Huobi Processed 50% of All PlusToken Withdrawals This Month: Report

Huobi Processed 50% of All PlusToken Withdrawals This Month: Report

To date, Chinese exchange Huobi has processed the highest number of withdrawals from the alleged crypto Ponzi scheme PlusToken’s recent multi-billion dollar moves.

Chinese crypto exchange Huobi has seen the highest number of withdrawals from the alleged crypto Ponzi scheme PlusToken to date, new research says.

Chinese exchanges prevail

New York-based blockchain infrastructure firm Elementus released a study on Aug. 23, claiming that the number of PlusToken withdrawals sent to Huobi exchange has accounted for nearly 50% so far.

As Cointelegraph reported earlier in August, PlusToken apparently began a mass sell-off of Bitcoin (BTC) that may have been to blame for a $400 dip in BTC’s price over a matter of minutes. 

According to the research, PlusToken withdrawals on Huobi amounted to over 4.3 million Ether (ETH) of 9.2 million ETH dispatched. Other popular exchanges for PlusToken withdrawals include another Chinese exchange, which received around 8% of withdrawals, as well as South Korean Upbit, Malta-based OKEx and Gate, another Chinese exchange.

Five largest PlusToken recipients |

Five largest PlusToken recipients | Source: Elementus

Bigger than BitConnect

As previously reported, PlusToken could be the largest crypto exit scam up to this point in history, with an estimated loss of about $2.9 billion. On July 10, Cointelegraph first reported on PlusToken when Vanuatu extradited six Chinese citizens who were arrested in the course of an investigation of an alleged crypto Ponzi scheme on South Korean wallet provider and exchange PlusToken.

According to Elementus, PlusToken’s scheme collected almost $2 billion in Ether alone (9.9 million ETH), while other involved cryptos also included BTC, XRP and EOS. In the study, Elementus anticipated PlusToken to be the largest Ponzi scheme to date, surpassing famous crypto exit schemes such as BitConnect and OneCoin.

Recently, Cointelegraph reported that over $240 million of PlusToken money were moved through four Bitcoin transactions.

Crypto News From the German-Speaking World: Week in Review

Crypto News From the German-Speaking World: Week in Review

From CT auf Deutsch: a highly active BaFin and a bankruptcy filing from an Austrian crypto ATM start-up lead the week’s news from the German-speaking world.

The German-speaking world was highly active as far as crypto was concerned this past week. Among other stories, the German Federal Financial Supervisory Authority (BaFin) issued several items of interest to the crypto community, a new fund for blockchain startups launched in Hamburg and an Austrian crypto ATM service filed for bankruptcy following an armed robbery.

BaFin publishes summary of current regulation

On Aug. 16, the BaFin published a leaflet for issuers of crypto tokens that summarized current German legal standards in the field. By condensing active regulations in such a fashion, the BaFin reportedly hopes to encourage compliance among a new wave of ICOs. In and of itself, this represents a significant courtesy to the industry, but as Cointelegraph auf Deutsch noted, this also streamlines the process on BaFin’s end, reducing the man-hours they must expend communicating with token issuers over opaque policies. 

The BaFin’s effort at clarity contrasts sharply with United States regulatory policy, which experts have noted remains tricky territory for crypto firms to navigate.

BaFin licenses new STO platform

As part of broader international expansion, Luxembourg-based Black Manta Capital Partners has received BaFin authorization to provide security token offerings (STOs) on their blockchain-based platform. 

STOs in Germany answer to the MiFID II Directive on Financial Instruments. Having received their MiFID II license, Black Manta hopes to begin STO services at their Berlin-based subsidiary at the end of Q4 of this year.

Black Manta’s next steps will reportedly be in the Asian market. Specifically, Co-founder and managing partner Christian Platzer cited Singapore as the firm’s next target for local licensing, saying: 

“While Black Manta Capital Partners want to be ‘boutique’ in its beginnings and run ‘handpicked’ STOs only, our strategy is global from day one: the first step is to link Europe and Asia on one blockchain-based investment platform. Therefore we are already looking today into Singapore.”

Austria’s largest mobile provider tests crypto payments

A1 Telekom, Austria’s largest mobile service provider, has begun a pilot program for crypto payment terminals in several of the company’s brick-and-motor outlets. Local startup Salamantex and project partners Ingenico and Concardis are providing the terminals and underlying network.

Customers will reportedly only need to have access to a crypto wallet to be able to make purchases at the test stores using select digital currencies. Regarding the extended testing and roll-out period, Markus Schreiber, head of A1 Business Marketing, said:

“Before the A1 Payment portfolio will be expanded by digital currencies and officially available to business customers, a multi-stage trial will now be carried out, starting with selected A1 shops.” 

A new fund launches in Hamburg to finance blockchain startups

Venture capital Blockrock Ventures has spearheaded a new fund for budding blockchain projects. The fund has reportedly secured 5 million euros and has a goal of 30 million euros. 

The new fund is advertised as focusing more on fostering development and providing accelerator services to startups in their early stages than traditional venture capital firms.

Blockrock Ventures is also reportedly looking for a BaFin license that will allow them to manage funds of over 100 million euros. 

Robbery drives crypto-ATM startup Bitiago into bankruptcy

In some of the more salacious news of the week, a late-July armed robbery of Austrian company Bitiago Crypto Consulting left the firm in dire straits. Two men with rubber truncheons and a gun showed up at the Bitiago’s offices and forced one of the founders to hand over cash, as well as transfer cryptocurrencies to a designated address.

Bitiago had aimed to expand crypto ATM access in Austria, but instead filed for bankruptcy three weeks after the robbery. Company co-founder Andreas Eckhart was reported as saying “You can not continue the business because of the robbery.” Bitiago’s website is already down.

Chainalysis Rolls Out Real-Time Threat Detector for 15 Major Cryptos

Chainalysis Rolls Out Real-Time Threat Detector for 15 Major Cryptos

Chainalysis, a blockchain analytics firm, announces the launch of a real-time compliance alerts solution, with service for 15 cryptocurrencies.

Blockchain analytics firm Chainalysis has launched transaction alerts for suspicious exchanges of a range of cryptocurrencies.

In a post published on the firm’s blog on Aug. 22, Chainalysis announced the launch of alerts for suspicious cryptocurrency transactions in Chainalysis Know Your Transaction (KYT), the company’s real-time anti-money laundering compliance solution. The company also claims that this is the first compliance alerts solution available for 15 crypto assets.

Compliance risk mitigation

The tool is meant to help cryptocurrency exchanges and other financial institutions mitigate their regulatory and reputational risks. Michael Breu, chief compliance officer at major crypto exchange Gemini, is quoted in the announcement:

“As a New York Trust company we are required to monitor transactions on and off our platform. […] Tools like KYT alerts, which provide real time and ongoing blockchain analysis, coupled with Gemini’s own compliance policies, help us meet our regulatory obligations.”

According to the article, the company’s KYT service has always included real-time transaction monitoring for large volumes of cryptocurrency activity to identify high-risk behavior. However, now alerts are generated whenever a transfer involves a risky counterparty and crosses a value threshold.

Major assets supported

Such alerts are divided into Severe, High, Medium and Low based on category, service, direct versus indirect exposure, direction of funds and amount. The supported assets include Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), top stablecoins and ERC-20 tokens such as Tether (USDT), Maker (MKR) and DAI. Chainalysis product VP John Dempsey commented on the development:

“As lawmakers and regulators focus their attention on the industry, it is more critical than ever that cryptocurrency businesses demonstrate compliance best practices. […] Every minute counts when managing exposure to sanctioned entities, hacked funds, darknet markets, and other illicit activities, which is why Chainalysis is investing in fast, actionable alerts to help our customers mitigate risk across cryptocurrencies.”

As Cointelegraph reported at the beginning of July, Chainalysis claims that 64% of ransomware attack cash-out strategies involve the laundering of funds via cryptocurrency exchanges.

Bitcoin Price Fights to Hold $10K Support While Altcoins See Drops

Bitcoin Price Fights to Hold $10K Support While Altcoins See Drops

Crypto markets continued to see red today with Bitcoin price hovering around the $10,000 threshold.

Saturday, Aug. 24 — crypto markets continued to see red today as Bitcoin (BTC) has dipped below $10,000 price mark several times over the past 12 hours.

Only two out of the top-20 coins by market cap are seeing gains over the past 24 hours at press time, including Cardano (ADA) and NEO (NEO), which are up 1.3% and 2.6%, respectively.

Coin 360

Market visualization | Source: Coin360

BTC fights to hold $10K support

Bitcoin is trading at $10,066 at press time, down 3.3% over the past 24 hours. The biggest cryptocurrency has dropped below $10,000 threshold three times over the past 12 hours and dropped below yesterday’s low of $10,078, according to data from CoinMarketCap. Meanwhile, losses over the past 7 days constitute 1.3% at press time.


Bitcoin 24-hour price chart | Source: Coin360

Ether (ETH), the second-largest cryptocurrency by market cap, is down 2.3% to trade at nearly $190 at press time. The top altcoin is up by roughly 2.9% over the past 7 days.


Ether 7-day price chart | Source: Coin360

XRP, the third cryptocurrency by market cap, tumbled 2.2% to $0.269 at press time. As with Ether, XRP is still up 2.1% over the past 7 days.


XRP 7-day price chart | Source: Coin360

Total market capitalization slipped from $270 billion at the beginning of the day to $263 billion at press time. Daily trade volume also tumbled from $52 billion to $49 billion.

Privacy-focused altcoin Monero (XMR) is seeing the biggest losses among top-20 coins by market cap, down nearly 5% over the past 24 hours.

Carney’s call for a monetary system to replace USD

Yesterday, the Governor of the Bank of England Mark Carney said that a digital currency like Facebook’s not-yet-launched cryptocurrency Libra could replace the United States dollar as the world’s reserve currency. Anthony Pompliano, founder of crypto investment firm Morgan Creek Digital Assets, pointed out that the supportive stance to Libra from the British regulator and central bank indicates the rapid adoption of crypto. He wrote on Twitter:

“It only took 10 years for central bankers to go from unaware of digital currencies to calling for one as the global reserve currency. This is moving much faster than almost anyone expected.”

Commenting on Carney’s recent call for a global monetary system to replace the U.S. dollar, crypto and blockchain expert Joseph Young noted that it is a “very interesting time for bitcoin and gold” as the currency war is intensifying alongside rising geopolitical risks. Young added that while Bitcoin’s price short term trend seems to be a minor downtrend, there is a chance that more investors will take a better look at alternative stores of value amid the foreign exchange wars.

Keep track of top crypto markets in real time here

US FTC Settles With Alleged Crypto Pyramid Scheme for $500,000

US FTC Settles With Alleged Crypto Pyramid Scheme for $500,000

The U.S. Federal Trade Commission has settled charges it filed in 2018 against a crypto pyramid scheme involving four individuals, with the defendants paying $500,000.

The United States Federal Trade Commission (FTC) has settled charges it filed in 2018 against an alleged crypto pyramid scheme involving four individuals.

Terms of settlement

According to an official statement on Aug. 22, the regulator permanently banned the defendants from multi-level marketing and misrepresenting investment opportunities and charged a total of over $500,000 as part of the settlement.

In March 2018, the FTC first obtained a court order against Thomas Dluca, Eric Pinkston, Louis Gatto and Scott Chandler that stopped their misleading marketing practices and froze their assets. At the time, the FTC stipulated that the individuals violated the FTC Act by “advertising, marketing, and promotion of purported money-making schemes.”

Referral pyramid scheme

Specifically, the action alleged that the defendants misled investors by promising high returns from paying crypto such as Bitcoin (BTC) and Litecoin (LTC) to sign up for schemes marketed under the names Bitcoin Funding Team and My7Network. The programs represented chain referral schemes, requiring members to constantly recruit new participants to generate revenue, the FTC noted.

The defendants reportedly claimed that Bitcoin Funding Team could turn a $100 payment into $80,000 in monthly income. Eventually, most participants failed to reimburse their initial investments, the FTC stated.

As part of the proposed settlement, Dluca will pay $453,932, and Chandler will pay $31,000. Pinkston also agreed to a $461,035 judgment, which will be suspended upon payment of $29,491, due to his inability to pay the full amount. If he is later found to have misrepresented his finances, he will be required to pay the full amount. The FTC filed the proposed order in the U.S. District Court for the Southern District of Florida.

Earlier this year, the FTC sued startup iBackPack for misusing raised funds of the amount of $800,000 during four crowdfunding campaigns from consumers.

Crypto Custody: Adoption Shortcut or Blockchain Purists’ Nightmare?

Crypto Custody: Adoption Shortcut or Blockchain Purists’ Nightmare?

With Coinbase becoming the world’s largest institutional custodian of digital assets, the crypto community is left to wonder what it means for the industry…

The major digital asset services platform Coinbase has recently announced the long-anticipated completion of a deal that has been in progress since at least May: the acquisition of Xapo’s institutional business. The move projects Coinbase Custody to the status of the world’s largest institutional digital asset custodian, securing more than $7 billion on behalf of over 120 clients globally. According to some estimates, Coinbase could now be holding over 5% of all Bitcoin in circulation.

Xapo, founded by early crypto evangelist Wences Casares and reported to be stashing cryptocurrency in secure vaults hidden in the Swiss Alps, has stated that the decision was prompted by the need to focus on the firm’s core retail exchange business.

The community response in the wake of the news revealed a complex amalgam of sentiments and considerations with regard to the emerging custody concentration dynamics — ranging from excitement for the upcoming onslaught of institutional investors to concern over monopolistic tendencies to excavation of prophecies from Bitcoin’s early days. 

The role of custody

Put simply, custody is a service of securely storing somebody else’s assets in a way that ensures regulatory compliance and allows users to perform operations — such as on-demand retrieval, collection of dividends or collateralizing derivative instruments, to name a few. While keeping track of where and how their money and stocks reside is easy for most individuals, it is a task traditionally outsourced on an institutional scale.

As crypto assets become a prominent part of the financial ecosystem, with institutional actors leveraging immense volumes of cryptocurrency, the question of how to go about storing and handling digital wealth at scale comes to the fore. However different from traditional financial instruments, blockchain-based assets still need to be secured in an organized manner to ensure a comparable level of compliance and protection. 

Alex Lam, co-founder and CEO of digital asset services platform RockX, observed to Cointelegraph that custodians in the crypto space do for institutional actors what hot and cold wallets do for retail investors:

“For large financial institutions and corporations who trade on a much larger scale than regular market participants, the security provided by trusted third parties bearing the burden of custodianship will give these legacy organizations the confidence and certainty they have come to expect in more traditional markets.”

Legitimizing the asset class

In traditional finance, custody is seen as the layer responsible for security and stability of the system, as it ensures that the assets held are both safe and compliant with the existing regulatory frameworks. Many stakeholders of the digital asset domain expect institutional custody to do the same job in the still-volatile cryptocurrency markets, serving as a legitimizing force for the industry in the eyes of both regulators as well as capital-rich financial firms wary to invest in the space.

Charles Lu, CEO of Findora, a blockchain service for building decentralized financial applications, said in a statement to Cointelegraph that he sees maturing custodial services in the blockchain sector as lowering the barriers for institutional investors to enter the market, which is a welcome development:

“Institutional investors require built-in support for automated compliance, as well as security, privacy and transparency. To succeed, the crypto finance ecosystem needs to listen to the needs of the market. Until more regulated, secure, reputable custodians enter the market, widespread institutional investment in digital assets will remain low.”

Tom Maxon, head of CoolBitX’s operations in the United States, emphasized the role that financial regulators play in shaping the custodians’ business, telling Cointelegraph that:

“Custodians tend to be large and reputable firms that are responsible for holding customers’ assets or securities for safekeeping in order to minimize the risk of their theft or loss. As this role is mandated by regulators overseeing the operations of financial institutions, they are unlikely to abandon the use of a custodian to enter into the cryptocurrency realm.”

Maxon added that the role that centralized exchanges currently perform in the crypto space is similar to that of institutional custodians, although such platforms are not particularly well-equipped for this position, saying, “It is widely-known that centralized exchanges are often hacked, making them unreliable and too risky for centralized crypto exchanges to be considered custodians by regulators.”

Interestingly, while many commentators associate the emerging centralized crypto custody trend with the prospect of a more efficient and straightforward regulatory framework for the industry over time, some are worried about the current lack of oversight. 

For one, entrepreneur and investor Roy Sebag pointed out in a tweet how Coinbase has amassed an enormous pool of value without having to go through standard auditing and financial reporting procedures, which would be unimaginable in the traditional finance.

Kevin Sekniqi, co-founder and chief protocol architect at AVA Labs, and Amani Moin, the company’s chief protocol architect for cryptoeconomics, noted to Cointelegraph in a joint statement to Cointelegraph that there are certain scenarios that are likely to engender the increased likelihood of consolidated crypto custody:

“Concentration of custody in and of itself is not necessarily disastrous, but concentration of assets increases the impact of black swan events. Given the lack of clear regulations in the crypto space, this risk is heightened even more than in traditional finance.”

Diverging assessments

As there seems to be some degree of agreement among industry experts with regard to what is happening on the crypto custody front, opinions differ considerably about what the consolidation trend means for the industry. Generally, the valence of evaluations hinges on whether the speaker views the arrival of traditional financial institutions in the crypto space as a positive thing or otherwise.

Jill Carlson, the co-founder of Open Money Initiative, articulated the feelings of the angst-ridden part of the community, wondering if the trend toward consolidated crypto custody was a step in the direction of “recreating the same, broken financial system.” Mike Poutre, managing partner at a blockchain-focused hedge fund Terraform Capital told Cointelegraph that he sees the Wall Street agenda behind the growth of crypto custody sector, saying:

“The big banks and brokerage firms want to introduce custodial relationships so they can produce more products to sell their existing customers. Their motivation is revenue based – pure and simple. Governments want to introduce custodial relationships so they can maintain their control over their citizens — pure and simple. Crypto purists should be very worried. Wall Street will most likely win this. Coinbase’s recent acquisition shows the writing on the wall.”

Lars Seier Christensen, chairman of the blockchain network Concordium, is skeptical about the very idea of outsourcing the custodial function to a third party in the domain of crypto finance. According to Christensen’s statement to Cointelegraph:

“It is a somewhat strange discussion as one of the main advantages with crypto is that you are your own custodian, per definition. Picking an external custodian is just introducing another point of failure and risk. This is only relevant for non-professional players in the industry — which may of course include some institutions that are not very serious about the space. In my view the role of being a custodian is vastly overestimated and there are far too many of those projects out there compared to potential clients.”

Institutional investment vs. ideological purity

Paradoxically, in order to get anywhere close to making the dream of an open, decentralized financial system come true, the crypto industry has to cooperate with the old guard that it aspires to eventually take down. Some experts who spoke to Cointelegraph on the matter saw the expansion of concentrated custody as a compromise between the crypto movement’s foundational ideas and the need to funnel institutional money into the space for the sake of mainstream adoption. RockX’s Lam said:

“Concerns that this marks a centralization of the cryptocurrency market are, to an extent, valid. However, if we are truly dedicated to bringing the cryptocurrency revolution mainstream, it is necessary to welcome institutional actors into the space.”

If the cryptocurrency industry is indeed hoping for institutional investors to join in, then the infrastructure has to be present. Maxon of CoolBitX commented regarding this:

“If we are aiming for cryptocurrency to become a viable alternative to the existing financial system, regulated custodian services will become necessary. With that, however, the industry could come to resemble aspects of the old order to which it was born to oppose.”

Other observers contend that adding a centralized layer on top of the crypto ecosystem’s decentralized foundation is nothing criminal, as Hans Sundby, head of crypto for blockchain protocol Geeq, told Cointelegraph, “A custodian is just a third party that offers a regulatory compliant, secure and efficient way of handling large investments and holdings.” CEO and founder of the Credits Blockchain platform Igor Chugunov told Cointelegraph that custody is something the crypto community will have to accept:

“It is not an attempt to copy someone, it is an attempt to cope with the issues that concern the audience of new investors, which the market of crypto needs. Moreover, we should take into account the strict security requirements demanded by regulators. Application of custody makes sense to me: the end justifies the means.”

Twitter user Oded Leiba noted that the emergence of crypto custodians is in line with the renowned computer scientist Hal Finney’s 2010 prediction that “Bitcoin banks” would arrive at some point, creating an arrangement in which the original cryptocurrency is used for interbank transactions while consumers deal with the second-level, derivative digital asset system. Perhaps far-fetched 10 years ago, such a prophecy doesn’t sound unfeasible today.

Ethereum Is in a Bear Market, But One Analyst Explains Why He’s Long

Ethereum Is in a Bear Market, But One Analyst Explains Why He’s Long

Ethereum is still in a bear market even as Bitcoin continues to post amazing gains. When will the tables turn for the largest altcoin by market cap?

Nowadays, it seems everyone is bearish on Ethereum and its Ether token (ETH) except for Placeholder VC partner Chris Burniske, who, earlier this week, made the case for why he believes ETH/USD is a great long-term investment. 

According to Burniske, the oft-cited narrative that the implosion of the ICO market led to Ether losing its use case is not entirely accurate. Rather, he posits that Ether is going through its first “mainstream bear market, just as Bitcoin did in 2014-2015.” 

Given that hindsight always provides one with a clearer picture of the general trend, Burniske points out that 2014-2015 was the optimal risk-reward period for investors seeking Bitcoin exposure. 

While all of this sounds encouraging, Burniske’s assessment goes very much against the grain of current investor consensus and the plethora of bearish signs exhibited on multiple time frames.

Ether’s trading stance remains bearish 

Ether and Litecoin (LTC) turned bullish in September 2018 and both foreshadowed what was to come from Bitcoin, which at the time was locked in a tight range around $6,500. As shown by the 3-day Moving Average Convergence/Divergence Oscillator (MACD), Ether’s impressive bull run appears to be over.

Picture 1

The MACD crossed below the signal line and dipped below 0 shortly after Ether topped out at $364. According to the negative histogram, it’s been downhill ever since. 

Picture 2

The 55-day moving average (DMA) has also dropped below the 100 DMA, while the 100 DMA is also on the verge of crossing below the 200 DMA on the daily time frame. 

Daily volume is also screeching to a halt as Bitcoin’s dominance continues to rise and Ether’s dominance rate amongst altcoins has dropped from 10.53% to 7.76% over the past 3 months. 

Selling volume is outpacing buying volume on the weekly timeframe and the ETH/USD pair is fast approaching the weekly support at $170. Below this is a precipitous drop to $100, then $80, both of which would be very unappetizing for investors. 

Picture 3


Clearly, traders are placing their long-term bets on Bitcoin instead of Ether. In the past, Bitcoin consolidation after strong rallies led to traders transitioning into altcoins. But now, it seems these investors are choosing to take shelter in stablecoins instead whenever Bitcoin price goes south.

Are Ethereum supporters losing hope?

Ether is essentially teetering on the precipice of uncertainty with a bearish bias. The current weekly Doji candle on the ETH-USD weekly chart below supports this assessment. 

Picture 4

Obviously, it’s going to take more than just a few oversold bounces to restore bullish investor sentiment to the largest altcoin by market cap. 

What’s concerning, however, is it seems investors and blockchain zealots are losing faith in the project and its ability to scale — which could pose a larger threat to Ethereum’s long-term value proposition. 

Growing pains

For what it’s worth, a quick perusal through crypto twitter allows one to gauge brewing negativity among many investors. Namely, core developers being too focused on hard forks, protocol upgrades and philosophical issues instead of ways to increase the value of the Ether. 

Earlier in the year Gnosis founder Martin Köppelmann said that he does “not see ASICs as an existential threat to Ethereum neither is ProgPoW a long term important improvement. In such a case in my view Ethereum HAS TO STAY NEUTRAL and let market forces do its thing.” 

Ethereum Classic technology coordinator Stevan Lohja appears to concur with Köppelmann’s point of view. Lojha tweeted

“ProgPoW isn’t effective. You can’t fairly distribute mining because human production is incredibly unequal. You’ll always have a minority with a disproportionately higher output. Alienating the MVPs on your team could lead to future losses.” 

Furthermore, with IEOs taking the place of ICOs and the transition of most of the largest altcoins by market cap to their own mainnets, the Ethereum network is left searching for a use case that will draw lucrative partnerships and retail investors.

Will a rising tide lift all ships?

Currently, dark clouds are gathering on Ether from multiple vantage points and the saving grace might be an explosive rally from Bitcoin as Ether typically follows BTC price action. 

The ETH-BTC pair is also less than inspiring on the weekly time frame. 

Picture 5

After forming a double bottom at 0.017594, the pairing is flashing a Doji candle, similar to the ETH/USD pair. Popular crypto-twitter analyst Dave the Wave, who is well known for his logarithmic regression analysis, believes that its not curtains for Etherum. 

He opines that investors taking “a major position in BTC and a minor one in ETH covers all bases.”

Picture 6

Ether and Bitcoin price charts in 2017-2019 clearly show Ether is entering a mini bearish spat that will be followed by a period of consolidation in the run up to the next bullish cycle. 

Of course, all of this could be dependent upon Bitcoin breaking above $12,500 again. But it’s also possible that Bitcoin’s market dominance will continue to grow as the 2020 halving event approaches. 

Simply put, Bitcoin’s growing dominance is sucking all the air from the room and altcoins, including Ether, are asphyxiating. 

Obviously, Ether has its users and potential use cases. The Ethereum network has huge capacity and there are a number of prominent projects and institutions using the protocol or investing in Ether on behalf of clients. 

As previously reported by Cointelegraph, the World Bank recently raised an additional $33.8 million from the second round of its blockchain bond offering, which is featured on a private version of Ethereum blockchain dubbed “bond-i.”

This follows the first successful trial by the World Bank of an $81 million blockchain-based bond on the same platform last year. 

The Nasdaq has also expressed serious interest in Ether (and other cryptocurrencies) and the exchange recently took part in a $27.5 million funding venture for ErisX, a crypto exchange offering spot and futures trading for a variety of digital currencies. 

Only time will tell if Burniske is correct about Ether being in a bear market. Long-term investors are hopeful as they patiently waited 15-months for a trend reversal and Ether’s current 2019 all-time high of $364 was exciting but not exciting enough. While it is honorable that Ethereum core developers are dedicated to ensuring that the network is the best it can be there is an old African proverb that perfectly sums up the situation:

“When elephants fight, the grass gets trampled.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

US Man Pleads Guilty to Running $25 Million Bitcoin Laundering Scheme

US Man Pleads Guilty to Running $25 Million Bitcoin Laundering Scheme

A man apprehended for selling two pounds of meth to an undercover agent pleaded guilty to running a $25 million money-laundering scheme using Bitcoin.

A Los Angeles man pleaded guilty to running a $25 million Bitcoin (BTC) money laundering scheme and sale of methamphetamine.

Possible life sentence

News outlet U.S. News reported on Aug. 23 that 25-year-old Kunal Kalra has pleaded guilty to charges including money laundering and distributing methamphetamines. Per the report, he could be sentenced to life in prison.

The authorities allegedly claim that from 2015 through 2017 Kalra exchanged BTC and dollars, ran a Bitcoin ATM and admitted to making deals with drug dealers and other criminals.

Sold meth to an undercover agent

Kalra also reportedly sold two pounds of meth to an undercover law enforcement agent. According to the report, he also faces money laundering charges in Texas, which were filed earlier this month.

As Cointelegraph recently reported, the United States Department of the Treasury has added multiple cryptocurrency addresses to its Specially Designated Nationals (SDN) list under the Foreign Narcotics Kingpin Designation Act, also known as the Kingpin Act.

In July, Treasury Secretary Steven Mnuchin said that the authority will work to prevent Bitcoin from becoming an “equivalent of Swiss-numbered bank accounts.” According to Mnuchin, the government combats “bad actors in the U.S. dollar every day to protect the U.S. financial system.”

Crypto News From the Spanish-Speaking World: Week in Review

Crypto News From the Spanish-Speaking World: Week in Review

A summary of this week’s top news from Spain and Latin America, as covered by our Spanish language version, Cointelegraph en Español.

This week was an important one for crypto adoption in the Spanish-speaking world, with reports of a government ministry working on a token in an Argentinian province and a Venezuelan state airline accepting the country’s controversial Petro coin. 

Here’s the past week of crypto and blockchain news in review, as originally reported by Cointelegraph en Español.

Spain’s first “legal” ICO speaks on regulation

On Aug. 22, Cointelegraph en Español spoke with Daniel Pons Ayala, founder and chief information officer of Spanish startup Cresio. The company claims to be the first legal initial coin offering (ICO) operating in Spain

Ayala shared his perspective on the attitudes of regulators and banks towards crypto in Spain. He said:

“Current regulations, with special reference to the Securities Market Law, do not establish a specific regulation for cryptocurrencies, ICO or STO, but do have mechanisms that can be adapted to these alternative financing mechanisms. Therefore, I would say that at the moment a specific regulation is not necessary, but, taking into account that the crypto ecosystem will grow in the coming years, it will be necessary for the administration staff to have a minimum knowledge to be able to value projects with blockchain base.”

Venezuelan state airline begins accepting the Petro

Venezuela’s Superintendent of Cryptoactives, Joselit Ramirez, announced on Monday, Aug. 19, that state airline Conviasa would begin accepting payment in the Petro, the state’s oil-backed cryptocurrency. 

According to Ramirez, customers should be able to use the Petro app to process payments for plane tickets in a matter of minutes.

The Petro has been plagued by false starts in various applications, with some commentators referring to it as a scam. It is also subject to international sanctions, with United States citizens prohibited from purchasing it, per an order from U.S. President Donald Trump.

Blockchain company expands crypto payments in Panama and Venezuela

Last week, blockchain firm Pundi X partnered with Panama-based company Chainzilla to distribute Pundi X’s cryptocurrency-enabled point-of-sale payment processors in the country. 

Yesterday, Cointelegraph reported on Pundi X’s further expansion of services at Venezuelan department store chain Traki’s 49 outlets. 

Province in Argentina to develop cryptocurrency

In Argentina, the Ministry of Industry of the Province of Misiones is reportedly working to develop JellyCoin, a token designed to streamline the province’s waste management system. JellyCoin is part of the broader Hive Project, which aims to link people with waste with industries that may have some use for that waste. 

Instability in Argentina’s economy has led to famously widespread demand for decentralized cryptocurrencies.

Poloniex Pledges to Reimburse Flash Crash Losses, Victims Displeased

Poloniex Pledges to Reimburse Flash Crash Losses, Victims Displeased

Poloniex is making moves to cover its losses from the CLAM flash crash, but questions remain about the accountability of margin borrowers…

When a financial system like the crypto market lacks liquidity, a crash becomes inevitable. This was the case at the margin trading marketplace hosted by U.S.-based crypto exchange Poloniex toward the end of May, when the value of a lesser-known crypto asset, CLAM, experienced a sudden, sharp crash. This resulted in the generalized loss of approximately 1,800 Bitcoins (BTC).

In what is its second attempt to make things right, Poloniex has said recently that, beginning later in August, it will start recovering the losses of the margin traders. The exchange will begin the trading fee holiday by crediting the affected users with the trading fees they’ve incurred since July 6, adding that the users in question “will see a repayment tracker in your account soon.” The first step of recourse from the exchange came on June 14, when it said it had distributed 180.73606744 BTC proportionately across affected lenders.

How did the crash happen?

Source: Coin360

Source: Coin360

On May 26 at about 20:15 UTC, the price of CLAM had begun falling from around $19.40, and on the same day, just over two hours later, it fell by nearly 80%. This kind of event — during which the value of an asset dips sharply within a short period — is called a flash crash. 

The given flash crash resulted in the loss of funds belonging to margin lenders, who typically placed a desired portion of their BTC up for margin traders to borrow in return for interest. Poloniex has a lending pool, in which it aggregates funds that lenders have put up to match the orders from margin traders.

According to the exchange, the loss to the lending pool occurred because the CLAM market lacked sufficient liquidity to allow the automatic liquidation of CLAM margin positions while the market was crashing rapidly. It added that a significant portion of the total CLAM margin positions was collateralized in CLAM itself, meaning that the values of both the margin positions and the collateral were dropping simultaneously.

Related: Margin Trading, Explained

The first step that Poloniex took was to freeze the accounts of the borrowers — margin traders — who defaulted until they return the owed amount. The exchange has also started removing CLAMS, along with three other tokens — BitAsset (BTS), Factom (FCT) and MaidSafeCoin (MAID) — from margin trading. The exchange also said its NICE/Actimize’s market surveillance tool, which launched on June 1, will help to monitor the market more efficiently by looking for similar flash crashes. Circle’s spokesperson went on to say in an email to Cointelegraph:

“It [the surveillance tool] is one of many new tools we have to help us respond immediately to potential problems in other margin markets, and it will help better protect our customers. In addition, we’ve added new procedures to monitor risk in margin markets, implemented new market protections to prevent major slippage and over-concentrated positions, added new staff to monitor risk, and removed margin trading for assets with low liquidity.”

A company spokesperson added that the trading holiday is only one of the steps the exchange is taking in its commitment to reimburse the impacted users:

“We are rebating impacted lenders 100% of their trading fees. Next, we plan to rebate impacted lenders 100% of their lending fees.”

How is Poloniex dealing with it?

Some users are displeased with how Poloniex generalized the loss, with some users claiming the exchange stole their funds because they didn’t have active margin loans on the day of the crash. In an email to Cointelegraph, a company spokesperson wrote:

“Based on an extensive analysis and deliberation, we came to the conclusion that given the way the Poloniex peer-to-peer (P2P) margin lending system works, the most responsible way to realize the loss was to generalize it proportionally across lenders. In this system, like other P2P margin lending systems, lenders do not choose individual borrowers. Most lenders and borrowers participate in the market consistently over time with loans turning over rapidly within the pool. At any given time, which lenders and borrowers have been matched is arbitrary.”

The exchange spokesperson added that the exchange attempted to rectify the issue right away:

“We worked to ensure the loss was realized as quickly as possible technically, at which time the lenders in the pool were impacted since they had loans outstanding. At the time the loss was realized, it was possible that any of the lenders with open loans were matched with a defaulted borrower at the time of that borrower’s default.”

David Silver, an attorney with a specialty in securities law, told the media that it’s illegal to socialize losses in the United States, and Poloniex could be attracting a legal battle as a result of its approach.

Despite the seemingly illegal status of the approach Poloniex took, it remains unseen how legal action would unfold. A case of socialized loss in margin trading is rather nonexistent in the traditional financial industry. In margin trading of traditional assets, the brokerage firm is the lender as opposed to retail investors in the crypto space.

Lending on Poloniex is essentially peer-to-peer in nature. This could add a new dimension to a potential legal battle because there are peer-to-peer lending regulations in many developed markets, including the U.S. However, the exchange states that it doesn’t offer margin trading to users in the U.S.

How have the affected traders reacted to Poloniex’s moves?

Cointelegraph has reached out to affected lenders on Reddit for their views on the moves the exchange is making to remedy the loss, and the consensus is that they’re unsatisfied. Please note, there is no confirmation if the respondents were indeed affected.

Reddit user geopo321 wrote:

“If Poloniex were operating in any regulated financial space, they would not be allowed to get away with this. They are simply taking advantage of the fact that there are no regulations or standards for them to abide by set by the industry. Instead of keeping payback as a high priority, they have pretty much deemed it as the lowest priority and taken the minimum amount of steps to try and appease affected parties.”

Reddit user kan3nas wrote:

“Poloniex socialized losses, that is unacceptable for any crypto exchange. I believe they keep hiding behind the fact that lending was only available for non-US citizen, therefore, it is very difficult for any of us to lawyer up.”

Reddit user nejelnejel wrote:

“Most lenders are hodlers. We don’t trade too often. Secondly after the haircut most of as withdrawn funds from Poloniex as we consider the exchange risky. So reimbursement equal to trading fees isn’t any reimbursement for us.”

Improving as time goes on

The Poloniex crash and subsequent loss beg the question about how exchanges designate the margin trader status to users and the processes that surround the vetting procedures. Responding to a question about how Poloniex approves users for margin trading, the spokesperson said:

“Like other crypto exchanges, we don’t have an additional approval process. However, we offer a low degree of leverage compared to peer exchanges and many of our users who trade on margin on Poloniex are heavy traders that use margin primarily to hedge their trading positions.”

In traditional margin trading, refusing to meet a margin call could hurt the trader’s credit report, making it hard to access credit elsewhere. In some cases, the broker could trigger a universal default, which allows other lenders to raise the defaulter’s interest rate. These measures discourage margin borrowers from defaulting. 

With a very minimal link with the traditional financial world, crypto margin trading doesn’t offer that level of security. Poloniex said it couldn’t go into detail on ongoing efforts to recover funds but says it is pursuing several avenues and is committed to recovering as much of the funds as possible.

Ex-Morgan Stanley Exec Joins His Former Colleagues at Shenzhen Crypto Firm

Ex-Morgan Stanley Exec Joins His Former Colleagues at Shenzhen Crypto Firm

Chinese cryptocurrency company Amber Group recruited ex-Morgan Stanley Asia head of derivatives Jeffrey Wang.

Former Morgan Stanley Asia head of derivatives Jeffrey Wang officially joined Amber Group, a Shenzhen-based cryptocurrency company.

As Bloomberg reported on Aug. 23, Wang will operate out of Vancouver as the head of Americas for Amber. According to the article, he previously worked at Morgan Stanley with four out of the five Amber’s founders, and two of them — Wayne Huo and Tony He — used to report directly to Wang.

No rest for the crypto market

This decision reportedly bought Wang back to work after taking the past three years off. He explained that the idea of a fast-growing nascent industry where his experience will be useful is what convinced him to join Amber, adding:

“As the more mature traditional markets are continuing to see compressed margins and moving to automation, the crypto financial market is still in its infancy.”

Artificial intelligence for trading

Amber Group reportedly started in 2015 as a side project for four traders at Morgan Stanley — Michael Wu, Tiantian Kullander, Huo and He — and Bloomberg LP developer Thomas Zhu. They began working on the project full-time in 2017. Amber’s aim is to explore machine learning for trading.

As Cointelegraph explained in a dedicated article published in November last year, artificial intelligence and machine learning could help various trading bots to constantly evolve and develop.

Can Blockchain Become an Integral Part of Autonomous Vehicles?

Can Blockchain Become an Integral Part of Autonomous Vehicles?

Blockchain technology is driving the development of autonomous vehicles and their communication with the world around them.

A decade ago, the thought of self-driving cars was far from reality, but with 2020 looming large, massive strides have been made in the field of autonomous vehicles. Meanwhile, in the space of a decade, Bitcoin has thrust cryptocurrencies and blockchain technology into the mainstream consciousness. The latter has become a tool that is quickly being integrated into the world of finance, governance, logistics as well as the motor industry.

Some of the world’s leading automobile companies have been exploring the applications of blockchain technology and how it can be used to improve vehicles, the systems that operate them as well as how they interact with the world around them.So how is blockchain being used to drive the development of autonomous vehicles around the globe?

Machine-to-machine communications

As recently as August 2019, Daimler carried out a test run in which trucks made machine-to-machine payments using a blockchain platform without any human interaction. Frankfurt-based bank and financial services firm Commerzbank tested payments between the trucks and electronic charging points, which were settled using the blockchain technology. 

The banking firm tokenized euros, which were then used by Daimler to test and process the payments using the pilot platform. The success of the project could be a potential driver for the use of blockchain technology to facilitate settlement systems for autonomous vehicles. 

While this is the latest instance of blockchain-powered autonomous vehicle interaction, there have been a number of major projects that are leveraging blockchain technology to store and use vehicle data. 

Back in May 2018, the Mobility Open Blockchain Initiative (MOBI) was launched by a joint venture made up of over 30 companies, headlined by major automobile companies BMW, General Motors, Ford and Renault. 

The principal work of the project was the creation of the MOBI Vehicle Identity Standard, which is looking to create a blockchain-based database for Vehicle Identity Numbers, which goes further than the current system that is used to register newly created vehicles.

By storing data on a blockchain, digital certificates for information including vehicle identity, ownership, warranties and current mileage can be securely stored in an electronic wallet. This data will be immutably stored on the blockchain and cryptographically verified. The vehicle can then communicate with various networks and pay for parking or tolls autonomously. 

The data of the vehicle can only be accessed by permissioned parties. This would then allow service providers and government entities to verify credentials and track certain data in real time. This connection with the world around the vehicle will also allow for digital currency transactions to happen autonomously in a cryptographically secure network.

It is an ambitious project but it is easy to see the benefits for the industry. A shared but secure database of vehicles that can interact with the world in real time could be useful to a number of industries, from dealerships and service departments to vehicle insurance companies.

Aside from its involvement in MOBI, GM has been making its own moves to use blockchain technology. In December 2018, the company filed a patent for a blockchain-powered solution to manage data from autonomous vehicles. 

The patent builds on an original filing back in 2017 and sets out in detail how the platform would work, allowing the distribution and communication of data between autonomous vehicles and services and facilities on roadways or in cities. 

GM’s patent suggests that a blockchain system would be best suited for this type of information sharing. The range of data shared would be anything from navigation, charging and refueling services, validity of licenses as well as recording balances for payable services like tolls and parking.

The American vehicle manufacturer isn’t the only company looking to develop technology in this vein. Multinational IT giant IBM is well known for filing patents for future blockchain-based projects, and it has made some big moves in the field of autonomous vehicles as well. 

In April 2019 the company filed a patent for a project that would allow it to manage data and interactions for self-driving vehicles using blockchain tech. This specific patent outlines technology that would allow autonomous vehicles to identify nonautonomous vehicles around it and predict their behaviour based on data from those vehicles’ driving record.

When making use of the blockchain technology, other users data remains secure, but autonomous vehicles can access the information in order to improve their navigation on the road. Only authorized parties would be able to access this data in real time, because it is cryptographically secure.

A practical example would be an autonomous vehicle driving on a highway. As it progresses, it can scan the license plates of nearby vehicles with sensors in order to access the necessary data using a blockchain-based application. 

Payment solutions for autonomous vehicles

Blockchain technology and cryptocurrencies have proven their worth as disruptive payment alternatives, and this very application is one that is being actively developed for use by autonomous vehicles.

In July 2019, Daimler announced that it had partnered with a blockchain startup to develop a hardware wallet solution for vehicles. The solution is a blockchain-based platform that would allow for the use of vehicle identities to process secure transactions on a blockchain ledger.

The end goal is to provide a software solution that will power a marketplace for vehicles that goes further than just autonomously paying for tolls or parking. The platform could be used for ride-sharing and secure exchange of traffic information to alleviate congestion.

Alternative solutions

The applications of blockchain technology are seemingly endless, and creative ideas have led to some ingenious use cases. For example, in May 2019, a research project was announced involving Honda and General Motors that would look into the interoperability between electric vehicles and smart power grids. The project is working under the scope of the aforementioned MOBI consortium.

The project will explore the possibility of using electric vehicles to stabilize the supply of energy in smart grids. The parties hope to develop a platform that will see electric vehicle users earn rewards for storing power and exchanging it with the grid when needed.

An academic perspective

The examples of blockchain’s use cases in the development of autonomous vehicles and the improvement of their processes is clear to see. Alejandro Ranchal-Pedrosa, a researcher in blockchain technologies at the University of Sydney, has done significant research in the space. 

Having co-authored a published use-case paper on blockchain technology for autonomous vehicles, the researcher told Cointelegraph that the applications of the technology in the automotive industry are plain to see, from payments per transport or unit of fuel, data-sharing for traffic and better transport to insurance.

Ranchal-Pedrosa believes there is one major hurdle to overcome in the use of blockchain tech in autonomous vehicles:

“It is understandable that the industry is taking its time, mainly, in my opinion, due to the scalability problem of blockchains and the latency requirement for autonomous vehicles which is why in most cases the automobile industry would leverage offchain protocols, when possible. We showed how offchain protocols and its fully trustless exchange of infinitesimally fragmentable goods give the possibility of new applications to the industry.”

It is difficult to identify the most beneficial use case of blockchain technology considering the massive potential and variety of possible uses. Various industries will tailor the technology to serve their greatest needs, but Ranchal-Pedrosa believes the most popular use case in the field of autonomous transport will be for transactional exchanges:

“The biggest influence is without any doubt towards the possibility of exchange of goods on-the-go, in a trustless manner. Insurance companies may or may not find blockchain technologies as the best fit for their services, but trustless exchange of transport (sort of a carpool in which you can sign a contract with literally anybody to pay per kilometer), fuel, or any other product/service seems to me like a perfect fit for the current industry, and especially the future autonomous vehicles and machine to machine communications.”

Telx Technologies Launches First Crypto-Facilitating SIM Card

Telx Technologies Launches First Crypto-Facilitating SIM Card

Telecommunications company Telx Technologies announces the launch of the first cryptocurrency SIM card wallet that enables transactions via SMS.

Cryptocurrency and telecommunications company Telx Technologies announced the launch of the first crypto SIM card wallet that enables transactions via SMS.

According to the company’s Medium post published on Aug. 22, the card allows its users to send cryptocurrencies via SMS with their dedicated crypto phone number. Notably, these transactions do not require a smartphone or an active Internet connection. On the other hand, the system also offers no control over a user’s crypto wallet.

Crypto transactions on “dumbphones”

As the crypto community tried to teach those new to the space during the “Proof of Keys” event in January, there are significant disadvantages in not having direct control over a wallet. More precisely, placing one’s assets in a wallet managed by a third party forgoes the trustless, decentralized and disintermediated nature of the technology involved, according to many crypto enthusiasts.

That being said, having your private keys managed by a third party often enables a higher degree of user-friendliness. Telx also mentioned this in its announcement:

“At Telx our goal is to make transacting digital currency as easy and accessible as possible. This means creating solutions that technical and non technical people alike can adopt. We believe there is tremendous synergy between payments and messaging.”

Everything new is well-forgotten old

Per the Medium post, the crypto SIM card is available in over 180 countries, allows unlimited SMS messaging and supports Bitcoin (BTC), Litecoin (LTC), DASH, Zcash (ZEC) and Bitcoin Cash (BCH). To execute a crypto transaction via this service, its user can send an SMS to any phone number.

Lastly, the company promises to prevent SIM swapping and phone number porting, to accept transactions originating only from the proper SIM card, to protect the wallet with a dedicated PIN number and to provide backup keys in case of a theft or loss.

As Cointelegraph reported in May, Sean Coonce, engineering manager at cryptocurrency custodian BitGo, announced that he became a victim of a SIM swapping hack.

Bitcoin Hovers Around $10,130 as Altcoins Suffer Minor Losses

Bitcoin Hovers Around $10,130 as Altcoins Suffer Minor Losses

Most of the top 20 cryptocurrencies are suffering moderate losses on the day while Bitcoin hovers around the $10,130 mark.

On Aug. 24, most of the top 20 cryptocurrencies are suffering moderate losses on the day while Bitcoin (BTC) hovers around the $10,130 mark.

Market visualization

Market visualization courtesy of Coin360

Bitcoin price is currently down by 0.6% on the day, trading at around $10,130 at press time, according to Coin360.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

Ether (ETH) is holding onto its position as the largest altcoin by its market capitalization, which currently stands at $20.5 billion. The second-largest altcoin, Ripple’s XRP, has a market cap of $11.6 billion at press time.

Coin360 data shows that ETH’s value decreased by about 0.52% over the last 24 hours. At press time, ETH is trading at around $191. On the week, the coin has also gained about 3.24%.

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

XRP is down by about 0.43% over the last 24 hours and is currently trading at around $0.272. On the week, the coin is up about 4.21%.

XRP 7-day price chart

XRP 7-day price chart. Source: Coin360

Among the top 20 cryptocurrencies, the only ones reporting over half of a percent worth gains other than Bitcoin are Tezos (XTZ), which is up about 2.71%, IOTA (MIOTA), which is up about 1.62%, and Unus Sed Leo (LEO), which is up 0.56%.

At press time, the total market capitalization of all cryptocurrencies is $268.5 billion, about 0.15% higher than this value was a week ago.

As Cointelegraph reported earlier today, representative Maxine Waters, chair of the U.S. House of Representatives’ Financial Services Committee, stated the organization will continue to review Facebook’s proposed cryptocurrency Libra and the corresponding digital wallet Calibra.

Keep track of top crypto markets in real time here

Binance Offers Lifetime VIP Membership to KYC Leak Victims

Binance Offers Lifetime VIP Membership to KYC Leak Victims

Major cryptocurrency exchange Binance will compensate its users affected by the recent Know Your Customer images leak with a lifetime VIP membership.

Major cryptocurrency exchange Binance announced that it will offer a lifetime VIP membership to all its users affected by the recent Know Your Customer (KYC) images leak on the platform.

According to the official blog, currently Binance is “actively contacting all potential victims with […] guidance on privacy protection and restitution,” and highly recommends “affected users to apply for new identification documents in their respective region.” The post also states:

“We are compensating affected users with a lifetime Binance VIP membership, including preferential trading fees, support, and more services.”

When a hacker knows your customer

As Cointelegraph reported recently, Binance said that its investigation of a KYC data leak that occurred in the beginning of August is still ongoing. The exchange’s security and investigations team is purportedly trying to identify the source of KYC images similar to those leaked by an unidentified hacker.

Binance announced the leak on Aug. 7, stating that an unidentified individual threatened the platform and demanded 300 bitcoins (BTC) in exchange for withholding over 10,000 photographs of purported Binance KYC data.

Cryptocurrency exchanges often require users to submit an image of themselves presenting credentials in order to verify their identity.

Binance also states that some of the leaked images overlap with the images that were processed by a third party vendor the exchange contacted several times from early December 2018 to late February 2019.