Crypto Hack Takes Crypto Exchange Cryptopia Offline
Another crypto hack has plagued the cryptocurrency space. This time, the New Zealand-based Cryptopia found itself at the center of it. The cryptocurrency exchange announced the news via the company’s Twitter this morning, stating it “suffered a security breach which resulted in significant losses.”
Cryptopia Crypto Hack
— Cryptopia Exchange (@Cryptopia_NZ) January 15, 2019
The exchange’s website is now completely offline, and the company states that it is undergoing maintenance. However, it is more likely that the team at Cryptopia is trying to track down the hacker and figure out how they gained access to the exchange’s system.
The initial hack figures are said to be around 19,000 ETH tokens, worth just over $2.4 million. With previous crypto hacks, these figures have been initially blown out of proportion and often are off from the final, more accurate figures. In addition to the ETH, it has been rumored that 48 million Centrality (CENNZ) tokens have also been transferred from the site to unknown wallets.
The good thing about this crypto hack is that Cryptopia revealed it to investors immediately, rather than trying to hide it. It seems the team at Cryptopia is quickly working on damage control, but it remains unknown at this time when we’ll get official hack numbers.
>> Malaysia Regulates Cryptocurrencies: Traders Must Comply With New Rule
Investors aren’t pleased and are all voicing their opinions on why this occurred.
Crypto Hack Backlash
One investor tweeted:
My first exchange to use was @Cryptopia_NZ but heard bad rumours of its level of security. If they implement $hydro‘s 2FA I might reconsider going back to use it as my main exchange! Safety first before trades 👍👍👍 @HydrogenAPI
— James Morillo (@pinoyfool) January 15, 2019
Another felt that its focus on too many altcoins was its downfall.
I wish you all the best. However, you have listed so many shit coins it was only a matter of time until something like this happened. Staff are always distracted dealing with shitcoins instead of focusing on what matters. That’s what it looks like from an outsiders perspective.
— MacX (@WhiteHayez) January 15, 2019
Still, hacks have happened to a number of exchanges and are a big reason why cryptocurrency hasn’t made its full push mainstream. Until cryptocurrency exchanges get a consistent handle on security and can prove security over a long period of time, institutional investors won’t come close to owning or using digital currencies.
Crypto hacks like this are not giving investors confidence in crypto.
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Malaysia Regulates Cryptocurrencies | New Rules that Must be Followed
Malaysia regulates cryptocurrencies as of today. The new rules affect both digital coins and ICOs (initial coin offerings). Though welcomed by many, the repercussions for those who don’t comply are deemed particularly harsh.
What will this mean for trading?
Malaysia Regulates Cryptocurrencies
The country’s Minister for Finance, Lim Guan Eng, announced that the order to regulate cryptocurrencies and initial coin offerings as securities has come into force—effective today, January 15th.
Launching an unauthorized ICO or exchanging in cryptocurrencies without approval could result in a 10-year jail term and a $2.4 million USD fine:
“Any person offering an ICO or operating a digital asset exchange without SC’s approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10mil [$2.44 million].”
Ouch.
Pro Crypto
Despite the harsh repercussions for illegal trading, Malaysia is predominantly pro cryptocurrency. The minister stated:
“The Ministry of Finance (MOF) views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses and an alternative asset class for investors.”
Trading
So what does this mean for traders as Malaysia regulates cryptocurrencies?
An official framework will be launched by the end of Q1 this year. This will detail the exact regulatory requirements for launching an ICO and trading on digital exchanges in the country. In general, crypto services and exchanges must obtain authorization from Malaysia’s Securities Commission. This body will work with the central bank to ensure compliance.
>> Russia to Avoid US Sanctions with $10 Billion Bitcoin Investment
As stated above, without official approval, traders face serious charges if caught.
The Capital Markets and Services Order 2019
Called ‘The Capital Markets and Services Order 2019,’ the next few months will prove crucial as traders and exchanges work to comply with the new relevant securities laws and seek approval by the commission.
India also recently regulated cryptocurrency. It spent most of 2018 implementing regulations for crypto services in its country.
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Russia to Avoid US Sanctions with $10 Billion Bitcoin Investment
According to a Russian economist with ties to the Kremlin, the superpower is preparing a massive $10 billion USD investment in Bitcoin to replace its US dollar reserves. Russia’s Bitcoin investment is a step to minimize US sanctions on the country.
Russia’s Bitcoin Investment
Vladislav Ginko, an economist at the Russian Presidential Academy of National Economy and Public Administration, said the Bitcoin investment was a step taken to avoid US sanctions on Russia.
Ginko believes that Russia’s decision to hold Bitcoin as a reserve currency instead of the US dollar is a move being made to “protect [Russia’s] national interests” in light of a possible interruption of “US nominated payments flows for Russian oil and gas.”
Russia’s Bitcoin investment is expected to begin in February. Mr. Ginko furthered:
“[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars […]These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin.”
US Sanctions Behind the Bitcoin Investment?
US sanctions have hit the Russian rouble hard. Now the superpower wants to replace some of its US dollar reserves with the world’s largest cryptocurrency by market cap.
>> Are Stablecoins the Future? The Winklevoss Twins Seem to Think So!
Recent US sanctions on Russia came after the poisoning of former Russian military officer Sergei Skripal in London. The former Russian military officer was a double agent for the UK’s Intelligent Services. Two active Russian military intelligent officers attacked Sergei and his daughter Yulia, with a nerve agent.
Russia and Crypto
Cryptocurrencies are very popular in Russia and even receive approval by the country’s President Vladimir Putin. According to Ginko, the cryptocurrency industry accounts for 8% of Russia’s GDP.
The Bitcoin investment is not the only sign of ‘de-dollarisation’ by the country. It has recently bolstered its supply of the euro, Chinese renminbi, and Japanese yen.
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Are Stablecoins the Future? The Winklevoss Twins Seem to Think So!
Are stablecoins the future of crypto? Cameron and Tyler Winklevoss, Bitcoin bulls and Gemini Exchange founders, seem to think so. This morning, an interview was published by Fortune where the twins discussed their first marketing campaign for Gemini.
Stablecoins and Gemini
The famous twins feel digital currency has a bright future, but there need to be banking-style regulations in order for investors to trust it.
“The idea is that companies that build on top of things like Bitcoin should have regulation that’s thoughtful and that doesn’t stifle innovation,” said Tyler on Fortune’s
‘Balancing the Ledger.’ “People believe in the dream of crypto, they just don’t know how to engage in it without getting burned. We’re here to say Gemini’s a place you can do that.”
The newly launched Gemini campaign encompasses just that and is called ‘Revolution Needs Rules.’ The Winklevoss Twins have the ad spread all across Wall Street and have even purchased a full-page in the New York Times.
Crypto has been in quite the bear market the past year, and the twins believe that stablecoins (digital currencies pegged to a fiat currency) are a bright spot for this downturn. It just so happens that the twins have created their own stablecoin for their platform named the Gemini Dollar, pegged to the US dollar. Stablecoins seem to be the new trend among the crypto community, as crypto’s high volatility seems to be its biggest deterrent.
>> Ethereum-Based “Stock” Exchange DX Plagued with Security Issues
However, like Tether (USDT), it is hard to tell if the coin is really pegged to the dollar and how that process even works. The Winklevoss twins explained in their interview that at least 60% of US 100 dollar bills are held overseas. They think this practice could be simplified if the holders just used stablecoins, instead of actual dollars.
With so many new stablecoins in circulation now, it will be difficult to keep up with them all, but the fakes can easily be exposed since they all should hold the same value.
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Ethereum-Based “Stock” Exchange DX Plagued with Security Issues
The highly anticipated Ethereum-based “stock” exchange, DX, launched this week! Despite the vast enthusiasm for the project, problems were immediately discovered regarding the company’s security. The launch on January 7th was only a soft launch, but traders aren’t pleased with the lack of security the platform has initially provided.
Ethereum-Based DX.Exchange Flaws
And we are finally live! Welcome to https://t.co/gavrexaT1d! Register now to start trading! #exchangeyourway pic.twitter.com/QN1joUR6SE
— DX.Exchange (@DXdotExchange) January 7, 2019
At launch, the exchange reported a few outages as the site couldn’t handle the traffic that was being brought to it. What intrigued most investors was DX’s promise that it would have major tech stocks like Apple and Tesla on the exchange from the start. To bypass US security laws, the Ethereum-based exchange is not open to US residents.
However, DX’s CEO and co-founder recently just made claims that the exchange will hit the US sometime this year. How they will get that approved by the SEC is beyond me. Especially considering the public companies being listed on the exchange don’t benefit whatsoever from the listing.
DX’s soft launch exposed an array of issues with the platform that investors weren’t pleased with.
Ouch that one looks bad!!!!!
FA analysis = pretty basic for 2019.
TA = not enough data yet.
Mcap = heavily over valued.
I’d be looking to dump that one for something with way way way better risk:reward. You’ll be lucky to hit a 300% on that during #altszn.— JESSE ℂOUℂℍ (@jessecouch) January 7, 2019
An anonymous trader told CCN that he created a dummy account of the site, in order to test its robustness, and discovered shocking details. Allegedly, the trader found that the request he sent from his browser to the exchange included information about the authenticated token and the user’s details to access the account.
>> Bitcoin Price: Another Sudden Sell-Off After a Steady Month
In addition to the private and public keys, the information included the password reset link. Basically, the trader could fully access any affected account of the user’s account if it wasn’t already logged out of. Furthermore, he found he could access some accounts even after the user had logged out.
The Ethereum-based exchange quickly caught wind of this and took action.
WE SCHEDULED FOR TODAY AT 11:00 AM (ESTONIA TIME ZONE) A MAINTENANCE UPDATE TO IMPROVE OUR PLATFORM FUNCTIONALITY AND PERFORM SEVERAL BUG FIXES AND UPDATES. THE PLATFORM WILL COME BACK FULLY FUNCTIONAL AFTER FEW MINUTES. THANK YOU FOR YOUR PATIENCE
— DX.Exchange (@DXdotExchange) January 9, 2019
Shortly after, DX published a blog post of the incident addressing the patches placed in their security issues. If you live outside the US and were considering trading on the DX platform, I strongly recommend you hold off—for now.
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