The $1 Trillion Wallet: BitGo’s Big Plan to Secure the Biggest Bitcoin Fortunes

The $1 Trillion Wallet: BitGo’s Big Plan to Secure the Biggest Bitcoin Fortunes

The stakes must have seemed high already in 2013, when the largest bitcoin wallets safeguarded by blockchain security provider BitGo held about $10 million-worth of the cryptocurrency. Later on, in 2015 they crept up to around $100 million. And what had perhaps been unthinkable in the years previous, by 2017 the largest crypto wallets in BitGo’s charge reached close to $1 billion. Looking ahead to the next milestone, BitGo CEO Mike Belshe will give a talk next month at Stanford University entitled “Securing the Trillion Dollar Wallet.” In a world of tokenized everything – not to mention hedge funds and other institutions redefining the meaning of a whale crypto investor – this no longer seems far-fetched. “Now we are really thinking, what’s it going to take to secure a trillion dollars?” Belshe told CoinDesk. “It may be a little far away, but we have to start thinking about it now; we have to start designing it now in order to get there.” Designing a system like this involves a complex blend of hardware and software, policies and procedures, not to mention meeting externally audited regulatory requirements (BitGo recently received approval in the U.S.to act as a qualified custodian for digital assets on behalf of institutional investors). However, as one security consultant told Belshe’s team, building a secure vault for such a large sum of money basically comes down to two things: kids and fingers. It’s one thing to keep the cryptographic private key controlling a bitcoin wallet in cold storage, i.e. on a piece of paper or a hardware device disconnected from the internet and locked in a safe. But if a bad guy comes into your office and is ready to cut off your finger or put a gun to your child’s head, what are you going to do? Obviously, quick and ready access to those assets means the security will be cracked. The trick is to marry technology with process and controls such that it’s difficult to get the money out – or at least so that moving the vast majority of the assets involves lots of independent, separate people whose key signatures are all required, said Belshe. He added: “Some of the technology guys out there are saying, ‘hey we can get you out of cold…

‘Tedious But Necessary’: Why This Decentralized Exchange Wants a License

‘Tedious But Necessary’: Why This Decentralized Exchange Wants a License

Everbloom, one of numerous so-called decentralized exchanges (DEXs) for cryptocurrencies that have cropped up lately, is seeking to become a licensed broker-dealer in a bid to attract institutional investors. Revealed exclusively to CoinDesk, the startup recently registered with the U.S. Securities and Exchange Commission and submitted an application for a license from the Financial Industry Regulatory Authority (FINRA), the self-regulatory organization (SRO) for securities dealers. If approved, Everbloom would be allowed to profit from services related to trading securities. That’s a must in the company’s view, given the uncertain regulatory environment for tokens issued through initial coin offerings (ICOs), and more specifically the possibility that many of the ERC-20 standard ethereum tokens traded on Everbloom could be deemed securities under U.S. law. “Obtaining a broker-dealer license is a long, tedious and expensive endeavor but we believe a necessary one that will ultimately add long-term value to the company and position ourselves well against our competitors,” said Everbloom chief operating officer Scott Pirrello. Stepping back, most DEXs today are “decentralized” in the sense that they let traders retain custody of their assets and utilize open source platforms that don’t necessarily require know-your-customer (KYC) identity checks. Rival startups like 0x generally outsource such operational responsibilities to entities called relayers and focus on maintaining the underlying protocols. Everbloom takes the opposite approach, aggregating order books from DEX protocol EtherDelta and soon 0x too. It’s essentially a central hub for self-custodied swaps on decentralized exchanges. This may sound ironic if not oxymoronic to some, like punk-pop music or vegan bacon. But, unlike traditional crypto exchanges, Everbloom doesn’t deal with custody or approve trades. It offers what Pirello called a “service-oriented approach” to self-custody by building compliant reporting and analytics features, plus accounting software, into its platform. While the DEX concept was originated by hardcore crypto users who despaired of trusting third parties with their funds, it’s starting to draw interest from the institutional crowd. These button-down investors may not want to handle custody themselves (and larger ones are required to use a qualified custodian anyway), but they don’t want to rely on some shadowy crypto exchange to do it either. Everbloom CEO Andrew Rollins put it a bit more diplomatically: “The appeal of the decentralized or non-custodial exchange approach is…

The Daily: Coinbase Launches Bundles, Coinswitch Supports Trading Without Account

The Daily: Coinbase Launches Bundles, Coinswitch Supports Trading Without Account

The Daily Crypto exchange Coinbase will present its clients with the option to buy bundles of multiple cryptocurrencies and access useful information about leading digital coins. Also in The Daily on Friday, users of exchange aggregator Coinswitch can now take advantage of the best rates across multiple platforms without the need to create an account, Neo launches bug bounty program, and Bitmain sells Decred miner.   Also read: Around the World on 1 BTC and the Plausibly Deniable Brainwallet Coinbase Offers Info on Leading Cryptos, Launches Coinbase Bundle This week, US-based crypto trading platform Coinbase, known for its conservative approach to adding new coins, shared plans to increase the number of its offerings, as news.Bitcoin.com reported. Now the company has announced it’s launching Coinbase Bundle, a basket of cryptocurrencies investors will be able to acquire for as little as $25. Customers will have the opportunity to buy, sell and transfer the cryptos that will be stored in individual wallets. The Bundle, designed to provide fast and easy exposure to the crypto market, will be available to verified Coinbase users in the United States and Europe within a few weeks. The San Francisco-headquartered exchange has also recently announced it will offer its customers detailed information about the 50 leading cryptocurrencies by market capitalization. The service will feature descriptions of the coins, links to their white papers and project websites, historical trading data, and the current marketcap, The Verge reported. The platform will also provide a comprehensive introduction to digital assets in its educational section known as Coinbase Learn, after admitting that “What is cryptocurrency?” is still the most common question asked by potential clients. Coinswitch Users Trade on Multiple Exchanges Without Accounts A new aggregation tool offers investors the opportunity to trade cryptocurrencies on a number of leading platforms including Changelly, Idex, Hitbtc and Kucoin, and they don’t even need to create an account. With Coinswitch, traders are able to find the best exchange rates, which is an automated process, before they commit to a crypto-to-crypto transaction. The service is non-custodial and holders of the digital assets will only have to provide the addresses of the respective wallets to start trading their coins. The interface also allows users to create a customized crypto exchange by adding…

From California to Colorado: How the US Regulates Political Donations in Crypto

From California to Colorado: How the US Regulates Political Donations in Crypto

On Sept. 20, the crypto community was rattled by the news that California’s political campaign regulator ruled in favor of an outright ban of any and all cryptocurrency donations. It came across as a surprise for many that the progressive state, which is home to the world’s largest technology hub as well as to a politician whom Bloomberg calls the ‘Crypto Candidate for Congress,’ has suddenly set such a hard-handed regulatory precedent in the run-up to November’s elections. If anything, the signals that emanated from the state’s Fair Political Practices Commission (FPPC) up to this point were largely positive: Just about a month ago, the commission considered the status of cryptocurrencies in state-level political campaigns. Although no definitive decision was reached at that time, commissioners were vocal about their reluctance to ban cryptocurrency from elections outright and expressed their willingness to do further research. How come the end result wound up so fiercely anti-crypto? Preserving fair political practices The Fair Political Practices Commission (FPPC) is a regulatory body tasked with ensuring the integrity and fairness of state-level elections of public officials in the state of California. Its main responsibility is to administer and enforce the 1974 law called the Political Reform Act — a major piece of anti-corruption legislation enacted in the wake of the Watergate scandal. The ambition of its sponsors has been to eradicate corrupt practices in state government by limiting the amount of money spent in elections and eliminating contributions from anonymous donors. The Act endows the FPPC with the power to institute, interpret and amend particular regulations that will advance fundamental principles of this law. The FPPC is a five-person, non-partisan commission, meaning that no more than three members can represent one of the political parties. Its current chairperson is Alice Germond, who is a Democrat; so are Commissioners Frank Cardenas and Brian Hatch. One of the remaining seats is currently vacant, which leaves the fourth Commissioner, Allison Hayward, the only Republican on board. Thanks to the transparency of the FPPC’s records, the process leading to issuance of the commission’s opinions is usually traceable in granular detail. A closer look into the steps and decisions that the FPPC members had to take is insightful in its own right — but it…

‘Active Scam’: MetaMask Adds Optional Block of Top Ethereum Decentralized App

‘Active Scam’: MetaMask Adds Optional Block of Top Ethereum Decentralized App

Cryptocurrency wallet and Ethereum decentralized app (DApp) extension MetaMask has blocked the most popular DApp for Ethereum, 333ETH. The Next Web reported on the block Friday, September 28. 333ETH promises “lifelong” payouts of Ether (ETH) to investors’ wallets via smart contracts upon an initial down payment. The latest in a series of popular Ethereum DApps to attract scam accusations, it is currently ranked the most popular on monitoring site DAppRadar. In comments on Twitter, MetaMask said it had opted to create the block, which it added it would make optional, due to the 333ETH DApp being an “active scam.” MetaMask claimed it was acting in users’ best interests. “This site was never the most used Dapp, and it was actively phishing people,” the extension’s official Twitter account wrote Thursday. “We will be adding the ability to skip our block page, we don’t mean to tell people what they can visit, but this site is an active scam.” Some of the most used Ethereum DApps this year have been products including Fomo3D and PoWH 3D, both of which openly admitted they were not financially sound investment opportunities. Fomo3D, for example, describes itself as an “ironic jab at the cryptocurrency ICO space, putting every player in the terrifying and tempting position to Exit Scam everything and run away with massive life-changing amounts of real Ethereum.” According to DappRadar, 333ETH currently holds over 7000 ETH ($1.58 million) in its smart contract.

‘Extremely Difficult’ Conditions: India’s Zebpay Shutters Crypto Exchange Over Central Bank Ban

‘Extremely Difficult’ Conditions: India’s Zebpay Shutters Crypto Exchange Over Central Bank Ban

Major Indian cryptocurrency exchange Zebpay announced it had stopped all trading due to the country’s banking ban. The official announcement was published Thursday, September 27. Citing “extremely difficult” conditions it encountered attempting to process customer orders in the current environment, the exchange gave just several hours’ notice of the decision, which as of press time is already in effect. The move caught many by surprise, coming almost three months after the July 6 deadline for banks to comply with the Reserve Bank of India’s (RBI) ban on offering services to cryptocurrency businesses. “…We continued to look for solutions as we did not want India to miss the bus of digital assets that power the public blockchain. However, the recent past has been extremely difficult,” the post reads. “The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.” India’s Supreme Court continues to grapple with the final appeals against the RBI ban, ahead of a final judgement on its legality which has seen multiple delays, Cointelegraph reported this week. Zebpay had halted fiat operations around the deadline in July, executives hoping that a change in conditions would allow a new banking partner to take over the necessary services.

ASX-Listed DigitalX Hit With Legal Action Over ICO Involvement

ASX-Listed DigitalX Hit With Legal Action Over ICO Involvement

Shares in the publicly listed blockchain tech and consultancy firm DigitalX have slumped after it revealed it is facing a legal claim in an Australian court In an announcement to the Australian Securities Exchange (ASX) Friday, the firm says it has been served with an Originating Application and Statement of Claim in the Australia’s Federal Court, which has been brought by a group of investors in an initial coin offering (ICO) to which it was an advisor. The parties are claiming roughly US$1,833,077 plus damages, the company indicates. DigitalX says it is currently reviewing the claim with its legal team, but it “denies any claim of wrongdoing and, for reasons that will become apparent as this matter progresses, believes that it has strong grounds to defend any claims bought forward by these applicants.” DigitalX states: “As such, the Company intends to vigorously defend this matter and protect the reputation of the Company.” As the news broke, shares in the Perth, Australia, and New York-based firm had dropped from a high of AUS$0.092 to AUS$0.08, at press time. The company, which provides ICO and blockchain consulting services and blockchain software development, originally started off as a bitcoin mining business called DigitalBTC and was the first ever publicly listed bitcoin companies, launching for trading on the ASX back in 2015. It abandoned mining the same year, amid a price slump at the time, and rebranded as DigitalX a month later as it shifted focus to consumer products including a payments app. Today’s news is not the first time the company has faced legal trouble and, in July 2016, its co-founder, Zhenya Tsvetnenko, resigned after he was indicted by the U.S. government for his alleged involvement in a fraudulent text messaging scheme. ASX image via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Bitcoin Breakout Elusive As Price Retreats from One-Week Highs

Bitcoin Breakout Elusive As Price Retreats from One-Week Highs

Bitcoin missed a bull breakout by a whisker, as prices backed off from a six-day high of $6,826 hit earlier today. BTC’s persistent defense of $6,000 over the last three months has convinced many, including billionaire investor Novogratz, that the leading cryptocurrency has bottomed out around the February low. While that argument sounds logical, a bullish breakout would be confirmed only after the cryptocurrency has found acceptance above the top edge of the three-month-long narrowing price range. However, crossing that key price hurdle is proving a tough task for the bulls. For instance, BTC was solidly bid in early European hours, but the bullish momentum ran out of steam as prices neared the upper end of the narrowing price range, currently located at $6,870. As a result, a definitive breakout remains elusive. At press time, BTC is changing hands at $6,645 on Bitfinex, representing a 2.5 percent gain on a 24-hour basis. Weekly chart On the weekly chart, the area around $6,000 (February low) has repeatedly capped the downside in BTC, which indicates the sellers have likely run dry, having pushed the cryptocurrency down by 70 percent from its record high of $20,000 hit in December. Daily chart As seen in the above chart, BTC has charted a large narrowing price range, known as pennant pattern, over the last three months.  A UTC close above the pennant hurdle of $6,870 would signal a bearish-to-bullish trend change. More importantly, the ensuing bullish move could be a rapid one as a prolonged period of range-bound trading is often followed by a big spike in volatility, according to technical theory. Indeed, the stacking order of the 50-day moving average (MA), below the 100-day MA, below the 200-day MA, is indicating that the path of least resistance is to the downside. However, price action always takes precedence over lagging indicators like MAs. View A pennant breakout, if confirmed, would validate the argument that cryptocurrency has carved out a long-term bottom around $6,000 and would open up upside toward May highs above $8,500. The outlook remains neutral while BTC is trapped inside the narrowing price range. A downside break of the pennant pattern will likely embolden the bears and allow re-test of the June low of $5,755. Disclosure: The author holds no cryptocurrency assets at…

India’s Zebpay Shuts Down Exchange Activities

India’s Zebpay Shuts Down Exchange Activities

Exchanges One of the largest cryptocurrency exchanges in India, Zebpay, is shutting down its exchange activities due to the crypto banking ban imposed by the country’s central bank. “At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business,” Zebpay wrote. Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals Zebpay Stops Exchange Activities Zebpay announced on Friday the shutdown of its popular crypto exchange, which according to its website has over three million users. “Despite regulatory and banking problems along our journey, we continued to look for solutions as we did not want India to miss the bus of digital assets that power the public blockchain,” the exchange wrote. However, Zebpay admitted: The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business. As a result, we are stopping our exchange activities. The exchange is canceling all unexecuted crypto-to-crypto orders on Sept. 28 at 4pm (Indian time). Customers’ cryptocurrencies will be credited to their Zebpay wallets. “No new orders will be accepted until further notice,” the exchange clarified but noted: Zebpay wallet will continue to work even after the exchange stops. You are free to deposit and withdraw coins / tokens into your wallet. Effects of RBI Crypto Banking Ban The Reserve Bank of India (RBI) issued a circular on April 6 banning banks and financial institutions under its control from providing services to crypto businesses. The ban went into effect in July. Shortly after the RBI issued its circular, Zebpay launched its crypto-to-crypto trading platform. In August, the exchange added trueusd trading. However, the banking problem has been hurting Zebpay’s business. On Sept. 4, the exchange announced that it will return all users’ Indian rupees on deposit at the exchange. “We have been distressed at the raw deal crypto-traders are getting in India as a result of the banking problems,” the exchange described. According to Unocoin, another major Indian exchange, “India’s biggest crypto population is not ready for the crypto-to-crypto trading,” CEO Sathvik Vishwanath told news.Bitcoin.com in September. Meanwhile, a number of smaller exchanges have launched exchange-escrowed peer-to-peer (P2P) trading which they claim…

Bad Cryptocurrency Projects Have Squandered Millions of Dollars

Bad Cryptocurrency Projects Have Squandered Millions of Dollars

Altcoins Cryptocurrency scams take many forms. But one thing they all share is the goal of enriching their founders at the expense of investors. If a crypto project is “investing” a large portion of its capital into lavish parties, PR stunts and marketing, there’s a strong chance that it’s a scam. Also read: Debit Card Issuer Bitnovo Announces Bitcoin Cash Support The Bigger the Party, the Greater the Comedown It was late October, 2017, and bitcoin was eyeing $6,000 territory as it geared up for a two-month bull run, the likes of which had never been seen before and has never been seen since. Money was flooding into the crypto markets, and while most people were happy to claim a piece of the pie by acquiring rapidly rising assets like BCT, ETH, and the newly birthed BCH, for some investors this wasn’t enough. They’d heard about the guaranteed daily interest that could be earned from a coin called Bitconnect and they wanted in. The gigantic scam that Bitconnect perpetrated has been detailed and memed to death, but there is one element of the case that has largely escaped scrutiny until now: the amount that senior Bitconnect figures were spending to lure new victims into their web. In late October of 2017, Bitconnect was a top 10 cryptocurrency, ranked eighth by market cap, with each token trading for around $213. Newly released chat logs show the amount of money that was sloshing around in Bitconnect’s dev fund, used to pay for Youtubers to shill the project as well as to host parties and shower major earners in the project’s pyramid referral scheme with gifts. $1 Million a Day Twitter account @bccponzi, which has doggedly detailed the Bitconnect scam for over a year, has analyzed some of the leaked Skype chats from senior figures Glenn Arcaro, Trevon James and Craig Grant. In October, the trio began spending $1,000 a day on Google and Facebook ads, and by November Craig Grant alone was spending $3,000 a day on ads. “I don’t track anything,” he confessed. “Just spend money, make more money.” By that point, Trevon James was bringing in over $1 million of new business a day, and their ad campaigns had helped Bitconnect to raise over $10 million…