EOS hack leads to $58,000 theft

About $58,000 was stolen from token exchange Newdex, through the issuance of fake EOS tokens in the network.

Newdex, in an announcement, confirmed that the hackers had issued 1 billion units of a token simply called ‘EOS,’ which were then used to purchase other tokens available in the exchange. All in all, the hackers made use of 11,800 fake EOS as though they were the real cryptocurrency.

The hackers were also able to purchase 4,028 of the actual EOS cryptocurrency, which were then transferred into a Bitfinex account.

“In order to provide better service, the Newdex team took responsibility for the entire loss and has fixed the problem in the first place and resumed normal transaction. All Newdex users please don’t worry and use it at ease,” Newdex said in its announcement. The exchange also said that it will be tracing the hackers and prosecuting them.

“The Newdex team is well aware that there are still many shortcomings to be improved… Although we have encountered many difficulties on the way forward and will encounter more problems in the future, we will not forget the initial intention and will do as best as we can to provide a better trading experience for Newdex users,” the exchange said.

Online tech magazine The Next Web explained that the hack was made possible because an EOS token could be created by anybody who wanted to, and could even be named ‘EOS’ itself.

“Second, Newdex doesn’t use smart contracts. [T]here was nothing to confirm the authenticity of the cryptocurrency being pumped into it,” David Canellis from The Next Web wrote, adding that Newdex was taking advantage of the “hype” surrounding decentralized exchanges, by calling itself such.

“In reality, it’s just a single user account handling trades under the guise of being an asset exchange—pretty centralized, if you ask me,” Canellis said.

EOS and its developers have been under criticism by the blockchain community, particularly for not quite living up to the claim of being “the next Ethereum,” although in terms of susceptibility to hacks, the moniker may be fitting.

Yo Sub Kwon, founder and CEO of blockchain security provider Hosho, issued a statement saying, “EOS smart contracts are so new that they will suffer from the same issues that Ethereum smart contracts did early on of just not knowing which problems to keep watch for during development… It is incredibly important to have smart contracts audited, especially if they are going to have large amounts of money run through them.”

Just last week, two EOS gambling platforms were reported to have been hacked, with the thieves running off with over $250,000 in all.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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EOS hack leads to $58,000 theft

About $58,000 was stolen from token exchange Newdex, through the issuance of fake EOS tokens in the network.

Newdex, in an announcement, confirmed that the hackers had issued 1 billion units of a token simply called ‘EOS,’ which were then used to purchase other tokens available in the exchange. All in all, the hackers made use of 11,800 fake EOS as though they were the real cryptocurrency.

The hackers were also able to purchase 4,028 of the actual EOS cryptocurrency, which were then transferred into a Bitfinex account.

“In order to provide better service, the Newdex team took responsibility for the entire loss and has fixed the problem in the first place and resumed normal transaction. All Newdex users please don’t worry and use it at ease,” Newdex said in its announcement. The exchange also said that it will be tracing the hackers and prosecuting them.

“The Newdex team is well aware that there are still many shortcomings to be improved… Although we have encountered many difficulties on the way forward and will encounter more problems in the future, we will not forget the initial intention and will do as best as we can to provide a better trading experience for Newdex users,” the exchange said.

Online tech magazine The Next Web explained that the hack was made possible because an EOS token could be created by anybody who wanted to, and could even be named ‘EOS’ itself.

“Second, Newdex doesn’t use smart contracts. [T]here was nothing to confirm the authenticity of the cryptocurrency being pumped into it,” David Canellis from The Next Web wrote, adding that Newdex was taking advantage of the “hype” surrounding decentralized exchanges, by calling itself such.

“In reality, it’s just a single user account handling trades under the guise of being an asset exchange—pretty centralized, if you ask me,” Canellis said.

EOS and its developers have been under criticism by the blockchain community, particularly for not quite living up to the claim of being “the next Ethereum,” although in terms of susceptibility to hacks, the moniker may be fitting.

Yo Sub Kwon, founder and CEO of blockchain security provider Hosho, issued a statement saying, “EOS smart contracts are so new that they will suffer from the same issues that Ethereum smart contracts did early on of just not knowing which problems to keep watch for during development… It is incredibly important to have smart contracts audited, especially if they are going to have large amounts of money run through them.”

Just last week, two EOS gambling platforms were reported to have been hacked, with the thieves running off with over $250,000 in all.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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US regulators punish crypto firm claiming ties to Coinbase

A Russian cryptocurrency firm has met the long arm of the law in Texas. According to a press release by the Texas Securities Commission (TSC), Coins Miner Investment Ltd. was presented with an emergency cease-and-desist order following allegations that the firm and allegedly misstated marketing material to investors.

Specifically, the TSC claims that Coins Miner fraudulently claimed ties to Cointelegraph and Coinbase. It allegedly spoofed Coinbase’s email address in an effort to defraud investors and make it appear as though the company was tied to Coinbase.

Additionally, Coins Miner lied and said that it was registered in the UK. However, it was operating out of Volgograd, Russia. TSC has charged the company with sending spam emails to lure them into making investments in its mining operations.

The cease-and-desist order targets a Coins Miner affiliate by the name of “Ana Julia Lara.” She is charged with representing herself as a cryptocurrency trader with Coinbase and for misappropriating a photo that allegedly showed her with the president of Ripple.

According to the order, “Respondent Lara is telling potential investors she met the president of Ripple and [is] providing potential investors with a photograph that purports to depict her and the president of Ripple. The photograph does not depict Respondent Lara. Instead the photograph depicts a vice president at CoinTelegraph Media Group [sic].”

On its website, CoinTelegraph has denied “all connection with the person ‘Ana Julia Lara.'”

A video published by Coins Miner was also targeted in the order. The fake video includes pictures of supposed facilities, as well as engineers and other professionals, that were proven to be stock photos easily accessible over the Internet.

Another video shows a journalist with Fortune magazine talking about crypto. Next to him is a logo for the Coins Miner company. However, the logo was superimposed on the imagery and the TSC order points out that “neither the journalist nor Fortune authorized the use of the video, which was filmed for Fortune as part of its coverage of cryptocurrencies.”

Crypto opponents love stories like these because they give them the opportunity to try and prove the fallacy of cryptocurrencies. However, a quick Internet search on the term “fraud” produces over 40 articles on fiat-based fraud and scams—written only in the past 24 hours.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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US regulators punish crypto firm claiming ties to Coinbase

A Russian cryptocurrency firm has met the long arm of the law in Texas. According to a press release by the Texas Securities Commission (TSC), Coins Miner Investment Ltd. was presented with an emergency cease-and-desist order following allegations that the firm and allegedly misstated marketing material to investors.

Specifically, the TSC claims that Coins Miner fraudulently claimed ties to Cointelegraph and Coinbase. It allegedly spoofed Coinbase’s email address in an effort to defraud investors and make it appear as though the company was tied to Coinbase.

Additionally, Coins Miner lied and said that it was registered in the UK. However, it was operating out of Volgograd, Russia. TSC has charged the company with sending spam emails to lure them into making investments in its mining operations.

The cease-and-desist order targets a Coins Miner affiliate by the name of “Ana Julia Lara.” She is charged with representing herself as a cryptocurrency trader with Coinbase and for misappropriating a photo that allegedly showed her with the president of Ripple.

According to the order, “Respondent Lara is telling potential investors she met the president of Ripple and [is] providing potential investors with a photograph that purports to depict her and the president of Ripple. The photograph does not depict Respondent Lara. Instead the photograph depicts a vice president at CoinTelegraph Media Group [sic].”

On its website, CoinTelegraph has denied “all connection with the person ‘Ana Julia Lara.'”

A video published by Coins Miner was also targeted in the order. The fake video includes pictures of supposed facilities, as well as engineers and other professionals, that were proven to be stock photos easily accessible over the Internet.

Another video shows a journalist with Fortune magazine talking about crypto. Next to him is a logo for the Coins Miner company. However, the logo was superimposed on the imagery and the TSC order points out that “neither the journalist nor Fortune authorized the use of the video, which was filmed for Fortune as part of its coverage of cryptocurrencies.”

Crypto opponents love stories like these because they give them the opportunity to try and prove the fallacy of cryptocurrencies. However, a quick Internet search on the term “fraud” produces over 40 articles on fiat-based fraud and scams—written only in the past 24 hours.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Fidelity Investments poised to launch crypto products by end of 2018

This past summer, Fidelity Investments indicated that it was preparing to join the cryptocurrency ecosystem. It said at the time that it had plans to introduce a cryptocurrency exchange, but didn’t lay out a time frame for when it would be ready. Now, the company has announced that it is setting up a number of crypto options, and that it expects to launch some, or all, by the end of this year.

The company’s CEO, Abigail Johnson, spoke last Friday at the Boston FinTech Week conference. In her speech, she said that Fidelity’s crypto and blockchain-related products will go live in the last quarter of 2018, but didn’t provide details on exactly which products and services the company would be rolling out. Johnson said, “We’ve got a few things underway, a few things that are partially done but also kind of on the shelf because it’s not really the right time. We hope to have some things to announce by the end of the year.”

Given that Fidelity is one of the most well-known financial companies in the world, the announcement will certainly have all eyes watching for future releases from the company to find out exactly what’s in store. Traditional finance entities and cryptocurrency companies alike will be anxiously awaiting any and all further announcements on the topic.

Johnson alluded to the fact that the rollout of products and services isn’t the same as what the company had first envisioned. She said, “What we started with was building a long list of use cases for either Bitcoin, Ethereum, other cryptocurrencies, or potentially just raw blockchain technology. Most of them have been scrapped by now or at least put on the shelf. The things that actually survived were not the things I think necessarily we expected. We were trying to listen to the marketplace and anticipate what would make sense.”

Institutional investments are often seen as being the best way to ensure widespread adoption and market stability. The last quarter of the year could prove to be extremely beneficial to the cryptocurrency industry with developments like those from Fidelity, and a ruling by the U.S. Securities and Exchange Commission (SEC) on a number of cryptocurrency exchange-traded funds (ETF), also expected sometime later this year.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Fidelity Investments poised to launch crypto products by end of 2018

This past summer, Fidelity Investments indicated that it was preparing to join the cryptocurrency ecosystem. It said at the time that it had plans to introduce a cryptocurrency exchange, but didn’t lay out a time frame for when it would be ready. Now, the company has announced that it is setting up a number of crypto options, and that it expects to launch some, or all, by the end of this year.

The company’s CEO, Abigail Johnson, spoke last Friday at the Boston FinTech Week conference. In her speech, she said that Fidelity’s crypto and blockchain-related products will go live in the last quarter of 2018, but didn’t provide details on exactly which products and services the company would be rolling out. Johnson said, “We’ve got a few things underway, a few things that are partially done but also kind of on the shelf because it’s not really the right time. We hope to have some things to announce by the end of the year.”

Given that Fidelity is one of the most well-known financial companies in the world, the announcement will certainly have all eyes watching for future releases from the company to find out exactly what’s in store. Traditional finance entities and cryptocurrency companies alike will be anxiously awaiting any and all further announcements on the topic.

Johnson alluded to the fact that the rollout of products and services isn’t the same as what the company had first envisioned. She said, “What we started with was building a long list of use cases for either Bitcoin, Ethereum, other cryptocurrencies, or potentially just raw blockchain technology. Most of them have been scrapped by now or at least put on the shelf. The things that actually survived were not the things I think necessarily we expected. We were trying to listen to the marketplace and anticipate what would make sense.”

Institutional investments are often seen as being the best way to ensure widespread adoption and market stability. The last quarter of the year could prove to be extremely beneficial to the cryptocurrency industry with developments like those from Fidelity, and a ruling by the U.S. Securities and Exchange Commission (SEC) on a number of cryptocurrency exchange-traded funds (ETF), also expected sometime later this year.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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China’s central bank warns public (again) against cryptos, ICOs

Residents in China have received a new warning against getting involved in cryptocurrency-related activities. This week, the People’s Bank of China (PBoC) has issued yet another notice to remind everyone in the country against investing in cryptocurrencies and initial coin offerings (ICOs) amid reports that domestic crypto activities have been flourishing recently.

According to the central bank, the cryptocurrency market is filled with so many uncertainties. The industry has seen skyrocketing prices, disrupting the market. The PBoC also reaffirmed its stance that ICOs do not have a proper financing mechanism, which needs to be regulated by relevant authorities. The PBoC notice reminded Chinese citizens that ICOs are “suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes and other illegal and criminal activities.”

According to the Chinese central bank, “It is important for consumers and investors to increase their awareness of risks associated with the industry and avoid falling in the same traps.”

The announcement comes a few weeks after the bank revealed a significant drop in cryptocurrency activities in the country. In August, PBoC stated that “The global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market.”

Since it banned ICOs in September 2017, mainland authorities have already shut down 88 ICO platforms and 85 ICO projects in the country.

However, reports recently surfaced that some investors and companies were braving the regulatory forces in China. Underground crypto transactions have become the order of the day with many people looking for ways around the ban. According to reports, some traders have resorted to using Virtual Private Networks (VPNs), while others opted for offshore exchanges. Others have turned to peer-to-peer transactions to pay for services and products or purchase their favorite currencies and tokens.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Leave crypto alone: Hester Peirce admonishes fellow regulators

The lone dissenter in the U.S. Securities and Exchange Commission (SEC) orders rejecting cryptocurrency exchange-traded funds (ETFs) called on the regulator to ease up on cryptocurrency-related products.

Commissioner Hester Peirce began her speech at a Cato Institute event in San Francisco with a disclaimer that her remarks were not to be taken as those of the commission, before launching into a plea for the SEC to be open to innovations in blockchain-based markets.

“We know we will be blamed when something goes wrong, and this fear leads to a default suspicion of risk-taking and a regulatory mindset that too often presumes that innovations designed to provide greater access to risk-taking are threats, both to our reputations and investor safety,” Peirce said.

She noted that the SEC decisions to deny ETF applications—currently under review—included a statement that the rejection was not based on an evaluation of the underlying assets, that is, cryptocurrencies. “The order, however, seemed to do almost that,” Peirce said. “It focused on the alleged flaws with Bitcoin markets, rather than on whether the exchange proposing to trade shares of the trust had taken steps to ensure the orderly trading of those shares.”

Peirce pointed out that much of the flaws of cryptocurrencies and related products were discussed openly. “What authority do we have to require that assets’ underlying securities be regulated as if they were securities? Even if we had this authority, private markets can and do regulate themselves. The crypto community includes lots of people who are very willing to speak up, criticize one another, and bring to light technological, corporate governance, and other perceived weaknesses in cryptocurrencies,” she said.

According to the SEC commissioner, cryptocurrency investments had to be made with care, just as any other investment. “Kleptocrypto is a new way of stealing from investors, but investors can protect themselves by exercising an old-fashioned dose of skepticism,” she said.

Risk, she noted, was a present factor in all investments, with people having differing appetites for it. “The SEC, as regulator of the capital markets, therefore should appreciate the connection between risk and return and resist the urge to coddle the American investor,” she said.

Rather than simply rejecting new financial products, Peirce said, “The SEC’s statutory mandates are much more modest. We are directed to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets. In my view, this threefold mission requires the Commission to ensure that investors have access to products and services that enable them to construct investment portfolios that meet their needs.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Litecoin is a ‘significantly overvalued relic,’ report finds

Litecoin (LTC) is ‘significantly overvalued’, according to a report published by Texas-based crypto hedge fund Multicoin Capital, which is short LTC.

In the report, managing partner Tushar Jain set out a comprehensive bear case for LTC, a withering assessment of the cryptocurrency, the Litecoin Foundation, and its prospects for the near future.

The report comes at a time of low Litecoin prices, already down from highs of $358 to just under $55. However, with Multicoin heavily shorting LTC, Jain predicted the market has yet to see anything like its bottom. In particular, he cited concerns over founder Charlie Lee distancing himself from the project, calling his decision to sell his entire stake in LTC a ‘red flag.’

“Despite [Charlie Lee’s] intentions, a misalignment of incentives now exists that decreases his motivation to continue development and add value to the protocol,” Jain wrote. “To better achieve this goal, we would have liked to see him time-lock his holdings or use them to fund further LTC development.”

The report continued to say Litecoin would face a struggle to overcome sell pressures, particularly with giant Litecoin bear Bitmain thought to be looking to offload as many as 1 million LTC in the near future, at a time when the cryptocurrency is already under heavy pressure.

Jain said that Litecoin was also struggling from a lack of adoption amongst merchants, the majority of which only support LTC as part of a basket of cryptocurrencies supported by their payment processor.

He explained, “Litecoin’s adoption is generally shown using qualitative evidence of merchants accepting Litecoin. Merchants accepting Litecoin also generally accept a basket of other crypto-assets because crypto payment processors such as BitPay support many cryptocurrencies. Merchants are not explicitly choosing to support Litecoin payments. Rather, they’re electing to accept payment in any crypto, of which Litecoin is just one.”

Concluding his negative outlook, Jain summed up Litecoin as a ‘relic of the pre-smart contract age.’

“Hovering at approximately $50, we believe LTC is significantly overvalued. Given the lack of a viable investment thesis, nonexistent positive catalysts and strong negative catalysts, we expect LTC to continue to substantially underperform the crypto market,” Jain stated.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Nasdaq makes $190M offer for Swedish crypto trading provider Cinnober

Nasdaq is set to acquire Sweden-based trading solutions provider Cinnober, in a deal that could see the stock exchange move into helping institutional investors gain access to new opportunities around cryptocurrency.

The move, announced last week, involves a $190 million all cash recommended public offer to Cinnober shareholders and warrant holders from Nasdaq. It plans to fund the acquisition with cash on hand or liquidity available under existing credit facilities.

It comes as the latest indication of Nasdaq’s growing interest in cryptocurrency trading and related services. Following the U.S. Securities and Exchange Commission’s (SEC) rejection of the latest Winklevoss crypto exchange traded fund (ETF) proposals, Nasdaq reportedly met with a panel of cryptocurrency experts to discuss ways of legitimising the sector, and of finding ways to placate the requirements of the SEC.

The acquisition will see Nasdaq take control of Cinnober, a firm with a reputation for bullishness around digital assets. Cinnober’s strategic partnership with cryptocurrency custodian BitGo also looks to be of interest to Nasdaq, for its appeal to institutional investors.

Custodianship has become an increasingly prominent issue amongst institutional investors, who are wary of deploying capital without solid security and custodial services in place.

With recent high profile hacks, including the Bancor exchange attack in June, some analysts have suggested these fears might be well placed. With its cryptocurrency custody service ready to go for institutional investors, the Cinnober acquisition therefore eliminates this barrier to market for Nasdaq in attracting institutional clients to invest in digital assets.

Nasdaq CEO and President Adena Friedman said the acquisition would allow the group to capitalise on new opportunities around cryptocurrencies and other digital assets.

“The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq,” Friedman said in a statement. “This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”

The acquisition comes at a time when large financial institutions are increasingly developing their custody services, with Bank of America and Citigroup announcing similar plans in recent months. Purchasing Cinnober will likely help position Nasdaq in this market, as well as marking their progress towards offering a more comprehensive lineup of crypto services.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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