Bitfinex Attack, Schemes of Steemit and Farms on Blockchain. Cryptospace News, August 1 – 7

07.08.2016

Attack on Bitfinex, blockchain and bitcoin implemented in a breakaway region of Ukraine, record-breaking trade volumes in Russia, and many more â€“ all in ForkLog’s weekly overview.

Bitfinex

No doubt, the attack on Bitfinex is the news of the week. August 2, the exchange’s websit went offline, while the administration claimed there were critical problems with security, and halted all operations.

Bitfinex Halts Operations Due to Security Issues: $65 Million Stolen

A bit later, it was announced on Reddit that unknown hackers had stolen nearly 120,000 BTC, which caused the cryptocurrency’s exchange rate to fall, and traders to panic. August 3, bitcoin trade volume comprised $331.3m, thus doubling the previous day’s numbers.

Intricate statements from the exchange’s administration made things even worse. Initially, they announced that all customer losses would be reimbursed. However, as early as Friday, they said that the losses would be distributed between all customers of the exchange, and further plans were revealed just recently:

Bitfinex Publishes Reimbursement Plans: 36% Haircut and Outstanding Tokens

The community’s reaction was mixed, and varied from extremely negative to extremely positive. Chinese investor and entrepreneur Chandler Guo stated that the decision could be a great one, provided Bitfinex reimburses the customers later.

Alleged Bitfinex Hacker Announces a Draw of 1,000 BTC

The events even got a fleur of mystery, as, shortly after the hack, Reddit user rekcahxfb organized a sort of lottery proposing anyone who provides a bitcoin address to win 1,000 BTC. The website users suggested that the mysterious donator has something to do with Bitfinex drama, as his nickname is ‘bfxhacker’ spelled backwards.

The fluctuations of bitcoin price this week were for the huge part provoked by Bitfinex’s security failure. However, after the huge drop right after the news the exchange rate has been steadily rising for some time and today it has reached about $590. The situation up until yesterday has been covered in our special article:

Between Past and Future: Bitcoin Price Settles around $570

Bitcoin and Gambling

Bitcoin’s growing popularity urges stakeholders of gambling businesses to treat it seriously. Their lobbyists shattered yet another fortress this week, when the UK Gambling Commission, which is Britain’s official gambling regulator, entitled its licensees to accept Bitcoin as payment. The decision was made after negotiations between the regulator and the market players. The resulting trade-off is now a part of new licensing regulations effective as of October 31, 2016.

Apparently, the next target for casino lobbyists would be Malta, whose gambling administration has once again declined to entitle its licensees to accept bitcoins.

Acquisitions, Mergers, and Reboots

This week also featured a few unions in the cryptoindustry. Possibly the biggest of all is RSK Federation, an initiative of South American startup Rootstock. The union is focused on supporting smart contracts platform Rootstock, which is a Turing-complete platform backwards-compatible with Ethereum, launched this May.

Rootstock Head Believes Expansion of RSK Federation Means Bitcoin Companies Are Ready for Sidechains

Meanwhile, LexisNexis Risk Solutions and London-based startup Elliptic decided to fight legalization of unlawful capitals together.

Media corporation Thomson Reuters has joined R3, a consortium formed by the world’s biggest financial institutions for the purpose of researching and implementing blockchain technology on global financial markets. Thomson Reuters has become the first media operator to join the consortium of 55 banks and financial organizations.

The week’s biggest deal is probably the acquisition of BitInvest payments system by bitcoin exchange Foxbit, which controls nearly 55% of Brazil’s cryptocurrency market.

In the meantime, Kim Dotcom stated that he would reboot Megaupload.

Kim Dotcom Announces Megaupload Reboot

Gatecoin, an exchange hacked this May, has announced that it launches trading once again.

Technology

After Ethereum hard fork and emergence of ETC, many users have to face the issues with tokens of both types at their addresses, and the risk of losing them while transacting. Developers of ShapeShift, apparently, seek to address the problem by creating a special service. It will charge 0.25% of transferred coins. The service is likely to become popular as ETC continues garnering support.

CHBTC, China’s biggest exchange in terms of ETH trade, has announced the launch of ETC trades.

Another Major Chinese Exchange Supports Ethereum Classic

The UK government has approved the usage of theÂ independent distributed platform for deployment and cloud storage of ledgers developed by Credits.

The team of web-browser Brave has announced it raised $4.5m from several venture funds, including Digital Currency Group, FF Angel, Propel Venture Partners, Pantera Capital and Foundation Capital. The browser, currently in beta, will feature built-in ad blocker offering users to watch ‘harmless adverts’. The browser will not load devices, and will transmit bitcoin micropayments for watching ads.

A program for support of the forthcoming crowdsale of decentralized content platform DECENT was launched. The DECENT team has reserved 1 million of DCT tokens for users who decided to partake in promoting the ICO. The bounties campaign kicked off August 3. It will last until DECENT Software Sale ends.

DECENT Software Sale Bounties Campaign Offers Easy and Fun Way to Get Rewarded

Researchers of BSafe testnet have announced that they intend to deploy a network of nodes across univeristies in different countries. The idea, once implemented, would allow students and professors to run deeper experiments with cryptocurrency, and would also create a new communications channel between universities and Bitcoin Core developers. BSafe was launched this February, and currently incorporates five nodes: three in Japan, one in the UK, and one in the US. However, the plans suggest that by the end of the year thirty nodes will be deployed. The group seeks to eventually run at least three such nodes in each country.

An interesting statement came from Donetsk, a city in Ukraine, where a group of local entrepreneurs have announced creation of DAO Donbass. The company intends to use bitcoin and blockchain-based projects to bypass economic sanctions imposed on the breakaway region where Donetsk is located. August 4, the city of Donetsk hosted a press conference titled â€śCryptocurrency and Blockchain Technologies: A Tool for Economic Developmentâ€ť. Creation of decentralized autonomous organization Donbass has been initiated over the course of the event. The organization will be focused on implementing and developing blockchain technologies and cryptocurrency in the region. According to the organizers, the conference managed to draw attention from local authorities and media, as well as from local entrepreneurs. Participating in the discussion of innovative technologies were representatives of the self-proclaimed republic’s government, including local ministry for education and science, ministry for information, ministry of communications, central bank, and other structures. Authorities of the breakaway region consider using crypto-technologies in public services.

Bitcoin and Blockchain to Be Used for Bypassing Economic Sanctions in Donetsk

Cryptocurrencies and Crime

Unfortunately, this week saw several new criminal instances related to cryptocurrency. The scandal around social network Steemit is gaining steam (pun intended). As a reminder, the distributed social network was attacked, with nearly 260 accounts hacked, and around $85,000 stolen in the form of Seem and Steem Dollars tokens. Some community members believe that it is the network’s administration that is responsible for the attack. One of the most prominent supporters of the idea is Tone Vays of bravenewcoin.com. He wrote on Facebook that Steemit is but a Ponzi schemeÂ and that he’s boycotting it. One of the network’s users known as keifhsmih wrote an expanded reply with 10 arguments as to why Steemit isn’t a scam.

Meanwhile, Ryan Kennedy from the UK, former CEO of cryptocurrency exchange MooPay (Moolah) was found guilty of three counts of rape between 2008 and 2015. According to the British media, Kennedy was accused on 14 couns of rape. Now he will have to service 11 years in prison, and will be registered as a sexual abuser. The sentence in question, however, did not mention the theft of $1.5m, which had been a part of the case as early as this February. It is unclear whether the accusations are still in force.

Misc

There have been several other events that are somewhat hard to categorize, yet worth mentioning.

Head and founder of Kolionovo farm in Russia, known to some due to his unusual projects, has transferred the farm’s financial operations onto blockchain. The new form features two-level architecture, with Kolions, the farm’s own cryptocurrency, used on the first one.

Farming Business in a Russian Village Transferred onto Blockchain

Even though the Russian government hasn’t made up its mind in cryptocurrency’s regard so far, local bitcoin trade volume was record-breaking this week having reached 193.5 million rubles.

Meanwhile across the Atlantic, US-based startup Cheaporn.net offered its clients to use bitcoins for accessing numerous pornographic websites. Reddit users believe that the startup may become one of the best instances of using cryptocurrency in adult industry.

Cryptocurrency fans preferring outdoor leisure to watching hot videos may play Takara, a game resembling Pokemon Go, with bitcoins and tokens used as tickets, discount coupons, shares, loyalty bonuses etc. used in Pokemons’ stead. The prizes may be provided by any other player, in which case he or she will be called ‘dropper’.

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