Scams

Five Korean Crypto Exchanges Revise Their Terms of Service

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Five South Korean-based cryptocurrency exchanges have opted to revise their terms of service in favor of their users as requested by the country’s Fair Trade Commission more than a year ago. In the recent revisions, the five exchanges will now take liability for any losses resulting from exchange hacks even in the cases where it is not proved to be a failure of their systems.

The news was shared by the local news media, the Yonhap News Agency on Monday, June 17th stating that:

“Five cryptocurrency exchanges have changed their terms of service in a way that they can be liable for problems caused by potential cyber-attacks or system malfunctions, even if operators are not willfully or grossly negligent.”

One of the said exchanges is Bithumb, which has experienced two security incidences over the past year leading to loses in excess of $50 million. Back in June 2018, Bithumb lost about $31 million in a security breach to its platform while a more recent hack in May 2019 saw the exchange loose $20 million worth of EOS and XRP coins in what the company described as an “insiders’ job.”

A statement by the company following the May incident stated that:

“As a result of the internal inspection, it is judged that the incident is an ‘accident involving insiders’. Based on the facts, we are conducting intensive investigations with KISA, Cyber Police Agency and security companies.”

UpBit, another cryptocurrency based in South Korea, became a target of a phishing attack last month believed to be orchestrated by hackers from North Korea.

The incident which was identified in time involved email solicitations of account information to UpBit users. UpBit emailed its users notifying them of the scam. In a statement to its users, UpBit wrote:

“If you receive an email with an attachment with a similar title that impersonates UpBit in future, please do not download the file attached to the email and delete the email immediately.” No losses were reported related to the phishing scam.

These are some of the security incidents that befall cryptocurrency exchanges, and to shield themselves against careless behavior by its users, most exchanges have included terms of service clause that exempts them from liability in case of a loss-incurring to its users except during incidences resulting from a system failure or negligence by the exchange.

Following a proliferation of these security incidents over the last few years, the Fair Trade Commission issued an advisory to the South Korean exchanges to update their policies to protect user funds. That was back in April 2018.

Despite the delay in execution, the change has now been implemented and the onus to protect user funds will now be heavily borne by the exchanges.


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Altcoin

Bitpoint Hack Shows That Regulators’ Scrutiny Does Not Equal Safety

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On July 12, 2019, Tokyo-headquartered cryptocurrency exchange Bitpoint promptly suspended its services after noticing an error in the outgoing funds transfer system. Soon, an official announcement followed, revealing that the trading platform had lost around 3.5 billion yen (roughly $32 million) as a result of a security breach. The exchange’s administration has managed to find a portion of the missing funds since the initial announcement was published. Nevertheless, the security breach seems to continue the streak of hacks targeting Japan-based exchanges.

Details of the hack

According to the breakdown of the hack published by Bitpoint’s parent firm, Remixpoint Inc., Bitcoin (BTC) accounted for the highest share of total losses. The total amount of stolen BTC (1,225) is worth over 15 billion yen (just over $138 million). Further, over 28 million XRP (10 billion yen, or $92 million) and 11,169 ETH (3.3 billion yen, or $30 million were…



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Scams

Facebook Stresses Libra’s Compliance With FinCEN at Senate Hearing

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David Marcus, head of Facebook’s crypto wallet Calibra, stressed Facebook’s intent to be compliant with the United States Financial Crimes Enforcement Network (FinCEN) in distributing the Libra stablecoin. As a Cointelegraph correspondent reports on July 16, Marcus delivered his comments at the ongoing hearing on Facebook’s Libra with the Banking Committee of the U.S. Senate.

Addressing the issues of money laundering and terrorism financing, Senator Cortez Mastro asked Marcus how Facebook is going to ensure that the platform is not being used for such purposes. Marcus responded that “this is something that I care about deeply, personally.” Marcus added that the company will have an Anti-Money Laundering program, reiterating Facebook’s commitment to FinCEN.

Marcus stated that “Calibra will be affordable and accessible and also safe and secure” and will comply with FinCEN and state regulation. According to Marcus, Libra Corporation will still register with FinCEN despite the…



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Altcoin

R3 to Support a Startup-Focused Stock Exchange in Brazil

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Blockchain consortium R3 has partnered with Brazilian fintech company Banco Maré to launch a stock exchange for investing in technology firms.

Banco Maré, a blockchain-powered digital bank focused on financial inclusion, intends to build a tokenized stock exchange offering investments in technology companies with “social impact,” Cointelegraph Brazil reports July 16.

The new R3 technology-backed platform, provisionally named BVM12, will purportedly open a new funding source for technology startups, as well as enable individual investors to generate dividends from investments in new technologies, the report notes.

Rio de Janeiro-based Banco Maré has reportedly conducted its first informal consultations with the Brazilian Securities and Exchange Commission, and is reportedly planning to make an official request to the agency in August 2019.

Banco Maré CEO Alexander Albuquerque claimed that the new venture aims to democratize risky investment and bring the low-income public to the stock market.

Earlier in June, Cointelegraph reported that the…



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Altcoin

Is There a Future for Privacy Coins in the United States? » The Merkle Hash

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Cryptocurrencies which provides users with privacy and anonymity are often looked down upon by politicians and other officials. Especially in the US, privacy coins such as Monero and ZCash might face an uphill battle in the future. The most recent White House press conference only confirms these currencies are designed for criminals and no one else. 

The Stigmas Remain

For quite some time now, the term “privacy coins” is associated with illegal activity on the internet and in the real world. This is primarily because of the privacy and anonymity features these currencies tend to provide to its users. In the case of Monero, for example, it is impossible to determine who owns how many coins, or who is sending and receiving transactions. This makes it a thorn in the side of government officials and financial experts, as they only see the negative side of this…



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Bitcoin

‘I like bitcoin,’ says House GOP leader McCarthy, hits Facebook Libra

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House Minority Leader Kevin McCarthy told CNBC on Tuesday that he likes the decentralized nature and the security of bitcoin.

“I like bitcoin” and the security of the blockchain ledger technology behind cryptocurrencies, the California Republican said, as he criticized Facebook’s plans for a Libra digital coin ahead of hearings on Capitol Hill this week.

Libra will be pegged to a basket of government-backed money, compared with bitcoin, which is highly volatile in price and derives value from factors including its ability to enable instantaneous, anonymous, global payments and as an investment.

Nobody controls bitcoin.

McCarthy did, however, say that bitcoin is not where it needs to be yet, alluding to the risks of cryptocurrencies being used by criminals and money launderers.

While Libra promises more stability, McCarthy remains concerned.

“When I’m on Facebook, I’m not the customer, I’m the product,” he said. “Facebook is free because…



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