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Survey: US Investors That Sold BTC Lost $1.7 Billion, Many Don’t Intend to Deduct Losses

Bitcoin investors in the United States who sold their crypto lost $1.7 billion, but many don’t plan on reporting their gains and losses, a survey shows.

Crypto investors in the United States who sold their Bitcoin (BTC) holdings lost $1.7 billion, but many do not plan to deduct the losses, a survey conducted by personal finance company Credit Karma published on Jan. 15.

The survey was conducted by research firm Qualtrics for Credit Karma, and surveyed 1,009 American BTC investors over the age of 18 in November 2018.

According to the aforementioned survey, a slight majority of Americans — 53 percent — plan to report their Bitcoin gains and losses for their taxes, while 19 percent are still undecided. The survey also found that 35 percent of the participants that sold their crypto at a loss will not report their losses on their tax returns.

Out of the investors who reported profits, 50 percent plan to report their gains, while only 38 percent of the investors who incurred losses intend on reporting them. Furthermore, the report states that the investors that aren’t reporting losses may be missing out valuable deductions.

As well, 35 percent of the surveyed U.S. Bitcoin investors believe that they are not required to report their profits or losses, and 58 percent were not aware that they could claim a tax deduction for their losses. The unrealized losses of the considered investor group amount to $5.7 billion, according to the report.

More than half (55 percent) of the surveyed Bitcoin investors that do not intend to report their crypto transactions on their tax returns assume that they didn’t gain or lose enough to be required to do it.

As Cointelegraph reported in April last year, the Credit Karma Tax platform announced that less than 100 people have reported capital gains from crypto investments out of the 250,000 most recent tax filers.

In October 2018, an advisory committee of the U.S. Internal Revenue Service reported that they want the agency to provide additional guidelines for the taxation of crypto transactions.

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Report: Critical Vulnerabilities Leaking User Data Found on DX.Exchange, Patched Later

Estonia-based cryptocurrency and tokenized stock exchange DX.Exchange has reportedly patched a critical vulnerability that leaked sensitive user data.

Estonia-based cryptocurrency and tokenized stock exchange DX.Exchange has reportedly fixed a critical vulnerability that leaked sensitive user data.

Technology news website Ars Technica reported on the security leak Jan. 9, citing an anonymous trader who conducted a security analysis of DX.Exchange.

According to Ars Technica’s article, a trader, who wished to remain anonymous due to legal concerns, noticed that the exchange was sending sensitive data of other users to their browser. After examining the data, the trader has reportedly found that the data included other users’ authentication tokens and password reset links:

“I have about 100 collected [authentication] tokens over 30 minutes, […] if you wanted to criminalize this, it would be super easy.”

The authentication tokens were reportedly formatted in the JSON Web token standard and could be easily decoded with the use of online tools, obtaining full names and email addresses of the exchange’s users.

According to Ars Technica, the trader has explained that the tokens could grant access to their associated accounts, as long as the user hasn’t manually logged out after the token was leaked.

The trader has also reportedly found a way to permanently backdoor an account by using the platform’s programming interface, which would grant them access even after a user has logged out.

Furthermore, Ars Technica reported that some of the login data leaked by the platform belongs to the employees of the site. The article explains the severity of the issue:

“In the event that such a token gave unauthorized access to an account with administrative privileges, the hacker might be able to download entire databases, seed the site with malware, and possibly even transfer funds out of user accounts.”

Ars Technica itself has reportedly checked and confirmed the presence of the vulnerabilities discovered by the trader, obtaining what it described as a large number of authentication tokens through the publicly available programming interface.

Ars Technica contacted the DX.Exchange, and according to the article, the leak has now been fixed. However, the company declined to comment on its intentions to warn the users about the now-patched vulnerability:

“Ars sent a response asking if DX.Exchange planned to reset all user tokens or passwords and to notify users that a leak exposed their names and email addresses. So far, the officials have yet to respond.”

As Cointelegraph reported Jan. 3, DX.Exchange leverages Nasdaq’s Financial Information Exchange (FIX) protocol and allows its users to trade tokenized stocks of major companies, including Google, Facebook and Amazon.

As of press time, DX.Exchange has not responded to Cointelegraph’s request for commentary.

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Litecoin Founder Stokes Debate Over ‘Bitcoin Extremists’ Tweet

Litecoin founder Charlie Lee has fired community debate in a tweet alleging that “some self-proclaimed Bitcoin Maximalists are actually Bitcoin Extremists.”

Litecoin (LTC) founder Charlie Lee has fired community debate with a tweet alleging that “some self-proclaimed Bitcoin Maximalists are actually Bitcoin Extremists.” Lee’s Jan. 6 post argued that:

“Some self-proclaimed Bitcoin Maximalists are actually Bitcoin Extremists. They think all other coins are scams and will go to zero. Maximalists think Bitcoin is and will remain the dominant cryptocurrency but there is room for altcoins to exist and even do well.”

Lee also opened a Twitter survey, which has drawn over 24,300 votes as of press time and is due to expire in 6 hours, inviting users to identify as either a “Bitcoin Extremist,” “Bitcoin Maximalist,” “Altcoin Maximalist,” or “Nocoiner.” At press time, 9 percent have identified as Bitcoin “extremists,” 48 percent as Bitcoin “maximalists,” 32 percent as altcoin “maximalists,” and 11 percent as “nocoiners.”

Lee’s remarks provoked a series of quick-witted responses — both dissenting and affirmative —  including one from crypto industry figure Jameson Lopp, who quipped, “Bitcoin Supremacists, please. Extremists has a negative connotation,” adding “I identify as a Segregated Witness.”

Mindful of Lee’s provocation, Ragnar Lifthrasir, founder of the International Blockchain Real Estate Association (IBREA), told Lee he was on “the path to wrong-think,” and that using the jargon of extremism was little more than a smear of anyone whose “opinion differs from Charlie’s.”

Lee’s comments also provoked debates over whether Bitcoin “maximalism,” is little more than a marketing term allegedly coined by altcoin founders, as well as over Bitcoin’s prevailing brand dominance. Some commentators responded —  without proclaiming any allegiances — that ultimately it will be the free market and tangible use cases that will separate the successful projects in a sector of proliferating cryptocurrencies.

As of press time, the share of Bitcoin’s market capitalization in the overall crypto market cap is at 51.8 percent, according to CoinMarketCap data.

On the cusp of the new year, tokenization protocol Stellar’s co-founder and CTO Jed McCaleb — who is also one of the founders of now-defunct Japanese Bitcoin exchange Mt. Gox, as well as a co-founder of Ripple (XRP) — provocatively claimed that “ninety percent of [crypto] projects are B.S,” adding he was “looking forward to that changing” in 2019.

McCaleb excluded Bitcoin, Ethereum (ETH), Stellar Lumens (XLM) —  and presumably XRP — from his criticisms.

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Fake News Site Promotes Bitcoin With Image of Ex-New Zealand PM

A fake news website released an article employing the image of New Zealand’s former prime minister to promote an alleged crypto scam.

An alleged fake news website released a crypto-related article employing the image of former New Zealand prime minister John Key, local media outlet Stuff reported Jan. 5.

The ad reportedly promoted Bitcoin (BTC) and a company called “Crypto Revolt,” which is allegedly a cloned scam site. The article further explains that the advertisement imitates a Stuff business news page and “purports to interview John Key on his enthusiasm for Bitcoin.”

Moreover, in place of the Stuff logo there is an “NZ Times” logo, and all the links reportedly lead to Crypto Revolt’s website. The source that encountered the ad suggested that the web address was suspicious and that the company itself could have been hacked.

As Cointelegraph reported in December 2017, Key had then denied rumors circulating that he invested in Bitcoin. The claim that Keys was a Bitcoin investor reportedly originally came from another fake news website, the link to which propagated through social media.

New Zealand’s police also warned of online scams in September after a cryptocurrency investor lost $213,000 due to fraud. In November, New Zealand’s Financial Markets Authority (FMA) also added three cryptocurrency-related websites to its blacklist of online scams, and another three were added to the list in December.

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Crypto Markets See Green as Bitcoin Nears $3,900 and Ethereum Touches $160

The crypto markets are seeing a wave of green, with Bitcoin near $3,900 and Ethereum close to $160.

Saturday, Jan. 5 — the crypto markets are mainly in the green today, as Bitcoin (BTC) moves closer to the $3,900 mark, data from Coin360 shows.

Market visualization by Coin360

Market visualization by Coin360

Bitcoin has shown slight growth today, up by around 3 percent and trading at about $3,899 at press time. Over the month, Bitcoin is up almost 1 percent and almost 7 percent over the week.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph’s Bitcoin Price Index.

Ethereum (ETH) is currently trading at around $159, up more than 6 percent on the day at press time. The second-largest cryptocurrency is seeing around 35 percent gains over the week, and 47 percent gains over the month.

This week, developers from Ethereum discussed the possibility of implementing a new proof-of-work (PoW) algorithm that would raise the efficiency of GPU-based — rather than ASIC-based — mining on the network. The debate over whether to go forward with the implementation comes ahead of the upcoming Ethereum Constantinople hard fork.

Ethereum’s 7-day price chart

Ethereum’s 7-day price chart. Source: Cointelegraph’s Ethereum Price Index

Third-largest cryptocurrency Ripple (XRP) is up over 2 percent at press time, trading at around $0.36. Over the week, the coin has seen more than 7 percent growth, and almost 5 percent gains over the month.

Ripple 7-day price chart

Ripple 7-day price chart. Source: Cointelegraph’s Ripple Price Index.

The total market cap of all cryptocurrencies is currently around $133 billion at press time, up from its weekly low of about $125 billion.

7-day chart of total market capitalization of all cryptocurrencies

7-day chart of total market capitalization of all cryptocurrencies from CoinMarketCap

Of the top ten cryptocurrencies, Litecoin (LTC) and TRON are showing the biggest growth, up over 12 and 15 percent respectively.

Earlier this week, the Gemini crypto exchange — founded by the Winklevoss twins in 2014 — released a series of ads calling for better regulation of the crypto space. The ads, which read “Crypto needs rules,” were received with mixed reactions from the crypto community, as some believe the space suffers from the intervention of regulators.

Also this week, five more crypto exchanges — including Coincheck — joined Japan’s self-regulatory association of cryptocurrency exchanges.