In the latest crypto news, we are focusing on a smart move done by the Binance team recently, with which the leading exchange managed to freeze some of the funds that were stolen from the crypto exchange Cryptopia during the high-profile hack which occurred earlier this week.
The CEO of Binance, Changpeng Zhao, has announced this news in a tweet on Wednesday, saying the following:
Just checked, we were able to freeze some of the funds. I don't understand why the hackers keep sending to Binance. Social media will be pretty fast to report it, and we will freeze it. It's a high risk maneuver for them. https://t.co/i0PeahLzic
— CZ Binance (@cz_binance) January 16, 2019
Zhao also questioned why do attackers keep on sending the stolen funds to Binance, mostly because the word spreads quickly and the crypto exchanges are not shy about halting the flow of stolen funds.
As Cryptopia tweeted, on the other hand, the breach occurred on Monday and caused the exchange to suffer from “significant losses.”
In numbers, this translates to at least $2.4 million worth of Ethereum (ETH) moved to several unknown wallets – as well as about $1.2 million worth of Centrality (CENNZ). Even though it is still unclear who is behind the hack, some people believe that Cryptopia may have made the transfers for security reasons.
The exchange commented:
We cannot comment as this matter is now in the hands of the appropriate authorities. We will update you as soon as we can.https://t.co/9uMiKQwb6u
— Cryptopia Exchange (@Cryptopia_NZ) January 15, 2019
What’s most interesting in the case is that one day before this hack, Zhao posted a message on Twitter where he advised crypto holders to store their holdings on exchanges instead of personal storage devices such as USB drives or hardware wallets.
The tweet was not that well received by the audience, giving Zhao comments about the risk of storing cryptocurrency on “reputable” exchanges like Binance.
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South Korea Ends $18 Million Crypto Ponzi Scheme With The Help Artificial Intelligence (AI)
“Through keywords such as Ponzi, loan and recruiting members, we were able to teach the AI patterns of Ponzi schemes. The program can also identify advertisement patterns and identified the enterprise in question, which [was caught] with evidence provided by an unnamed informant.”The CEOs of the scheme, known as Lee and Bae, amassed a lot of money through selling private digital tokens named M-Coin which posed to be a real altcoin, along with membership fees from recruits, as the publication states. The figures also took advantage of the public's lack of knowledge of the crypto space to part them from their fiat investments.
“In our stakeout, we saw that most people attending the swindler’s presentation for membership were elderly people in their 60s and 70s,” Hong Nam-ki added.Currently, Ponzi schemes still remain a persistent phenomenon despite the increasing legitimacy of cryptocurrency in the public eye. This is obviously not the first (or the last) crypto ponzi scheme that exists out there - and will hopefully not be the last to be spotted with the help of artificial intelligence (AI). Earlier this year, authorities caught up with the controllers of OneCoin which is a notorious international quasi-pyramid scheme which ran for several years.
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Crypto Giant Coinbase Taps Into A $255 Million Customer Insurance Policy Program
"The data is clear that, today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking."Martin also touched on the possible scenarios and how Coinbase's insurance policies give customers peace of mind that the Bitcoin or altcoin savings they hold at the exchange is protected from losses.
“If the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole,” he wrote.According to experts, the worst case scenarios for losses in this manner break down to two categories: crime and specie. While crime covers losses caused by criminals who hack, steal and conduct fraud transfers, insider trading losses are also covered. On the other hand, the Specie coverage kicks in whenever there is a physical damage or theft or private key data in cold storage. As Martin explained:
“Crime policies would not generally cover the costs of incident response, PR costs, etc. Crime policies also don’t generally cover failures of the underlying currency (e.g. 51% attacks). Coverage for hot wallet exposures are also significantly more expensive than cover for cold storage alone.”He also had plenty to say about why is insurance important for crypto companies and what it should cover.
"Companies should focus on insurance for value in flight. This means that exchanges and wallets should have sufficient Crime coverage to fully cover their hot wallets (including enough buffer to handle asset price spikes)," Martin added.He concluded with a statement in which he said that Coinbase is working with regulators and insurers to create more insurance solutions in different areas.
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