bitcoin exchange

The director of a UK-based bitcoin exchange kidnapped earlier this week has been released after he paid his captors a ransom of more than $1 million in bitcoins.

Pavel Lerner, 40, was kidnapped on December 26 while leaving his office in Kiev, Ukraine. According to local media reports, a group of men wearing balaclavas grabbed him and forced him into a black Mercedes-Benz.

uk bitcoin exchange
Photo from Pavel Lerner’s Facebook Page

Lerner is an executive at EXMO, a UK-based cryptocurrency exchange that processes approximately $100 to $125 million in trades on a daily basis, primarily against the US dollar and the Russian ruble.

After spending nearly two days in captivity, Lerner was released on December 28 after paying a ransom of more than $1 million in bitcoins, according to a report in the Financial Times.

“He was kidnapped by an armed gang for the purpose of extorting bitcoins,” Anton Gerashchenko, a Ukranian official, told the publication, adding: “We have operative information that he paid more than $1m worth of bitcoins.”

Geraschenko said that Lerner was in a “state of shock” when he was released and was “very lucky that he remained alive.”

On Thursday — while Lerner was in captivity — EXMO revealed that it had been the subject of a DDOS attack, but it is not known whether the two incidents are related. The exchange assured users that, even in Lerner’s absence, the trading platform was operating as usual and that user funds remained safe.

As BlockExplorer explained its previous article on Lerner’s kidnapping, the incident is the latest in a small but growing trend of individuals being targeted by criminals for their cryptocurrency wealth.

Because decentralized cryptocurrency transactions are uncensorable and, in most cases, users retain control of their holdings, cryptocurrency executives and investors prove to be attractive targets for criminal enterprises.

Consequently, users should recognizing the risks of publicizing both their personal holdings and their affiliation with the industry in general and take steps to secure their investments against theft, just as they would with traditional assets.

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venezuela

Government cryptocurrency is coming, whether we want it to or not. On the 28th of December in Caracas, Venezeual’s Information Minister Jorge Rodriguez said: “It is a matter of days before we announce the first issuance of the ‘petro’ cryptocurrency.” Information Minister Jorge Rodriguez said these words at a press conference regarding ‘Petro’, broadcast on state TV Thursday.

Early in December, Venezuelan President Nicolas Maduro announced that Venezuela would be issuing their own cryptocurrency in order to circumvent U.S.-led financial sanctions.

According to Rodriguez on Thursday, the Petro will help Venezuela face the increasing international diplomatic opposition regarding President Nicolas Maduro’s crackdown on any political opposition at home. Rodrigues also hopes the Petro will help him skirt sanctions or attacks on Venezuela from the international financial system at large. “It will allow us to overcome any financial blockade.” He said.

Not the first announced government cryptocurrency, but Petro could possibly be the first to market

While not the first announcement of a government-issued cryptocurrency, nor nearly the first time that government has meddled in crypto,  the Petro is the first cryptocurrency to be backed by physical assets. Maduro stated on Wednesday that more than 5 billion barrels of Venezuelan oil will serve as the backing for the cryptocurrency. This oil should be able to back around $267 billion worth of currency, compared to the Bitcoin’s current market cap of $247 billion.

While he didn’t give any further details on mining or how this would be secured or “decentralized,” Rodriguez did say that miners were already lined up. Needless to say, we’re eager to find out how this government cryptocurrency will function.

Venezuela to launch Petro cyrptocurrency

coinbase

Bitcoin exchanges Coinbase and GDAX added full support for bitcoin cash on Tuesday evening, and the rollout did not go smoothly.

Bitcoin Cash Price Explodes After Coinbase Listing

Earlier today, Coinbase announced in a blog post that it had added full support for bitcoin cash, the third-largest cryptocurrency by market cap, enabling users to buy, sell, send, and receive the coin on both Coinbase and GDAX, its professional trading platform. Customers who had coins stored on the exchanges at the time of the fork also received access to their airdropped funds.

The bitcoin cash price surged to record levels in response to the announcement, reflecting the fact that Coinbase’s brokerage service is one of the primary ways in which new users in many countries — the U.S. in particular — purchase cryptocurrency. Some analysts attribute the recent litecoin and ethereum rallies, for instance, to their presence on Coinbase amid an explosion of new user registrations.

bitcoin cash price
Source; CoinMarketCap

Within hours, the global average bitcoin cash price had jumped from $2,300 to $3,000, and it swelled as high as $3,813 before settling down to a present value of $3,224, according to the BlockExplorer price index. This movement represented a single-day increase of 47 percent and lifted bitcoin cash’s market cap to nearly $55 billion.

A Messy Rollout

The news was a huge boon for bitcoin cash proponents, as it further cemented the coin as a top-tier cryptocurrency and made it more accessible to new investors, many of whom likely remain unfamiliar with it.

However, for the company, the rollout could not have gone much worse.

Coinbase’s pricing data comes from GDAX, where the bitcoin cash price quickly — and inexplicably — shot up to $8,500 before the exchange shut down BCH trading and cleared the order books just minutes after their launch.

bitcoin cash price
Source: Coinbase

At press time, GDAX’s BCH markets remained offline, with the last posted trade priced at $9,500. Coinbase, however,  had adjusted the bitcoin cash price down to $3,193, a level that corresponded to the global average.

The rollout left users confused — and enraged — and scores of frustrated users took to social media channels to vow that they would cease to use either Coinbase or GDAX.

It is likely that cooler heads will prevail once GDAX corrects whatever issue caused the price to leap to $9,500 and launches stable BCH markets. Nevertheless, the incident marks yet another public relations headache for Coinbase following a year of unprecedented expansion that has been accompanied by significant growing pains.

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Signal creator Moxie Marlinspike has announced MobileCoin, an ambitious project that purports to overcome the limitations that prevent bitcoin from serving as a viable medium for small-value payments.

It’s no secret that the user experience has largely taken a backseat to innovation in cryptocurrency development. While this was understandable during the technology’s early days, cryptocurrency’s rapid journey into the mainstream has necessitated the creation of a more accessible user experience so that, according to the common parlance, even your grandma can use it.

Unfortunately, improved accessibility has come primarily at the application level through third-party services that require users to sacrifice — to varying degrees — privacy, and security, and even control over their private keys.

MobileCoin revealed by Moxie Marlinspike

Released this week, the MobileCoin whitepaper (PDF) reveals a roadmap — still in its early stages — to make cryptocurrency usable for everyday transactions without sacrificing security and decentralization.

“I think usability is the biggest challenge with cryptocurrency today,” Marlinspike told Wired. “The innovations I want to see are ones that make cryptocurrency deployable in normal environments, without sacrificing the properties that distinguish cryptocurrency from existing payment mechanisms.”

Drawing on his experience developing end-to-end encrypted messaging systems at Open Whisper Systems, Marlinspike envisions a mobile-focused cryptocurrency protocol that will integrate seamlessly with secure messaging apps such as Signal and WhatsApp. Significantly, users will be able to recover their funds using a simple four-digit PIN code, eliminating the complexity of private key management.

MobileCoin will be based on the federated Stellar Consensus Protocol (SCP), enabling transactions to process in less than a second. While nodes will do the “heavy lifting” for the network by handling transaction processing, the whitepaper claims that they will not be able to “learn anything about their users’ balances or transaction history.”

This will be accomplished through a layered approach that isolates nodes in SGX secure enclaves and also employs CryptoNote — the same basic protocol on which privacy-centric Monero is based — to provide users with one-time addresses that cannot be linked together if node operators successfully compromise SGX.

At four pages, the MobileCoin whitepaper is incredibly brief, and security researchers have stated that many questions remain about the use of federated protocols and SGX enclaves — questions that the developers will hopefully answer in the coming months.

Nevertheless, given Marlinspike’s development chops, MobileCoin is a project worth keeping an eye on.