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Bitcoin news roundup, September 17, 2017

Bitcoin news roundup, September 17, 2017

This week’s summary of various cryptocurrency news and developments:

New developments:

BTC-e’s new exchange platform is up and running: it’s called WEX

BTC-e, one of the oldest Bitcoin exchanges, had been taken down following the arrest of a Russian national in Greece. At the time, the man was believed to be an admin at the exchange, but soon a Bitcointalk account associated with the exchange started rolling out updates, and clarified that he wasn’t connected to the organization, and that the exchange still held 55% of user funds, despite its domain being seized by law enforcement. The exchange also claimed that it would reimburse the remaining 45% through a Bitfinex-like token, and that it would be back online in September.

As covered by DeepDotWeb, the exchange already started giving users their Bitcoin Cash tokens, and allowed them to update their security settings. Via Twitter, BTC-e now announced its new platform, WEX, the result of a months-long effort by the company to return service to its customers. According to CoinDesk, WEX is trying to differentiate itself from BTC-e by claiming that it’s unrelated to the company – despite migrating the exchange’s former users, it claims to have a different technical team. WEX also claims to not have received funds from BTC-e, and to abide by Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. For the next few days it is to operate in test mode, and users who transfer their balances over to it will receive bonus tokens.

 

Alleged BTC-e admin claims innocence in new interview

As stated above, BTC-e was taken down and its domain was seized by authorities following the arrest of a Russian national in Greece. The man, named Alexander Vinnik, was allegedly a BTC-e operator, despite the exchange denying he ever worked there in the first place. Now, in an interview with Russia Today, Vinnik revealed that he doesn’t consider himself guilty and that he only found out what his charges were one month after his arrest. He stated:

  • “I do not consider myself guilty … The fact that I worked for BTC-e and did my job, and it’s not justifiable to accuse me of it. I found out about the charge about a month after I was taken into custody. This was told to me by my Russian lawyer.”

Moreover, he pointed out that being a Russian citizen, he doesn’t understand why he would be extradited to the U.S. His wife, speaking to Russia Today, claimed that he is “wanted for his intellect.”

JP Morgan’s CEO Jamie Dimon stated that “Bitcoin is a fraud”

Jamie Dimon, JP Morgan’s CEO, recently called Bitcoin a “fraud” while speaking at a banking conference in New York, and added that he would fire any employee trading the cryptocurrency, as according to the banker it’s both “stupid” and against JP Morgan’s rules. Notably, according to CNBC, he stated:

  • “It’s just not a real thing, eventually it will be closed.”

Moreover, Dimon compared it to the tulip bulb craze in the 17th century, one of the most well-known bubbles in history. The banker even stated that his words weren’t advice on what to do, and that the cryptocurrency could still surge in value before ultimately going down. He added that his daughter bought Bitcoin and, after the cryptocurrency’s price surged, she now “thinks she’s a genius.” Finally, he opined that Bitcoin’s purpose is to be used in impoverished economies such as that of Venezuela, or to be used by murderers or drug dealers.

World affairs:

China’s cryptocurrency exchanges received shutdown orders

According to various reports, China’s cryptocurrency exchanges received shutdown orders from authorities, as China proves last week’s rumors of the country shutting down Bitcoin exchanges were true. BTCChina, the longest-running Bitcoin exchange in the world, announced via Twitter it would suspend trading on September 30.

 

The announcement was followed by ViaBTC and Yunbi’s announcements that they would, too, shutter their platforms, with registrations, deposits, and trading pairs being closed on September 25, and their websites on September 30.

Later on, reports from Chinese financial website Caixin revealed that two other trading platforms, OKCoin and Huobi, will close their trading platforms by the end of October – these were given extra time reportedly due to their large number of users and the fact that neither had listed trading pairs of Initial Coin Offering (ICO) tokens. A lot of people believe that the Chinese government will establish a licensing process in the future.

Report claims North Korea is targeting the South’s Bitcoin exchanges

U.S.-based cybersecurity firm FireEye’s senior researcher Luke McNamara recently published a blog post in which he claims the firm recently observed North Korean actors target South Korean cryptocurrency exchanges, in an attempt to steal funds. The report states that North Korea’s actors launched phishing attempts against exchange employees, using tax-themed lures, and deploying malware linked to North Korean actors who used it to attack global banks in 2016. The attack’s goal, per the report, is presumably to fund the North Korean regime. It states:

  • “With North Korea’s tight control of its military and intelligence capabilities, it is likely that this activity was carried out to fund the state or personal coffers of Pyongyang’s elite”

Russian Minister claims cryptocurrencies are “impossible to ignore”

A Russian minister, Mikhail Abyzov, recently spoke against the idea of cryptocurrencies being banned, and instead stated that the technology is “impossible to ignore,” meaning that he believes a decision regarding cryptocurrencies will soon be made, even if by necessity due to the technology’s growth, according to Russian news source RIA. Notably, Abyzov stated that it was necessary to move from a policy of denial to a more thoughtful approach. He said:

  • “It is necessary to move from a policy of denial and prohibition to a very accurate, thoughtful state regulation of the turnover of crypto-currencies. I think we should officially recognize them as a financial tool and properly handle it carefully so that excessive pressure does not destroy the technology itself.”

Financial:

Bitcoin at $3,599.11 following China’s crackdown

China’s crackdown and Jamie Dimon’s words on Bitcoin, mentioned above, both led the number one cryptocurrency’s price below the $3,000 mark this week, before it recovered to $3,599.11 at press time, according to data from CoinMarketCap. The recovery was triggered once China announced that two of its exchanges, OKCoin and Huobi, had until October to shut down their operations. Bitcoin’s market cap is currently at $59.6 billion, and its dominance is at 48.6%.



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Australian Authorities: Rise In Organized Crime Is Due To The Increased Popularity Of Cryptocurrencies

Australian Authorities: Rise In Organized Crime Is Due To The Increased Popularity Of Cryptocurrencies

Australia’s financial sector has experienced a major increase in organized crime. The country’s criminal intelligence agency reported that this rise is due to the growth of online banking systems and increased popularity of cryptocurrencies.

Recently, the Australian Criminal Intelligence Commission (ACIC) published a report, in which the agency stated that the expected damage of the money laundering and further financial crimes – conducted by organized criminal gangs – costs the country over $28.43 billion annually.

Australian authorities claim that e-commerce businesses and cryptocurrency exchanges lack the transparency regarding the transparency of the transactions and the use of encryption. Therefore, according to the ACIC, the exchanges and e-commerce businesses are facilitating the organized crime since the criminals can take advantage of the anonymity of the websites to evade tax and conduct other illegal activities.

“Bitcoin, which can be traded anonymously and is as good as cash, is traded now on most significant international exchanges,” Justice Minister Michael Keenan said in a statement.

To strengthen the anti-money laundering laws of the country, Australia is seeking to follow Japan’s path to regulate cryptocurrencies. Lawmakers proposed reforms, in which cryptocurrency exchanges will be placed under the remit of Australia’s financial crime fighting agency, Austrac.

“Stopping the movement of money to criminals and terrorists is a vital part of our national security defenses and we expect regulated businesses in Australia to comply with our comprehensive regime,” Mr. Keenan said.

The Japanese government acted in a similar manner when the country regulated cryptocurrencies. By October 1, all bitcoin, altcoin exchanges and money transfer businesses that are seeking to operate in the country must come under the regulatory supervision of the Japan Financial Services Agency. Furthermore, the exchanges will be supervised by officials at least once a year to see that the businesses are complying with the regulations.

While regulating the digital currency sector, the Australian government also plans to deregulate low-risk sectors in the country, such as cash-in-transit, which is already subject to state and territory licensing requirements, Mr. Keenan said.

The ACIC’s report also revealed the increase of money laundering through online betting sites, which are, according to the government agency, mostly owned by international organized crime groups. Earlier this year, the tax authorities in Australia fined Tabcorp Holdings, Australia’s largest betting company, for $35 million since the firm breached the country’s money laundering laws.

The report also highlighted that narcotics is the main source of the income of organized criminals. Furthermore, the ACIC listed other criminal activities, which are trending now. The agency reported that credit card fraud causes $411 million while identity fraud causes $1.74 billion of damage each year. Both crimes are quite popular among darknet criminals. After a successful breach on a government agency, institute or a company, the cybercriminals often advertise the stolen personal information (including credit card and banking data) on the dark web for sale.

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Bitcoin news roundup, September 10, 2017

Bitcoin news roundup, September 10, 2017

This week’s summary of various cryptocurrency news and developments:

New developments:

Cryptocurrency complaints surged this year, just like its userbase

A recent report published by student loan market LendEDU revealed that cryptocurrency-related customer complaints, the majority of which against Coinbase, filed with the U.S. Consumer Financial Protection Bureau (CFPB) surged this year. According to the report, a total of seven cryptocurrency-related complaints had been filed with the CFPB in 2016, while this year the number has surged to 277, and keeps on rising. LendEDU believes it might reach 425, meaning the surge is of nearly 6,000%. That said, the CFPB receives hundreds of thousands of complaints every year, and as such the number related to cryptocurrencies remains miniscule. Moreover, although Coinbase did receive a huge number of complaints, it now has over 10 million users and has had a rough time dealing with the huge user influx it received this year.

BTC-e’s return is seemingly plagued by scams and tech problems

Last week, DeepDotWeb reported on one of the oldest Bitcoin exchanges, BTC-e, being back online after being taken down following the arrest of a Russian national in Greece. A Bitcointalk account associated with the exchange then started rolling out updates on its situation, and revealed that the Russian national wasn’t connected to the exchange, and that it still controlled 55% of user funds, despite the seizure. It added that the exchange is to reimburse the remaining 45% by issuing a Bitfinex-like token.

The exchange didn’t issue these tokens yet, but has now started giving users their Bitcoin Cash. Various users have complained about not being able to either log on to their accounts, access their funds, or properly manage their two-factor authentication (2FA) settings, according to CoinDesk. Moreover, the exchange itself has warned users about phishing attempts, as bad actors are trying to take advantage of the situation and steal user credentials.

 

World affairs:

Australia to have 2,900 new Bitcoin ATMs

According to CryptoCoinsNews, a partnership between two FinTech firms in Australia could mean the country will have 2,900 new ‘two-way’ Bitcoin ATMs in the future. The joint-venture, between blockchain startup DigitalX and ATM developer Stargroup would essentially revolve around updating existing ATMs’ software to support Bitcoin buy and sell options. Data from CoinATMRadar revealed that there are currently 16 Bitcoin ATMs in the country, meaning the number would surge to nearly 3,000 if the joint-venture goes forward.

China has banned ICOs

Financial news site Caixin recently reported on a notice issued by a working group led by China’s central bank, the People’s Bank of China (PBoC), that said Initial Coin Offerings (ICOs) will be banned from the country. The notice described ICOs as an unauthorized fundraising tool that can involve financial scams, and as such no organization or individual can raise funds through an ICO. A list of 60 major platforms that are to be inspected by local financial regulatory bodies was also revealed.

Furthermore, organizations that raised funds through ICOs need to return investors their funds, in order to protect their interests and properly deal with the risks. Two of China’s largest ICO platforms – ICOage and ICO.info – already suspended their services. To remain compliant, Chinese exchanges removed ICO tokens issued by organizations and individuals based in China.

https://twitter.com/cnLedger/status/906111094380302337

Bank of Russia issued a warning against ICOs

Russia’s central bank, the Bank of Russia, published a public notice this week on its stance toward ICOs, citing a number of inquiries related to their rising popularity. The Bank of Russia warned that exchanging cryptocurrencies and participating in ICOs is risky due to “sharp fluctuations”, and that at this point it won’t greenlight any cryptocurrency exchanges, nor would it approve its tech for infrastructure purposes. The notice read:

  • “Given the high risk of circulation and use of cryptocurrency, the Bank of Russia considers it premature to admit cryptocurrencies, as well as any financial instruments nominated or associated with crypto-currencies, to circulation and use at organized trades and in clearing and settlement infrastructure on the territory of the Russian Federation for servicing transactions with crypto-currencies and derivative financial instruments on them.”

Financial:

Bitcoin at $4,251.87 following reports of China shutting down Bitcoin exchanges

Bitcoin’s price tumbled after China’s ban on ICOs, but quickly recovered afterwards. It crashed again, however, after financial news website Caixin reported that sources close to China’s internet financial risk rectification work group stated that the country will ban domestic cryptocurrency exchanges. This would mean that Chinese citizens wouldn’t be able to use the Chinese yuan to buy Bitcoin, or vice versa. There are reasons to believe Caixin’s report is authentic, as a recent tweet from the People’s Daily, the Chinese Communist Party’s official newspaper, says the same thing.

However, when contacted by news outlets, Chinese exchanges revealed that they hadn’t been contacted by authorities on the matter, and have been operating normally. On Twitter, cnLedger clarified that right now fake news are circulating on social media, and that in the worst case scenario cryptocurrencies will survive, just like Google, Facebook, and Twitter did after being banned from China.

At press time, one Bitcoin is worth $4,251.87, and the cryptocurrency’s market cap is of $70.3 billion. Bitcoin’s dominance is at 47.4%, according to CoinMarketCap.

IOTA’s price crashed after past cryptographic vulnerabilities were revealed

IOTA, a $1.5 billion cryptocurrency, has seen its value plummet in the last few days, after researchers from Boston University and MIT Media Lab’s Digital Currency Initiative (DCI) revealed that they found “cryptographic vulnerabilities” in its hashing function. The vulnerabilities were explained by DCI Director Neha Narula in a Medium post, and revealed that researchers were concerned when they found that IOTA developers created their own hash function, something security experts caution against. Peter Todd even said it was “completely insane.”

According to Narula, bad actors could have used the vulnerability to steal user’s funds, or even destroy them. These were revealed to IOTA’s team before they were brought to the public, and developers issued a patch to address the problem last month. IOTA founder David Sønstebø stated that the vulnerabilities do not “represent valid attacks on the IOTA cryptocurrency.” Nevertheless, Narula’s post spread rapidly through social media, and led to IOTA’s value plummeting by 15%. At press time, According to CoinMarketCap, one MIOTA is worth about $0.56.



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Hackers Steal Cellular Accounts to Break 2FA Protected Online Bitcoin Wallets

Hackers Steal Cellular Accounts to Break 2FA Protected Online Bitcoin Wallets

All of the major cellular service providers have been seeing an increase of attacks on customer accounts. Hackers are stealing cell phone numbers from users of Verizon, AT&T, T-Mobile, and Sprint through social engineering techniques. Once the attackers have control of a phone number they can use it to reset passwords for services like Google and social media sites. The hackers are able to break 2 Factor Authentication (2FA) for services which send out a 2FA code via SMS text message. Recently, Chinese researchers were able to make calls and texts from a user’s cellular phone number using an attack known as the Ghost Telephonist.

Even the Chief Technologist for the United States’ Federal Trade Commission fell victim to cellphone hijacking. According to statistics from the Federal Trade Commission, the number of cellular account hijackings had more than doubled in January 2016 from the number of cellular account hijackings during January 2013. 2,658 cellular account hijackings were reported in January of 2016. Many of the hijackings are used to steal online cryptocurrency wallets, such as those hosted by Coinbase. Once an account has been hijacked the attacker can drain the account’s entire holdings of cryptocurrencies. One cryptocurrency investor who spoke with the New York Times claimed he had lost cryptocurrency holdings worth over one hundred and fifty thousand US dollars. Another person, Joby Weeks, told the New York Times that they had utilized increased security features for their cellular service accounts after family members had fallen victim to account hijackings, but despite the increased security features his account was hijacked and he had lost nearly a million dollars worth of cryptocurrencies. “Everybody I know in the cryptocurrency space has gotten their phone number stolen,” Weeks told the New York Times.

Unlike traditional monetary transactions, cryptocurrency transactions are not reversible, making it extremely difficult to recover stolen coins. Cellular account hijackers are targeting people who talk about cryptocurrencies on social media and people who are known to be investors in cryptocurrencies. Cellular account hijackers also sometimes will hold e-mails, private personal information, and naked pictures for ransom, threatening to release them if the victim doesn’t pay up. Unless cellular service providers make drastic changes to the way they approach securing accounts, experts believe these account hijackings will continue to increase.

Some cellular service providers have added the ability to add PINs. Adam Pokornicky, who is a managing partner for a cryptocurrency investment firm, added increased security measures to his Verizon account and changed his PIN, after being informed that an attacker had tried over a dozen times to try and get his phone number transferred. However, on the following day, the attacker successfully convinced a Verizon employee to transfer the number without asking for the PIN. A representative for Verizon denied that phone porting attacks were common, and defended the company’s efforts to protect user accounts. While extra security measures are usually added on the customer notes, cellular service provider employees are able to simply ignore, or forget to follow the additional security measures.

It is believed by many who investigate these crimes that some of these cellular account hijacking operations are being carried out by groups of hackers. The short amount of time in which multiple accounts are hijacked after the phone number has been ported may be an indication that more than one person is involved in the account hijackings. The cryptocurrency security company BlockSeer claims to have traced cellular account hijackings back to groups of hackers in the Philippines, Turkey, and the United States. Attackers use social engineering skills on cellular service provider employees, often having to make many attempts until they are able to convince an employee to transfer a number to a new mobile device. “These guys will sit and call 600 times before they get through and get an agent on the line that’s an idiot,” Weeks said. Representatives for Coinbase told the press that they were expending more resources on trying to further secure accounts.

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How Ad Trackers Make Cryptocurrency Transactions Less Private

How Ad Trackers Make Cryptocurrency Transactions Less Private

Researchers from Princeton University have released their findings on how online ad trackers can compromise the privacy of cryptocurrency transactions. The title of the new research paper is, “When the cookie meets the blockchain: Privacy risks of web payments via cryptocurrencies.” The privacy issues occurred on over 100 online merchants from over 20 countries that accepted cryptocurrencies. Cookies and other information obtained by ad trackers that are used on e-commerce sites can reveal the identity of customers who pay with cryptocurrencies. Some of the information online stores share with third party advertisers can include purchases a user has made, how much they have spent, as well as contact and shipping information. Even for online stores which do not collect much information about, users could obtain incriminating information if a user purchases a product with a cryptocurrency and then later purchases a product from the site using a credit card.

Some of the larger online vendors which accept cryptocurrencies include Overstock, Newegg, and Microsoft, all of which utilize third party ad trackers. Google’s ad tracker is said to be installed on nearly 80% of sites on the internet, according to the researchers from Princeton. Some of the major ad trackers, such as Google and Facebook, also obtain information directly from user accounts on their services, but most ad trackers do not have that advantage.

According to the researchers, nearly all but a few of the e-commerce sites that were studied gave third party scripts access to at least some of their customers personal information. Over 100 of the 130 e-commerce sites that accepted cryptocurrency also gave access to data about cryptocurrency transactions made by customers. Over 50 of the e-commerce sites exposed payment data to third party trackers through leaks in their shopping cart scripts. Over 30 of the e-commerce sites leaked customer e-mail addresses to third party trackers. A dozen of the e-commerce sites examined by the researchers directly leaked customer Bitcoin addresses to third party trackers. 13 of the e-commerce sites the researchers observed leaked shipping address information to third party trackers. The researchers from Princeton also tested the effectiveness of cluster intersection attacks against coin mixing. They found that when an attacker had some additional information, such as if a person made multiple cryptocurrency transactions, they could reverse the privacy enhancing effects of coin mixers.

People can protect themselves from the attacks the researchers used by utilizing privacy and anonymity software such as the Tor Browser and the Brave web browser, or add-ons such as uBlock Origin, Disconnect.me, and Ghostery. The version of Tor Browser which comes installed with the TAILS operating system is bundled with uBlock Origin installed. TAILS operating system itself is excellent to use to help protect your privacy. Firefox now incorporates tracking protection, using either the basic blocklist or the strict blocklist from Disconnect.me, for private browsing, but tracking protection can also be turned on for regular browsing sessions as well. Blocking third party cookies also helps. Another browser add-on which can help fight against third party ad trackers is to use the NoScript add-on. NoScript comes bundled with the Tor Browser.

Unfortunately for some online stores, some javascripts may need to be temporarily enabled in order to make a purchase. Third party trackers can use malicious javascript to extract bitcoin addresses from e-commerce sites. While defending against third party trackers can significantly help protect privacy, the researchers note that the merchants and payment processors themselves can be potential adversaries. The researchers also noted that 25 out of the 130 e-commerce sites that were observed leaked information to third party trackers even when certain forms of tracking protection were used. It appears that financial privacy remains under attack by governments, corporations, and hackers, and until e-commerce sites begin to take the securing of their customer’s private information seriously, users will have to be even more vigilant and work harder to protect the privacy of their cryptocurrency transactions.

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Tutorial – How To Host Your Own DNS Website Domain On Ethereum’s Blockchain

Tutorial – How To Host Your Own DNS Website Domain On Ethereum’s Blockchain

You can now host DNS domains on Ethereum’s blockchain through ENS, which is short for Ethereum Name Service, a distributed, extensible domain naming system that relies on Ethereum’s blockchain. This is possible via adjusting the domain name server settings to point to gateway DNS servers, which resolve lookups through checking an ENS registry that points to resolvers including the zone data for the domain in question.

Throughout this tutorial, I will present you with a simple guide to help you host your DNS domain on the blockchain.

Note: You have to be running a full Ethereum node on your machine to be able to follow through this tutorial. We have a detailed tutorial on how to run a full Ethereum node that will help you run yours, even if you are a total newbie.

1. Implementing your own ENS registry:

First, you will have to implement ENS central component, i.e. “the registry”. To do so, run the following code into an Ethereum console (via your Ethereum client):

Once this contract is successfully mined, you will have a fresh new ENS registry, whose root is controlled by the account that created the contract, i.e. the transaction. As such, this account will have total control over the registry, as it can add or remove nodes along the entire tree.

2. Implementing a registrar:

A registrar represents a contract that controls a node, i.e. a name, within the ENS registry, and provides a special user interface for participants to register subnodes, i.e. subdomains. A registrar can be implemented on any domain name. Throughout the following example, we will implement a basic first-in-first-served registrar via the root node.

To implement a first-in-first-served registrar via the root node of your ENS registry, run the following code in an Ethereum console.

Once this contract is successfully mined, as owner of the ENS registry, you can transfer the ownership of the root node to the new registrar that has been created via executing the following code in an Ethereum console:

Now, users can register names, i.e. nodes, with the registrar. You can register the names you desire with the FIFS registrar. Users can now register domain names via two top level domains:

  • .eth: this top level domain uses an auction registrar that has the same functionality of the main network and permits users, registering domain names, to own them indefinitely. Visit this link for registering a domain name with the auction registrar.
  • .test: this top level domain allows any user to claim any unused domain name for test purposes. Domain names expire automatically after 28 days.

3. Implementing a DNSResolver instance:

To implement an instance of the DNSResolver, run the following code in an Ethereum console.

4. Setting DNSResolver as the domain name’s resolver:

The ENS registry has to be modified so that the newly implemented DNSResolver acts as the resolver of your domain name. This can be done by using the setResolver function, as in the following code example:

So, in the previous example, we set DNSResolver to be the resolver of the domain name deepdotweb.eth.

The ENS blog has a useful guide that includes details of how to interact with the ENS registry e.g. registering a name, transferring name ownership, creating subdomains…..etc.

5. Writing a Zonefile:

You have to write a zonefile that includes an NS record of your domain name that specifies address.ns1.ens.domains as the resolver, but don’t forget to replace address with the address of your ENS registry that you implemented in step 1, but omit the “Ox” in the beginning. The following is an example code for a zonefile.

6. Cloning and Building ensdns:

Clone and build ensdns. Now, start your node and then run the following code in an Ethereum console:

This will upload the zonefile to the blockchain.

7. Finally, Updating Your NS Records:

The final step is to update your NS records with your registrar to point to the domain you used above which is in the format:

address.ns1.ens.domains

So, if we chose a domain name e.g. deepdotweb.eth it will be hosted on the blockchain, i.e. resolve to something like:

397437541a757880eCC5d26606624F4FC8958Cb5.ns1.ens.domains

Here you go, you now have an ENS domain hosted on Ethereum’s blockchain. In the end, it is worth mentioning that ENS hosting is an experimental feature that is still in its infancy, so you should not use it for any critical domains. The DNS gateway still has not been extensively tested and presently, only a single instance is working, so there is no backup or any mitigation strategies in case of server failure. Also note that the configuration and API can be changed in backwards-incompatible ways, which can break your nameserver. This should only be used for experimental and research purposes.

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Australia Prepares for the First Stage of Government Bitcoin Regulation

Australia Prepares for the First Stage of Government Bitcoin Regulation

According to the Financial Times, Australian authorities announced legislation that will massively alter the course of cryptocurrency in the country. The legislation places “digital currency” exchanges under the legal jurisdiction of Australia’s Transaction Reports and Analysis Centre (Austrac). Austrac is Australia’s financial crime branch of government, and as such, will be investigating crimes committed with cryptocurrency.

Unsurprisingly, the Australian Minister for Justice, Malcolm Keenan, pushed the movement. At some point during August 2016, Keenan announced an Austrac restructuring that freed up space for a “cybercrime” department. He said that the country needed a closer eye directed towards cryptocurrency crimes for the “unprecedented national security threats” they created.

In Keenan’s most recent statement regarding a cryptocurrency monitoring department in Austrac, he spoke between the lines. Except this time, the new legislation closely follows a massive money laundering scandal at one of Australia’s largest banks. It also rides the wake created by the takedown of the oldest Bitcoin exchange, BTC-E.

“We know that the national security threat to our nation and globally is unprecedented and modern technologies are presenting new and evolving threats – none more so than from malicious cyber activity,” he said in 2016. “We know that the use of fraudulent identities continues to be a key enabler of serious and organized crime and terrorism.”

According to Reuters, in 2017, Keenan said that “the threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide.”

Screenshot_20170825_020624.png

In addition to a heightened regulation of digital currencies like Bitcoin and Ethereum, the new bill empowers law enforcement at Australia’s borders. The country’s law enforcement shines at those borders—at least when looking at darknet market drug importation or international smuggling crimes. (The Australian Border Force received a tactical boost earlier this year.) Now, law enforcement at Australia’s borders have increased search and seizure powers. Although, what those powers will translate to in real life is a different story altogether.

Although Australia was the first (reported) country to recognize Bitcoin as a “real world” currency, it missed the first place spot for “quickest to cryptocurrency regulation.” In early 2017, Japan introduced laws that required the regulation of any new “alternative coin.” Much of the changes in Japan were related to the hack of the former Bitcoin exchange ”Mt.gox.” While the monitoring of a wide spectrum of financial crimes was implied, an Austrac report from 2014 mentioned digital currencies in reference to terrorism financing and money laundering.

“A number of online payment systems and digital currencies are also anonymous by design, making them attractive for terrorist financing,” it read. This cryptocurrency regulation legislation is just the beginning of the terrorist money laundering bill.

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Bitcoin news roundup, September 3, 2017

Bitcoin news roundup, September 3, 2017

This week’s summary of various cryptocurrency news and developments:

New developments:

Troubled Exchange BTC-e is now back online

BTC-e, one of the oldest bitcoin exchanges, was taken down earlier this summer after a Russian national was arrested for allegedly laundering billions in bitcoin. At the time it was believed that he was an admin at the exchange, and it was also revealed that the exchange was fined for $110 million, but soon after an admin behind the exchange’s Bitcointalk forum account starting posting updates on its situation and clarified the Russian national never worked there. The admin revealed that the exchange controlled 55% of user funds, and that it would reimburse the remaining 45% by issuing a Bitfinex-like token.

In one of the updates the admin also added that the exchange would relaunch in September – and it did. BTC-e is now back online on the https://btc-e.nz/ domain. At press time, users are only able to alter their security settings and check their account balances, while being advised by the exchange to alter their security settings, as the seizure might have compromised their security.

 

Wrestler John Cena put bitcoin in front of his 7 million Instagram followers

Celebrity support is vital for cryptocurrencies to hit mainstream adoption and, now more than ever, it looks like celebrities are starting to accept cryptocurrencies. This week, professional wrestler John Cena posted a stock image of physical bitcoins on Instagram and, at press time, the image already has nearly 54,000 likes in it, along with a lot of comments. Other celebrities, including billionaire Mark Cuban and rapper The Game, have recently been involved in cryptocurrency-related projects

John Cena’s post coincided with a new all-time high for bitcoin. Although it may be unrelated, the push towards mainstream adoption will certainly help bitcoin gain momentum.

The SEC warned would-be ICO investors about potential “pump and dump” schemes

The U.S. Securities and Exchange Commission (SEC) recently warned would-be ICO investors about possible “pump and dump” schemes on Initial Coin Offerings (ICOs) as companies may try to take advantage of people looking to invest in “new and emerging technologies.” The warning reads:

  • “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams. These frauds include ‘pump-and-dump’ and market manipulation schemes involving publicly traded companies that claim to provide exposure to these new technologies.”

The move comes after the SEC suspended the trading activities of four OTC-based companies, over concerns regarding the accuracy of information and value of the assets in their ICOs.

World affairs:

A Putin ally wants to raise $100 million in an ICO to invest in bitcoin mining

According to Bloomberg, Putin’s internet advisor plans on raising $100 million through an ICO to challenge China’s bitcoin mining supremacy. The goal is to get his company, Russian Miner Coin (RMC), to use funds raised through the ICO to bitcoin mining infrastructure in Russia and, in return, token holders would have the rights to 18% of the revenue generated by said mining infrastructure.

According to Putin’s internet advisor, Dmitry Marinichev, Russia has the potential to be a dominant player in the cryptocurrency mining industry, as per his own words the country could managed to own 30% of the cryptocurrency mining market.

Bitcoin exchange ShapeShift forced by reckless regulations to leave Washington state

Popular cryptocurrency exchange ShapeShift recently announced it was terminating its service to Washington residents due to the state’s reckless regulations, imposed by “Senate Bill 5031.” According to a blog post, the company is now joining others, such as Bitstamp, Bitfinex, and Poloniex, in leaving the state as the new bill essentially requires these companies to apply for a license and post a surety bond, potentially costing them thousands of dollars. Moreover, they’re required to gather and store personal data on their users, which according to ShapeShift means the data can possibly be stolen by hackers.

In its announcement, ShapeShift criticized Washington regulators, stating:

  • “We believe the position that Washington’s regulators have taken is unethical, wasteful, and reckless. We cannot expect the same people, and the same thinking, that designed, built, and promoted the legacy fiat financial system to do what is needed to build a better alternative.”

China considers cracking down on ICOs

A report by Tencent Finance recently revealed details of a meeting that took place on August 18. In it, China’s central bank, the People’s Bank of China (PBoC), and officials from the Securities and Futures Commission, the insurance regulatory body, and the Banking Regulatory Commission, among others, discussed regulatory oversight of ICOs. This reportedly includes limiting their scale and size, while increasing the amount of information that needs to be disclosed, and strengthening supervision and risk alerts. Furthermore, if ICOs are seen as a significant market risk, the report shows they could potentially be suspended. At this point, however, regulations are still at a preliminary stage.

Russia wants to restrict cryptocurrency sales to “qualified investors”

According to local television channel Rossiya 24, Russia’s deputy finance minister Alexey Moiseev stated that it’s hard to “argue cryptocurrency is not a pyramid scheme”, and reportedly has plans on banning cryptocurrency sales to those who aren’t seen as qualified investors, and who have a reason to purchase digital assets. Notably, he stated:

  • “For ordinary people, there’s no way because these are very dangerous investments that could lead to loss of money.”

According to Moiseev, as a regulated financial instrument, stock exchanges under the supervision of Rosfinmonitoring, the Federal Financial Monitoring Service, would sell cryptocurrencies.

Financial:

Bitcoin hit a new historic all-time high above $5,000

Bitcoin’s value has been surging lately, as fears of a bubble forming fade away, and as investor interest keeps growing. At press time, one bitcoin is worth $4,635.26, according to CoinMarketCap, but the cryptocurrency managed to reach an all-time high above $5,000 this week. Bitcoin’s market cap is currently of $76.6 billion, and its dominance is of 45.9%. The cryptocurrency ecosystem has a market cap of $167 billion.

Litecoin hit a $92.07 all-time high, before dropping to $79.29

Litecoin has been surging this week, to the point of shattering its previous all-time high and hitting a new one of $92.07, according to CoinMarketCap. The surge appears to have started because of a tweet from Litecoin developer Charlie Lee. In the tweet, Charlie Lee showed a screenshot of a Lightning network-enabled wallet, stating that it was working on the Litecoin mainnet.

The cryptocurrency’s development, along with support from various companies and renowned individuals is also helping it reach new heights.



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Anonymous Cryptocurrency Monero Sees Drastic Increase in Liquidity, Adoption by Largest Exchange

Anonymous Cryptocurrency Monero Sees Drastic Increase in Liquidity, Adoption by Largest Exchange

Monero, the second largest privacy-focused anonymous cryptocurrency behind Dash, has recently demonstrated a rapid increase in value after being adopted and integrated by Bithumb, the world’s largest cryptocurrency exchange by volume.

Over the past 12 months, South Korea evolved into a major cryptocurrency market, becoming the biggest Ethereum exchange market by trading volume. A significant increase in demand from professional and institutional investors in Asia allowed Bithumb to overtake US-based exchanges such as Bittrex and Kraken to become the global cryptocurrency market’s leading digital currency trading platform.

Last week, Bithumb announced its plan to fully integrate Monero by August 27. It revealed that deposits for Monero users will be open by August 23. By the end of this month, Monero investors and traders will be provided with drastic improvement in liquidity, due to the integration of Monero by Bithumb. In its peak days, Bithumb processes around $700 million worth cryptocurrency trades on a daily basis, well above the trading volumes of other cryptocurrency trading platforms such as Poloniex and Bittrex.

Since its early days, Monero has secured its title as the most transparent and secure anonymous cryptocurrency. Supporters of Monero firmly believe that Monero is the only anonymous cryptocurrency in the market that had launched transparently, without pre-sales and conditional mining deals. For instance, Bytecoin and Dash launched with token pre-sales and as a result, Dash had struggled to recover from its negative reputation in 2015. ZCash also received criticisms from the community for its conditional mining deal, which enforces miners to provide a portion of their earnings from ZCash mining to the ZCash development team.

Still, for many years, Monero has had difficulty appealing to the general consumer base unlike Dash. Through Jaxx and many user-friendly wallet and trading platforms, Dash attracted many users and investors. Due to its efficient and practical marketing, Dash evolved into a leading cryptocurrency why Monero struggled to become a major cryptocurrency.

The integration of Monero by Bithumb is expected to allow Monero to overtake Dash in terms of trading volume and for the first time since its launch, secure an active trading community apart from Poloniex. Already, the market has responded to the announcement of Bithumb, as even prior to accepting deposits, the market cap and price of Monero increased significantly.

Bithumb’s decision to integrate Monero also sets a positive precedent for the cryptocurrency industry and the community’s viewpoint on anonymous cryptocurrencies. For years, Monero was used as one of the main payment methods on some of the world’s largest dark web marketplaces. The now-defunct AlphaBay relied on Monero transactions to process deals on dark web. Criminals and money launderers also have been using Monero in order to anonymously transact amongst each other.

Most recently, it was revealed that funds from the accounts of the WannaCry ransomware distributors were moved to several Monero accounts through ShapeShift. As a response, the ShapeShift team announced that it would assist law enforcement in tracing the transactions but it would be difficult considering that Monero transactions are completely private.

Exchanges have been reluctant on listing Monero due to Know Your Customer (KYC) and Anti-Money Laundering (AML) policies. As an anonymous cryptocurrency, Monero has obviously been the go-to choice for online criminals. Hence, law enforcement agencies expect digital currency trading platforms that have integrated Monero to help the government to crackdown on criminals using Monero to launder money and finance criminal activity.

In February, DeepDotWeb reported that the FBI and many other law enforcement agencies were concerned with the applicability of Monero and its anonymous nature.

“There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where it’s not very obvious what the transaction path is or what the actual value of the transaction is except to the end users,” said Special Agent Battaglia.

The adoption of Monero by Bithumb will likely trigger a surge in demand towards anonymous cryptocurrencies in the upcoming months, especially in Monero. Users of bitcoin that are conscious about their transactions and the traceability of their payments will likely switch over to Monero as its liquidity will drastically increase with Bithumb.

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Introduction to Bitcoin Transaction Accelerators

Introduction to Bitcoin Transaction Accelerators

As we watch Bitcoin blockchain scaling issues popup, their weight can be felt by users. The waiting list for BTC transaction sometime grows beyond control, causing users either to pay a large fee or to content with delayed transactions. Some Bitcoin service providers, however, offer Bitcoin transaction accelerator services intended to help clear the pending Bitcoin transactions and make them go through the Bitcoin network smoothly.

Transaction Accelerators allow users to reduce the waiting time of each transaction during a congestion time by prioritizing transactions. They do so by adding submitted transactions onto their mining networks to ensure that the tx. Is included in the first block mined by the providers. However, this is a process that relies heavily on the provider’s mining power and is not guaranteed to work 100% of the time due to the luck factor in Bitcoin.

While most transaction accelerators charge a fee, some like the ViaBTC are free to use, but extremely limited. So for a generally fixed fee per transaction.

Services Comparison

ViaBTC: ViaBTC pioneered this service as a protest against the current limitations on the Bitcoin network. The service gives priority to the user-submitted transactions into the next mined blocks by the ViaBTC pool. The only requirement is that your transaction include a minimum fee of 0.0001BTC/KB.

The free-to-use nature of the service has made it widely popular as every hour, the number of transaction requested reaches its limit and it is common be presented with the message “Submissions are beyond limit. Please try later.” on the top middle of the page, this means you will have to wait for the next hour for a new submission.

After submitting the transaction, you have to wait for the next block to be mined by ViaBTC Pool.

BTC.com: This service is provided in cooperation with several main mining pools. However, in most cases BTC.com mining pool is including the stuck transaction into their own mined blocks. They promise a chance of 75% for including transactions in the next block within one hour. Within 4 hours the chance is claimed to be at 98%. They guarantee that if the transaction isn’t confirmed in 12 hours, the fees will be fully refunded to your card within 10 ~ 15 days. This policy is not applicable to the transactions which are removed or double-spent during the acceleration process.

This is a paying service with an estimated price based on the transaction size that you preview on the website itself. You will be charged through credit card. Unlike ViaBTC, there is no requirement for minimum fees, even if you pay no fee you will still have the chance to get the transaction confirmed through BTC.com transaction accelerator service.

Sosobtc: Offering a similar service to the one provided by BTC.com, sosobtc charges a lower fee rates of only $2.9/KB. The minimum fee is $2.9 even for a transaction lower than 1KB, which is mentioned on the service announcement page. After receiving the commission and details, the transaction will be confirmed within 2 hours, or the money will be fully refunded.

Sosobtc offers cryptocurrency price charts, news and navigation. They don’t have their own mining pool but they cooperate with several mining pools in order to operate their Bitcoin transaction accelerator service. However, they don’t have a public service page as the other two providers. Users have to add their customer service staff in wechat (cai20101150090) or QQ (67433377), who will manually accelerate your transaction.

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