrency.

Stronghold itself will let its users send and receive bitcoin, ethereum, and Stellar’s native asset, the lumen (XLM), at the time of launch. The stable coin will be available for purchase by commercial banks and more at the time of launch, with further access expected to open up to retail investors at a future date.

In spite of the difficulty of getting a licensed bank to actually custody funds, Stronghold CEO, Tammy Camp expects that the ability to merge the stability of fiat currency with the speed of cryptocurrency will someday appeal to more than just commercial banks, but to central banks themselves.

“The settlement can happen in three to five seconds,” said Camp, who previously worked at Stellar. “Whereas if you were to use something like Transferwise it would take several days, because it would have to go through all the correspondent banking to settle.”

While anyone can download the software to become a Stellar anchor, each entity that does so must grant permission to the others in order to do business, making the blockchain a hybrid of sorts between publicly available platforms like bitcoin and permissioned platforms popular among enterprises.

As a result, Stellar’s lumen cryptocurrency now has the seventh-largest market capitalization with a $4.4 billion valuation, and like ethereum can support the creation of any number of digital assets. So far, there are about 20 stellar anchors and about 3,000 assets that have been created, including for mobile-minutes, loyalty points, and a number of international currencies, according to Lisa Nestor, Stellar’s director of partnerships.

But this is only the second anchor that Nestor says is issuing U.S. backed tokens. Following just weeks on the heels of the White Company, which launched a similar stable coin last month, the director says the two launches mark a transition for the blockchain platform.

“USD is really the bridge currency, and it’s really what a lot of institutions want to use,” she said. “For all the Stellar partnerships, it’s a huge value add.”

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SunnyJuly 17, 2018
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4min00

IBM has teamed up with financial technology start-up Stronghold to launch a cryptocurrency that’s pegged to the U.S. dollar.

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The tech giant has put its weight behind a so-called “stablecoin,” a digital token that, in principle, is tied to an existing government-backed currency, in order to reduce the volatility associated with virtual currencies.

In this case, the cryptocurrency, called “Stronghold USD,” is backed by Federal Deposit Insurance Corporation-insured U.S. dollars, IBM said Tuesday, with reserves being held by blockchain-focused asset manager Prime Trust.

IBM said it will experiment with the virtual greenback to explore ways of helping banks and other financial institutions process payments faster and more securely. The aim of stablecoins is to reduce the volatility that is commonplace in the cryptocurrency market.

But it follows much controversy surrounding a well-known stablecoin known as tether, which has been accused of being used to prop-up the price of bitcoin during last year’s spike in value.

Tether is also a contentious subject in the cryptocurrency world due to concerns surrounding its U.S. dollar reserves. The fear is that Tether Limited, the company behind the tether coin, does not hold enough dollars to account for the number of tokens in circulation.

The move marks a further push by the decades-old IT powerhouse into the world of cryptocurrencies and blockchain technology. Blockchain networks are the virtual ledgers on which cryptocurrency transactions are recorded.

Earlier this year, IBM teamed up with environmental tech start-up Veridium to turn carbon credits — tradable instruments aimed at reducing greenhouse gas emissions — into digital tokens. The company also uses blockchain firm Stellar’s digital tokens, lumens, to enable faster payments between a consortium of banks.

IBM said Stronghold’s stablecoin will rely on the platform developed by Stellar, which was co-founded by former Ripple executive Jed McCaleb in 2014.

Big Blue’s blockchain is different to the original one that underpins bitcoin. Whereas the bitcoin blockchain is public and allows anyone to participate, IBM’s only allows a certain number of trusted parties to use it.

The entire cryptocurrency market is currently worth more than $270 billion, according to industry website CoinMarketCap. It has seen a significant downturn since the start of the year, with the world’s best-known digital currency, bitcoin, falling steeply from its record high near $20,000 late last year to around $6,700 as of Tuesday.

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SunnyJuly 16, 2018
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4min00

The Financial Stability Board set out its framework for monitoring cryptocurrencies like bitcoin.


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Global financial regulators are now keeping an eye cryptocurrencies like bitcoin, having published their framework for monitoring stability implications within the market.

The framework was established to allow the Financial Stability Board, which helps G20 countries coordinate policy, to catch stability risks early, Reuters noted.

The cryptocurrency sector has sat in a regulatory gray area, with a lack of clarity as to which financial rules apply.

Reuters highlights the volatility of cryptocurrency prices and the fact that startups have begun issuing new digital currencies via initial coin offerings (ICOs) as factors in the FSB getting involved.


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“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the board told Reuters in a statement on Monday. “The use of leverage, and financial institution exposures to crypto-asset markets are important metrics of transmission of crypto-asset risks to the broader financial system.”

Last week, Chinese police shut down a World Cup gambling ring that was hosting $1.5 billion in cryptocurrency bets. The bust came after the country banned ICOs last September, saying scams had “seriously disrupted economic and financial order.”

However, the market continues to develop elsewhere. CNET checked out the Sirin Finney, one of first blockchain phones, last week. It boasts a hidden pop-up screen for cryptocurrency security.

In June, Facebook started allowing some advertisements for cryptocurrencies, but still prohibits ads promoting options and ICOs.

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SunnyJuly 16, 2018
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5min20

The price of bitcoin surged Monday after a report said that BlackRock has set up a working group to explore ways of taking advantage of the cryptocurrency market.

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The world’s most valuable virtual currency by market value jumped more than 4 percent to around $6,612, according to industry website CoinDesk, which tracks prices from a number of different exchanges.

The prices of ethereum and ripple, the second and third-largest digital assets by market capitalization respectively, also got a boost. Ethereum was up by more than 5 percent while ripple jumped 4 percent.

London’s Financial News newspaper, citing two unnamed sources, said that BlackRock has formed a team from different parts of the business to investigate cryptocurrencies and blockchain, the technology that underpins them.

According to one of the sources, the asset management giant will study whether it should invest in bitcoin futures. The sources also said that BlackRock’s working group will keep a close eye on what its competitors are doing in regard to cryptocurrencies and blockchain.

“Like most financial institutions, BlackRock has a working group that meets periodically to exchange information on blockchain and consists of employees from various parts of the business,” a spokesperson for the company said in an emailed statement.

“We have been looking at blockchain technology for several years, recognizing potential for shared processes and data across market participants, clearing, settlement and reconciliation and simplified securities issuance.”

CNBC understands that the working group is not a new development and has, in fact, existed since 2015.

The news follows a report by Fortune magazine that hedge fund billionaire Steve Cohen’s venture arm Cohen Private Ventures invested in Autonomous Partners, a cryptocurrency-focused investment fund.

Many industry experts believe that increased involvement from institutional investors in the cryptocurrency space will boost confidence in an otherwise dubious market.

Virtual currencies have been shrouded in doubt due to excessive volatility in the market resulting in wild price swings. Bitcoin soared close to $20,000 late last year, but has declined since, with transaction volumes falling significantly.

Financial regulators around the world are concerned about the speculative nature of cryptocurrencies, and their possible use for illicit activities. China and South Korea have both banned a practice known as an initial coin offering (ICO), for instance, which is a means of start-ups selling new digital tokens to propel their business.

The report will come as a surprise to many, as BlackRock’s Chief Executive Larry Fink has previously railed against bitcoin, calling it an “index of money laundering.”

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SunnyJuly 16, 2018
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2min00

Popularly known as “Hedge Fund King,” Steven Cohen is now all ready to enter into the crypto business by making investments in cryptocurrency-focused hedge fund Autonomous Partners through his VC firm Cohen Private Ventures. The exact amount of donation and terms have not been disclosed by any of the company yet.

Arianna Simpson, a venture capitalist with a history in the bitcoin space founded Autonomous Partners sometime last December. Several high-end firms and individuals like Coinbase CEO Brian Armstrong, Union Square Ventures, and Craft Ventures have already made a big undisclosed amount of investments in Autonomous Partners.

However, as per a report by Coindesk, this is not the first time Cohen Private Ventures has invested in Simpson’s projects. Her venture fund, Crystal Towers Capital, had previously received an investment from the VC firm sometime back in 2015.

As entrepreneurs have shifted focus to satisfy the increasing demand from traditional investors, the Cryptocurrency-focused hedge funds have rapidly grown in number over the last year.

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As per data from Autonomous Next, 175 crypto hedge funds were established as recently as 2017 from an estimated 251 crypto hedge funds with $3.5–$5 billion of assets under management.

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SunnyJuly 16, 2018
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10min30

If you’re thinking cryptocurrencies have been an embarrassing speculative fad full of shady offshore players you’d be largely right – but we are also now arguably at the end of the beginning and moving into a far more interesting era. If you’re also old enough to remember the early stages of the dot com frenzy in the mid 90’s you’ll remember a similar scenario: Outrageously ambitious business plans based on unproven new technology and markets, endless hand waving self promoters and scammers confusing perceptions of reality, cliques of technology experts, VC’s and suits pumping up their market segment positions.

The naked greed and quick buck speculative atmosphere around cryptocurrencies resembles the rapid rise of the web 1.0 dot com era – from ugly, confused and often corrupt beginnings rose the industry that today dominates the world and the financial markets. Just look at mid 1990’s print magazine articles and TV shows – before everyone was on the internet – for evidence.

I recently met with the organizers of next week’s Distributed2018 conference in San Francisco to get their perceptions of where we are after the recent speculative bubble deflations around bitcoin and other cryptocurrencies. In my opinion speculative frenzy has overshadowed far more fundamental shifts in the maturation of a space which in certain important areas is rapidly gaining sophistication, scale and security. The irony of our meeting up to discuss this in downtown San Francisco’s post Amazon retail apocalypse of empty store fronts, victims of the crushing success of the dominant online sales platforms, wasn’t lost on any of us.

Distributed2018 is an interesting event, and a laudable effort to help east to collaborate and share thoughts with west in San Francisco CA, with significant participation from Chinese, South Korean and Japanese conference organizers and attendees. The organizers are striving to create a credible discussion forum nucleus for the serious side of cryptocurrencies, blockchain and smart contract business logic in a world awash with hype, hustle and zero calorie content events.

The organizers feel we have definitely been through a reality check phase around cryptocurrencies, with a lot more hard questions being asked around investment in previous generation of Initial Coin Offerings (ICO’s) and more importantly upcoming launches. Just like in the early dot com days the rear view mirror makes for some pretty bizarre viewing of the routes taken to get to where we are today (misinformation, speculation, hyperbole and mis-steps) but the route forward looks very interesting indeed as the space matures and regulation around the world begins to start to catch up. More importantly, serious financial market interest is building around ‘old money’ onshore regulated investment in credible ventures.

Crowdsourcing – Kickstarter projects etc – were originally a Web 2.0 phenomenon to help quickly fund ventures via lots of small contributions from interested parties worldwide, instead of the slower route of pitching angel investors and venture capitalists. ICO’s crowdsourcing origins subsequently grew to be a mutant monster of this approach, and just like the dot com boom has been driven more by greed than logic with a few exceptions. In my opinion reframing ICO thinking as early stage investment in promising ventures is a healthier way of looking at this going forward, and given the way venture capitalists have been buying the ICO coins of credible start ups to hold stakes in them, this appears to be the way of the future. Many venture capitalists are also now writing restrictions on ICO’s into their terms and agreements in order to protect their early stage investments from dilution.

The hard facts are that despite all the endless hype about innovation and start up culture, venture capital, angel investment and corporate budgeting is inadequate in a world that is moving ever more quickly. Investing in ICO coins or tokens as ownership of ‘early stage shares’ in a business entity you believe in is a healthy VC like approach – and just like VC’s If you don’t understand the business model, stay away. The Distributed2018 organizers agree – the pace of innovation and change worldwide needs a new, more agile digital framework to support the speed at which business opportunities evolve and mutate, and the pace is only likely to get faster.

Taking a long view on the maturity of crypto currencies, the world wide web from its infancy is barely 25 years old, the iPhone ignited and quickly matured the smartphone and apps revolution eleven years ago and Facebook – who this summer are rumored to be contemplating a cryptocurrency payments system for use on their platform via a company wide blockchain platform – only reached meaningful scale (launching ‘like’ buttons etc) around ten years ago.

Bitcoin is nine years old, Ethereum launched via crowd sale in 2014, barely four years ago. The short video above amply illustrates the febrile atmosphere around the hundreds of ICO’s that launched in 2017 – the cause now of this years’ dot com like reality check.

We’ve just come through an initial period of ICO pyramid and pump and dump schemes that have been all to similar to early stage dot com scams. Decentralized applications (‘Dapps’) have had high market caps but low user numbers, with indexes generating significant revenue from speculators. The big shift has to come though, not least to break the current business monopoly of centralized platforms – Facebook, Google, Amazon – with many anticipating tokenized mobile device Dapps will soon be the next big business wave that disrupts the current platforms deadlock.

Now things start to get interesting – remember the old dot com joke about crazy, loss making startup business plans to sell dog food online? Last year – an age ago in the digital economy – Petsmart bought online dog food vendor Chewy for 3.35bn USD. Similarly, ignore the business maturation and evolution of cryptocurrencies at your peril.

Close to seventy percent of the world’s population own smart phones, but currently only one percent of these smart device owners use cryptocurrencies. Facebook and others are sure to legitimize transactional use of their own currencies to defend their moats, but in my opinion the huge opportunity to decentralize business transactions and incentivize consumers to lock into preferential cryptocurrencies is now looming large on the horizon, and a great commercial engine for the ‘splinter net‘ (both positive opportunities for small players and another platform threat from the giant global corporations). Add in the global implications of the parallel digital explosion in Asia to be explored at Distributed2018 this week, and we have a very interesting new wave of change and innovation looming…

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SunnyJuly 16, 2018
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4min40


This is the first time a full cryptocurrency acquisition has occurred in the industry

CyClean Platform acquired 60% share of IMUSIC THINGS LIMITED which is the holding company of Ketchup Shared Bicycle Platform on 29th of June and signed at Hong Kong Science Park.

This historic event is the first time in the cryptocurrency industry where an acquisition was solely done by cryptocurrency and not cash nor spot goods.

The platform of IMUSIC THINGS LIMITED is called Ketchup. It does not require docking stations of previous shared bicycle models because its bikes have Smart Lock, GPS tracking system, Manager app and buyer-shares-profit-model through its rental services.

Ketchup’s platforms are installed in Hong Kong Science Park and several areas close to Hong Kong’s public transportation. The CEO of IMUSIC THINGS LIMITED, Kenneth Chau is the chairman of Science Park and is well known business man and media magnate in Hong Kong. .

Ketchup bike has smart lock, GPS tracking, app integration, and even two small solar panels for charging to realize the ecofriendly model. It will expand to e-bikes as well with a one battery per person system for smooth managing of battery charging for e-bikes.

Singapore based CyClean Platform already has a strong reputation. It purchased the 60% share using only cryptocurrencies: 50% as CyClean coins and 50% as JPAY coins.

Ketchup was previously approached by one of the largest companies in Hong Kong for shared bicycle but chose to be acquired by CyClean with cryptocurrencies, which indicates the high potential of CyClean Platform and futuristic approach for innovation.

Also at this signing event, movie investment company Brighten signed MOU with CyClean to accept CyClean coins as its movie investment tool.

CyClean’s COO Cooz Komei Tokita says: “In the future, with reward system and coin valuation, we will continue to accelerate the green revolution and protect the health of humanity and our ecosystem.”

“Additionally, the mother platform of CyClean, JPAY platform solved the problem of volatility and confirmation of time for cryptocurrency market in order to make crypto payment gateway (CPG) system possible. Therefore JPAY will be the leading platform in CPG as its first kind.”

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SunnyJuly 15, 2018
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43min60

A Bithumb exchange office in Seoul. Last month, Bithumb said it lost over $30 million worth of bitcoin and other cryptocurrencies in a cyberattack.


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Jean Chung/Bloomberg News

Executives at Bithumb, a popular cryptocurrency exchange in South Korea, sensed something awry last month.

After a rival was hacked earlier in June, Bithumb experienced a rise in failed user logins and unauthorized access attempts, according to an exchange official who asked not to be named. Bithumb added more online security personnel to conduct extensive checks and moved more of its digital currency reserves into offline storage.

It wasn’t enough. On June 19, Seoul-based Bithumb said it lost over $30 million worth of bitcoin and other cryptocurrencies in a cyberattack. It has since recovered some, lowering its loss estimate to $17 million.

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Swiped

Some of the biggest hacks on cryptocurrency exchanges and platforms

#wsj-ai2html-1531516083470 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1531516083470aiAbs position: absolute; .wsj-ai2html-1531516083470aiImg display: block; width: 100% !important; #wsj-ai2html-1531516083470 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-1 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; text-align: center; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-3 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 300; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-4 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-4-5 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 300; color: #323232; margin-top: 1px;

Value of coin loss, in millions

DATE OF HACK

EXCHANGE/PLATFORM

ORIGIN

Japan

Japan

Italy

Hong Kong

Slovenia

Germany

South Korea

South Korea

U.K.

South Korea

Israel

Jan. 2018

Jan. 2014

Feb. 2018

Aug. 2016

Dec. 2017

April 2016

June 2018

April 2017

July 2017

June 2018

July 2018

Coincheck

Mt. Gox

BitGrail

Bitfinex

NiceHash

DAO

Coinrail

Youbit

Parity

Bithumb

Bancor

$535

$450

$170

$77

$70

$55

$40

$35

$32

$32

$24

#wsj-ai2html-1531516083470 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1531516083470aiAbs position: absolute; .wsj-ai2html-1531516083470aiImg display: block; width: 100% !important; #wsj-ai2html-1531516083470 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-1 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; text-align: center; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-3 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 300; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-4 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-3-5 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 300; color: #323232; margin-top: 1px;

EXCHANGE/

PLATFORM

ORIGIN

DATE OF HACK

Value of coin loss, in millions

Japan

Japan

Italy

Hong Kong

Slovenia

Germany

South Korea

South Korea

U.K.

South Korea

Israel

Jan. 2018

Jan. 2014

Feb. 2018

Aug. 2016

Dec. 2017

April 2016

June 2018

April 2017

July 2017

June 2018

July 2018

Coincheck

Mt. Gox

BitGrail

Bitfinex

NiceHash

DAO

Coinrail

Youbit

Parity

Bithumb

Bancor

$535

$450

$170

$77

$70

$55

$40

$35

$32

$32

$24

#wsj-ai2html-1531516083470 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1531516083470aiAbs position: absolute; .wsj-ai2html-1531516083470aiImg display: block; width: 100% !important; #wsj-ai2html-1531516083470 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-1 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 13px; line-height: 18px; font-weight: 300; text-transform: uppercase; text-align: center; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-3 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 300; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-4 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 25px; font-weight: 500; text-align: right; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-2-5 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 300; color: #323232; margin-top: 1px;

EXCHANGE/PLATFORM

Value of coin loss, in millions

ORIGIN

DATE OF HACK

Coincheck

Mt. Gox

BitGrail

Bitfinex

NiceHash

DAO

Coinrail

Youbit

Parity

Bithumb

Bancor

Jan. 2018

Jan. 2014

Feb. 2018

Aug. 2016

Dec. 2017

April 2016

June 2018

April 2017

July 2017

June 2018

July 2018

Japan

Japan

Italy

Hong Kong

Slovenia

Germany

South Korea

South Korea

U.K.

South Korea

Israel

$535

$450

$170

$77

$70

$55

$40

$35

$32

$32

$24

#wsj-ai2html-1531516083470 position: relative; overflow: hidden; width: px; display: none; .wsj-ai2html-1531516083470aiAbs position: absolute; .wsj-ai2html-1531516083470aiImg display: block; width: 100% !important; #wsj-ai2html-1531516083470 p font-family: Arial,Helvetica,sans-serif; font-size: 13px; line-height: 18px; margin: 0; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-1-0 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 20px; font-weight: 500; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-1-1 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 300; color: #323232; margin-top: 1px; #wsj-ai2html-1531516083470 .wsj-ai2html-1531516083470-aiPstyle-1-2 font-family: Retina,Helvetica,Arial,sans-serif; font-size: 15px; line-height: 18px; font-weight: 300; text-align: right; color: #323232; margin-top: 1px;

Exchange/platform, origin, date of hack and value of coin loss in millions of dollars

Coincheck (Japan, January 2018)

$535

Mt. Gox (Japan, January 2014)

$450

BitGrail (Italy, February 2018)

$170

Bitfinex (Hong Kong, August 2016)

$77

NiceHash (Slovenia, December 2017)

$70

DAO (Germany, April 2016)

$55

Coinrail (South Korea, June 2018)

$40

Youbit (South Korea, April 2017)

$35

Parity (U.K., July 2017)

$32

Bithumb (South Korea, June 2018)

$32

Bancor (Israel, July 2018)

$24

Note: DAO was created by German-based Slock.it.

Sources: Autonomous Research, staff reports

Since 2011, there have been 56 cyberattacks directed at cryptocurrency exchanges, initial coin offerings and other digital-currency platforms around the world, according to an analysis by Autonomous Research, a London-based financial-services research firm, bringing the total of hacking-related losses to $1.63 billion. Some of the biggest hacks occurred at Japanese exchanges Mt. Gox in 2014 and Coincheck this past January. The most recent hack took place on July 9, when hackers swiped $23.5 million worth of cryptocurrencies from an Israeli platform called Bancor.

The increasing frequency of hacks points to the vulnerabilities of cryptocurrencies and the platforms people use to trade them, adding to broader investor worries about fraud and lax regulation of the industry.

Many attacks have centered around Asia, a hotbed for cryptocurrency trading. Four of the seven hacks so far this year have been in the region, with over $800 million worth of cryptocurrencies stolen—already more than any other calendar year. Cyberthieves could be targeting more popular trading venues, a potential risk for investors in the U.S. and elsewhere.

Unlike stock exchanges, which facilitate trading but don’t actually hold securities on behalf of investors, many cryptocurrency exchanges charge fees for trading and also store currencies for their customers. Analysts say that makes cryptocurrency exchanges like sitting ducks. Thieves that manage to break in can do something akin to robbing a bank—getting hold of valuable cryptocurrencies that they can cash out of.

Cryptocurrency exchanges are “easy to breach, with minimum effort and expense from attackers and with maximum return on investment,” said

Robert Statica,

president of BLAKFX, a cybersecurity firm in New York.

Recent cyberattacks have hurt market sentiment. After a steep slide this year, bitcoin dropped further after the Bithumb incident in June. Currently sitting at around $6,300, bitcoin trades near its low for the year and well off its record high near $20,000 established in December.

The hacks are “bad for users, bad for exchanges and terrible for confidence,” said

John Sedunov,

an assistant professor of finance at Villanova University. “If I don’t have confidence in where I’m storing my crypto assets or where I’m investing, how can I really trust any of this?”

Not all investors are ruffled by the hacks. Lee Gui-im, a retiree in Seoul, hasn’t been able to access her cryptocurrency assets for a month after Coinrail, the other South Korean exchange breached last month, temporarily shut down all services. That hasn’t discouraged the 61-year-old from continuing to attend meetups to identify her next cryptocurrency investment.

“Every exchange is in danger of hacks. This isn’t just Coinrail’s problem,” said Ms. Lee as she was leaving a blockchain company info session this past week. “I haven’t lost faith in [crypto] coins—just exchanges.”

There are currently 205 cryptocurrency exchanges in operation, many of which are based in Asia, according to research firm CoinMarketCap.

Chainalysis, a New York-based blockchain-analytics firm, said South Korea has been a ripe area for hackers because of the market’s rapid growth in a short amount of time. The South Korean won is one of the most commonly used fiat currencies for trading cryptocurrencies.

“There simply are many targets there,” said

Kim Grauer,

senior economist at Chainalysis, adding that “some exchanges have not been able to maintain the proper level of defense as they have grown.”

Regulatory gaps in South Korea also make it less compelling for exchanges to step up security efforts, said

Stacy Scott,

managing director at cybersecurity and investigations firm Kroll.

A government inspection of 21 cryptocurrency exchanges in South Korea earlier this year found that no firm met all 85 inspection standards established by authorities, but there is no law to penalize exchanges that fall short.

Bithumb said late June it is working with other exchanges around the world to track down and recover stolen digital coins that may have been moved to other trading venues. Coinrail is planning to resume services on July 15 after a monthlong operating hiatus. The exchange said it has so far recovered three types of virtual currencies that were stolen, but hasn’t disclosed how much it lost. An earlier Wall Street Journal article estimated that $40 million worth of digital coins were taken.

“These are incredibly fragile technologies that are highly vulnerable to attacks,” said

Alan Curtis,

chief executive at a cryptocurrency startup called Radar Relay.

Mr. Curtis’s firm operates a newer type of cryptocurrency trading venue called a decentralized exchange. Launched less than a year ago, Radar Relay operates a peer-to-peer platform that allows people to trade cryptocurrencies with each other directly, similar to how people connect with each other via a site like Craigslist to buy and sell goods and services.

Decentralized exchanges, however, tend to lack liquidity and make up a small percentage of the market’s overall trading volumes, said

Lex Sokolin,

global director of fintech strategy at Autonomous Research.

“I don’t know if there’s a silver bullet that will stop the hacking other than investing significantly in infrastructure and cybersecurity,” he said.

Write to Steven Russolillo at steven.russolillo@wsj.com and Eun-Young Jeong at Eun-Young.Jeong@wsj.com

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