Massive Lawsuit Brought Against Consumer Financial Protection Bureau by PayPal

  • PayPal says that the regulations implemented by the CFPB force them to make “misleading and confusing” disclosures to customers.
  • The payment processing firm is asking to be compensated for the attorney fees and cost of taking this case to court.

PayPal is one of the biggest payment processors in the world, and they’ve served millions of customers on various merchant websites. However, they have recently gotten involved in a lawsuit against the Consumer Financial Protection Bureau. According to PayPal, the CFPB has required them to make disclosures about its fees with “misleading and confusing” statements.

The lawsuit, which was filed on December 11th by PayPal, states that the agency seems to be unclear on the substantial ways that digital wallets and prepaid products (like their prepaid debit cards) differ. A court filing revealed to CoinTelegraph shows that the CFPB requires both digital wallets and prepaid products to be regulated under the same rules. However, this type of regulation for the digital wallets that PayPal offers is “fundamentally ill-suited,” as PayPal states.

Within this lawsuit, there’s a specific CFPB rule in question – “Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) Rule.” The rule was originally implemented in April this year, and it states that PayPal must provide users with a disclosure on the fees that are not charged by the company. PayPal claims that the rule also doesn’t properly demonstrate what most customers actually pay for their fees.

Essentially, the rule states that the descriptions of these fees on PayPal that “undermine PayPal’s own clear disclosures” need to be simplified. Furthermore, the rule bans them from offering information to consumers that would otherwise allow them to make “an informed decision,” and instructed the firm to tell their customers the worst possible fee that they may come up against, “even if the fee would rarely be incurred.”

In the filling, PayPal added, “The Rule mandates that customers be given — and actually view — ‘short form’ fee disclosures. The requirements for this short form disclosure are extremely prescriptive and rigid. Certain fee categories must be placed in specified positions and presented in certain font sizes […] The Rule further prohibits PayPal from including explanatory phrases within the disclosure box to describe the nature of these fee categories.”

Along with the petition for the ruling by CFPB to be deemed unconstitutional, the push to relieve them of it also asks that PayPal be awarded the costs and attorney fees by the court, as they deem appropriate.

Andrew Rossow, an internet attorney from Ohio, said that the lawsuit from PayPal makes it clear that there are many regulators – CFPB included – don’t actually understand the new technologies being launched in the industry today, like blockchain, artificial intelligence, and others.

Rossow added, “I think the CFPB’s recent expansion of Regulation E (Prepaid Accounts Under the Electronic Fund Transfer Act) and Regulation Z (Truth in Lending Act) was premature because it still doesn’t understand, in my opinion, how these digital wallets (which includes cryptocurrency wallets—hot and cold) operate and the parties that involved in even the most ‘basic’ of digital money transactions.”

If the court sides with PayPal, the progress could be huge for the cryptocurrency industry. After all, PayPal isn’t just standing up for itself – it is “defending the business operation of each of its competitors, protecting themselves from unwarranted and almost endless liability at any given point in time,” says Rossow.

PayPal has recently revealed their substantial quarterly profits and has been recording new users and more transactions. However, the platform recently cut some of their partnerships, including their ties to Pornhub and their models.

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Author: Krystle M

Kraken Security Labs Discovers ShapeShift’s KeepKey Crypto Wallet Can Be Hacked Easily For $75

KeepKey hardware wallets are affected by a flaw that would make them vulnerable to attacks if a hacker has access to the device for around 15 minutes. This is according to a recent report released by Kraken Security Labs and published in a blog post on December 10.

KeepKey Crypto Hardware Wallet Affected By Flaw

As per the report released by Kraken, an attacker would rely on voltage glitching to extract the encrypted key of the user from KeepKey wallets. After this, the encrypted seed can be cracked and the PIN can be easily hacked with brute force. The researchers claim that it is possible to perform this attack with a consumer-friendly glitching device for just $75.

In addition to it, the report explains that it would not be possible to stop these attacks from happening with a software update from the company. In order to solve this issue, a needed  complete hardware redesign, which is certainly expensive to perform and very costly for users.

The company claims that they are already aware of these attacks but their goal is to protect users against remote attacks that could happen to online, desktop or mobile wallets, among others.

It is very important for users to be sure that if they lose their cryptocurrency wallet, the funds could be potentially accessed by attackers and the funds could be at risk of being stolen. The cryptocurrency market has many times been affected by hacks that were pointed at exchanges and other large holders of digital assets.

The report has also advised users to enable the BIP39 Passphrase with the KeepKey client in order to protect the crypto funds in the wallet. The passphrase is generally not user-friendly in practice but it is also not stored on the device, meaning it would not be vulnerable to this attack.

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Author: Carl T

EOS Network Downgraded To C- On Weiss Ratings For Centralization And Potential For Faking Activity

EOS network’s governance issues continue to haunt them as Weiss Ratings recently downgraded the network from B category to C-. Weiss Ratings also posted a Twitter thread explaining why they had to downgrade the project which was once hyped as “Ethereum Killer.”

Weiss Ratings in its tweet claimed that although the public sentiment was right behind the project in its hayday and the platform was known for being a fast, efficient and most important a decentralized ecosystem. However, in the past year, there has been a continuous decline in the decentralization aspect where major whales control the majority of the token flow which could be of a deep concern.

Weiss Ratings claimed that the top 100 EOS token holders who represented a meager 0.01% of the total token holders on the platform, has a whopping 68% of the voting power on the network. This means these whales can easily manipulate the network as per their will.

One of the main reasons that the EOS network was lightening fast compared to the likes of Bitcoin or Ethereum because the platform has locked the number of block producers to just 21 which means any update on the leader had to go through these 21 block producers. Compare it to Bitcoin which has over 9,000 nodes, thus each transaction on the network has to run through all these leaders to verify the authenticity of the transactions.

However, this feature which was considered as a boon for the network soon turned out to be a bane as it leads to centralization in governance. The recent case where it airdropped EIDOS token, which led to great congestion on the network. The congestion led to a very high operational fee and thus the whales who had the EOS tokens were able to pay for high transaction fees and hoard the EIDOS tokens.

Whales could Diverge Resources to Fake Activity

The Weiss Rating tweet also speculated that since the resources and control of the network are concentrated in the hands of very few, they could easily fake activities like doing a series of fake ghost transactions to heighten activity on the network.

This was even proven during the EIDOS airdrop when the network was registering transaction activity as high as 43 million per day, most of which were done towards gaining more free EIDOS. The EIDOS airdropped required users to send a minimum amount of EOS to an EIDOS wallet address and in return, an unspecified amount of EIDOS was sent back to users’ accounts.

EOS was trading at $2.75 at press time and has lost most of its gains from its yearly highs of $6.0. Looking at the string of controversies surrounding the altcoin, the team behind it would really need to rethink their strategy for the long run.

All of Today’s EOS Price Analysis, Chart Forecasts and Industry News

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Author: James W

Despite a Love or Hate Relationship, New Futures Investments Are Making Cryptos More Popular

Futures markets can help economies to grow a lot, but some people see them as very speculative. The situation would not be different in the case of crypto futures, which are even more speculative to some experts but are helping the market to grow.

Bloomberg has recently published an article affirming that Bitcoin futures show how the market has matured. According to the post, futures went from almost being meaningless to around 50% of all the spot trading activity in the market in just a couple of years.

What consequences has this brought to the market? The investor base has grown in numbers and the volatility has been decreased during this timeframe.

Crypto futures are so popular right now that most crypto exchanges are offering them together with services of lending and borrowing cryptocurrencies. This makes it very easy for crypto holders to make considerable profits just using these financial tools.

The article also notices that the volumes of contracts in traditional exchanges that started their futures during 2017 such as the Chicago Mercantile Exchange (CME) have doubled their volume in 18 months. This shows that, despite being still a small market, the growth has been exponential so far.

While there are still doubts among some investors about if cryptos will represent a revolution in the markets or not, the fact is that they can be pretty profitable right now.

New exchanges such as the Intercontinental Exchange’s Bakkt have just appeared and will probably leave their mark in the industry, too. With all these improvements, it is hard to see a future in which cryptocurrencies will not be popular investments.

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Author: Hank Klinger

AT&T Decides to Fight the VideoCoin Crypto Executive’s SIM Swap Lawsuit Worth $1.7 Million

  • AT&T claims to fight the accusations made against them. The claim states that the company was careless with a customer’s loss of just over million dollars in a SIM swapping scam.

Seth Shapiro, VideoCoin’s head of strategy, filed a lawsuit on October 17 in U.S. District Court for the Central District of California accusing the telephone company for neglecting to protect his cell phone during a May 2018 hack. Hackers were able to gain entry into his wallets on 11 exchanges worth over $1.8 million dollars. The claim affirmed that two employees who were from Tucson, Arizona and working for AT&T, led the operation.

Jarrett White and Robert Jack got $4,300 and $585.25, individually, from programmers. The theft happened when Shapiro declared the culmination of $50 million from a private ICO, instead of a public deal.

After a progression of SIM swaps, Shapiro lost $1.7 million in digital currency. Cybercriminals gained control of his cellphone, accessed his email along with his trade records to take a total of a million dollars and a balance that belonged to other individuals who were investing in crypto projects with him.

AT&T spokesman Jim Greer said:

“It is unfortunate that Mr. Shapiro experienced this, but we dispute his allegations. We look forward to presenting our case in court.”

Joel Ortiz, the genius behind the Shapiro hack, was sentenced to 10 years in prison earlier this year.  An associate, who was considered a minor was also charged in several cases. Ortiz was accused of taking several million dollars, of which only 400,000 were returned to his accounts.

Another SIM hack allegation was brought against AT&T a year ago, when Michael Terpin, a crypto executive and  business partner in several ventures, claimed to have lost $23.8 million when Shaipro’s cell phone was hacked.

The SIM swap losses have led to an undeniable inquiry for security specialists.

The CEO of the California-based SIM card security supplier DontPort – Haseeb Awan, spoke to CoinDesk and said,

“Individuals ought to keep away from SMS [verification] at whatever point conceivable.”

SIM swapping is a notable risk among the more prominent crypto community, and are frequently focused on due to their exposure and because they may hold higher amounts in their accounts. Shapiro told his investors that he took his cell phone to AT&T when his phone all of a sudden quit working.

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Author: Sritanshu Sinha

State Owned Oil Giant, PDVSA, Requests Venezuelan Central Bank To Test Holding BTC & ETH For Payments

Venezuela has a stash of crypto’s and it does not seem afraid to use them. The only problem is that the country does not seem completely sure about how to use them, also.

As reported by Bloomberg, the central bank of Venezuela recently started tests in order to determine how to use it’s cryptos to boost their national reserves. With inflation that goes beyond 1,000,000% a year, the country is desperate to have some monetary relief.

According to four people with “direct knowledge” of the situation, one of the state-run oil companies in the country, Petroleos de Venezuela SA, wants to pay its suppliers using BTC. The country’s international reserves are running pretty low now and it would be useful to have cryptos as an option.

The main reason why the government is considering this is because of the U. S. sanctions against the country, which isolated Venezuela from global markets and affected its economy. The current political and economic crisis doesn’t help, either.

Venezuela’s President Nicolas Maduro attempted to create the Petro, a national cryptocurrency, some time ago, but the project utterly failed. Because of this, it would make a lot of sense for Venezuela to start using Bitcoin. Several people outside of the government already do.

Cryptocurrencies were created partly as a way to avoid sanctions, so it is not surprising at all that they would be used on a nationwide basis to avoid sanctions from other governments. Other countries such as North Korea and Iran could follow a similar route, too, as it is harder to track Bitcoin transactions.

The U. S. government could, on the other hand, blacklist wallet addresses, which is already done in some cases. This could get in the way of Venezuela’s plans.

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Author: Gabriel Machado

The Mining Power of Litecoin Has Went Down Over 25% Since The LTC Block Halving

Litecoin (LTC) miners are facing problems recently. Many of them have decided to unplug their mining devices after the most recent halving happened. Data from the LTC network shows that the difficulty is going down because of that. It went from 15.9 million to 11.4 million one day after the halving.

The event named as halving, in case you are wondering, is a periodic halve in the rewards offered per block. This mechanism is present in most blockchains and it happens to regulate inflation and minimize it.

Litecoin’s mining difficulty is adjusted every 2,016 blocks (around four days). This is done to make the intervals between blocks always be around 2.5 minutes. Now, after a drop of 28% in the difficulty, the token is seeing its lowest difficulty since April.

Most analysts believe that the rewards per block going from 25 LTC to 12.5 LTC without a significant increase in price are the main reason why miners are abandoning the game.

If they want to maintain their profits in a situation such as this one, they do not have a lot of choices other than upgrading their equipment. In some cases, it can become unprofitable to mine after the halving.

Bitcoin generally sees spikes in its price after halvings, but Litecoin is yet to have the same luck. In fact, the prices of LTC actually went down after the event. Before the halving they were around $93 USD and are $74 USD now.

According to data taken from popular mining pools such as InnoSilicon and FusionSilicon, miners only have profitability of 10 to 20% now, a considerable decrease. Will more miners leave the scene? Probably.

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Author: Gabriel Machado

Graychain Report Shows Crypto Lenders Earned Under 2% On $4.7 Billion Worth of Loans

Cryptocurrencies are bringing a revolution to the world but if you want to use them in order to profit from loans, we have bad news for you. According to a new report made by Graychain, a crypto credit assessment company, $4.7 billion USD has been lent in the crypto industry up until this point. However, the returns from that are only 1.8%.

Borrowers generally get at least 6 to 10% returns on investments per year, so a profit of only 2% is meaningless. Inflation is higher than that in most countries.

The CTO of Graychain, Neil Zumwalde, has said that most companies are actually lending money for very short periods when compared to more traditional loans. Also, it is easier to make it look like the loans are more profitable when you look at their originations only.

He said that the company gathered data from several companies such as Dharma, Compound, Unchained, and Maker in order to make the study. Some companies such as Genesis and Celsius, however, are less prone to offer information and can keep it private. Without this private information, the numbers can be slightly different from the reality.

According to the executive, the market is growing fast. As the industry is maturing, more opportunities are appearing and more loans are being made.

Part of the reason why the profit is so low is that cryptos are volatile and because some of them are very short. As prices change all the time and nobody wants to lose money, people often don’t hold the money long enough.

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Author: Gabriel Machado

Patientory (PTOY), The Crypto Worth Less Than A Cent, Can Be Very Profitable In The Future

Many cryptos are all about a promise. Patientory is one of them. The crypto, which was created for a health app, is worth only a cent per PTOY token, but some of its executives believe that the project may be worth millions in the day.

Chrissa McFarlane, the CEO of the company, was recently interviewed by the crypto media outlet Coindesk. According to her, at the moment people are using the token only for small experiments, but she defended that the project may be worth millions in the future.

One of the main goals is to have data from healthcare providers in order to create a big network that will provide all range of health services for users.

At the moment, the project lacks clients, but it has a growing community with several contributors. The project is basically gearing up for a profitable future, its CEO affirms. According to her, the standards for interoperability of the company are getting better and, with time and testing, the network will finally be prepared to empower patients and to finally be profitable.

So far, Patientory was only able to get $12.4 million USD. Most of the money came from the Initial Coin Offering, which was held two years ago, but some came from venture capital later on. Most of the money has been used in the development of the platform and in related events aimed to bring awareness to the project.

Unfortunately, the future of this project is far from certain. While the management is sure that the product is innovative and will bring millions in profit, the truth is that most startups end up dying after a few years.

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Author: Daniel W