Most crypto exchanges are vulnerable by design, says ByBit CEO

Most crypto exchanges are vulnerable by design, says ByBit CEO

Crypto exchange security is once again in the news after hackers breached KuCoin. But this shouldn’t surprise people as exchanges are vulnerable by design, according to ByBit CEO Ben Zhou. 

Zhou told Cointelegraph that exchanges act as a single point of failure. As a centralized web application, exchanges are susceptible to the same security issues as all other websites. 

Security becomes even more important as investors and traders are increasingly taking exchanges to task to protect funds. 

The vast majority of crypto exchange servers and storage networks, Zhou said, keep digital currencies in hot wallets. If hot wallets are not properly protected, then this opens them up to theft. Zhou thinks that a cold wallet system is more secure since hot wallets are connected to the internet, making them more vulnerable to hacking. Cold wallets, on the other hand, are not connected online. The only downside is not being able to make large withdrawals from an exchange immediately.

According to Zhou, investing in security should be one of the highest priorities on an exchange platform’s agenda, especially if it operates online. To combat potential hacking threats, exchanges also need to better address vulnerable areas and apply multiple security layers for penetration testing. 

Any security system should also protect information across all points of interaction. This means protecting user data from account registration, login, trading, and any information exchange with the platform. Zhou added that:

“This can be accomplished by applying best practices for application lifecycle management, hiring knowledgeable and reputable security consultants for penetration testing and running bounty programs within the white hat community to identify any potential vulnerabilities.” 

Zhou also recommends cryptocurrency exchanges work with reputable security firms to carry out security audits, apply strict management processes, and invest in zero-trust architecture. Zero-trust architecture requires verification for anyone accessing a service to prevent any potential data breaches both internally and externally. 

He said there are several bespoke security solutions from third-party vendors that exchanges can use but noted these could also be developed in-house.

Zhou revealed that ByBit invested considerable resources in developing and enhancing its own security protocols and solutions. They have implemented a multi-signature cold wallet system to protect the safety of users’ funds. ​

When it comes to combating potential hacking threats, ByBit organized and conducted multiple red alert scenarios and bounty programs with the white hat hacker community. This is to ensure there are no system vulnerabilities. Zhou added that: 

“Even when it comes to withdrawals, we subject any requests to at least three layers of risk-control verifications. Crypto asset consolidation among cold wallets follows the strictest policy, including physical environment security, system security, encryption techniques, operation authentication, monitoring and audit.” 

As Cointelegraph previously reported, the recent crypto twitter hack was a wake-up call for centralized platforms to address online security issues. 

Source: bitcoinslate.com

Author: admin


Crypto-Fueled Market Openbazaar to Close Shop Unless OB1 Raises Community Funding

Crypto-Fueled Market Openbazaar to Close Shop Unless OB1 Raises Community Funding

Crypto-Fueled Market Openbazaar to Close Shop Unless OB1 Raises Community Funding

On September 25, the creators of the decentralized marketplace, Openbazaar, announced that unless the project can gather community funding, the supporting services like seed nodes and the API wallet will shut down. The firm behind the project, OB1 is also removing the Haven app from the iOS App Store and Google Play on October 1.

The open-source decentralized marketplace project Openbazaar started from an idea first conceived at the Bitcoin Hackathon in Toronto in April 2014. The first version of Openbazaar was released on April 4, 2016, and news.Bitcoin.com was one of the first to review the platform the following day.

The marketplace that ran for five years uses cryptocurrencies for payments, a peer-to-peer solution for exchanges, an escrow system, and Ricardian contracts.

On Friday, the development team and OB1’s CEO Brian Hoffman announced the project might be closing up shop soon, unless OB1 can raise funds.

“In 2014 Openbazaar started and today we’re announcing that it is now time to perhaps close this chapter,” Hoffman wrote on September 25. “Unless the community comes together to help. I’m extremely proud of what we accomplished over the years and the principles of what we stood for will remain,” the OB1 founder added.

In the company blog post, the firm said that it did not achieve the level of adoption and user growth it had hoped for when the project was invoked. “As a result, OB1 cannot sustain funding the ongoing infrastructure costs,” the blog post noted. Additionally, OB1 detailed that the company has been relying on donation funds but the money is running low.

“At OB1, we have desperately tried to secure more funding to not only maintain Openbazaar’s support costs but execute the next phase of the protocol that we believe can unlock explosive user adoption,” the company added. “Sadly, we have been unsuccessful and have no choice but to discontinue these supporting services.”

The farewell announcement highlights that during the next week or so, the team will be publishing explainers on how to release funds from Openbazaar nodes. Haven app users are being told to “immediately remove funds from their wallet.”

Further, OB1 said the development team plans to open source the Openbazaar search engine and Blockbook indexer code. This way, those who want to leverage Openbazaar privately can do so with these tools.

A great majority of the crypto community bid the project farewell on social media and crypto forums. Many were sad to see the project throw in the towel and said that the team put in a good effort.

At the end of the announcement post, the OB1 team left donation addresses so the community can help fund the project further. The Openbazaar project is accepting funds in BTC, LTC, ZEC, BCH, and ETH.

The team revealed on Saturday morning (ET) that someone sent 2.5 ETH to the project overnight. The project has received donations from a number of crypto communities and on Saturday afternoon, the team’s official Twitter account cryptically said: “Good news [is] coming.”

What do you think about the Openbazaar team’s recent announcement? Let us know in the comments section below.

Grayscale Investments Scooped Up Over 17,000 BTC in the Last Seven Days

Novogratz: Dangerous Time to Be in Stocks, Bitcoin Has More Upside Than Gold

BCH, Bitcoin, bitcoin cash, Brian Hoffman, BTC, Community Funding, crypto assets, crypto community, Cryptocurrency, Decentralized Market, donations, farewell, Haven, Haven App, Lack of Adoption, Marketplace, OB1, OpenBazaar, Ricardian contracts, trading

Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Source: news.bitcoin.com

Author: News by Jamie Redman


Bitcoin Could Scale Up to a ‘Trillions’ Market Cap in 5 to 10 Years

Bitcoin Could Scale Up to a ‘Trillions’ Market Cap in 5 to 10 Years

ARK Funding Administration LLC thinks that bitcoin is an asset with one of the crucial enticing risk-reward profiles. In a current evaluation, the New-York based mostly funding advisory agency made a reasonably optimistic name concerning BTC’s progress. Bitcoin’s community valuation may balloon to $1 – 5 trillion within the subsequent 5-10 years.

ARK Make investments offers funding consultancy with a sole concentrate on disruptive and modern applied sciences like AI, machine studying, blockchain, and so on. The agency thinks that bitcoin’s aggregated market worth may soar as much as 25 instances from the place it’s at present.

Their foundation for this declare? An in depth analysis that outlines how bitcoin can seize a wide range of markets, together with monetary settlement networks:

In the US alone, deposits totaling $14.7 trillions generate $1.three quadrillion in settlement volumes between and amongst banks annually.

If it have been to seize 10% of these settlement volumes at an analogous deposit velocity, we consider the Bitcoin community would scale greater than 7-fold from roughly $200 billion to $1.5 trillion in worth.

Talking of worth settlement, Bitcoin has already ascended the standing of a priceless cash switch community. As reported by CryptoPotato, since 2017, the overall worth of BTC transactions have fallen within the $670 to $750 billion vary. Bitcoin and Ethereum are on tempo to settle a mixed $1.three trillion in transactions in 2020.

What cryptocurrency will become the main one in a year?
BitcoinEthereum

Yassine Elmandjra, ARK Make investments’s resident crypto analyst, identified that bitcoin may assist defend different belongings.

Bitcoin may present safety towards the arbitrary seizure of belongings

In our view, a wise allocation to bitcoin would approximate the chance {that a} misguided regime will confiscate belongings – whether or not by inflation or by outright seizure – throughout a person’s lifetime pic.twitter.com/dS5mRtIl5f

— Yassine Elmandjra (@yassineARK) September 17, 2020

And the way would this come into being? Yassine says that bitcoin’s shortage, sturdiness, divisibility, and comfort wrt portability renders it protected from centralization.

The ARK Make investments evaluation finds out that bitcoin trades extra like a large-cap inventory than an entire asset class. BTC has a better buying and selling quantity than Google and Netflix however decrease than Fb and Amazon.

Nonetheless, Bitcoin capturing 10% of gold’s world market will propel it’s community valuation upwards of $1 trillion. Additionally, as a result of the world’s first cryptocurrency does a minimal of $200 million in every day buying and selling volumes,

a buy-side establishment restricted to 10% of the quantity may deploy roughly $20 million per day.

Other than the above, based mostly on ARK Make investments’s Bitcoin market outlook,

At historic progress charges, bitcoin’s every day quantity would exceed the quantity of the US fairness market in fewer than Four years, and the quantity of the US bond market in fewer than 5 years. pic.twitter.com/uqY4SfZZDk

— Yassine Elmandjra (@yassineARK) September 17, 2020

Bitcoin’s market can also be just about liquid, the funding advisor mentioned. Because the prime cryptocurrency is akin to a distinguished publicly traded fairness, this can be a favorable facet for attracting the eye of institutional gamers.

ARK Make investments simulated the Bitcoin funding behaviors of those deep-pocketed gamers based mostly on ‘1,000,000 portfolios composed of varied asset lessons’.

Within the first simulation state of affairs, with a restrict of 1% allocation restrict, establishments optimizing for returns in comparison with volatility would allocate 0.27% ‘whereas these aiming for the best Sharpe Ratio would allocate 0.74%.’

When bitcoin’s buying and selling volumes and liquidity method different asset lessons, institutional gamers would need to cast off the 1% allocation restrict. Now:

allocations to bitcoin would vary from 2.55% when maximizing returns and minimizing volatility to six.55% when maximizing Sharpe Ratios.

Developing a predictive mannequin which incorporates our 5-year forecast for bitcoin’s TAM, buyers searching for to attenuate volatility would allocate between 0.03% and 1.28% to bitcoin. Buyers searching for to maximise Sharpe Ratio would allocate between 4.8% and 25.78% to bitcoin.

The agency states that buyers and people who allocate capital in markets ought to critically think about turning into part of the bitcoin market or it could be too late.

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Source: gentlecrypto.com


Darknet, cryptocurrency and two intersecting health crises

Darknet, cryptocurrency and two intersecting health crises

While the precise origin of the COVID-19 pandemic is unknown, it has infected more than 30 million people, with almost 1 million confirmed to have died from it as it continues to spread across the world. The highly contagious virus has the ability to survive up to three weeks in frozen food supplies of meat and fish, according to a study.

Related: Illicit crypto transactions are getting more attention from the government

The United States — the worst-hit country by sheer numbers — is now facing two intersecting health crises: The ongoing opioid overdose epidemic and the coronavirus pandemic with more than 200,000 confirmed COVID-19 fatalities, which is about 20% of the global total death cases. Regrettably, each has the potential to exacerbate the effects of the other. Nevertheless, in a hopeful announcement, the U.S. Naval Research Laboratory disclosed that they found a safe way to track the spread of COVID-19 and other contagious diseases from one cell to another in the human body.

The Centers for Disease Control and Prevention reports that drug overdose deaths have been on an upward climb for several years across all demographic groups in the United States. More precisely, the catastrophic outbreaks of COVID-19 cases have been recorded in the U.S.’ packed jails, prisons and immigration detention centers, according to epidemiologist Dr. Chris Beyrer.

Overcrowding, poor hygiene, inadequate access to medical care, as well as the incarcerated population suffering from a number of pre-existing conditions, including substance use disorder which is estimated at 65%, have created a perfect storm for a COVID-19 outbreak. Currently, COVID-19 infection rates in prisons alone exceed the total cases of some countries.

As the world’s leader in incarceration, the U.S. imprisons many on drug-related offenses. These even include teenagers who run Bitcoin (BTC) drug businesses on the darknet.

A transnational task force of both the U.S. and Europe — the Joint Criminal Opioid and Darknet Enforcement, or J-CODE — combats the complex and deadly threat of online darknet drug sales in opioids, in particular fentanyl, with the assistance from the U.S. FBI, the DEA, the USPIS, ICE of Homeland Security Investigations, the CBP, the DOJ, the DOD and Europol.

Earlier this year, Christopher Wray, the director of the FBI, in a report to the House Judiciary Committee, noted:

“Today, international criminal enterprises run multinational, multi-billion-dollar schemes from start to finish. Modern-day criminal enterprises are flat, fluid networks with global reach. […] Transnational organized crime networks exploit legitimate institutions for critical financial and business services that enable the storage or transfer of illicit proceeds. […] Illicit drug trafficking continues to be a growing threat. Large amounts of high-quality, low-cost heroin and illicit fentanyl are contributing to record numbers of overdose deaths and life-threatening addictions nationwide. The accessibility and convenience of the drug trade online contributes to the opioid epidemic in the U.S.”

With the COVID-19 pandemic, the drug-trafficking business — just like the rest of the economy — further shifted online to the darknet, according to UNODC’s recent World Drug Report.

Timothy J. Shea, the acting administrator of the U.S. Drug Enforcement Agency, highlighted:

“As technology has evolved, so too have the tactics of drug traffickers. Riding the wave of technological advances, criminals attempt to further hide their activities within the dark web through virtual private networks and tails, presenting new challenges to law enforcement in the enduring battle against illegal drugs.”

For a progress report regarding the work of the J-CODE, U.S. Senators Maggie Hassan, Dianne Feinstein and John Cornyn asked the U.S. attorney general’s office and the FBI in a letter whether the DOJ has a system that tracks indictments and investigations related to crimes involving the darknet and opioids; if authorities have been able to determine which countries opioids are coming from on the darknet; and whether there are technology companies that provide secure or encrypted communications that don’t cooperate with law enforcement with respect to drug trafficking.

According to Chainalysis’ recent Global Crypto Adoption Index, Eastern Europe accounts for more global darknet market activity than any other region, with most of the darknet peer-to-peer crypto and trading transaction activity occurring on Hydra Marketplace, which can only be accessed with an anonymized browser like The Onion Router, or TOR.

The core principle of TOR was developed in the mid-1990s by the U.S. NRL employees — mathematician Paul Syverson and computer scientists Michael G. Reed and David Goldschlag — to facilitate encrypted online U.S. intelligence communication with intelligence sources around the world. Onion routing — encrypting communications and “bouncing” them around a network of nodes so no one can ascertain where they originate from — was further developed by Defense Advanced Research Projects Agency, a research and development agency of the U.S. DOD, in 1997.

In 2002, the alpha version of TOR was developed by Syverson and computer scientists Roger Dingledine and Nick Mathewson, with a second-generation “TOR: The Second-Generation Onion Router” released by the Naval Research Laboratory under a free license two years later. The Electronic Frontier Foundation began funding Dingledine, Mathewson and others to continue TOR’s development until they launched “The TOR Project,” a nonprofit organization to help maintain the network. Prior to 2014, the majority of funding sources for TOR came from the U.S. government.

TOR is the most popular means by which people access darknet sites that are encrypted and hidden from traditional search engines, allowing users to interact with a high degree of confidentiality. TOR has several search engines, directories and hidden wikis that users can easily use to navigate their way around the darknet.

The anonymity of the darknet has fostered crimes such as narcotics trafficking and money laundering with the use of cryptocurrency. By 2010, with the launch of Bitcoin and with hacktivists involved in the Arab Spring movements, sites offering almost any type of illicit service imaginable experienced an explosion.

Criminals prefer using the darknet coupled with cryptocurrency tumblers or mixing services, which are transmitted person-to-person with no oversight by governments or central banks, to obscure the trail back to the fund’s original source while paying for illicit goods and services.

Reportedly, Hydra, the largest darknet market, has been planning to expand into the English part of the darknet by launching Eternos, a new darknet called AspaNET that will be an alternative to TOR.

In a DEA announcement, “the Department of Justice, through the Joint Criminal Opioid and Darknet Enforcement team, joined Europol to announce the results of Operation DisrupTor, a coordinated international effort to disrupt opioid trafficking on the Darknet.” Law enforcement officials arrested 179 people and seized more than $6.5 million in cash and digital currency, and 500 kilograms of drugs in a worldwide crackdown on opioid trafficking on the darknet.

The FBI’s Wray noted that “with the spike in opioid-related overdose deaths during the COVID-19 pandemic, we recognize that today’s announcement is important and timely.” He added:

“The FBI wants to assure the American public, and the world, that we are committed to identifying Darknet drug dealers and bringing them to justice. But our work does not end with today’s announcement. The FBI, through JCODE and our partnership with Europol, continues to be actively engaged in a combined effort to disrupt the borderless, worldwide trade of illicit drugs. The FBI will continue to use all investigative techniques and tools to identify and prosecute Darknet opioid dealers, wherever they may be located.”

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Selva Ozelli, Esq., CPA is an international tax attorney and certified public accountant who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.

Source: www.bit-cointalk.com


Bitcoin, Ether Slump; Banks Can Now Back Stablecoins

Bitcoin, Ether Slump; Banks Can Now Back Stablecoins

Get Forbes’ top crypto and blockchain stories delivered to your inbox every week for the latest news on bitcoin, other major cryptocurrencies and enterprise blockchain adoption.

(Photo by studioEAST/Getty Images)

Bitcoin slumped with the stock market Monday, falling more than 5%, after miners began selling at a higher rate on Sunday. Ether cooled off as well, and the average DeFi token has slumped 30% to 40% in recent weeks.

Bitcoin showed more strength later in the week with 4% gains Thursday. Guy Hirsch, an executive at crypto trading firm eToro, expects uncertainty about the upcoming U.S. election and heightened political tensions to be a boon for bitcoin.

Source: Messari. Prices as of 4:00 p.m. on September 25, 2020.

The Office of the Comptroller of the Currency issued another letter opening the door for more banks to be accommodating to the crypto industry. It’s now allowing U.S. financial institutions to hold deposits as reserves for stablecoins pegged to the U.S. dollar. Under acting comptroller Brian Brooks, a former Coinbase executive, the OCC first expressed more lenience to crypto with a letter permitting cryptocurrency custodial services in July.

Two Visa executives made it clear in an exclusive interview that digital assets and blockchain technology will be important parts of the credit giant’s future. Head of fintech Terry Angelos and head of crypto Cuy Sheffield covered Visa’s partnership with Coinbase, its withdrawal from Facebook’s Libra Association, its recent blog post about its approach to digital currency and much more.

The proliferation of DeFi assets has created new opportunities as well as new problems on the Ethereum blockchain. In order to initiate any activity on the blockchain, users need to pay a fee for the unit of activity, called gas, and those fees have risen by a factor of more than 20 this year as activity has surged. The inflation is disrupting preexisting business that aren’t DeFi models and has priced out experimentation, critics say.

But DeFi appears to be here to stay, and crypto exchange OKCoin listed three more tokens this week, part of its announcement earlier this month that it would explore listing up to 18 new assets. Bitcoin is even starting to get into the craze, with some investors converting it to tokenized bitcoin to access DeFi markets.

Both the Fed and the European Central Bank are now racing to try to generate more inflation and revitalize consumer spending amid the current economic downturn, a dynamic that could lend long-term support to cryptocurrencies. Even for risk-averse institutions trying to hedge their portfolios, a 1% allocation could have a significant impact.

The emerging sovereign debt crisis is also beginning to accelerate, with more than 100 countries owing $130 billion in debt interest this year. Covid-19 has pushed economies to the brink across the globe, offering a potential new reason for more widespread cryptocurrency adoptions.

The EU announces its first ever plan to regulate cryptocurrencies [CNBC]

Winklevoss Twins’ Crypto Exchange Is Expanding Into the U.K. [Bloomberg]

The Currency Cold War: Four Scenarios [CoinDesk]

Source: forbes.com

Author: Crypto Confidential


Most crypto exchanges are vulnerable by design, says ByBit CEO


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