IRS is Developing ‘Exploitation Techniques’ to Break Into Crypto Wallets

IRS is Developing ‘Exploitation Techniques’ to Break Into Crypto Wallets

  • Internal Revenue Service (IRS) is now targeting cryptocurrency users through the “development of exploitation techniques against Cryptowallets.”

According to its March report, the emergence and rapid adoption of cryptographic currencies have created a gap in digital forensic capabilities, and the decentralization and anonymity provided by cryptos are fostering an environment for the storage and exchange of value outside of the traditional purview of law enforcement and regulatory organizations.

The focus of IRS is crypto wallets, for which its Digital Forensics Unit provides forensic support for task forces agents, computer investigative specialists, and cyber investigators.

With the process of decrypting the hardware devices to gain access to the wallets being challenging, it says, “further forensic research is needed to mature the process and obtain reliable results.”

The proposal’s objective is to validate cybersecurity research in cryptographic wallets exploitation, identify new methods to gain access to these wallets, and create hands-on training for the identified techniques in supporting the digital forensic laboratory.

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Author: AnTy

BaFin Warns Binance of Offering “Stock Tokens’ Without ‘Necessary Prospectuses’

BaFin Warns Binance of Offering “Stock Tokens’ Without ‘Necessary Prospectuses’

This is in violation of European Union securities law, as per Germany’s financial regulator, while Binance says it is “committed to following local regulator requirements.”

Germany’s financial regulator is warning that Binance risks being fined for offering its tokenized stocks without filing a prospectus before offering the assets. The regulator said in a statement,

“BaFin has grounds to suspect that Binance Germany is selling shares in Germany in the form of ‘share tokens’ without offering the necessary prospectuses.”

“Please bear in mind that securities investments should only ever be carried out on the basis of the necessary information.”

Earlier this year, the leading stock exchange announced the launch of zero-commission stock trading, starting with Tesla (TSLA). Binance then announced the listing of competitor Coinbase’s COIN shares, and then this Monday, MicroStrategy (MSTR) joined Apple (AAPL) and Microsoft (MSFT) on the platform.

These “stock tokens” are denominated in the exchange’s own stablecoin BUSD.

The Federal Financial Supervisory Authority (BaFin) said this week that there is no prospectus on the exchange’s website for MicroStrategy, Tesla, and Coinbase issues, which is a violation of European Union securities law.

The violation can result in Binance being fined 5 million euros ($6 million). A spokesperson for the UK’s financial watchdog said,

“The firm offers a number of regulated and unregulated products and services across multiple jurisdictions … We are working with the firm to understand the product, the regulations that may apply to it, and how it is marketed.”

The synthetic shares, backed by actual stock, allow investors to reap the economic gains of a company’s stock performance and dividends, according to Binance. A Binance spokesperson said,

“Binance takes its compliance obligations very seriously and is committed to following local regulator requirements wherever we operate. We will work with regulators to address any questions they may have.”

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Author: AnTy

MasterCard Reiterates Interest In Helping Government Build CBDCs

MasterCard Reiterates Interest In Helping Government Build CBDCs

Leading global payment and technology firm Mastercard has announced plans to explore smart contract technology on Central Bank Digital Currencies (CBDCs).

MasterCard Investing in Smart Contract Tech For CBDCs

Mastercard’s efforts in examining how smart contracts can help central banks develop digital cash is a push towards the realization of state-backed currencies.

The announcement made during the company’s Q1 earnings call revealed Mastercard’s efforts in the crypto world by collaborating with governments in the development of CBDCs beyond mere payment options.

Miebach said several central banks, including the European Central Bank and the Bank of England, plan the CBDC with a “two-step approach” in mind.

The two-step approach is a system in which the central bank issues a CBDC, and private banks and payment companies provide it to users to develop related services.

CBDCs continue to be a trending topic right now as central banks around the world are in various stages of research and development of digital currencies. CBDCs are digital versions of fiat currencies (like the euro, US dollar, or Japanese yen) backed by a central bank.

MasterCard Contributing Its Quota To Crypto Industry

Before now, Mastercard had established a series of partnerships with governments on state-backed digital currencies.

Last year, Mastercard launched a testing platform that allows central banks to evaluate digital currencies. The platform was developed to facilitate an environment where banks, fintech, and consumers can partner for the issuance, distribution, and exchange of digital currencies.

Miebach had previously revealed the company’s plans to focus on stablecoins and CBDC.

Earlier in February, Mastercard collaborated with the Bahamas government, which provided the citizens with the option of loading the country’s CBDC onto a prepaid Mastercard.

Besides CBDC issuance, MasterCard is pushing the crypto frontier. The payment network was one of the first firms to support cryptocurrencies on its payment network.

Its rival, VISA, is not left behind as the company has also been making supportive moves in the crypto industry.

VISA’s crypto payment boss Guy Sheffield believes the CBDC path could affect the global adoption of crypto as a whole. He explained on Twitter,

“As governments evaluate CBDC, the path that they decide to take will have major implications for privacy, monetary sovereignty, geopolitics, and financial inclusion, as well as global adoption of crypto dollars and bitcoin.”

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Author: Jimmy Aki

Beijing Probes into Bitcoin Mining; This Is ‘Normal Bureau Business’ Aimed at Energy Consumption

Beijing Probes into Bitcoin Mining; This Is ‘Normal Bureau Business’ Aimed at Energy Consumption

Beijing is conducting a check on data centers involved in cryptocurrency mining to understand their impact on energy consumption. The probe was directed by city authorities.

The Beijing Municipal Bureau of Economy and Information Technology sent an “emergency notice” to the city’s data center operators earlier this week to report on if they are involved in crypto mining and if so, to provide the amount and share of power consumed by them, reported the Chinese state media PengPai.

The three biggest telecom operators in China also received the notice.

“China used to be a place where cryptocurrency mining was thriving, but the business is shrinking due to policies,” Edward Lu, senior vice president of Canaan Inc, a Chinese cryptocurrency mining machines maker told Reuters.

The Beijing Bureau of Economics and Information Technology meanwhile has clarified that the notice was issued by the bureau, mainly from the perspective of the types of services carried by the data center and the energy consumption, and it is the normal business work of the bureau. The local publication Wu Blockchain noted,

“Security inspections in northwestern China have basically ended, and the bitcoin hashrate has begun to recover. This inspection is not aimed at Bitcoin mining, but on the overall safety of electricity.”

Just this month, Li Bo, deputy governor of the People’s Bank of China called Bitcoin and stablecoins investment options and said that they are not currencies. He further said,

“Until we figure out what regulatory rules are needed, we will continue to maintain our current initiatives.”

Additionally, Li Bo believes that if stablecoins are to become widely used payment solutions, stronger regulatory rules are required, which will be more stringent than Bitcoin’s current supervision.

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Author: AnTy

Gold ETF Records Biggest One-day Reduction in Over 4 Years

Gold is losing its appeal, is what the bitcoin proponents say time and again. But it looks like it’s not just what the crypto enthusiasts have been saying; rather, it has actually been happening.

The latest data from Bloomberg shows that gold ETF holdings have had their biggest one-day reduction since November 2016. An exchange-traded fund (ETF) tracks an asset, commodity, or index that can be purchased or sold on an exchange like a regular stock.

Reportedly, total holdings have dropped 23.5 tons to 3058 tons, the lowest since last May.

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This makes sense given the price of spot gold is trading around $1,770 an ounce, in a downtrend ever since hitting a new all-time high in August last year at $2,075 per ounce.

Compared to gold’s -6.50% performance this year, so far, Bitcoin, aka ‘digital gold,’ has increased 88% in value YTD, while still being down over 16% from its ATH of almost $65,000.

“Bitcoin is stealing gold’s shine,” noted Mike McGlone of Bloomberg. “Accelerating trends in decarbonization, electrification, and digitalization.”

Even the largest gold ETF, SDPR Gold Shares (GLD), is recording a decline in its assets under management (AUM) at $58 billion, last seen in May 2020, down from $84.24 billion in August.

This has been despite the fact that “we’re in an everything bubble,” in which we are seeing asset inflation increasing.

This bubble can be overwhelmingly attributed to one singular trend, QE, which makes asset prices go up, notes Travis Kling, who runs the Ikigai fund.

With the Federal Reserve continuing to add trillions of dollars to the market, everything is running hot, and “Bitcoin appears to have been purpose-built for a time such as this. A perfect mirror reflection of monetary and fiscal policy irresponsibility. Money printer go brrr and number go up,” he said.

This is why in the last 11 years, as the total assets of the world’s central banks went straight up, BTC price went from nine cents to $65k. Kling said,

“Anyone in the world with an internet connection can buy $1 worth of Bitcoin & begin protecting themselves against monetary debasement & the rapidly increasing risk that the largest monetary experiment in human history will end poorly.”

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Author: AnTy

Fidelity Launches Digital Asset Analytics Tool For Institutional Investors

Financial services firm Fidelity investment has launched a digital assets analytics platform for institutional investors.

Fidelity’s Sherlock To Guide Institutional Investors

Fidelity named the platform Sherlock, which is a digital assets analysis tool that will provide fundamental and technical analysis for fund managers and investors.

According to the firm, Sherlock will collate valuable pieces of information on the blockchain, market, social sentiment analysis, as well as industry news into a single portal.

The platform will also research crypto-assets relying on quality institutional data providers coupled with the provision of unique analytics to guide investors.

Fidelity’s Sherlock is expected to provide much-needed competition against existing solutions produced by companies like Messari.

In 2018, Messari launched a data solution service and had gained valuable recognition worldwide by integrating with Kaiko’s Rest API.

Other giant forces to be reckoned with in the provision of data and analytics are Dune Analytics, Glassnode, Skew, Coin Metrics, and Santiment.

Speaking on the new development, Kevin Vora, Vice president, Product Management, Fidelity Center for Applied Technology (FCAT), said Sherlock would deliver comprehensive data and deep analytics as clients will no longer face numerous irrelevant resources.

Fidelity Dominating the Crypto Space

Besides developing Sherlock to help institutional investors, Fidelity investment has been making significant contributions to the crypto space.

Earlier, Fidelity Charitable, the charitable arm of the mutual fund giant, reportedly raised $28 million in cryptocurrency donations.

The acceptance of cryptocurrencies as part of donations for the non-profit was a welcome development in the crypto space.

More importantly, the investment firm plans to launch its bitcoin exchange-traded fund (ETF) for digital assets and virtual currency, per Form S-1 filed with the Securities and Exchange Commission.

While SEC is yet to approve any firm to date, Fidelity might be feeling lucky due to its track record in the traditional finance space.

Given the prevalence of existing data and analytics solutions for institutional investors, observers will be eager to see if the newly introduced Sherlock solution by Fidelity investment will also turn things around.

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Author: Jimmy Aki

BTCPay Server Releases New Version After Tesla Discloses Vulnerability

BTCPay Server Releases New Version After Tesla Discloses Vulnerability

Bitcoin payment processor, BTCPay Server, has released a new version after Tesla’s security engineering team disclosed vulnerabilities.

As such, any BTCPay Server user running a version older than v.1.0.7.1 is recommended to update your instance. Aaditya Purani, Sr. Security Engineer at Tesla said,

“Got assigned 6 CVEs for my findings on BtcpayServer. Highlights include a pre-auth remote code execution by combining two bugs (under certain circumstances). Thanks to BtcpayServer for their swift remediation actions. Please update your instances to v1.1.0.”

Tesla’s security engineering team first reported the vulnerabilities on April 19th, and after investigating and confirming them. BTCPay Server, along with Tesla’s team, patched the vulnerabilities.

A newly patched version, v1.0.7.1, has been released today.

The vulnerabilities included CVE-2021-29251, a critical one that allowed a malicious part to generate an email asking for a password reset to the victim. If the victim clicked, then the targeted account could be taken over.

In CVE-2021-29246, BTCPay Server wasn’t properly validating file names in upload forms, which could result in uploaded files being saved in arbitrary locations on the server. CVE-2021-29250 was related to XSS vulnerability in the Point of Sale feature.

Another CVE-2021-29245 allowed the generation of legacy API Keys which can be used to generate new invoices, and the selection of UTXOs in Payjoin were using a weak RNG.

CVE-2021-29247 involved the lack of httponly, and CVE-2021-29248 allowed a remote attacker to obtain sensitive information.

“We would like to thank Tesla for submitting the disclosure that led to these fixes and helping us with remediation,” stated BTCPay Server, which is now looking into the creation of a bug-bounty program as one way to improve the security process.

Earlier this year, Tesla announced its billion-dollar worth bitcoin holdings and then later started accepting BTC as a payment. Instead of converting to cash, the company will be holding.

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Author: AnTy

SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

Meanwhile, the Fed Chair is in no rush to issue a digital dollar either as the focus is on doing it right than doing it fast.

China’s digital yuan will not overthrow the dollar’s reign, said a top US Securities and Exchange Commission official (SEC). And this is because of the growth of dollar-backed stablecoins.

Central banks around the world are working on the digitized version of their fiat currency with an aim to improve the payments system.

The People’s Bank of China (PBOC) is leading this race of a central bank digital currency (CBDC) as it extends the trials of digital yuan to more cities and even across borders in Hong Kong.

This fast pace of China has some worried that the yuan could gain dominance over the dollar, the world’s leading reserve currency. But according to Hester Peirce, aka “Crypto Mom,” the rise of stablecoins wouldn’t let that happen. she said,

“Even in 2021, there’s been a tremendous growth in stablecoins – these are essentially private digital dollars.”

“That, effectively, may be our answer to the Chinese CBDC (central bank digital currency). It may be just private stablecoins.”

“If they’re dollar-backed, then I think that the dollar will still be quite relevant,” said Peirce during a digital currency event.

According to the International Monetary Fund, the dollar accounted for almost 60% of the world’s official foreign exchange reserves at the end of 2020, while China’s share is just 2.25%.

Stablecoins, meanwhile, are on their way to surpass $100 million in market cap, with Tether the dominant stablecoin has a market cap of $51 billion alone, which is managing over $20 billion in trading volume every day. Tether’s on-chain volume has reached $754 billion YTD, already 2% higher than the total volume transacted in 2020, per IntoTheBlock.

On the topic of a digital dollar, Federal Reserve Chairman Jerome Powell said this week that China’s digital yuan plans wouldn’t push them to rush its own CBDC plans, adding that China’s approach won’t work in the US.

“It is far more important to get it right than it is to do it fast,” Powell said.

“The currency that is being used in China is not one that would work here. It’s one that really allows the government to see every payment for which it is used in real time.”

The US central bank is taking its time to understand digital currencies, he said. “Central bank digital currencies are now possible,” Powell said.

“We need to understand whether that is something that would be a good thing for the people that we serve.”

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Author: AnTy

MicroStrategy May Purchase More BTC, But May “Sell” and “Decrease its Overall Holdings of Bitcoin”

MicroStrategy May Purchase More BTC, But May “Sell” and “Decrease its Overall Holdings of Bitcoin”

Publicly-traded business intelligence company MicroStrategy released its Q1 2021 financial results, revealing “one of the strongest operational quarters” in its business in years.

More importantly, MicroStrategy continues to HODL all 91,579 BTC that it has purchased so far. Michael J. Saylor, CEO of MicroStrategy said,

“MicroStrategy’s first-quarter results were a clear example that our two-pronged corporate strategy to grow our enterprise analytics software business and acquire and hold bitcoin is generating substantial shareholder value.”

The company, however, is not done with its bitcoin buying spree and “may purchase additional BTC and increase its overall holdings.” But they may also “sell its bitcoins and decrease its overall holdings of bitcoin.”

Back in September, Saylor had famously said, “I Didn’t Buy It to Sell It. Ever,” and then this year, “If you owned the most desirable asset in the universe, why would you ever sell it?”

But of course, at some point, he has to sell, at least some.

This week, as we reported, Tesla sold 10% of its bitcoin holdings, but this trimming, as the electric car maker CEO said, was to prove the liquidity of the crypto asset while assuring that they believe in the long-term value of it.

Interestingly, at the time of the Bitcoin purchase, it made up 7.7% of Tesla’s available cash, which at the end of March, it had increased to 14.4%.

MicroStrategy meanwhile reported cash and cash equivalents of $82.5 million, up from $22.9 million at the end of the previous quarter.

The company reported a 10.3% increase in revenue at $122.9 million, with revenue from product licenses and subscription services amounting to $31.3 million, a 52.3% increase.

Gross profit for the quarter was $100.4 million while net loss was $110.0 million, or $11.40 per share on a diluted basis compared to net income of $0.7 million.

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Author: AnTy

Coinbase Acquires Data Analytics Platform Skew; Allows US Users to Buy Crypto Using PayPal

Coinbase Acquires Data Analytics Platform Skew; Allows US Users to Buy Crypto Using PayPal

  • Coinbase now allows its millions of users in the US to buy cryptos using PayPal.

The largest cryptocurrency exchange in the US, Coinbase now offers a simple and fast way to buy digital assets on the platform using your debit cards and bank accounts linked to the payments giant PayPal, which along with Venmo, also allows its users to buy crypto but only a limited number, so far.

ACH and wire transfers take time, but with an existing PayPal account, one can start making transactions on Coinbase right away. The user doesn’t need to add bank accounts or card numbers directly to Coinbase.

To buy crypto on Coinbase with PayPal, you have to select it as a payment method. Then you have to select or add either a debit card to a bank account linked to the PayPal account and make a purchase, applicable only up to $25,000 a day.

This ability to use funds from PayPal to buy crypto on Coinbase will be expanded to more countries as well in the coming months. Already, cash withdrawals to PayPal are available in the US, Canada, EU, and the UK.

Today, Coinbase also announced the acquisition of data analytics platform Skew, which it says will allow it to provide real-time actionable data analytics to institutions and traders.

This will help the company serve its more than 7,000 financial institutions and enhance its prime offering. The acquisition is subject to customary closing conditions and is expected to close in the second quarter.

London-based Skew, which was founded in 2018, already serves over 100 customers, including the likes of One River Asset Management and Susquehanna International Group.

Earlier this month, Coinbase had gone public through direct listing with its share price briefly as high as $430. Currently, COIN is trading at $294.77, in line with the consolidating bitcoin prices of around $54,000.

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Author: AnTy