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Major Canadian Crypto Exchange QuadrigaCX Clashes with Bank over $22 Million in Frozen Funds

QuadrigaCX, Canada’s largest cryptocurrency exchange has been denied access to CA$28 million of its funds domiciled in the Canadian Imperial Bank of Commerce (CIBC) since January 2018. The company, based in Vancouver has reacted furiously after the bank decided to freeze several accounts operated by Quadriga’s payment processor.

Legitimate Question or Conjecture?

The Globe and Mail reports that CIBC froze the accounts following its inability to ascertain the real owners of the funds and requested the court to take possession of the funds in question. It has also asked for a pronouncement on the rightful owners of the funds between the payment processor, Quadriga, and the 388 people who made deposits for the purchase of cryptocurrencies. Quadriga posits that a large chunk of the funds in contention belong to it, and that it is inappropriate for the bank to freeze the account.

A court document quotes the trading platform urging the court  not to yield to what it described as unverified and invidious conjecture that the transactions are questionable. Margaret Waddell, Quadriga’s lawyer claims the judge has reserved his decision in the hearing on the case. The CIBC on its part has refused to make any comments on the case.

In Quadriga’s opinion, the CIBC has deliberately held on to depositors’ funds since January 8, 2018. It also accuses the CIBC of seeking ways to further prolong the holding of these funds while trying to rationalize an act which should not have happened in the first place. Quadriga has informed its customers via email that Canadian banks are colluding to make its operations difficult by hindering its efforts to access funds in its savings accounts. This it claims, is a coordinated effort to fight against the adoption of bitcoin and cryptocurrencies in the country.

Old versus New

While none of Canada’s five biggest banks have responded to these claims, the lawsuit suggests a fierce contest between the crypto world and the conventional banking system in Canada. It comes at a time when bitcoin ownership is rapidly increasing among Canadians, with a study showing that bitcoin ownership jumped 72 percent in just 12 months from 2016 to 2017.

Major global crypto platforms like Huobi have also made their entrance to the Canadian market over the past few months as the country’s crypto market increasingly attracts attention that was once monopolised by its northern neighbour. The spike in crypto adoption and trading in Canada has also coincided with a push by financial regulators to santise the crypto space in the country, with coordinated regional efforts like ‘Operation Cryptosweep‘.

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Ethereum: We Haven’t Seen the Last of the Bug That Killed the DAO

More than two years after the collapse of The DAO thrust the Ethereum community into civil war, one of the bugs that caused that caused that black swan event continues to lurk in many smart contracts, waiting to be exploited by hackers.

That’s according to Emin Gün Sirer‏, a computer science professor at Cornell and the co-director of cryptocurrency research initiative IC3, who said that he has seen a variety of smart contracts that may be vulnerable to a “reentrancy” attack that allows a malicious user to drain ETH from a payment channel.

“BTW, I’ve seen other contracts like this one that implicitly trust the erc-20 tokens issued on top of their platform to not perform reentrant calls. I’m sure this isn’t the last episode of this bug,” he wrote on Twitter.

Sirer was commenting on the news that SpankChain, an adult entertainment startup whose platform runs partially on Ethereum smart contracts, had been hacked for nearly $40,000 worth of cryptocurrency over the weekend.

As CCN reported, the company said that the hacker used a reentrancy attack to siphon 1165.38 ETH out of the smart contract over a series of transactions. In short, the attacker used a malicious smart contract to trick the SpankChain contract into believing that the attacker could withdraw funds from the payment channel.

The firm explained:

“The attacker created a malicious contract masquerading as an ERC20 token, where the ‘transfer’ function called back into the payment channel contract multiple times, draining some ETH each time.”


As both Spankchain and Sirer noted, the attack was similar to the one that crippled The DAO, a decentralized venture capital fund that long held the record for most funds raised by an initial coin offering (ICO).

Worth as much as $150 million at a time when the total market cap of ethereum was still far below $2 billion, The DAO held nearly 15 percent of the total ETH supply on June 17, 2016, when an attacker stole 3.6 million ETH — today worth nearly $815 million — by exploiting its vulnerable smart contract.

We all know what happened next: a series of futile attempts to recover the funds, the infamous chat room conversation, and the contentious hard fork that resulted in the creation of Ethereum Classic.

Now, more than two years later, Ethereum has largely put The DAO hack in its rearview mirror. The ethereum price, which plunged as low as $6 in the months following the hack, now stands at $230. Hundreds of blockchain startups have used Ethereum to raise billions of dollars through ICOs, and thousands of developers are building decentralized applications (dApps) that run on the platform.

However, though the consequences may not always be quite as serious as they were on that infamous morning in June 2016, the bug that permanently altered the cryptocurrency landscape appears determined to continue to rear its ugly head.

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Japanese Technology Conglomerate GMO to Unveil Yen-Pegged Crypto Stablecoin

Japanese internet giant GMO Internet has announced that it will launch a stablecoin pegged to the yen next year.

According to the founder and president of GMO Internet, Masatoshi Kumagaii, the stablecoin which will be known as GMO Japanese Yen (GJY) will be issued in Asia. It is expected that the assets backing the stablecoin will be stored in Japan where the tech firm already has banking licenses.

Cross-Border Transactions

Besides aiding GMO Internet in branching into the remittance and settlement business, the yen-pegged stablecoin will be instrumental in helping the tech conglomerate settle transactions for its other business including the cryptocurrency mining farms that it operates. Other than the crypto mining arm of the business which began operations last year in December, GMO Internet also makes cryptocurrency mining hardware. Additionally, GMO Internet also runs a cryptocurrency exchange which was launched in May 2017.

The announcement by GMO Internet comes at a time when the number of stablecoins is growing. While Tether is still the dominant stablecoin globally, GMO Internet estimates that the number of stabelcoins currently stands at around 57 with 23 of them already in circulation.

One of the newest stablecoins on the market is the USD Coin (USDC), developed by Circle, a cryptocurrency and blockchain technology startup. Pegged to the U.S. dollar, the USDC had bagged the support of 30 partners at the time of the launch and this included cryptocurrency exchanges. Leading cryptocurrency wallet services such as Ledger, BitGo and Coinbase also announced native support for the stablecoin.


While lauding the development, Circle’s co-founders, Sean Neville and Jeremy Allaire, compared the transformative impact of blockchain technology and cryptocurrencies to the internet:

“Just as HTTPS, SMTP and SIP enabled free borderless information sharing and communications, crypto assets and blockchain technology will enable us to exchange value and transact with one another in a similar way: instantly, globally, securely and at low cost.”

AUD-backed Stablecoin

In the same month Australian cryptocurrency exchange Bit Trade and blockchain employment platform, Emparta, had announced a partnership aimed at developing an Australian dollar-pegged stablecoin which will be unveiled in 2019.


Still, in September, Gemini, the cryptocurrency exchange started by the Winklevoss twins unveiled the Gemini dollar (GUSD), announced a stablecoin pegged to the US dollar. And in July a San Francisco, California-based financial institution, Stronghold, revealed that it had developed a stablecoin pegged to the dollar. Unlike most other stablecoins which exist on the Ethereum blockchain, Stronghold’s stabelcoin was built on the Stellar network.

Other firms which are working on stablecoins include a16z, a startup that has received venture funding from Silicon Valley legend Andreessen Horowitz, among others. Paxos, an institutional cryptocurrency exchange operator, also recently got the greenlight from the New York Department of Financial Services to release a US dollar-pegged stablecoin tentatively named the Paxos Standard.

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Coinbase: Japan’s Crackdown on Cryptocurrency ‘Good for Us’

Cryptocurrency exchange giant Coinbase isn’t concerned that Japan’s Financial Services Agency (FSA) has begun to view the crypto trading industry with a more cautious eye in the wake of several high profile exchange hacks on the regulatory agency’s watch in 2018.

Speaking with the Nikkei Asian Review, Mike Lempres, Coinbase’s chief policy officer, said that increased scrutiny of cryptocurrency exchanges applying for virtual currency licenses is Japan was actually a good thing for the San Francisco-based company because it would give them a leg up on the competition.

“The Japanese government is more focused on security,” he said. “That is good for us.” Discussions with the FSA are “going well,” he continued. “We are… committed to getting it done. It will certainly be in 2019.”

That’s a bold claim, particularly considering that, as Nikkei notes, the FSA has not approved a virtual currency license since Dec. 2017, shortly before Tokyo-based exchange Coincheck was hacked for a record $530 million in Jan. 2018. Last month, Osaka-headquartered trading platform Zaif lost $60 million following a hack and is now struggling to compensate customers.

Coinbase believes those hacks, rather than make regulators and investors hesitant to engage with the still-nascent cryptocurrency industry, will increase demand for firms with a trustworthy track record.

“Japan has been an active large market from the very beginning, and has proved resilient as it bounces back from several bad experiences,” Lempres said. “We think there is great demand for a trusted provider of services here.”

Lempres explained that Coinbase devotes far more resources to securing client assets than many other cryptocurrency exchanges, with “dozens” of the firm’s 550 employees working full-time on asset security.

Indeed, a recent profile in Wired detailed the lengths to which Coinbase goes to secure cryptocurrency assets stored in its custodial “vault,” pop-up Faraday cages and all. Lempres further explained that just one percent of the company’s funds are held in online “hot wallets,” with the remaining 99 percent secured in cold storage. Moreover, those one percent of funds that are stored in Coinbase’s hot wallet are fully-insured.

However, though a global company with operations in dozens of countries, Coinbase’s security apparatus is centered in the U.S., which could lead to problems if the FSA says that it wants Coinbase Japan to physically store its assets in Japan, where the agency can more easily monitor them.

“We have everything built to protect our storage… in the U.S.,” said Lempres. “We won’t do anything to even raise possibility of a hack. It would be hard for us to duplicate what we do in the U.S. today in Japan and other countries.”

CCN reported in June that Coinbase was plotting an expansion into Japan, with the exchange operator tapping former Morgan Stanley Japan investment banker Nao Kitazawa to serve as chief executive of Coinbase Japan.

“As in other markets, we plan to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA to ensure compliance with local laws at every stage,” the firm said at the time.

Last week, reports emerged that Tiger Global, a major U.K. hedge fund, was close to completing a $500 million investment in Coinbase. Various reports differed on whether the fund was purchasing shares directly from Coinbase or on the secondary market, but in one respect they all agreed: the investment would value Coinbase at $8 billion, cementing its status as not only one of the largest cryptocurrency companies but also one of the world’s most valuable privately-held tech companies.

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$6.4 Million of Thai Actor’s Family Assets Seized in $24 Million Bitcoin Fraud Case

Ten months after a Finnish national filed a complaint after losing 5,564 bitcoins to fraudsters in Thailand, the family of the Thai television actor Jiratpisit ‘Boom’ Jaravijit is now the target of the country’s anti-money laundering agency in relation to the scam.

According to The Nation, Thailand’s Anti-Money Laundering Office (AMLO) has seized assets worth 210 million baht (approximately US$6.4 million) belonging to the Jaravijit family over their involvement in the bitcoin fraud case in which a Finnish national, Aarni Otava Saarimaa, lost bitcoins which were worth approximately US$24 million at the time the crime occurred.

Bank Accounts and Land

Per the AMLO, the assets which have been seized from Jiratpisit include five bank accounts. Two of the bank accounts had a combined balance of around 4 million baht. Additionally, a plot of land registered in the actor’s name estimated to be worth 43 million baht was also seized bringing the combined value of his seized assets to 47 million baht (US$1.4 million).

Other members of the Jaravijit family whose assets were also seized include the actor’s elder brother, Prinya Jaravijit, and the sister, Supitcha Jaravijit. Just like with Jiratpisit, the assets seized in the case of Prinya and Supitcha were also bank accounts and plots of land. Assets belonging to other non-members of the Jaravijit family believed to have acted as accomplices or accessories to the crime were also confiscated.

The decision to confiscate the assets was made by the transaction committee of the anti-money laundering agency which resolved to seize 64 items in addition to interest. The confiscation order will be in effect for a period of 90 days, running from August 14 to November 11, 2018. According to the AMLO, victims of wrongful seizures will have an opportunity to lodge an appeal.

“Anyone whose assets are unrelated to the alleged wrongdoing and wrongly confiscated may file their appeal with the AMLO secretary-general within 30 days of learning about this order,” said the anti-money laundering agency.

The Genesis

As previously reported by CCN, the scheme to defraud Saarimaa was allegedly masterminded by Prinya who is said to have invited the Finn to make an assortment of investments including stocks listed on the Stock Exchange of Thailand as well as in two companies NX Chain Inc and Expay Software. Saarimaa went on to transfer his bitcoin holdings worth 797 million baht at the time (approximately US$24 million) to Prinya’s wallet.

But instead of making the investments as promised, Prinya diverted the funds to bank accounts belonging mostly to members of his family with some of the money being used to buy parcels of land. Saarimaa filed a complaint with the Thai police in January this year.

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Singapore’s Central Bank Will Aid Crypto Startups in Opening Bank Accounts

Ravi Menon, the chief of Singapore’s defacto central bank and regulator, has backed domestic cryptocurrency startups and exchanges to gain banking services in the technology-forward city-state.

Monetary Institute of Singapore (MAS) managing director Ravi Menon has called for the banking industry to get over the “hurdle” of offering services to domestic cryptocurrency startups in a marked attempt to foster the fintech industry.

Speaking to Bloomberg, Menon said that while Singapore will not be “an extremely lax regulatory environment” for crypto industry firms locally and beyond, there could be respite coming for startups who have banks reluctant to offer simple banking services like opening banking accounts.

The central bank official stated:

What we are trying to do is to bring the banks and cryptocurrency fintech startups together to see if there is some understanding they can reach.

The embracive, if cautious, approach is a significant contrast to the likes of India, wherein the central bank forced all regulated financial institutions – including banks – to cease offering services to cryptocurrency firms. The Indian central bank’s move has largely dented the industry, leading to the closure of one of India’s biggest cryptocurrency exchanges recently.

For a senior central bank official, Menon has ruled out regulation for decentralized open cryptocurrencies like bitcoin in the past, insisting that bitcoin “itself does not pose the risk that warrants regulation”.

“Our approach is to look at the activity around the cryptocurrency and then make an assessment of what regulation would be suitable,” he said last year, calling for oversight into activities that could abuse cryptocurrencies.

As cryptocurrency markets touched an all-time high earlier in January, driven by a bull-run through much of 2017, Menon sought to bring attention to the “good applications” of cryptocurrencies citing cheap, real-time, international remittance as an example.

“I do hope when the fever has gone away, when the crash has happened, it will not undermine the much deeper, and more meaningful technology associated with digital currencies and blockchain,” Menon said earlier this year.

The permissive ecosystem has seen Upbit, South Korea’s largest cryptocurrency exchange, establish a new cryptocurrency exchange in Singapore last month. Binance, the world’s largest cryptocurrency exchange by trading volume, also announced plans to launch a fiat cryptocurrency exchange in Singapore.

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India’s Securities Regulator Tight-Lipped on Crypto Regulation, Inquiry Reveals

The Securities and Exchange Board of India (SEBI) recently responded to some 68-questions about crypto asked by a New Delhi-based legal agency.

The response came under the pretext of a Right-to-Information (RTI) act that allows citizens to request information from a public authority. Blockchain Lawyer filed an RTI application to SEBI seeking knowledge on various aspects of crypto regulation, including their official stance, recently study tours and the outcomes of internal meetings over the proposed crypto law so far.

According to Varun Sethi, a legal counselor at Blockchain Lawyer, SEBI didn’t provide straightforward answers to a majority of their questions, citing confidentiality. A copy of the response revealed many instances in which the regulator ducked questions that could have clarified the current status of crypto regulation in India.

SEBI, for instance, didn’t reveal its research data that could be the base for the future crypto law. The regulator explained that releasing such information could “affect its strategic decision-making process.” Considering it was important for local blockchain industry to understand the source of their research, which the regulator claimed to have drafted after taking “personal views” of its officers, the decision to withhold information from them didn’t go well.


At the same time, the RTI response also hid some critical details about the SEBI’s widely-covered blockchain study tour. The regulator had sent just three of its officers to crypto-friendly countries like Switzerland and Japan. But it refused to disclose the outcome from the said tours, telling that “the disclosure of such strategic and confidential information may also affect and compromise the interests of the securities market in specific and may impact the economic interests of the country.”

The RTI also found that SEBI had conducted an internal meeting on the topic ‘Bitcoin and Blockchain’ on October 30, 2017. It has been reported previously that the regulator was attempting to pass the burden of crypto regulations to RBI by treating it as a  currency asset. The central bank took drastic actions this year by banning banking support to cryptocurrency-focused companies, including exchanges.

After almost a year since the meeting, both SEBI and RBI still have not concluded the status of cryptocurrencies in India. Furthermore, their lack of transparency in response to the RTI is raising more doubts, as far as preparedness is concerned.

Sethi in its statement to CCN confirmed that it would file an appeal in response to the SEBI’s unsatisfactory answers to the Indian crypto community. He said:

“Our primary thoughts are concerned with some claims in the reply. Like experts hired to speak, three officers sent abroad to understand blockchain, internal meeting in Oct 2017 about blockchain. But what is also concerning is lack of transparency in responses. Our next step shall be filing an appeal.”

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UK Telecom Regulator Receives £700,000 Blockchain Grant for Managing Phone Numbers

UK national telecoms regulator Ofcom has received £700,000 ($912,000) to explore blockchain solutions in UK landline telephone management. The grant was issued by the Department of Business, Energy, and Industrial Strategy.

An Ofcom announcement states that between now and April 2020, industry participants will be invited “to trial the porting and management of millions of telephone numbers using blockchain and ledger technology” in an initiative involving industry and university providers as well as third-party providers.

Blockchain technology will allow trusted transactions (AKA ‘consumer porting’ in this case) to “manage the lifecycle of a telephone number transforming data to support voice call routing and ownership.” The blockchain will treat telephone numbers as digital assets to improve landline telephone number management.

Ofcom CEO Mansoor Hanif had this to say about the new project:

“We will be working with industry to explore how blockchain could make it quicker and easier for landline customers to switch providers while keeping their number – as well as reducing nuisance calls. And we’ll expand our research into other areas where innovative technologies such as blockchain could be applied to benefit consumers.”

The Use Case

There are 1 billion landline telephone numbers available in the UK, including those in use and those reserved for future potential use. Groups of phone numbers will be issued in blocks on the blockchain to telecoms operators who will then port them (transfer them from one phone and/or consumer to another).

Blockchain is anticipated to lower the cost of regulation and business overheads, increase industry agility, improve customer experience when switching telecoms providers, and making telephone fraud management and prevention more effective.

The regulator will be building a database of phone numbers for which previous attempts have failed due to the cost and difficulty of getting multiple competing parties to collaborate. The number database placed on the blockchain will allow for transparency between users and telecoms providers.

The telecommunications industry is actually one of the larger markets which may see major disruption from blockchain innovation in the coming years. Mobile network operators (MNOs) suffer from major inefficiencies in billing, payment, and subscription systems which could be completely overhauled and streamlined with blockchain technology. UK-based projects like Diadem are launching a new type of mobile network using smart contracts to tackle these inefficiencies and revamp the industry, whereas existing MNOs like Korea’s KT Corp are integrating blockchain into their existing systems.

A report from MNO trade body GSMA indicates that MNOs will invest $0.5 trillion in mobile capital expenditure between 2018 and 2020, priming the telecoms industry for wide-scale blockchain adoption if early efforts are successful.

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Bitcoin Volume Improves: Crypto Market Primed for a Major Short-Term Rally?

Yesterday, on October 10, the price of Bitcoin broke out of the $6.600 mark after stabilizing at the $6,550 level for a few weeks.

The volume of Bitcoin saw an increase of 12 percent from $3.2 billion to $3.6 billion on Coinmarketcap and $2.1 billion to $2.38 billion on ShapeShift’s

Some tokens including 0x and Polymath have recorded decent 5 to 10 percent gains in the past 24 hours but the inability of Bitcoin to demonstrate a promising recovery in its volume to its previous level at around $4.3 billion has prevented the rest of the market from initiating a major rally.

Technical Analysts Predict a Big Move

The majority of technical analysts and prominent traders in the cryptocurrency sector are anticipating a large move on either the upside or downside. Currently, due to the relatively low volume of the crypto exchange market, it is not certain that the next major movement of Bitcoin will be breakout of two resistance levels at $6,800 and $7,000.

Hence, in the days to come, it is possible that BTC experiences a substantial spike in its volume and breakout of the $6,800 level or sees another shakeout before initiating a meaningful short-term rally.

“The range that never ends. It’s getting tighter though and I suspect we’ll get a big move soon. Recent PA is stuck in the one big green candle. Be careful in both directions, I wouldn’t be surprised by big shakeouts before the real move,” Don Alt said.

But, as respected trader Crypto Dog explained, the probability of BTCinitiating a positive upside movement in the upcoming days is higher than the likelihood of the dominant cryptocurrency testing the $6,000 support level, given its stability and graudal increase in volume.

He stated:

“BTC is nearing apex of this consolidation pattern, hopefully we see a break upwards in the next day or two. From my experience, the longer a consolidation pattern (the closer price ranges to apex), the more likely it is to break down rather than up.”

Previously, after major 60 to 80 percent corrections, Bitcoin has historically tended to initiate strong recovery following a few months of noticeable stability. In October 2013 for instance, BTC demonstrated a rate of volatility at around 4 percent before recording a three-fold surge in price by the end of the year.

Thus, it is entirely possible that the two-month stability period of BTC from August to October could allow the asset to test major resistance levels at $6,800, $7,000, and $8,000 in the weeks to come, as long as its volume can be sustained.

Rest of the Market

Ethereum, Ripple, Bitcoin Cash, and EOS have struggled to see any major movement in the past week, recording a minor drop in value in the past 24 hours. The volume of XRP, the native cryptocurrency of the Ripple blockchain network, has dropped from its $1.5 billion peak to $395 million within a period of two weeks, which is concerning for the short-term price trend of XRP.

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Venezuelans Must Now Pay Passport Fees with the Government’s Petro Cryptocurrency

Starting next week, Venezuelans will have to pay their passport fees with the petro, the controversial state-supported cryptocurrency that is allegedly backed by oil. This was announced in a press conference on Friday, Oct. 5, by the country’s vice president, Delcy Rodriguez, ahead of the coin’s official launch in November. This follows a similar press release by President Nicolas Maduro, who stated that oil purchases will now be made with petros (PTR).

According to Rodriguez, new passports will cost two petros, while extensions can be purchased half that. Bloomberg reports that the new registration price is four times the monthly minimum wage (around 7,200 bolivars), which takes it out of the hands of the average Venezuelan. The enforcement of the new rules will make it even more difficult for Venezuelans to travel out of the country. For Venezuelans living abroad, the cost for new issuance will be $200 while extensions will be $100.

Venezuela has been battling with hyperinflation since 2014, which saw its national currency — the bolivar — depreciate rapidly in value. Needing a currency to fill the void created by the bolivar, some Venezuelans switched to cryptocurrencies such as bitcoin and later, dash, which became arguably more reliable as a store of value and medium of exchange, to combat the side effects of the rampant inflation and the nosediving bolivar.

Seeing the remarkable ascendancy that cryptocurrencies were enjoying, especially dash, the Venezuelan government decided to issue an oil-backed cryptocurrency, the petro, in Dec. 2017.

While the creation of the state-backed cryptocurrency has created a more favorable environment for non-centralized tokens to flourish in the country, it has also come with all forms of oppositions and controversies.

In an earlier announcement last week, the Venezuelan President had claimed that petro would be listed on the six major crypto exchanges for trading, but this hasn’t stopped it from courting controversy. Following the announcement, ethereum core developer Joey Zhou shared a tweet in which he called the state-owned cryptocurrency a “blatant dash clone,” at least according to its whitepaper.

Adoption for dash has, however, been on the increase, so much that Ryan Taylor, CEO of Dash Core Group, called the country the second largest market for dash.

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Analyst: Ethereum Sell-Off in August Shows Crypto Has Hit a Bottom in 2018

According to cryptocurrency analyst Eric Thies, the crypto market may have hit a bottom in September as the price of Ethereum (ETH) declined by more than 50 percent.

Since delving below the $180 mark, ETH has since recovered to $230, likely due to the demonstration of massively oversold conditions by the market in late September.

ETH Enabled ICO Bubble, Which Led to Crypto Bubble

ethereum price chart

ETH/USD | Bitfinex

Throughout the third and fourth quarters of 2017, interest and demand for initial coin offering (ICO) projects hit an unprecedented level. Blockchain projects raised significantly more capital through token sales than from venture capital firms.

TechCrunch exclusively reported that ICOs raised 3.5x more capital than VC-backed startups in the blockchain sector. Jason Rowley wrote:

“Over the past 14 months, blockchain and related startups have raised nearly $1.3 billion in traditional venture capital rounds worldwide. But for the ICOs Crunchbase has captured, nearly $4.5 billion was raised via ICOs.”

Thies stated that the massive growth of the ICO sector contributed to the mid-term rally of the crypto market as it achieved an all-time high valuation of nearly $900 billion.

He theorized:

“Bitcoin’s run in the end of 2017 was fueled by a massive ICO (ERC20) bubble and therefore indirectly fueled via ETH. .Meaning that ETH capitulating in early September was significant to ending the bear market. We were all looking in the wrong place, expecting BTC to do it.”

Bitcoin has declined from $12,000 to $6,000 in early February amidst a bear market, and Thies stated that the end of the capitulation of Bitcoin was when the dominant cryptocurrency consistently started to demonstrate a high level of stability at the $6,000 mark.

bitcoin price chart

BTC/USD | Bitfinex

“BTC parabolic continuation into mid-December was due in-part to the $BCH fork from August. Those with high amounts of BTC now had freeplay money to throw at whatever ICO was on the come up. BCH has also capitulated, while we were once again looking elsewhere. The third factor is $USDT and the enormous influx of liquidity coming into the market via exchanges, etc.,” he added.

Since then, Bitcoin, Ethereum, and the rest of the cryptocurrency market have stabilized in a low price range, which could allow the market to collectively initiate a short-term rally.

Many Experts Believe Crypto Has Hit a Bottom

Billionaire investor Mike Novogratz famously stated in early September that Bitcoin has bottomed out at $6,000. ShapeShift creator and CEO Erik Voorhees emphasized that while the bear market is not over, it is a viable period for investors to accumulate because it is difficult for BTC to decline below its current level.

Technical indicators have suggested that the market is bear biased, with Bitcoin demonstrating its lowest yearly volume over the past seven days. But, given the positive developments in the cryptocurrency sector and the stability BTC has shown throughout the past two months since early August, it is entirely  possible that the bottom of the crypto market has already been established.

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EU Watchdog Will Evaluate ‘Every’ ICO for Potential Regulatory Push

The European Securities and Markets Authority (ESMA) is assessing every single ICO operating within its jurisdiction, Reuters reported on Oct. 8.

ESMA chair Steven Maijoor — who warned crypto investors in Jan. 2018 that they could potentially lose all of their funds by investing in initial coin offerings (ICOs) — said that he had been observing the current regulations that can fit an ICO.  He added that, so far, these ICOs have been unable to reveal their “extra benefits” when compared with traditional capital raising companies.

Maijoor explained to the EU’s Committee on Economic and Monetary Affairs that some ICOs are similar to financial instruments and in turn could be subject to regulations.

“The subsequent question is what do we do with those ICOs that are outside the regulatory world. We will assess that as a board. We expect to report by the end of the year,” said Maijoor.

Meanwhile, the European Commission’s Vice President, Valdis Dombrovskis, said in the EU Economic and Financial Affairs Council (ECOFIN) meeting last month that cryptocurrencies are here to stay. He added that crypto market would grow despite volatility in cryptocurrencies.

In Dec. 2017, Dombrovskis sent letters to ESMA, European Banking Authority (EBA), and European Insurance and Occupational Pensions Authority (EIOPA), to request them to warn crypto enthusiasts of the risks involved in crypto investment.

Even though Dombrovskis supported cryptocurrencies in his recent statement, he conveyed his warning once again. However, on the topic of ICOs, he explained that they had the “potential to emerge as a viable form of alternative financing.”

The EU has consistently struggled with one question: should they create new laws or apply existing laws to the crypto sector? According to Dombrovskis, ECOFIN is working with EBA, ESMA, and EIOPA to find solutions to these problems.

ICO Approval Status in Other Countries

Last month, 15 members of Congress signed a letter requesting the U.S. Securities and Exchange Commission (SEC) to clarify the status of ICOs and other cryptocurrency assets.

Meanwhile, the UAE’s Emirates Securities & Commodities Authority (ESCA) recently announced that the country would launch ICOs to help raise money for businesses in 2019. The ESCA also plans to submit a regulatory framework for ICOs within the first six months of 2019.

Last week, Min Byung-Doo, National Policy Committee chairman of South Korea, emphasized the importance of legalizing ICOs in South Korea’s National Assembly meeting. Byung-Doo pointed out that ICOs couldn’t simply be dismissed since they are “getting bigger and bigger.”

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Binance Donating Crypto Listing Fees to Charity Should be Praised, Not Criticized

On Oct. 8, CCN reported that Binance, the world’s largest cryptocurrency exchange, will donate all crypto listing fees to charity.

The majority of investors and traders in the cryptocurrency industry reacted positively to the praiseworthy decision of the exchange. But some criticized Binance, falsely claiming that the exchange received large listing fees in the past.

Binance Listing Fee Controversy Blown Out of Proportion

Previously, some projects and founders of small cryptocurrencies claimed that Binance had asked for a 400 Bitcoin listing fee for digital assets to be listed on the platform.

Speaking to CCN, Binance CEO Changpeng Zhao (CZ) stated that the 400 BTC figure was a “purely made up number” and that the exchange has never offered any specific number to projects in the past.

“There were so much incorrect data, rumors and FUD about listing fees. We care about our community and want to address this once and for all,” CZ told CCN in an interview.

Binance Zhao Changpeng Sequoia

Binance CEO Changpeng Zhao | Source: YouTube/Piergiorgio Borgogno

In an interview with Ran Neuner of CNBC’s Crypto Trader in July, CZ clarified that Binance does not request listing fees from projects that apply to be listed on the platform. The exchange integrated many cryptocurrencies that have not provided any listing fee to Binance to cover operating costs that are generated in the process of securely listing an asset.

In fact, CZ stated during the interview that the exchange does not prefer blockchain projects voluntarily offering large listing fees to Binance, as it could lead the team to be suspicious about the legitimacy of the project.

In the first quarter of 2018, Binance is said to have generated $200 million in profit, most of which comes trading fees, like any other exchange in both the crypto and traditional finance sector. Listing fees, if the exchange even profited off of them, would have accounted for a very small portion of the total profits the exchange demonstrated in early 2018.

More importantly, it is necessary for critics of the exchange to speculate whether any major exchange in the global market would even consider hindering its reputation and name value for several millions of dollars when its business is valued at billions of dollars by investors, especially venture capital firms outside of the cryptocurrency sector.


The ambitious decision of Binance to transparently donate all listing fees received by projects that apply to be listed on the exchange to charity should be praised, as it sets a precedent for other trading platforms in the market, especially minor exchanges that may be profiting off of listing fees by integrating poor projects with little to zero track record.

To CCN, CZ stated that he certainly hopes other exchanges follow Binance in donating listing fees to charity and Binance hopes to set an industry standard.

“I certainly hope so. They copied us on many other things, this will be a good thing to copy. There is no competition in charity,” he said.

The recently launched Blockchain Charity Foundation led by UN Ambassador of Goodwill, Helen Hai, has already made significant progress in recent months by positively affecting the world through crypto and blockchain technology, with the assistance of UN.

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Bitcoin Price Intraday Analysis: BTC/USD Confirms Bull Trap

The Bitcoin-to-dollar exchange rate on Tuesday dropped 1.69 percent from 6734-fiat to 6620-fiat after confirming a bull trap.

The current market volume is lower than expected to excite a steady upside – even downside. In our previous analysis, we had stated that a breakout would be confirmed once we climb over September 5 high. BTC/USD managed to test the level in yesterday’s upside action but didn’t see as many open long positions as closed ones. That said, 6734-fiat is already a level to watch out for to confirm a short-term break towards September high.

Bitcoin, meanwhile, seems to have found a bottom as predicted by the many institutional investors last week. The lack of a substantial volume upside is matched equally by an absence of bears. So far, the market has seen big players hinting their long positions by entering somewhere above the $6,000-mark. Incidentally, the level signifies a breakeven return of investment for miners, a network of machines running the Bitcoin network after investing sums in high-end mining machines, space, and electricity.

On daily charts, BTC/USD is still attempting a steady breakout but ends up in a bull trap signal on every jump. The yesterday’s upside closed below resistance and formed a red candle, indicating a false breakout signal. The pair’s upside is capped by a medium-term descending trendline (adjusted after the recent growth) and an equally persistent rising trendline is providing the support.

The fundamentals and technicals collaborate to offer a medium-term bullish bias. In the meantime, day traders are getting enough intrarange opportunities to enter/exit their positions on minor profits.

BTC/USD Intraday Analysis

On 15m charts, BTC/USD is attempting to close above 61.8% Fibonacci level of the last swing from 6548-low to 6712-high. Targeting the falling descending trendline our primary upside, we will initially open a long position towards the 50H SMA coinciding with 6651-fiat while maintaining a stop loss order just 3-pips below the entry level. It should get us some decent profits with minimal risk.

Looking the other side, we might be looking at a Head & Shoulder formation where the price would target 6586-fiat as the neckline. That said, a close below the previous low could have us enter a short towards 6586-fiat. At the same time, we will open a stop loss order above our entry position – 3-pips will be enough to minimize our risks.

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Indiegogo’s First Security Token ICO Raised $18 Million

The owner-operator of the St. Regis Aspen Resort has concluded its security token offering (STO), raising $18 million in the first equity ICO hosted on the Indiegogo platform.

Asset management firm Elevated Returns, the owner of St. Regis Aspen, on Tuesday announced that accredited investors had purchased all $18 million worth of Aspen Coins made available through the sale, bringing Indiegogo’s first security token ICO to a successful conclusion.

Unlike utility token ICO tokens, which (at least purportedly) serve as coupons for a product or service, security tokens represent investment contracts. In this case, each Aspen Coin represents a share in a single-asset real estate investment trust (REIT) that holds the $18 million in St. Regis Aspen equity made available through the STO/ICO. Since securities offerings are regulated by the SEC, the sale was restricted to accredited buyers.

“The Aspen Digital closing not only represents a new coin on the market that is asset-backed, it also establishes a blueprint for future real estate tokenization,” said Jason Kirschenbaum, director at Elevated Returns. “The future of real estate investing is one that provides global exposure, transparency, public access and liquidity, all of which are elements that can be delivered through blockchain technology.”

st. regis aspen resort indiegogo ico

St. Regis Aspen Resort | Source: Wikimedia

The token, which was built to the ERC-20 token standard, was made available on Indiegogo through a partnership with Templum Markets LLC, a FINRA and SEC-registered operator. While Aspen Coins can technically be held in any ethereum wallet, investors seeking to sell their security tokens must do so through Templum’s alternative trading system (ATS) to comply with federal securities regulations.

In an interview with CCN earlier this year, Indiegogo co-founder Slava Rubin said that expanding into cryptocurrency-based crowdfunding is a “natural extension” of the firm’s business.

“We predict a rise in the potential and demand for tokenized securities, because digital ownership on the blockchain provides so many advantages over legacy investments, and tech-savvy investors are seeing the value proposition in real time. This addition to our business is just a natural extension of our vision for a crowd-financed world.”

Indiegogo had previously hosted a utility token ICO in partnership with licensed broker-dealer MicroVentures. However, months after that sale was concluded, MicroVentures abruptly canceled the sale and returned funds to contributors, citing regulatory concerns.

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Bitcoin Price Heading into ‘Classic Breakout Pattern’: Analyst

The bitcoin price has been remarkably stagnant in recent weeks, with the flagship cryptocurrency’s volatility declining to a 17-month low on Oct. 8.

Analysts including Bloomberg Intelligence commodity strategist Mike McGlone have said that this could be an indication the cryptocurrency market is beginning to establish itself into a maturing asset class. But while declining volatility may make the case that bitcoin is a store of value a bit more plausible, cryptocurrency investors, particularly those who placed their bets when the market was near an all-time high, would prefer that BTC plateau while trading near a peak — not languishing in a valley.

Bitcoin Price Heading into ‘Classic Breakout Pattern’

EToro senior market analyst Mati Greenspan says that the market may soon return to its volatile roots, as bitcoin looks poised to awake from its slumber.

Writing in market commentary made available to CCN, Greenspan said that bitcoin’s range has steadily been getting narrower, so much so that it has now reached a tip. This, he said, is a “classic breakout pattern.”

bitcoin price chart

BTC/USD Trading Range | Source: eToro/Mati Greenspan

Greenspan further noted that on the two previous occasions in 2018 when this pattern has occurred, the bitcoin price has broken out to the upside, suggesting that we will see a similar occurrence within the near future.

bitcoin price chart

BTC/USD | Source: eToro/Mati Greenspan

That breakout could throw the bitcoin price into even more bullish territory. BTC is currently trading below its 200-day moving average (DMA), as it has been for some time. The market has made “about a half dozen” attempts at breaking through that resistance line since declining below it; however, it has bounced off every time. Consequently, Greenspan believes that a strong breakout above the 200 DMA could fundamentally alter trading sentiment in the market, stirring up bullish activity heading deep into the fourth quarter.

“In fact, we can see that it [the 200 DMA] has bounced off this line about half a dozen times this year,” he wrote. “A strong breakout above the 200 Day Moving Average could easily flip sentiment from bearish to bullish for many cryptotraders.”

Has the Breakout Begun?

There are signs that this process may have already begun. As CCN reported this morning, bitcoin trading volume saw an abrupt increase this morning, rising to $2.53 billion from $2 billion, according to CoinCap.

Along with that increase in volume, the bitcoin price successfully broke out of the $6,550 range in which it had been trading throughout October, rising to $6,640 on Bitfinex as of the time of writing.

If bitcoin can continue to post higher trading volumes, ideally surpassing the $3 billion mark, it could challenge resistance at $7,000. This will not be an easy task, as BTC failed to make a sustained push past that mark in mid-September. However, if it does, it could be a sign that, as Blockchain Capital’s Spencer Bogart predicted last week, the market has found a bottom.

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Roubini Calls Buterin a Dictator, Falsely Claims Crypto is Centralized.

Nouriel Roubini, a proclaimed critic of the crypto sector, characterized decentralization as a myth, claiming that no system, currency, or protocol can exist in a peer-to-peer ecosystem.

“Decentralization in crypto is a myth. It is a system more centralized than North Korea: miners are centralized, exchanges are centralized, developers are centralized dictators (Buterin is ‘dictator for life’ ) & the Gini inequality coefficient of bitcoin is worse than North Korea,” Roubini said.

Crypto is Decentralized

Crypto is decentralized in every aspect. Miners could theoretically gain dominance over the market but individual miners that fuel mining pools can leave the pools if they disagree with the decision made by the entities.

Developers of major public blockchain networks like Bitcoin and Ethereum rely on nodes and miners to approve and run their software. If the public decides not to run code written by a certain group of developers, it cannot force the ecosystem to adopt it.

As Ethereum co-creator Vitalik Buterin said in July:

“The thing with developers is that we are fairly fungible people. One developer goes down and someone else can keep on developing. If someone puts a gun to my head and tells me to write a hard fork patch, I’ll definitely write the hard fork patch. I’ll write the GitHub issue, I’ll write up the code, I’ll publish it, and I’ll do everything they say. If I do this and publish a hard fork patch to delete a bunch of accounts, how many people will be willing to download the update, install it and switch to that update? This is called decentralization.”

Not every cryptocurrency or public blockchain are completely decentralized and admittedly, there exists several large blockchain protocols that provide a specific group of individuals more authority over the network to engage in important decision-making.

However, the governance system of most public blockchain networks including Ethereum is structured in a way that developers in the open-source developer community can propose solutions, suggestions, and changes to the existing codebase of Ethereum.

In some cases, code written by anonymous developers have been integrated into the blockchain, because miners, nodes, and developers are always incentivized to run the best version of the software that exists in the ecosystem to improve the blockchain.

In response to Roubini’s claim, Buterin explained:

“I don’t think that’s a fair characterization; if you look more deeply at the actual processes of ethereum governance you’ll find that while a technical elite does exist (as in all cryptocurrencies), my own involvement is much less pivotal than it seems from the outside.”

Positive Approach of Buterin

Still, Buterin further emphasized that public blockchain governance systems could be more decentralized through the implementation of multiple client implementations, decentralized exchanges, and proof-of-stake.

Specifically, multiple client implementations enable miners and node operators to vote for the best software that is available in the ecosystem as several developer communities compete to offer the most sophisticated and efficient codebase.

“That said, I agree centralization of developers, exchanges and miners/validators is a problem! Though we are actively implementing multiple routes to mitigate this (eg. multiple client implementations, decentralized exchanges, various protocol features in PoS,” Buterin added.

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Bitcoin Cash Evangelist Roger Ver May Launch a Cryptocurrency Exchange

Bitcoin cash evangelist and owner Roger Ver is considering launching a cryptocurrency exchange that would use BCH as its base currency.

The controversial bitcoin cash promoter, once known as “Bitcoin Jesus” for his early support for the cryptocurrency in the years before last year’s BTC/BCH divorce, told Bloomberg that, if his company wanted to, it could build an exchange “really, really cheap.”

“If we build it ourselves, we can do it really, really cheap, and we get exactly what we want,” he said. “But we don’t have the security of a battle-tested exchange that’s been around for a while.”

The plans for the cryptocurrency exchange are still in the early stages, and Ver said that he has not decided whether to build it internally from the ground up or seek to acquire a platform that is already up-and-running.

Either way, he said that the exchange would be hosted at, which already operates a mining pool and a cryptocurrency wallet that supports both BTC and BCH. Last November, the firm sparked criticism by quietly updating the wallet to default to bitcoin cash rather than bitcoin, which critics said could be confusing to new cryptocurrency users who stumbled upon the website by conducting a Google search for “bitcoin.”

Ver alleged that hosting the exchange at would provide the platform with “instant liquidity” due to the website’s current popularity. However, it’s unclear to what extent users desire to use BCH as a base currency, given how rare that is among other exchanges.

According to CoinMarketCap, CoinEx is the only major exchange that offers liquid markets denominated in BCH, though, as an exchange that operates on a transaction fee mining model, its volumes are not seen as reliable signals about trader interest for particular markets or trading pairs.

As of late Friday morning, bitcoin cash is valued at $515, which translates into a $9 billion market cap and makes BCH the fourth-largest cryptocurrency. The coin has a daily adjusted trading volume of $382 million, which ranks sixth among coins and tokens. Bitcoin, the most liquid cryptocurrency, has an adjusted daily volume of $3.5 billion.

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CNBC Analyst Predicts Bitcoin Price Is ‘About To Explode,’ Citing ETF Buzz

Cryptocurrency analyst Ran Neuner — host of the CNBC show Crypto Trader — believes BTC prices are “about to explode,” citing bullish market buzz about the near-term possibility of an SEC-approved bitcoin ETF.

“I just bought bitcoin for my parents. It’s too obvious that it’s about to explode,” Neuner tweeted on October 7.

Neuner said the mounting expectation that the Securities and Exchange Commission could soon approve a bitcoin ETF could send prices through the roof.

Countdown To SEC Deadline

Neuner, the CEO of crypto investment firm Onchain Capital, noted that around this time last year, BTC surged on reports that a cash-settled futures contract would launch.

Neuner reasoned that SEC approval of a bitcoin ETF would be much bigger news than a futures contract, and would have a more dramatic impact on the market.

CNBC crypto trader ran neuner

Ran Neuner is bullish about bitcoin. Credit: CNBC

“Last year, around this time, BTC went from $6,691 (Nov. 11) to $20,000 (Dec. 17) in 5 weeks,” Neuner tweeted. “This on the back of the expectation and launch of a cash settlement BTC futures contract.”

He continued: “An ETF is a way bigger deal and requires actual purchase of BTC. 2 looming SEC decision deadlines ahead.”



That said, predictions by any crypto expert should be viewed cautiously. Because the industry is still young and unregulated, there are a lot of unforeseen factors that could affect prices.

Keep in mind that in February 2018, Ran Neuner predicted that BTC would top $50,000 by the end of the year. So far, it does not appear that this forecast is realistic given current market conditions.


Meanwhile, the SEC has set a November 5 deadline to review nine bitcoin ETF applications. As CCN previously reported, some market experts predict that a bitcoin ETF is likely to be approved in early-2019.

In July 2018, the SEC rejected the Winklevoss twins’ second attempt to launch an exchange-traded fund that tracks the price of bitcoin. The agency had rejected Cameron and Tyler Winklevoss’ first such application in March 2017.

While the virtual currency market slumped over the summer, several key developments could be setting the stage for a near-term rally and a longer-term market run-up.

Yale Invests In Two Crypto Funds

As CCN has reported, Yale University — whose endowment tops $29 billion — recently invested in two crypto-focused venture funds.

In doing so, Yale became the first university endowment to invest in cryptocurrencies, in a sign that institutional investors are starting to embrace digital currencies as investment vehicles.

While Yale’s allocation in crypto is reportedly small, even a 1 percent allocation would approach a staggering $290 million.


Analysts say Yale’s foray into virtual currencies will undoubtedly trigger a chain reaction that could open the floodgates for other institutional investors to start pouring money into crypto funds.

Top universities typically copy what their peers do, so if one massive endowment signals that crypto is worthwhile, others will parrot their moves.

CIO: Investment ‘Herd Mentality’ Will Take Over

In April 2018, Ari Paul — the chief investment officer of crypto investment firm BlockTower Capital — said it was “inevitable” that several super-rich universities would start investing in cryptocurrencies this year, as CCN reported.

“I do think it’s inevitable from a few angles,” Paul said. “Even if they never believe in it as an asset class, they’re smart enough to recognize the alpha opportunity.”

Ari Paul, the former portfolio manager for the University of Chicago, said several pension funds and university endowments began researching crypto-investments as early as 2015.

“Endowments could pull the trigger at any moment,” Paul said. “They’re on the fence.”

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‘We Got Spanked’: Adult Entertainment ICO Suffers $38,000 Hack

“We got spanked.”

That’s the message that SpankChain, the initial coin offering (ICO) funded adult entertainment website, used to inform its users that a hacker had exploited a bug in one of its smart contracts to abscond with 165.38 ETH, worth about $38,000 at the time of the theft. Another $4,000 worth of the platform’s ICO token, BOOTY, was immobilized as a result of the breach, bringing the total economic impact of the hack to about $42,000.

The hack occurred at roughly 6 pm PST on Saturday, though the company did not discover the theft until the following evening, at which point it took the website offline to prevent further breaches.

“Unfortunately, as we were in the middle of investigating other smart contract bugs, we didn’t realize the hack had taken place until 7:00pm PST Sunday, at which point we took Spank.Live offline to prevent any additional funds from being deposited into the payment channels smart contract,” the announcement read.

According to SpankChain, the hacker exploited a “reentrancy” bug, similar to the one used in the infamous DAO hack.

“In short, the attack capitalized on a ‘reentrancy’ bug, much like the one exploited in The DAO. The attacker created a malicious contract masquerading as an ERC20 token, where the ‘transfer’ function called back into the payment channel contract multiple times, draining some ETH each time.”

SpankChain ICO

The company admitted that it had failed to pay for a security audit of its payment channel smart contract, which could have cost as much as $50,000 — well above the amount of funds affected by the hack. Nevertheless, SpankChain said that it realizes now that it should have paid for the audit, expensive though it may have been.

“As we move forward and grow, we will be stepping up our security practices, and making sure to get multiple internal audits for any smart contract code we publish, as well as at least one professional external audit,” the company said.

Most of the affected funds belonged to SpankChain. However, about $9,300 worth of the stolen and immobilized funds belonged to users. Consequently, the company, which raised $7.2 million through its ICO in late 2017, said that it would airdrop $9,300 in ETH to affected users’ SpankPay accounts following the website’s reboot within the next several days.

As CCN reported, SpankChain is just the latest in a long line of Ethereum projects that have lost money when hackers exploited bugs in their smart contracts.

In July, decentralized exchange (DEX) Bancor lost $23 million in ETH and other ethereum tokens when a hacker compromised a wallet used to upgrade some of the platform’s smart contracts. That same month, KICKICO lost 70 million KICK worth $7.7 million when a hacker managed to gain control of the project’s smart contract.

Previously, a smart contract governing multi-signature ethereum wallets suffered multiple security breaches, resulting in a $32 million theft and $150 million in permanently-frozen funds. Such hacks have led Litecoin creator Charlie Lee to suggest that Solidity, the native programming language of Ethereum smart contracts, is a “hacker paradise.”

However, the problem is not isolated to Ethereum. In September, several decentralized applications (dApps) running on the EOS network were exploited as the result of smart contract bugs as well. At least two gambling dApps were affected, losing a collective $260,000 when hackers discovered a way to place bets without having to stake any real tokens, allowing them to gamble consequence-free.

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