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Binance Freezes Hacked Cryptopia Funds, Raises Questions Around Cryptocurrency Fungibility

Part of the funds from the Crytopia hack were recently sent to the Binance cryptocurrency exchange. In response, Changpeng Zhao (CZ), the CEO of Binance froze the funds, raising questions around cryptocurrency’s anonymity and fungibility. Cryptopia is a tiny exchange with a daily trading volume averaging around $2 million. The exchange was hacked on the evening of Jan. 13th for an estimated $3.5 million in cryptocurrency. The company announced the hack on Jan. 15th. Now, the hackers are likely looking for ways to launder, convert, and obfuscate the source of these funds. Especially now that authorities in New Zealand are involved. As part of this process, the hackers sent 31,320 Metal (MTL) ERC20 tokens to Binance. Trading at approximately $0.24 at press time, this amounts to roughly $7,500 in stolen cryptocurrency. After receiving a tip-off on Twitter, Changpeng Zhao immediately froze the funds: Just checked, we were able to freeze some of the funds. I don't understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It's a high risk maneuver for them. https://t.co/i0PeahLzic — CZ Binance (@cz_binance) January 16, 2019 Implications for Fungibility Fungibility, as it applies to cryptocurrency, is the concept that any given coin is identical and substitutable for any other coin in the same denomination. To give a non-cryptocurrency example, an ounce of pure gold is equivalent to any other ounce of pure gold. Correspondingly, someone might think that one bitcoin is equivalent to any other bitcoin. The problem boils down to traceability. If that bitcoin is tainted with money laundering or criminal activity, then it is not equivalent in terms of value or utility to another ‘clean’ bitcoin. Since the blockchain ledger provides a transaction history, that bitcoin could be traced back to some criminal activity. If involved in criminal activity, those funds could get blacklisted or result in legal consequences for any future receiver. Frozen Funds Demonstrate Non-Fungibility There is no doubt that freezing the hackers’ funds were justified. Exchanges should collaborate to inhibit illegal activity and make it as difficult as possible to engage in harmful criminal behavior. Yet, the very fact that Binance was able to identify the stolen funds and freeze them at all could be cause for broader concern. If someone receives $20 in cash, the previous owners of that cash are largely untraceable. If someone receives $20 in bitcoin, all previous wallet addresses attached to that transaction are visible. And, if bitcoin is treated as a commodity, then this could have interesting legal ramifications. If someone unknowingly receives illicit funds, how will law enforcement treat these cases, and who does the onus for checking fall on? For other commodities, if stolen goods are purchased unknowingly, law enforcement has the right to seize those goods and return them to the original owner. Those who intend to resell goods have an even higher responsibility to evaluate whether purchased goods are stolen. Yet, it’s still unclear whether exchanges, businesses, and individuals need to go through these processes. If they do, it introduces yet another complication and cost for transacting in cryptocurrency. Potential Solutions Privacy coins such as Monero and Zcash offer one potential solution: using technology to obfuscate transaction history. But, both of these coins need to catch up to the network effects already established by Bitcoin and Ethereum—which are already accepted at a larger, albeit still limited—number of vendors. Moreover, there is still a non-zero risk that regulators succumb to the public perception that these coins are used by “criminals and tax-evaders,” and place a blanket ban on privacy coins. Other ways crypto users have tried to limit personal liability include maintaining anonymity between wallet addresses and personal identification, using new wallet addresses for each transaction, using cryptocurrency mixers, washing coins in a loosely regulated exchange, and other systematic ways for obfuscating the transaction history of funds before making a purchase. Whether these activities fall into a legal gray area is another question. There still isn’t a clear solution to the issues of fungibility. Until then, it is likely that regulators and law enforcement will set a clearer precedent through doled-out enforcement actions. The post Binance Freezes Hacked Cryptopia Funds, Raises Questions Around Cryptocurrency Fungibility appeared first on CryptoSlate.
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Constantinople Delayed | Bitcoin Price in 2019? | Cryptopia Hacked

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Can Crypto Bots Be Hacked on Exchanges?

The cryptocurrency industry lures millions of customers and thousands of frauds. The unregulated Wild West of the modern financial sphere features insane volatility, round-the-clock trading, and anonymous transactions hidden from governments and regulators. Hackers are ever ready to steal millions of dollars in crypto by using both classic and innovative tools to fool novice token holders. From traditional phishing to clipboard hijacking, hackers apply various schemes to replace wallets’ addresses.One of the modern approaches is related to manipulations with crypto bots and APIs. Fraudsters can compromise automated trading software on exchanges and place any orders, or get access to users’ sensitive data. If you consider using bots, make sure to read more about their features, vulnerabilities, and safety measures.A primer on crypto botsCrypto trading bots are programs, which analyze markets and place orders automatically. Considering high volatility and constant changes of the crypto world, bots are convenient as they can monitor the market 24/7/365. Also, they are fast and can place buy/sell orders regularly to get more profits.Sounds wonderful, doesn’t it? However, trading bots aren’t flawless. They are relatively complex systems, which strictly follow the user-defined preferences, so they require careful tuning. Additionally, advanced programs may come with monthly fees. It means that you can easily lose money if you don’t know how to use bots properly.Before ordering or creating a bot, it’s better to remember the general features of premium software:● Reliability● Transparency● Profitability● Ease of use● SecurityProbably, the last point is the most important as it closely relates to the safety of your money. Any bot is certainly a gold mine for hackers or phishers, so pay close attention to the protection of trading software, or a platform that you use. Before engaging in any sort of activity, check the security measures for every exchange pointed out on TheProblem.wtf.Weaknesses of automated tradingCrypto bots execute orders by interacting with exchanges APIs — application programming interfaces. As a result, we face the scenario of two machines working together without manual control.The problem is in the centralized nature of trading bots and platforms. As hackers can’t access blockchain-based systems because of their nearly perfect security, they focus on traditional central-server systems, which rely on personal data like passwords, e-wallet addresses or keys. And it becomes even easier to hack machines, which work independently.Thus, bots and APIs have three major flaws that might result in:● Making unprofitable deals. If hackers get access to the first layer of trading interface, they can only place orders. Certainly, they will make deals which are profitable for them, but not for you.● Stealing money. The second layer gives options to withdraw money. Obviously, hackers will do it after placing some orders and getting enough profit.● Getting access to sensitive data. Along with making buy/sell deals, fraudsters can access personal info like keys to crypto wallets that are linked with the bot.Hackers and their toolsHackers can break into the system and modify codes to set new algorithms for bots. Sometimes, the owners can even miss these changes and continue using their trading software. Without diving into technical details, there are some other ways to hack bots, trading programs or APIs.Further on, you can check the examples of crypto bots based on different technical frameworks.APIsAs we’ve mentioned before, bots interact with exchanges’ APIs — specific interfaces, which allow placing orders automatically. Usually, these systems are based on a few permission levels protected with unique keys. Utilizing phishing schemes, hackers can access these keys and break into the system.One of the brightest examples of fraudulent API usage is the Binance case. This exchange has three permissions in its API: reading, trading, and withdrawing. In July 2018, hackers got access to the first two levels, pumped the price of SYS coin, and transferred huge amounts to the accounts with withdrawing permissions that they had controlled earlier. As a result, Binance prompted temporary shutdown, reset all API keys, and tested the whole security system.What’s the problem? Binance is a highly secure platform but it’s also centralized. Professional hackers can steal keys and get control over trading bots or APIs easily.AppsThis example is simple and, partially, refers to the previous one. You know trading applications for desktops or mobiles, which allow placing orders in a smooth and convenient way. These programs aren’t bots as they require manual control, but they also are based on APIs, which have some weaknesses.For instance, remember the fake Poloniex apps created by fraudsters for Android systems. They were freely available in Google Play, so users simply provided their personal info and account credentials to hackers. Fake exchange applications are a kind of phishing scams that are utilized by criminals to access user wallets or accounts, so be careful and use 2FA always.ExtensionsSome trading bots may come as add-ons for browsers. They look highly convenient as you can trade faster and always control the process. However, we suggest avoiding such extension options by all means, because they are fraudulent usually. Browser plugins and add-ons may compromise your hardware or simply copy everything you type in including keys and passwords.Slack botsVarious Slack programs and channels are used by crypto scammers for fraudulent activity. In 2017, it was reported that a number of blockchain development teams were attacked by cyber criminals via a Slackbot. Hackers utilize phishing schemes by alerting users about a potentially profitable deal and providing a link to a scam website, which will ask you to enter sensitive data or log in to your wallet.Protecting yourself from hacksSummarizing it, we want to provide some info on safety measures which you should take while interacting with any crypto trading program, application, or interface. Here are the most valuable tips:● Keep API keys secret. Don’t share your personal data like keys for bots, private addresses of crypto wallets, and passwords.● Turn off automated withdrawals. Better, spend some time and do it manually. In this case, hackers will potentially be able to make unprofitable deals but they will not steal your money.● Do a lot of research. Bots are pretty complicated tools, so take your time and read about trading strategies, preferences, and protection measures.Generally, rely on trusted software only, and don’t forget about ‘Internet hygiene’. Bots may be useful and profitable, but they are machines and they may be hacked like any other computing devices.Can Crypto Bots Be Hacked on Exchanges? was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
Hackernoon

Cryptopia Hack Update: While Police Investigation Continues, People Demand Refund from Hacked Exchange

Following the major loss from Hacked Cryptopia crypto exchange, about 40 people trying to reclaim their funds, New Zealand media reported. Cryptopia is the first exchange to suffer hack crises in the year 2019. Following the incident, police have begun investigating the matter and the amount that has disappeared. Cryptopia hack raises the question over exchange security, police investigation continued Clive Cousins who is the lawyer in Christchurch said that, in the year 2018, few investors reached out to him, inquiring the status of their funds on Cryptoia. “We were contacted initially by about three people, including a South African lawyer, who were complaining that they were having trouble transacting using their wallets and couldn’t withdraw funds.” He further adds that 40 plus individual again approached him to file a ‘joint lawsuit’ against hacked Cryptopia exchange. Accordingly, on January 15, 2019, police have locked down Cryptopia’s Colombo St headquartered office and published an initial report on its official website. However, police examined the office yesterday but no comments from the company’s officials are available yet. Further, the police are doing its best and in talks with the relevant agencies to partner within the country and overseas as well. Following the investigation report, Cryptopia exchange informed its users on social media that the matter is ‘in the hands of authorities’, henceforth, they cannot discuss on the matter. We cannot comment as this matter is now in the hands of the appropriate authorities. We will update you as soon as we can.https://t.co/9uMiKQwb6u — Cryptopia Exchange (@Cryptopia_NZ) January 15, 2019 However, following the Cryptopia’s twitter update, many users voiced on their funds that are stuck due to hack incident. In fact, few of such users ask exchange to let them access to withdraw their funds. One of the twitter follower (username –AkihabaraPab) points ‘police action of taking fingerprints in its office. He says; Meanwhile in New Zealand, Police are taking fingerprints in cryptopia's offices, showing publicly that they have fully understood what happened and are commited to finish the job 😀 — Pab Akihabara (@AkihabaraPab) January 15, 2019 FMA also Investigating the Cryptopia matter Along with New Zealand police, Financial Markets Authority (FMA) is also investigating the breach report. Nevertheless, a spokesperson told that Cryptopia informed FMA on Wednesday morning and the police officers were informed late on Monday. While taking Cryptopia’s hack inquiry up, FMA says; We will be engaging with the firm and the police. Although it was a huge loss, the exchange has accounted for various complaints in the past also. A spokesperson said that FMA received various complaints on Cryptopia which was forwarded to ‘dispute resolution service’. Moreover, FMA also informed users ‘how these complaints can be addressed to the dispute resolution service’. Talking about the hack, cryptocurrency consultant, Josia Spackman blame ‘listing of unfamiliar or lesser known crypto assets on Cryptopia’ is the major cause of hack. As such, these coins are not as famous as the Bitcoin and other known cryptocurrencies. He further adds; “Unfortunately, as a result, they’ve had these other coins disabled. So once you purchase them you basically can’t get them off the exchange.” Although the hack of cryptocurrency exchange is not the first time in history, there have been many cases of such incidents including Japan’s Coincheck hack in early 2018. Josia Spackman further notes that; “The problem is it’s easier to hack a computer than to physically walk into a bank and take gold and silver.” The post Cryptopia Hack Update: While Police Investigation Continues, People Demand Refund from Hacked Exchange appeared first on Coingape.
CoinGape

Cryptopia Cryptocurrency Exchange Was Hacked

On January 14, the New Zealand cryptocurrency exchange Cryptopia was hacked. According to company representatives, as a result of the attack, hackers stole the users digital assets. On January 15, Cryptopia posted on ... Запись Cryptopia Cryptocurrency Exchange Was Hacked впервые появилась Bit.news.
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BAT Outperforms Bitcoin, XRP On New Brave Browser “Rewards” Feature

Brave Browser Announces BAT “Rewards” Feature On Tuesday, Brave Browser, a crypto-friendly internet application headed by the founder of Mozilla Firefox, Brendan Eich, made a surprising announcement, seemingly aiming to start of 2019 with a proverbial bang. Via a company release, conveyed through its in-house blog, the Brave and Basic Attention Token (BAT) team, which consists of Eich, coupled with an array of fintech, Silicon Valley, and crypto veterans, revealed that it would be previewing “opt-in ads in [the] desktop browser developer channel.” While this feature sounds nebulous, there’s more to this integration than meets the eye. In fact, as broken down in a PC Magazine feature article, this new advertising model will allow common Joes and Jills to earn crypto, in the form of BAT, and potentially other rewards in the feature. This new offering, dubbed Brave Rewards, will siphon 70% of earned ad revenue to users who agree to view advertisements. The remaining 30% will be paid to Brave’s war chest — a likely controversial play, but one necessary for the blockchain project’s long-term survival. Rewards will be available via Brave’s developer/test browser edition. It wasn’t exactly divulged when the innovative feature would hit the publics’ desktops, but the following GIF is how the feature will work: Looking outwards, the Brave team revealed that they expect opted-in users to earn upwards of $60 to $70 a year in the near future, with their preliminary projections predicting that $224 a year could be earned by 2020 through Brave’s in-house ecosystem. While this sounds great — an effective free $224/year for viewing ads — like all things too good to be true, there’s a catch. At the time of writing, Brave has announced support for BAT token withdrawal, as the company wants Rewards’ users to reward their favorite content creators, whether it be large new portals or Youtubers. After this feature goes live successfully, Brave intends to activate “publisher-integrated ads,” which will allow content creators to feature “private ads” on content creators’ pages through the startup’s systems. The company subsequently explained its Brave Ads offering and its applications/benefits from a top-down perspective, writing: With Brave Ads, we are reforming an online advertising system which has become invasive and unusable. Users have turned to ad blockers to reclaim their privacy from ads that track them and sometimes even infect them, and publishers are finding it increasingly difficult to earn ad revenue to sustain quality content with intermediaries that collect huge fees. It is important to reiterate that at this time, this newfangled feature is technically in its beta phase. Due to this positive news, the popular altcoin, which recently gained the support of industry powerhouse Coinbase, has posted a respectable price gain. At the time of writing, BAT is currently valued at $0.125 apiece, posting a 3% in the past 24 hours. The crypto, currently the 36th in this market’s standings, is currently outperforming Bitcoin (BTC) by 2.7%, and Ethereum (ETH) by 2.4%. Crypto Lulls: Bitcoin, Ethereum, XRP Post Barely Any Movement In the same vein of cryptocurrency prices, the broader market has posted close-to-zero movement in the past 24 hours. Per data from Coin Price Watch, BTC has found itself at $3,645 — a mere 0.58% gain over the past day. Other leading crypto assets have also posted slight gains, but have still underperformed BAT. XRP, the go-to asset for fintech upstart Ripple, is up 1.27%, as it sits just shy of the $0.33 price level at $0.3296. ETH, which recently tumbled due to the delayed Constantinople fork, has found itself up by 2%, regaining a portion of the losses incurred yesterday. While the market is trending slightly positive, some analysts expect that BTC is ready to dive. Speaking to MarketWatch, Jani Ziedens of Cracked Market claimed that BTC, if truly oversold, should be posting monumental gains right now, rather than finding itself in an extended lull. So, Ziedens added that this “lethargic base” indicates that demand is limited, “incredibly weak” even, and as such, lower crypto bottoms may be inbound. BAT Title Image Courtesy of Descryptive.com via Flickr The post BAT Outperforms Bitcoin, XRP On New Brave Browser “Rewards” Feature appeared first on Ethereum World News.
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Cryptopia Hacker Moves Stolen Crypto to Binance; Community Alerts CZ and Funds Are Frozen

It is clear that hackers gave themselves a place to stay in the cryptocurrency industry, which was only made more evident by a recent security breach that happened over the last few days. Cryptopia, a leading exchange in New Zealand, announced a breach that ended in a major theft on January 14th. However, unlike the unfortunate tale that many other exchanges succumb to, that is not the end of the story. The official statement notes that Cryptopia has placed itself into a maintenance mode, helping them to protect their accounts until the regulatory authorities of New Zealand provide other details. Both the High Tech Crimes Unit and the local police are pursuing investigative efforts, though they have commented that “a significant value of cryptocurrency may be involved.” At this point, the actual amount has not been released, and no substantial details have been provided. Still, that has not stopped local news portal Radionz from reporting that the loss is close to $3.6 million. A Twitter user, ShaftedTangu, seems to know where these digital assets are going. On the posts, the user said, Hey @cz_binance Binance has stolen tokens from Topia hitting it sir. Can you lock it down? https://t.co/0XllsBejUV — I Dream Of Alts (@ShaftedTangu) January 16, 2019 Through a string of additional tweets, the user continued to track the funds, as he mentioned wallet address 0x9007a0421145b06a0345d55a8c0f0327f62a2224. In another tweet, he claimed, “Currently the 0x900 wallet contains around $10 mil USD of tokens, large amounts are $PRL $2mil, $CENNZ $1.168 mil, $Denacoin $2.73 mil, $MSP $0.99 mil” Luckily, just under four hours after the original tweet, CZ Binance replied. The reply said, Just checked, we were able to freeze some of the funds. I don't understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It's a high risk maneuver for them. https://t.co/i0PeahLzic — CZ Binance (@cz_binance) January 16, 2019 With such a nonchalant type of reply, it is quite a victory for Cryptopia and Binance that the funds could be frozen at all. However, the victory has not been won yet, considering there is no indication of exactly who performed the hack in the first place. Cryptopia has remained silent, though they posted to their own Twitter profile, saying, “We cannot comment as this matter is now in the hands of the appropriate authorities. We will update you as soon as we can.” As a result of these issues, Zhao posted that users should keep their holdings on exchanges, rather than a hardware wallet. However, his post caused an onslaught of negative replies, with some saying that his post implied that self-storage is substantially riskier than storing on a seemingly “reputable” exchange. Zhao later retracted, saying that he was not advising investors to store funds on exchanges. In the first half of 2018 last year, there was over $731 million lost in thefts involving exchange hacks. However, none have reached the severity experienced by the 2014 Mt. Gox hack.
Bitcoin Exchange Guide

Binance Freezes ‘Some of the Funds’ Stolen in Cryptopia Hack

Some of the stolen cryptocurrency from yesterday’s Cryptopia hack has been sent to Binance, which has confirmed already freezing some of the funds.  Binance Freezing Funds Stolen from Cryptopia Twitter account @ShaftedTangu has alleged that some funds stolen as a result of Cryptopia’s hack have been siphoned through Binance. The amounts sent to Binance in question include roughly $7,500 in Metal (MTL) 00, $6,750 in KyberNetwork coin (KNC) 00, $7,181 OmiseGO tokens (OMG) 00, and $8,724 in EnjinCoin (ENJ) 00. All of it totals around $30,000. Changpeng Zhao, CEO at Binance – the world’s largest cryptocurrency exchange by means of traded volumes, has confirmed the allegations, reassuring that they’ve already frozen some of the funds. Zhao commented: Just checked, we were able to freeze some of the funds. I don’t understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It’s a high-risk maneuver for them. Just checked, we were able to freeze some of the funds. I don't understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It's a high risk maneuver for them. https://t.co/i0PeahLzic — CZ Binance (@cz_binance) January 16, 2019 Bitcoinist reported yesterday that Cryptopia’s security has been breached, resulting in ‘significant losses’. Police in New Zealand also confirmed. Binance Caught in the Fire Zhao’s tweet caused a reaction in crypto Twitter’s community as one user (@Crypto_Bitlord) expressed his bewilderment that Zhao referred to “social media” as a means of reporting rather than Binance’s own surveillance systems. I’m genuinely shocked stolen funds from @Cryptopia_NZ have easily passed through @binance UNDETECTED until social media flagged them. This raises some big questions. How is that possible with modern blockchain analysis? — Sir Bitlord (@Crypto_Bitlord) January 16, 2019 On the matter, Binance’s CEO said: It’s quite easy to generate a brand new address. We (and no one) recognize every transaction out there. We already have very in-depth and detailed blockchain analysis. Yet, the question remains – if a regular Twitter user has been able to detect the transaction in question, how, and more importantly – why did Binance miss it? Perhaps the better question, as posed by @Crypto_Bitlord is: So you are saying criminals can steal funds and just create a brand new address to send to before binance? In the meantime, Binance announced today the launch of their Binance Jersey fiat exchange. The platform is aimed at traders from Europe and it offers BTC/GBP, ETH/GBP, BTC/EUR, and ETH/EUR trading pairs. What do you think of Binance missing the transactions in question? Don’t hesitate to let us know in the comments below! Images courtesy of Shutterstock The post Binance Freezes ‘Some of the Funds’ Stolen in Cryptopia Hack appeared first on Bitcoinist.com.
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