Welcome to a new edition of TokenReporter. This week I have some interesting news.
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Just wanted to let you all know that I am now editor-in-chief of The Block, a new crypto/fintech site produced by Mike Dudas. The Block is a great site with some great reporters including Larry Cermak and Frank Chapparo and if you want to learn more about crypto without suffering through flame wars and hype, this is the place to go.
I took the job for a single simple reason: I want to pull crypto out of the enthusiast gutter. As it stands, too many services and sites offer very little in the way of valuable information. I hope we can remedy that. This shouldn’t change anything about TokenReporter or HypeHop as I still love the operational side of the ecosystem and hope I can keep building.
2019 Will See More Institutional Players in Crypto, Says PwC Leader
Henri Arslanian, the PricewaterhouseCoopers (PwC) fintech leader for Asia, has predicted that more institutional players will enter the crypto industry in the next year.
In an interview with Bloomberg, Arslanian said that “there’s a lot of exciting things that the crypto ecosystem is looking forward to in 2019.”
“A lot of elements are changing at the global level. If you look at 2018, a number of jurisdictions provided more regulatory clarity than have before. Countries from Hong Kong to Switzerland, Gibraltar to Malta…I expect many of those to take place as well in 2019,” said Arslanian.
Arslanian declared that he expected “many more big banks” to enter the space along with institutions. Undeniably, his predictions fall on fertile ground. Big players are already taking interest in crypto. Despite murmurs of a possible delay, early 2019 is scheduled to see the launch of Bakkt, a Bitcoin futures trading and custody platform created by the Intercontinental Exchange (ICE). Moreover, the world’s second-largest stock exchange, Nasdaq, plans to roll out Bitcoin futures in the first quarter of 2019.
Crypto Mining Malware Hit 4,000 Percent in 2018, McAfee Reports
Cryptocurrency hackers were busy in 2018, but it wasn’t with launching ransomware attacks. The McAfee Labs Threats Report December 2018 has shown a massive increase in crypto mining malware activity this year. After a temporary slowdown in Q2, the growth of coin miner malware returned to unprecedented levels in the third quarter. In fact, it rose by over 4,000 percent in 2018.
According to the report, crypto-criminals are using new cryptojacking malware and primarily target those who use “routers or IoT devices such as IP cameras or video recorders as crypto miners.” The choice of IoT devices may come as a surprise given their low CPU processing power. Still, the growing volume of the devices and their “lax security” make them easy targets for hackers.
WSJ Reveals Crypto Projects Show Signs of Plagiarism and Fraud
The WSJ took a close look at white papers of 3,291 projects that announced an initial coin offering (ICO) from ICOBench.com, Tokendata.io, and ICORating.com. The analysis of these documents showed that 16 percent (513) of the documents plagiarized content and promised implausible returns. If this wasn’t enough, they also listed fake team members to boost their credibility. In an attempt to lure investors, more than 2,000 whitepapers contained enticing language, such as “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk, and little risk.”
Biotech Billionaire Philip Frost Settles with SEC over Crypto Penny Stock Scam
Dr. Philip Frost, a billionaire and a CEO of Opko Health Inc., has just agreed to a proposed settlement with the Securities and Exchange Commission (SEC).
Back in September, the SEC charged a group of 10 individuals and 10 associated entities for running classic pump-and-dump schemes that defrauded investors and generated over $27 million from unlawful stock sales. Frost, Opko Health, and the Frost Gamma Investments Trust were accused of “violating antifraud, beneficial ownership disclosure, and registration provisions of the federal securities laws.”
Without actually admitting or denying the allegations, Opko agreed to an injunction from certain violations of the SEC Act of 1934 and a $100,000 penalty. The company also promised to perform certain undertakings related to the Exchange Act. Moreover, Frost will need to pay $5.5 million to the SEC and is permanently barred from participating in offerings of penny stocks, with certain exceptions.
Bithumb Acquitted of Charges in $355,000 Hacking Lawsuit
South Korean court has just set an arguably dangerous precedent, ruling in favor of a crypto exchange Bithumb over an investor in a lawsuit filed by the latter.
Ahn Park had sued the exchange for his loss of $355,000 in an alleged hack on Nov. 20, 2017. In the suit, Park faulted Bithumb’s negligence and inadequate security safeguards for the theft. He claimed the exchange failed to protect his assets and that Bithumb’s support team did not fulfill its obligations as a “financial services” firm.
In his ruling, the judge stated that due to the volatile nature of cryptocurrencies, it “is not reasonable to apply [Korea’s] Electronic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of [South Korean regulator] the Financial Services Commission.” Also, he added, “We cannot enforce a high level of security like a bank.”
The ruling must have come as a relief for the exchange which otherwise could have faced an onslaught of similar lawsuits from other investors. It’s worth noting that recently Bithumb had gone through a major hack that resulted in a theft of tokens worth $30 million. Although the company recovered the tokens worth $13 million with the help from industry peers, a startling $17 million is still missing.