Srp 20

Three Chinese Men In Custody Over $87M Cryptocurrency Theft

Police in China has detained three men suspected of pulling the country’s biggest ever cryptocurrency heist — worth 600 million yuan ($87 million). 


Theft is China’s Biggest: Reports

As multiple outlets report quoting local news publication Huashang News on August 19, authorities concluded an investigation spanning almost six months into three men who allegedly hacked a computer for Bitcoin and Ether.

“Our bureau has not dealt with this kind of case before,” South China Morning Post quotes a police officer as telling Huashang“It’s the first virtual currency-related case in Shaanxi.”

According to Huashang, the investigation behind the arrest of the men — known as Zhang, Cui and Zhou — began in March, when the victim came forward to report a hacking of his computer. At the time, losses were thought to total 100 million yuan.

Having analyzed “30,000 pieces of information” related to the event and the alleged perpetrators, the arrests were made on Wednesday last week. Legal proceedings remain ongoing.

China Leads World in Blockchain Patent Applications

Disrupting The Bitcoin Criminal Narrative

The size of the theft is reminiscent of an increasing cryptocurrency criminal trend largely playing out in nearby Vietnam.

As Bitcoinist previously reported, a giant altcoin scam which afflicted 32,000 investors earlier this year saw organizers make off with funds worth a reported $660 million at the time. More recently in July, the CEO of a local cryptocurrency mining company suddenly disappeared and shuttered operations — leaving $35 million unaccounted for.

While Chinese police added that the use of cryptocurrency made their job more difficult, on a global level, law enforcement agencies are beginning to change the narrative that crypto assets aid and abet the success of criminals.

In an interview with Bloomberg earlier this month, Lilia Infante, an agent with the Cyber Investigative Task Force at the US Drug Enforcement Administration, said she actually hopes malicious actors will “keep using” Bitcoin and even privacy-focused altcoins such as Monero. “The blockchain actually gives us a lot of tools to be able to identify people,” she revealed. 

What do you think about China’s latest cryptocurrency theft? Let us know in the comments below! 


Images courtesy of Shutterstock.

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Srp 12

Man Visits KuCoin’s Hong Kong Office To Find That It Does Not Exist

A Hong Kong man skeptical of the cryptocurrency exchange KuCoin, paid a visit to its registered address in Hong Kong, only to find that it doesn’t actually exist.


Communication Breakdown

In a recent post on Medium, Jackson Wong from Hong Kong wrote about his experience visiting the KuCoin offices in Hong Kong — or rather not visiting, as he found barely a trace of the company in its registered HK location.

The search was prompted by concerns Wong voiced in a previous post in January of this year, in which he warned readers that KuCoin was not actually operating out of Hong Kong like they had claimed. This came after finding out that KuCoin’s registered operating address was in mainland China.

The search was prompted by concerns Wong voiced in a previous post in January of this year, in which he warned readers that KuCoin was not actually operating out of Hong Kong like they had claimed.

This was important at the time because of an announcement by the People’s Bank Of China (PBOC) stating that it would block access to all domestic and foreign cryptocurrency exchanges and ICO websites, which would include affecting the KuCoin exchange.

Wong warned users of the KuCoin exchange to “Get out right now before it is frozen and KuCoinShares (KCS) drops to $0.”

Increasing Suspicions

Fast forward to Wong’s most recent post in which he details his increasing suspicions leading him to go searching for a physical location or individual representing KuCoin in Hong Kong.

Wong explains his long-time suspicions of the KuCoin exchange stemming from never seeing any coverage of the exchange or company in the media, despite claiming a Hong Kong operating address. He also voiced concerns that KuCoin had no registered license to trade cryptocurrency in Hong Kong and that none of the KuCoin team had Hong Kong names or listed a Hong Kong residential address.

Wong’s suspicions finally got the better of him and he decided to go and see if he could find the KuCoin office that was listed in Hong Kong.

Fast forward to Wong's most recent post in which he details his increasing suspicions leading him to go searching for a physical location or individual representing KuCoin in Hong Kong.

Wong documents his journey to the listed building address with photographs. After arriving he takes a photo of a board listing all of the building’s operating businesses. The board had no mention of KuCoin. When Wong went up to the 20th floor he did see a sign reading “Smart Team International Business Ltd.,” which was similar to a secretarial company KuCoin previously registered called “Smart Team Secretarial Ltd.”

Upon further inquiry, Wong was told by a company sharing the 20th floor, that no employees from STIB Ltd. were there because they had moved out years before.

Upon further inquiry, Wong was told by a company sharing the 20th floor, that no employees from STIB Ltd. were there because they had moved out years before.

After arriving he takes a photograph of a board listing all of the building's operating businesses. It had no mention of KuCoin.

Wong ends with a warning to anyone who has funds in KuCoin stating:

Since KuCoin is completely in stealth, and you couldn’t find them in their registered ‘office’, nor is there even a single person in their ‘office’, if KuCoin decides to exit scam on us — either by withholding our withdrawals or simply by shutting down their entire exchange and run with our money —we will have absolutely no recourse.

What do you think about the KuCoin exchange? Are Jackson Wong’s concerns exaggerated? Let us know your thoughts in the comments below!


Images courtesy of Bitcoinist Archives, Medium.

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Kvě 24

From Russia with Love: How Cryptocurrency and Blockchain are Finding Their Feet

· May 23, 2018 · 9:00 pm

In the West, crypto markets continue to battle with the regulatory uncertainty as the SEC and other regulatory bodies take their time to decide which camp they sit on. At the same time, things are not much rosier in the East either where China is yet to warm up to cryptocurrencies.


Blockchain has been around “long” enough to show the proof of concept in that by utilizing blockchain it is possible to streamline a number of processes, both on the governmental and also corporate levels. This then has prompted an exponential rise in fintech start-ups looking to challenge the status quo and disrupt the standard ways of storing, organizing, and extracting data sets. However, the actual implementation of blockchain technologies across much of Western Europe and even the US has been constrained by the regulatory uncertainty.

On the one hand, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are yet to put a fundamental framework forward to appease concerns surrounding utility vs security token model. While in Europe, an introduction of General Data Protection Regulation (GDPR), which is perfectly suitable for blockchain applications, is being rushed through by compliance and HR departments with such haste that blockchain is far away on their radar.

In Blockchain We Trust

In Blockchain We Trust

Russia is an interesting case when it comes to the world of ICOs. On the one hand, it is a great place to source technical experts for your blockchain related ventures. The price tag might be astronomical but at least you know what you are getting for the labor and that is quality, reliability and of course security. So, with one piece of the puzzle sorted comes the tricky bit, finding a suitable business partner and this is where things go wrong… really wrong.

One of the most depressing and worrying statistics that has come out of the Russian Association of Cryptocurrencies and Blockchain (RACIB) is that around half of the ICO funds in the country that were raised in the past year – amounting to $300 million – have gone to pyramid schemes.

Economic and political uncertainty, together with numerous corruption scandals has really dented investor appetite for projects in the country. It is very much high-risk, high-reward based game when it comes to investing in Russia and when combined with the volatile nature of the currency, this perception is unlikely to change anytime soon. The regulation and oversight by the government can help alleviate some of the concerns relating to fraudulent activities but at least for now, the crypto community is yet to “sanction” Russian projects altogether.

In the meantime, the likes of Blackmoon (BMC) will remind budding entrepreneurs and investors of the success stories and there is, of course, hope that the government, which is actively looking at ways to promote and integrate digital economy, will not be overly involved in regulation aspect.

On the subject of regulation, it was reported that the Russian State Duma’s Committee for Legislative Work will support the first reading of an initiative that will add the basic norms of digital economy to the Russian Federation Civil Code. The initiative itself does not mean that digital currencies will now become a legitimate means of payment and instead, a separate law developed by other regulatory bodies, will outline conditions for using digital currencies as a payment method. The initiative will also look to treat a digital confirmation by a user in a smart contract is equal to his written consent.

What Does Russia’s Future Hold?

Over the course of 19-20 May 2018, Moscow hosted one of the largest cryptocurrency summits of 2018, with over 200 speakers and over 3000 participants taking part in the event. While the event may not carry the same weight as Consensus, which took place earlier this month, or d10e, it was an important event for the country that stands at a crossroads with the technology. The decisions that will be made by the government need to be made in the spirit of blockchain and with the aim to further technological, as well as economical, advancement as opposed to being the means to destabilize the Dollar.

The commissioning of the crypto-rouble is not far-reaching enough. Anyone looking for inspiration should turn to Dubai and their smart-city plans. According to Smart Dubai, which is conducting government and private organization workshops to identify areas that will benefit from the overhaul, the strategy could save 25.1million man hours, equivalent to $1.5 billion in savings per year for the emirate. It has been noted that the fast majority of improved efficiency will come from moving to paperless government.

What do you think of the latest developments in Russia and can it reform and lead the way in providing a sound base for crypto projects? 


Images courtesy of Wikimedia Commons, Shutterstock

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Dub 16

Samsung Delves Deeper into Crypto Exploring Blockchain for Its Logistics

· April 16, 2018 · 5:00 pm

Samsung Electronics Co. is the latest big name to show a keen interest in the powers of blockchain technology, specifically, how it can be incorporated into their supply chain management processes.


Even though cryptocurrencies may still be getting critiqued, it’s supporting technology is being more readily adopted. The advantages of blockchain such as security and immutability, are major drawcards for companies that rely heavily on record keeping, such as healthcare, finance, and even art.

Blockchain to aid in shipping

However, it is also a viable option for supply chain management, an option that massive electronics corporation, Samsung, is ready to explore. According to Bloomberg Quint, the company’s logistical and information and technology branch, Samsung SDS CO., could use a blockchain ledger to monitor their billion-dollar global shipments sector.

Song Kwang-woo, the blockchain chief at SDS, touched on how the technology could revolutionize other businesses:

It will have an enormous impact on the supply chains of manufacturing industries. Blockchain is a core platform to fuel our digital transformation.

A cost-effective way of working

A part of this digital transformation is working towards a paperless way of doing business. Not only are physical documents annoying, they’re expensive too. In fact, according to International Business Machines Corp., the documentation costs for container shipments is more than double that of other modes of transportation.

When it comes to Samsung shipments, this equals a substantial amount of money. For this year alone, SDS projects that the company will transport 488,000 tons of air cargo and one million 20-foot-equivalent (TEU) shipping units. The SDS has said that by implementing blockchain technology, the company could save as much as 20% in shipping fees.

It’s not just about saving money though. Blockchain technology could actually impact on overall customer satisfaction. This is because efficiency associated with this technology could mean a shorter time span between product launches and product shipment. Not only will that keep Samsung customers smiling, it will also give the company a competitive edge over their industry rivals.

Cheong Tae-su, who is a professor of industrial engineering at Korea University, explained a bit further:

“It cuts overhead and eliminates bottlenecks. It’s about maximizing supply efficiency and visibility, which translates into greater consumer confidence.”

What’s more, Samsung appears to be going all-in into cryptocurrencies in general as it recently announced manufacturing mining chips. This move that puts them in direct competition with the Taiwan-based company, TSMC, a preferred ASIC chip supplier to Bitmain.

Samsung joins an ever-growing list

Samsung isn’t the only global company big on blockchain. Mastercard recently announced that they will soon be hiring blockchain experts to help drive innovation with regard to payment solutions.

Governments are also realizing its benefits, with China financially contributing towards blockchain-based startups. In addition, the European Union has launched the EU Blockchain Observatory and Forum, which aims to foster blockchain promotion.

The blockchain business is definitely booming. The US-based research company, Gartner, has predicted that the technology will add $176 billion USD worth of value to businesses by 2025. This number is set to increase to over $3 trillion by 2030.

What do you think of yet another big corporation using blockchain technology? Let us know in the comments below!


Images courtesy of Shutterstock, Bttcoinist archives

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Úno 06

FUD Storm Continues as China Steps Up Pressure Against Cryptocurrencies

· February 6, 2018 · 9:00 am

Following false fears of a Bitcoin ban in India, the FUD storm continues as China looks to completely eradicate cryptocurrency trading—but can they succeed?


Chinese FUD Strikes Again

It’s been a rough month for Bitcoin and the cryptocurrency market. The price of the dominant cryptocurrency has dropped below $8,000, and many altcoins have suffered even more significant losses, following a seemingly endless flood of FUD (Fear, Uncertainty, and Doubt) from mainstream media outlets.

Now, it appears the FUD of the day is that China, already notoriously unfriendly towards cryptocurrency, is ready to block all access to cryptocurrency trading websites and initial coin offerings (ICOs) by utilizing its notorious Great Firewall of China.

China

The troublesome story comes primarily from Financial News, a publication affiliated with the People’s Bank of China (PBOC), which is quoted as stating:

To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs.

Since then, advertisements for cryptocurrencies have reportedly stopped appearing on both Baidu and Weibo—China’s largest search engine and social media platform, respectively.

Scaling the Wall

Though China continues to be an enemy of cryptocurrency, it remains to be seen whether or not their increased measures have a greater effect than their already-instituted domestic ban.

According to the South China Morning Post, the PBOC-affiliated article admitted that recent attempts to eradicate digital currencies by shutting down domestic exchanges haven’t worked as well as planned, quoting:

ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions. Overseas transactions and regulatory evasion have resumed.

The Financial News’ article also spins the planned ban as being for the protection of the country’s citizens, stating:

Risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling.

China has already banned ICOs and domestic cryptocurrency exchanges, but many eager investors inside the country have found workarounds. According to Donald Zhao, a Bitcoin trader who moved to Tokyo following China’s domestic ban, China’s new regulations might succeed in making it even harder for individuals to circumvent the law:

It is common for people to use VPNs [virtual private networks] to trade cryptocurrencies, as many exchange platforms relocated to Japan or Singapore … I think the new move literally means it would be even harder to circumvent the ban in China … people promoting related business programmes may be arrested.

Still, where there’s a will, there’s a way, and people who really want to trade cryptocurrencies will likely figure out how to do so in secret.

China

Though stricter regulations in China aren’t going to help the market recover any faster, it’s worth mentioning that other countries are set to benefit. According to Cathay Capital’s Ace Yang:

It’s positive news for Japan and Singapore, because demand for participating in trading is not diminishing and traders have got to go somewhere.

What do you think about China’s claim to increase measures against cryptocurrency trading? Do you think it will have any long-term effects, or is it just another case of FUD? Let us know in the comments below!


Images courtesy of Shutterstock, Bitcoinist archives.

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Lis 19

Investors Should be More Careful in Which ICOs They Invest

· November 18, 2017 · 10:15 pm

As Initial Coin Offerings are rising in popularity, experts are advising investors to be careful about fraudulent token sales.


Fraudulent ICOs

Fraudulent ICOs

Initial Coin Offerings, or ICOs, have become increasingly popular over the past year. Many interesting projects and startups have decided to raise funds through ICOs instead of through venture capitalists. According to the cryptocurrency statistics website CoinSchedule, over $3 billion was invested in many different token sales this year alone. The reason why so many individuals and hedge funds are heavily investing in ICOs is the potential high return on their investments.

Most ICOs have returned very impressive returns for the early investors, and thus they manage to catch the attention of more new investors. But some experts warn that potential fraudulent ICOs might try to abuse the current market trend in order to raise funds without delivering any products. In a recent CNBC interview, co-founder of Ethereum Joseph Lubin and CEO of Ripple Brad Garlinghouse, they gave statements regarding the current token sale trend. The Ethereum co-founder stated following:

High-quality projects, but there have been a lot of copycat projects where people copy all the same materials (and) don’t intend to deliver any value to the people buying the tokens

These fraudulent token sales have also caught the attention of the Chinese government. In a quick response, Chinese regulators decided to effectively ban any ICOs and token sales in China until the government implements proper regulations. Lubin stated following regarding the Chinese ICO ban:

With China’s political approach to things, and with the fraud that was rampant there, it made a lot of sense for them to pause things a little bit and get a better, deeper understanding of the ecosystem, and scare potential fraud perpetrators

Token sales are also a very important component in order to drive innovation in the cryptocurrency and tech community according to analysts. Garlinghouse stated following:

There are a lot of really fabulous things that get done with digital assets and blockchain technologies to reduce friction, to reduce costs, and enable things that weren’t possible before. I think instead of focusing on those, we’re distracted by what’s going on in this gray area

More Regulations?

More Regulations?

China isn’t the only government that took a stance on ICOs. The South Korean government has also moved on banning token sales until further notice. Experts believe that more governments worldwide are going to implement and enforce regulations for token sales, in order to protect consumers and investors from scams. US and UK regulators are currently observing the ICOs markets before they decide to implement regulations.  Many cryptocurrency community members believe that more regulations might hinder and potentially even damage the progress of bitcoin and blockchain technology development in the future.

What are your thoughts on fraudulent token sales? Do you think that governments should implement more regulations in order to protect investors from ICO scams? Let us know in the comments below!


Image courtesy of Pixabay

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