Author Archives: Nick Marinoff

French Crypto Banking Startup Disappears After Failed ICO

A French crypto banking startup known as Hush has up and vanished following the failure of its initial coin offering (ICO).

Founded in Toulouse, France by Eric Charpentier – also founder of the banking startup Morning – the organization was a self-proclaimed “neo bank” that sought to utilize cryptocurrencies and digital tokens when creating a service system that would give customers complete control over their finances.

Crypto Has Paved the Way for Strange Behavior

Unfortunately, the bank came with a touch of controversy, primarily due to its founder Charpentier. Two years ago, his other startup, Morning, saw its operations suspended by financial regulators who believed the company was mishandling customer funds. Later, the venture was acquired by the French bank Edel, who operates it today.

Following the opening of Hush’s doors, Eric announced that the company would engage in an ICO project that sought to raise anywhere between $17 and $23 million. Hush allegedly had a team of recognized advisers backing it up, and it was garnering solid rankings for its ICO prospects. Sadly, with the crypto arena losing wind fast and most major currencies in the red, the company only sold about 245 of its coins, garnering just over $600,000 in the end – only a small fraction of the intended goal.

Three months later, Hush has seemingly gone completely silent, and is nowhere to be found. Several consultants involved with the project have not been paid, while the company’s Medium account no longer exists. In addition, Charpentier has deleted all his tweets regarding Hush and has expunged his LinkedIn account. He has also deleted his Telegram account.

Hush community manager Max Massat is claiming:

“Eric is now taking the time to manage his projects far from the pressure of his networks. We have decided not to justify ourselves. We work in silence. The real investors in the project know. We leave the fantasies for others.”

At the time of writing, both Massat and Charpentier have disappeared from the public eye. There have been no further public comments regarding Hush, while the company’s Telegram channel remains inactive. Charpentier is allegedly facing legal issues from those hired to consult on Hush, who say they have not received fair compensation.

Who Wasn’t Paid for Their Work?

One such consultant is Sebastien Bourguignon, who states:

“I didn’t have any news from Eric Charpentier since [the middle] of June. He didn’t pay me for the advisory [work]. I am in litigation with him.”

Do you think Hush is simply working behind closed doors, or do you think something strange is going on? Post your comments below.

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Nvidia Faces Class-Action Suits from Crypto Investors

GPU maker Nvidia is facing several class-action lawsuits from crypto investors who aren’t happy about the company’s massive stock drops.

During the bitcoin boom of 2017, the prices of GPUs went up tenfold as more and more miners aimed to get in on the action. Nvidia – which manufactures GPUs – ultimately claimed that they were “masters at managing” the crypto space and said that any drops in the demand for crypto wouldn’t hurt business.

Crypto Investors Want Their Money Back

Unfortunately, this wasn’t the case. At the time of writing, Nvidia’s stock prices are down roughly 50 percent from where they stood during 2017. Investors have lost barrels of cash and aren’t happy about the end results. Nvidia is now facing several class-action suits from these investors who feel that Nvidia falsely advertised how secure it was and provided misleading information to get new investors involved.

One thing that many investors say Nvidia tried to do was account for its oversupply of bitcoin and cryptocurrency miners by increasing their prices dramatically. Wanting to ensure every miner got his or her wish, Nvidia ordered several extra mining rigs and additional equipment, believing they would be sold without issue to customers. Unfortunately, when the customers didn’t come, Nvidia tried to make up for its overabundant supply of miners by firing their prices up.

The Schall Law Firm – which is representing all investors allegedly wronged by the company – has issued an official statement on the matter and is now searching for investors who may have lost as much as $100,000 or more by putting their money into Nvidia. The statement reads:

The Details of the Suit

“According to the complaint, the company [NVIDIA] made false and misleading statements to the market. NVIDIA touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary. The company claimed to be ‘masters at managing our channel, and we understand the channel very well.’ NVIDIA also claimed to the market that any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the company’s business because of strong demand for GPUs from the gaming market. Based on these facts, the company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about NVIDIA, investors suffered damages.”

In total, Nvidia is facing approximately four separate class-action lawsuits on similar grounds.

Do you believe companies like Nvidia are responsible to their investors under all circumstances? Post your comments below.

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Industry Leaders Offer Bitcoin Predictions for 2019

2018 is gone, and crypto enthusiasts are ready to ring in 2019 and move on from the past 12 months of what many likely consider “lowly behavior” amongst bitcoin and many of its altcoin cousins.

Bitcoin fell by over 75 percent from its December 2017 high of nearly $20,000. At the time of writing, it’s trading for just over $3,700. Other cryptocurrencies, like Ethereum, were trading for nearly $1,400, but are now struggling to maintain a $100 price. In addition, many cryptocurrency companies have either disappeared or filed for bankruptcy, while others – such as the blockchain-powered social media alternative Steemit – has laid off about 70 percent of its staff.

Bitcoin Saw Massive Drops in 2018

2018 has been a poor year for bitcoin and cryptocurrencies, and many are looking to simply move on and hope for bigger and better things as we say hello to 2019, but what will this year bring? Can we look forward to bullish momentum in the coming months, or will things shrivel up and die even further?

Many analysts are piping in with their 2019 predictions, and you can guess that the consensus is split right down the middle, with some thinking 2019 will do nothing but bring about repeat behavior, and others saying that this year will be when crypto bursts through the gates and cements its position on mainstream territory.

Brad Garlinghouse – CEO of Ripple, the second-largest cryptocurrency by market cap – has stated that the future is likely to be positive, with more banks implementing blockchain technology into their operations and trying to cash in on crypto’s benefits. The idea is that crypto, despite its falling prices, remains a solid investment goal for many investors, who are still looking to get a piece of the action. Thus, banks will work hard to ensure they can assist customers to invest in crypto safely, though whether this means more stable coin options is not yet clear.

Another prediction is that more retail investors will get involved in the crypto scene. We have witnessed companies like coffee king Starbucks pair up with the Intercontinental Exchange (ICE) to potentially allow customers to purchase products with crypto, and we may see more ventures follow suit.

Maria Smith – VP of partnerships and payments for Starbucks – comments:

A Mixed Future for Crypto?

“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks. Other businesses will soon see the benefits that Starbucks receives when customers pay for products with cryptocurrency using newer, faster infrastructure, which wasn’t there last year.”

However, there remains negative sentiment regarding the potential of a bitcoin ETF, which has yet to be approved. The VanEck SolidX venture has once again been pushed back to February in terms of the Securities and Exchange Commission (SEC) making an official decision, and the number of postponements is causing many to lose faith.

Do you think 2019 will be a great year for crypto? Post your comments below.

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Italy Is Looking to Expand Its Blockchain Protocols

The Ministry of Economic Development in Italy has tasked 30 proclaimed experts in the cryptocurrency space with the task of building the nation’s blockchain strategy from the ground up.

Among those tasked with the job are Angiolini Giorgio – head of marketing at the telecon firm Italtel and a member of UN INFO’s blockchain group; Pimpinella Martino Maurizio – president of the Italian Association of Paying Services Providers; Vitale Marco – president of the blockchain firm Quadrans Foundation, and Monaco Marco – head of the blockchain competence center at PWC Italy.

Italy and Blockchain Coming Together

A spokesperson for the organization announced:

“The group’s main goals will be to know, deepen and address the issues of distributed ledger technologies (DLT) and blockchain, as well as increase public and private investments in this direction.”

In addition, members will also be required to build regulatory and technical tools to further enhance Italy’s blockchain operations.

Europe has been leading the battle for enhanced distributed ledger prowess. Switzerland – Italy’s neighbor to the north – is currently the home of what’s known as “Crypto Valley,” a series of varying cryptocurrency and blockchain-based startup ventures. Switzerland is known for its lenient and often friendly regulatory policies towards cryptocurrencies and their digital counterparts. Crypto Valley has taken part of its name from the renowned “Silicon Valley” in northern California, which houses several leading technology companies like social media giant Facebook.

To the south of Italy is Malta, a small island-nation looking to build itself up as the continent’s leading cryptocurrency and blockchain hub. Over the past 12 months, the country has established regulations for crypto-associated companies that are so attractive, many digital asset ventures from Asia have packed their bags and moved roughly 3,000 miles to make Malta the site of their headquarters. Among the companies to have done this are Binance, a leading overseas cryptocurrency exchange.

Europe Opening Its Doors to Crypto

Despite a growing list of cryptocurrency platforms, Asia is known for being relatively strict when it comes to digital asset and blockchain businesses. In South Korea, for example, initial coin offerings (ICOs) and similar funding ventures are banned, while countries like India have fully barred its banks and financial establishments from doing any kind of business with crypto enterprises, though this may change in the coming months.

A committee has already been formed to question the legitimacy of cryptocurrencies, while members have met on varying occasions to discuss potential regulatory solutions in lieu of a full-on ban of digital assets trading.

Are we likely to see more crypto-based activity occur in Europe? Post your comments below.

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Huobi Will Launch EOS-Based Crypto Exchange

Huobi’s mining division – Huobi Pool – has announced plans to build the first crypto exchange devoted to EOS, currently the fifth-largest cryptocurrency by market cap after entities like bitcoin, Ripple’s XRP and Ethereum.

The exchange is scheduled to launch during the first quarter of 2019. EOS allows users to share in all its decision-making processes through its distributed proof-of-stake (DPos) consensus method, and customers will be able to trade and sell EOS for several other types of cryptocurrency.

A Crypto Exchange Centered on One Coin

Cao Fei – chief executive officer of Huobi Pool – explains:

“As an EOS super node, Huobi Pool has placed its ecological development high on its list of priorities. Launching this EOS exchange is simply the next logical step in our support.”

Huobi Pool has been working with EOS since it launched early in the year. The organization has also paired up with other block producers to build an EOS test chain known as the Crypto Kylin Testnet – a platform where up and coming EOS projects can be tested prior to launching. In addition, Huobi Pool also created a voting platform for EOS holders and built an EOS community from the ground up to ensure holders always remain aware of node elections.

Lastly, Huobi Pool has developed a series of animated videos – entitled “EOS 20 Questions” – they believe will assist EOS holders in better understanding the currency’s benefits.

Huobi opened for business in 2013. Consisting of approximately ten downstream and upstream enterprises, Huobi has established itself as a leading blockchain company and cryptocurrency exchange over the last five years. The company’s present accumulative turnover exceeds $1 trillion in USD annually, and the exchange serves over 130 different countries.

So far, the winter is proving to be a serious and busy time for Huobi. The company recently announced it would be supporting TRON through its exchange services, and the company also launched the Huobi Derivative Market (DM) exchange at the Cryptofrontiers conference in New York.

The platform allows customers to purchase or sell bitcoin at pre-determined prices. Cryptocurrencies are often very vulnerable to volatility and wild price swings, and this new strategy is alleged to offer higher protection to customers.

Getting More People in the Game

Joshua Goodbody, general counsel of Huobi’s global institutional team, explained in an interview:

“Cryptocurrency is a rapidly expanding and maturing market. As part of that maturation, we see more and more sophisticated investors and traders from more established financial markets looking to gain exposure, including institutional players.”

Are we likely to see more exchanges in the future centered around a single coin? Post your comments below.

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Nearly $1 Million in Blockchain Bug Bounties Offered in 2018

Blockchain technology is often touted for its strength, stamina, and overall safety. The possibilities for blockchain to finally expand beyond crypto are finally beginning to show themselves, but the fact remains that blockchain is still a developing platform, and many kinks still need to be worked out.

This year, hackers made an estimated $878,000 from bug bounties. This is money not garnered from individuals’ wallets or coins kept in storage, but from the exchanges themselves.

Blockchain Needs Time to Build Itself

Following events such as Mt. Gox and Coincheck – two of the worst cryptocurrency-based thefts in history – many exchanges and wallet platforms are looking to improve their safety standards and keep their customers’ money secure. Occasionally, these exchanges are likely to find software bugs in their systems that could potentially be manipulated later by malicious individuals looking to get their fingers around money that’s not theirs.

What do these exchanges do? They pay hackers to enter their systems and fix the problems before they’re uncovered by the wrong people. They then pay these hackers for their services with what’s known as “bug bounties.” By August of this year, roughly $600,000 in bug bounties had been collected, though by December’s end, that number had skyrocketed to nearly $900,000.

The biggest “payer” of bug bounties was Block.one, which awarded over $500,000 to hackers that sealed off gaps in its code. In second place came U.S.-based exchange Coinbase, which paid over $200,000 in 2018, while Tron came in third, having paid over $76,000 in bug bounties.

A spokesperson for Hacker One explains:

“Nearly four percent of all bounties awarded on Hacker One in 2018 were from blockchain and cryptocurrency companies. The average bounty for all blockchain companies in 2018 was $1,490. That’s higher than the quarter four platform average of around $900. One of the top-paid crypto hackers earned seven times the median software engineer salary in their country respectively.”

Bitcoin and bitcoin cash were some of the biggest subjects of hackers’ affection this year, as Hacker One reports that both currencies suffered from “crippling vulnerabilities” in 2018. In addition, roughly 34,000 smart contracts on the Ethereum network were also vulnerable to malicious activity.

The Cycle Continues

Unless the blockchain is EOS, most transactions occurring via distributed ledgers are not reversible, which means once the money is stolen or gone, it is gone forever.

At press time, some of the companies still offering bug bounties to hackers willing to examine their systems include Augur, which is granting $200,000 in reward money to anyone that can uncover “critical issues” in its network.

Do you think bug bounties are a good idea, or could they somehow give hackers the wrong idea? Post your comments below.

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Crypto Wallets Still Aren’t as Safe as They Should Be

We’re about to enter 2019, and hardware wallets still aren’t enforcing the protections they should be. Investors and their crypto stashes are still very much at risk, according to a new study.

A team of security researchers – Dmitry Nedospasov, Thomas Roth and Josh Datko – began examining varying cryptocurrency wallets in June to see if these wallets could be compromised or hacked. Six months later, they’re showing their findings in a new presentation at the Chaos Communication Congress.

Are Crypto Wallets Up to the Test?

Among the wallets tested were the Trezor One, the Ledger Nano S, and the Ledger Blue. The developers tested these and other wallets against both supply chain and side channel attacks, finding both chip and firmware-level vulnerabilities in the process.

One of the biggest problems came in the form of the security stickers that vendors typically use as “seals” for the wallets’ boxes and casings. If the sticker is intact, it is often assumed that the device hasn’t been tampered with or is safe to use.

However, Datko demonstrated that a malicious individual can easily remove the sticker by blasting it with a hairdryer on low heat. This pushes the sticker back without leaving any residue on the case. Datko was then able to remove the stickers from the Trezor One boxes and USB ports, leaving no glue or attaching substance behind.

Following this demonstration, Datko opened the wallets’ enclosures, gaining access to the hardware underneath. From there, he was able to replace the microcontroller, commenting:

“Once you’ve done that on the Trezor wallet devices, you can put your compromised bootloader in there.”

This later allowed Datko to connect to the chip and gain consistent access with a hardware debugger, which would allow an individual to install malicious code onto the wallet(s). He then took things further and installed what he referred to as a “cheap hardware implant” onto the Ledger wallet that allowed him to approve transactions without a user’s permission or knowledge. This is particularly dangerous in the sense that a hacker could easily garner and move illegally possessed funds and the wallet owner would never know.

What Could Happen if These Issues Aren’t Solved?

Lastly, the researchers were able to reverse-engineer firmware upgrades and find technical issues that would allow hackers to write custom firmware on the devices.

Granted these and other wallet vulnerabilities remain, 2019 could potentially start in the same way 2018 did – with another Coincheck. What a great beginning to the new year, right?

Do you believe wallet companies aren’t doing enough to protect their clients? Why or why not? Post your comments below.

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Samsung Files Crypto Trademark in the U.K.

Electronics company Samsung has filed a U.K. trademark for a new crypto wallet. The trademark was filed on Thursday, December 27 with the U.K. Intellectual Property Office.

Samsung is also including smartphones, tablet computers, portable computers, computer software and mobile telephones with the crypto wallet in its registration paperwork.

Crypto Goes Well with Technology

The company stated in its filing:

“Computer software for use as a cryptocurrency wallet; computer software for cryptocurrency transfer and payments using blockchain technology; computer application software for smartphones, namely, software to allow users to transfer cryptocurrency based on blockchain technology and pay via third party’s application software.”

Previously, Samsung had denied rumors that its Galaxy S10 phone possessed its own cryptocurrency wallet, though earlier in the month, the venture filed three different trademark applications with the European Union for both blockchain and cryptocurrency-based software.

This isn’t the company’s first outing into crypto territory. Last summer, Samsung announced that it would be using CopPay – a multi-cryptocurrency payment platform for both consumers and businesses alike – to accept digital asset payments for goods and services in the three Baltic States (Lithuania, Estonia and Latvia). Customers living in those countries could now purchase smartphones, television sets, laptops, tablets and other Samsung products using virtual currencies like bitcoin, Ethereum, Ripple’s XRP, Dash and Litecoin.

CopPay announced:

“Our goal is millions of CopPay virtual terminals installed and functioning around the world. CopPay makes it simple for merchants and service providers to become a part of the growing cryptocurrency economy and attract new clients.”

The company further stated that it possessed the “global infrastructure” to allow cryptocurrency payments in the first place.

Despite regular price drops in the likes of bitcoin and its altcoin cousins, there appears to be a growing pressure amongst traditional companies to get involved in the digital asset space. As time goes by, we are seeing more and more companies that have little or nothing to do with digitization or technical finance step into the ring with crypto.

More Businesses Will Lead to Legitimacy

Recently, Madison Holdings Group – a Hong Kong stock exchange-listed wine company – announced that it would be purchasing a 67 percent share in BitOcean, one of Japan’s leading cryptocurrency exchanges. The purchase is alleged to cost more than $30 million.

This suggests that many companies – despite regularly falling prices – see crypto as the wave of the future and are eager to get a piece of the action before things get too expensive or the space is overrun. The more these businesses get involved, the more legitimate the space will become.

Are you excited about Samsung’s latest blockchain developments? Why or why not? Post your comments below.

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Top Crypto Podcasts of 2018

In two days, 2018 will be at its end. Considering there’s nothing more we can really do about bitcoin’s price in that time (after all, Tom Lee’s many year-end predictions never came true), we might as well focus on the joy of crypto for a little while.

If you’re late to the crypto craze and want to get into it but just don’t know how, here are some of the top podcasts you can listen to that might have the information on cryptocurrencies you’re looking for.

Listening About the Benefits of Crypto

The first is Unchained. Hosted by Laura Shin, a former reporter with Forbes, the podcast features lengthy conversations with crypto startup executives and entrepreneurs in the blockchains pace. Some of the podcast’s previous guests include Changpeng Zhao, CEO of the crypto exchange Binance, and bitcoin developer Jimmy Song.

The amount of information it gives makes it a little more tailor-made for experienced crypto investors, but it’s a hub of knowledge that’s likely to get you going in the right direction if crypto has ever interested you.

Next, we have Off the Chain. This one also features a wide array of entrepreneurs discussing what’s happening in the blockchain and digital asset arenas, though most of the time, it’s a venue for them to speak ill of each other. Off the Chain has become something of a platform for entrepreneurs to call each other out on the allegedly shady tactics they employ while pitching their own products. Past speakers include founder of Abra Bill Barhydt and Murad Mahmudov, an established cryptocurrency analyst.

Third is Unconfirmed, also hosted by Laura Shin. This one, however, deals less with specific topics and rather just lets the speakers speak. Here, you can listen to some of the world’s leading blockchain industry members deliver their insights as to what they think the future of crypto holds for long-term investors. Past guests include Jackson Palmer, creator of Dogecoin, and Cornell University professor Emin Gun Sirer.

A Few More Examples

Steal This Show is not primarily centered on blockchain topics, but when it moves in this direction, it can provide top-level information to its listeners. The podcast is hosted by activist and filmmaker Jamie King, and discusses anything from the peer-to-peer (p2p) marketplace to BitTorrent. The show has also discussed common worries regarding blockchain technology.

Last is Magical Crypto Friends, designed for “bitcoin maximalists.” The podcast discusses topics ranging from regulation and decentralization to bitcoin’s changes over the past ten years. It’s also a joint hosting job between Blockstream CSO Samson Mow, Litecoin creator Charlie Lee and Monero lead Riccardo Spagni.

Would you listen to any of these podcasts? Why or why not? Post your comments below.

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190 Crypto Companies Are Looking to Operate in Japan

Japan is one of the largest crypto hubs across the globe. Along with the United States, it’s the only country that enforces some sort of licensing structure for companies looking to enter the crypto space, and as it turns out, most companies are looking to get a piece of that action.

According to Japan’s Financial Services Agency (FSA), approximately 190 new cryptocurrency firms are seeking entry to Japan’s digital asset market. Four months ago, that number stood at only 160, suggesting an increase of roughly 30 companies in a relatively short period.

Japan’s Crypto Scene Is Expanding

The FSA has issued a statement, explaining:

“Including preliminary consultation/ inquiries regarding registration, more than 190 operators are expressing their intention of market entry.”

This presents an interesting scenario in the sense that most companies are showing interest in being part of a legit enterprise. Japan’s FSA has sworn to become far more involved in the nation’s crypto arena following the Coincheck debacle that occurred last January. More than $500 million in crypto funds were stolen, and the exchange was widely criticized for its utilization of hot wallet over cold storage tactics.

The FSA then began working with Coincheck and competing exchanges to update their security protocols. The organization also began issuing warnings to exchanges advising them to cooperate with its new licensing structure and explaining that those who refused would face the possibility of shutdown.

There are roughly 16 licensed cryptocurrency exchanges in Japan including GMO Coin and SBI Virtual Currency. All cryptocurrency exchanges must register with the FSA before opening their doors for public trade.

The fact that Japan is being strict with crypto-based businesses and operations, yet so many companies want in suggests that these enterprises strongly desire regulation and a sense of legitimacy. Among the companies looking to perform crypto-related business in Japan are Yahoo!, Daiwa Securities Group, Money Forward Inc., Yamane Medical Corp., Avex Inc. and Samurai & J Partners.

The FSA Is Always Watching

In addition, the FSA has also given approval to Coincheck (following an extensive audit), Lastroots and Everybody’s Bitcoin as cryptocurrency dealers. This gives them and companies like them the opportunity to operate in Japan’s primary crypto sector while their applications are still under review.

Coincheck has slowly been reintroducing its services to customers after it was obtained by the Monex Group just a few months ago.

Are we likely to see other companies banging on Japan’s cryptocurrency doors? Post your thoughts and comments below.

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