Bitcoin News Roundup 26.11.17
This week’s summary of various cryptocurrency news and developments:
Mark Karpeles hints at MtGox revival through an ICO
According to former MtGox CEO Mark Karpeles, the complexity of the company’s bankruptcy makes it hard for creditors to recover their losses, and a revival of the company may be the way to solve the problem. MtGox’s bankruptcy claims are complicated due to the Bitcoin value held by its customers at the time, as some creditors now claim the capital gains from the cryptocurrency’s value should also be paid to them. The company, which went bankrupt back in early 2014 following the loss of hundreds of millions worth of Bitcoin at then-current prices, now faces a difficult situation as the capital gains haven’t been realized yet, and some of the Bitcoins that were recovered are currently under the custody of a trustee.
Karpeles presented a possible solution: to revive MtGox with a price tag of $245 million, either through a recapitalization by way of an equity sale, or through an Initial Coin Offering (ICO). The post reads:
- “Launch an ICO to raise money to hypothetically revive MtGox. This sounds more challenging, both legally and because there is no guarantee of raising enough to revive MtGox. In case there is not enough raised it could still be locked to be distributed to creditors, which would be better than nothing.”
Tether hacked for $31 million, attack connected to 2015 Bitstamp hack
Tether, the company that issues USDT tokens, supposedly backed by fiat 1:1, reported being hacked this week for a total amount of $30,950,010 after a “malicious external attacker” managed to withdraw funds from the company’s treasury wallet. In response to the attack, Tether revealed that it would update to a new version of the Omni Core software, in which it is built on, to lock the stolen tokens and prevent the hacker from being able to use them – which led to exchanges using the USDT tokens to do the same. The announcement read:
- “$30,950,010 USDT was removed from the Tether Treasury wallet on Nov. 19, 2017 and sent to an unauthorized Bitcoin address. As Tether is the issuer of the USDT managed asset, we will not redeem any of the stolen tokens, and we are in the process of attempting token recovery to prevent them from entering the broader ecosystem.”
The team’s centralized decision was coitized, and later on a Reddit user named “SpeedflyChris” revealed that using a smart Bitcoin explorer, he managed to link the attack with the Bitstamp hack of 2015, in which about 18,000 BTC (worth $5 million at the time) were stolen from the exchange after employees fell victim to a phishing attack. Per the redditor, the owner of the address that received funds from Bitstamp’s hack in 2015 sent 0.01 BTC to the wallet that received the stolen Tethers, presumably to ensure the funds could be moved around. SpeedflyChris then claimed that some of the funds from the hacker were laundered on the now-defunct exchange BTC-e, which rebranded and relaunched as WEX, and that the hacker used to change funds on LocalBitcoins. He stated:
- “So LocalBitcoins guys, if you have a log of who was using this address back in 2015, you’ve got the hacker ;)”
Fraudsters stole $3.2 million using a Bitcoin Gold wallet scam
A recent scam involving a Bitcoin Gold wallet netted its fraudsters at least $3.2 million. The scam asked users to insert their private keys or recovery seeds on a website, so they would then get access to their Bitcoin Gold, which was generated at the time of the hard fork. Users trusted the website partly because it was open-source, although the code on Github was later on changed, and because the team behind Bitcoin Gold supported it on various occasions, according to CoinDesk.
In response to the scam, Bitcoin Gold issued a statement in which its representatives clarified that they are figuring out a way to remedy the situation, and that the findings of its investigation will be disclosed to the public once appropriate to do so. The statement notably ends with advice for cryptocurrency enthusiasts, stating:
- “It’s worth reminding everyone that it will never be truly safe to enter your private key or mnemonic phrase for a pre-existing wallet into any online website.”
New hard fork launches Bitcoin Diamond (BCD), introducing proof-of-stake to Bitcoin
This year, Bitcoin’s network saw its first hard fork, leading to the creation of Bitcoin Cash (BCH). Then Bitcoin Gold (BTG) came and now, despite the cancellation of the SegWit2x hard fork, another new cryptocurrency using the Bitcoin brand is being introduced. Launched at block 495,866, Bitcoin Diamond (BCD), aims to switch from proof-of-work to proof-of-stake after a 10,000 block mining period, and has a total supply of 210 million coins, as opposed to Bitcoins’ 21 million
— Bitcoin Diamond (@BitcoinDiamond_) November 24, 2017
The cryptocurrency also features an 8 MB blocksize, SegWit support, and an anonymous development team. BCD has already been listed on various exchanges, including Binance, Gate.io, and OKex.
Ethereum-based startup vanishes after raising $374,000 in ICO
An Ethereum-based startup named Confido that pitched itself as an app that allowed for smart contracts to act as an escrow between buyers and sellers during transactions has recently vanished after raising $374,000 in an ICO, leading investors to believe it was all an exit scam. During the ICO, Confido distributed CFD tokens to investors, and soon a post made by its founder and CEO, Joost van Doorn, crashed their price. The post stated the company was facing legal trouble due to a contract, but didn’t reveal much about it. Later on, the company’s website and social media profiles were all deleted.
As Bitcoin crosses $14,000 in Zimbabwe, the country’s central bank chief says it isn’t legal
Last week, DeepDotWeb reported on how a military coup led to a Bitcoin price surge that allowed the cryptocurrency to cross the $14,000 mark in Zimbabwe. Due to the cryptocurrency’s popularity, a senior official for Zimbabwe’s central bank, Norman Mataruka, said that it isn’t legal to use the cryptocurrency within the country. He added:
- “In Southern Africa, what we have done as regulators, we have said that we will not allow [Bitcoin] in our markets.”
Per local news source Chronicle, Mataruka noted that research is currently being undertaken within the financial institution in an attempt to determine risks associated with Bitcoin and other cryptocurrencies, adding that Bitcoin won’t be allowed until a regulatory framework has been drawn.
Russian minister claims Bitcoin will never be legal in the country
According to Russia’s state-owned news agency TASS, the country’s minister for communications and mass media, Nikolai Nikiforov, recently told reports that Russia will never see Bitcoin as a “legal entity,” although the nation sees potential in blockchain technology. He was quoted as saying:
- “Bitcoin is a foreign project for using blockchain technology, the Russian law will never consider Bitcoin as a legal entity in the jurisdiction of the Russian Federation.”
Earlier this year, Nikiforov announced that, following a decision by President Vladimir Putin, the country would be minting its own cryptocurrency, the cryptoruble. At the time, he cautioned that the move wasn’t meant to be read as sign that the government was warming up towards cryptocurrencies.
Bitcoin reaches a new all-time high of $8,670, partly led by Japan and South Korea
This week, Bitcoin reached a new all-time high of $8,673.70 according to data from CoinMarketCap, partly thanks to Japan and South Korea. The cryptocurrency has been trading at a premium in these countries, as leading exchanges are registering historical trading volumes. Bitcoin’s dominance is currently at 52.7%, as the cryptocurrency’s market cap hit $144 billion, out of the cryptocurrency ecosystem’s cap of $274 billion.