Coincheck Resumes New Account Openings, Customers Deposits

Coincheck, the Tokyo-based cryptocurrency exchange victim of a $500 million worth theft, has resumed new account openings, customer deposits, and purchasing of some digital currencies.

The operator had suspended some services following the late January incident in order to protect customers’ assets and investigate the cause of hacking.

Coincheck Exchange Resumes Trading of BTC, ETC, LTC, BCH, New Accounts Exclusive for Japan Residents

The theft of $500 million worth of NEM in early 2018 caused alarm in Japan, forcing the hand of the country’s financial watchdog, the Financial Services Agency (FSA), to be more demanding of cryptocurrency exchanges operating in its jurisdiction.

Coincheck has improved its governance and internal control throughout the year in order to safely restart its activities, the company explained in the announcement.

“In particular, we resumed JPY withdrawal in February 2018 and remitting and selling of cryptocurrencies gradually during the period from March to June 2018. And now, here we announce that Coincheck has resumed “new account openings” and “customers’ depositing and purchasing some cryptocurrencies” services today.”

The cryptocurrencies made available for deposit are BTC, ETC, LTC, and BCH, which are also available for purchase. Bitcoin trading on Coincheck was never suspended and users were always able to sell any cryptocurrency on their portfolios.

New account openings are only available for customers residing in Japan. The registration process includes the submission of identification documents and a KYC check, before receiving a postcard-sized letter from Japan Post instructing the account activation.

Coincheck requests existing customers to generate a depositing address when reusing the depositing service. If a remittance is sent to the old deposit address, the operator will not reflect it on the user’s balance nor return it back.

The operator, which was acquired by Monex Group for $33.5 million, warns customers that trading services may be temporarily suspended if the platform experiences a significant increase in the volume of transactions or sudden price fluctuations.

Coincheck is yet to resume depositing and buying of ETH, XEM, LSK, XRP, and FCT, as well as leveraged transactions for new positions, its affiliate service, JPY depositing through convenience stores, JPY quick depositing (Pay-easy), Coincheck Payment, and Coincheck DENKI (electricity). The services are expected to resume once they are confirmed safe and ready to be offered, the operator added.

In May 2018, the cryptocurrency exchange announced it was ordered to delist Monero (XMR), Zcash (ZEC), Dash and Augur’s Reputation (REP) in accordance with Japan’s FSA’s new policy which aims at banning cryptocurrencies that offer significant anonymity.

Featured image from Shutterstock.

Coinbase Raises $300 Million, Reaching $8 Billion Valuation

The San Francisco-based cryptocurrency exchange and brokerage service Coinbase announced on Tuesday that it had raised $300 million in series E equity funding. This latest round confirms Coinbase’s status as the largest cryptocurrency organization of its kind, bringing its market valuation up to $8 billion.

Also read: Bitstamp Confirms Acquisition by South Korean Company

Coinbase Raises More Funds in Order to Expand Global Efforts

Coinbase Raises $300 Million, Reaching $8 Billion ValuationCoinbase has raised more money this month after raising $100 million in August in a series D funding round. The company announced on Oct. 30 that the corporation has secured another $300 million from various venture capital investors. The companies who participated in the series E round include Polychain Capital, Y Combinator Continuity, Wellington Management, and Andreessen Horowitz. According to the company’s blog post, Tiger Global Management led the latest Coinbase investment round.

“We’re pleased to announce that Coinbase will add an additional $300 million of investment at a post-money valuation of over $8 billion to accelerate the adoption of cryptocurrencies and digital assets,” explained the San Francisco company’s blog.

The exchange details that the new funding will be dedicated to expanding services across the globe and that Coinbase plans to “lay the groundwork” to support “thousands” of cryptocurrencies in the future. The cryptocurrency service also detailed that it plans on enticing more institutional interest towards the digital asset economy by bolstering the company’s custody offering. Coinbase just received a trust charter from the New York Department of Financial Services on Oct. 23 which will help them build a standalone entity called the Coinbase Custody Trust Company.

Coinbase Raises $300 Million, Reaching $8 Billion Valuation

Coinbase Envisions ‘Tremendous Promise’

The cryptocurrency exchange also discussed how it recently added the USDC stablecoin and plans to add more “utility applications for crypto” in the future. Coinbase further emphasized that with the new series E funding they will remain “a crypto-first company.” Coinbase has performed well within the cryptocurrency economy since its inception in 2012, gathering roughly 44 investors and seven large funding rounds.

There are a few other online digital currency platforms that will compete with Coinbase in the U.S. One such competitor could be the new startup Voyager backed by Uber co-founder Oscar Salazar. There’s also Circle Financial, another unicorn cryptocurrency business that’s raised $246 million to date. After the recent funding round, Coinbase has now raised a total of $525.3 million and the company has reassured the crypto community that the money will be well spent towards spreading cryptocurrency adoption worldwide.

“We see tremendous promise in crypto to build the next great phase of the internet (often referred to as Web 3), which has the power to put control back in the hands of consumers, unleash a new era of innovation, and offer greater access to economic opportunities to more people around the world,” Coinbase concluded.

What do you think about Coinbase raising $300 million in a series E funding round? Let us know what you think about this subject in the comments section below.


Images via Shutterstock, Coinbase, and Pixabay. 


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Crypto Exchange Service Helps Bithumb Recover 1 Million XRP After Massive June Hack

Prague-based crypto exchange service Changelly has announced that it helped South Korean exchange platform Bithumb recover 1,063,500 Ripple (XRP) in stolen assets following a massive hack in June, a press-release stated, Oct. 26.   

In June 2018, hackers attacked South Korea’s leading crypto exchange Bithumb. As soon as security specialists had detected the theft, the exchange temporarily suspended all deposits and withdrawals, and moved its customers’ funds to a cold wallet.

Bithumb initially lost over $30 million worth of cryptocurrencies due to the hack. Four months after the incident, Bithumb recovered approximately $14 million in stolen digital assets after it collaborated with global counterparts.

According to Ilya Bere, CEO of Changelly, the service quickly cooperated with Bithumb and the South Korean police to offer its help. The company implemented Anti-Money Laundering (AML) procedures targeting several malicious addresses recognized by Bithumb and prevented transactions from going through the application program interface (API).

As a result, Changelly managed to capture a significant amount of cryptocurrency with a suspicious origin and keep the funds secured. The recovered funds were worth about $585,000 at the time of the hack, according to the press release. Bere further explained that the case could serve as an example of industry-wide engagement:

“This case sets a precedent for how the joint work of the key players in the cryptocurrency market can positively affect the industry, bringing security improvements to the crypto-trading projects.”

The Bithumb hack is one of the largest of 2018 so far, with the price of Bitcoin (BTC) dropping by $200 soon after. The incident is only surpassed by the attack on Japanese exchange Zaif, which resulted in the theft of around $59 million worth of cryptocurrencies in September.

Crypto ‘An Intellectual Experiment’ That Can Still Fail – Says Xapo CEO

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Crypto ‘An Intellectual Experiment’ That Can Still Fail – Says Xapo CEO


Xapo CEO, Wences Casares, described cryptocurrency as “an intellectual experiment” that might still fail, in a recent interview with Bloomberg. However, he further stated that the experiment was more likely to succeed, although the results are still several years away.


Experimental

Casares, the Argentinian entrepreneur known as ‘patient zero’ for his role in promoting bitcoin within Silicon Valley, says that the experiment may work or may not work. However, he points out that the experiment is happening right now, so it’s worthwhile paying attention.

Wences Casares

He certainly feels that the experiment is more likely to succeed, but that it is irresponsible to ignore the possibility of failure. The technology is robust, but humans created it and humans are fallible. Perhaps something that we haven’t found in the past ten years will materialize to create a failure.

The Internet – 1992

Casares likened the current state of blockchain to the internet in 1992. Back then, all you needed to know, was that a new protocol could move information from anywhere to anywhere, in real time, for free. That had the potential to change information forever. It would have been churlish at the time to complain that you couldn’t yet watch a movie on it.

Similarly, he states that Bitcoin and blockchain bring certain attributes that haven’t been achievable before. Firstly, a computer system which is sovereign, or autonomous. A system which only obeys its own rules. Added to that, the system is uncensorable, and (in the case of Bitcoin) there will only ever be 21 million issued.

A Measure of Success

Casares states that the success of the crypto experiment is still at least seven, maybe ten or twenty years away. He feels like the success of Bitcoin 00 would see it used as a global (non-political) standard of value and settlement. In the same way that we have global units of weight and length (unless you live in the US), the price of everything from dollars to oil to gold would be given in bits.

Bitcoin (BTC)

Casares concludes by saying that he doesn’t think Bitcoin will replace currencies as that scenario doesn’t make sense to him. However, he does fell that Bitcoin can change money the way the internet changed information.

Do you agree with Casares’ statements? Share your thoughts below!


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Russia: Authority to Regulate Cryptocurrency Market per FATF Recommendations

A well-placed Russian official has called for global cryptocurrency standards to prevent money laundering and provide legitimacy to the industry while enforcing broad recommendations to control the sector, reported local news outlet Izvestia on October 29, 2018.

FATF Asked to Act Fast

Pavel Livadny, Vice President of the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring), has utilized the Financial Action Task Force’s (FATF) recommendations to control, regulate, scrutinize, and assess financial markets related to cryptocurrencies and its associated businesses, such as wallets, exchanges, and custody providers.

The FATF is a 1989-founded intergovernmental body that primarily works towards evading money laundering and develops global standards to combat terrorist financing. Currently, 37 member-countries make up the Paris-headquartered organization, and 31 other economies “participate and observe” in FATF’s work without proposing operational decisions.

Livadny believes the authority must further regulate the burgeoning cryptocurrency sector, which is seeing fast growth in both institutional and governmental developments in 2018 despite the year’s notorious and prolonged bear market.

As part of recommendations, the Russian official revealed all local token issuers, exchanges, and crypto-businesses are required to register with Rosfinmonitoring to continue their operations, in addition to following strict guidelines set down by the Russian watchdog. Fortunately, the rules are aimed at businesses with a considerable income, rather than startups with no revenues to show.

Temporary Moves until Permanent Bills

To increase investor credibility and transparency in the cryptocurrency industry, businesses with over 600,000 rubles, or approximately $9,000, are required to register with Rosfinmonitoring. However, the dictum exists until proper Russian legislations are introduced to govern the sector, post which the new laws would take precedence.

Livadny notes that token circulation and market liquidity will not be affected gravely, while their issuance and usage will be duly monitored. In addition, strict Anti-Money Laundering (AML) standards will be enforced upon crypto businesses in line with the FAFT’s recommendations, which allow cryptocurrencies to be circulated, exchanged, and transacted digitally for payments and investments.

Meanwhile, Russia remains in a gray area for cryptocurrency regulations. The country continues to delay its regulatory framework for digital assets, which were expected in July 2018 and has failed to pass adequate tax laws.

The much awaited “On Digital Assets” bill, requested by Prime Minister Vladimir Putin in January 2018, continues to be a no-show with authorities citing the “complexity” of subject matter and “lack of consensus” amongst parliament members as reasons for the delay.

Bitstamp Is Looking Towards ‘Global Expansion’ After Being Acquired by South Korean Investors

On October 29, the cryptocurrency exchange, Bitstamp, was acquired by Belgium-based investment firm NXMH, which in turn, is owned by South Korean media conglomerate NXC Corp.

The Luxembourg-registered exchange is now controlled by the same company that bought the majority stake in the South Korean crypto exchange, Korbit, last year, while its CEO remains in office to continue with Bitstamp’s “global expansion.”

Brief history of Bitstamp, Europe’s oldest and most legally compliant crypto exchange

Bitstamp was launched in August 2011 by Nejc Kodrič and Damijan Merlak in their native Slovenia. As Kodrič recalled in an interview, their business started out in a garage “with an initial capital of just a thousand euros, two laptops and a server.” The idea to open up an exchange came to the entrepreneurs after they experienced difficulties buying Bitcoin in Europe.

As they told Forbes, when they were originally registering their exchange with a Slovenian bank in 2011, it didn’t object because people in Slovenia “didn’t know what Bitcoin was.” In April 2013, Kodrič and Merlak outsourced support, compliance, and legal needs to the U.K., because they couldn’t do all the screening “necessary to keep bad guys out” in their home country. Bitstamp was now a UK registered limited company.

In 2016, Bitstamp became Europe’s first fully legal crypto exchange after it received a license from Luxembourg to operate as a payment institution. To receive the document, the exchange went through two years of various checks, including an audit by Ernst & Young. Being a compliant business, Bitstamp has stuck to strict Know-Your-Customer (KYC) principles.

In 2017, Bitstamp became one of four crypto exchanges that provides the CME Group with pricing data for its Bitcoin futures trading. Kodrič told Cointelegraph at the time:

“It’s essential that we ensure that all data provided does not include any forms of manipulation that could affect the index. We’re proud that we’ve earned the trust of the industry and were chosen to be a part of the new Bitcoin futures market.”

Security seems to be one of the main priorities for Bitstamp, especially after the 2015 hack, when the exchange lost 19,000 BTC (around $5 million at the time). The fraudsters stole the funds from Bitstamp’s hot wallet in a typical phishing attack — the exchange employees received personal emails and Skype messages from seemingly friendly sources. As a result, the person responsible for security, Bitstamp system administrator Luka Kodrich, downloaded malware onto the work computer, which led to the exchange’s security getting breached.

Compensation did not follow, but the security regime was significantly toughened. Specifically, carrying out transactions on Bitstamp now requires using multisignature, and 98 percent of the cryptocurrency is stored in a cold wallet.

Established back in 2011, Bitstamp is the oldest active crypto exchange in the world. It is currently ranked 26th on CoinMarketCap, seeing around $65,858,358 in trades in the 24 hours before press time. Kodrič told Reuters their volume has been down between 60-70 percent comparing to previous years, but stressed that Bitstamp remained profitable in 2018 because current cryptocurrency prices were still higher than they were for most of last year.

Buyout details: Kodrič remains CEO, investor ‘helps with global expansion’

On October 29, Reuters reported that Bitstamp has been acquired by Brussels-based investment firm NXMH in an “all cash deal.” Prior to that, the exchange had raised a total of about $14 million from investors including Pantera Capital, which invested $10 million in Bitstamp in 2014.

NXMH is a family investment holding which has over 2 billion euros in assets “managing the wealth of an Asian tech entrepreneur,” as per its Linkedin profile. It was founded in 2011 and focuses on European consumer and tech investments. The firm is a subsidiary of South Korea-based media giant NXC Corp, which bought a 65.19 percent stake in South Korean crypto exchange Korbit last year.

The deal between NXMH and Bitstamp was reportedly finalized on October 25. Whilst Kodrič declined to share the full terms to the media, he informed Reuters that in 2016 Bitstamp was valued at $60 million, up from $39 million in 2014. Interestingly, in March 2018 the exchange was rumored to be “in the final stages” of being acquired by South Korean investors (of which NXMH is technically a subsidiary) for $400 million.

NXMH now has an 80 percent stake in Bitstamp, with Kodrič retaining his 10 percent ownership interest and staying on as CEO. NXMH has also reportedly obtained “part” of Pantera Capital’s $10 million stake in the exchange, however it will keep a six percent ownership stake in the exchange. Kodrič’s co-founder, Damian Merlak, has reportedly sold all of his 30 percent stake in the exchange in the NXMH deal. According to Kodrič, his co-founder has “not been active since 2015.”

Bitstamp CEO does not believe anything will change for either the exchange’s customers or its 180 employees following the acquisition, as he told Fortune:

“We have kind of the same opinion as NXMH — why change something if it works perfectly well?”

He added that a merger between Bitstamp and Korbit (both owned by one parent company NXC Corp.) was in the talks, but the parties decided to run the exchange separately in the end. The crypto exchanges still plan to share technology, research, and development resources, according to Kodrič.

NXMH was one of four interested bidders for Bitstamp in a process that began in “mid-2017.” He added that they initially struck the deal last December, as the price of Bitcoin was peaking near $20,000, and it took several months for the companies to receive regulatory approval for the arrangement.

Kodrič claims that he and Merlak “were not looking to sell,” and “were definitely not looking for investment because they “didn’t need to raise the capital.” Nevertheless, he took the opportunity to cash out on the majority of his share in the company while keeping 10 percent and remaining the CEO:

“[Bitstamp and NXMH] were very much aligned—where we see the industry going and what the company wants to be […] They’re willing to help us along the way, and help us with our global expansion.”

Other major acquisitions of 2018: Poloniex, BitTrade, Bithumb

Earlier in February, Goldman Sachs-backed, Circle startup, acquired the US-based Poloniex crypto exchange for $400 million.

In late May, Japanese crypto exchange BitTrade was acquired for S$67 million ($50 million) by a Singaporean multi-millionaire and entrepreneur, Eric Cheng. After purchasing a 100 percent stake in the company, Cheng became the first foreign investor to own an exchange licensed by Japan’s Financial Services Agency (FSA).

On August 31, Japanese e-commerce giant Rakuten, with a market capitalization of over $12.5 billion, revealed a 265 million yen ($2.4 million) deal to acquire domestic crypto exchange, Everybody’s Bitcoin.

In October, BK Global Consortium, a group led by one of South Korea’s leading plastic surgeons, Dr. Kim Byung Gun, closed a deal to obtain “50 percent plus one share” of BTC Holding Co. – the largest investor in Bithumb crypto exchange. According to Bloomberg, the purchase was settled at around 400 billion won ($352 million) and will be finalized in February 2019.