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Hodler’s Digest, February 4–10: Top Stories, Price Movements, Quotes and FUD of the Week

The mystery around embattled crypto exchange QuadrigaCX deepens, and Facebook acquires a blockchain startup.

Top Stories This Week

Facebook Reportedly Acquires Blockchain Startup in First Blockchain-Related Acquisition

Social media network Facebook has reportedly acquired blockchain startup Chainspace in its first apparent blockchain-related acquisition. According to news outlet Cheddar, the acquisition is considered an “acquihire,” or an acquisition of a company made in order to get the skills or expertise of its staff, as opposed to the company’s service or products. According to Cheddar, four of the five researchers that worked on Chainspace’s academic white paper will be joining Facebook. Facebook had told Cheddar that it had not acquired any of Chainspace’s technology.

Leaked Mt. Gox Info Purports to Show $318 Million in Bitcoin, Bitcoin Cash on BitPoint

According to leaked documents reportedly showing the rehabilitation proceedings of defunct cryptocurrency exchange Mt. Gox, the trustee for the process has sold around $318 million in  Bitcoin (BTC) and Bitcoin Cash (BCH) on trading platform BitPoint. The information, which purportedly comes from the Tokyo District Court, shows incomplete scans of transaction at BitPoint, reportedly confirming that Mt. Gox trustee Nobuaki Kobayashi sold coins on a major exchange to repay creditors. CEO of United States exchange Kraken Jesse Powell has previously noted that Kraken’s suggestions for selling coins in an auction or with an OTC broker were not acted on.

Jack Dorsey, CEO of Twitter and Square

Venezuela’s New Crypto Legal Framework Comes Into Force, Doesn’t Mention Petro

Venezuela’s new crypto legislation, which establishes a legal framework for the industry, officially came into force at the end of January. The official set of rules, which makes no mention of the national cryptocurrency Petro, was initially approved by the Constituent National Assembly — an alternative to the country’s Parliament, created in 2017 — in November 2018. The bill lets the national crypto watchdog inspect crypto-related commercial activities in the country. Also this week, Bitcoin trading reached an all-time high in the country amid the hyperinflation and ongoing presidential crisis, above 2,000 BTC on the week.

QuadrigaCX Controversy Continues as Securities Regulator Begins Investigation

As research this week has alleged that major Canadian crypto exchange QuadrigaCX may not have the cold wallet reserves that it had reported, the Ontario Securities Commission (OSC) has initiated a probe into the situation. The exchange had filed for creditor protection after the death of its founder in late December, Gerald Cotten, who allegedly controlled all of the exchange’s funds. Roughly 115,000 customers are without access to their funds, and a court-ordered lawyer will receive the encrypted laptop — which allegedly contains the crypto reserves — from QuadrigaCX representatives as per a court order. Moreover, the crypto exchange’s lawyers are considering selling the company to cover the debts.

BitTorrent Token Sales Sells Out in Under 15 Minutes, Makes Over $7 Million

The BitTorrent token (BTT) sale on the Binance Launchpad platform that concluded earlier this week net $7.1 million with the sale of 50 billion tokens in under 15 minutes. The BTT is based on a Tron TRC-10 token and will be used in order to transact computing resources between BitTorrent clients and other service users. Each token was priced at $0.00012, and were sold on the Binance Launchpad in two simultaneous sessions, one for those using Binance’s native token and the other for those using Tron (TRX).

Winners and Losers

The crypto market has seen a slight uptick at the end of the week, with Bitcoin trading at around $3,654, Ripple at about $0.30 and Ethereum at around $117. Total market cap is at about $120 billion.

The top three altcoin gainers of the week are Guaranteed Ethurance Token Extra, Nullex and MMOCoin. The top three altcoin losers of the week are Ultra Coin, bitqy and DOWCOIN.

Winners and Losers

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“I only have bitcoin,”

Jack Dorsey, CEO of Twitter and Square

 

“Amazon will have to issue a currency sooner or later.”

Changpeng Zhao, CEO of Binance

Changpeng Zhao, CEO of Binance

“There are 2,000 cryptocurrencies out there, 95 percent of them are useless and will die a painful death. The sooner that happens, the better.”

Matt Hougan, Global Head of Research at Bitwise Asset Management and president at ETF.com

 

“Eventually, do I think someone will satisfy the standards we’ve laid out there? I hope so, yes, and I think so.”

Robert J. Jackson Jr., the SEC’s only Democratic commissioner, speaking about Bitcoin exchange-traded funds

 

“Thus, transparency and instantaneity are the true strengths of the blockchain, and should generate not only significant time savings and increased security, but also significant [financial] savings.”

Béatrice Collot, Head of Global Trade and Receivable Finance at multinational banking giant HSBC

 

“We need a change in our laws and that requires more interaction with lawmakers and regulators. We need to make Switzerland open and easy for companies to invest in blockchain projects.”

Daniel Haudenschild, recently elected president of the Swiss Crypto Valley Association

FUD of the Week

US Lawsuit Alleged Investment Group Duped Investor Into $2 Million Token Purchase

A U.S. lawsuit this week has alleged that New York-based investment group Blue Ocean Capital Group Inc. had misled plaintiff Lijun Sun to purchase $2 million of the cryptocurrency MCash. The lawsuit notes that the MCash token was not properly registered with the U.S. securities regulators, and that the investment materials provided to Sun did not accurately represent the token or its terms of purchase. Sun has asked for a return of his investment as well as damages worth $6 million.

Zcash Discloses Already Fixed Vulnerability That Permitted Unlimited ZEC Counterfeiting

An official blog post from Zcash reported this week on the patching of a vulnerability that could have allowed an attacker to create infinite Zcash (ZEC). According to the post, the vulnerability was discovered in March 2018 by one of the Zcash developers. A solution for the problem was covertly included (in order to prevent exploitation by bad actors) in the Sapling network upgrade that was adopted last October. Since the variant of zk-SNARKs that contained the bug was implemented by other projects, Zcash noted that these projects have also taken appropriate actions.

Matt Hougan, Global Head of Research at Bitwise Asset Management and president at ETF.com

Winklevii vs. Shrem: Judge Rules Twins Must Pay $45,000 in Shrem’s Legal Fees

A judge has ruled that Tyler and Cameron Winklevoss must pay $45,000 of crypto entrepreneur Charlie Shrem’s legal fees as part of an ongoing lawsuit. In the proceedings, the Winklevoss twins have previously instigated an investigation and asset freeze on Shrem after accusing the entrepreneur of failing to pay back 5,000 BTC from a 2013 trade deal. Shrem’s lawyer has denied the accusations, and a judge has removed the asset freeze. According to media reports, the lawsuit will cover new ground in June.

Best Cointelegraph Features

‘The NEM Foundation You Knew Before Is Gone,’ What Is Next?

After the NEM Foundation released an announcement this week about the state of their funds, revealing that they only had about a month of operations left, the crypto community has been questioning how things got to this point. Cointelegraph looks at the history of the Foundation and how this financial disaster could have come about.

Forbes ‘Fintech 50’ List, Reviewed: New Players, Veterans and Startups Which Didn’t Make the Cut

Forbes’ latest edition of “Fintech 50” has been released, this time with only six crypto and blockchain companies, as opposed to last year’s 11. Cointelegraph examines what made these companies stand out even amid the crypto bear market.

QuadrigaCX Is Filing for Creditor Protection Amid Liquidity Crisis, Community Remains Largely Skeptical

As the controversy around embattled Canadian crypto exchange QuadrigaCX deepens, Cointelegraph gives a rundown of the exchange’s legal history, current legal problems, and some of the questions raised concerning the death of its founder and the locations of its cold wallet reserves.

How We Will Remember the Year of the Dog? ICO Market Decline, Trend Toward Compliance and Other Takeaways

And happy Chinese New Year to all our Hodler’s who celebrated this week! We here at Cointelegraph looked at all of the major events that have taken place during the Year of the Yellow Mountain Dog.

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Zcash Vulnerability Permitting Infinite ZEC Counterfeiting Fixed and Disclosed

A vulnerability that could have permitted an attacker to coin infinite ZEC has been patched and disclosed by the company behind the coin.

A vulnerability that could have permitted an attacker to coin infinite Zcash (ZEC) has been patched and disclosed by the company behind the coin, a post on the official Zcash blog states on Feb. 5.

Ariel Gabizon, an engineer at the Zerocoin Electric Coin Company — the startup behind privacy-focused cryptocurrency Zcash — reportedly discovered the vulnerability the night before his talk at the Financial Cryptography 2018 conference in March 2018. Gabizon contacted Sean Bowe, a cryptographer at the Zcash Company, the same day.

A fix for the vulnerability was covertly included (to prevent exploitation) in the Sapling network upgrade adopted on Oct. 28, 2018. The bug was contained in the variant of zk-SNARKs — the kind of cryptography that grants anonymity to shielded Zcash transactions — and had been independently implemented by other projects.

Namely, Horizen (previously known as ZenCash) and Komodo blockchains both suffered from the same vulnerability. The Zcash team reportedly “disclosed the impact and fix path of this issue to Horizen’s” security team and Komodo’s developers via encrypted email in mid-November. The post declares:

“It appears that both Horizen and Komodo have taken appropriate actions per our recommendation.”

As Cointelegraph reported in March last year, American whistleblower Edward Snowden voiced concerns over Bitcoin’s long-term prospects citing its lack of privacy and defining Zcash as the most interesting altcoin on the market because of its anonymity features.

Also, in February 2018, an investment thesis by Grayscale Investments forecast that the value of Zcash could reach over $62,000 by 2025, assuming that the coin will represent 10 percent of all offshore wealth by that point.

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All Cryptos See Major Losses as Market Hit by Distinctly Unfestive Correction

Crypto markets are lacking in Christmas cheer, with virtually all of the top 100 coins by market cap in the red.

Friday, Dec. 25 — crypto markets are lacking in Christmas cheer, with many major crypto assets hit with double-digit losses. Virtually all of the top 100 coins by market cap are in the red, as data from Coin360 shows.

Market visualization by Coin360

Largest cryptocurrency Bitcoin (BTC) has plummeted over 9 percent on the day, and is trading at $3,812 as of press time, according to Cointelegraph’s Bitcoin Price Index. After bullish growth yesterday, Christmas eve, to break over $4,236, the top coin has been trading as low as $3,755 in the trading hours before press time — an around $500 drop.

Over these past seven days, Bitcoin’s trading pattern has been characterized by high volatility — veering between reclaiming the $4,000 price point and beyond, to dipping back down towards the $3,700–$3,800 range.

While the coin is still a strong 17.2 percent higher than its value at the start of its weekly chart, on the month, Bitcoin is down by around 12 percent.

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

Second-largest crypto by market cap Ripple (XRP) has fared even worse, shedding a stark 15 percent over the 24 hours before press time, according to Cointelegraph’s Ripple Price Index. The asset is currently trading at $0.38 — following an intraweek peak at $0.45 yesterday. On its weekly chart, Ripple is nonetheless a strong 31.5 percent in the green, with monthly losses at a mild 7 percent.

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

Ethereum (ETH) — ranked third by market cap — has lost over 18 percent on the day and is trading at $127 to press time. During yesterday’s mini-rally, Ethereum had broken above $150 — its highest price point in around five weeks.

Ethereum is a bullish 51.5 percent in the green on its weekly chart, and it has inched into green on the month, up by around 5 percent.

Yesterday’s price hike in the context of Ethereum’s 3-month price chart. Source: Cointelegraph’s Ethereum Price Index

Fourth-largest cryptocurrency Bitcoin Cash (BCH) is down around 20.7 percent and is trading at $164 as of press time. Having seen astonishing volatility as of late, the coin is around 113 percent up on its weekly chart — and down by around 27 percent on the month.

Newly-forked Bitcoin SV (BSV), currently ranked ninth largest cryptocurrency, is down around 15 percent at $93, according to CoinMarketCap data.

Including BTC, XRP, ETH and BCH, sixteen of the top twenty coins on CoinMarketCap are down by between 10 and 19 percent on the day. Stark losses have hit cryptos such as Litecoin (LTC) — down almost 12 percent at $31.09 — IOTA (MIOTA) — down 14 percent at $0.33 —  and Cardano (ADA), down 16 percent at $0.04.

Dash (DASH) is down by around 16 percent at $82; Ethereum Classic (ETC) is down around 13 percent at $4.72. Privacy-focused altcoins Monero (XMR) and ZCash (ZEC) are down 10.8 and 12 percent, at $50.5 and $61.57 at press time.

Total market capitalization of all cryptocurrencies is at $128.8 billion as of press time — having hit over $147.8 billion yesterday. It nonetheless remains up from a low of $114.2 billion at the start of the 7-day chart on Dec. 18.

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

Earlier today, news broke that Japanese internet giant GMO Internet Group is quitting the Bitcoin mining hardware sector, after reporting an “extraordinary loss” in Q4 this year, amid the unrelenting crypto bear market.

On a more positive note for adoption, blockchain protocol TRON (TRX) passed one million user accounts this week, even as the token has not been spared today’s blisteringly red markets.

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Report Finds Over $3 Million of Altcoin Bitcoin Private Covertly Premined

An additional 2.04 million Bitcoin Private, worth about $3.672 million, have reportedly been secretly coined while importing Bitcoin chain data.

During the import of Bitcoin (BTC) chain data, an additional 2.04 million units of altcoin Bitcoin Private (BTCP) have reportedly been secretly coined, crypto assets analytics website Coin Metrics reports Dec. 23.

The allegedly secretly coined cryptocurrency — a fork merging Bitcoin and ZClassic — is worth $3.672 million at press time.

The project’s white paper states that the initial coin supply is equivalent to the combined supply of Bitcoin and ZClassic coins, alongside a small quantity destined for the miner program, making the total supply equal to around 20.4 million BTCP.

However, according to the aforementioned report, over two million units have been covertly minted while importing Bitcoin data “and sent to the BTCP shielded pool, bringing the initial supply to 22.6 million.”

This alleged action, the researchers point out, contradicts “the white paper and all of the materials published by the team.” The report also states that a reported 300.000 “units of the covert premine were moved out of the shielded pool towards what appear to be exchanges.”

This alleged quantity of BTCP, given the limited uptake of the cryptocurrency by the recipients of the airdrop, meant those additional 300,000 units “represent close to 10% of the BTCP supply in circulation.”

Ultimately, Coin Metrics also points out that there are still “1.80M covertly minted units remaining in the shielded pool.” At press time, Bitcoin Private lost over 23 percent of its value on the day and is trading at around $1.84.

As Cointelegraph recently reported, Starteos, one of the EOS Block Producers (BPs), appeared to publicly offer financial rewards to token holders in return for their votes in an apparent violation of the EOS constitution. This is not the first such scandal involving EOS, as this year Huobi — which is both a crypto exchange and a BP — was accused of running a corruption scheme.

Also about a year ago, SegWit2x, a hard fork designed to help with the scalability issues of Bitcoin (BTC), was scheduled to happen at a predetermined block, but has been since then canceled.

However, the project has been later “revived.” Analysing the proposed code, the community found out that the developers had tried to premine 6 million BTC, equivalent to 28 percent of the total supply.

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Crypto Markets See Little Movement, Bitcoin Continues to Trade Just Below $6,500

Crypto markets are calm and mostly green, with Bitcoin continuing to trade just below $6,500 and most major coins seeing change of within a 2 percent range.

Saturday, Oct. 20: Crypto markets are seeing little momentum, with virtually all of the major cryptocurrencies seeing slight growth and losses between a 1-2 percent range, as Coin360 data shows.

coin360

Market visualization by Coin360

Tether (USDT) has mostly settled back in to its characteristic trading pattern. Having briefly lost its U.S. dollar peg last week, the asset has since reclaimed its historical trading range close to a 1:1 ratio to the greenback. Today the stalwart stablecoin has seen an almost 1 percent drop to trade at $0.979.

Bitcoin (BTC) is trading at $6,473 at press time, seeing negligible price change on the day according to CoinMarketCap. Following its short-lived ascent to $6,965 Oct. 17, correlated with Tether’s price tumble, Bitcoin has corrected back to a trading range just a little higher than at the start of its weekly chart.

Earlier this month, Bitcoin achieved a 17-month low volatility rate, recording its highest level of stability since mid-2017, and the trend has continued over the past few days.

Coupled with low volatility, BTC trading volumes remain low; as of press time the figure is around $3.55 billion.

On the week, the top coin has seen a gentle increase of around 3.3 percent: on its monthly chart, growth is just 0.23 percent.

BTC

Bitcoin 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) is seeing similarly slight momentum, up just 0.63 percent to trade around $205, according to CoinMarketCap. Over the past week, the leading altcoin has seen a similar trading pattern to Bitcoin, spiking to $220 Oct. 15 before correcting downwards and then sideways in recent days.

This brings Ethereum to a 3 percent gain on its weekly chart; monthly losses are roughly equal in the opposite direction, at 2.7 percent.

ETH

Ethereum 7-day price chart. Source: CoinMarketCap

Most of the remaining top ten coins on CoinMarketCap are in the green.

The strongest top-ten performer is fourth largest coin Bitcoin Cash (BCH), up 1.4 percent on the day to trade around $447. Anonymity-oriented alt Monero (XMR) is seeing a modest 0.21 percent change on the day to press time.

In the context of the top twenty coins, the market picture is also stable, with virtually all assets seeing minor growth of below the 1-2 percent mark. The exception is Zcash (ZEC), which has relatively “soared” almost 4 percent on the day to trade at $124.86.

The alt dislodged Dogecoin (DOGE) from its spot as twentieth largest coin by market cap earlier this week, and has seeing sustained growth atypical for the wider market.

Native exchange token Binance coin (BNB) is one of the only top twenty coins in the red, but down only 0.56 percent..

Total market capitalization of all cryptocurrencies is at around $209 billion as of press time. Since its intraweek peak at $220.2 billion Oct. 15., the market has tapered downwards and has continued evenly around the $210 billion mark for several days.

Total

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

A new report from Big Four auditor Ernst and Young has found that among the “top” initial coin offerings (ICOs) that raised capital in 2017, 86 percent of project tokens are trading below their listing price, with 30 percent having lost “substantially all value.” Beyond investment returns, the auditor found that only 29 percent of studied projects had either a working product or prototype – up just 15 percent from at the end of last year.

In other altcoin news, developers at Ethereum – the platform the underpins most ICO tokens – yesterday reached a consensus to delay a planned hard fork of the protocol until January 2019. The fork, dubbed “Constantinople,” was supposed to be activated by the end of Oct.-Nov. this year, but faced a number of hurdles during its testnet trial last weekend.