AuthorTopic: P O O F ! Goes The Crypto  (Read 18474 times)

Offline azozeo

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P O O F ! Goes The Crypto
« on: November 18, 2017, 02:13:36 PM »
https://www.armstrongeconomics.com/world-news/cryptocurrency/ethereum-cryptocurrency-almost-400-million-vanishes/

Thanks to a string of screw-ups and bugs, an unsuspecting developer recently took possession of an estimated $US390 million worth of the Ethereum cryptocurrency by accident. In an attempt to give back the money, however, the guy ended up locking up the funds permanently. Essentially, the money has just evaporated.

It turns out that hackers started the trouble getting into the cryptocurrency wallet service stealing about $42 million. To then patch the vulnerability to their block-chain technology, they introduced a bug that affected multi-signature wallets. These are wallets which require several people to enter keys before funds get transferred. This was intended to be top security for Ether which is the second largest cryptocurrency. Somehow, a guy called “devops199” triggered the bug and took control of all multi-sig wallets unintendedly. Then devops199 attempted to reverse the process to give back the money which then triggered the bug. The result was the destruction all of the funds. The bug caused a chain reaction of events that locked all multi-signature wallets that cannot now be unlocked.
Welcome to the world of Cryptocurrency.

BTW: Blockchain can be hacked, in case you did not know.
« Last Edit: January 11, 2018, 02:36:25 AM by RE »
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Offline moniker

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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #1 on: November 20, 2017, 07:06:59 AM »
https://www.armstrongeconomics.com/world-news/cryptocurrency/ethereum-cryptocurrency-almost-400-million-vanishes/

Thanks to a string of screw-ups and bugs, an unsuspecting developer recently took possession of an estimated $US390 million worth of the Ethereum cryptocurrency by accident. In an attempt to give back the money, however, the guy ended up locking up the funds permanently. Essentially, the money has just evaporated.

It turns out that hackers started the trouble getting into the cryptocurrency wallet service stealing about $42 million. To then patch the vulnerability to their block-chain technology, they introduced a bug that affected multi-signature wallets. These are wallets which require several people to enter keys before funds get transferred. This was intended to be top security for Ether which is the second largest cryptocurrency. Somehow, a guy called “devops199” triggered the bug and took control of all multi-sig wallets unintendedly. Then devops199 attempted to reverse the process to give back the money which then triggered the bug. The result was the destruction all of the funds. The bug caused a chain reaction of events that locked all multi-signature wallets that cannot now be unlocked.
Welcome to the world of Cryptocurrency.

BTW: Blockchain can be hacked, in case you did not know.

At this point why would anyone buy any cryptocurrency at all. Then answer is the central bankers/cabal are behind it.
« Last Edit: November 20, 2017, 07:10:01 AM by moniker »

Offline Eddie

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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #2 on: November 20, 2017, 08:33:37 PM »
I think it was Knarf who posted some article that showed that the vast majority of bitcoin holdings were fairly meager amounts monetarily, while the number of large dollar crypto accounts was vanishingly small. That explains a lot.

It's millions of Chinese trying desperately to offshore whatever modest savings they possess, in any way possible. that's what's driving crypto.
What makes the desert beautiful is that somewhere it hides a well.

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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #3 on: November 21, 2017, 12:16:58 AM »
I think it was Knarf who posted some article that showed that the vast majority of bitcoin holdings were fairly meager amounts monetarily, while the number of large dollar crypto accounts was vanishingly small. That explains a lot.

It's millions of Chinese trying desperately to offshore whatever modest savings they possess, in any way possible. that's what's driving crypto.
Joseph Farrell has a recent post that the cabal is behind it. I would have to agree if coverage on main and alternative media is analyzed. Looks like a sophisticated psyop Also Lynette zhang gets it right when she says it’s a prelude to the nwo monetary system.

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After bitcoin’s wild week, traders brace for futures launch
« Reply #4 on: December 10, 2017, 02:15:41 AM »
https://www.reuters.com/article/us-bitcoin-futures/after-bitcoins-wild-week-traders-brace-for-futures-launch-idUSKBN1E404D

After bitcoin’s wild week, traders brace for futures launch
Saqib Iqbal Ahmed


5 Min Read

NEW YORK (Reuters) - The newest way to bet on bitcoin, the cyptocurrency that has taken Wall Street by storm with its stratospheric price rise and wild daily gyrations, will arrive on Sunday when bitcoin futures start trading.
Virtual currency Bitcoin tokens are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration

The first bitcoin future <0#XBT:> trades are set to kick off at 6 p.m. EST (2300 GMT) on Cboe Global Markets Inc’s (CBOE.O) Cboe Futures Exchange.

The launch has given an extra kick to the cyptocurrency’s scorching run this year. It has nearly doubled in price since the start of December, but recent days saw sharp moves in both directions, with bitcoin losing almost a fifth of its value on Friday after surging more than 40 percent in the previous 48 hours.

Sponsored

But while some market participants are excited about a regulated way to bet on or hedge against moves in bitcoin, others caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

“The pretty sharp rise we have seen in bitcoin in just the last couple of weeks has probably been driven by optimism ahead of the futures launch,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.

The futures are an alternative to a largely unregulated spot market underpinned by cryptocurrency exchanges that have been plagued by cybersecurity and fraud issues.

“You are going to open up the market to a whole lot of people who aren’t currently in bitcoin,” Frederick said.

The futures launch has so far received a mixed reception from big U.S. banks and brokerages.

Interactive Brokers plans to offer its customers access to the first bitcoin futures when trading goes live, but bars clients from assuming short positions and has margin requirements of at least 50 percent.

Several online brokerages including Charles Schwab and TD Ameritrade will not allow the trading of the newly launched futures from day one.

Some of the big U.S. banks including JPMorgan Chase (JPM.N) and Citigroup (C.N), will not immediately clear bitcoin trades for clients, the Financial Times reported on Friday.
Slideshow (4 Images)

Goldman Sachs Group Inc (GS.N) on Thursday said it is planning to clear bitcoin futures for certain clients.
VOLATILITY DAMPENER

Bitcoin’s manic run-up this year has boosted volatility far in excess of other asset classes. The launch of futures may help dampen some of the sharp moves, analysts said.

“Hypothetically, volatility over the long run should drop after institutions get involved,” said Ophir Gottlieb, chief executive of Los Angeles-based Capital Market Laboratories.

“But there may not be an immediate impact, say in the first month,” he said.
Cboe Global Markets Inc125.27
CBOE.ONasdaq
+1.08(+0.87%)
CBOE.O

    CBOE.OJPM.NC.NGS.N

The launch futures on an underlying spot market can lend more order to spot trading in the long run, by facilitating better price discovery and directional bets, not just long bets, J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago, said.

Analysts, however, warn that much of how the futures market will react is a mystery, given that bitcoin is unlike any other asset.

“This is completely unknown territory,” said Charles Schwab’s Frederick.

Fears of inaccurate pricing and systemic risk to clearing houses should prices move sharply and clients fail to meet margin calls remain. Brokers have said that more safeguards are needed to protect against bitcoin’s high volatility.
Related Coverage

    Factbox: Cboe, CME to launch bitcoin futures contracts

For a factbox on the launch of bitcoin futures contracts, see:

The risk of market participants manipulating the underlying spot market to their benefit in the futures market is another big concern.

“Large equity indexes show some volatility around cash settlements and those are in highly liquid, highly regulated venues,” said Steve Sosnick, chief options strategist at Interactive Brokers Group Inc in Greenwich, Connecticut.

“Compare that to cash settlement in bitcoin, and there is a lot more uncertainty on how that would play out.”

(For a graphic on Bitcoin's blistering ascent, click here)

Reporting by Saqib Iqbal Ahmed; Additional reporting by Chuck Mikolajczak; Editing by Meredith Mazzilli
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Offline moniker

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Re: After bitcoin’s wild week, traders brace for futures launch
« Reply #5 on: December 10, 2017, 02:12:56 PM »
https://www.reuters.com/article/us-bitcoin-futures/after-bitcoins-wild-week-traders-brace-for-futures-launch-idUSKBN1E404D

After bitcoin’s wild week, traders brace for futures launch
Saqib Iqbal Ahmed


5 Min Read

NEW YORK (Reuters) - The newest way to bet on bitcoin, the cyptocurrency that has taken Wall Street by storm with its stratospheric price rise and wild daily gyrations, will arrive on Sunday when bitcoin futures start trading.
Virtual currency Bitcoin tokens are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration

The first bitcoin future <0#XBT:> trades are set to kick off at 6 p.m. EST (2300 GMT) on Cboe Global Markets Inc’s (CBOE.O) Cboe Futures Exchange.

The launch has given an extra kick to the cyptocurrency’s scorching run this year. It has nearly doubled in price since the start of December, but recent days saw sharp moves in both directions, with bitcoin losing almost a fifth of its value on Friday after surging more than 40 percent in the previous 48 hours.

Sponsored

But while some market participants are excited about a regulated way to bet on or hedge against moves in bitcoin, others caution that risks remain for investors and possibly even the clearing organizations underpinning the trades.

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

“The pretty sharp rise we have seen in bitcoin in just the last couple of weeks has probably been driven by optimism ahead of the futures launch,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

Bitcoin fans appear excited about the prospect of an exchange-listed and regulated product and the ability to bet on its price swings without having to sign up for a digital wallet.

The futures are an alternative to a largely unregulated spot market underpinned by cryptocurrency exchanges that have been plagued by cybersecurity and fraud issues.

“You are going to open up the market to a whole lot of people who aren’t currently in bitcoin,” Frederick said.

The futures launch has so far received a mixed reception from big U.S. banks and brokerages.

Interactive Brokers plans to offer its customers access to the first bitcoin futures when trading goes live, but bars clients from assuming short positions and has margin requirements of at least 50 percent.

Several online brokerages including Charles Schwab and TD Ameritrade will not allow the trading of the newly launched futures from day one.

Some of the big U.S. banks including JPMorgan Chase (JPM.N) and Citigroup (C.N), will not immediately clear bitcoin trades for clients, the Financial Times reported on Friday.
Slideshow (4 Images)

Goldman Sachs Group Inc (GS.N) on Thursday said it is planning to clear bitcoin futures for certain clients.
VOLATILITY DAMPENER

Bitcoin’s manic run-up this year has boosted volatility far in excess of other asset classes. The launch of futures may help dampen some of the sharp moves, analysts said.

“Hypothetically, volatility over the long run should drop after institutions get involved,” said Ophir Gottlieb, chief executive of Los Angeles-based Capital Market Laboratories.

“But there may not be an immediate impact, say in the first month,” he said.
Cboe Global Markets Inc125.27
CBOE.ONasdaq
+1.08(+0.87%)
CBOE.O

    CBOE.OJPM.NC.NGS.N

The launch futures on an underlying spot market can lend more order to spot trading in the long run, by facilitating better price discovery and directional bets, not just long bets, J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago, said.

Analysts, however, warn that much of how the futures market will react is a mystery, given that bitcoin is unlike any other asset.

“This is completely unknown territory,” said Charles Schwab’s Frederick.

Fears of inaccurate pricing and systemic risk to clearing houses should prices move sharply and clients fail to meet margin calls remain. Brokers have said that more safeguards are needed to protect against bitcoin’s high volatility.
Related Coverage

    Factbox: Cboe, CME to launch bitcoin futures contracts

For a factbox on the launch of bitcoin futures contracts, see:

The risk of market participants manipulating the underlying spot market to their benefit in the futures market is another big concern.

“Large equity indexes show some volatility around cash settlements and those are in highly liquid, highly regulated venues,” said Steve Sosnick, chief options strategist at Interactive Brokers Group Inc in Greenwich, Connecticut.

“Compare that to cash settlement in bitcoin, and there is a lot more uncertainty on how that would play out.”

(For a graphic on Bitcoin's blistering ascent, click here)

Reporting by Saqib Iqbal Ahmed; Additional reporting by Chuck Mikolajczak; Editing by Meredith Mazzilli
Futures price is above spot.

Offline RE

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Bitcoins, Crypto-Currencies and Other Financial Asset Bubbles
« Reply #6 on: December 11, 2017, 12:56:42 AM »
https://jackrasmus.com/2017/12/09/bitcoins-crypto-currencies-and-other-financial-asset-bubbles-excerpt/

Jack Rasmus
Predicting the Global Economic Crisis

« Bitcoin, Cryptos, and Financial Asset Bubbles–audio
Bitcoins, Crypto-Currencies and Other Financial Asset Bubbles (excerpt)


December 9, 2017 by jackrasmus

The following is an excerpt from my forthcoming article by the same title in the december-january issue of the European Financial Review. Many of the themes covered in my last friday’s Alternative Visions radio show on the topic of the Bitcoin-Crypto bubble are addressed in the article in print form.

The US and global economy are approached the latter stages in the credit cycle, during which financial asset bubbles begin to appear and the real economy appears to be at peak performance (the calm before the storm). This scenario was explained in my 2016 book, ‘Systemic Fragility in the Global Economy‘. In coming weeks I will be posting in serial form the concluding chapter of that book for readers on this blog, entitled ‘A Theory of Systemic Global Fragility‘.

Here’s the excerpt from the forthcoming European Financial Review article; (a book review of my most recent book, ‘Central Bankers at the End of Their Ropes?’ by Dr. Larry Souza will also appear in that coming EFR issue).

………………………..
Is Bitcoin a Bona Fide ‘Bubble’?
……………………………
“What’s a financial asset bubble? Few agree. But few would argue that Bitcoins and other crypto currencies are today clearly in a global financial asset bubble. Bitcoin and other crypto currencies are the speculative investing canary in the global financial asset coalmine.

One can debate what constitutes a financial bubble—i.e. how much prices must rise short term or how much above long term average rates of increase—but there’s no doubt that Bitcoin price appreciation in 2017 is a bubble by any definition. At less than $1000 per coin in January, Bitcoin prices surged past $11,000 this past November. It then corrected back to $9,000, only to surge again by early December to more than $15,000. Given the forces behind Bitcoin, that scenario is likely to continue into 2018 before the bubble bursts. The question of the moment, however, is what might be the contagion effects on other markets?”

……………………………..
What’s Driving the Bitcoin Bubble?
……………………………..
If Blockchain and software tech company ICOs are driving Bitcoin and other crypto pricing, what’s additionally creating the bubble?…..Who is buying Bitcoin and cryptos, driving up prices, apart from early investors in the companies? ……the absence of government regulation and potential taxation of speculative profits from price appreciation has served as another important driver of the Bitcoin bubble bringing in still more investors and demand and therefore price appreciation. No regulation, no taxation has also led to price manipulation by ‘pumping and dumping’ by well positioned investors….. Another factor driving price is that Bitcoin has become a substitute product for Gold and Gold futures……But what’s really driving Bitcoin pricing in recent months well into bubble territory is its emerging legitimation by traditional financial institutions………futures and derivatives trading on Bitcoin are set to begin in December 2017 in official commodity futures clearing houses, like CME and CBOE…..Bitcoin ETFs derivatives trading are likely not far behind……….big US hedge funds are also poised to go ‘all in’ once CME options and futures trading is established…… Declarations of support for Bitcoin has also come lately from some sovereign countries………While CEOs of big traditional commercial banks, like JPM Chase’s Jamie Dimon, have called Bitcoin “a fraud”, they simultaneously have declared plans to facilitate trading in the Bitcoin-Crypto market.

…………………………………………….
Bitcoin as ‘Digital Tulips’
…………………………………………….
Bitcoin demand and price appreciation may also be understood as the consequence of the historic levels of excess liquidity in financial markets today. Like technology forces, that liquidity is the second fundamental force behind its bubble. To explain the fundamental role of excess liquidity driving the bubble, one should understand Bitcoin as ‘digital tulips’, to employ a metaphor.

The Bitcoin bubble is not much different from the 17th century Dutch tulip bulb mania. Tulips had no intrinsic use value but did have a ‘store of value’ simply because Dutch society of financial speculators assigned and accepted it as having such. Once the price of tulips collapsed, however, it no longer had any form of value, save for horticultural enthusiasts.

What fundamentally drove the tulip bubble was the massive inflow of money capital to Holland that came from its colonial trade in spices and other commodities in Asia. The excess liquidity generated could not be fully re-invested in real projects in Holland. When that happens, holders of the excess liquidity create new financial markets in which to invest the liquidity—not unlike what’s happened in recent decades with the rise of unregulated global shadow banking, financial engineering of new securities, proliferating liquid markets in which securities are exchanged, and a new layer of professional financial elite as ‘agents’ behind the proliferating new markets for the new securities.

……………………………………………
Bitcoin Potential Contagion Effects to Other Markets
…………………………………………….
A subject of current debate is whether Bitcoin and other cryptos can destabilize other financial asset markets and therefore the banking system in turn, in effect provoking a 2008-09 like financial crisis………….Deniers of the prospect point to the fact that Cryptos constitute only about $400 billion in market capitalization today. That is dwarfed by the $55 Trillion equities and $94 trillion bond markets. The ‘tail’ cannot wag the dog, it is argued. But quantitative measures are irrelevant. What matters is investor psychology. ……For example, should cryptos develop their own ETFs, a collapse of crypto ETFs might very easily spill over to stock and bond ETFs—which are a source themselves of inherent instability today in the equities market. A related contagion effect may occur within the Clearing Houses themselves. If trading in Bitcoin and cryptos as a commodity becomes particularly large, and then the price collapses deeply and at a rapid rate, it might well raise issues of Clearing House liquidity available for non-crypto commodities trading. A bitcoin-crypto crash could thus have a contagion effect on other commodity prices; or on ETFs in general and thus stock and bond ETF prices.”

copyright Jack Rasmus, 2017
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Offline Eddie

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Re: Bitcoins, Crypto-Currencies and Other Financial Asset Bubbles
« Reply #7 on: December 11, 2017, 04:02:23 PM »
https://jackrasmus.com/2017/12/09/bitcoins-crypto-currencies-and-other-financial-asset-bubbles-excerpt/

Jack Rasmus
Predicting the Global Economic Crisis

« Bitcoin, Cryptos, and Financial Asset Bubbles–audio
Bitcoins, Crypto-Currencies and Other Financial Asset Bubbles (excerpt)


December 9, 2017 by jackrasmus

The following is an excerpt from my forthcoming article by the same title in the december-january issue of the European Financial Review. Many of the themes covered in my last friday’s Alternative Visions radio show on the topic of the Bitcoin-Crypto bubble are addressed in the article in print form.

The US and global economy are approached the latter stages in the credit cycle, during which financial asset bubbles begin to appear and the real economy appears to be at peak performance (the calm before the storm). This scenario was explained in my 2016 book, ‘Systemic Fragility in the Global Economy‘. In coming weeks I will be posting in serial form the concluding chapter of that book for readers on this blog, entitled ‘A Theory of Systemic Global Fragility‘.

Here’s the excerpt from the forthcoming European Financial Review article; (a book review of my most recent book, ‘Central Bankers at the End of Their Ropes?’ by Dr. Larry Souza will also appear in that coming EFR issue).

………………………..
Is Bitcoin a Bona Fide ‘Bubble’?
……………………………
“What’s a financial asset bubble? Few agree. But few would argue that Bitcoins and other crypto currencies are today clearly in a global financial asset bubble. Bitcoin and other crypto currencies are the speculative investing canary in the global financial asset coalmine.

One can debate what constitutes a financial bubble—i.e. how much prices must rise short term or how much above long term average rates of increase—but there’s no doubt that Bitcoin price appreciation in 2017 is a bubble by any definition. At less than $1000 per coin in January, Bitcoin prices surged past $11,000 this past November. It then corrected back to $9,000, only to surge again by early December to more than $15,000. Given the forces behind Bitcoin, that scenario is likely to continue into 2018 before the bubble bursts. The question of the moment, however, is what might be the contagion effects on other markets?”

……………………………..
What’s Driving the Bitcoin Bubble?
……………………………..
If Blockchain and software tech company ICOs are driving Bitcoin and other crypto pricing, what’s additionally creating the bubble?…..Who is buying Bitcoin and cryptos, driving up prices, apart from early investors in the companies? ……the absence of government regulation and potential taxation of speculative profits from price appreciation has served as another important driver of the Bitcoin bubble bringing in still more investors and demand and therefore price appreciation. No regulation, no taxation has also led to price manipulation by ‘pumping and dumping’ by well positioned investors….. Another factor driving price is that Bitcoin has become a substitute product for Gold and Gold futures……But what’s really driving Bitcoin pricing in recent months well into bubble territory is its emerging legitimation by traditional financial institutions………futures and derivatives trading on Bitcoin are set to begin in December 2017 in official commodity futures clearing houses, like CME and CBOE…..Bitcoin ETFs derivatives trading are likely not far behind……….big US hedge funds are also poised to go ‘all in’ once CME options and futures trading is established…… Declarations of support for Bitcoin has also come lately from some sovereign countries………While CEOs of big traditional commercial banks, like JPM Chase’s Jamie Dimon, have called Bitcoin “a fraud”, they simultaneously have declared plans to facilitate trading in the Bitcoin-Crypto market.

…………………………………………….
Bitcoin as ‘Digital Tulips’
…………………………………………….
Bitcoin demand and price appreciation may also be understood as the consequence of the historic levels of excess liquidity in financial markets today. Like technology forces, that liquidity is the second fundamental force behind its bubble. To explain the fundamental role of excess liquidity driving the bubble, one should understand Bitcoin as ‘digital tulips’, to employ a metaphor.

The Bitcoin bubble is not much different from the 17th century Dutch tulip bulb mania. Tulips had no intrinsic use value but did have a ‘store of value’ simply because Dutch society of financial speculators assigned and accepted it as having such. Once the price of tulips collapsed, however, it no longer had any form of value, save for horticultural enthusiasts.

What fundamentally drove the tulip bubble was the massive inflow of money capital to Holland that came from its colonial trade in spices and other commodities in Asia. The excess liquidity generated could not be fully re-invested in real projects in Holland. When that happens, holders of the excess liquidity create new financial markets in which to invest the liquidity—not unlike what’s happened in recent decades with the rise of unregulated global shadow banking, financial engineering of new securities, proliferating liquid markets in which securities are exchanged, and a new layer of professional financial elite as ‘agents’ behind the proliferating new markets for the new securities.

……………………………………………
Bitcoin Potential Contagion Effects to Other Markets
…………………………………………….
A subject of current debate is whether Bitcoin and other cryptos can destabilize other financial asset markets and therefore the banking system in turn, in effect provoking a 2008-09 like financial crisis………….Deniers of the prospect point to the fact that Cryptos constitute only about $400 billion in market capitalization today. That is dwarfed by the $55 Trillion equities and $94 trillion bond markets. The ‘tail’ cannot wag the dog, it is argued. But quantitative measures are irrelevant. What matters is investor psychology. ……For example, should cryptos develop their own ETFs, a collapse of crypto ETFs might very easily spill over to stock and bond ETFs—which are a source themselves of inherent instability today in the equities market. A related contagion effect may occur within the Clearing Houses themselves. If trading in Bitcoin and cryptos as a commodity becomes particularly large, and then the price collapses deeply and at a rapid rate, it might well raise issues of Clearing House liquidity available for non-crypto commodities trading. A bitcoin-crypto crash could thus have a contagion effect on other commodity prices; or on ETFs in general and thus stock and bond ETF prices.”

copyright Jack Rasmus, 2017


I don't think the tulip analogy works here, although any fool can see cryptos are in a bubble. I'd say the bubble is mostly being driven by fairly poor Chinese people hoping to get their money into any asset not completely controlled by their despotic regime. There are an infinitesimally small number of really big bitcoin accounts, and a whole lot more (95%) that only have a tiny position. The big players will no doubt head for the exits quietly at some point and leave the peons holding the proverbial bag.

You do have to distinguish between blockchain technology and actual cryptocurrecnies, which are not one and the same.

What makes the desert beautiful is that somewhere it hides a well.

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Bitcoin Futures: 3 Nightmare Scenarios
« Reply #8 on: December 12, 2017, 03:19:20 AM »
7 more pages at the link.

RE


https://seekingalpha.com/article/4131235-bitcoin-futures-3-nightmare-scenarios

Bitcoin Futures: 3 Nightmare Scenarios
Dec.12.17 | About: Bitcoin Investment (GBTC)
Kyle Spencer

Long/short equity, special situations, contrarian, research analyst
(1,315 followers)
Summary

The CBOE's launch of Bitcoin futures on Sunday was a watershed event for Crypto, but Wall Street (mostly) stayed away.

Investment banks continue to have very real concerns about the stability about the risks associated with crypto derivatives.

They'll eventually get with the program, but not until their concerns about manipulation, counterparty risk and contango are addressed.

No matter how you look at it, the CBOE's launch of Bitcoin (OTCQX:GBTC) (COIN) futures on Sunday night - one week ahead of its rival CME - was a watershed event. Not since Facebook's IPO back in May of 2012 have the eyes of so many non-financial professionals been glued to a trading screen. Within minutes of the 6 PM EST open, the lookie-loos crashed the CBOE website, prompting CBOE to rush out a Twitter advisory.

With the media frenzy and all the new attention from millennials who, until a few weeks ago, weren't even aware of the existence of the Chicago Board Options Exchange, one could be forgiven for thinking that Bitcoin futures had taken Wall St. by storm.

Trading opened on a quiet note, but quickly picked up steam as the night wore on. By 6:35 PM EST, just 341 lots had traded, with each lot representing one bitcoin. By 8:00 PM, 800 lots had traded. The session ended on a high note, with about 2,700 contracts trading hands. While certainly respectable (when VIX (VIXY) trading opened in 2004, its first day haul was a paltry 421 contracts), it was a drop in the ocean compared to Bitcoin's $14.58 billion unregulated 24-hour trading volume from Dec. 9th to 10th. By way of comparison, about the same amount of money traded hands for #56 rated Power Ledger over unregulated exchanges in the same time frame.

Why? Simple: The institutional money didn't show.

It may seem awkward at first blush that people whose very livelihood depends on the marketing and managing of risk should shy away from a frothy instrument that guarantees just that, but Wall Street's financial titans are taking no chances. Even Goldman Sachs (GS), the investment bank famously described as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" by Rolling Stone's Matt Taibbi in 2010 - limited its involvement to clearing trades for only a small, select group of clients. Per Goldman Sachs spokeswoman Tiffany Galvin:

    “Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process.”

In fact, Goldman's wait-and-see approach is positively enlightened compared to its fellow megabanks, who penned a scathing open letter under the umbrella of the Futures Industry Association to CFTC chairman Giancarlo, in which they wrote that -

    "while we greatly appreciate the CFTC’s efforts to receive additional assurances from these exchanges, we remain apprehensive with the lack of transparency and regulation of the underlying reference products on which these futures contracts are based and whether exchanges have the proper oversight to ensure the reference products are not susceptible to manipulation, fraud, and operational risk."

Translation: There is simply no compelling reason for Wall Street banks who are just now beginning to shrug off the shackles of Dodd Frank and seemingly endless fines and widespread social revulsion associated with the financial crash of '08, who spend mountains of money every year on AML/KYC compliance, to bear the brunt of the risk associated with making markets in cryptoassets in the middle of the second longest bull market in history. Why take the risk and get dragged through the mud for another decade in penance?...
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http://www.businessinsider.com/coinbase-halts-ether-and-litecoin-trading-2017-12

Coinbase halts ether and litecoin trading as cryptocurrency market approaches $500 billion

    Frank Chaparro


Screen Shot 2017 12 12 at 12.09.40 PM MI

    Coinbase, the popular cryptocurrency trading platform, blocked users Tuesday from buying red-hot litecoin and ether.
    Investors poured into the two red-hot digital currencies Tuesday morning, pushing them both to new heights.
    Litecoin hit a record of $312 on Tuesday, while ether soared over to more than $600 for the first time.
    The cryptocurrency market is gunning for $500 billion.

 

Cryptomania has propelled two lesser-known cryptocurrencies to record highs Tuesday, forcing one exchange to halt trading.

Screen Shot 2017 12 12 at 1.01.59 PM Coinbase

Coinbase on Tuesday halted trading of red-hot litecoin and ether, according to cryptocurrency watcher CoinDesk. The publication tweeted a photo showing Coinbase "temporarily disabled" trades of the two digital coins on its platform.

Coinbase's status page showed ethereum and litecoin were experiencing major outages.

Both litecoin and ether hit all-time highs Tuesday morning.

Ether hit $600 a token, while litecoin gained more than 40% to $312.

Across the market for digital coins, new investors are pouring in. The 10 largest cryptocurrencies were all trading in the green Tuesday, according to data provider CoinMarketCap.

At the time of print, the entire market nearly reached $500 billion. Cryptocurrencies volumes approached record highs above $35 billion.

The launch of bitcoin futures by Cboe Global Markets, the Chicago exchange group, further pushed bitcoin and other cryptocurrencies into the spotlight. The new futures market, which went live Sunday, could pave the way for a bitcoin-linked exchange-traded fund and dampen bitcoin's spine-tingling volatility. Of course, the 1,000% plus returns across the market has also piqued the interest of Wall Street and Main Street investors.

Enthusiasts think the new found interest in the crypto-world will intensify in 2018.

"2018 will be the year of mass public awareness for bitcoin and cryptocurrency," Perry Woodin, CEO of Node40, said in preparded remarks sent to Business Insider. "It is going to be the year when every friend and relative will want to know how much you have and how to purchase it."

Still, many market watchers see a massive bubble in the crypto-market. Even Mike Novogratz, a famed hedge fund manager turned crypto-investor, called it "the biggest bubble of our lifetimes."

Litecoin's founder also chimed in on the frenzy. The former director of engineering at crypto exchange Coinbase tweeted a dire warning for potential litecoin holders Monday night:

"Sorry to spoil the party, but I need to reign in the excitement a bit…," he wrote. "Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy!"

A spokeswoman for Coinbase told Business Insider, "The site is seeing high traffic volume at the moment and some users may be experiencing intermittent service outages."
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Bitcoin fever exposes crypto-market frailties
« Reply #10 on: December 14, 2017, 12:01:42 AM »
https://www.reuters.com/article/us-markets-bitcoin-risks-insight/bitcoin-fever-exposes-crypto-market-frailties-idUSKBN1E7254

#Business News
December 13, 2017 / 6:46 AM / Updated 15 hours ago
Bitcoin fever exposes crypto-market frailties
Jemima Kelly, Anna Irrera


9 Min Read

LONDON/NEW YORK (Reuters) - As bitcoin raced to another record high on Tuesday, one of the biggest providers of digital currency wallets, Coinbase, went down under the weight of traffic, leaving many of its more than 10 million customers unable to access their funds.
FILE PHOTO: A coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic/File Photo

At the same time, Bitfinex, the world’s biggest bitcoin exchange by trading volume, said it was under a heavy denial-of-service (DDoS) attack, meaning its servers had been intentionally flooded with junk online requests, taking down its website and crippling its services.

The latest outages show how the market infrastructure for an immature and volatile instrument that millions of investors have piled into may be ill-equipped to cope with sudden shifts in demand, which is worrying some investors.

During a particularly volatile period of trading on Dec. 7, bitcoin surged from below $16,000 to $19,500 in less than an hour on Coinbase’s exchange GDAX, while it was changing hands at less than $16,000 on another, Bitstamp.

As trading volume surged, GDAX and Coinbase went down at least 10 times because of “record-high traffic”, Coinbase said.

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“More people are engaging with our platform than ever and that bodes well for the future of the digital currency. At the same time, it does create extreme volatility and stress on our systems,” the company’s director of business operations, David Farmer, said.

“We can confirm that there has been no unusual or suspicious activity. All we know right now is that there is a large amount of traffic,” he told Reuters.

Bitfinex said it had been under a sustained DDoS attack since last week.

“While last week the platform traded continuously, to effectively perform emergency maintenance, we took the website down for a brief time today (Tuesday) to mitigate further issues for customers,” a spokesman said.

“We are constantly improving our systems to ensure that we’re able to both accommodate the immense volume of trading that occurs on our platform while also fending off sustained DDoS attacks,” he said.
24/7 MARKET

Daniel Masters, founder of Global Advisors Bitcoin Investment Fund, worries the exchanges would struggle to cope if there were a sudden rush for the exit.

“The ability of these platforms to handle volume is yet to be tested properly,” he said. “What happens if this market turns into a lot of sellers? The liquidity itself could be an issue.”

Charles Cascarilla, chief executive of New York-based company Paxos, which operates cryptocurrency exchange itBit, told Reuters that dealing with spikes in volume was a problem faced by all exchanges, not just cryptocurrency platforms.

“Clearly the reality is the world of cryptocurrency is growing at an exponential rate right now and everyone is doing their best to expand infrastructure, but it is hard to know what would happen in a hypothetical scenario,” he said.
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Cameron Winklevoss, co-founder of the Gemini exchange, an early bitcoin investor and an outspoken supporter of the cryptocurrency, said the risk the wider market would suffer badly if one exchange went down no longer existed, as trading volume had become more evenly spread.

“We are definitely beyond the too-big-to-fail situation,” he told Reuters. “That was a problem we had five years ago when Mt. Gox accounted for 95 percent of volume.”

“Most of the exchanges are doing a good job. This is a 24/7 market, there is no session close and there is no downtime.”

Mt. Gox, the world’s biggest bitcoin exchange at the time, collapsed in 2014 after hackers stole 650,000 bitcoins, triggering a collapse in the bitcoin price.

The demise of Mt. Gox left more than 24,000 customers unable to access hundreds of millions of dollars of cryptocurrency and cash. More than three years later none has recouped a cent.
BITCOIN FUTURES

Some investors had said they were worried the launch of bitcoin futures by the world’s biggest derivative exchanges could exacerbate volatility by prompting some traders to take out large positions betting on a price fall in the future.
FILE PHOTO: A Bitcoin logo is displayed at the Bitcoin Center New York City in New York's financial district in NY, U.S. on July 28, 2015. REUTERS/Brendan McDermid/File Photo

The Chicago-based Cboe Global Markets Inc. futures launched a futures contracts on bitcoin on Dec. 10 and CME Group Inc will launch a rival contract a week later.

So far this week, the launch of futures by Cboe does not appear to have created any additional volatility, with price moves less violent than last week’s wild trading.

But Tim Swanson, a bitcoin expert and founder of Post Oak Labs, a technology advisory firm, said he was concerned that if the futures liquidity increases there could be an incentive for someone with a large bet against bitcoin to disrupt or attack the network to make money from the ensuing price fall.

CME Group and Cboe declined to comment.

Flooding the bitcoin network with tiny transactions could potentially send the price down sharply, said Swanson, as could sending many sell-signals to the market that are not honored - so-called spoofing, which is illegal in regulated markets.

A surge in bitcoin trades in recent weeks has also left the blockchain network that the cryptocurrency relies on to process and verify transactions struggling to keep up.

As of Wednesday at 1445 GMT, more than 125,000 bitcoin transactions remained unconfirmed.

In the past week, more than half a million new users have opened wallets with retail-focused bitcoin wallet provider Blockchain, the firm said, taking the total number of users to more than 20 million, from 10 million last year.

The London-based company has also been struggling to keep up, citing “record traffic levels” last week.
VOLATILE TRADING

Created in 2008, bitcoin uses encryption and a shared blockchain database that enables the anonymous transfer of funds outside of a conventional centralized payment system.

But there is little evidence to suggest buyers are using bitcoin as a means of exchange and payment. On the whole, they buy the cryptocurrency as a speculative investment, attracted by massive price gains, said Garrick Hileman, a research fellow at the University of Cambridge’s Judge Business School.

As a result, some banks say they are worried that a collapse in bitcoin would have a knock-on effect on investments by individual investors in other asset classes.

Deutsche Bank said in a report on Dec. 7 that a bitcoin crash - and the impact it could have on retail investors’ confidence - was one of the biggest risks to markets in 2018.

Periods of high volatility are not uncommon in other currencies and asset classes, particularly in commodities and emerging markets. But bitcoin’s volatility is extreme, and frequent: the one-day price move has been more than 10 percent on nine days in the past three months.

Moves of a similar magnitude for the U.S dollar, for example, are extremely rare. Its biggest one-day move against a major currency was in January 2015 when the Swiss central bank abandoned a cap on the franc, sending the dollar down 18 percent.

Some bitcoin watchers, such as Swanson, also worry about the risk of one of the big exchanges being suddenly shut by authorities.

In July, U.S. authorities shut down the website of the BTC-e exchange, saying it had “facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking”.

BTC-e, which is no longer operating, could not be reached for comment.

The top three exchanges out of more than 100 - Bitfinex, GDAX and bitFlyer - are home to more than 60 percent of all trading, according to data provider Bitcoinity.

Another issue specific to the market is the risk of hacking and theft. More than 980,000 bitcoins have been stolen from exchanges, Reuters has found, with the Mt. Gox heist accounting for the majority.

Last week, a Slovenian cryptocurrency mining marketplace, NiceHash, said it had lost about $64 million worth of bitcoin in a hack of its payment system.

For graphic on bitcoin's blistering ascent, click: tmsnrt.rs/2zClJF3

Reporting by Jemima Kelly and Anna Irrera; additional reporting by Amanda Cooper; editing by David Clarke
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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #11 on: December 19, 2017, 05:45:38 PM »
I don't know if this is the same attack, but this attack got away with 4,000 bitcoins and the company has gone bankrupt. "Very sorry".

http://www.zerohedge.com/news/2017-12-19/asian-crypto-traders-spooked-after-korean-exchange-files-bankruptcy
Crypto Traders Spooked After Korean Bitcoin Exchange Files For Bankruptcy
Tyler Durden
Dec 19, 2017

A cryptocurrency exchange in South Korea collapsed on Tuesday after it suffered a second cyberattack in eight months and lost a large amount of its digital-currency reserves. This spooked Asian investors who sold Bitcoin (and other cryptos).

As The Wall Street Journal reports, Yapian, the company that operates a Seoul-based exchange called Youbit, suspended digital-currency trading and filed for bankruptcy after its systems were hacked in the predawn hours of Tuesday. The exchange trades 10 virtual currencies including bitcoin and ethereum.

Yapian said in a statement that the latest security breach caused it to lose 17% of its total assets. The company didn’t specify the type of virtual currencies that were stolen or the financial value of its losses. In April, Youbit, formerly called Yapizon, lost 4,000 bitcoins now worth $73m to cyberthieves.

Users of the exchange with digital coins in their online accounts were told by Youbit on Tuesday that they could withdraw about 75% of their cryptocurrency for the time being. The remaining balances would be returned after the company goes through bankruptcy proceedings, it said.

It said it was "very sorry" that it had been forced to shut down.

Once again however, the dip in BTC is being bought off the lows...

 

Ethereum had surged overnight (touching almost $900 in overnight trading) but was also sold on the Korea news...

However, on the positive catalyst side, CoinTelegraph reports that in 2018 central banks will hold cryptocurrency, alongside gold and foreign currencies, according to the CEO of Blockchain.info, Peter Smith.

Speaking in a short interview on CNBC’s Coin Rush segment, Smith forecast that next year would see the first such incorporations of crypto into traditional financial institutions, saying:

    “I think this year will be the first year we start to see central banks start to hold digital currencies as part of their balance sheet.”

2018 will be the year that central banks hold digital currencies: Blockchain CEO from CNBC.

Bitcoin’s rapid rise this year, from around $1,000 in January to $20,000 this week, has attracted the attention of banks, governments and regulators globally. In some markets banks specifically have adopted varying and sometimes polarizing, views on the cryptocurrency’s future.

While South Korea’s Shinhan announced it would become the first major bank to offer customers Bitcoin wallets and storage, the Governor of Denmark’s central bank this week described Bitcoinas “deadly” and urged citizens to stay away from it. 

As a trend, Smith continued, central banks would likely begin to issue their own branded digital assets “either late this year or early next year.”

Multiple governments, including Russia's, are considering issuing a national digital currency, and Dubai has already officially decided to do so.

During the interview, when quizzed about the likelihood of a “major hack” occurring in the crypto space in the future, Smith said that since it had been around five months since the last major hack, the ecosystem was “due for one in the next month or two.” Speaking of his own company, he told CNBC:

    “We’ve been one of the biggest targets for a long time; it keeps you busy.”

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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #12 on: December 19, 2017, 06:25:33 PM »
https://www.businessinsider.com.au/one-of-the-co-founders-of-bitcoincom-has-sold-all-of-his-bitcoin-2017-12
The Swedish co-founder of Bitcoin.com has sold all his bitcoins
Tom Turula
Dec 19, 2017

Emil Oldenburg, the CTO and co-founder of bitcoin.com has spent the past three years in Tokyo. Oldenburg is also the co-founder of Safello, a Swedish bitcoin exchange.

    Bitcoin is “as good as useless” and has no future as a tradeable currency says Emil Oldenburg, the co-founder and CTO of bitcoin.com, one of the world’s largest bitcoin websites.
    Oldenburg has sold his bitcoins and believes others will do the same when they realize how illiquid the market is.
    He says bitcoin’s drawbacks are high fees and transaction lead times – a heated topic of discussion in the community today – and resistance to change from people running the old bitcoin network.
    Oldenburg believes there’s a brighter future for Bitcoin Cash, a spinoff currency of bitcoin that is now being actively promoted by bitcoin.com.

Bitcoin.com is one of the world’s largest bitcoin sites, having grown its profile this year thanks to the remarkable price surge of the cryptocurrency. But its cofounder and CTO, Emil Oldenburg, a Swedish native, is extremely skeptical when it comes to bitcoin’s future.

”I would say an investment in bitcoin is right now the riskiest investment you can make. There’s an extremely high risk,” he says in an interview with Swedish tech site Breakit.

Although Oldenburg is far from the first to criticize the cryptocurrency’s viability as an investment asset, his position as an industry insider does stand out – even as he migrates to its spinoff, bitcoin cash (BCH).

“I have in fact sold all my bitcoins recently and switched to bitcoin cash,” he says, referring to the currency that split from bitcoin in August and recently overtook Ethereum as the world’s second-largest cryptocurrency. Bitcoin Cash has also gained the strong support of Oldenburg’s co-founder, Roger Ver.

Oldenburg’s big problem with bitcoin is high transaction costs and lead times. Indeed, by some counts, bitcoin transaction fees are doubling every three months, and it now takes on average 4,5 hours to confirm a bitcoin transaction. Ars Technica reported that fees reached $26 per trade recently.
“When people realize how bitcoin works, they will start to sell”

While buying, selling or trading bitcoin is not an issue today, Oldenburg says, problems surface when bitcoin transactions are recorded on the blockchain, the digital ledger that records each transaction.

There’s only a limited amount of transactions per second you can make in the bitcoin network, which in part depends on the “block size” of the memory that store the transactions on the blockchain. This bottleneck makes for a highly risky and illiquid cryptocurrency, Oldenburg says, adding that “the old bitcoin network is as good as unusable.”

The reason why bitcoin holders haven’t understood these risks, according to Oldenburg, is because most have so far only bought the cryptocurrency – but never sold or traded with them.

“As soon as people realize that this is how it works, they will start to sell,” he says to Breakit.
Read More: Bitcoin’s illiquidity is going to be a huge problem when the bubble bursts

As the chart below shows, the lead times and fees associated with bitcoin transactions seem only to be increasing as new investors crowd the market in chase of quick returns.



This chart shows a seven-day average of the total number of minutes it takes to conduct a bitcoin transaction, since May 2016. In short, the average transaction time has been rising with the price of bitcoin. Source: Blockchain Luxembourg SARL

Even though these “up to 12-hour transaction lead times” (when moving bitcoin to and from exchanges) could be adressed, Oldenburg sees no signs of change, because the currency is purportedly being run by the ”old” bitcoin network, the members of which he calls “fanatical bitcoin talibans”.

”[They] want things this way. They see bitcoin as a digital gold and a technical experiment, as opposed to something you can actually use.”
“Bitcoin Cash is the future”

In a move that could be considered ironic, Oldenburg says bitcoin.com is distancing itself from bitcoin (BCT) and has even stopped developing services around it – to mostly focus on bitcoin cash (BCH).

“It only costs $0,012 [BI Nordic: 10 Swedish “öre”, the centesimal subdivision of krona] to send a [Bitcoin Cash transaction] and there are no lead times. The only drawback is that you need larger hard drives, but that’s not a problem for most people,” Oldenburg says to Breakit.

Oldenburg says the bigger “block size” limit of Bitcoin Cash, currently at 8Mb – as opposed to bitcoin’s 1Mb – leads to lower transaction fees and a safer, more liquid investment.

All in all, he doesn’t believe bitcoin will be the currency for everyday use the world has been hoping for.

“Not as long as the network is run by this group of people [in the old bitcoin network]. The solutions will be found in bitcoin cash, that’s where I see a future.”

Based out of Tokyo but registered on S:t Kitts, bitcoin.com has tens of millions of unique monthly visitors, according to Similarweb, a web analytics site.

Bitcoin.com – not to be confused with the non-revenue making bitcoin.org – was founded in 2015 by bitcoin investor Roger Ver, and provides a range of services related to bitcoins, including a bitcoin casino, news services and its so called bitcoin “mining pool” – the site’s biggest single source of revenue – where it forges new units of the cryptocurrency to be released for trading.

That said, the company has a heavy vested interest in the cryptocurrency markets, with Roger Ver taking an open stance for the new Bitcoin Cash and against “Bitcoin Core” (i.e., BCT) for reasons similar to Oldenburg’s.

Oldenburg doesn’t want to talk about bitcoin.com revenues or to what extent they depend on trades in BCH versus BCT, but he reveals to Breakit the company makes “an awful lot of money”.

As do its employees. Seeing that bitcoin.com pays its employees’ salaries in bitcoin, many have struck gold on this year’s price surge, Oldenburg says.

“All my salary in the past three years has been paid in bitcoin,” he says.
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Re: P O O F ! Goes The Crypto. $400,000,000 vanishes
« Reply #13 on: December 20, 2017, 12:53:01 AM »
I don't know if this is the same attack, but this attack got away with 4,000 bitcoins and the company has gone bankrupt. "Very sorry".

...and...It's Gone!

<a href="http://www.youtube.com/v/TGwZVGKG30s" target="_blank" class="new_win">http://www.youtube.com/v/TGwZVGKG30s</a>

RE
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South Korean Bitcoin Exchange Goes Bankrupt After Getting Hacked Again
« Reply #14 on: December 21, 2017, 03:19:21 AM »
...and...it's gone!

RE

https://nextshark.com/south-korean-bitcoin-exchange-goes-bankrupt-getting-hacked/

South Korean Bitcoin Exchange Goes Bankrupt After Getting Hacked Again
Ryan General
By Ryan General
Posted on December 20, 2017


Following a significant loss of Bitcoin assets due to its second alleged hacking this year, South Korean cryptocurrency exchange Youbit has announced that it is now shutting down and filing for bankruptcy.

The cyber attack, which reportedly caused a loss worth 17% of the exchange’s total assets, has further raised security concerns in local cryptocurrency trading in South Korea, Reuters reports.

Youbit suffered its first hacking back in April, losing almost 4,000 Bitcoin in the process. According to local media reports, South Korea’s spy agency has linked North Korea to the attack. Without elaborating on the actual amount lost in the latest attack, Youbit announced on its website that 17% of its total assets were indeed stolen via hacking at 4:35 a.m. local time on Tuesday.

“There were no additional losses, as other coins were in the cold wallet,” Youbit’s owner, Yapian, said Tuesday.

Due to the incident, all Youbit customers’ Bitcoin assets have been temporarily marked down to 75% of its total value per individual until the company moves through bankruptcy proceedings. As a precaution to minimize further customer losses, the exchange has also seized trading.

Youbit is a minor player in South Korea’s robust cryptocurrency market, with Seoul-based Bithumb, the world’s busiest virtual currency exchange, covering about 70%  of the local market share.

Cyber Crime agency Korea Internet & Security Agency (KISA) has confirmed that it has started an investigation into the hacking along with the police, according to the BBC. Bitcoin’s continuous surge in valuations in recent months has reportedly made cryptocurrency exchanges and wallets constant targets of cyber attacks.

Bitcoin has been so well received in South Korea that even the prime minister was prompted to warn that cryptocurrencies might corrupt the nation’s youth. The Bitcoin frenzy in Korea has reached to a point where locals are trading Bitcoin at a premium of about 23% higher than prevailing international rates, Bloomberg reports.

Security experts warn that they will continue to become more vulnerable to cyber-crime attacks as Bitcoin further increases its value in the future. Bitcoin has traded its highest record so far at over $19,000 per coin on Monday before dropping back to $16,800 per bitcoin the following day.
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