Top Crypto News – 05/04/2018

Breaking: Hacked Japanese Exchange Coincheck Accepts Takeover Bid


Embattled cryptocurrency exchange Coincheck has reportedly decided to accept a takeover offer from Monex, Japan’s third-largest online brokerage.

Japanese business daily Nikkei is reporting that crypto exchange Coincheck will accept a takeover bid that includes capital in several billion yen, worth tens of millions of dollars, from major Japanese online brokerage Monex. The decision to accept the bid was reportedly made today, a move which will see Coincheck reshuffle its management as the exchange continues its recovery effort after suffering a $530 million theft in NEM tokens in January – the largest cryptocurrency exchange theft of all time.

Monex’s foray into the cryptocurrency industry comes amid its belief that blockchain, the underlying technology of cryptocurrencies like bitcoin, will power its core operations as major online brokerage/

Details of the exact figures and form of investment are still being finalized, the report adds, with details of the deal to be announced tomorrow, Friday.

Coincheck’s founding president Koichiro Wada and chief operating officer Yusuke Otsuka will step down immediately after the exchange receives new capital from Monex as a part of the takeover. Monex chief operating officer Toshihiko Katsuya is in position to take over as Coincheck’s new president. His experience as president of Monex’s online brokerage arm makes him ‘a sound choice to rebuild the troubled cryptocurrency exchange’ the report added.

Coincheck, which has already begun distributing reparations to customers impacted by the NEM theft, has seen struck with two business improvement orders from the Financial Services Agency (FSA), the country’s’ financial regulator. While the FSA has issued licenses to sixteen domestic exchange operators, Coincheck isn’t among them. However, the Tokyo-based exchange is still applying for a license with the FSA set to scrutinize its deal with Monex and review its operations under new management.

Featured image from Shutterstock.
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Ken Shishido Wants Everybody to Use the ‘Cash’ Denomination for Fractions of BCH


Promoting Bitcoin Cash Throughout Japan and Worldwide

Ken Shishido is well known in Japan throughout the cryptocurrency circuit. He is the organizer and co-founder of the Tokyo Bitcoin Cash Meetup. Just recently Shishido gave a presentation on how he thinks adoption should be promoted in Japan and some of the ways he and the Meetup members have been bolstering widespread acceptance. At the Satoshi’s Vision Conference (SVC) Shishido explains that he has hosted over 170 cryptocurrency Meetups over the past years, describing his background within the bitcoin industry in Japan. The Tokyo Meetup organizer has also traveled all around the world spreading the gospel of cryptocurrencies as well. Shishido explains to the crowd that Japan has one of the highest populations of cryptocurrency users worldwide with roughly 2 million users in the country, according to his estimates.

Ken Shishido Wants Everybody to Use the 'Cash' Denomination for Fractions of BCH
Ken Shishido at the Satoshi’s Vision Conference in Tokyo.

BUIP087: Using the Denomination ‘Cash’ for One Hundred Satoshi

During the end of Shishido’s discussion he briefly mentions one the goals he is currently working on which is changing the name for smaller fractions of bitcoin cash from ‘Bits’ to ‘Cash.’ Essentially, Shishido has submitted a BUIP request to change the terminology in bitcoin cash to “cash” (CSH) as the standard term for 100 (one hundred) ‘satoshi’ or 1/1,000,000 (one one-millionth) of a bitcoin cash (BCH). Shishido explains his motivation for wanting to change the current terminology.

“Bitcoin cash strives for the worldwide adoption, and unit denomination and calculation must be easy for the average users for daily transactions — And, it needs to to be differentiated from Bitcoin Core (BTC) to avoid confusion,” explains Shishido’s BUIP request.

The “cash” denomination has been discussed and proposed by many people before. Authors of this BUIP take no credit for inventing the term — As BCH grows in price versus fiat currencies, it’s important to give users the ability to quickly and accurately calculate prices for transactions, savings and other economic activities.

Ken Shishido's Quest to Use the 'Cash' Denomination for BCH Fractions
Bitmain CEO Jihan Wu likes the look of the ‘cash’ denomination.

Unit Wallet Adds the ‘Cash’ Denomination

So far Shishido’s idea has been welcomed by the community and he has been asking businesses to consider the idea. Just recently the bitcoin cash-centric mobile platform Unit Wallet just launched its latest 2.0 version with new features like the Cash address format.

Ken Shishido's Quest to Use the 'Cash' Denomination for BCH Fractions
Unit Wallet’s new user interface features the ‘cash’ denomination.

Moreover, Unit Wallet also utilized Shishido’s cash denomination concept and smaller fractions of BCH contain the word ‘cash’ in the user interface. Check out why Ken Shishido thinks BCH proponents should bolster the idea of a ‘cash’ denomination in the video below.

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AngelList ICO Spin-Off CoinList Raises $9.2 Million in Funding

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A platform for token offerings first incubated at venture firm AngelList has completed its Series A.

Launched last May, CoinList revealed Wednesday it has raised $9.2 million to build out a platform where accredited investors can invest in initial coin offerings (ICOs), or custom cryptocurrencies issued by startups and open-source projects. Investors in the round include Polychain Capital, FBG Capital, Libertus Capital, Electric Capital, CoinFund and Digital Currency Group.

The news closely follows CoinList’s announcement in October that it would continue to pursue its model, one that had seen it offer support for Filecoin’s record-breaking September ICO, as a standalone company.

Still, that’s not to say there won’t be changes that reflect the sector’s shifting regulatory environment in the U.S.

In statements, CoinList co-founder and CEO Andy Bromberg notably said the company plans to use part of the fresh capital to build a secondary exchange for blockchain-based securities.

“There is not right now a good tokenized exchange for securities,” Bromberg told CoinDesk. As such, CoinList hopes to be the first to introduce “a liquid and compliant secondary exchange for securities.”

The statements point to the growing tension between crypto innovators, who have argued that cryptocurrencies, even when issued in public sales, can be considered commodities, and U.S. regulators, who have largely asserted such creations are captured by securities law.

Still, in this environment, CoinList said it hopes to distinguish itself by offering investors access to high-quality projects that buck the fly-by-night reputation industry offerings have sometimes attained.

Bromberg told CoinDesk:

“The best projects are being directed toward CoinList as a the place to go to run a client token sale.”

Selective strategy

Going forward, CoinList detailed how future sales will be operated to ensure anti-money laundering (AML) and know-your-customer (KYC) due diligence is performed on all platform users.

While the exact rules around accreditation are slightly complicated, users must meet an income or asset threshold: at least $200,000 in annual income for an individual, or $1 million in net assets.

But while that may seem to limit the service’s clientele, Bromberg said the platform has so far processed $400 million in investments, with thousands more users joining daily.

So far, CoinList has seen three ICOs launch through its platform, Filecoin, Blockstack and Prop, and CoinList representatives said the pace of launches is perhaps unlikely to escalate in the short-term.

“It’s really a matter of being incredibly selective there,” Bromberg told CoinDesk.

Another challenge, Bromberg acknowledged, would be liquidity, especially as the cryptocurrency market cools and a fear of regulators creeps back into the community.

Bromberg, however, remained confident, concluding:

“Initially, I think we’ll be relying on our investor base to drive capital into the market and do market making … We’ll be able to offer real liquidity to a lot of these securities.”

Gold coins via Shutterstock
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Verge Is Forced to Fork After Suffering a 51% Attack


Accident-Prone Altcoin Has Another Bad Day

Verge Cryptocurrency Falls Prey to a 51% AttackOn Wednesday April 4, “ocminer”, a regular poster on the Bitcointalk forum, announced that verge (XVG) was experiencing a 51% attack. A bug in the altcoin’s code enabled the attacker to spoof timestamps and cause each new block to be produced using the same algorithm. Usually, a different algorithm must be used for each block to prevent any single miner or pool of miners from controlling the XVG hashrate. The verge community aren’t known for their tolerance of negative stories, and soon they’d piled into the Bitcointalk thread to dismiss the “fake news and FUD”. One fanboy mused:

The timing of this attack seems highly suspicious.  Is it possible this was not an individual but an anti-crypto governmental organization that fears the huge deal that Verge is making?  Way too much of a coincidence here. I’ve said for months that all it takes is one huge (legit) deal with an Amazon/Paypal class company and the market will quadruple overnight.

Using a number of exploits in the XVG code, the attacker was able to mine multiple blocks one second apart, all performed using the scrypt algorithm, a feat which ought to have been impossible. The attack relented after three hours, but by that time the attacker had confirmed hundreds of blocks, making a rollback of the blockchain necessary to undo the damage. Lead verge developer Justin posted an emergency commit to temporarily fix the problem and was successful – but only at the second attempt. A hard fork will now be initiated to remedy the matter once and for all.

Verge’s problems may only just be beginning though. The attacker taunted the team in a forum post, writing “Hey Verge Team, get some real developers and fix your code.
We have found another 2 exploits which can make quick hashes as well.” To compound the misery, at least one verge holder was then fooled by a Twitter scam, explaining:

I visited some hours ago the official Verge Twitter profile to read the news about the hash hack. While reading the tweet i noticed several messages offering a compensation for the attack by Verge. Send x Eth and you get some bonus back. Sounded legit to me as it was affilated to the hash attack and i suffered from it as well having had some hours only orphaned blocks on all my baikals, hence i fall victim to this damn scam on the official twitter page.

Verge Cryptocurrency Falls Prey to a 51% Attack
The 51% attack used the scrypt algorithm for each block, which ought to have been impossible

51% Attacks Are Ultra Rare

Verge Cryptocurrency Falls Prey to a 51% AttackWhile often theorized, 51% attacks are extremely rare. To control the majority of bitcoin’s hashrate, for example, an attacker would require over 14 exahashes of power, which would be all but impossible. Altcoins have a much lower hashrate, but even so, it is unusual to witness such an attack in the wild. Interestingly, another Proof of Work (PoW) coin, electroneum, is believed to have succumbed to a 51% attack just three days ago. Reports are surfacing that the electroneum 51% attack has since resumed, with the same entity behind the verge attack believed to be responsible.

Rowan Stone, founder of cryptocurrency mining firm Alter Chain explains: “PoW coins [such as verge] are secured via decentralized consensus. This attack is a great example of what is possible when a single entity has enough hashpower to create their own consensus. The fact that the XVG code base had a fairly significant bug just made it easier for the attacker to pull this off.”

Problem? What Problem?

In typical fashion, the verge team tried to play down the severity of the attack, tweeting:

Verge Cryptocurrency Falls Prey to a 51% Attack

On the Bitcointalk forum, the damage control exercise was cranked higher still, with a verge team member disingenuously writing “we’re kinda glad this happened and that it wasn’t as bad as it could have been.” Verge also tried to shut down discussion of the “minor” incident in its Telegram channel. The reality was nothing of the sort: all verge wallets are out of sync as the blockchain snapshot is stuck at block at 2007364 and a hard fork is imminent. Verge claim that around 250,000 XVG were stolen by the rogue miner, but dissenters have claimed that as many as 3.9 million coins may have been taken.

One forum member wrote: “Based on what I see from the dev postings here it’s apparent that if ocminer had never brought this to everyone’s attention, the XVG team would have never admitted to or disclosed what happened. Trying to downplay and being flippant about the severity here is just pissing on the XVG faithful.” A verge developer tried to shrug off the magnitude of the attack, protesting “how much eth has been stolen this year? this is insignificant in contrast”.

Verge Cryptocurrency Falls Prey to a 51% Attack

XVG is down 16% in the last 24 hours, Wednesday’s attack only tempered by anticipation of a “big announcement” on April 16 that has caused verge to double in price in the past week. In 2018 alone, verge has shrugged off privacy leaks, its Twitter being hacked, developer doxed, the embarrassment of having to beg its community for $3 million, and now a 51% attack. The rest of the cryptocurrency world may be laughing, but XVG’s true believers remain unfazed.

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