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Is Bitcoin Changing? Big Shifts and What It Means for Us

 


On the financial front, traditional powerhouses like Grayscale, BlackRock, and Fidelity are diving into Bitcoin, earning them the moniker 'Bitcoin whales.' These heavyweights are injecting billions into the digital currency, holding a sizable chunk of the finite 21 million bitcoins available.

Out of the 19 million bitcoins currently in circulation, an estimated 3.5 million are lost, either due to forgotten digital wallet details or lingering criminal proceeds. Concerns arise over the 2.3 million bitcoins held by cryptocurrency exchanges, acting as crypto-banks, sparking debates about reliance on centralised systems.

Adding to the mystery are 'unknown whales,' individuals or entities owning over 10,000 bitcoins, accounting for roughly 8% of the total. The remaining 7% of bitcoins are yet to be mined, with the last one expected in 2140. Meanwhile, Satoshi Nakamoto, Bitcoin's enigmatic creator, sits on an estimated 1.1 million bitcoins, securing a spot among the world's wealthiest.

Regulated investment firms, given the green light by US financial authorities, are now in the game. Grayscale, BlackRock, and Fidelity collectively hold about 4.5% of all bitcoins, signalling a significant shift.

Law enforcement's involvement introduces another layer, with nearly 200,000 bitcoins awaiting auction from cyber-crime seizures. MicroStrategy and Tether emerge as noteworthy Bitcoin holders, with MicroStrategy leading as the single largest organisation owner, holding around 193,000 Bitcoins. Tether, recognized for its stablecoin, claims an estimated 67,000 bitcoins.

Publicly listed Bitcoin miners, including Marathon and Hut8, contribute significantly, holding around 40,000 bitcoins collectively. Well-known investors like the Winklevoss Twins, Tim Draper, and companies like Tesla and Block add further diversity to the landscape.

Approximately 10.5 million bitcoins are believed to be held by the general public, constituting roughly 50% of the existing supply. However, the actual number of individual Bitcoin owners remains a mystery.

Interestingly, the recent surge in Bitcoin's value is credited not to individual retail investors but to Bitcoin whales, including major banks. Analysts suggest that these influential entities are steering both the price and demand, reshaping the once peer-to-peer digital cash dynamics.

As big financial players gather more and more bitcoins, it's making us rethink what Bitcoin was supposed to be. Originally, it was all about being decentralised and not controlled by big institutions. Now, with these financial giants holding a lot of bitcoins, we're wondering where Bitcoin is headed and if it's staying true to its roots. The world of cryptocurrency is changing, and it's not just affecting digital money – it's making waves in a much bigger way.


Blackbaud Enhances Security Measures Following FTC Settlement


Blackbaud, a major player in U.S. donor data management, recently settled with the Federal Trade Commission (FTC) after facing scrutiny for a ransomware attack in May 2020. This attack led to a substantial data breach affecting millions of individuals. The FTC's concerns revolved around security lapses, including weak passwords and insufficient monitoring of hacking attempts. The settlement marks a crucial step for Blackbaud, emphasising the need for enhanced security measures and data protection.

The FTC's complaint highlighted various security lapses by Blackbaud, including a failure to monitor hacking attempts, inadequate data segmentation, weak password practices, and a lack of multifactor authentication. As part of the settlement, Blackbaud is now mandated to enhance its security measures and delete unnecessary customer data from its systems.

One crucial aspect of the settlement requires Blackbaud to establish a data retention schedule, outlining the rationale behind retaining personal data and specifying a timeline for its deletion. The company is also obligated to promptly notify the FTC in the event of a data breach requiring reporting to relevant authorities.

The FTC alleges that Blackbaud paid a ransom of 24 Bitcoin (worth around $250,000 at the time) to the ransomware gang that stole sensitive personal data. However, the complaint reveals that the company did not verify whether the hacker actually deleted the stolen data. The breach, disclosed in July 2020, impacted over 13,000 Blackbaud business customers and their clients across the U.S., Canada, the U.K., and the Netherlands, exposing banking information, social security numbers, and plaintext credentials.

The aftermath of the breach saw Blackbaud facing 23 proposed class-action lawsuits in the U.S. and Canada by November 2020. In March 2023, the company agreed to pay $3 million to settle SEC charges for failing to disclose the full impact of the ransomware attack. Additionally, in October, Blackbaud agreed to a $49.5 million settlement to resolve a multi-state investigation supported by attorneys general from 49 U.S. states.

FTC Chair Lina M. Khan emphasised the severity of Blackbaud's failure to accurately convey the breach's scope, stating that it kept victims in the dark and delayed necessary protective actions. The settlement not only addresses security measures but also requires Blackbaud to avoid misrepresenting its data security and retention protocols in the future.

This settlement serves as a reminder of the responsibility companies bear in securing and managing the data they handle. It underscores the importance of robust cybersecurity practices, regular monitoring, and prompt disclosure in the event of a breach. As we move through our online experiences, these incidents show how important it is for companies to protect data and be clear with their clients and stakeholders.



Navigating the Paradox: Bitcoin's Self-Custody and the Privacy Challenge

 

Self-custody in Bitcoin refers to individuals holding and controlling their private keys, which in turn control their bitcoin. This concept is akin to securing physical gold in a personal safe rather than relying on a bank or third-party custodian. Unlike physical assets such as gold, verifying the legitimacy of bitcoin transactions in the digital realm is more straightforward and does not involve the complex process of melting down to authenticate.

While certain regulations require individuals and entities, particularly in financial services, to report their holdings and transactions to regulatory bodies, this obligation aims to prevent illicit activities and ensure tax compliance. While reasonable for businesses in regulated markets, extending these requirements to personal finances, especially for private individuals, seems contradictory in a society that values personal freedom and privacy.

Bitcoin's architecture presents a paradox: it is transparent, allowing verification of the 21 million cap and transaction history, yet remarkably private as the true control lies with the holder of private keys. This duality ensures currency integrity but poses challenges to personal financial privacy under regulatory scrutiny.

To address this, innovative solutions like multi-signature wallets are emerging. Companies like Swan and On-ramp are developing tools focused on multi-signature wallets for individuals and institutions. This approach, such as a ⅔ multi-signature solution, allows a compliant third party to hold a key without compromising individual control, providing a subtle yet effective means of regulatory verification.

Multisig solutions also enhance security against theft while maintaining user control over assets, striking a delicate balance between autonomy and regulatory compliance. As the Bitcoin ecosystem evolves, these solutions become crucial for preserving personal financial freedom while aligning with existing regulatory frameworks.

The regulatory landscape must adapt to Bitcoin's distinct characteristics, leading to the development of refined self-custody approaches that support privacy, autonomy, and regulatory compliance. Advocacy for standardized reporting mechanisms for self-custodied assets can align with regulatory requirements without compromising Bitcoin's foundational tenets.

Balancing innovation and regulation presents challenges, requiring collaborative discourse among all stakeholders. Bitcoin's principles of autonomy and privacy may clash with regulatory transparency efforts, but finding a balance is essential for the cryptocurrency's revolutionary role in finance. Bitcoiners play a crucial role in advocating for their privacy and sovereignty rights, emphasizing that saving within the Bitcoin network is a legitimate exercise of economic liberty and not a criminal act or subject to public disclosure.

Crypto Enthusiasts Embrace New Frontier: Investing in Bitcoin ETFs Explained

 


This was the first time the Securities and Exchange Commission approved an exchange-traded fund that contained bitcoin, but the Commission stressed that its decision does not mean it endorses or approves Bitcoin, but that it remains deeply sceptical about cryptocurrencies. 

Despite a deadline for just one application, the SEC stated that it had given the green light to 11 exchange-traded funds for Bitcoin. The agency said that this would provide a level playing field and competitiveness for all. 

As part of its approval process, the government has approved spot Bitcoin exchange-traded funds (ETFs), which can be bought by pension funds and ordinary investors. In the wake of the announcement by the head of the Securities and Exchange Commission, cryptocurrency fans reacted with glee - and memes about becoming rich. 

However, the warning was tempered by an explanation of the risks associated with the asset. A previous attempt for approval by the US financial watchdog had been repeatedly rebuffed due to concerns about potential fraud and manipulation, as well as the lack of any transparency. ETFs are an excellent way to invest in something or a group of things, like gold or junk bonds, without actually owning those items themselves.

The ETFs trade much like stocks, which allows them to be purchased and sold throughout the day, as opposed to traditional mutual funds. Since Bitcoin was launched, anyone who wanted one had to purchase it. That means either that one would have to learn about cold wallets or that one would have to open an account on a crypto-trading platform like Coinbase or Binance, which is not an easy task to learn about. 

Many new investors who are not inclined to go through all the extra steps to invest in Bitcoin could benefit from a spot Bitcoin ETF. In anticipation of the SEC approval, Bitcoin prices have soared, with the price trading at $45,280 on Wednesday, up from around $27,000 at the beginning of the month. 

A crypto exchange called FTX filed for bankruptcy in November 2022, resulting in a price drop of $16,000 in November 2022. A major concern of investors who are considering buying an ETF in this area is the volatility of bitcoin's price. 

Even though Bitcoin has not caught on as a replacement for fiat currency in November 2021, it soared to nearly $68,000 in November. The bitcoin price dropped below $20,000 one year after investors retreated from riskier assets and several company scandals eroded confidence in the crypto market.

Although regulators and law enforcement are cracking down on some bad actors in the crypto industry, such as Sam Bankman-Fried of FTX, the industry still feels like it is a Wild West. During this week's hack on the SEC's X account, in which a fake tweet claimed ETFs were approved, prices skyrocketed and raised questions about the SEC's ability to protect itself from scammers manipulating the market and whether they would be able to stop them. 

ETFs linked to Bitcoin can change in price rapidly and without warning or explanation, so investors will have to weigh that up before purchasing a digital coin ETF. But ETFs are generally sold as high-risk, high-reward products anyway. In addition, there is also the possibility of cybercrime which has taken place in the past few years. 

Almost every crypto company has been wiped out of the cash market overnight as a result of huge and costly attacks on bitcoins and other cryptocurrencies. When Blackrock, for instance, becomes a major Bitcoin holder, their cyber-security will be tested in ways they are not accustomed to due to the complexity of the blockchain. 

In addition to the negative environmental impact, there is also a cost associated with it. It is no secret that the Bitcoin blockchain relies on thousands of powerful computers all around the world to process transactions and create coins. It is expected that the use of renewable energy will increase going forward, but it remains to be seen how investment companies will process the potential costs associated with Bitcoin against buyers concerned about compliance with environmental, social, and corporate governance (ESG) regulations.

Rise of OLVX: A New Haven for Cybercriminals in the Shadows

 


OLVX has emerged as a new cybercrime marketplace, quickly gaining a loyal following of customers seeking through the marketplace tools used to conduct online fraud and cyberattacks on other websites. The launch of the OLVX marketplace follows along with a recent trend in cybercrime marketplaces being increasingly hosted on the clearnet instead of the dark web, which allows for wide distribution of users to access them and for them to be promoted through search engine optimization (SEO). 

Research conducted by Zerofox cybersecurity researchers discovered that there is a new underground market called OLVX (olvx[.]cc) that was advertising a wide variety of hacking tools for illicit purposes and was linked to a large number of hacking tools and websites. 

Researchers at ZeroFox, who detected OLVX at the end of July 2023, have noted a marked increase in activity on the new marketplace in the fall, noticing that both buyers and sellers are increasing their activity on the marketplace. 

There have been several illicit tools and services offered to threat actors by OLVX since its launch on July 1, 2023. As opposed to the other markets that OLVX operates in, it focuses on providing cyber criminals with tools that they can take advantage of during the 2023 holiday peak season in retail. 

ZeroFox found that OLVX marketplace activity spiked significantly in fall 2023 due to more items selling on the marketplace, and buyers rushing to the new store to purchase those items. OLVX is estimated to be the result of leaked OLUX code from 2020/2021, according to an investigation. 

Post-leak stores use improved versions of OLUX code, even though the old OLUX code is outdated. For better accessibility and better web hosting, OLVX hides the contents of its website on Cloudflare. For customer growth, OLVX does not make use of the dark web; instead, it relies on SEO and forums to grow customers.

For customer support, OLVX runs a Telegram channel to provide support. The company's reputation and earnings are boosted by strong relationships with its customers.  Unlike most other markets of this nature, OLVX does not rely on an escrow service to ensure funds are protected.

Instead, it offers a "deposit to direct payment" system which supports Bitcoin, Monero, Ethereum, Litecoin, TRON, Bitcoin Cash, Binance Coin, and Perfect Money as cryptocurrencies. By doing this, users are encouraged to spend more, because funds are always available, so browsing leads to more frequent purchases for the user. 

To maintain privacy and security, customers who are running low on funds are advised to use time-limited anonymous cryptocurrency addresses to "top-off" their accounts, in order to maintain funds. During the holiday season, OLVX and similar marketplaces thrive as cybercriminal hubs, supplying tools for targeting campaigns to cybercriminals during the colder months. 

On the site, OLVX offers hosting via Cloudflare and advertises DDoS protection through Simple Carrier LLC, which is a substandard hosting provider.  Consumers are increasingly putting their security at risk as they shop. 

OLVX is one of the leading tools that criminals use during the holiday season for illicit activities, making this the time of year when criminals run their heists. Due to the unique nature of the platform, an independent verification team can not verify that the above quality and validity claims are accurate, however, users believe that OLVX's rising popularity and established reputation lend credibility to the majority of the claims. 

Interestingly, Zerofox indicates that fraudulent activity on the platform starts to increase as users get closer to the holiday shopping season, which means that buyers should maintain heightened vigilance so as to avoid scams and identify fraud.

El Salvador to Offer Citizenship for a $1 Million Bitcoin ‘Investment’


Last week, the El Salvador government, along with the stablecoin company Tether, joined in an initiative called ‘Adopting El Salvador Freedom,’ which will enable foreigners to obtain a Salvadoran passport in exchange for a million dollars in Bitcoin.  

This initiative, which has a 1,000-participant annual cap, seeks to attract high-net-worth individuals by providing them with residency and eventual citizenship in exchange for their investment. 

The initiative will require the ‘participant’ to make a $1 million investment in BTC or USDT, and successful applicants will be eligible for a Salvadoran passport and citizenship. According to a Bitcoin news source, Adriana Mira, El Salvador's Vice Minister of Foreign Affairs, emphasized the program as a critical step for anyone hoping to contribute to El Salvador's economic future. 

However, Tether needed to make it clear where the funding will take place.  

In September, El Salvador became the first nation to accept Bitcoin as a legal tender. The country required companies to accept the popular cryptocurrency as payment and launched a digital wallet named "Chivo" to encourage its citizens to use it by offering a $30 sign-up bonus in Bitcoin.

However, this plan evoked controversies among the Salvadoran public, with them protecting against the action – and President Nayib Bukele's alarming shift towards autocracy ensued – a vast majority of them continuing the use of cash. According to Fortune, Bitcoin's price fell from an all-time high of over $69,000 in November 2021—when Bukele announced the building of a “Bitcoin City”— to less than $17,000 by the start of 2023 as a result of Bukele's disastrous use of tens of millions of federal funds on the cryptocurrency.

How Did Bitcoin Boost The El Salvador’s Tourism

Despite the controversy revolving around the initiative, the country has gained popularity among Bitcoin enthusiasts worldwide. The country’s tourism minister announced in May that travellers were coming to the nation in unprecedented quantities because of its dedication to cryptocurrency. This included a huge number of the most well-known “Bitcoin maxis” in the world, such Swan Bitcoin, a powerful business that established a home in El Zonte, a surf town that is primarily responsible for sparking the nation’s Bitcoin experiment.  

Researchers: 'Black Basta' Group Rakes in Over $100 Million

 

A cyber extortion group believed to be an offshoot of the infamous Russian Conti hacker organization has reportedly amassed over $100 million since its emergence last year, according to a report published on Wednesday by digital currency tracking service Elliptic and Corvus Insurance.

The group, known as "Black Basta," has allegedly extorted at least $107 million in bitcoin, with a significant portion of the laundered ransom payments flowing to the sanctioned Russian cryptocurrency exchange Garantex, as revealed in the joint report. Attempts to contact Black Basta through its dark web site were unsuccessful. Garantex, which faced U.S. Treasury sanctions in April of the previous year, expressed support for global initiatives combatting cybercrime and urged information-sharing regarding the hackers' finances, pledging to block suspicious funds.

Elliptic co-founder Tom Robinson characterized Black Basta's substantial earnings as making it "one of the most profitable ransomware strains of all time." The researchers arrived at this figure by identifying known ransom payments linked to the group, tracing the laundering of digital currency, and discovering additional payments.

Robert McArdle, a cybercrime expert from security firm TrendMicro not involved in the report, deemed the reported Black Basta figure "certainly in a believable range for their operations."

The Elliptic-Corvus report also presented evidence linking Black Basta to the now-defunct Russian group "Canti." Conti, formerly a prominent ransomware gang, gained notoriety for coercing victims through data encryption, ransom demands, and threats to publish stolen information. 

The report suggests that individuals from Conti, following the dismantling of its leak site after Russia's invasion of Ukraine and the subsequent posting of U.S. bounties on its leadership, may have reorganized and rebranded, with Black Basta potentially being a manifestation of this restructuring.

"Conti was perhaps the most successful ransomware gang we've seen," remarked Robinson. The recent findings indicate that some individuals responsible for Conti's success might be replicating it with the Black Basta ransomware, he added.

Coin Cloud Crisis: Bitcoin ATM Giant Faces Data Breach, 300,000 Customers Impacted

 


In February 2023, Coin Cloud, a Bitcoin ATM operator with over 4,000 machines throughout the U.S. and Brazil that once boasted more than 4,000 machines before filing for bankruptcy in January 2023 due to financial difficulties, has been purportedly targeted by an unidentified hacking group in an attempt to take advantage of Coin Cloud's insecurity. 

The recently discovered security breach of Coin Cloud, which was once a prominent Bitcoin ATM operator, has sent shockwaves through the cryptocurrency industry as a result of the incident. As a result of an unknown hacker intrusion into the company's backend system, sensitive customer information and proprietary code have been accessed by hackers.

A total of around 70,000 client selfies have been compromised, and nearly 300,000 individuals' personal information has been exposed in this breach. The incident has been revealed by vx-underground, a cybersecurity group that provides a report explaining how digital currencies operate under inherent risks that need to be understood. 

In a recent report, hackers are purportedly using covert methods to discuss their plans, raising concerns that the stolen data may be revealed to the public on a public conference call. According to the report, the breach affects many types of consumer information, including basic personal details, social security numbers, occupations, and addresses of physical locations.

According to reports, affected customers are reported to be from the United States and Brazil. Data breaches of this magnitude are particularly alarming given the scope of the breach. Aside from the personal information that hackers have obtained, the hackers claim that they have obtained 70,000 images of selfies used by customers as part of their identity verification process in the financial industry. 

A breach of this kind could be of even greater significance. An anonymous cybersecurity account known as VX-Underground claims that hackers have breached the personal information of 300,000 Coin Cloud customers, including vital information such as Social Security numbers, date of birth, names, email addresses, telephone numbers, occupations, and addresses, among others. This information is being retrieved by hackers who are using pseudonymous accounts. 

There is the potential to make physical threats, such as stalking, harassment, or targeted attacks, due to this disclosure of such personal and detailed information, which can be used by malicious actors. Aside from the financial risks, victims will also be at risk in real-world ways, which highlights the need for advanced cybersecurity measures and proactive efforts to protect sensitive information as soon as possible. 

The VX Underground has reported that the hackers were able to steal the source code of the entire backend of Coin Cloud thanks to compromising the data of US residents and Brazilian users. The compromised data includes information from US residents and Brazilian users. In addition to Coin Cloud's financial difficulties, this cybersecurity incident adds to its woes. 

Coin Cloud filed for bankruptcy earlier this year, and it now finds itself facing financial difficulties again. In the United States bankruptcy court, Coin Cloud announced on February 8th that it planned to file a Chapter 11 reorganization petition. Despite this, Chris McAlary, the CEO of Coin Cloud and president, explained that this step was taken to protect the interests of its creditors by restructuring their debt. 

The company's liabilities, according to a filing made on February 7th, ranged from $100 million to $500 million, whereas its assets were valued between $50 million and $100 million, which was quite the contrast. Due to this breach, customers are advised to closely monitor their accounts and to take extra precautionary measures like the freezing of their credit reports, to lessen any potential impact of the breach on their overall financial health. 

As a company, Coin Cloud has a lot at stake in the current crisis and its response will have major impacts on the way we see crypto ATMs in the future. How Coin Cloud addresses customer concerns and takes remedial measures will play an essential role in regaining trust among customers. 

This financial imbalance ultimately led the company to seek bankruptcy protection, signalling deeper financial problems within the company, which is evidenced by reports that the company owes its creditors upwards of $50 million, a considerable amount more than its declared assets. 

It was revealed in the bankruptcy documentation that Coin Cloud owed more than $100 million to Genesis Global Trading, a subsidiary of Digital Currency Group, in the form of debts. Coin Cloud detailed its outstanding debts in its bankruptcy documents. With a debt of approximately $8.5 million owed to Cole Kepro, the company is owed the second largest amount of money.

What is up with the NFTs?


In the latest episode of the infamous The Simpsons, the hapless father Homer turns himself and later his son Bart into an NFT, in an attempt to gain millions.

However, things take a different turn when he finds out (from a pizza cat), that the NFT ‘craze’ is over. 

This episode is gaining wide recognition from the NFT fans and sceptics for the Simpsons makers for creating a parody related to the crypto industry and how it peaked a few years ago but has since quieted down. 

Are NFTs Really Dead? 

According to an analysis of the issue, the famous Non-Fungible Token market witnessed its biggest low recently, with October being labelled as a “Floptober.”

According to researchers at Dapp Radar, the NFT value has hit its lowest since the NFT market peaked. 

The overall amount of money sold in the sector, or trading volume, has decreased by 89% since the start of 2022.

It was $12.6 billion (£10.4 billion) in the first quarter of 2022, and as of the third quarter of 2023, it is only $1.39 billion.

Additionally, the sector is shrinking. The makers of the infamous Bored Ape NFTs, Yuga Labs, revealed an undisclosed number of layoffs last month.

Among its most well-known series is Bored Ape Yacht Club. Millions of dollars were once paid for NFTs, which were driven by wealthy customers such as talk show presenter Jimmy Fallon and media sensation Paris Hilton.

Since October 2022, Paris Hilton has not posted on X (formerly Twitter) about the NFTs, despite the fact she has posted almost daily from January and February 2022 to promote her collections. 

The value of the cheapest NFT in the collection, Bored Ape NFTs, peaked in the beginning of May 2022 and cost approximately $268,000 (144 Ethereum tokens), according to the NFT Price Floor website. It is now only $56,000.

Due to increasingly poor bids, US collector and artist Taylor Whitley was compelled to sell six of his seven highly valued Bored Ape NFTs.

"I haven't really wanted to sell, but the market is really bad, so it's the smart thing for me to do. I think the NFT market could even go lower," states Taylor in a talk with BBC.

Taylor rejected many better offers for his most prized Bored Ape in the past, but last month he sold it for $212,000 dollars.

If he had sold at the peak, he could have received at least ten times more for his NFTs. Even though it hurt, he was an early investment and still made huge gains. He made 1,000 times more money on his most recent transaction than on his original $200 investment.

For every Bored Ape NFT, there are several other smaller brands and artists that are aiding the NFT industry.

Angie Taylor, a Scottish artist, used to receive up to $8,000 for every NFT piece, but these days she only makes about $600.

She was forced to return to her part-time tutoring work before to NFT.

She says, "I'm still selling bits and pieces here and there, but I am having to do a day job as well. I can't make a living off this anymore with nothing else."

However, she was aware that the bubble would eventually burst. 

"I kind of budgeted for this to happen, because I thought, this is a boom and bust type of situation," she says.

Obviously, this is a buyers' market, and many contented purchasers are taking advantage of the slump.

Recently, Adam, also known online as Little Fish, made $663,000 for his crypto-punk artwork NFT.

Although the European full-time cryptocurrency investor recognizes that the sum is substantial, he believes he received a good deal on his CryptoPunk #36009./ After all, its seller turned down a $1.18 million offer a year ago.

"The downturn is exactly why I bought it. People are desperate. In the winter time you can buy summer clothes for cheap," he says.

Adam further says that he believes that summer will come again for NFTs, and he will “enjoy it,” whenever it does.  

From China To WikiLeaks: Censored Texts Survive In Bitcoin And Ethereum


Bitcoin is described by individuals in varied way, some say it is digital money currency, a digital store of value and a platform for data that is immune to censorship.

Fundamentally, anyone can access and upload data, thanks to technology; nevertheless, bitcoin has transformed that data into directly valuable economic assets by establishing a bearer asset that can be traded for goods or fiat money. Interestingly, transferring texts is banned in one nation, they are completely legal in another. 

Project Spartacus, an effort to employ ordinals to inscribe every war record on Wikileaks, was inspired by this new use case. An interview with Dr. Ai Fen, the first "whistleblower" physician in China during the COVID-19 pandemic, was also banned. It was first posted on the Ethereum blockchain and many of the resources pertaining to her were progressively removed from the Chinese Internet.

A new technique called ordinals makes it possible to associate each sat in a Bitcoin transaction with an equivalent resource in the Bitcoin's memory pool. As a result, it is now possible to generate NFTs on Bitcoin.

Project Spartacus uses ordinals to facilitate the conversion of Wikileaks war log photos into Bitcoin. In this case, the objects in question are a permanent archive of papers related to which Julian Assange was prosecuted. By choosing to commit one of the war logs to every block, they can make sure that the financial power underlying Bitcoin is dedicated to safeguarding the logs. Additionally, there is a section for Bitcoin donations to different nonprofit organizations.

Not only has non-economic data been put into Bitcoin blocks before, but with ordinals, there has never been a greater need or opportunity for programmatic inscription implementation. The secret is to utilize a script and imprint several images or actions such that, to the user, they appear to be a single transaction.

The ideology behind Bitcoin’s creation has led to this new censorship-resistant way of disseminating information. Monero, one of the first Bitcoin forks, gets its name from the Esperanto word for money. Socialist nations like Vietnam and the People's Republic of China co-opted Esperanto, the misguided attempt by anarchists with a global mindset to communicate, in order to strengthen their hold on power.

With its value rooted in far more modern technology and financial incentives for its survival, bitcoin has a far better chance of surviving and spreading.  

Investigating Chainalysis Data Reliability in Cryptocurrency Cases

 

Chainalysis has been a key player in bitcoin investigations in recent years, giving financial institutions and law enforcement authorities vital information and insights. But as its impact expands, concerns regarding the veracity and reliability of the information it offers have surfaced.

The scrutiny over Chainalysis data was thrust into the spotlight by the recent 'Bitcoin Fog' case, which raised concerns about the reliance on Chainalysis in criminal investigations. Critics argue that the reliance on a single source for such critical information may lead to potential biases or inaccuracies. Bloomberg's report on the case highlights the complexities surrounding the use of Chainalysis in legal proceedings, emphasizing the need for a nuanced understanding of the data it provides.

One of the primary concerns regarding Chainalysis data is its potential impact on privacy and civil liberties. As blockchain analysis becomes more prevalent, there are fears that innocent individuals may be caught in the crossfire of investigations. The delicate balance between effective law enforcement and protecting individual rights remains a key challenge.

Chainalysis, however, defends its practices and emphasizes its commitment to transparency and accuracy. In a recent blog post, the company provided insights into its methodology and highlighted its efforts to continuously improve the quality of the data it delivers. Michael Gronager, CEO of Chainalysis, affirmed, "We understand the weight of responsibility that comes with providing data for legal proceedings, and we take every measure to ensure its reliability."

Experts in the field also weigh in on the matter. Dr. Sarah Hopkins, a leading blockchain analyst, commented, "While Chainalysis has undoubtedly been a game-changer in tracking illicit activities, it's essential to remember that it's just one piece of the puzzle. It should be used in conjunction with other investigative techniques to ensure a comprehensive understanding of the situation."

The controversy about Chainalysis data's dependability serves as a reminder of how bitcoin research is changing. Despite the fact that it has frequently been useful, it is crucial to view its conclusions critically. The techniques and equipment used to research cryptocurrencies must change as technology improves and the market itself develops. In this quickly evolving industry, a multifaceted strategy that balances privacy concerns with the requirement for efficient law enforcement is still crucial.

Cryptocurrency Giants FTX, BlockFi, and Genesis Hit by Kroll Hack

Customers of prominent cryptocurrency companies FTX, BlockFi, and Genesis had their financial and personal information exposed in a recent cybersecurity breach. Concerns have been expressed about the security of private information in the cryptocurrency sector as a result of the hack.

The breach, according to claims from sources, was carried out by taking advantage of flaws in the systems of Kroll, a reputable data management business. The personal information of innumerable users is now in danger due to Kroll's involvement in processing the client data of these cryptocurrency companies.

FTX, BlockFi, and Genesis being prominent names in the cryptocurrency sector, have a significant user base that relies on their platforms for trading, lending, and other financial services. The compromised data includes user names, email addresses, phone numbers, transaction histories, and potentially even account passwords. This sensitive information falling into the wrong hands could lead to identity theft, phishing attacks, and financial fraud.

The incident raises questions about the industry's overall data security practices. While the cryptocurrency market has been praised for its decentralized nature and robust encryption, this breach underscores the persistent vulnerabilities that exist in digital systems. Companies dealing with such high-value assets and sensitive data must prioritize cybersecurity measures to prevent such incidents.

The breach has consequences beyond only the immediate loss of client data. Users may stop using these platforms, which could result in lost revenue for the impacted businesses. Regulatory organizations might examine these occurrences more closely, which would result in tougher compliance standards for cryptocurrency businesses.

FTX, BlockFi, and Genesis have assured their consumers that they are acting right now in reaction to the intrusion. They are trying to improve their security procedures, assisting law enforcement, and carrying out in-depth investigations to ascertain the scope of the intrusion. Users who are affected are advised to modify their passwords, use two-factor authentication, and be on the lookout for phishing attacks.

The Bitcoin industry as a whole needs to pay attention after this tragedy. The digital world has unmatched prospects, but it also has its own challenges, notably in terms of cybersecurity. To properly protect the information of their users, businesses must implement proactive security measures, carry out routine audits, and spend money on powerful encryption.

Customers of these affected sites must implement suggested security procedures and stay up to date on developments as the investigation progresses. Additionally, the event highlights how crucial industry cooperation is to jointly fix vulnerabilities and improve the overall security posture of the Bitcoin ecosystem.


BlackRock's Bitcoin ETF Reveals the Future of Cryptocurrency Surveillance

 


Surveillance is about to reach a new level as Blackrock awaits the SEC's confirmation regarding its Bitcoin ETF launch. An ETF tied to Bitcoin was filed on June 15 by the world's largest asset manager, reportedly the world's largest asset manager. In an era when the Securities and Exchange Commission (SEC) and other regulatory agencies crack down on the financial sector, the timing of the announcement was crucial.  

There were a few market observers who wondered if BlackRock, the world's largest asset manager, would have a better chance of securing approval than other competitors who had been rejected by the U.S. Securities and Exchange Commission when it filed to establish a spot bitcoin exchange-traded fund in the U.S. Their investigation quickly led them to identify an application feature that made it possible for authorities to be made aware of questionable trades. 

The Surveillance-Sharing Agreement (SSA), now commonly known as the Surveillance-Sharing Agreement (SSA), was introduced after BlackRock's application was submitted. Nevertheless, the issue of information-sharing agreements that change the balance of power and give regulators the authority to request details about the application will significantly impact the U.S. Securities and Exchange Commission's (SEC) decision. 

As a result of regulators' misgivings about its first effort to file for an exchange-traded fund that focuses on Bitcoin spot markets, BlackRock has submitted an amended application to the SEC to apply with an emphasis on Bitcoin spot markets.

It was announced recently by the Nasdaq exchange that BlackRock plans to finalize a surveillance agreement with Coinbase (COIN), addressing one of the main issues the Securities and Exchange Commission has raised when rejecting Bitcoin spot ETF applications in the past. In a new filing made by the Nasdaq exchange on BlackRock's behalf, the company explained that it intends to finalize the surveillance agreement with Coinbase (COIN).  

Bitcoin ETF is expected to be approved more quickly by the world's largest asset manager because of its strong financial background. The application also triggered a series of follow-up documents with the Surveillance-Sharing Agreement (SSA), which initiated several follow-up filings. The Securities and Exchange Commission may approve the application if the information-sharing agreement is crafted to give the regulator increased control over the application.  

A client of the agency claims there is a protocol in place that uses information sharing and surveillance to circumvent the manipulation of the cryptocurrency market. When the Winklevoss twins applied for a Bitcoin ETF in 2017, they were the first to bring these requirements to light. The details of the exchange of information between Coinbase and NASDAQ were also required as part of the request.  

As it seems, there is a tug-of-war between spot exchanges and regulators, ETF providers, and listing exchanges over how data surveillance carried out by spot exchanges will be administered. It was a great relief to see that the information-sharing agreement also allowed the exchange to share this data with the providers of ETFs and regulators.  

Here is a spotlight on specific trades or traders to spread information about them. In addition, the agreement would compel cryptocurrency exchanges to share data, including personally identifiable information (PII), with each other. The information contained in this report will include the names, addresses, and other details of the customers. According to Bitcoin ETF filings, no agreements allow information sharing. A similar structure is present in other markets, however, and this is similar to what is visible in the US.  

There is also the matter of specificity and the difference between the specific request for sharing information and the subpoena. This is also a significant factor. An individual familiar with the matter told a reporter that the proposed scenario might be more like a fishing expedition. This is where trade information is communicated between two points at the same time rather than across a wide spectrum.  

Cryptocurrency traders prefer to remain anonymous and keep their information private to avoid identification. For this reason, they came into the world of crypto trading. Nevertheless, if the Exchange Traded Fund strategy is to succeed, this will have to be addressed, if it is to succeed.  

There are some things to improve regarding the recent Bitcoin ETF applications submitted to the Securities and Exchange Commission. The Commission has asked applicants to resubmit their applications. Whether or not this scenario will benefit the crypto industry, and for what reason, can only be determined by time.  

What Are The Benefits of Sharing Information? 


Brokers and exchanges in equity markets know the unique combination of information and surveillance sharing. They have been doing this for a long time. Here the regulatory authority can ask for extra information regarding a client’s trading history, and they have to oblige.  

Suppose that a broker has a client, and NASDAQ receives an order from the broker on behalf of the client. In this instance, the exchange's SMARTS surveillance system flagged this order as suspicious to prevent execution. A suspicious activity report (SAR) must be filed by the broker and the exchange. 

Regulators can investigate the SAR report and ask for private information about a person. To achieve this goal, it is necessary to determine if the same beneficial owner is behind all trades. Depending on the facts of the case, a consolidated audit trial might be an appropriate course of action. 

The SEC may also approve all other filings submitted on the same day if it approves BlackRock's Bitcoin ETF. While there has been a lot of speculation regarding its functioning and sharing of information, one thing is certain: it will expose users to crypto assets, thus inadvertently increasing cryptocurrency adoption rates.  

According to BlackRock's revised application for a Bitcoin ETF, a new level of regulatory oversight is being implemented on digital currency markets. There is a possibility that regulatory dynamics will shift and a stronger focus on trade oversight. This will be done through a Surveillance-Sharing Agreement and partnerships with exchanges such as Coinbase.

RFK Jr. Criticizes Crypto, Following Anti-CBDC Remark


On Tuesday, US Democratic presidential candidate Robert F. Kennedy has taken another dig at cryptocurrency, following earlier comments he made opposing a U.S. central bank digital currency, or CBDC. His tweets came out swinging on defense of the digital assets sector, denouncing what he called a "war on crypto."

Kennedy officially declared his 2024 presidential bid last month. He stated that the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC) have "no authority to wage an extra-legal war on crypto that leaves major banks as collateral damage."

Kennedy cited an article by Ellen Brown titled "How the War on Crypto Triggered a Banking Crisis," in which Brown makes a "strong case" that a government-sponsored campaign against the digital assets sector was responsible for several historic bank failures in March, including Silicon Valley Bank, Signature Bank, and Silvergate Bank.

It is debatable whether there is a coordinated attempt to remove cryptocurrency from the American financial system. According to Barney Frank, an ex-congressman who served on the board of directors of Signature Bank, “the institution was shut down to send an anti-crypto message.” These assertions were later denied by a New York regulator.. On May 2, Kennedy criticized Biden on May 2 for calling the US banking system "safe and sound.” “Today, bank stocks are crashing. The American people deserve more than glib assurances and perception management,” he tweeted.

Following this, on May 3, he criticized the Biden administration's proposed tax on crypto mining. An environmental lawyer, Kennedy called the proposed 30% tax on energy used by crypto miners "a bad idea" He said mining's energy use was a concern (though somewhat overstated), stating, “The environmental argument is a selective pretext to suppress anything that threatens elite power structures, Bitcoint for example.”

Days after Kennedy's anti-CBDC comments, the Federal Reserve clarified its position, stating that the FedNow payments system, which Kennedy claimed to equate with a CBDC, is neither a digital currency nor a replacement for cash.

While some Democrats, such as Elizabeth Warren, have repeatedly criticized cryptocurrency and made it a centerpiece of their political platforms, others, such as New York City Mayor Eric Adams, have been outspoken in their support for the emerging asset class.  

Clipper Virus: 451 PyPI Packages Deploy Chrome Extensions to Steal Crypto


Threat actors have recently released more than 451 distinct Python packages on the official Python Package Index (PyPI) repository in an effort to infect developer systems with the clipper virus. 

The libraries were discovered by software supply chain security firm Phylum, which said the ongoing activity is a continuation of a campaign that was first made public in November 2022. 

How Did Threat Actors Use Typosquatting? 

In an initial finding, it was discovered that popular packages including beautifulsoup, bitcoinlib, cryptofeed, matplotlib, pandas, pytorch, scikit-learn, scrapy, selenium, solana, and tensorflow were being mimicked via typosquatting. 

For each of the aforementioned, the threat actors deploy between 13 and 38 typosquatting variations in an effort to account for a wide variety of potential mistypes that could lead to the download of the malicious package. 

In order to evade detection, the malicious actors deployed a new obfuscation tactic that was not being utilized in the November 2022 wave. Instead, they are now using a random 16-bit combination of Chinese ideographs for function and variable identifiers. 

Researchers at Phylum emphasized that the code makes use of the built-in Python functions and a series of arithmetic operations for the string generation system. This way, even if the obfuscation produces a visually striking outcome, it is not extremely difficult to unravel. 

"While this obfuscation is interesting and builds up extremely complex and highly obfuscated looking code, from a dynamic standpoint, this is trivial[…]Python is an interpreted language, and the code must run. We simply have to evaluate these instances, and it reveals exactly what the code is doing,” reads a Phylum report. 

Malicious Browser Extensions 

For taking control of the cryptocurrency transactions, the malicious PyPi packages create a malicious Chromium browser extension in the ‘%AppData%\Extension’ folder, similar to the November 2022 attacks. 

It then looks for Windows shortcuts pertaining to Google Chrome, Microsoft Edge, Brave, and Opera, followed by hijacking them to load the malevolent browser extension using the '--load-extension' command line argument. 

For example, a Google Chrome shortcut would be hijacked to "C:\Program Files\Google\Chrome\Application\chrome.exe --load-extension=%AppData%\\Extension". 

After the web browser is launched, the extension will load, and malicious JavaScript will monitor for cryptocurrency addresses copied to the Windows clipboard. When a crypto address is found, the browser extension will swap it out for a list of addresses that are hardcoded and under the control of the threat actor. By doing this, any sent cryptocurrency transaction funds will be sent to the wallet of the threat actor rather than the intended receiver. 

By including cryptocurrency addresses for Bitcoin, Ethereum, TRON, Binance Chain, Litecoin, Ripple, Dash, Bitcoin Cash, and Cosmos in this new campaign, the threat actor has increased the number of wallets that are supported. 

These findings illustrate the ever-emerging threats that developers face from supply chain attacks, with threat actors inclining to methods like typosquatting to scam users into installing fraudulent packages.  

How ChatGPT Could Drive A Viral Crypto Narrative


AI Crypto: The next big thing 

AI crypto tokens will surely be the next big thing in the industry, an image of Metaverse mania, Defi boom, or meme coin explosion. 

ChatGPT and other AI-based technologies have been viral across social media and the business world. Will this make three altcoins stand-out winners in the next bull market?

Understanding AI Crypto: How trading narratives can bring profit

Narratives are important for incredible rallies or declines, does not matter if they are accurate or not. For instance, the last Bitcoin narrative was aggravated by its use as an inflation hedge. But when the inflation hedge surfaced, the top cryptocurrency was hit by one of its worst downtrends to date. 

Other latest narratives include Defi driving Ethereum and similar coins higher, or when Metaverse tokens rose rapidly after Mark Zuckerberg changed the parent company's name to Mera (earlier Facebook). 

NFTs also helped Ethereum and newbies like Solana. Elon Musk made meme coins go viral by just tweeting about it.

The one thing common in all these assets is that the narratives made money while being in markets, it is all that matters. For savvy cryptocurrency investors exploring the next big narrative, you don't have to look beyond two letters: AI.

AI Crypto and ChatGPT

OpenAI's ChatGPT is currently all over social media. The AI tool has already passed the Medical License Exam, Bar Exam, and MBA exam. People are using it to write articles, solve questions, and tweets, do homework, and perform tasks automatically. People are even using it for Bitcoin as various celebrities. The platform has shown sheer potential. 

Crypto AI Tokens on the edge of a new "Bull Cycle"

Although no AI crypto tokes share any resemblance with ChatGPT, projects with links with anything AI has recovered more significantly from cryptocurrency bear market lows.

For instance, Fetch.ai(FET), is up roughly 480% from its lows and is up over 200% in January 2023 itself. Ocean Protocol (OCEAN) is another great example, with a 230% recovery from lows and more than 100% year-to-date. SingularlyNet (AGIX) beats them both with a low put in three months before and more than 600% gains from the low. AGIX jumped over 460% during January 2023 with a full week still left. 

The results are surprising, but there's still a lot more to see. Jason Soni, Crypto and Currency Analyst at Elliott Wave International recently made a video on three AI-based crypto tokens that may be on the verge of a new bull cycle. 

The three cryptocurrencies analyzed in the video are AGIX, FET, and OCEAN. You can find Soni's analysis on Elliott Wave international's Crypto Trader's Classroom, which brings three new videos every week. The video explains where these altcoins are in their current market cycle and breaks down why there could be more upside in the future. 



A $100 Million Theft Has Been Attributed to the Lazarus Group by the FBI

 


A $100 million cryptocurrency heist was committed by the Lazarus Group last June, which has been blamed by the FBI for the crime. Known for stealing cryptocurrency to help support the military and weapons programs of the North Korean government, this team is associated with the North Korean government. 

A statement released by the FBI on Tuesday identified Lazarus Group, which is also known as APT38, as the perpetrators of the June 24 attack on the Harmony Horizon bridge. The FBI released this information. In the course of this attack, $100 million worth of Ethereum was lost. Harmony Horizon is a bridge that allows you to connect Ethereum, Bitcoin, Binance Chain, and Harmony with the aforementioned cryptocurrency systems. The Ethereum bridge was accessed by attackers in June of this year and the cryptocurrency was stolen. 

There has been a reported theft on the Horizon bridge this morning for approximately $100MM, which was discovered by the Harmony team. At the time of the incident, Harmony said that they had begun to work with national authorities and forensic specialists to identify the perpetrator. In addition, they had begun to regain the funds that had been stolen. 

As a team, the FBI and the Department of Justice's National Cryptocurrency Enforcement Team have combined to investigate the Harmony heist, as well as several United States attorneys' offices. Earlier this week, the FBI announced that the Lazarus Group had been responsible for the attack and used its malware tool TraderTraitor as part of its operation. This malware was one of the components of the attack. 

"During the June 2022 heist, North Korean cyber actors, who used an encryption protocol known as Railgun, a privacy protocol, gained access to over $60 million worth of Ethereum (ETH) that had been stolen. It is believed that a portion of the stolen Ethereum from this theft was sent to several virtual asset services for conversion into bitcoin (BTC)," the FBI said in a statement released by the bureau. 

Lazarus Group is a North Korean security firm that has been active for several years. It is closely associated with the North Korean government and typically pursues the interests of the government. A successful attack by this group on the Bank of Bangladesh in 2016 netted it $81 million. Since then, Lazarus has continued to operate against banks and crypto exchanges to fund its operations. 

Lazarus Group is a group of companies that specialize in penetrating cryptocurrency firms and exchanges, as well as other targets. This is done with the use of their tools that are integrated into TraderTraitor. Oftentimes, these tactics begin when hackers send phishing emails to employees at a target company. They entice them to download malicious files in the hopes that they will be able to decipher what they are downloading. 

Many of these messages are disguised as recruitment efforts and offer high-paying jobs to entice recipients to download cryptocurrency applications laced with malware, also known as TraderTraitor by the U.S. government, according to a CISA advisory released in April. 

TraderTraitor is the term used to describe a series of malicious applications that are written using cross-platform JavaScript and run on the Node.js runtime running on Electron using the Node.js runtime environment. Several malicious open-source applications have been downloaded into the system, posing as tools that can help traders or price forecasters trade cryptocurrencies. TraderTraitor campaigns promote the alleged features of the applications on websites with modern designs. 

Several intrusions carried out by the Lazarus Group have used TraderTraitor as part of their investigations, and they have been quite successful in doing so. There was also another tool they used, a macOS backdoor called AppleJeus, which they implemented along with more advanced ways. 

In addition to spreading cryptocurrency trading applications modified to contain malware that facilitates cryptocurrency theft, the Lazarus Group also distributed AppleJeus trojanized cryptocurrency applications targeting individuals and companies, including cryptocurrency exchanges and financial services firms. 

According to the advisory, the North Korean regime will likely continue to exploit the vulnerabilities of cryptocurrency technology companies, gaming companies, and exchanges. This will enable it to generate and launder funds to support its regime. 

During the Harmony intrusion, the Lazarus Group moved bitcoin to several exchanges, which the FBI worked with to freeze those assets.

An Active Typosquat Attack in PyPI and NPM Discovered

The typosquatting-based software supply chain threat, which targets explicitly Python and JavaScript programmers, is being warned off by Phylum security researchers.

What is Typosquatting?

Cybercriminals that practice typosquatting register domains with purposeful misspellings of the names of popular websites. Typically for malevolent intentions, hackers use this tactic to entice unwary users to other websites. These fake websites could deceive users into inputting private information. These sites can seriously harm an organization's reputation if attacked by these perpetrators. 

PYPI &NPM

Researchers alerted developers to malicious dependencies that contained code to download Golang payloads on Friday, saying a threat actor was typosquatting well-known PyPI packages. 

The Python Software Foundation is responsible for maintaining PyPI, the largest code repository for the Python programming language. Over 350,000 software programs are stored there. Meanwhile, NPM, which hosts over a million packages, serves as the primary repository for javascript programming. 

About the hack

The aim of the hack is to infect users with a ransomware variant. A number of files with nearly identical names, like Python Requests, are being used by hackers to mimic the Python Requests package on PyPI.

After being downloaded, the malware encrypts files in the background while changing the victim's desktop wallpaper to a picture controlled by the hacker, and looks like it came from the CIA.

When a Readme file created by malware is opened, a message from the attacker requesting $100, usually in a cryptocurrency, for the decryption key is displayed. 

The malware used is referred to as W4SP Stealer. It is able to access a variety of private information, including Telegram data, crypto wallets, Discord tokens, cookies, and saved passwords. 

One of the binaries is ransomware, which encrypts specific files and changes the victim's desktop wallpaper when executed. However, soon the malicious actors published numerous npm packages with identical behaviors. For the decryption key, they demand $100 in Bitcoin, XMR, Ethereum, or Litecoin.

Each of the malicious npm packages, such as discordallintsbot, discordselfbot16, discord-all-intents-bot, discors.jd, and telnservrr, contains JavaScript code that acts identical to the code embedded in the Python packages. 

Louis Lang, chief technology officer at Phylum, predicts a rise in harmful package numbers. These packages drop binaries, and the antivirus engines in VirusTotal identify these binaries as malicious. It is advised that Python and JavaScript developers adhere to the necessary cybersecurity maintenance and stay secure. 



Growing Cyberattacks on Cryptocurrency

Cybercrimes against cryptocurrencies continue to soar and pose a primary threat to giant institutions of cryptocurrencies, individuals, and governments worldwide. The whole world talks about bitcoin, cryptocurrencies, and blockchain technology, however, no one seems to talk about the high probability of loss and cyber threats. 

In the first half of 2022, malicious actors have successfully captured nearly $2 billion worth of cryptocurrencies, a 60% rise from last year. There are various reasons why cryptocurrencies are attacked by cybercriminals, often and extensively. 

SonicWall published a report that disclosed that cryptojacking and ransomware attacks had dropped in the latter half of 2019. Cyber intelligence further added that the drastic drop in the number of crypto-jacking cases happened because of the closing down of Coinhive. However, it led cyber attackers to turn to more targeted attack vectors with an increase in specialized malware attacks to steal digital currencies. 

While some cybersecurity organizations are showing their interest in slowing down the crypto market would lead to a slowdown in cybercrime, this is not possible, and the risks and threats associated with it will remain high. Even some trends indicate that the crypto-crime problem may grow worse in the coming years. 

According to the technical data, cryptocurrency exchanges, personal wallets, and platforms are primary targets of cryptohackers since they deal in large volumes of virtual money. The research shows that from June 2021 to June 2022, crypto platforms witnessed a loss of an estimated amount of $44 billion. 

Cyberthreats exploited unsecured wallets, SIM card jacking, and stealing recovery phrases and passwords. Furthermore, the profile of the cyber incident shows that cryptocurrency ATMs are currently targeted by cryptohackers. There were approximately 1,500 cases of crypto ATM fraud last year reported in which hackers captured $28 million, said the FBI. 

Nevertheless, reports also confirmed that State-sponsored cryptohackers regularly target crypto firms and the stolen money is being funded for financing terrorist activities and war crimes. Cryptocurrency is also the de facto currency of the Dark Web, where virtual currency is traded for various illicit activities. 

How can you protect your system and your funds from being compromised? 


  • Educate yourself and your workforce about the threats and methods of protecting your system. 
  • It is always advisable to do business with exchanges and marketplaces that follow proper regulations and security practices. 
  • Organizations should follow multi-layered defense protection and have the proper technical defenses in place when it comes to emergencies because cyberattacks can impact even the most security-savvy organizations.

Hong Kong Will Legalize Retail Crypto Trading to Establish a Cryptocurrency Hub

 


A plan to legalize retail cryptocurrency trading has been announced by Hong Kong to create a more friendly regulatory regime for cryptocurrencies. There has been an opposite trend over the last few years in the city, with skeptical views, as well as China's ban on the practice. 

According to sources familiar with the matter, an upcoming mandatory licensing program for crypto platforms scheduled to take effect in March next year will allow retail traders access to crypto platforms. There has been a request not to name these people since they are not authorized to release this information publicly.

There have been reports that the regulators are planning to allow the listing of higher-value tokens in the coming months but will not endorse specific coins such as Bitcoin or Ether, according to the people. They noted that the details and timeframe are yet to be finalized since a public consultation is due first.

At a fintech conference that starts on Monday, the government is expected to provide more details regarding its recently announced goal of creating a top crypto hub in the region. To restore Hong Kong's reputation as a financial center after years of political turmoil and the aftermath of Covid curbs sparked a talent exodus, the marketing campaign comes amid a larger effort to put Hong Kong back on the map.

Gary Tiu, executive director at crypto firm BC Technology Group Ltd, said that, while mandatory licensing in Hong Kong is one of the most effective things regulators can do, they cannot forever satisfy the needs of retail investors who are investing in crypto assets. 

Criteria for listing 

According to people familiar with the matter, the upcoming regime for listing tokens on retail exchanges is likely to include criteria such as the token's market value, liquidity, and membership in third-party crypto indexes to determine eligibility for listing. Their approach resembles the one they used when it came to structured products such as warrants, they continued. 

Hong Kong's Securities and Futures Commission spokesperson did not respond to a request for comment regarding the details of the revised stance adopted by the agency. 

Several crypto-related Hong Kong companies that are listed on the stock exchange increased their share prices on Friday. In the same report, BC Technology climbed 4.8% to its highest in three weeks during the third quarter, whilst Huobi Technology Holdings Ltd. rose slightly. 

In a world where more and more regulators are grappling with how to manage the volatile area of digital assets. This area has gone through a $2 trillion rout, following a peak in early November 2021. The sector is finding it difficult to regain its previous strength. Firms that dealt in cryptocurrency were crushed by the crash because their leverage grew without limit and their risk management methods were exposed.

It is widely believed that Singapore has tightened up its digital-asset rules to curb retail trading in digital assets to deal with the implosion that has hit Hong Kong. 

There was a proposal earlier this week by Singapore to ban the purchase of leveraged retail tokens on the retail market. There was a ban on cryptos in China a year ago because it was largely illegal. 

Michel Lee, executive president of digital-asset specialist HashKey Group, said that Hong Kong is trying to frame a crypto regime that extends beyond the retail token trading market to incorporate all types of digital assets, including cryptocurrencies. 

Bringing the ecosystem to the next level 

Among other things, Lee believes that tokenized versions of stocks and bonds could become a much more significant segment in the future as time passes on. Lee said, "Just trading digital assets on its own is not the goal". According to Lee, digital assets are not intended to be traded on their own but the ecosystem must grow as quickly as possible.”

A big exchange such as Binance and FTX once had their base in Hong Kong. Their attraction was the reputation of a laissez-faire regime and their strong ties to China. A voluntary licensing regime, that was introduced by the city in 2018, limited crypto platforms' access to clients with portfolios exceeding HK$8 million ($1 million) to those with portfolios of less than that amount. 

It has been confirmed that only two firms have been approved to operate under the license, BC Group and HashKey. FTX successfully managed to turn away the more lucrative consumer-facing business to the Bahamas last year as a result of the signal of a tough approach. 

However, the plan to attract crypto entrepreneurs back to Hong Kong seems to be a bit short of what is needed to usher them back. Among other things, it remains to be seen if mainland Chinese investors would be able to trade in tokens through Hong Kong if that were to be permitted. 

Leonhard Weese, the co-founder of the Bitcoin Association of Hong Kong, expressed a fear that there might be a very strict licensing regime in the future. "The conversations I have had indicate that people still fear it will be very stressful," he said. The company claims that it is not competitive on the same level as overseas platforms. Therefore, it will not be as attractive to customers as it would be if it dealt directly with retail users. 

According to blockchain specialist Chainalysis Inc., the volume of digital-token transactions in Hong Kong through June declined less than 10% from a year earlier, the most modest increase in the region outside of a slump in China, in the 12 months through June. It has fallen two positions from its global ranking of 39 in 2021 to 46 in 2022 when it comes to crypto adoption throughout the city. 

The Securities and Futures Commission of Hong Kong's Fintech Department has also suggested that the city could take further steps in this area, including the establishment of a regime to authorize exchange-traded funds seeking exposure to mainstream virtual assets. 

It shows that the one country, two systems principle is being put into action in financial markets, Wong said at an event last week. He said that the fact that the city can introduce a cryptocurrency framework distinct from China's indicates how far it has come.