Category Archives: exchange platform

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Coinsecure Loses $3.5 Million in Bitcoin in Suspected Hack

Indian exchange platform Coinsecure suffered the worst cryptocurrency theft in the country’s history this week, with 438 Bitcoins syphoned out of user accounts into an address outside of the platform’s control. This was the equivalent of approximately USD 3.5 million.

The International Business Times reported that the theft came to light when users began complaining they could not access their funds over several days. The Coinsecure website issued an official notice on 12 April, assuring users that a First Information Report (FIR) with the Cyber Cell of Delhi had been filed and that they were working to recover all of the lost funds.

The notice outlined details of the apparent hack, noting that it appeared to occur when its chief security officer (CSO), Dr Amitabh Saxena, was extracting Bitcoin Gold. Dr Saxena claimed that the funds were ”lost in the process during the extraction of the private keys”.

Suspicious circumstances

As it is only the CEO and the CSO that maintain access to the private keys of the company’s wallet., this makes the circumstances behind the extraction particularly suspicious, leading the exchange to believe that the CSO created the story to cover up his own theft.

The FIR outlines their accusation, stating, ”The incident reported by Dr Amitabh Saxena does not seem convincing to us. The exchange in the FIR requested the authority to seize Dr Amitabh Saxena’s passport so he cannot fly out of the country.”

A second update on the Coinsecure website assured users that their Indian Rupee (INR) funds were safe, calling on members of the Bitcoin community for any information that could help secure the return of funds.

Crypto fraud in India

The last few months have seen several cases of similar fraudulent behavior in India. The founder of cryptocurrency investment fund Gainbitcoin was arrested earlier this month for allegedly scamming victims out of USD 300 million. The year to date has seen USD 670 million worth of cryptocurrencies stolen through fraudulent activities.

Investors are encouraged to put in research before parting with funds to protect themselves from such scams. It is important to ensure that platforms used are secure, with KYC policies being preferable. Due to the decentralized nature of cryptocurrency trading, it is often very difficult to recover stolen funds.

 

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Yahoo Japan to Be 40% Stakeholder in Crypto Exchange

Yahoo Japan has announced plans to purchase a 40% minority stake in cryptocurrency exchange BitARG. The platform is headquartered in Tokyo, scheduled for launch later this year.

BitARG has accepted the offer from Yahoo Japan’s subsidiary, stating, ”As a result of this capital participation, the Company will be able to utilize the service operation and security expertise of the Yahoo Japan Group, which will make it easier for customers to prepare for the start of the exchange service managed by the Company and to improve the operation after the commencement. We will promote the provision of secure exchange services.”

Reuters has reported unofficial figures regarding the financial terms of the agreement, estimating the deal to be worth between USD 18.5 million and USD 27.8 million. BitARG has been granted a license to operate as a domestic cryptocurrency trading platform from Japan’s Financial Service Agency (FSA), making the deal far more financially viable for Yahoo to invest in.

Yahoo has also reportedly scheduled additional investments through alternative subsidiaries to support the development of BitARG throughout this year and next.

The deal is particularly significant as Yahoo Japan is one of the most popular websites used in the country, ranking as the fourth most visited website, while also being home to Japan’s largest online auction site. Yahoo itself is a top 40 website globally in terms of traffic rank; a tech conglomerate of this stature entering the cryptocurrency sector could be a significant benefit for the industry.

Similar ventures

Yahoo is not the first corporate giant to invest in the cryptocurrency industry; last week Monex, an online brokerage servicing Japan, confirmed a complete acquisition of exchange platform Coincheck. The cryptocurrency trading platform was experiencing an onslaught of criticism due to its poor security assurances that led to the theft of USD 530 million worth of NEM tokens.

Japanese bank SBI has plans to launch its own cryptocurrency exchange. As Japan’s FSA strengthens regulations around security measures for such projects following the Coincheck theft, startup projects such as this will have to prove they can comply with more stringent security checks.

 

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Russian State-Owned Bank To Trial Crypto Transactions

Prominent state-owned Russian bank Gazprombank has announced plans to facilitate cryptocurrency transactions in Switzerland.

Gazprombank, Russia

In an interview conducted by Russian local news outlet Vedomosti on 29 March, Sobol described the operations not as grand scale, but rather for the benefit of the bank itself. Sobal noted, ”this is a demand from the sides of our large private clients for such amenities”, acknowledging the significant call for traditional banks to streamline the banking services of clients holding cryptocurrency funds.

In the interview, Sobal said that the upcoming pilot operation from Gazprombank would seek to organize this service specifically for their clients, although currently the transactions are taking place for Gazprombank’s own investment profits. The report was unclear on whether the operation would be expanded to all of their banking customers. Sobol stated the bank was “trying to follow the situation actively.”.

The deputy chairman of the board at Gazprombank, Aleksandr Sobol, described the tolerant cryptocurrency legislation in Switzerland as the reason the country was chosen for the project. Cryptocurrency exchange is a legal activity in Switzerland.

Crypto law in Russia

Gazprombank’s project follows the news in January outlining the plans of the largest Russian bank Sberbank, to open a cryptocurrency exchange, also in Switzerland. Sberbank aims to provide cryptocurrency exchange to investors on an institutional level, rather than to retail investors.

Russian law currently bans any form of cryptocurrency operations, pushing those interested in the industry to do business in more crypto-friendly countries.

The Russian government is reviewing cryptocurrency regulation under the Digital Assets Regulation Bill filed 25 January. The bill defines cryptocurrencies and tokens as digital financial assets. If the bill passes in its current form, it would allow trading on cryptocurrency exchange operators with authorized Know-Your-Customer (KYC) standards. This would also apply to initial coin offerings (ICOs) established in Russia.

The final version of the bill is set to be released on 1 July.

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