Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.
Top Stories This Week
Japanese Cryptocurrency Exchange Zaif Hacked Of Reported 5,966 Bitcoins
As a result of a security breach on September 14, hackers have managed to steal 4.5 billion yen from Japan’s Zaif cryptocurrency exchange, as well as 2.2 billion yen from the assets of the company, with total losses amounting to 6.7 billion yen or around $59.7 million. Tech Bureau Inc, which operated Zaif, stated this week that the exchange detected a server error on September 17, after which Zaif suspended deposits and withdrawals. On September 18, the exchange realized that the error was a hack, and reported the incident to Japan’s financial regulator, reporting losses of 5,966 bitcoins (BTC) in addition to some Bitcoin Cash (BCH) and MonaCoin (MONA).
SpaceX CEO Elon Musk Turns To Dogecoin Creator To Stop Crypto Scammers
Elon Musk, the CEO of SpaceX and Tesla Elon Musk asked Jackson Palmer, the creator of Dogecoin (DOGE), to help him combat “annoying” cryptocurrency scammers on Twitter this week. Musk, directing his tweet at Palmer, asked for help getting rid of scam spammers, to which Palmer replied by sending Musk a short script in direct messages to try to fix the problem.
US SEC Postpones VanEck Bitcoin Exchange Traded Fund, Asks For Further Comments
The U.S. Securities and Exchange Commission (SEC) has requested further comments regarding its decision on the listing and trading of VanEck and SolidX’s Bitcoin (BTC) exchange-traded fund (ETF), which is expected to list on the CBOE BZX Equities Exchange (BZX). In a notice, the SEC asks for additional comments from interested parties addressing the sufficiency of the BZX’s statement in support of the proposal. In particular, the SEC is seeking comments on eighteen key issues, among which are commenters’ views on BZX’s assertions that BTC “is arguably less susceptible to manipulation than other commodities that underlie exchange-traded products (ETPs).”
New York Attorney General Report: Crypto Exchanges Vulnerable To Manipulation
A new report published by the New York Attorney General’s office states that cryptocurrency exchanges are vulnerable to manipulation, conflicts of interest, and other consumer risks. The findings, part of the “Virtual Markets Integrity Initiative” that consisted in surveying 13 cryptocurrency exchanges, found that an absence of standard methods for auditing virtual assets results in the lack of a consistent and transparent approach to independently auditing digital currency traded on exchanges.
Researchers Explain How Gemini Dollar Transactions Can Be Changed Or Paused
The implementation of the recently launched Gemini dollar (GUSD) stablecoin can be completely changed by a Gemini custodian every 48 hours, according to a study authored by blockchain researcher Alex Lebed and crypto consultant Alexey Akhunov. In the study, the authors review the code of the GUSD’s smart contract in order to demonstrate that the implementation of the Gemini USD can become non-transferrable or frozen at any moment, which is noted in the Gemini dollar’s white paper.
Most Memorable Quotations
“The data age is major opportunity for manufacturers to reform the industry. But blockchain and IoT will be meaningless tech unless they can promote the transformation of the manufacturing industry, and the evolution of the society towards a greener and more inclusive direction,” — Jack Ma, founder of Chinese e-commerce giant Alibaba
“Cryptocurrencies are perfect, but are used for bad purposes today, so [one has to be] careful. Blockchain and distributed ledger technologies are also perfect, they are big, big tools,” — Francisco Gonzalez Rodriguez, executive chairman of multinational Spanish banking group Banco Bilbao Vizcaya Argentaria (BBVA)
“As the government and regulators decide whether the current Wild West situation is allowed to continue, or whether they are going to introduce regulation, consumers remain unprotected,” — UK Treasury Committee on cryptocurrency regulation
Laws And Taxes
Ukrainian Parliament Seeks To Tax Cryptocurrency Assets With New Bill
Ukraine’s parliament has proposed a bill that would tax operations with crypto assets with a five percent tax on individuals and legal entities operating with virtual currency assets, such as cryptocurrencies and tokens. Starting Jan. 1, 2024 crypto-related profits by businesses would be taxed at 18 percent, which is a basic rate for corporate and personal income tax in Ukraine. According to the lawmakers, the introduction of this tax would make it possible to “draw 1.27 billion hryvnia ($43 million) to the budget annually from 2019-2024.”
US Lawmakers Send Open Letter To IRS Asking For Crypto Taxation Clarity
U.S. lawmakers have called on the Internal Revenue Service (IRS) to issue clarified and “comprehensive” crypto taxation guidance in an open letter this week. The representatives deem that the IRS has had “more than adequate time” to work through complexities after its preliminary rules were issued four years ago, arguing that while the IRS has proactively continued to remind taxpayers of the penalties for non-compliance with its guidance, its failure to introduce a more robust taxation framework “severely hinders taxpayers’ ability” to meet their obligations.
Financial Task Force Says International AML Standards For Crypto Coming Soon
The Financial Action Task Force (FATF) said it is getting closer to the establishment of a global set of anti-money laundering (AML) standards for cryptocurrencies. The agency’s president Marshall Billingslea reportedly said that he expects the coordination of a series of standards that will close “gaps” in global AML standards at an FATF plenary in October. At that time, the FATF will purportedly discuss which existing standards should be adapted to digital currencies, as well as revise the assessment methods of how countries implement those standards.
Binance To Soon Begin Private Beta Testing Of Crypto-Fiat Singapore Exchange
Binance, the largest global crypto exchange, will soon start private beta testing a crypto-fiat exchange in Singapore, as Binance co-founder and CEO Changpeng Zhao (CZ) tweeted this week. According to CZ, the testing will be launched on September 18, and while no further details have been specified, the crypto-fiat Singapore-based exchange will presumably support the local Singapore dollar.
US PNC Bank To Use RippleNet For Customers’ International Payments
PNC, which is ranked among the top ten U.S. banks with 8 million customers and retail branches in 19 states, will use RippleNet to process international payments for its customers. A particular PNC unit — Treasury Management — will use Ripple’s blockchain solution xCurrent to speed up overseas transactions held by U.S. commercial clients. Ripple emphasises that xCurrent will allow PNC business clients to receive payments against their invoices instantly, changing their approach to managing both accounts and their working capital.
Ripple Executive Hints Of xRapid Launch Coming Soon
Head of regulatory relations for Asia-Pacific and the Middle East at Ripple Sagar Sarbhai told CNBC this week that Ripple has been making strides toward the launch of its product xRapid, noting that a commercial version of its payment platform could launch “in the next month or so.” The xRapid product is a real-time settlement platform designed to speed up international payments that addresses the issues of minimizing liquidity costs and making cross-border payment transactions faster.
Canadian Coinsquare’s Investment Subsidiary Launches Two Tech-Based ETFs
Coinsquare’s subsidiary — Coin Capital Investment Management — has reportedly become the 30th ETF operator in Canada, with the launch of the Coincapital STOXX Blockchain Patents Innovation Index Fund (LDGR) and the Coincapital STOXX B.R.AI.N. Index Fund (THNK) on the Toronto Stock Exchange (TSX). LDGR is a research-focused ETF that intends to provide investors with global equity securities of firms that invest in the development of blockchain technologies, while THNK, aims to provide investments in global equity securities concentrated around four “megatrends” in technology — biotechnology, robotics, artificial intelligence (AI), and nanotechnology.
Brazil’s Largest Brokerage To Launch Bitcoin, Ethereum Exchange
The largest brokerage in Brazil, Grupo XP, will enter the crypto space by launching an exchange for Bitcoin (BTC) and Ethereum (ETH) in the near future called XDEX with around forty employees. Grupo XP is the biggest financial group in Brazil, comprising companies with various business models. XP has reportedly set a goal to have $1 trillion reais ($245 billion) under custody by 2020, which is four times what the company expects to raise by the end of this year. In addition, XP will launch a bank in the next few months.
Mergers, Acquisitions, And Partnerships
Crypto Exchange Huobi Joins Russian Bank Innovation Fund
Cryptocurrency exchange Huobi has joined Russia’s VEB Innovation Fund to share notes on crypto regulation. Russia’s cryptocurrency regulation draft law, which passed in a first reading in May, are tentatively set to be passed in October. One of the main goals of the partnership with Huobi and the VEB Innovation Fund is to draw on the crypto regulation experience gained by Huobi and to apply it in Russia, especially for adjusting the legal framework on digital assets.
Switzerland And Israel Agree To Share Blockchain Regulation Experience
Switzerland and Israel have agreed to share their experience on regulating the blockchain industry.Switzerland’s Minister of Finance Ueli Maurer and State Secretary for International Financial Matters Joerg Gasser have recently visited Israel to officially request access to the local markets for Swiss banks.As Gasser told Reuters, by the end of 2018 he plans to prepare a report on blockchain regulation for the Israeli officials that would outline general recommendations.
R3, Dutch Digital Security Company Partner For Blockchain-Based IDs
Blockchain consortium R3 has deployed a digital ID application developed by Dutch digital security company Gemalto on the latest version of the Corda Platform. The parties now expect to conduct several pilots of the application — called the Trust ID Network — that will reportedly be launched later this year. The application enables digital service providers to operate “fully verified and secured” user personal data by creating a Digital ID, allowing consumers to register within various banking, e-commerce, and e-government services while avoiding repeated due diligence procedures.
Poland’s Largest Bank Partners With Coinfirm To Launch Blockchain Solution
Poland’s largest bank , PKO Bank Polski, will launch a blockchain solution for its customer documents via a partnership with UK-based Coinfirm “in the coming days,” the parties confirmed this week. As part of a drive to enhance security of customer data, PKO Bank Polski will use Coinfirm’s Trudatum to provide blockchain-issued paperwork to its some five million account holders.
Chinese Blockchain Fund To Raise Almost $13 Million For Japanese Stablecoin
Yao Yongjie, whose $1.5 billion Grandshores Blockchain Fund has the backing of well-known Chinese Bitcoin investor Li Xiaolai and the local government of the city of Hangzhou, is seeking to create up to three new stable cryptocurrencies (stablecoins) pegged to various fiat currencies. The first reported stablecoin project would involve the Japanese yen, and a second company Yao chairs, Hong Kong-based Grandshores Technology, aims to raise HK$100 million ($12.7 million) in financing for the cryptocurrency.
Winners And Losers
The crypto markets have experienced a comeback this week, with Bitcoin trading for around $6,756 and Ethereum at $245. Total market cap is now around $228 billion.
The top three altcoin gainers of the week are Carebit, Bob’s Repair, and the Ultimate Secure Cash. The top three altcoin losers of the week are Protean, Abulaba, and Bitmark.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
FUD Of The Week
Bitcoin Core Updates Fixes Vulnerability That Could “Take Down The Network”
Bitcoin Core has released an update following the recent detection of a vulnerability in the software: Bitcoin Core 0.16.3 was released with a fix for a denial-of-service (DoS) vulnerability.The vulnerability could reportedly cause a crash of older versions of Bitcoin Core if they attempted processing a block transaction that tries to spend the same amount twice. According to Casaba Security co-founder Jason Glassberg, the recent vulnerability found on Bitcoin Core software could “take down the network.” He explained that the network crash “does not appear” to target users’ wallets, but would rather “affect transactions in the sense that they cannot be completed.”
China’s Central Bank Warns Public Of Risks With ICOs, Crypto Trading
The People’s Bank of China has issued a new public notice this week “reminding” investors of the risks associated with Initial Coin Offerings (ICOs) and crypto trading. Today’s notice ,released from the bank’s headquarters in Shanghai, censures the “unauthorized” and “illegal” ICO financing model for posing a “serious disruption” to the “economic, financial and social order.”
German Finance Minister Doubts Whether Crypto Could Ever Replace Fiat
Germany’s Finance Minister Olaf Scholz doubted publicly this week that cryptocurrencies can currently replace traditional fiat currencies. Scholz compared cryptocurrencies to the tulip fever bubble in the Netherlands in the 17th century saying, “and the danger is great that there will be such a tulip inflation,” noting that cryptocurrencies should also be closely observed by regulators, as they could be used for terrorist financing, money laundering or other criminal activities.
Reuters: Brazilians Antitrust Regulator To Inspect Six Major Banks Over Crypto Trade
Brazil’s antitrust regulator, the Administrative Council for Economic Defense (CADE), is reportedly inspecting six major national banks for alleged monopolistic practices in the crypto space, according to Reuters. The probe, which was initiated n the request of the Brazilian Blockchain and Cryptocurrency Association (ABCB) following several complaints, will determine whether the country’s largest banks closed the accounts of brokerages trading in Bitcoin.
Malware Reportedly Stolen From NSA Contributes To Skyrocketing Cryptojacking
Leaked code targeting Microsoft Systems which hackers allegedly stole from the U.S. National Security Agency (NSA) sparked a fivefold increase in cryptocurrency mining malware infections, according to a report from the Cyber Threat Alliance. Eternal Blue, which was reportedly stolen and then used for the infamous cyberattacks WannaCry and NotPetya, has been used by hackers to gain access to computers in order to covertly mine for cryptocurrency, with detections up 459 percent this year.
Prediction Of The Week
Bitcoin To See 30 Percent Rally By End Of 2018, Says Mike Novogratz
Billionaire investor Mike Novogratz predicted this week on Twitter that Bitcoin will see a 30 percent rally by the end of 2018. Stating that the $8,800 to $10,000 threshold would be the the defining moment for institutional investors to enter the space, Novogratz claimed that it is impossible for BTC to not reach the $8,800 to $10,000 price points by the end of the year.
Bitcoin Miners Flock To New York’s Remote Corners, But Get Chilly Reception
The New York Times visits Massena — a region formerly filled with American corporations offering unions jobs — that now has one of the state’s highest unemployment rates. However, as the Time notes, the “abundant, cheap electricity flowing from a dam in the St. Lawrence River,” has brought in the cryptocurrency mining companies, bringing mixed reactions from the area’s residents.
No One Knows What to Call the Hottest Cryptocurrency
After Ripple (XRP) saw an unprecedented amount of growth this week, the question arose: what is it really called — Ripple or XRP? While Ripple Labs Inc. notes that the tokens are different than its open-source network, the token did used to be referred to as “ripples (XRP).”