After CFTC Files Charges, Chainalysis Labels BitMEX Crypto Exchange as a ‘High Risk’

BitMEX is set to be classified as a ‘high risk’ exchange by crypto intelligence firm Chainalysis; barely a week since its officials, including CEO Arthur Hayes, were indicted by the U.S Commodity Futures Trading Commission (CFTC).

Chainalysis advised its clientele, which includes government agencies, financial institutions, and crypto exchanges that it would consider BitMEX a ‘high risk’ label as of October 13 onwards.

This risk classification update on BitMEX means that Chainalysis clients who leverage the platform’s ‘KYT’ monitoring tool will be able to see both historical and future trigger alerts from the now haunted crypto derivatives exchange. Chainalysis shared the client advisory email with TheBlock,

“Any transfers from October 1st and later should be considered high risk. Compliance teams should also look back at older transfers, but given this change may trigger alerts on thousands of older transfers, it is reasonable to do that incrementally,”

However, a Chainalysis spokesperson said that the company’s clients could opt for their own risk tolerance levels and adjust accordingly. That said, they were keen to highlight it is their duty as a crypto intelligence firm to protect its clients, hence the consideration of ‘high risk’ based on criminal charges filed against a specific firm or its ownership/leadership.

Meanwhile, Arthur Hayes remains at large as BitMEX’s parent firm, HDR Global Trading Ltd, vows to take on the government against the recently filed charges. The accused are being pursued on grounds of violating KYC/AML rules and running an unregistered trading service. While it might be early to predict the future of BitMEX, the exchange is already taking a hard hit on its business. In fact, brutal skeptics like LMAX Group CEO, David Mercer, are of the opinion that recent developments will ultimately affect BitMEX’s going concern,

“I can’t see any significant institution wanting to continue to trade there.”

Also Read: ‘Warning Shot’ for DeFi: Here’s Why BitMEX Charges are ‘Incredible Bearish’ for this Burgeoning Sector

More Reading: After Targeting BitMEX, SEC Takes On John McAfee, Who Made Over $23M From Fraudulent ICO Promotions

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Author: Edwin Munyui

Russian Monitoring Agency Develops Blockchain Analysis Tool To Track Bitcoin And Monero

A report from local news channel RBC confirmed on Tuesday Russian intelligence unit, Rosfinmonitoring, (Russia’s Federal Financial Monitoring Service), has proposed a cryptocurrency monitoring tool similar to U.S.’s Chainalysis. The agency, in charge of reducing cases of money laundering and terrorist financing in the country, will start tracking Bitcoin and other cryptocurrencies including privacy enhanced tokens such as DASH and XMR.

“The Transparent Blockchain”, is a new prototype built in partnership with the Lebedev Physical Institute of the Russian Academy of Sciences that will use artificial intelligence to track blockchain activity and cryptocurrency transactions. According to the report, a letter to the Deputy Minister of Digital Development, Communications and Mass Media, Maxim Parshin, has been approved by the Ministry of Telecom and Mass Communication.

So far, the Rosfinmonitoring has started preparations for widespread production of the software with the Bank of Russia and financial institutions within the country set to test it in the “near future.”

A $10 million request

The prototype is ready and tested on drug controls, the Federal Financial Monitoring Service confirmed. However, till now development of the blockchain analysis service has been constricted to extrabudgetary funds. To continue the build, the Rosfinmonitoring requested the federal government to increase their funding for the project by 760 million rubles (~$10.42 million) in the next three years.

Russia has been on the forefront in preventing money laundering and terrorist financing using cryptocurrencies. In July, President Vladimir Putin signed two digital asset bills into law – first, authorizing that crypto is property and second, digital assets cannot be used as a form of payment within the country. Earlier this month, the Russian government outlawed sending cryptocurrencies to any anonymous wallets forcing users to be fully KYC compliant.

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Author: Lujan Odera

Cellebrite Launches Crypto Tracer Solution Powered by CipherTrace for Tracking Illicit Activities

Cellebrite, a digital intelligence firm has released a cryptocurrency transaction tracing tool called “Cellebrite Crypto Tracer,” which would help law enforcement agencies, businesses, and analysts to trace crypto transactions being used for any illicit activity such as money laundering, terrorism, drugs, human trafficking, weapon sales, and ransomware schemes.

The firm has promised to offer its crypto transaction tracing toolkit to investigators, along with analysts and even those who want to lawfully use the toolkit to obtain evidence of any kind of criminal activity being carried out using cryptocurrencies.

As per a study conducted by Oxford University, over $76 billion in Bitcoin is being used to facilitate illegal activities. The use of digital assets, especially Bitcoin and privacy-centric coins, has been a significant hurdle for law enforcement agencies and remains one of the prominent reasons governments have a passive stance towards regulating cryptocurrencies.

How Does Cellebrite’s Crypto Tracer Solution Work?

The Cellebrite crypto tracer solution creates an array of data sets with attributable points. The toolkit collects data from open-source and private references, deception data, and human intelligence, which results in a data set of 522 million attributable points.

Leeor Ben-Peretz, chief strategy officer of Cellebrite, sheds some light on how the tracing solution aggregates and intelligently uses data to help users trace illicit activity. The firm claims that its solution, with millions of data sets, can pinpoint the origin of funds as well as where the fund is headed to and can determine if the destination is an exchange or a wallet. Peretz explained:

“Some of the major features of the solution include the ability to conduct risk scoring and profile hundreds of global exchanges, ATMs, mixers, money laundering systems, gambling services, and known criminal addresses and assign risk levels to transactions.”

The launch of the crypto tracing tool could not have been timed better. Just last week, Twitter experienced one of the worst cyberattacks in recent history, where the accounts of hundreds of prominent personalities like Elon Musk, Kanye West, Jay-Z, and many more were taken over by hackers.

All the accounts tweeted a fake bitcoin scam promising people to double the amount they send to the mentioned bitcoin address. While the scams look apparent to many, and Twitter managed to gain control within a few minutes, hackers still managed to get over $100,000.

With other blockchain tracing providers such as Chainalysis also tracking the transactions of the wallets that received these funds. Now, with CypherTrace powered, Cellebrite’s tracing solution can help in locating the accused behind these hacks. However, cybercriminals have adapted to the evolving landscape of technology, and have become more sophisticated in their hacks and scams.

John Jefferies, a chief financial analyst of CypherTrace, believes as the cryptocurrency gains more mainstream adoption, the crimes associated with it will also see a rise. He said:

“As the market capitalization of crypto grows, larger financial crimes and nation-state scale. Regulatory reform, driven by the updated FATF guidelines, will force jurisdiction arbitrage as new laws are enacted, globally on unsynchronized timelines.”

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Author: Rebecca Asseh

Cisco Systems Warns Cryptojacking Botnet Mining Monero (XMR) Is Also Stealing User Data

Cisco Systems threat intelligence team has released a warning regarding a newly discovered Monero Mining crypto-jacking botnet called “Prometei.” The notice stated that the botnet not only mines Monero using targeted computer’s resources but also steals data from the system.

The warning revealed that the botnet has been active since May and relies on 15 executable modules to steal administrator passwords from the targeted systems. Once the malware gets access to the system, it steals all available data from the computer system.

Cisco Systems also revealed that the malware is very much active today and has infected thousands of systems. The malware is capable of containing up to 10,000 systems at any given point, which is evident from the high hash generating a frequency of 1M Hash/sec (million hashes per second).

Talking about how impactful the Monero mining botnet is, Vanja Svajcer, a researcher at Cisco Talos, revealed that the botnet generates revenue of around 1500 USD per month for its owners. While this may not seem profitable to many, the amount is ten times more than the average monthly salary in many countries. Apart from that, it also costs a significant amount of time for the computer owners whose system is used to mine Monero. Svajcer explained how the botnet is harmful:

“Stealing credentials is the most dangerous part of the Prometei botnet. You could consider the attacker with its bot being a burglar in your home. Naturally, the burglar searches all the drawers and finds various keys. They take keys with them and ask somebody else (another infected system) to check if any of the keys work on your car, safe deposit box, etc. When criminals break into a house, it opens up a whole new set of opportunities. It is very similar to this botnet.”

The intelligence researchers at Cisco also believe the creator of the botnet is somewhere in Eastern Europe. For a single individual, the amount generated by the botnet should be enough as extra pocket money.

Cryptojacking malware attacks have been one of the long-running nuisances without any permanent solutions along with ransomware attacks. While ransomware attacks are quite aggressive where the hacker directly demands a ransom, cryptojacking is kind of a passive attack where the target computer owner, in most cases, won’t even realize that their system has been compromised.

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Author: Hank Klinger

Blockchain Intelligence Startup, TokenAnalyst, Shuts Down; Some Employees Move to Coinbase

Token Analyst, a startup focused on blockchain market intelligence, has announced that it’s ceasing operations after two years in operation.

A medium post by the firm on May 5 notes that it will no longer be supporting its products which include APIs and the TokenAnalyst platform.

According to the blog, the team is proud to have contributed to the growth of crypto and blockchain in areas like transparency:

“Our mission was to bring transparency to the decentralized world, and we believe we made significant progress towards this mission.”

The team, however, added that it will remain committed to developing the open financial system for worldwide adoption. Notably, some of the employees in TokenAnalyst will be joining Coinbase to advance this course:

“While we will not be actively working on TokenAnalyst anymore, we are very excited to announce that some of our team is joining Coinbase.”

The blog concluded by thanking TokenAnalyst’s stakeholders for their support, noting that they have been a big factor in the company’s success:

“It was truly invigorating to tweet/whatsapp/telegram/email/signal 24/7 with crypto enthusiasts from all over the world. It was your incredible support, encouragement, and passion that kept us going and motivated.”

TokenAnalyst founders, Sid Shekhar and Jai Prasad, who are speculated to be among those moving to Coinbase also shared their twitter handles @jai_prasad17 or @sidshekhar24 for further communication.

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Author: Edwin Munyui

AI Startup SenseTime Partners With Chinese Central Bank In Development Of Digital Yuan

The well known artificial intelligence (AI) firm SenseTime, valued at $7.5 billion, has officially partnered with China’s digital currency research institute, an offshoot of the Chinese Central Bank, to help in accelerating the creation of digital yuan.

SenseTime, which is based in Hong Kong, announced that the deal will see the startup offer its expertise on accelerating, innovating as well as implementing the applications for AI technology within the Chinese financial sector.

SenseTime and China’s Central Bank – The Finer Print

According to the deal, SenseTime will collaborate with the People’s Bank of China (PBOC) to enhance risk control as well as operational capacity among the financial institutions across China.

SenseTime will now consult the Digital Currency Research Institute in the creation of a joint research division that will oversee the adoption of AI within the financial space in China.

SenseTime stated:

“The two parties will jointly establish a research and innovation body, take application scenarios as guidance, jointly develop applications of AI technology in financial scenarios, and accelerate the advancement of AI innovation research in the financial field.”

SenseTime’s Background of Exciting Innovation

Established in 2014, SenseTime provides expert services on facial recognition as well as images but on a large scale. The startup has since attracted numerous clients and partners over time such as Weibo, Alibaba, Xiaomi, and Huawei.

The firm is backed by Alibaba, which led SenseTime’s funding round with an investment of $600 million back in 2018. SenseTime is also backed by big names such as Temasek Holdings (Singapore’s state investment company), SoftBank Vision Fund, Qualcomm Ventures, and others.

China has been keen on the introduction of a central bank digital currency (CBDC), and is currently conducting a pilot program of its digital yuan in four cities including Shenzhen, Suzhou, Chengdu, and Xiongan.

The American restaurant giants McDonald’s and Starbucks are some of the firms involved in digital yuan piloting in Xiong’an, for example. Reportedly, China is aiming to introduce the use of digital yuan across the country in May 2020.

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Author: Joseph Kibe

Intelligence Community Is Prepping For Black Swan Events That May Crush The US Dollar

It looks like the US Office of the Director of National Intelligence (ODNI) is looking to sponsor a researcher who can conduct a study on what would happen if the dollar would no longer be a global reserve currency.

The agency posted at the end of last year a job listing with the deadline on February 28, listing in which it’s saying that it’s looking for people with a background in economics. It also mentions the research is the first one of its kind for the intelligence’s post-doc program and that it’s meant to help with preparation for a black swan eventuality in which the US dollar would no longer be globally dominant.

The Research to Be Shared with the Intelligence Community

The study would fall under the National Counterproliferation Center’s purview. The National Counterproliferation Center is functioning under the ODNI and tries to combat weapons of mass destruction from being proliferated, mostly by stopping terrorist financing. The results of the research will be shared with the intelligence community.

While not attributed to any event or trend, the job listing does say it’s looking for cryptocurrency enthusiasts because there is the eventuality in which a digital currency undermines the US dollar, for example the digital yuan scheduled to be issued by China. This is exactly what the listing reads:

“If either of these scenarios or others come to pass, the U.S. would lose both its status in the world and its global authorities.”

A Researcher with Black Swan Events Knowledge

The researcher who will be involved in the post-doc program will receive sponsorship from ODNI, access to IT and advanced computing, plus funding. His or her work would be checked by the agency periodically in order to be understood. The researcher would collaborate with ODNI experts and other governmental entities.

The agency wants someone who knows how to work with statistics, artificial intelligence and who has knowledge about black swan events that happened throughout history, all while thinking all sort of scenarios of such events happening in the future.

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Author: Oana Ularu

Bitcoin On-Chain Transactions Have Been Dropping Since June, BTC HOLDers Staying Strong

Glassnode, a market intelligence portal, has revealed that Bitcoin has dropped by 50% in the past five months, but investors are still holding on to the cryptocurrency. The platform said that investors are still keeping their coins hoping for an upsurge, despite the current poor performance of the cryptocurrency.

According to Glassnode, UTXOs would be created for fewer transactions. But the dwindling price has caused the number of UTXOs to increase considerably in the past few weeks. This shows that a lot of investors are still keeping faith in Bitcoin, even though there could be more dip in the value of the cryptocurrency. They are still hoping that the dip in value will be straightened in due cause to pave the way to rise.

Investors not Unfazed by the Short-term Pullback

As the bear market continues in December, experts are saying this trend will continue for a while. But investors are still holding on tight to their Bitcoin, as they are anticipating an upturn in their fortunes. The investors are hoping that the bear market in Bitcoin is gradually coming to an end, and would not want to miss out when it starts rising again.

Why Investors are still Holding On

There are no serious events in the next few weeks that suggest Bitcoin could bounce back. But there are few events they are hoping to capitalize on next year. In 2020, there will be more regulated cryptocurrency custodians. Also, May next year would see the beginning of block reward halving. These two events could pave the way for the rise of cryptocurrency.

Investors are hoping that these events could help the rise in the value of Bitcoin. Consequently, the Skew crypto data platform shows that investors are currently hanging on for this rise, which they believe would not take long.

Last month, the most active crypto market was the European market. Recently, billionaires like Bill Pulte and Mark Cuban have started paying more attention to Bitcoin. It shows that the traditional financial sector is still paying attention to the activities of Bitcoin, despite its drop in volume and value.

For this reason, investors believe the bear market of Bitcoin would not last long since there are so many indices that indicate so. A lot of stakeholders are paying close attention to the cryptocurrency. And the regulation of cryptocurrency custodians would help to keep the coin in good shape.

Investors still have to be Alert

Investors still need to evaluate market fundamentals such as transaction value in USD, unique addresses, as well as hashrate. These are important long term indices that could determine the value of Bitcoin in the market.

For the short term, investors need to look at the likelihood of miner capitulation, lower time frame levels, and the volume of Bitcoin. Experts have noted that anything is possible in a volatile market.

The fact that Bitcoin has risen to unprecedented levels within a space of few years means it could still depreciate father than its current value. According to Josh Rager, a cryptocurrency expert, Bitcoin could still fall below the $5000 if the sentiment around the cryptocurrency changes.

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Author: Ali Raza

Cindicator Launches Edge Web App To Track 150 Crypto Assets Using Hybrid Intelligence indicators

Cindicator, the hybrid intelligence company recently introduced Edge, a new web-based application that can be used to receive and track indicators for more than one hundred and fifty cryptocurrency assets.

Estimating Possibilities In The Marketplace

According to information provided in a blog post published on September 11th, Cindicator Edge, the new product is targeting CND (Cindicator) token holders. At the moment, only the demo version has been provided by the company.

The new product is aimed at helping the token holders to make valuable trading decisions by being able to estimate probabilities of numerous events that are likely to occur across more than 150 digital futures, stocks, and assets, this according to the official company announcement.

For users to be able to receive the indicators on a real-time basis, they will be required to ensure that they have connected the application to their ETH wallet address. When the connection is established, it will help to unlock a maximum of 12 indicators each week.

Vlad Kazakov who is the current owner of Cindicator Edge stated that the product was tested with about four hundred users prior to the release of the demo. In the tests, it was found to work well with many of its testers giving it a positive review.

Partnership Agreement With Kyber

In the announcement released via the blogpost, Cindicator also mentioned that it had entered into a partnership agreement with Kyber. Kyber is a payment service and an-chain liquidity protocol that facilitates the automatic conversion of cryptocurrency assets. This partnership made it easier for the application users to integrate their CND tokens into the other readily available tokenized environments.

Kyber additionally provided the application’s users with options to help them acquire CND tokens directly from the Edge application. This means that users did not have to go back to an exchange for them to transfer their available tokens to the external wallet.

This news comes in the heels of the CND tokens being listed on the Kyber Network. The listing occurred on August 13th, 2019 and was formally announced by Cindicator. CND had earlier in the year been listed on Allbit.

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Author: Daniel W

Blockchain Device Market Expected to Grow to $1.285 Billion By 2024; Smartphone & PoS Systems Leading

A report recently released by MarketsandMarkets, a market research and intelligence platform indicated that the BTC devices market was expected to grow by an annual compound growth rate of 42.5%.

The platform released its report on September 12th. The report formally focused on BTC devices such as crypto ATMs, POS devices, Crypto hardware wallets, wired and wireless connectivity, and blockchain smartphones. It also looked into the geographical locations where these devices were likely to be deployed, at what rate.

When compiling the report, the platform suggested that the BTC devices market was likely to notice a substantial growth in the next three years. The growth would see the market valuation come to $1,285 million by the end of 2024. At the moment, the market valuation currently stands at $218 million.

Major Factors and Contributors

MarketsandMarkets stated that some of the factors that had contributed to this growth were the increased adoption of BTC technology in many areas such as venture capital funding development, retail and supply chain management, as well as the growing market capitalization for initial coin offering and cryptocurrency.

According to the same report, it was estimated that the lack of awareness, compliances, and clear regulations would likely curtail the growth and development of this market.

It went on to say that blockchain devices that relied on wireless connectivity for data transfer, such as point of sale devices, crypto hardware wallets, and smartphones were likely to register the highest growth in the period that had been forecasted.

Nonetheless, it was expected that these devices would be accompanied by pre-configured devices and blockchain gateways that had been adopted in telecommunication, banking, automotive, government, and other sectors.

North America’s Dominance

The report went on to note that when geographical boundaries were considered, chances are that North America would lead the rest of the world in the BTC devices marketplace. The reason for this is that the region has become an early adopter of BTC technology and accompanying devices.

Additionally, many of the BTC devices vendors are based in North America, and will thus contribute to its growth in the region.

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Author: Daniel W