Businesses

Coinbase is Erratically Overcharging Some Users and Emptying Their Bank Accounts 143

A growing number of Coinbase customers are complaining that the cryptocurrency exchange withdrew unauthorized money out of their accounts. From a report: In some cases, this drained their linked bank accounts below zero, resulting in overdraft charges. In a typical anecdote posted on Reddit, one user said they purchased Bitcoin, Ether, and Litecoin for a total of $300 on February 9th. A few days later, the transactions repeated five times for a total of $1,500, even though the user had not made any more purchases. That was enough to clear out this user's bank account, they said, resulting in fees. [...] Coinbase representatives have been responding to similar complaints on Reddit for about two weeks, but the volume of complaints seems to have spiked over the last 24 hours. Similar complaints have popped up on forums and Twitter.
Bitcoin

Energy Riches Fuel Bitcoin Craze For Speculation-shy Iceland (apnews.com) 99

Iceland is expected to use more energy "mining" bitcoins and other virtual currencies this year than it uses to power its homes. From a report: With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy. The new industry's relatively sudden growth prompted lawmaker Smari McCarthy of Iceland's Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country's catastrophic 2008 banking crash. "Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government," McCarthy told The Associated Press. "These companies are not doing that, and we might want to ask ourselves whether they should."
Education

Cryptocurrency Classes Are Coming To Campus (nytimes.com) 80

While the price of Bitcoin has dropped since Christmas, the virtual currency boom has shown no signs of cooling off in the more august precincts of America's elite universities. The New York Times: Several top schools have added or are rushing to add classes about Bitcoin and the record-keeping technology that it introduced, known as the blockchain. Graduate-level classes this semester at Carnegie Mellon, Cornell, Duke, the Massachusetts Institute of Technology and the University of Maryland, among other places, illustrate the fascination with the technology across several academic fields, and the assumption that it will outlast the current speculative price bubble. "There was some gentle ribbing from my colleagues when I began giving talks on Bitcoin," said David Yermack, a business and law professor at New York University who offered one of the first for-credit courses on the topic back in 2014. "But within a few months, I was being invited to Basel to talk with central bankers, and the joking from my colleagues stopped after that." For a class this semester, Mr. Yermack originally booked a lecture hall that could fit 180 students, but he had to move the course to the largest lecture hall at N.Y.U. when enrollment kept going up. He now has 225 people signed up for the class.
Businesses

Hackers Hijack Government Websites To Mine Crypto-Cash (bbc.com) 48

BBC reports: The Information Commissioner's Office (ICO) took down its website after a warning that hackers were taking control of visitors' computers to mine cryptocurrency. Security researcher Scott Helme said more than 4,000 websites, including many government ones, were affected. He said the affected code had now been disabled and visitors were no longer at risk. The ICO said: "We are aware of the issue and are working to resolve it." Mr Helme said he was alerted by a friend who had received a malware warning when he visited the ICO website. He traced the problem to a website plug-in called Browsealoud, used to help blind and partially sighted people access the web. The cryptocurrency involved was Monero -- a rival to Bitcoin that is designed to make transactions in it "untraceable" back to the senders and recipients involved. The plug-in had been tampered with to add a program, Coinhive, which "mines" for Monero by running processor-intensive calculations on visitors' computers. The Register: A list of 4,200-plus affected websites can be found here: they include The City University of New York (cuny.edu), Uncle Sam's court information portal (uscourts.gov), Lund University (lu.se), the UK's Student Loans Company (slc.co.uk), privacy watchdog The Information Commissioner's Office (ico.org.uk) and the Financial Ombudsman Service (financial-ombudsman.org.uk), plus a shedload of other .gov.uk and .gov.au sites, UK NHS services, and other organizations across the globe.
Bitcoin

Russian Nuclear Scientists Arrested For 'Bitcoin Mining Plot' (bbc.com) 84

Russian security officers have arrested several scientists working at a top-secret Russian nuclear warhead facility for allegedly mining crypto-currencies, BBC reported Friday, citing local media. From the report: The suspects had tried to use one of Russia's most powerful supercomputers to mine Bitcoins, media reports say. The Federal Nuclear Centre in Sarov, western Russia, is a restricted area. The centre's press service said: "There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining." The supercomputer was not supposed to be connected to the internet -- to prevent intrusion -- and once the scientists attempted to do so, the nuclear centre's security department was alerted. They were handed over to the Federal Security Service (FSB), the Russian news service Mash says. "As far as we are aware, a criminal case has been launched against them," the press service told Interfax news agency.
Bitcoin

Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin (investopedia.com) 109

In a bid to attract businesses involved in blockchain and cryptocurrencies, Arizona lawmakers have proposed a bill that would allow the state's citizens to pay their taxes in bitcoin. "Arizona State Rep. Jeff Weninger, who introduced the bill, said it was a signal to everyone in the United States, and possibly throughout the world, that Arizona was going to be the place to be for blockchain and digital currency technology in the future," reports Investopedia. From the report: Weninger, a Republican, also cited the ease of making online payments through the cryptocurrency "while you're watching television," as another reason. But he did not divulge much detail about the implementation of such a system. That might be the reason why Weninger faces an uphill battle in getting the bill approved by the state legislature. Bitcoin's price volatility is already being cited as a possible roadblock to implementing such a measure by state legislators. Arizona state senator Steve Farley, a Democrat who's running for governor, said the bill puts the "volatility burden" of bitcoin's price on taxpayers who make payments in U.S. dollars. "It would mean that the money goes to the state and then the state has to take responsibility of how to exchange it," Farley said.
Bitcoin

Bitcoin Won't Be the Dark Web's Top Cryptocurrency For Long (cnet.com) 79

Bitcoin has essentially become the poster child for cryptocurrencies, and that's a problem for cybercriminals dealing on the dark web. From a report: Researchers from Recorded Future, a threat intelligence company, looked through 150 of the dark web's top marketplaces and forums and found that bitcoin's boom is driving shady characters away from the cryptocurrency. The rise of bitcoin has brought cryptocurrency -- digital alternatives to government-issued money -- to the mainstream, enticing people who are looking to get rich quick. Last December, bitcoin hit its all-time high at nearly $20,000, but it has since slumped and as of Thursday is trading at a little over the $8,000 mark. But before it was a massive investment that millionaires bought, it was the dark web's currency of choice, thanks to its decentralized and anonymous structure.
Twitter

Twitter Bans Notorious Bitfinex and Tether Critic Bitfinex'ed (thenextweb.com) 73

Twitter has officially suspended Bitfinex'ed -- a notorious internet sleuth who has long speculated that popular exchange desk Bitfinex has quietly been printing its dollar-pegged Tether digital tokens out of thin air, a move that could lead to the collapse of Bitcoin and perhaps even the entire market, The Next Web reports. From the report: In an email to TNW, Bitifinex'ed said that Twitter has yet to clarify the reasons for the suspension. "This account has been suspended," the message reads. It is worth noting that in addition to the claims made against Bitfinex and Tether, Bitfinex'ed has previously accused other well-known figures within the crypto-community of foul play. Indeed, earlier in January the anonymous investigator suggested Litecoin Charlie Lee might have engaged in insider trading during his time at Coinbase. Lee ultimately denied these claims. In the aftermath of this altercation, waves of Lee supporters took to Twitter to condemn the premises of the piece Bitfinex'ed authored.
Bitcoin

Get Ready For Most Cryptocurrencies to Hit Zero, Goldman Says (bloomberg.com) 276

An anonymous reader shares a report: The tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse, according to Goldman Sachs Group's global head of investment research. Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they're replaced by a small set of future competitors, Goldman's Steve Strongin said in a report dated Feb. 5. While he didn't posit a timeframe for losses in existing coins, he said recent price swings indicated a bubble and that the tendency for different tokens to move in lockstep wasn't rational for a "few-winners-take-most" market. "The high correlation between the different cryptocurrencies worries me," Strongin said. "Because of the lack of intrinsic value, the currencies that don't survive will most likely trade to zero."
Bitcoin

Senate Cryptocurrency Hearing Strikes a Cautiously Optimistic Tone (techcrunch.com) 44

An anonymous reader quotes a report from TechCrunch: In a hearing today before the Senate Banking Committee, Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman Christopher Giancarlo opened up about what the near-term U.S. regulatory fate of cryptocurrency might look like. In a week of plunging prices and bad news, the hearing struck a tone that coin watchers could reasonably interpret as surprisingly optimistic. Over the course of the open hearing, Clayton and Giancarlo traded testimony over what can be regulated, what should be regulated and how, while offering a broader outlook on the long-term future of virtual currency markets and blockchain tech.

The testimony drew a useful distinction among three pillars of the virtual currency ecosystem (for lack of a better unifying term): cryptocurrencies, "a replacement for dollars;" ICOs, "like a stock offering;" and distributed ledger technologies, or the technical framework generally known as blockchain. Throughout the hearing, on the SEC side, Clayton struck a relatively solemn tone focused on ICO fraud concerns, while the CFTC's Giancarlo came across as genuinely enthusiastic and curious about the emerging market.
When asked about the intrinsic value of cryptocurrency, Clayton said: "There are a lot of smart people who think there's something to the value of cryptocurrency and the international exchange and I'm not seeing those benefits manifesting themselves in the market yet. I look at this from the perspective of Main Street investors and they should understand that."

On ICOs as a security: "I believe every ICO I've seen is a security... You can call it a coin but if it functions as a security, it is a security... Those who engage in semantic gymnastics or elaborate re-structuring exercises in an effort to avoid having a coin be a security are squarely in the crosshairs of our enforcement provision."
Bitcoin

Man Sues T-Mobile For Allegedly Failing To Stop Hackers From Stealing His Cryptocurrency (theverge.com) 133

Over the weekend, a lawsuit was filed against T-Mobile claiming that the company's lack of security allowed hackers to enter his wireless account last fall and steal cryptocoins worth thousands of dollars. "Carlos Tapang of Washington state accuses T-Mobile of having 'improperly allowed wrongdoers to access' his wireless account on November 7th last year," reports The Verge. "The hackers then cancelled his number and transferred it to an AT&T account under their control. 'T-Mobile was unable to contain this security breach until the next day,' when it finally got the number back from AT&T, Tapang alleges in the suit, first spotted by Law360." From the report: After gaining control of his phone number, the hackers were able to change the password on one of Tapang's cryptocurrency accounts and steal 1,000 OmiseGo (OMG) tokens and 19.6 BitConnect coins, Tapang claims. The hackers then exchanged the coins for 2.875 Bitcoin and transferred it out of his account, the suit states. On November 7th, the price of Bitcoin was $7,118.80, so had the hackers cashed out then, they would have netted a profit of $20,466.55. Tapang goes on to say, "After the incident, BTC price reached more than $17,000.00 per coin," but given the volatility of bitcoin prices, the hackers may not have benefited from the soar.

The suit alleges T-Mobile is at fault partly because the carrier said it would add a PIN code to Tapang's account prior to the incident, but didn't actually implement it. Tapang also states that hackers are able to call T-Mobile's customer support multiple times to gain access to customer accounts, until they're able to get an agent on the line that would grant them access without requiring further identity verification. The complaint also lists several anonymous internet users who have posted about similar security breaches to their own T-Mobile accounts.

Bitcoin

US Regulators To Back More Oversight of Virtual Currencies (reuters.com) 121

Digital currencies such as bitcoin demand increased oversight and may require a new federal regulatory framework, the top U.S. markets regulators will tell lawmakers at a congressional hearing on Tuesday. From a report: Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), will provide testimony to the Senate Banking Committee amid growing global concerns over the risks virtual currencies pose to investors and the financial system. Giancarlo and Clayton will say a patchwork of rules for cryptocurrency exchanges may need to be reviewed in favour of a rationalised federal framework, according to prepared testimony published on Monday. Congressional sources told Reuters the hearing will largely be a fact-finding exercise focusing on the powers of the SEC and CFTC to oversee cryptocurrency exchanges, how the watchdogs can protect investors from volatility and fraud, and the risks posed by cyber criminals intent on stealing digital tokens.
Bitcoin

Five Major Credit Cards Are Now Blocking Cryptocurrency Purchases (cnbc.com) 253

An anonymous reader quotes CNBC: J.P. Morgan Chase, Bank of America and Citigroup said Friday they are no longer allowing customers to buy cryptocurrencies using credit cards. "At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved," a J.P. Morgan Chase spokesperson said in a statement to CNBC. "We will review the issue as the market evolves."

A Bank of America spokesperson also said in an email that the bank has decided to decline credit card purchases of cryptocurrencies. Citigroup said in a statement that it has "made the decision to no longer permit credit card purchases of cryptocurrency. We will continue to review our policy as this market evolves." Earlier in January, Capital One Financial said it has decided to ban cryptocurrency purchases with its cards. Discover Financial Services has effectively prohibited cryptocurrency purchases with its credit cards since 2015.

Bitcoin

India Rejects Cryptocurrency, But It Isn't Giving Up On Blockchain (betanews.com) 51

Mark Wilson shares a report from BetaNews: A budget speech given by India's finance minister led to numerous reports that India was banning the use of cryptocurrencies such as Bitcoin and Ethereum within the country. While Arun Jaitley noted in a speech that the Indian government does not recognize cryptocurrencies as legal tender, his slightly ambiguous language resulted in something of a misunderstanding. Now the Blockchain and Cryptocurrency Committee of the Internet and Mobile Association of India (IAMAI) has spoken out in an attempt to clarify the issue, and allay fears that Bitcoin et al are on the verge of being banned. At first glance, Jaitley's speech certainly seemed to imply that the Indian government wants to forbid the use of cryptocurrencies. In reality, he merely voiced concern about how cryptocurrencies were being used, and announced vague plans to introduce regulation to stop their use for illegal purposes. Delivering his speech, Jaitley said: "Distributed ledger system or the block chain technology allows organization of any chain of records or transactions without the need of intermediaries. The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system. The Government will explore use of block chain technology proactively for ushering in digital economy."
Bitcoin

Bitcoin Plummets Below $8,000 For First Time Since November (axios.com) 298

Bitcoin's value dipped $8,000 this morning -- the first time since November 24, according to CNBC -- just hours after the cryptocurrency made news after going under $9,000. From a report: After the news that Bitcoin had headed south of $9,000, CNBC branded the range of $9,000 to $10,000 as "a difficult one for bitcoin to break below" after its surge over $10,000 last year.
Bitcoin

India Vows To Eliminate Use of Cryptocurrencies in the Country (hindustantimes.com) 68

India will move to stamp out use of cryptocurrencies, which it considers illegal, country's Finance Minister Arun Jaitley said on Thursday, launching a no-holds-barred attack on virtual currencies such as Bitcoin. From a report: Governments around the world are grappling with how to regulate cryptocurrency trading, and policymakers are expected to discuss the matter at a G20 summit in Argentina in March. "The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system," Jaitley told parliament in his annual budget speech. However, the minister said, the government would explore use of block chain technology proactively to speed the move toward a digital economy. Jaitley's announcement could trigger "panic selling" in cryptocurrencies in India, said Amit Maheshwari, partner at tax consultants Ashok Maheshwary & Associates LLP.
Bitcoin

Why Tether's Collapse Would Be Bad For Cryptocurrencies (wired.com) 161

Yesterday, Bloomberg reported that the U.S. Commodity Futures Trading Commission sent subpoenas last week to virtual-currency venue Bitfinex and Tether, a company that issues a widely traded coin and claims it's pegged to the dollar. Wired's Sandra Upson explains why Tether's collapse would be bad for the entire cryptocurrency market: Unlike bitcoin and its many siblings, tether is what is called a stablecoin, an entity designed to not fluctuate in value. With most cryptocurrencies prone to wild swings, tether offers people who dabble in the market the option of buying a currency that its backers say is pegged to the U.S. dollar. The root of the controversy is whether the company behind it, also called Tether, is telling the truth when it claims that every unit in circulation is matched by a U.S. dollar it holds in reserve. If the company has a dollar for every tether, that means in theory any holder can sell tethers back to the company for an equal number of dollars at any time. This belief keeps the value of a tether pegged to a dollar.

If tethers are not backed by a matching number of dollars, then Tether can print an arbitrary amount of money. (Other cryptocurrencies, by contrast, create new tokens according to strictly prescribed, predictable rules.) Other problems ensue, including suspicions that Tether is timing the release of new tethers to coincide with drops in the price of bitcoin and then using those tethers to scoop up bitcoins. Some observers fear that these purchases are artificially inflating the price of bitcoin. If traders lose faith in tether, they could end up triggering the crypto version of a bank run. Tether helps stabilize cryptocurrency exchanges in various ways, so its collapse could also cause some exchanges to topple, wiping out billions of dollars of investments overnight and potentially undoing much of the public's growing interest in new technologies like bitcoin.

Advertising

Facebook Is Banning Cryptocurrency, ICO Ads (techcrunch.com) 41

Facebbook has a new advertising policy pertaining to cryptocurrency, binary options and initial coin offerings. The policy specifically prohibits ads that promote those types of products and services "that are frequently associated with misleading or deceptive practices," Facebook Product Management Director Rob Leathern wrote in a blog post today. TechCrunch reports: Cryptocurrencies like Bitcoin, Litecoin and Ethereum, and initial coin offerings have all hit the mainstream, which has promptly resulted in a number of scams. While Facebook says it wants people "to continue to discover and learn" about those products and services, "there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith," Leathern wrote. Leathern recognizes that the policy is quite broad, but he says that's intentional. The plan is to continue working to better detect deceptive and misleading ads that pertain to cryptocurrencies, ICOs and binary options. Over time, Facebook says it will revisit the policy and its enforcement mechanisms as its signals improve. In the meantime, Facebook is encouraging people to report content that violates this policy.
Bitcoin

Ethereum Startup Vanishes After Seemingly Making $11, Leaves Message: 'Penis' (vice.com) 125

CaptainDork shares a report from Motherboard: An Ethereum startup called Prodeum disappeared from the web on Sunday after raising a grand total of $11 USD from investors in a crowdsale. Shortly after the website disappeared, a message appeared on its homepage: "penis." Prodeum's website now redirects visitors to the Twitter account of a cryptocurrency trader (they did not immediately respond to our request for comment), and its Twitter account has been deactivated. Prodeum is at least the second Ethereum startup to pull up stakes after raising money from people in events called Initial Coin Offerings, or ICOs, in which a startup funds their enterprise by taking cryptocurrency from people in exchange for digital tokens. Some ICOs have managed to raise millions of dollars, and the last startup to vanish after conducting an ICO -- Confido, which disappeared from the internet in late 2017 -- made off with roughly $374,000. (A message later appeared on Confido's site stating that it would buy back investors' tokens, but it's unclear if that took place.)

Prodeum, by comparison, only seems to have raised $11 based on the Ethereum address that was advertised on Prodeum's site as being the ICO address. (Update: After this article was published the contents of the ICO wallet were sent to another wallet. That wallet contains roughly $100, with the other funds all coming from a single wallet that predates the Prodeum ICO and contains 46 cents.) Prodeum's pitch, according to a cached version of its webpage, was to track vegetables in a supply chain using digital addresses on a blockchain -- a decentralized ledger at the heart of Ethereum and other cryptocurrencies like Bitcoin.
As for why the "penis" message was left on its homepage, it may have something to do with the name of the startup. Prodeum is a medication that treats urinary tract infections and other urinary problems...
Crime

FBI Warns of Email Death Threats Demanding Bitcoin (abc7.com) 95

An anonymous reader writes: "I will be short. I've got an order to kill you," the note said, demanding $2,800 in U.S. dollars or Bitcoin. "I switched from being upset about it to, 'I need to get the word out'," one of its targets told a local newscaster. They filed a report through the FBI's web site.

"If only 1% of people send money -- there's no overhead for them; that's money in the bank," one FBI agent tells the news team. A quick Google search finds recent reports of two nearly identical threats using the same text.

"I have been thinking for a long time whether it is worth sending this notice, and decided that you still have the right to know... I've got an order to kill you, because some of your activity causes trouble to several people... I decided to break some rules, as this will be my final order... As soon as I receive the funds, I will forward you the name of the man [this] order came from, and all other information I have."

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