Bitpoint has just issued a notice and apology to its customers after the Japan-based cryptocurrency exchange lost $32 million to a hack. The security breach occurred on July 11, 2019, where five different cryptocurrencies were stolen from the exchange’s hot wallet. As a result of the theft, Bitpoint has completely suspended its services.
Another Hack, One Too Many
Recently, Bitpoint announced that it had detected a security breach on its platform on the night of June 11, 2019. The attack led to the loss of five cryptocurrencies. The hackers were reported to have carted away about 2.5 billion yen, customers funds, and about a billion yen which belonged to the cryptocurrency exchange, Bitpoint itself.
Bitpoint further mentioned that its security team had noticed an issue in Ripple remittance. On trying to confirm the state of things, it noticed that truly, XRP was pilfering through the system. Further investigation showed that other assets also held in its hot wallet were affected. However, its cold wallets were not tampered with.
Hack Event Led To Exchange Closure
The hack has, therefore, led to the suspension of all its services where customers can neither create new accounts on the exchange nor trade crypto assets them. The discontinuation of services is in a bid to minimize losses. In the same vein, an investigation is still ongoing to identify the cause of damage and the actual outflows.
Prior to this time, Japan Financial Services had asked Bitpoint and other exchanges to improve internal controls before the order was lifted in June. The crypto market, on the other hand, has not recorded significant losses after the news went viral which can be attributed to the fact that the exchange catered to a small market.
Nonetheless, the same unaffected response was evident when Binance, one of the world’s top cryptocurrency exchanges was hacked on May 7, 2019. Binance had to fall back to its emergency insurance fund in order to cushion the effect of the hack which was valued at about $40 million.
A Global Launch Of Attacks On Crypto Exchanges
Hacks on exchanges seem to have become the order of the day given the trend that has been exhibited of recent. Like Bitpoint, Coincheck, another exchange based in Japan was hacked in January 2018 and $530 million worth of NEM tokens were carted away. Similarly, Cryptopia, a digital exchange in New Zealand was hacked twice in January 2019.
These events are not the last of its kind since DragonEx and Bitrue, two Singapore-based exchanges were hacked in March and June respectively. GateHub, a Slovenia-based crypto exchange on June 7, 2019, also reported a loss of almost $10 million worth of XRP on its platform.
Crypto Trader Says Mysterious Whale Building Massive Buy Walls – Plus Ethereum, Ripple and XRP, Litecoin, Zcash
From a mysterious crypto whale on Binance to a new fork of Zcash, here’s a look at some of the stories breaking in the world of crypto.
Ethereum and Bitcoin
Crypto traders say an Ethereum whale is making a huge splash on the crypto exchange Binance.
According to Three Arrows Capital CEO Su Zhu, the whale has bought 300,000 ETH worth about $70 million in recent weeks. The most recent buy order clocks in at 20,000 ETH worth about $4.5 million.
The big buy order triggered a debate on whether the whale is trying to create the illusion of demand to push the price of Ether, Bitcoin and the entire crypto market higher.
On Sunday, a separate crypto whale was accused of selling 15,000 ETH on the crypto exchange Bitstamp and triggering a cascade that pushed Bitcoin and the overall crypto market at large into a downward spiral.
Ripple and XRP
The Canada-based crypto exchange CoinField has rapidly expanded its use of XRP as a base pair on the platform. The exchange says it now has 30 coins paired directly with XRP.
Litecoin creator Charlie Lee just sat down for an interview with MaiCoin. The podcast looks at Facebook’s Libra, Lee’s upcoming meeting with Justin Sun and Warren Buffett and Asia’s love for Tether (USDT).
Lee says lunch with Buffett is exposure for crypto. As for flipping the vocal crypto critic into a Bitcoin or Litecoin supporter, Lee says,
“It’s not possible to convince him. He doesn’t invest in technology stuff, so he’s not and won’t be into Bitcoin, and that’s not surprising at all.”
The privacy coin Zcash just had its first “friendly” fork, creating a new coin called Ycash. The new coin was created by Zcash team member Howard Loo, and is described as having a number of goals that differ from Zcash.
“We are launching Ycash to restore a goal – mining on commodity hardware – that appears to have been largely abandoned on the Zcash blockchain. We are also launching Ycash to uphold a promise – that the Zcash Founders Reward would be forever capped at 2.1 million coins – that we fear will come under increasing pressure between now and the expiration of the Founders Reward in October 2020.”
Japan Eyes Development of SWIFT-Like Platform for Cryptocurrencies: Report
While world leaders are facing the threat of Libra and Facebook’s massive userbase of 2.5 billion, enough to transform the entire global financial system seemingly overnight, Japan is spearheading the development of a SWIFT-like network for cryptocurrency, reports Reuters.
Similar to the SWIFT network used by banks, the new international crypto-based platform would allow banks to track transactions and more effectively fight money laundering.
Set to launch in the next few years, it would be monitored by a team related to the inter-governmental Financial Action Task Force (FATF).
Given the decentralized nature of cryptocurrencies which run on public blockchains, however, it remains unclear how the system would conduct its surveillance.
Meanwhile, the world’s financial leaders are moving in concert to stay ahead of the Libra threat. Gathering at the G7 conference in France on Wednesday, Italy’s finance minister told Reuters,
“There’s widespread concern and a decision that this concern should translate into action… to control what’s going on.”
The news outlet reports that a source said there was “a very large consensus on the need to act quickly” in response to the changing landscape of money and global payments and with Facebook’s looming entry into the industry.
Japanese Finance Minister Taro Aso is initiating plans for a comprehensive assessment of Facebook’s Libra.
Said Aso following the first day of the G7 gathering,
“Applying existing regulations alone may not be enough. A comprehensive examination is needed to see if Libra poses new challenges that existing rules do not take into account…
On the other hand, authorities need to respond in a timely fashion so they’re not behind the curve.”
Facebook Libra Risks to Financial Stability Demand ‘Highest’ Regulatory Standards, Says G7
The G7 group of nations has warned that cryptocurrencies such as Facebook’s Libra are a threat to global financial stability.
A task force set up by the G7 to examine the issues said that rules of the “highest” standards are needed to minimize the use of digital currencies in money laundering and funding terrorism, Reuters reportsThursday.
Following a meeting of finance chiefs from the G7 in Chantilly, France, this week, the group also said it would address tax issues raised by the digital economy, as per a draft summary of the meeting obtained by Reuters.
As expected, Facbook’s Libra and its perceived risks to the monetary control of regulators was high on the agenda at the meeting, although some benefits were also observed.
Benoit Coeure, European Central Bank (ECB) board member and head of the G7 task force, told the G7:
“A global stablecoin for retail purposes could provide for faster and cheaper remittances, spur competition for payments and thus lower costs, and support greater financial inclusion.”
Yet, he went on to say that such cryptocurrencies raise “serious risks” to policy priorities, such as anti-money laundering, financing of terrorism, consumer and data protection, competition and compliance with tax rules.
Bank of France governor and and member of the governing council of the ECB, Francois Villeroy de Galhau, also said that, while regulators seek to encourage innovation, “that cannot come to the detriment of the security of the consumer.” He also said more details were needed regarding gray aspects of Facebook Libra.
A piece in the Financial Times today further quotes Coeure as saying that cryptocurrencies like Libra “could also pose issues related to monetary policy transmission, financial stability and the smooth functioning of and public trust in the global payment system.”
French finance minister Bruno Le Maire echoed previous concerns over the threat to the dominance of national currencies by a token launched by a tech firm with billions of users, saying: “The sovereignty of nations might be weakened or jeopardised by these new currencies.”
The draft document from the G7 stated that “significant work” is required from developers of stablecoins like Libra before regulatory approval is likely to be granted.
The FT cites the document as saying:
“As large technology or financial firms could leverage vast existing customer bases to rapidly achieve a global footprint, it is imperative that authorities be vigilant in assessing risks and implications for the global financial system.”
Among its draft recommendations, the G7 says such stablecoins must meet the highest regulatory standards and come under regulatory oversight. A good legal basis in jurisdictions where they operate is also key in order to guarantee adequate protection for stakeholders and users.
The group further lists the need for “operational and cyber resilience” and secure, transparent management of assets to protect market integrity.