Binance founder slapped with lawsuit over failed Sequoia deal

Binance founder slapped with lawsuit over failed Sequoia deal

This year is starting out rough for Binance. 

Zhao Changpeng, the founder of cryptocurrency exchange giant Binance, has been sued in Hong Kong’s High Court by venture capital firm Sequoia Capital after allegedly violating an exclusivity agreement by engaging with another venture capital firm.

Binance—despite only coming into business in July 2017, rose quickly to become the largest cryptocurrency exchange by January 2018. According to court filings, Sequoia started its relationship with Binance in August, bidding for a nearly 11% stake in the company which they valued at around $80 million at the time. Negotiations stretched on for months, however, with Zhao saying in December last year that their valuation of the exchange was too low.

The other venture capital firm in question—IDG Capital—allegedly came into the picture with a far bigger valuation of Binance, and a far bigger offer. According to Bloomberg, IDG offered two rounds of substantial funding: $400 million and $1 billion. The legality of this negotiation between Binance and IDG was challenged by Sequoia, which brought the case to court. An order was handed down banning Binance from entertaining other investors.

This isn’t the only problem Binance faced in recent months. In February, Binance had to temporarily shut down their platform, citing server issues. But this spiralled into an FUD battle against John McAfee, who later apologized for fanning the flame.

About a month later, the exchange fell victim to a breach which saw hackers infiltrating some users’ accounts and using their funds to pump a little known altcoin. This prompted the exchange to put a $250,000 bounty over the hackers’ heads. The exchange also allocated an additional $10 million in rewards for any other hacks that may happen in the future.

Unfortunately, all this commotion also triggered alarm bells from Japan’s Financial Services Agency (FSA). Binance received a warning of closure from the FSA, saying they have to comply with licensing requirements if they want to continue their operations. This confirmed an earlier report by news agency Nikkei , who Zhao accused of “irresponsible journalism” as he was initially denying any issues with the FSA.

Zhao Tweeted afterwards that they are finding a solution. “We received a simple letter from JFSA about an hour ago. Our lawyers called JFSA immediately, and will find a solution,” he wrote.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Binance leads $30M funding round for privacy-centric MobileCoin

Binance leads $30M funding round for privacy-centric MobileCoin

The biggest cryptocurrency exchange by volume, Binance, has ventured into the virtual messaging service world by leading a funding round for the new cryptocurrency, MobileCoin. The Hong Kong based exchange, which has plans to move to Malta in the near future, has sunk no less than $30 million denominated in Ethereum and BTC into the project via its blockchain incubator Binance Labs. MobileCoin’s development team also includes the creator of Signal, Moxie Marlinspike.

The new cryptocurrency will be using the Stella consensus Protocol to operate. This makes privacy a focus of the operation, while also creating a seamless user experience that lends itself particularly well to integrating with mobile messaging apps such as Signal and Whatsapp. Both of these systems use end-to-end encryption technology that was developed by Marlinspike himself.

Binance Labs described MobileCoin as ‘a mobile-first, user-friendly cryptocurrency which plays a critical role in mainstream cryptocurrency adoption.’ Of course, it remains to be seen whether this altcoin will be taken up although it will probably have a promising start when listed on the Binance exchange.

Binance seems to be attempting to emulate Coinbase by investing in other industry projects. The latter has since launched its first venture fund, although it has also stated that it would not be investing in any crypto assets as this could create a conflict of interest as well as regulatory problems.

There are rumours, however, that Marlinspike is not that much involved in the project although he is described as a technical advisor. On Twitter, Dogecoin creator Jackson Palmer noted that Marlinspike is “barely involved with the actual development on this thing.”

Currently, MobileCoin does not appear to have an open-source code repository, though the rumors about Marlinspike’s involvement or lack of it, are currently just rumours. Once MobileCoin releases the project’s open source code, the true level of Marlinspike’s involvement in the project’s development should become clearer.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Malta attracts yet another cryptocurrency exchange—OKEx

Malta attracts yet another cryptocurrency exchange—OKEx

Hot on the heels of Binance declaring that it is coming to Malta, cryptocurrency exchange OKEx confirmed that it’s also setting its sights on the Mediterranean Island, which has proudly declared itself to be the “Blockchain Island.”

In a blog post on Thursday, OKEx announced that it was looking favourably at moving its operations to Malta since there was a lot of potential for the technology to move forward. Parliamentary Secretary for the Digital Economy Silvio Schembri posed for a photograph with Tim Byun and Chris Lee, top officials of OKEx whilst tweeting the announcement.

“Malta’s Virtual Financial Asset Act is a solid foundation for the industry and the government to work together in fostering the nascent blockchain/digital asset industry. More specifically, Malta’s sound risk-based approach will help cultivate a responsible, compliant, and healthy ecosystem,” explained Tim Byun, chief risk officer and head of government relations at OKEx.

“We look forward to working with the Malta government as it is forward thinking and shares many of our same values, the most important of which are protection of traders and the general public, compliance with Anti Money Laundering and Know Your Customer standards, and recognition of the innovation and importance of continued development in the Blockchain ecosystem,” added OKEx CEO Chris Lee.

Incidentally, Malta has just proposed major anti-money laundering legislation which is expected to sail through the local Parliament. This continues to confirm the much vaunted hype behind the Mediterranean island of Malta, which has already secured a major coup with Binance founder Changpeng Zhao tweeting his support for further expansion in the blockchain and cryptocurrency industries.

OKEx is currently based outside of Hong Kong and is operating from Japan, but has actively been considering a move from some time following regulatory clampdowns in the Asian country.

Malta, on the other hand, has begun actively courting cryptocurrency firms. Government officials have said that they want to transform the EU member state into a “Blockchain Island” through the passage of blockchain-friendly legislation.

The island saw the first major fruits of those efforts in March, as Hong Kong-based exchange Binance—currently the largest in the world—confirmed that it would move to Malta and not establish its base in Japan as previously planned.

Malta’s Prime Minister Joseph Muscat personally welcomed the company to the region, and Binance CEO Changpeng Zhao has said that he is aware of more than 20 cryptocurrency projects considering a move to Malta. Amongst these is the TRON project backed by Justin Sun, who has also tweeted his support for Malta’s ambitious moves in the region.

OKEx and Binance are not the only Hong Kong-based exchanges plotting to relocate their operations. Bitfinex, the sixth-largest cryptocurrency exchange, is reportedly to move its headquarters to Switzerland.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Cryptocurrency exchange Binance sets its sights on Malta

Cryptocurrency exchange Binance sets its sights on Malta

Binance, the world’s largest cryptocurrency exchange by traded value, is planning to open an office in Malta, founder Zhao Changpeng confirmed in an interview with Bloomberg from Hong Kong.

The exchange, founded in Hong Kong last year, will soon start a “fiat-to-crypto exchange” on the European island nation and is close to securing a deal with local banks that can provide access to deposits and withdrawals, according to Zhao. The executive did not provide a timeframe.

The move could also be seen as an effort by Binance to escape serious regulatory issues which it encountered in China and Japan recently. Binance also suffered a number of hacks in the past weeks which somewhat dented its reputation. Zhao described Malta as “very progressive when it comes to crypto and fintech.”

Binance’s move to Malta was also announced through a tweet by Prime Minister Joseph Muscat and was further confirmed by Zhao in another tweet.

Worldwide regulators have been cracking down on cryptocurrency exchanges and businesses since last year, leaving many like Binance struggling to find a permanent base. The company had an office in Japan and was trying to get a license to operate, but decided to remove its staff to avoid a clash with local regulators, Zhao said. Japan’s Financial Services Agency issued a warning to the venue on Friday for operating without approval. That news led to a crash in the price of several crypto currencies including Bitcoin.

The move to Malta comes as policymakers look for ways to promote the nation as a leader in the digital assets field. The government has held several public consultations on regulating virtual currencies, token sales and crypto exchanges. Plans for a Malta Digital Innovation Authority that will certify and regulate blockchain-based businesses and their operations were unveiled last month, the Malta Independent reported. The organization will also create a framework to oversee initial coin offerings, according to the report.

Zhao said he had recently been invited by the Maltese government to review an upcoming bill that was favourable to crypto businesses. Binance was ranked as the world’s top-ranked exchange by volume for the past 24 hours, trading about $1.7 billion, according to Coinmarketcap data.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Binance denies reports of Japan closure amid FSA crackdown

Binance denies reports of Japan closure amid FSA crackdown

Cryptocurrency exchange Binance is about to be slapped on the wrist by Japan’s Financial Services Agency (FSA) and could be made to shut down, according to Japanese news outlet Nikkei. The warning supposedly came as a result of Binance operating in the country without a license, and was announced following the March 7 hack of the exchange. Binance’s CEO, Changpeng Zhao, has refuted the news that the company was contacted by the FSA.

On March 7, users began reporting odd activity with their Binance accounts. Once users began to report the activity, Binance disabled all withdrawals and began an investigation. While they first denied the hack, Binance executives finally admitted that there had been an attack, and reversed all of the unauthorized transactions.

The FSA recently launched a wave of inspections into cryptocurrency exchanges. The inspections follow a hack that occurred on Coincheck in January of this year. More than $723 million in tokens was stolen during that hack. In one instance, $123 million worth of Ripple was stolen in a single transaction. Coincheck, like Binance, is not registered with the FSA.

After the Nikkei article regarding the FSA action against Binance was published, Zhao took to Twitter to deny the allegations. He admonished the Japanese news outlet, saying, “Nikkei showed irresponsible journalism. We are in constructive dialogs with Japan FSA, and have not received any mandates. It does not make sense for JFSA to tell a newspaper before telling us, while we have an active dialog going on with them.”

Binance launched in July of last year after raising $15 million through its initial coin offering (ICO). It currently has the highest trading volume in the world with a market capitalization of around $1.3 billion. The company was originally located in China; however, but relocated to Japan when Chinese regulators began their crackdown on cryptocurrencies.

There has been no further information to confirm or refute the claims that Binance will be forced to shutter its operations in Japan. One Twitter user, Henno van Rensburg (@hennokun) seems to have someone on the inside, though. He tweeted that the rumor is at least partly true, with the exchange being asked to remove its Japanese language version of the site to discourage trading among Japanese enthusiasts. The news has certainly impacted trading. Across the board, with just a few exceptions, all cryptocurrencies have been trading down following yesterday’s minor climbs.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Binance places $250

Binance places $250,000 bounty on hackers’ heads

Another $10 million has been allocated for future bounties.

Last week, an unknown group of hackers infiltrated some accounts on cryptocurrency exchange Binance and used their funds to pump up a little known coin called ViaCoin (VIA). Despite the hackers actually walking away with a loss instead of a profit after the suspicious transactions were reversed, the hack stirred up more rumour than what it actually was and has even been blamed by some for the cryptocurrency market drop.

And it looks like Binance has had enough.

In a release, the exchange—which holds the second place in terms of trade volume globally, has announced that they are giving a $250,000 reward for the first person to provide substantial information that will lead to the legal arrest of the hackers.

“To ensure a safe crypto community, we can’t simply play defense. We need to actively prevent any instances of hacking before they occur, as well as follow through after-the-fact. Even though the hacking attempt against Binance on March 7th was not successful, it was clear it was a large-scale, organized effort. This needs to be addressed,” they wrote.

The recent hack was blamed on third party apps, particularly a compromised trading bot as well as phishing scams. ViaCoin, on the other hand, denies any involvement in hack and pump, and said in a series of Tweets that they have offered Binance their technical support.

In addition to the $250,000 bounty for last week’s hack, the exchange is also allocating $10 million in cryptocurrencies for rewards in case more hacks happen in the future.

“Furthermore, Binance has currently allocated the equivalent of $10,000,000 USD in crypto reserves for future bounty awards against any illegal hacking attempts on Binance. We have also invited other exchanges and crypto businesses to join our initiative. We welcome their participation at any time,” they added.

The bounty system could possibly deter future hacks: last year, after Coindash hinted at launching an investigation to pinpoint the culprit (or culprits) behind the 37,000 ETH hack instigated against them last year, the hacker started returning the stolen funds. Shortly after their announcement, the hacker sent back 10,000 ETH, and another 20,000 ETH was returned last month. The remaining 7,000 ETH has yet to be heard of.

And with authorities and independent investigators starting to get in on tracking stolen funds such as that of Mt Gox’s, an arrest may not be that far off.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
BTC takes punch to the gut with SEC ruling

BTC takes punch to the gut with SEC ruling, Binance glitch

It shouldn’t come as much of a surprise, but judging by the market reaction, several events this week had a significant impact on cryptocurrency, particularly legacy Bitcoin (BTC).

The U.S. Securities and Exchange Commission (SEC) has announced that cryptocurrency platforms will be obligated to register with the commission as though they were fully-fledged exchanges. The news didn’t go over too well with the BTC community, and resulted in hefty drop in its value.

After reaching nearly $20,000 in December (Merry Christmas), BTC has now lost about 50% of its value. It dropped to $9,000 at the time of writing. The cryptocurrency community has seen how regulators around the globe appear to be focusing more on blockchains and digital assets, including cryptocurrency mining and trading, and this has raised fears that tighter controls could mean limited trading.

The SEC has taken the stance that, due to the lack of regulatory oversight, a cryptocurrency platform that calls itself an exchange provides a false sense of security to users. In order to protect consumers, the agency decided that the platforms, or exchanges, must be required to register themselves as such. In a statement released on Wednesday, the SEC said, “If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

Some trading platforms, such as GDAX of Coinbase, aren’t registered with the SEC as exchanges.  They do, however, hold money transmission licenses with individual states. The trading platform Gemini is registered in New York as a trust company and Templum LLC, an affiliate of Liquid M Capital, is registered with the SEC as an “alternative trading system.” These companies, along with many others, will now have to register as exchanges with the SEC.

Another event went down Wednesday that didn’t do anything to help Bitcoin, either. Binance, an Asia-based and one of the world’s largest cryptocurrency exchanges, became the subject of hacking attempts. Many investors that use the exchange took to both Twitter and Reddit, reporting that their coins had been stolen and used to purchase Viacoin. Viacoin’s value saw a sharp uptick on Wednesday that seemed to corroborate the claims, jumping 28%. Binance officials denied the rumors, but acknowledged the fact that they were witnessing trading irregularities.

Following an investigation by Binance, it was determined that, in fact, the user accounts had been hacked. However, the last laugh would be had by Binance and the users. Binance reversed all of the losses, including the gains earned by the hackers, and returned the stolen amount to the users. The excess that the hackers thought they would earn was given to Binance Charity.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Hackers pumped up Viacoin using Binance customers' funds

Hackers pumped up Viacoin using Binance customers’ funds

Binance CEO says “all funds are safe,” and that the hackers actually lost funds of their own.

Yesterday, Binance had to freeze withdrawals after noticing some suspicious activity in the exchange. Users saw a huge leap in buy orders for a little known cryptocurrency called Viacoin (VIA), prompting Binance to investigate.

Hackers pumped up Viacoin using Binance customers' funds

It was revealed that hackers managed to infiltrate users’ accounts, and use their funds to pump up VIA. According to Binance, the victims were those who were using a particular trading bot which may have been compromised, but that Binance itself has not been hacked.

“We are investigating reports of some users having issues with their funds. Our team is aware and investigating the issue as we speak.

As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.

Please remain patient and we will provide an update as quickly as possible,” Binance wrote on their Reddit subchannel.

Binance CEO Zhao Changpeng was very quick to address the issue, which caused some panic in the crypto market. “All funds are safe. There were irregularities in trading activity, automatic alarms triggered.  Some accounts may have been compromised by phishing from before.  We are still investigating.  All funds are safe.”

He later said that they are reversing the suspicious trades. “We have localized the irregular trades, they will be reversed. All funds are safe, thanks to the fast alarm. Please learn to secure your accounts against phishing,” he tweeted.

Users are now debating on how the hack could have been pulled off despite API keys being IP-locked, with some saying it would have been impossible given the strict security measures they enforce on their accounts

Hackers pumped up Viacoin using Binance customers' funds

Meanwhile, Viacoin denies any involvement in the pump. In a Tweet, echoing Binance’s theory that an infected trading bot may be to blame, or perhaps a phishing scam. They added that Viacoin may have been targeted “due to our thin orderbook and reasonably low marketcap.”

At the same time that the hack was instigated, BTC was seen crashing.

Hackers pumped up Viacoin using Binance customers' funds

Shortly after the ruckus, Zhao tweeted an image explaining how some users may have fallen for a phishing scam.

After reversing the unauthorized trades, he said that the hackers even lost some coins of their own, which he will donate to charity.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
McAfee apologizes to Binance over shutdown FUD

McAfee apologizes to Binance over shutdown FUD

In the wake of Binance’s recent shutdown, cybersecurity researcher and cryptocurrency advocate John McAfee apologized to the company and CEO Changpeng “CZ” Zhao over the former’s involvement in speculative discussions regarding the origins and nature of the alleged hack on the exchange.

McAfee went on Twitter on Sunday, saying: “I would like to apologize to Binance and to CEO Changpeng Zhao for my part in the FUD regarding their outage last week. As a long time cyber security professional, my instincts, coupled with numerous reports which were dubious in nature, overrode my better judgment. Forgive me.”

The FUD regarding Binance’s shutdown includes speculations that the exchange wasn’t able to fully contain the damage of the distributed denial-of-service attack (DDoS) made on their globally distributed servers.

After Binance announced that it is back online, McAfee stated on Twitter that while he wasn’t “trying to spread FUD,” he has “received dozens of reports” similar to his earlier assertion in the thread that he wasn’t able to use Binance. McAfee stated that he was only “trying to understand” the situation, adding that given his experience as security researcher, he knew that “potential hacks are far more easy to solve if investigated immediately. Days later magnifies the task by orders of magnitude.”

The claim made by McAfee was coupled with a screenshot of what appeared to be a message from Binance’s website acknowledging that they were attacked and compromised. In a reply within the thread, McAfee made the following assertion: “There has never been, in the history of hacking, a single f** company that admitted to being hacked without being pushed.”

These allegations were later disproved, with Binance posting a public ledger pointing to their wallet addresses. Anyone looking into the provided wallet address may fact check for its history, current amount, as well as pending and unconfirmed transactions.

An official recap of the incident was posted by Zhao via LinkedIn Pulse, detailing how 1.7% of Binance users were affected by a data corruption. In the same writing, Zhao mentioned McAfee and thanked the cybersecurity researcher for his contributions to how the incident was resolved.

“The real helper was Mr. Mcafee, posting an obvious fake image about us being hacked. Everyone pitched in to help defend us. He united the community for us, and rallied such support, during a time when we needed it the most. Sometimes, things that look negative are actually positive,” said Zhao, who also defended McAfee, saying that the cybersecurity researcher was “completely innocent”, and was merely “asking the wrong questions.”

At a time when fear, uncertainty, and doubt override user confidence in companies and even cryptocurrencies around which communities are built, showing full transparency and accountability over incidents that impact lives is key to sustaining growth and inclusion. While the Bitcoin Cash community is also affected by the recent shutdown, there is also a lesson here on how to face a complaining crowd spreading rumors: stick to the facts, do what needs to be done, and keep on doing what is right for the community.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Binance shuts down temporarily

Binance shuts down temporarily, cites server issues

Hours after getting featured on the cover of Forbes magazine for their crypto rich list, Binance CEO Changpeng “CZ” Zhao announced via Twitter that the exchange will be down for 12 hours, citing “a server issue on our replica database cluster” that caused “some data to be out of sync.”

According to Zhao’s estimates, the syncing issue will take several hours to resync with their backend server’s master branch. Zhao assured everyone using the exchange that “no data is lost.”

In a recent post from their support page, Binance announced a “System Upgrade Extension,” noting “a significant increase in users and trading activity” made the extension necessary. The exchange will effectively halt withdrawals and trading until 2PM UTC, which is approximately 12 hours after the announcement was posted.

The announcement fueled some adverse and speculative reactions from Binance users. Twitter user @ThatDudeF asked Zhao, “Not a hack right?” The CEO promptly replied with a “no.”

Server issues are nothing new when it comes to prominent exchanges like Binance, which can process some 1.4 million transactions per second on an average day. However, due to reports of the recent intrusions on the Coincheck exchange based in Japan, cryptocurrency users are wary and sensitive to any news of instability from major exchanges.

The exchange’s CEO is among the most prominent figures in the cryptocurrency industry, alongside Roger Ver and Ben Reeves. Zhao, who once worked overnight shifts at a fast-food restaurant and a gasoline station while studying computer science at a Canadian university, ranks third on Forbes’ crypto billionaire list.

Binance is one of the largest and most prominent exchanges to feature Bitcoin Cash (tagged as BCC in their ticker, not to be confused with the fraudulent Bitconnect) as a major cryptocurrency. Binance’s server update will affect Bitcoin Cash users and traders, and those with funds held at the exchange are advised to stay vigilant for developments regarding the exchange’s site upgrade.

[UPDATE] Binance CEO Changpeng Zhao has announced on Twitter that their platform’s servers have been fixed and upgraded. Trading is now open and no funds were stolen or lost. The announcement also acknowledged that there was a DDoS attack on their cloud provider. The CEO promised to provide a more detailed summary of what happened as soon as possible while the company prioritizes answering customer concerns.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Exchanges call for time-out on new account registrations as demand overflows

Coinbase reported a staggering 100,000 signups within 24 hours in November last year.

As fluctuations in trading value draw massive attention to cryptocurrencies, the deluge of new users is challenging the stability of cryptocurrency exchanges, forcing some of them to temporarily freeze new account registrations altogether.

For the last half of 2017, Bittrex has been struggling with handling the volume of users trying to register new accounts with them. As part of KYC (know your customer) compliance procedures, verification of new accounts were on a standstill for months, much to the frustration of new users.

In December 16, Bittrex finally released a statement saying new registrations are halted until the exchange finishes some upgrades that will help them cope with the heavy traffic. Cex.io followed shortly, saying they will “temporarily pause the registrations of new users, until we can guarantee the decent response time to each and every ticket or a verification request.” Adding to this list is Binance, announcing last week that they are also calling for a time-out.

While these exchanges made official announcements, Bitfinex chose a more subtle approach: new registrants now need an “invitation code” to get in. “Due to extraordinary demand, new accounts require an invitation code,” the form reads. Where such codes can be found, however, remains unknown, but they would supposedly be open for new registrations again on January 15.

Exchanges call for time-out on new account registrations as demand overflows

 

These exchanges are not the only ones struggling to keep up. Kraken reported a series of days with 50,000 new account registrations and 10,000 new support tickets in December. And Coinbase endured 100,000 user registrations within 24 hours from CME’s announcement of its inclusion of BTC in its futures trading platform.

As the mainstream population starts to get in on the cryptocurrency boom, some are out to take advantage of the situation. A report has been circulating saying some users are selling “fully verified exchange accounts”, which offer larger withdrawal limits. Beware of such practices, however. If the previous owner has set up the account recovery to loop back to accounts he has control of, this means whatever funds you have in the wallet are at risk.

Similarly, second-hand hard wallets are also unsafe. Reddit user u/moodyrocket lost his life savings recently after moving them to a second-hand Ledger Nano. Apparently, the previous owner set up the wallet so that it unlocks with a recovery seed he holds—not the one he gave the buyer, a trick called “man in the middle.” Suffice it to say, saving a few bucks in this case was far more costly.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Exchanges call for time-out on new account registrations as demand overflows

Coinbase reported a staggering 100,000 signups within 24 hours in November last year.

As fluctuations in trading value draw massive attention to cryptocurrencies, the deluge of new users is challenging the stability of cryptocurrency exchanges, forcing some of them to temporarily freeze new account registrations altogether.

For the last half of 2017, Bittrex has been struggling with handling the volume of users trying to register new accounts with them. As part of KYC (know your customer) compliance procedures, verification of new accounts were on a standstill for months, much to the frustration of new users.

In December 16, Bittrex finally released a statement saying new registrations are halted until the exchange finishes some upgrades that will help them cope with the heavy traffic. Cex.io followed shortly, saying they will “temporarily pause the registrations of new users, until we can guarantee the decent response time to each and every ticket or a verification request.” Adding to this list is Binance, announcing last week that they are also calling for a time-out.

While these exchanges made official announcements, Bitfinex chose a more subtle approach: new registrants now need an “invitation code” to get in. “Due to extraordinary demand, new accounts require an invitation code,” the form reads. Where such codes can be found, however, remains unknown, but they would supposedly be open for new registrations again on January 15.

Exchanges call for time-out on new account registrations as demand overflows

 

These exchanges are not the only ones struggling to keep up. Kraken reported a series of days with 50,000 new account registrations and 10,000 new support tickets in December. And Coinbase endured 100,000 user registrations within 24 hours from CME’s announcement of its inclusion of BTC in its futures trading platform.

As the mainstream population starts to get in on the cryptocurrency boom, some are out to take advantage of the situation. A report has been circulating saying some users are selling “fully verified exchange accounts”, which offer larger withdrawal limits. Beware of such practices, however. If the previous owner has set up the account recovery to loop back to accounts he has control of, this means whatever funds you have in the wallet are at risk.

Similarly, second-hand hard wallets are also unsafe. Reddit user u/moodyrocket lost his life savings recently after moving them to a second-hand Ledger Nano. Apparently, the previous owner set up the wallet so that it unlocks with a recovery seed he holds—not the one he gave the buyer, a trick called “man in the middle.” Suffice it to say, saving a few bucks in this case was far more costly.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.