Bitcoin-Skandal: Wurde Mt. Gox in Wahrheit nie bestohlen?

Crypto-Powered: Understanding Bitcoin, Ethereum, and DeFi

Crypto-Powered: Understanding Bitcoin, Ethereum, and DeFi
Until one understands the basics of this tech, they won’t be able to grasp or appreciate the impact it has on our digital bank, Genesis Block.
This is the second post of Crypto-Powered — a new series that examines what it means for Genesis Block to be a digital bank that’s powered by crypto, blockchain, and decentralized protocols.
Our previous post set the stage for this series. We discussed the state of consumer finance and how the success of today’s high-flying fintech unicorns will be short-lived as long as they’re building on legacy finance — a weak foundation that is ripe for massive disruption.
Instead, the future of consumer finance belongs to those who are deeply familiar with blockchain tech & decentralized protocols, build on it as the foundation, and know how to take it to the world. Like Genesis Block.
Today we begin our journey down the crypto rabbit hole. This post will be an important introduction for those still learning about Bitcoin, Ethereum, or DeFi (Decentralized Finance). This post (and the next few) will go into greater detail about how this technology gives Genesis Block an edge, a superpower, and an unfair advantage. Let’s dive in…

Bitcoin: The First Cryptocurrency

There are plenty of online resources to learn about Bitcoin (Coinbase, Binance, Gemini, Naval, Alex Gladstein, Marc Andreessen, Chris Dixon). I don’t wanna spend a lot of time on that here, but let’s do a quick overview for those still getting ramped up.
Cryptocurrency is the most popular use-case of blockchain technology today. And Bitcoin was the first cryptocurrency to be invented.
Bitcoin is the most decentralized of all crypto assets today — no government, company, or third party can control or censor it.
Bitcoin has two primary features (as do most other cryptocurrencies):
  1. Send Value You can send value to anyone, anywhere in the world. Nobody can intercept, delay or stop it — not even governments or financial institutions. Unlike with traditional money transfers or bank wires, there are no layers of middlemen. This results in a process that is much more cost-efficient. Some popular use-cases include remittances and cross-border payments.
  2. Store Value With nothing but a smartphone, you can become your own bank and store your own funds. Nobody can seize your assets. The funds are digital and stored on a blockchain. Your money no longer needs to be stored at a bank, in a vault, or under your mattress. I covered a few inspiring use-cases in a previous post. They include banking the unbanked, protecting assets from government seizure, mitigating the risk of a bank run, and protection against hyperinflation (like what recently happened in Venezuela).
The fact that there are so few things one can do with Bitcoin is one of its greatest strengths.
Its design is simple, elegant, and focused. It has been 10+ years since Satoshi’s white paper and no one has been able to crack or hack the Bitcoin network. With a market cap of $170B, there is plenty of incentive to try.

Public Awareness

A few negative moments in Bitcoin’s history include the collapse of Mt. Gox — which resulted in hundreds of millions of customer funds being stolen — as well as Bitcoin’s role in dark markets like Silk Road — where Bitcoin arguably found its initial userbase.
However, like most breakthrough technology, Bitcoin is neither good nor bad. It’s neutral. People can use it for good or they can use it for evil. Thankfully, it’s being used less and less for illicit activity. Criminals are starting to understand that transactions on a blockchain are public and traceable — it’s exactly the type of system they usually try to avoid. And it’s true, at this point “a lot more” crimes are actually committed with fiat than crypto.
As a result, the perception of bitcoin and cryptocurrency has been changing over the years to a more positive light.
Bitcoin has even started to enter the world of media & entertainment. It’s been mentioned in Hollywood films like Spiderman: Into the Spider-Verse and in songs from major artists like Eminem. It’s been mentioned in countless TV shows like Billions, The Simpsons, Big Bang Theory, Gray’s Anatomy, Family Guy, and more.
As covid19 has ravaged economies and central banks have been printing money, Bitcoin has caught the attention of many legendary Wall Street investors like Paul Tudor Jones, saying that Bitcoin is a great bet against inflation (reminding him of Gold in the 1970s).
Cash App already lets their 25M users buy Bitcoin. It’s rumored that PayPal and Venmo will soon let their 325M users start buying Bitcoin. Bitcoin is by far the most dominant cryptocurrency and is showing no signs of slowing down. For more than a decade it has delivered on its core use-cases — being able to send or store value.
At this point, Bitcoin has very much entered the zeitgeist of modern pop culture — at least in the West.

Ethereum: Programmable Money

When Ethereum launched in 2015, it opened up a world of new possibilities and use-cases for crypto. With Ethereum Smart Contracts (i.e. applications), this exciting new digital money (cryptocurrency) became a lot less dumb. Developers could now build applications that go beyond the simple use-cases of “send value” & “store value.” They could program cryptocurrency to have rules, behavior, and logic to respond to different inputs. And always enforced by code. Additional reading on Ethereum from Linda Xie or Vitalik Buterin.
Because these applications are built on blockchain technology (Ethereum), they preserve many of the same characteristics as Bitcoin: no one can stop, censor or shut down these apps because they are decentralized.
One of the first major use-cases on Ethereum was the ability to mint and create your own token, your own cryptocurrency. Many companies used this as a way to fundraise from the public. This led to the 2017 ICO bubble (Initial Coin Offerings). Some tokens — and the apps/networks they powered — were fascinating and innovative. Most tokens were pointless. And many tokens were outright scams. Additional token reading from Fred Ehrsam, Balaji, and Naval.

Digital Gold Rush

Just as tokens grew in popularity in 2017–2018, so did online marketplaces where these tokens could be bought, sold, and traded. This was a fledgling asset class — the merchants selling picks, axes, and shovels were finally starting to emerge.
I had a front-row seat — both as an investor and token creator. This was the Wild West with all the frontier drama & scandal that you’d expect.
Binance — now the world’s largest crypto exchange —was launched during this time. They along with many others (especially from Asia) made it really easy for speculators, traders, and degenerate gamblers to participate in these markets. Similar to other financial markets, the goal was straightforward: buy low and sell high.
That period left an embarrassing stain on our industry that we’ve still been trying to recover from. It was a period rampant with market manipulation, pump-and-dumps, and scams. To some extent, the crypto industry still suffers from that today, but it’s nothing compared to what it was then.
While the potential of getting filthy rich brought a lot of fly-by-nighters and charlatans into the industry, it also brought a lot of innovators, entrepreneurs, and builders.
The launch and growth of Ethereum has been an incredible technological breakthrough. As with past tech breakthroughs, it has led to a wave of innovation, experimentation, and development. The creativity around tokens, smart contracts, and decentralized applications has been fascinating to witness. Now a few years later, the fruits of those labors are starting to be realized.

DeFi: Decentralized Finance

So as a reminder, tokens are cryptocurrencies. Cryptocurrencies can carry value. And value is a lot like money. Because tokens are natively integrated with Ethereum, it’s been natural for developers to build applications related to financial services — things like lending, borrowing, saving, investing, payments, and insurance. In the last few years, there has been a groundswell of developer momentum building in this area of financial protocols. This segment of the industry is known as DeFi (Decentralized Finance).
In Q2 of 2020, 97% of all Ethereum activity was DeFi-related. Total DeFi transaction volume has reached $11.5B. The current value locked inside DeFi protocols is approaching $2 Billion (double from a month ago). DeFi’s meteoric growth cannot be ignored.
Most of that growth can be attributed to exciting protocols like Compound, Maker, Synthetix, Balancer, Aave, dYdX, and Uniswap. These DeFi protocols and the financial services they offer are quickly becoming some of the most popular use-cases for blockchain technology today.
This impressive growth in DeFi certainly hasn’t come without growing pains. Unlike with Bitcoin, there are near-infinite applications one can develop on Ethereum. Sometimes bugs (or typos) can slip through code reviews, testing, and audits — resulting in loss of funds.
Our next post will go much deeper on DeFi.

Wrap Up

I know that for the hardcore crypto people, what we covered today is nothing new. But for those who are still getting up to speed, welcome! I hope this was helpful and that it fuels your interest to learn more.
Until you understand the basics of this technology, you won’t be able to fully appreciate the impact that it has on our new digital bank, Genesis Block. You won’t be able to understand the implications, how it relates, or how it helps.
After today’s post, some of you probably have a lot more questions. What are specific examples or use-cases of DeFi? Why does it need to be on a blockchain? What benefits does it bring to Genesis Block and our users?
In upcoming posts, we answer these questions. Today’s post was just Level 1. It set the foundation for where we’re headed next: even deeper down the crypto rabbit hole.
Other Ways to Consume Today's Episode:
We have a lot more content coming. Be sure to follow our channels:
Have you already downloaded the app? We're Genesis Block, a new digital bank that's powered by crypto & decentralized protocols. The app is live in the App Store (iOS & Android). Get the link to download at
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Top 10 of The Biggest Cryptocurrency Hacks and Scams Ever

If you have been around the cryptocurrency industry long enough, you will know that one of the biggest risks faced by users is the loss of funds through hacks on cryptocurrency wallets and exchanges.
Online exchanges are prime targets for hackers and thieves on the internet. This is mainly because of the amount of funds that are kept on these platforms. For hackers that have succeeded in stealing funds from such platforms, the amounts are usually huge.
As much as individual users try to play their roles in securing their accounts by using personal passwords, PINs and codes, there is a higher layer of security that lies in the hands of the platform providers. Once this is breached, the individual security efforts become irrelevant.
Over the years, exchanges and wallets appear to have improved in terms of security as the frequency of hacks and platform breaches have reduced. What used to be a common occurrence in the industry has become a rare development, with hacks now few and far between.
Let’s take a look at the top 10 of the biggest cryptocurrency hacks and scams ever.

10. Bitcoin Gold ($18 Million)

In May 2018, the theoretical 51% attack possibility was proven in a heist that saw a breach in Bitcoin Gold which cost the protocol $18 million.
In this heist, hackers used 51% raw computing power to seize control of the network and carry out their ulterior plans effectively. Ciphertrace and other security outfits in the ecosystem believe that the algorithm weaknesses in Bitcoin Gold’s Proof of Work (PoW) transaction verification may have enabled the success of the theft.

9. Geth ($20 Million)

In June 2018, the Ethereum client Geth was hacked and ETH worth $20 million was stolen. This incidence was reported by blockchain security firm, Cyphertrace. During the hack, JSON-RPC port 8545 was exploited. This is the port that initiates ETH send transactions.
All the ETH wallets that were affected by this breach was drained by the thieves, accumulating to the quoted $20 million equivalence based on the price of ETH at that time.

8. Bancor ($23.5 Million)

In July 2018, about one month after the Geth incident, decentralized cryptocurrency exchange, Bancor was hacked and $23.5 million worth of crypto stolen. This particular event raised some eyebrows in the cryptocurrency industry, redefining the general opinion of decentralized exchanges being prone to hacking.
The process involved the exploitation of a security flaw in a wallet that was used to update some of the smart contracts on the exchange. Bancor, which was one of the most successful ICOs of 2017, raising $153 million during its token sale, was forced to shut down after the hack.

7. Coinrail ($40 Million)

Coinrail was hacked in June 2018, and $40 million was stolen from the exchange. The South Korean exchange which ranked among the top 100 exchanges by volume, suspended its services shortly after the hack.
According to sources from the exchange, the tokens that were stolen included NPXS tokens from the Pundi X project, ATC from Aston and the NPER project’s NPER token.
  1. Binance ($40.7 Million)
Binance exchange was hacked in May 2019 and 7,000 Bitcoins were stolen from the platform. The value of the Bitcoins stolen at the time was about $40.7 million.
To achieve their aim, hackers were able to steal API keys, two-factor codes and some other key information to access the wallets. According to the exchange, the incident impacted only about 2% of its total Bitcoin holdings as all other wallets are secure.
Affected wallets were promised a refund through the exchange’s Secure Asset Fund for Users (SAFU) arrangement. This is a policy that the exchange uses to prepare for rainy days. A portion of fees charged on the exchange is set aside in order to ensure that platform users do not bear the brunt during occurrences such as this.

5. Zaif ($60 Million)

Japan-based cryptocurrency exchange Zaif was hacked in September 2018 and $60 million was stolen in the process. The theft was possible after hackers gained authorised access into the exchanges hot wallets, making away with huge amounts of Bitcoin, Bitcoin Cash, and MonaCoin.
The exchange’s asset reserve could not cover the loss, therefore it reached an agreement with a Japan-listed firm called Fisco to receive a $44.5 million investment in exchange for a major share of ownership.

4. Bitfinex ($77 Million)

The Bitfinex hack of August 2016 was a popular event that rocked the entire cryptocurrency industry. The hack occurred at a time when cryptocurrencies appeared to be shifting gears in terms of awareness and development. As a matter of fact, the aftermath of the event saw the Bitcoin price drop by 20%.
After the hack, Bitfinex issued cryptographic tokens to its users that were affected by the hack, all of which the exchange announced to have bought back by April 2017.

3. BitGrail ($187 Million)

$187 million worth of Nano tokens were stolen from BitGrail in February 2018. The reported theft was announced weeks after the unauthorized transfer was initiated. This information was from evidence retrieved from the Nano blockchain explorer by skeptics.
While BitGrail recognized the concerns of it users, it however stated that it is impossible for it to refund the stolen amount.

2. Mt. Gox ($460 Million)

The Mt. Gox scandal remains one of the biggest stains on the cryptocurrency industry. In February 2014, Mt. Gox was hacked and as much as $460 million was stolen from the exchange. In the wake of this, the exchange’s CEO, Mark Karpeles issued a statement that accepted responsibility on behalf of his company.
“We had weaknesses in our system, and our bitcoins vanished. We’ve caused trouble and inconvenience to many people, and I feel deeply sorry for what has happened, “ he said.
At the time, Mt. Gox was the world’s largest Bitcoin exchange that looked impressive from the outside, but many who claimed to know about the internal workings accused the company of a messy combination of poor management, neglect, and raw inexperience.
The size of this event left a huge dent on the reputation of Bitcoin and the crypto industry at large. It took a long time before the market picked up again, and for users to regain confidence in the industry. The exchange has since gone down and ceased to exist.

1. Coincheck ($500 Million)

The biggest theft in the history of the cryptocurrency industry happened in January 2018, when Japan-based cryptocurrency exchange, Coincheck was hacked. A total of NEM tokens worth $500 million were stolen in the process.
A statement from the exchange accepted the blame and took responsibility for the breach. According to reports, rather than storing its customers’ assets in offline wallets, the assets were stored in hot wallets that were connected to the internet. Coincheck also reportedly failed to protect the wallets with standard multi-signature security protocols.
Having traced the destination of the stolen funds, NEM developers created a tracking tool that would allow exchanges to automatically reject stolen funds.


Hacks and massive theft of cryptocurrencies have contributed to the setback experienced by the technology. Each of the events takes a hit on the confidence of investors and willing participants who may not be sure of how the affected exchanges will handle the situation.
The industry is however learning from past experiences, as the frequency of such hacks have reduced, while in some cases, modalities are being put in place to ensure that end users do not bear the brunt of such events, just like the case of Binance.
The NEM developers’ response to the Coincheck hack has a way of rendering stolen funds unspendable, as long as other members of the community comply. However, no one knows how long this will last, and if the hackers will be able to nullify the traceability of the stolen coins yet.
The action by the developers will discourage hackers and thieves, but is yet to restore value to the end users whose funds have been stolen.
For the industry to grow as it should and become stable, security of funds need to be established. Exchanges and developers are continuously making efforts to ensure that funds and transactions within the industry remain safe at all times.
submitted by OliAustin101 to TopBottomCrypto [link] [comments]

Chromapolis FUD: Stop the nonsense. (RE: The Ian Balina Scandal)

Chromapolis FUD: Stop the nonsense. (RE: The Ian Balina Scandal)
This piece was originally posted here by an anonymous writer, but I thought that it hadn't received enough views to truly defend the team. I'm sure many of you saw the Ian Balina ICO pool scandal here, but I thought it unfairly dragged down Chromaway's name with it.
There has been massive amounts of FUD going around the ICO community–some accusations are well-founded, and I understand the confusion and anger. I’m not here to defend the actions of the team, and I’m not here to say that they have reacted in the best way possible. Nor am I here to defend the actions of Ian Balina. I am, however, here to defend the characters of the ChromaWay team and the accomplishments and contributions they have made to the blockchain industry.
First of all, Alex Mizrahi has contributed more to the development of this fascinating industry than 99.99% of ICO participants. The ChromaWay team, led by Alex, were the first to create a protocol capable of issuing tokens, called “colored coins” at the time (circa 2011~2012). The concept was so new at the time that he even had to quote Meni Rosenfield on what “colored coins” were:

By the original design bitcoins are fungible, acting as a neutral medium of exchange. However, by carefully tracking the origin of a given bitcoin, it is possible to “color” a set of coins to distinguish it from the rest. These coins can then have special properties supported by either an issuing agent or a Schelling point, and have value independent of the face value of the underlying bitcoins. Such colored bitcoins can be used for alternative currencies, commodity certificates, smart property, and other financial instruments such as stocks and bonds.

His role in the propagation of the idea of what we now call “tokens” played a huge role in expanding the blockchain industry into what it is today. In fact, when Vitalik introduced the concept of Ethereum to the world onstage at Bitcoin Miami 2014, he praised colored coins and its potential to radically change the scope of blockchain applications.

Above: Slide from Vitalik’s presentation in BTC Miami 2014 on the applications of blockchain and distributed consensus, following Satoshi’s creation of digital currency and blockchain in 2009. Vitalik described colored coins by saying, “the idea behind [colored coins] is okay, you have a blockchain and you have a currency on it, but what if you could put other currencies on the blockchain as well.”

Above: Jimmy Song, one of ChromaWay’s early hires, explains Colored Coins and ChromaWallet back in 2014 in Zug, Switzerland.
We’ve come a long way from the small grassroots and enthusiast developer communities in 2011, to now multimillion dollar companies appearing out of thin air during 2017-18. If the ChromaWay team were only in it for the money, wouldn’t they have thrown together a whitepaper and raised $30 million when ICOs were all the rage last year? No, they waited for a breakthrough in lowering the barrier of entry for developers that want to create dapps: Postchain.
The implications of their breakthrough in Postchain is huge. The internet as we know it today, “internet 2.0” was created on the backbones of relational databases and improved protocols. Postchain, very simply put, allows relational blockchains. This means that any developer, blockchain experienced or not, will be able to create dapps using SQL queries that they are already familiar with. If more people cared about the core technology and its potential to truly make dapps mainstream and less about getting “hyped up” coins at a higher price, these recent waves of FUD would not have been given much attention--what Ian decides to do with his allocation is his decision. Again, I am not defending his actions nor the team’s response to the FUD. Quite frankly, the Chromaway team has never had to deal with situations like these, and I’m sure stress played a huge part.
So what else has the team been doing since 2011? Short answer: a lot of research, ideas, and development, that we take for granted today.
What were you doing to help this revolution? They may have made mistakes--after all it is their first ICO. But it’s not fair to attack their character based on miscommunications and mistakes, that ultimately have no long-term effects on the project.
If you have a problem with the way they have communicated with the community and investors that is completely reasonable. But do not start acting out character assassinations on people that have been building infrastructure in the space for years simply because you are unhappy with their inexperience in PR relations and communications. Come at them with your concerns not your vitriol. Creating anonymous posts where all you do is bash on them without providing constructive criticism will only create more problems.
To add onto this, this article has been making the rounds and makes a lot of assumptions and straight out unfounded accusations. To be more specific near the end they call out an influencer known as “TheGobOne” as having been fined $400,000 by the SEC because of pooling. First of all TheGobOne is a Canadian citizen and is not governed by the SEC. And by his own word has not been in contact or been contacted by them in regards to pooling funds. To create entirely false talking points to support your narrative is as disingenuous as possible. Why the author felt the need to spread lies to try and support his point shows a clear alterior motive in trying to character assassinate influencers and team members associated with the project, rather than coming at them with purely fact based concerns.

Above: TheGobOne refuting claims he was fined by the SEC in his Discord Announcements channel earlier today.
Everyone in the blockchain space has been a bit on edge lately because of the serious market downturn. If you’re an investor you’ve been feeling the heat of the giant -70%+ losses on altcoins. Feeling frustrated at that is completely natural but in the end we have to make sure we don’t explode at projects and people that have little to do with our own down investments. There are teams and projects that are simply trying to build something they believe the space needs. Let’s try to make the crypto community stronger and come together to help these developers make the best projects they can. Without bombarding them with negativity for every mistake they make on the way there.
Ending on a lighter note, you can see Alex’s true character in a funnily relevant thread from 2012 titled “fuck this shit, I want my own blockchain!” where he says:
I understand that many community members won't like some of these features, but the goal here is to try new things, not to get some people rich. If you don't like it, then forget about it. If nobody likes it, I have other things to do.
submitted by cryptohan to CryptoCurrency [link] [comments]

Deex; The Answer To Mt Gox

A short history of the most famous crypto exchange’ scam. We showed the history of Mt. Gox – the most scandalous crypto-exchange with the help of Little Big, Skibidi song. In 2014, this exchange conducted 70% of all transactions within the bitcoin network. But after the hacker attack 850,000 of bitcoins was stolen, and 750,000 ofthem were customer’s coins. If only Mt.Gox were decentralized exchange the hackers could not steal customer’s funds. DEEX is the best thing that has happened with decentralized exchanges. Trade on DEEX and get profit! Right now! Safe and secure!
submitted by ezerlan to BlockchainStartups [link] [comments]

[uncensored-r/btc] Guess who controls over half a billion Tethers across 3 exchanges—over 73% of USDT currently in c...

The following post by peptocurrency is being replicated because some comments within the post(but not the post itself) have been openly removed.
The original post can be found(in censored form) at this link: btc/comments/7ih0hd
The original post's content was as follows:
EDIT 4: Apparently this is making some waves. I realize there are people who will see this that are new to cryptocurrency. A fairly general understanding/background on Bitfinex, Tether, and the history of cryptocurrency exchange scandals would be useful. (i.e. Mt. Gox - which fraudulently made off with millions of dollars worth of BTC after artificially inflating its price at the expense of thousands of users) As this post is already extremely lengthy, I'll try and sum up the basics before getting started (skip to below this section if you are already familiar):
First off, I'm not the first person to look into this. And it's hardly new info. For example, Bitfinex'ed (medium, twitter) has been onto this situation for quite some time now, and it's worth checking out if you want to keep learning.
  1. I've previously posted on the interrelatedness of Bitfinex and Tether. Worth a read if you don't know how they're connected.
  2. Bitfinex is a cryptocurrency exchange with a dark past involving multiple run-ins with trading laws and regulations, problems with banks and multiple hacks resulting in the loss of millions of dollars worth of BTC.
  3. Tether (USDT) is a fairly new development. Its first address came into existence in 2014. What it claims to be is a cryptocurrency backed 1:1 with the USD. So for every Tether, there is supposedly $1 backing it. Thus the name, "Tether." Problem is, there is no evidence of this. The requirements to buy Tether involve extensive verification hoops, that make it pretty much defeat the purpose of cryptocurrency.
  4. The primary difference between Tether and virtually every other cryptocurrency in existence is that it does not have to be mined into existence. It can simply be "typed" into existence through a keyboard. Go ahead, type a number on your keyboard. $100,000,000? No problem. Done.
  5. Because of this, and after seeing hundreds of millions of Tether being typed into existence to the tune of over 800 million, most of which is being used on exchanges, it has come to the attention of the cryptocurrency community as a whole, that Tether may not be such a great thing for Bitcoin - or any other cryptocurrency. We've found that it is being "created" freely, without any proof of its required $USD reserves.
Tether has the equivalent power of the Federal Reserve. That alone, is absolutely insane. You can see why these factors combine to create a somewhat stormy horizon for cryptocurrency as a whole.
All I aim to do in this post is to outline who owns the majority of Tether (USDT), where it's located, how much of BTC's daily trading volume it makes up, and how I came to those conclusions. Anything beyond that, like implications or predictions about price, manipulation, BTC being propped up by Tether, etc. or any kind of conspiracy, I steer clear from. The information below is, to the best of my knowledge, purely factual information, not theoretical.

Start here if already familiar.

This is going to sound crazy. But the wallets don’t lie, and I’ll break it all down below (as if summoning hundreds of millions of dollars worth of fake money out of thin air to spend on real crypto-currency wasn't crazy-sounding enough). I know this is long, but it's worth reading if you have the time. TL;DR at the bottom.
First, I need to outline which addresses are which. All the following addresses were at one time, or are currently on Tether's "Rich List." And as we'll get to below, belong to Bitfinex:
Tether Printer: 3MbYQMMmSkC3AgWkj9FMo5LsPTW1zBTwXL Tether Treasury: 3BbDtxBSjgfTRxaBUgR2JACWRukLKtZdiQ Bitfinex-A: 1KYiKJEfdJtap9QX2v9BXJMpz2SfU4pgZw unknown/Bitfinex-B: 1AA6iP6hrZfYiacfzb3VS5JoyKeZZBEYRW Bittrex: 1DUb2YYbQA1jjaNYzVXLZ7ZioEhLXtbUru Poloniex-A: 1Po1oWkD2LmodfkBYiAktwh76vkF93LKnh Poloniex-B: 1Co1dhYDeF76DQyEyj4B5JdXF9J7TtfWWE
As some of you know, I’ve been investigating the web of transactions and addresses from OmnExplorer for the last several days/weeks. It has become more interesting the deeper I dig: Tether, through Bitfinex (their own partner, arguably owned by the same company) is sending hundreds of millions of USDT to Bittrex and Poloniex accounts. This would be normal if it weren’t for the fact that all these accounts appear to be under control of Tether & Bitfinex directly.

From Tether to Bitfinex to Bittrex

I discovered this when I realized Bitfinex doesn’t have any USDT trading volume, nor is USDT offered for any trading pairs on Bitfinex, despite Bitfinex being the only Associate of Tether listed in its legal terms. “So what, Pepto?” Well this is weird for several reasons:
  1. Bitfinex is listed as the only partner of Tether in Tether’s legal terms. You’d think the only exchange partnered with Tether, and indemnified in its legal terms, would be offering USDT in its trading pairs, no? Why isn’t USDT offered on Bitfinex? After all, they are heavy users of it.
  2. Bitfinex-A has been the recipient of hundreds of millions of USDT, directly from the Tether Printer and Treasury.
  3. Bitfinex-A has spent the majority (hundreds of millions in ~half-million to million increments) of its USDT by sending it to an unknown address which exclusively sends USDT to Bittrex.
  4. Bitfinex-A and Bittrex are currently top 3 on Tether's "Rich List." They currently hold ~386million USDT across both addresses.
Think about these points. The only one who can be in control of this unknown address is Bitfinex. Here's why: 1) Bitfinex does not offer or trade USDT. Tell me what random soul out there is privately selling hundreds of millions of USDT worth of goods or services directly to Bitfinex, only to send their USDT revenue to Bittrex? Who in their right mind would sell anything in exchange for Tether? 2) It’s not Bittrex, because they would have received it from the Treasury if they had directly bought it from Tether for use in their trading pairs, the only place besides an exchange where you can get it. But besides offering it as a trading pair, what exchange would ever directly trade hard cash for a digital token whose terms of service explicitly outline its worthlessness?
It is because of these points that we can safely deduce that this unknown address is owned by Bitfinex. So we’re going to label this unknown address “Bitfinex-B” for future reference. Next. If Bitfinex-B is sending USDT exclusively to the Bittrex address on Tether’s “Rich List” immediately after receiving USDT from Bitfinex-A, who is the owner of the Bittrex address?
Do we need to ask why Bittrex would ever exchange cash, goods or services with Bitfinex for USDT again? It's pretty clear at this point that the "Rich List" Bittrex address belongs to Bitfinex as well. Alright, so in case we're lost, so far, the flow of USDT looks like this:
Tether Printer >> Tether Treasury >> Bitfinex-A >> Bitfinex-B >> Bittrex

From Poloniex to Bitfinex to Bittrex

But wait, there’s more. Bitfinex-B also occasionally receives several hundred thousand USDT from one of the “Rich List” Poloniex addresses (Poloniex-A). Poloniex-A also sends tens of millions of USDT to the second Poloniex “Rich List” address, (Poloniex-B) and visa/versa.
Poloniex-A >> Bitfinex-B + Poloniex-B Poloniex-B >> Poloniex-A
Now, if Bitfinex-B is receiving occasional USDT from Poloniex-A (as we outlined above), then who is sending USDT from the Poloniex-A? Let’s look at a few major hints:
  1. Poloniex-A has sent a tiny amount of USDT directly to the Tether Printer once before.
  2. What reason would Poloniex-A ...
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Japan sanctions Coincheck after hackers steal cryptocurrency worth $530 million

This is the best tl;dr I could make, original reduced by 64%. (I'm a bot)
Following the biggest cryptocurrency heist in recent times, Japan on Monday imposed sanctions on virtual currency exchange Coincheck after hackers stole hundreds of millions of dollars in digital assets from the Tokyo-based firm.
Units of the cryptocurrency NEM worth $530 million were taken - based on the exchange rate on Friday - exceeding even the $480 million in bitcoin stolen from the MtGox exchange in 2014.
Coincheck suspended trading of all cryptocurrencies except bitcoin on Friday, and said it had lost 523 million units of NEM, the 10th biggest cryptocurrency in the world based on market capitalisation.
The agency will supervise Coincheck to ensure the measures are being implemented and contracts are being honoured, Chief Cabinet Secretary Yoshihide Suga said at a regular briefing.
As many as 10,000 businesses in Japan are thought to accept bitcoin, and bitFlyer - the country's main bitcoin exchange - saw its user base grow beyond one million in November.
In the wake of the MtGox scandal, Japan passed a law on cryptocurrencies that requires exchanges to be regulated by the FSA. The law went into effect in 2017.
Summary Source | FAQ | Feedback | Top keywords: Coincheck#1 cryptocurrency#2 exchange#3 bitcoin#4 million#5
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The Bitcoin Phony Rally of November 2013 has distorted the price for all of 2014. Here's how:

(1) Someone apparently infiltrated a leading but unsecure exchange by using a virus/bot that created fraudulent data in MySQL and PHP so that they could pretend to have, say, over a hundred million dollars in fake fiat.
(2) They used this fake hundred million dollars to buy real bitcoins - spending, say, around 2 and half million fake dollars every few days, in over 40 buying sprees, to eventually scoop up around 270,000 real bitcoins over the course of a month.
(Note: As most traders know, buying a lot all at once like this usually isn't smart - because it causes a lot of "slippage" - ie, everyone sees the buyer starting to buy, and so the price rises before the buyer is finished buying. But in this case, since the "dollars" being spent are fake anyways, the buyer doesn't care if they make the price rise due to "slippage". The dollars they're spending didn't come from their bank account, because with a few keystrokes, some knowledge of PHP and MySQL - and access to the servers in Tokyo hosting this unsecure exchange - they were able to "magically" invent over a hundred million fake dollars out of thin air. They don't even have to suffer the privacy invasions and indignity of KYC/AML either.)
(3) Speculators around the world (especially the Chinese, who are said to enjoy speculating) got fooled by this phony price rise, making them think a major rally was underway. When they saw all this fake fiat being spent, they jumped on the bandwagon and spent their real fiat due to FOMO (fear of missing out).
This made the so-called "price" on this unsecure exchange go sharply upward by a factor of 12x in just one month: from USD 100 to USD 1,200 in November 2013.
Actually (due to the "no-arbitrage" principle of economics) the price went up around 12x on all markets around the world (including over-the-counter - OTC - and - LBC) because everyone (including the media) had fallen into the habit of using that leading but unsecure exchange (now secretly hosting a virus/bot) as their main pricing reference.
(4) Now the fake buyer disappears with 270,000 BTC, bought using fake fiat. The market peaks and eventually does a "mean reversion" (dropping from USD 1200 back down its more typical trend-line around USD 300). And the unsecure exchange which they infiltrated eventually declares bankruptcy and goes out of business due to fraud / incompetence / malfeasance.
(5) Now instead of everyone being excited and saying "Great, bitcoin went up 300% from USD 100 to USD 300 in just one year! Best investment of 2014!!" ...
Instead, everyone's depressed and saying "Damn, bitcoin went down 75% from USD 1,200 to USD 300 in one year! Worst investment of 2014!!"
Plus, a lot of people will be scared away by "volatility".

OK, we have no hard evidence that anything like the above scenario actually did take place in November 2013. But we do at least have circumstantial evidence of the existence of such a virus/bot (called Willy Bot) on Mt Gox:
So, what can we learn from this?
People need to realize that all the "good" news of 2014 regarding infrastructure and momentum (VCs, vendor acceptance, consumer awareness, remittance - plus the ongoing stability of the Bitcoin network itself, for over 5 years now) has been overshadowed by one very major piece of bad news:
We apparently let a virus/bot create an exciting but fake one-month 12x price spike of USD 100 to USD 1200 in November 2013... And now after that virus/bot has gone away, we're seeing a long and painful one-year 75% price drop from USD 1200 to USD 300 during 2014.
Maybe people need to reject the possibly fraudulent fantasy that the price ever legitimately was USD 1200. Maybe the price never "really" was USD 1200. Maybe we just need to get over that fantasy.
Why do we continue to base the "narrative", the "story" of bitcoin's price on this USD 1200 figure from a shady exchange which collapsed in scandal? - How do we know that "price" of USD 1200 wasn't just a figure of our collective imagination?
People did hand over 270,000 Bitcoins - that we do know for a fact.
But did they ever get USD 112 million in return?
(Ask the people who got screwed over by Mt Gox. Remember how Mt Gox was famous in 2013 because you couldn't get your fiat out. Hmm... wonder why that was? Could it be... that the fiat you "had" was actually from the Willy Bot - so that fiat never existed?? Sounds pretty plausible.)
Glass half-full or half-empty?
It's quite possible a virus/bot created the illusion that the price went from USD 100 to USD 1200 in one month. (And we do know that many people who tried to ride this wave upwards got screwed later when it crashed.)
Imagine if people had instead seen the price of bitcoin simply go up slowly but surely from USD 100 to USD 300 over the last 12 or 13 months.
I bet a lot more Russians would be trying to move their devaluing rubles into bitcoin right now... if we were at 300 USD, up from 100 USD last year, instead of being at 300 USD, down from 1200 USD last year. The Willy Bot makes all the difference between saying "Bitcoin worse than Ruble in 2014" versus "Bitcoin better than Ruble in 2014". It all depends whether you think Bitcoin started from USD 100 - or from USD 1200 - around November and December of last year.
So if this Mt Gox Willy Bot did indeed exist, then it seems like it has seriously injured the image of Bitcoin - and people's preference for it as an investment.
It's going to take time - and honesty and education - to put this damaging delusion of the Bitcoin Phony Rally of November 2013 behind us.
TL;DR - Someone apparently infected a major exchange with an "infinite fiat" virus to artificially pump the price up from USD 100 to USD 1200 in one month around November 2013. And then the price went back down from 1200 USD to USD 300 over the next year.
Result: Instead of saying "the price went up 3x in 2014" (from USD 100 to USD 300) everyone has ben saying "the price went down 4x [ie, down 75%] in 2014" (from USD 1200 to USD 300).
It's all relative. If you want a little more realism, maybe it's best to zoom out on the price chart - and ignore the Bitcoin Phony Rally of November 2013 - and focus on the steady rise from 100 to 300 USD, minus that totally fake-looking short-lived 12x blip.
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MAD Doge - Market Analysis 2/9/2014 (Edition Edition) Sochi n' Such

Let's fly right into this:


Market Trend

The Free Market

Ready? Okay, let's get started

Cool down

Upcoming Topics

Hopefully I can cram all that into this week, we're planning on posting once a day except for Thursday.
Keep it classy shibes, SHIBE ON!
TLDR: Too Much Regulation Sucks.
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MtGox CEO heads to trial in Japan over missing Bitcoins

This is the best tl;dr I could make, original reduced by 71%. (I'm a bot)
Tokyo - The former CEO of collapsed Bitcoin exchange MtGox heads to trial in Tokyo next week on charges stemming from the disappearance of hundreds of millions of dollars worth of the virtual currency from its digital vaults.
The 32-year-old was first arrested in August 2015 and released on bail nearly a year later over allegations he fraudulently manipulated data and pocketed millions worth of Bitcoins.
MtGox, which claimed it once hosted around 80 percent of global Bitcoin trading, shuttered in 2014 after admitting that 850,000 coins - worth around $480 million at the time - had disappeared from its vaults.
"The charges only cover a subset of the issues which were happening at MtGox, so I don't expect that we will find out most of the information we want to know," said Kolin Burges, a British investor who said he lost several hundred Bitcoins in the MtGox collapse.
In the wake of the MtGox scandal, Japan passed a bill stipulating that all virtual currency exchanges must be regulated by its Financial Services Agency.
Despite the demise of MtGox and concerns about security, Bitcoin and hundreds of rival digital currencies are becoming increasingly popular and accepted by merchants worldwide.
Summary Source | FAQ | Feedback | Top keywords: Bitcoin#1 currency#2 MtGox#3 around#4 Karpeles#5
Post found in /Bitcoin, /mtgoxinsolvency and /BitcoinAll.
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Fraudsters and losers: Five greatest cryptocurrency flops in history

Bankruptcies, lawsuits, thefts and information leaks are inseparable companions of any big business, and cryptocurrencies are no exception. CoinFox recalls the most scandalous failures of the blockchain industry.
Every child learning to walk and run will be falling, and sometimes quite painfully. The teething problems of the rapidly developing cryptocurrency industry – gullibility, fecklessness, incompetence, overestimation – resulted in hundreds of millions of dollars lost. As we will see, even successful and reputable startups are not immune from this risk.
Mt. Gox: A company that nearly buried bitcoin
The Japan-registered exchange used to be the biggest online platform for BTC/USD operations, brought to the world in 2009 by Jeb McCaleb as an online marketplace for wizard-themed playing cards (its name stands for “Magic: the Gathering Online Exchange”). Just like an evil wizard, it made a vast sum of money disappear without a trace. Some of its clients lost a fortune.
The trading platform, which in 2013 processed 70% of all bitcoin operations, collapsed due to a flaw in its code that allowed hackers to steal digital currency from customer accounts. Over 2011- 2014, the violators managed to drain 744,408 bitcoins, including 100,000 belonging to the company itself. At that moment, the loss was estimated at over $450 mln and amounted to 7% of all bitcoins in circulation.
The company admitted the losses in February 2014. And it came as little surprise to people who had knowledge of the Tokyo-based company’s inner work. “Gox is the worst-run business in the history of the world,” said bitcoin advocate Roger Ver, who tried to help the company to sort out an earlier hack, which also resulted in a large bitcoin leakage. No wonder, the Wired magazine ruthlessly criticised Mt. Gox as a “messy combination of poor management, neglect, and raw inexperience.”
So frustrating was the money loss and so vast was the scale of the scandal that many people believed it would undermine public trust forever and drive cryptocurrencies totally beyond the law. Up until the crisis, bitcoin had been gradually gaining world acceptance, and the damage to its reputation could have destroyed it for good.
It is notable that on 20 March 2014, Mt. Gox declared it “found” 200,000 bitcoins worth around $116 million in an old digital wallet from 2011. In April, suffering from a lawsuit avalanche, the company that had nearly buried the world’s most popular cryptocurrency gave up its plans to rebuild under bankruptcy protection and asked the Tokyo court to allow its liquidation.
KnCMiner: the short journey “to the skies”
The Swedish company KnCMiner had an extraordinary start. In the beginning, it managed to raise $32 million of investments. Business Insider UK included the miner in the list of top-21 most influential bitcoin companies. In June 2015, KnCMiner implemented the new powerful Solar ASIC that was supposed to boost the efficiency of mining, but that turned out to be useless due to the anticipated bitcoin block reward halving.
“We knew that there were risks related to doing this in Sweden. We aimed for the skies, not to build a mediocre medium sized business. We got big investors on board and took a chance. But it hasn’t paid off,” said CEO Sam Cole.
Early in 2015, a scandal broke out around the quality of KnCMiner’s products and services. According to Swedish media, more than 100 clients accused the company of fraud and sent a collective complaint to Swedish authorities. As the dissatisfied clients claimed, the mining device called Titan did not work well and caused ignition, whereas the company refused to return the money for it. Besides, it was reported that the company refused to communicate with the lawyers that represented the interests of the clients.
“All the while we were having huge problems with their machines (fires, burnt-out cores, random shutdowns, etc.). [At the same time], KnC was making press/Twitter, etc. releases about how happy their customers were with the junk they had sent them,” wrote one of the enraged clients.
The Swedish court ruled in favour of KnCMiner, refusing to satisfy the claim of the applicants, but that did not help the company: due to the abovementioned reasons, the KnC was unable to cover its own expenses. Besides, the lawsuits brought in by its American clients are still being considered by courts in the USA.
Cryptsy: how to lose $6 million
The operation of the cryptocurrency exchange Cryptsy ended in January 2016, also in a flop. According to the company, that was caused by a hacker’s attack that resulted in Cryptsy losing 13,000 bitcoins and almost 300,000 Litecoins (which equalled more than $6 million in January). However, in reality, the theft had happened eighteen months before – on 29 July 2014. The management of the exchange decided not to report the large cryptocurrency leak from the users’ “hot wallets”, hoping to recompense the stolen money with their own reserves.
But the exchange failed to make up for the loss. In October 2015, rumours began to spread regarding the hard financial situation of the platform: users started noticing problems when trying to remove their money from exchange wallets. But Cryptsy CEO Paul Vernon denied any financial difficulties faced by the company.
The exchange blamed the hacking on one of the platform’s developers, Lucky7Coin. However, some of the clients have a different opinion: they suspect the owner Paul Vernon and his ex-wife Lori Ann Nettles of removing the funds and cashing them out. Now they are involved in court proceedings in Florida.
The collective lawsuit to Vernon and his former spouse reads that the money removed from Cryptsy was cashed out and spent to buy a $1.5 mln villa on the Florida coast and an Infinity QX80. A temporary sale ban has been imposed on this property following the investors’ demand.
Bitcoin Foundation: the weakest link
Lost credibility – that is the situation the Bitcoin Foundation ended up in. Initially launched to spread the knowledge of cryptocurrencies and popularise bitcoin, the foundation was supposed to act as a link between the bitcoin community and the conventional industries and governmental bodies. But the practice has shown that companies can perfectly do it on their own without any help, while the fund’s monthly budget, as big as $150,000, would make for a modest crowdfunding campaign of an emerging cryptocurrency startup.
The financial position of the Bitcoin Foundation has got worse during the last eighteen months. First of all, the foundation has lost part of its funds due to the high volatility of bitcoin. Secondly, the inflow of the donations to the not-for-profit organisation by bitcoin companies has considerably dwindled. That happened due to the fund being increasingly accused of inefficient spending of its money. For instance, the community was outraged to learn that Board Member Patrick Murck had spent $12,000 to visit a seminar in London.
In October 2015, at a board meeting, it was announced that the organisation has funds only sufficient to operate until March 2016. The board members had to donate money from their own pocket: the head of the Foundation Bruce Fenton, as well as Board Members Bobby Lee and Brock Pierce, contributed $10,000 each. About $65,000 was also received from a miner who chose to remain unknown.
Still, the foundation has failed to return the main investment – the trust of the industry. The letter Fenton wrote in May in which he tried to encourage Bitcoin Core developers to enhance cooperation with the fund was scorned by the community. The Core team was not convinced either: Peter Todd noted that Bitcoin Foundation is not the organisation that people want to be associated with. “I personally would like to distance myself from it,” he added.
After Bruce Fenton quit his position of CEO, it was occupied by a South African venture investor Llew Claasen. He will have to make a difficult choice: whether to try and return the trust of the industry with more investments, or follow the advice of some bitcoin activists and shut down the organisation.
The DAO: the tragedy of “not-so-smart” contracts
For a long time, the community only preferred to talk about the advantages of decentralisation: resistance to fraudulent schemes, saving on intermediaries, a more transparent governance system where every participant has a voice that will never be ignored in the voting. True democracy.
Now we know what the ticket costs that brings you to this democratic paradise: $60 million. This is the sum lost by The Decentralised Autonomous Organisation (The DAO), albeit not completely, due to a loophole in the platform’s code. Earlier this year The DAO triumphantly raised about $150 million attracting investors by its innovative design.
The smart contract turned out to be not so smart: the fraudster managed to outsmart it and make use of a vulnerability in The DAO’s architecture. On 17 June, 3.6 million ethers were removed from the DAO’s main account, which at that moment equalled $60 million. Formally, though, the thief has done nothing illegal, it was not even a hack: he made use of a legitimate function provided by the smart contract itself.
Now Ethereum developers are hastily proposing various decisions: from “doing nothing” to temporarily freezing all the funds in The DAO (including those rescued and removed to safe accounts) and even calling off transactions in the whole Ethereum network. Although the latter can certainly return the funds, it will give the industry an irreparable reputational blow. One of the advantages of the blockchain – irreversibility – will be discredited. And whenever you allow yourself to pull back and change the name of the game, there will be always room for fraudsters.
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Bitcoin News 14th March 2014 - Mt. Gox Files for Bankruptcy La chute du Bitcoin liée à la faillite de Mt. Gox en 2014 ? Prozessauftakt im Bitcoin-Skandal MtGox Saga Continues - Update 25 Feb 2014 Mt Gox The Untold Story! (Bitcoin Exchange Hack)

Two years before Mt. Gox filed for bankruptcy, a half dozen employees at the Tokyo-based bitcoin exchange challenged CEO Mark Karpeles over whether client money was being used to cover costs ... Erst 2014 machte die Pleite der in Tokio ansässigen einst größten Bitcoin-Börse Mt.Gox Schlagzeilen. Damals verloren die rund 127.000 Kunden umgerechnet rund 443 Millionen Euro. Mal waren es ... About Mt. Gox. In February 2014 Mt. Gox suspended trading and filed for bankruptcy after approximately 850,000 Bitcoins were stolen, at the time, valued at more than $450m. This What Bitcoin Did series of interviews is with a number of the key people related to Mt. Gox. The Mt. Gox hack. On 7 February 2014, Mt. Gox stopped all bitcoin withdrawals, claiming that it was merely pausing withdrawal requests “to obtain a clear technical view of the currency process.” After a number of weeks of uncertainty, on 24 February 2014, the exchange suspended all trading and the website went offline. 10.03.2014, 12:47 Uhr • Lesezeit: 1 Min. Gerade keine Zeit? Jetzt speichern und später lesen. Hacker haben interne Dokumente des insolventen Bitcoin-Marktplatzes Mt. Gox veröffentlicht.

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Bitcoin News 14th March 2014 - Mt. Gox Files for Bankruptcy

Mt. Gox files for bankruptcy protection in the US: the Japan-based bitcoin exchange has filed for Chapter 15 Bankruptcy protection in the United States. Chapter 15 bankruptcy is based on a UN ... Der ehemalige Chef der Bitcoinbörse Mt. Gox steht seit diesem Dienstag vor Gericht in Tokio. Mark Karpelès wird vorgeworfen, Bitcoins im Wert von mehreren Mi... 0:55:30 Adam B Levine joins 1:04:50 A Trader's perspective on MtGox and the people who have lost Coins 1:09:38 Keeping your Bitcoins safe with paper wallets 1:52:00 Personal responsibility of the ... Mt. Gox’s Mark Karpelès is dedicating his life to righting the wrongs of his company’s collapse in 2014. Subscribe to Fortune - This is a brief history of the Mt. Gox exchange. Its history, hacks and impact on Bitcoin and the crypto world. Contact me about crypto business ventures at [email protected] Items That I ...