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Winklevoss Cryptocurrency ETF Denied by SEC Due to Offshore Manipulation Concerns — Price Reacts

With much of the financial world fixated on the prospect of a bitcoin exchange-traded fund, the US Securities and Exchange Commission (SEC) has reportedly denied the proposal from Gemini founders Cameron and Tyler Winklevoss. 


3-1 Against

The US Securities and Exchange Commission (SEC) has reportedly rejected the first-ever cryptocurrency ETF proposal from Cameron and Tyler Winklevoss — the famous entrepreneurs behind cryptocurrency exchange Gemini.

The Winklevoss Bitcoin Trust was already denied by the SEC in 2017. However, CNBC now reports that the twins’ recently submitted rule change proposal has also been rejected by the independent agency of the United States federal government — marking yet another loss in the Winklevoss’ quest for an ETF.

The vote was reportedly 3-1.

Winklevoss

It remains to be seen how this decision will affect other proposals for a Bitcoin-backed ETC.

According to CNBC, the SEC has cited investor protection as the reason behind its denial of the Winklevoss twins’ ETF, claiming that bitcoin is subject to a concerning amount of fraud and manipulation conducted largely from unregulated offshore markets.

The news also follows the SEC’s delaying of an Arca Inc. filing from January 2018 seeking approval to list and trade shares of five Direxion bitcoin ETFs. Earlier this week, news of the postponement came in a U.S. Government Publishing Office (GPO) post, which read:

The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change.

All eyes now remain firmly fixated on the SEC’s upcoming decision regarding the CBOE bitcoin ETF proposal — which one legal expert believes will be delayed into March 2019.

Update 5:39 pm: The price of Bitcoin has reacted to the news, falling more 2 percent over the last hour after holding impressive gains made over the past week. It now appears as though the short-term upside potential is capped for the market leader, though it remains to be seen whether or not the bears will firmly retake control over the next few days.

What do you think about the Winklevoss’ denied proposal? Do you think we will see a bitcoin ETF this year? Let us know in the comments below! 


Images courtesy of Bitcoinist archives.

[Full Disclosure: The contents of this article are not intended as financial advice from both Bitcoinist and the author.]

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Google Yanked MetaMask From the Chrome Store, Left a Phishing Scam Up

It was “an interesting wake-up call.”

That was how Kevin Serrano, an employee at ethereum startup and incubator ConsenSys, described the revelation that MetaMask had been removed from Google Chrome’s web store in a recently published blog post.

MetaMask, a Consensys “spoke,” is an ethereum wallet that also serves as a bridge between web browsers and the ethereum blockchain. A little after 10:00 a.m. EDT Wednesday morning, the MetaMask team announced on Twitter that the extension had been removed from the Chrome store.

The team received no explanation for Google’s action, according to Serrano, or even notification that it had happened – though he added that it’s possible the email bounced. The extension was restored to the web store around five hours later. According to Serrano, Google explained that delisting MetaMask had been an “error.”

And in this way, Serrano said it became clear:

“For a product that enables decentralized technology, [MetaMask] has centralized points of failure.”

It’s an issue blockchain entrepreneurs have grappled with since the industry first started testing its ideas.

One of the fundamental merits of blockchains and the decentralized applications built on top of them is that no single party can take down or censor them. Yet, this theoretical quality is frequently rendered moot where blockchain networks meet the legacy web or financial system.

Centralized exchanges, where fiat currency is converted into cryptocurrencies, are the most commonly cited example of where censorship-resistance and decentralization fail in practice.

But this incident has highlighted another such choke point: app stores.

Making the app available to users, Serrano continued, requires “placing our trust in browsers, GitHub and the people deploying in order to keep the system working.”

Phishing frenzy

It’s not only the trust required to keep the extension open to the most users (sufficiently tech-savvy users could have still downloaded it on Chrome), but also the fact that the action opened up opportunities for scammers – an endemic problem in the cryptocurrency space.

With MetaMask proper removed, Serrano wrote, “What was left when one searched the term ‘MetaMask’ on the store was a few re-branded MetaMask forks and one ambiguously branded lookalike.”

Indeed, the situation presented the risk of phishing, in which attackers trick would-be users into downloading fake files that contain malware.

At one point Augur, another ethereum project, tweeted a warning not to download an extension called “MetaMask by Kupi.net,” which was available in the Chrome store (it has since been removed). The app “is a fake, phishing app,” the Augur team wrote, attaching an image:

metamask phishing chrome

Serrano told CoinDesk in an email that attempts to steal from users were also present on Telegram, a messaging platform popular with cryptocurrency enthusiasts, where attackers were “posing as an alternative support desk.” It appears that some users were affected by this scam, he said, as well as an unrelated one on the Google Play Store, which lists apps for Google’s Android operating system.

A Google spokesperson declined to comment on these phishing attempts.

While MetaMask continued to work on other browsers – Brave, Opera and Firefox – and those who had already downloaded the Chrome version were still able to use it, the team is looking into more decentralized alternatives such as IPFS, Serrano said.

The team also published a guide to installing the extension manually.

Fish hooks image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Court Sentences Bitcoin Ransomware Creators to Community Service

The developers behind the CoinVault and BitCryptor ransomware were sentenced to 240 hours of community service in a Dutch court on Thursday.

Melvin and Dennis van de B., aged 25 and 21, were convicted of accusing 1,259 computers in the Netherlands and other Western European countries with the ransomware and demanding bitcoin payments as a ransom to fix the computers. The two reportedly made roughly 10,000 euros each between 2014 and 2015, Dutch website NU.nl reported.

CoinVault would cut off victims’ access to files on their computers and demand 1 bitcoin as a ransom – equivalent to several hundred euros at that time. Almost a hundred victims paid the fee, according to NU.nl.

After the news of the malware spread, cybersecurity firm Kaspersky Lab tipped the Dutch police on the names of the hackers. The firm said it had found a bug in the CoinVault code and could see “one of the suspect’s first names in the pdb path.” Kaspersky also issued around 14,000 decryption keys for the victims of the attack, as previously reported by CoinDesk.

The men told the court they just wanted to experiment and challenge their technical skills, but the judges noted that the brothers would always ask for payment, including when some victims were asking for the return of files related to their deceased parents, the Dutch website NRC.nl reported.

Some of the victims are now demanding compensation in bitcoin, 2-spyware.com wrote.

The Public Prosecution Service had previously demanded a suspended prison sentence of one year, but the judges took into consideration that the brothers had no previous criminal record and hadn’t commit any new crimes while waiting for the trial since their arrest in 2015.

Editor’s note: some of the statements in this article were translated from Dutch.

Business miniature image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Coinbase Announces E-Gift Cards: Pay for Uber With Bitcoin

Coinbase continues to expand its portfolio of cryptocurrency items, adding new means that users can take advantage of to spend their cryptocurrency on day to day items and services.


E-Gift Cards Are Already Available

E-Gift Cards Are Already Available

Coinbase announced today that customers in Australia and EU are now able to spend their cryptocurrency balances on e-gift cards instantly. As such, the platform becomes the first to provide options for direct withdrawals into e-gift cards.

The initiative was carried out in partnership with WeGift, a company focused on providing digital gift cards, and is currently available in several select EU countries – the UK, Spain, Italy, France, and the Netherlands – and Australia. Coinbase said that it will be expanding the number of involved markets and retailers within the next three months, moving to other countries shortly thereafter.

Pay for Your Uber with Bitcoin

With this new product on the market, Coinbase users will be able to withdraw their cryptocurrency holdings into e-gift cards. These can then be used to pay for a range of different services and with some popular retailers such as Uber, Nike, Tesco, Ticketmaster, Google Play, and others.

In addition, Coinbase said that customers who purchase e-gift cards will be able to enjoy zero withdrawal fees.

Presumably, this would provide further transactional flexibility for regular users, who would be able to use their cryptocurrency for purchasing selected day-to-day items or pay for services.

Do you think Coinbase’s e-gift cards will enhance the cryptocurrency spending experience? Let us know in the comments below!


Images courtesy of Pexels, Glassdoor

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US Lawmakers Want FinCEN Mandate to Explicitly Cover Crypto

A new Congressional bill would update the mandate of the Financial Crimes Enforcement Network (FinCEN) to include a specific focus on cryptocurrencies.

The FinCEN Improvement Act (H.R. 6411), filed jointly by U.S. Congressmen Ed Perlmutter (D-CO) and Steve Pearce (R-NM) on July 18, directs FinCEN to look into how cryptocurrencies might be used in terrorism or other illegal activities, in addition to working with tribal law enforcement agencies and other terror financing schemes.

Specifically, it includes language reflecting “matters involving emerging technologies or value that substitutes for currency, and similar efforts.”

It states:

“Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities in the global financial system and are increasingly using emerging payment methods such as virtual currencies to move illicit funds.”

FinCEN, which operates under the U.S. Treasury Department, is set to “safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities,” as stated on its website.

Pearce said in a news release that the new directives would “ensure” FinCEN’s ability to “continue their vitally important mission in the dynamic world environment.”

The proposed bill comes years after FinCEN first published guidance for money transmitters working with cryptocurrencies. Firms in the U.S. that undertake such activities are required to register with FinCEN, and more recently, the agency said that exchanges which handle tokens sold during initial coin offerings (ICOs) must also comply with its regulations.

“This is an important step in modernizing FinCEN and ensuring our law enforcement and intelligence communities can detect and prevent criminals and terrorist networks from using virtual currencies to move illicit funds or carry out cyber warfare,” Perlmutter said last week.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.