Category Archives: Bittrex

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Bitmain Sues Unknown Hacker Who Stole 617 Bitcoins via MANA Market Manipulation

Bitmain is suing ‘John Doe’, an unknown hacker who gained access to Bitmain’s Binance account on 22 April 2018. Ultimately 617 bitcoins worth USD 5.5 million were stolen from Bitmain, the largest cryptocurrency mining firm on the planet.

The scheme the hacker used to steal the bitcoins was unique. Instead of directly withdrawing cryptocurrency from Bitmain’s account, likely impossible due to some sort of 2FA requirement, the hacker manipulated the MANA market to steal Bitmain’s bitcoins. MANA is the native cryptocurrency of decentraland, and its trading volume of only USD 10 million per day on average makes it an easy target for market manipulation.

After the hacker gained access to Bitmain’s bitcoins and ether, they placed large buy orders for MANA. This caused a rally in daily trading volume from USD 10 million to over USD 100 million. Part of this price rise can be explained by other traders thinking this was a legitimate MANA rally and jumping in. Globally, MANA’s average price jumped from USD 0.12 to USD 0.23 during the hack, an impressive 90% rise. On Binance, the price rise was even more drastic, with a peak price of USD 0.34, a 180% increase.

The hacker likely had a large amount of MANA on hand before the hack, and they filled Bitmain’s overpriced MANA buy orders. Then the hacker placed orders to buy Mana at prices far below the market value and used the Bitmain wallet to match these orders. The combination of these mechanisms drained USD 5.5 million of bitcoin from Bitmain’s wallet in a single day, without directly withdrawing cryptocurrency from Bitmain’s wallet.

After the bitcoins were siphoned into the hackers wallet, the hacker proceeded to trade for other cryptocurrencies and withdraw funds. Some of these funds were withdrawn to Bittrex and other unnamed cryptocurrency exchanges. Essentially, the hacker mixed the coins to obfuscate the trail.

Bitmain is suing the hacker for unauthorized access, computer trespass in the 2nd degree, electronic data theft, the USD 5.5 million of stolen cryptocurrency, and attorney fees. A key part of this lawsuit will involve subpoenas to obtain information from Binance and Bittrex, in order to gain enough information to identify the hacker and proceed with the criminal case.

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Bittrex, Cryptofacil to Launch Crypto Exchange in the Caribbean and Latin America

Bittrex has partnered with Cryptofacil, a new crypto exchange headquartered in the South American nation of Uruguay, to launch a crypto exchange across the Caribbean and Latin America. This is a major milestone since this region has lacked a major crypto exchange up until now. This new exchange will have over 200 cryptocurrencies and 270 token pairings.

Crypto exchanges are one of the most critical pieces of infrastructure for the adoption of crypto. Exchanges, like the one Cryptofacil is launching, provide a conduit for fiat currency to flow into and out of the crypto markets. Latin America and the Caribbean have numerous different fiat currencies, and major offshore crypto exchanges that usually only deal with USD, EUR, and JPY are simply inadequate. This launch is implicitly saying they will be making connections with banks in each nation in the region, to provide crypto trading for each type of fiat in the region.

Once Cryptofacil is fully launched, citizens of Latin America and the Caribbean will be able to buy and sell crypto with their native fiat currencies, massively accelerating crypto adoption and the usefulness of crypto in the region. There are hundreds of millions of people living in this region, so this is a major development.

Bittrex will provide essential infrastructure and liquidity for Cryptofacil. Bittrex has tens of millions of dollars in trading volume per day; Cryptofacil can connect with this trading liquidity, which will give its customers optimal trades even when this new exchange is just starting. Additionally, Bittrex is one of the biggest exchanges in the United States, and its experience will help guide Cryptofacil through complex international regulations.

Bittrex CEO, Bill Shihara, says, “Bittrex works every day to advance blockchain technology and this partnership with Cryptofacil will further drive its worldwide adoption. Cryptofacil and Bittrex will provide Latin American and Caribbean customers a reliable, fast and secure trading platform that also offers access to some of the world’s most innovative blockchain projects. As we continue expanding our global footprint, it is partnerships like this one that will serve to not only support the blockchain industry, but also to incubate innovative projects using this revolutionary technology.”

 

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Bittrex Teams up with Licensed Broker-Dealer for Securities Trading

Crypto exchange Bittrex is teaming up with licensed broker-dealer Rialto Trading to launch a new digital securities trading platform, pending approval from the relevant US authorities. Rialto Trading is an Alternative Trading System (ATS) that already offers fixed income securities, and once approval is granted it will begin offering crypto securities with the help of Bittrex’s expertise.

The CEO of Bittrex, Bill Shihara, says, “We’re merging Bittrex’s technology, cybersecurity and blockchain expertise with Rialto’s deep knowledge of the securities industry. And, when you add that foundation with Rialto’s extensive background in financial services, including Shari’s experience at Goldman Sachs and Deutsche Bank, this new venture is well-positioned to further advance blockchain’s adoption by offering a comprehensive solution at the right time.”

The US Securities and Exchange Commission (SEC) declared in 2018 that most initial coin offering (ICO) related cryptocurrencies were securities. The essence of the SEC’s new classification system is if investors buy a cryptocurrency and expect profits, and profits from that cryptocurrency go to a centralized organization, then that cryptocurrency is a security. Sufficiently decentralized cryptos like Bitcoin and Ethereum are not going to be considered securities, and so far the SEC has only given traders the green light to trade these without following securities laws. Exchanges must work with the SEC to offer trading for most other cryptos. Additionally, ICOs that don’t go through the SEC are illegal.

This is major news for Bittrex, the 37th largest exchange in the world according to CoinMarketCap with trading volume near USD 30 million per day as of 24 August 2018. Bittrex has been a popular exchange since the early days, and if this partnership with Rialto Trading is successful they will soon be able to offer most crypto without worrying about breaching securities laws.

Being able to offer legal securities trading will give Bittrex a major competitive edge over other exchanges that offer services to US citizens. Coinbase, the largest crypto exchange headquartered in the United States, is also making efforts to start offering securities trading via obtaining a broker-dealer license. Instead of partnering with a broker-dealer like Bittrex is, Coinbase is outright buying two firms with broker-dealer licenses, Keystone Capital and Venovate Marketplace.

 

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Exchange Alliance Unites Gemini, Bittrex, bitFlyer USA, Bitstamp

Cryptocurrency exchanges Gemini, Bittrex, Bitstamp and bitFlyer USA have formed an alliance called the Virtual Commodity Association (VCA) working group. The goal of the VCA working group is to be a self-regulatory organization (SRO) that will work together to regulate their cryptocurrency exchanges with a common set of rules, which will help increase global crypto adoption by increasing security, compliance, accountability, and transparency. The VCA working group will have an independent board of directors and executive director.

Bitstamp has been one of the top USD to Bitcoin exchanges since the early days. Gemini is a well-known exchange that is headquartered in New York City and geared towards institutional investors. Bittrex is a popular crypto exchange that accepts USD. bitFlyer USA is the US branch of Japan’s most popular exchange.

The common denominator between these exchanges is that they are well-known and make significant amounts of money, but they are nowhere near the top crypto exchanges in the world. Huobi, Binance, Bitfinex, and OKEx are the top crypto exchanges in the world and often have daily trading volume of USD 0.5-1 billion. Bitstamp has trading volume of less than USD 100 million per day, Bittrex is at less than USD 50 million per day, and Gemini is around USD 25 million per day.

Even though the VCA working group is being marketed as focusing on regulations, it is likely that they will be focusing on working together to achieve greater success, like an alliance or cartel. Right now the exchanges in the VCA working group are relatively small fish in an ocean filled with whales, and perhaps if they work together they could become a bigger player. A big part of that will be achieving optimal balance regarding regulations, and they can do that much better together than alone.

It appears the VCA working group is open to accepting new members beyond the initial four exchanges that comprise the group right now. Perhaps the group harbors hopes to one day become influential in the industry.

 

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Bittrex to Offer Select Clients US Dollar Pairs

US-based cryptocurrency exchange platform Bittrex has confirmed a partnership with several financial institutions that will allow select clients in the US to pair BTC/USD, as well as connect pairs for ‘stablecoins’ Tether and TrueUSD.

As reported by Bloomberg, the agreement will allow for now predominantly corporate clients in a limited number of states to purchase the nearly 200 digital tokens offered on the platform, using the US dollar directly.

Bittrex is working closely on the deal with New York-based Signature Bank alongside several other financial firms. Signature Bank will be responsible for holding the dollar-denominated funds.

Banks, regulations cryptocurrencies

Bittrex CEO Bill Shihara recently commented on the impact he suspects that this will have on the relationships between banks and cryptocurrency.

”It’s been a long path. It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance,” he said.

Purchasing cryptocurrencies directly with fiat currencies is becoming increasingly difficult as anti-money laundering (AML) regulations and know-your-customer (KYC) policies are being enforced by a growing number of governments.

These policies have in part contributed to a negative reputation that the cryptocurrency industry is paired with, disincentivizing many predominant financial institutions from offering related services for fear of risking their reputation.

While that is changing (notably Goldman Sachs announced earlier this month they are launching a Bitcoin trading desk), Bittrex’s actions are an important step in moving away from platforms that offer only ”crypto-to-crypto” services, meaning no fiat currency is involved in transactions.

Bittrex has confirmed that it plans to extend the offering to retail customers in the foreseeable future.

Several other banks have administrated similar deals. Prominent US cryptocurrency exchange Coinbase has reportedly developed close working relationships with Cross River Bank, Metropolitan Bank and Silvergate Bank in the US, recently securing a Barclays PLC bank account in the UK.

 

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