Tag: coinbase

Coinbase UK Now Supports Four New Assets: XTZ, DAI, EOS, & LINK

Cryptocurrency exchange platform Coinbase announced last week that Coinbase UK now supports four new assets on its platform, which are Tezos (XTZ), Dai (DAI), EOS (EOS), and Chainlink (LINK).  Coinbase reported that by supporting the new assets, the platform grants customers access to buy, sell, and trade even more assets through a GBP wallet, funded by a GBP bank account or credit and debit card. The crypto portal also noted that the support follows the complete reinstatement of its GBP wallet functionality and the recent launch of BAT, ZRX, REP, XLM, and XRP.

“Adding support for even more assets brings us closer to our long-term mission to help bring economic freedom, innovation, and equality to everyone, everywhere.”

The support of the assets also comes just days after Coinbase announced its Coinbase Card supports five new assets and ten new countries. The card is now available in a total of 29 countries, with customers in Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden being able to spend their crypto balance using a contactless Visa debit card in millions of locations worldwide.

“We’ve also more than doubled the number of assets available to spend — going from 4 to 9. XRP, BAT, REP, ZRX, and XLM wallets can now be used to buy anything from coffee to Christmas shopping. These five new assets join BTC, ETH, BCH, and LTC. Spending crypto as easily as money in your bank account is exactly what Coinbase Card lets you do. But for us, it doesn’t stop there. Spending summaries, combined with our brand new monthly statements feature, make tracking your crypto spend easy.”

Coinbase Card Now Supports Five New Assets & Ten New Countries

Cryptocurrency exchange platform Coinbase announced on Thursday its Coinbase Card now supports five new assets and ten new countries. According to Coinbase, the card is now available in a total of 29 countries, with customers in Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden being able to spend their crypto balance using a contactless Visa debit card in millions of locations worldwide.

“We’ve also more than doubled the number of assets available to spend — going from 4 to 9. XRP, BAT, REP, ZRX, and XLM wallets can now be used to buy anything from coffee to Christmas shopping. These five new assets join BTC, ETH, BCH, and LTC. Spending crypto as easily as money in your bank account is exactly what Coinbase Card lets you do. But for us, it doesn’t stop there. Spending summaries, combined with our brand new monthly statements feature, make tracking your crypto spend easy.”

Coinbase went on to add that once a Coinbase Card has been requested, customers can spend their crypto through the in-app card, before the contactless Coinbase Card arrives.

San Francisco-based Crypto Exchange Coinbase Has Generated Nearly $2 Billion in Transaction Fees Since its Launch in 2012

Brian Armstrong, CEO of San Francisco-based crypto exchange Coinbase, revealed recently that the leading digital currency trading platform has generated almost $2 billion in transaction fees since it launched in 2012.

Armstrong, whose comments came during Vanity Fair’s New Establishment Summit on October 23, sad that technology has always been his company’s main focus, which is why the exchange has consistently generated substantial revenue.

Coinbase has been profitable since 2017. The company has generated billions of dollars in transaction fees. Armstrong stated:

“Most of these profits we’re plowing back into the business to create new products. I sort of think of us as the anti-unicorn unicorn […] I want Coinbase to be a company of repeatable innovation.”

He also mentioned:

“Crypto is creating a new economy, and it’s replacing and disrupting a whole bunch of areas of financial services. I don’t want people to get caught up in the hype. I think over the next decade, crypto is going to become a greater percentage of the GDP…the real pace of the technology is actually much more linear [than the bubble that has cropped up around smaller crypto assets.]”

Armstrong further noted that he does not understand why regulatory authorities have reacted negatively to the Facebook-led Libra project. 

He remarked:

“I’d really like to see the US embrace this area of innovation.”

Armstrong added:

“There are a lot of people who are unbanked in the world, who are underbanked…My hope is [that] the US [encourages] innovation, even if it comes from a company like Facebook that they’re not necessarily very happy with.”

Notably, Coinbase is among the 21 remaining firms that are part of the Libra Association, a non-profit organization that has been scrutinized by regulatory authorities throughout the world for its potential to violate user privacy and regulatory guidelines. The Libra Association recently lost seven major corporations, including eBay, Stripe, Visa, and Mastercard.

Armstrong has previously criticized US lawmakers for requesting Stripe, Mastercard and Visa to withdraw from the Libra project. Commenting on how the payment companies were pressured into leaving the Association by US Senators Brian Schatz and Sherrod Brown, Armstrong remarked:

“Something feels very un-American about this. Two senators writing to Visa, Mastercard, and Stripe to ask them to withdraw from Libra.”

Coinbase Receives E-Money License in Ireland, Company Is Expanding European Operations

San Francisco-headquartered crypto exchange Coinbase is expanding its operations in Europe with an e-money license granted by Ireland’s central bank.

On October 11, Zeeshan Feroz, CEO of Coinbase’s UK division, revealed that the digital asset trading platform had become “one of just a few companies” to have received an e-money license in Ireland.

Coinbase’s management launched its operations in Dublin in October 2018, in order to expand the company’s business in Europe and also as a contingency plan following the UK’s exit from the European Union. 

Feroz stated:

“Europe represents a huge opportunity for Coinbase and today’s announcement is another positive step for us in the region. The approval from the Central Bank of Ireland will now enable us to expand our Irish operation and deliver a better product to customers across some of our fastest-growing markets. It will also allow us to secure passporting for our customers across the EU and EEA.”

Martin Shanahan, CEO of IDA, a state agency that attracts foreign investment to the country,  congratulated Coinbase on receiving the e-money license.

Shanahan remarked:

“Coinbase’s choice of Dublin for this operation reinforces the strength of Ireland as a destination for financial services companies, providing a consistent, certain, pro-enterprise policy environment for businesses to grow and thrive.”

Coinbase Announces Launch of Coinbase Pro Mobile App

Cryptocurrency exchange platform Coinbase announced on Thursday the launch of its Coinbase Pro mobile app. Coinbase claims the Coinbase Pro mobile app offers the most intuitive feature set of any mobile crypto trading platform.

“The Coinbase Pro mobile app offers a feature-rich trading experience, including real-time candles, depth charts, order books and advanced order types, along with intuitive shortcuts. Orders made via the app will carry the same fees as those executed via the desktop platform, and traders will have access to the more than 50 trading pairs available today on Coinbase Pro. The app is available to Coinbase Pro customers in 100+ countries around the world.”

Coinbase also noted that since the launch of Coinbase Pro on desktop, few features have been requested more than a mobile trading experience. Coinbase went on to add:

“Opportunities to buy and sell present themselves at all hours of the day. This means it’s critical for traders to have access to the tools and information they need to capitalize on these moments, when and where they need it. That’s why today we’re announcing the launch of the Coinbase Pro mobile app, a powerful, mobile-first trading platform that was built with a focus on speed, ease of use, and a clean, streamlined trading experience.”

Coinbase Pro’s mobile app is currently available through the Apple store.

San Francisco-based Rentals Firm Omni Is Reportedly in Acqui-Hire Talks With Crypto Exchange Coinbase

San Francisco-based Omni, a marketplace that lets users rent products from nearby stores, has been forced to deal with layoffs, according to sources familiar with the matter.

As reported by TechCrunch, the company has laid off seven employees from its operations team. Omni is also reportedly considering selling its engineering team to digital asset exchange Coinbase after receiving interest from online professional services marketplace Thumbtack.

Omni’s business, which involves renting out tents, bikes, and power drills, has not been doing well. The company had considered launching a white-labeled platform that would allow merchants to run their own rental business.

Omni may have a lot of cash after it raised $25 million from San Francisco-based Fintech firm Ripple. However, the company fears that its new platform might not be able to generate enough revenue.

Omni’s management is reportedly in talks with Coinbase to hire its engineering team, which might work on Coinbase Earn, an initiative that rewards users with cryptocurrency for participating in various blockchain-related online educational programs. 

Some Omni engineers are currently interviewing at Coinbase, however, one of the exchange’s representatives said that there’s no official deal yet and that there is nothing officially on the record.

Before providing rentals, Omni specialized in on-demand storage, where the company’s workers would go to people’s homes, pick up and tag their items, and store them in a warehouse. The items would then be returned whenever Omni’s clients wanted them. 

The company’s rental business became popular in San Francisco and also began expanding to other cities. In April 2019, Omni extended its operations by allowing users to earn money by renting out their items in storage to other Omni clients.

The company’s management revealed in May that it was preparing to sell its storage business to SoftBank-backed competitor Clutter. Omni’s users complained about various issues including misplaced goods and changing prices. The firm’s customers were also surprised that suddenly a different company was holding their possessions.

Omni’s vision of providing cloud storage for the physical world previously managed to attract investments from Flybridge, Highland, Allen & Company, Founders Fund, Precursor and several angel investors. 

Coinbase Pro Multiplies Fees for Lowest-Tier Trades by Professionals

Coinbase is increasing fees at Coinbase Pro, the company’s platform for professionals trading crypto.

The increases will go into effect on Monday, October 7, 2019.

The company announced the fee changes in a blog post, and says the changes are, “designed to increase the depth and liquidity of our markets.”

Professional traders trading at lower amounts will bear substantial increases, but very high-tier traders will enjoy some reductions.

Discounts start at the $100 million mark.

Here is a chart of current fees:

And here is a chart of amended fees (both charts from Coinbase Pro):

The changes reportedly make Coinbase the most expensive crypto platform to trade on in the world (tied with Bitstamp).

Crypto Twitter has responded with its characteristic chagrin.

Block publisher Mike Dudas tweeted:

“Can someone please explain to me the 4D chess of @CoinbasePro raising fees while@BinanceAmerica launches fee-free through November?”

“icebergy” tweeted:

“Coinbase Pro‘s fee adjustment just opened the door for BinanceUS to take over”

Rival crypto trading platform Bittrex capitalized on the moment by announcing it has lowered fees. “Under the fee schedule – the more you trade, the more you save!” the exchange wrote in a log post featuring this chart:

San Francisco-based Coinbase and Kraken were recently identified by the Blockchain Transparency Institute (BTI) as the two most reliable crypto trading platforms regarding the prevention of wash trading.

Wash Trading: Blockchain Transparency Institute Reveals Kraken, Coinbase Remain Cleanest Crypto Trading Platforms [u]

The Blockchain Transparency Institute (BTI) has published its updated market surveillance report which revealed that US-based digital asset exchange Kraken and Coinbase are among the cleanest trading platforms in the crypto industry.

On September 19, the BTI released its 5th market report that examines and verifies reporting of crypto exchange trading volumes. The institute has been publishing reports since August of last year, and through its internal algorithms, BTI determines actual (real) trading volumes by removing all wash trading.

The agency’s report noted:

“Since the start of 2019, global wash trading has reduced by 35.7% among the real Top-40 exchanges. The process of sharing our data reports with many of these exchanges has resulted in enhanced mechanisms for detecting wash trading accounts and shutting them down.”

BTI’s report mentioned that the cleanest digital currency exchanges since its previous reports continue to be San Francisco-based Coinbase and Kraken. Delaware-registered Poloniex and Korean exchange Upbit are also among the cleanest crypto trading platforms, the report noted. 

OKEx and Bibox are the exchanges with the highest amount of wash trading, BTI’s report revealed.

The agency’s report also noted that the US and Japan are ranked the highest when it comes to digital asset exchanges with the most accurate reporting. 

BTI’s reports stated:

“This can be due to several factors, the main of which is the legal and regulatory standards in these countries. However, stricter regulatory frameworks do not always produce the cleanest exchanges.”

In March 2019, Bitwise Asset Management also published a report on Bitcoin (BTC) trading volumes. The San Francisco-headquartered index fund provider found that around 95% of BTC trading volume, as reported on CoinMarketCap, was attributed to wash trading.

Wash trading is an illegal market manipulation tactic in which multiple traders place several buy and sell orders simultaneously on the same asset, in order to artificially inflate trading volumes. This gives the impression that the asset being traded has a lot more demand than it actually does.

Update:

OKEx’s management claims that BTI’s report is “fake and misleading.”

In statements shared with Crowdfund Insider, the exchange noted:

“OKEx is not involved in and does not tolerate any wash trading activities on our [trading] platform.”

OKEx alleged that BTI’s analysis lacks the comprehensiveness required to deliver accurate results. As explained by the exchange:

“Due to the complexity of derivatives instruments trading, thousands of trades could be placed per day by a single user via collocated machines. Attempting to use retail-oriented parameters such as website/mobile traffic in any research is de-facto an apples-to-oranges comparison.”

OKEx also noted that it is committed to surveillance.

“We have adopted different measures to prevent and stop any attempts of wash trading. We have a trading surveillance team working 24/7 to monitor the trades on OKEx. We also partner with AML companies and consistently upgrade our KYC system to ensure that our market is healthy.”

OKEx has also joined the Data Accountability & Transparency Alliance (DATA), which is led by crypto data site CoinMarketCap, in an effort to maintain transparency.

Dash Now Supported on Coinbase’s Crypto Platform

Coinbase announced last week it is now supporting Dash (DASH) through its cryptocurrency exchange platform. This news comes just days after Dash announced its availability on Coinbase Pro. Coinbase reported that its customers may now buy, sell, convert, send, receive, or store DASH. The currency will be available for customers in all Coinbase-supported regions, with the exception of New York and the UK. Additional jurisdictions may be added at a later date.

“Dash is a cryptocurrency optimized for payments that has optional speed and privacy features. At this time, Coinbase will not support these features. Dash is accepted at over 4,000 merchants worldwide. Its unique network architecture consists of both regular miners and privileged machines called Masternodes. Through its off-chain community governance system, anyone can submit and vote on proposals to improve the ecosystem’s functionality, utility, and adoption.”

Coinbase went on to add that along with adding new cryptocurrencies to its platform it is also investing in new tools to help customers understand and explore cryptocurrencies.

Former Coinbase Exec Joins CFTC as Director of Market Oversight

Coinbase’s current VP and General Counsel for Business Lines and Markets, Dorothy Dewitt, is leaving the exchange to become Director of Market Oversight at the Commodity Futures and Trading Commission (CFTC).

Dewitt’s LinkedIn profile indicates she’s been working at Coinbase for 11 months.

The CFTC, “polices…derivatives markets,” in the US, and, “seeks to lower the risk of the futures and swaps markets to the economy and the public.” Coinbase (Pro) is currently the largest cryptocurrency exchange in the US.

“I am excited Dorothy will soon be joining our team,” said CFTC Chair Heath Tarbert.  “She brings to the CFTC more than 20 years of private sector experience in the financial services and legal fields.  Her strong investment, risk, legal, and compliance background and familiarity with distributed ledger technology, including crypto assets, will be invaluable as the agency looks to develop a holistic approach to regulating 21st century commodities.”

DeWitt is a graduate of Harvard Law School and the University of Texas. She is also a Certified Anti-Money Laundering Specialist licensed to practice law in New York.

Before becoming VP at Coinbase, Dewitt worked in, “senior legal and compliance roles for Citadel Securities…(at) S&P Global, and as an attorney at Davis Polk & Wardwell.”

As well, she spent, “…nearly a decade…as a portfolio manager of alternative investment funds that relied heavily on derivatives and swaps.”

DeWitt was a partner, portfolio manager, and general counsel at Cadogan Management. She also managed arbitrage, credit, event-driven and fixed income investments for the GAM Multi-Arbitrage Fund London.

Dewitt has also worked as a research analyst, “at a merger arbitrage and event-driven hedge fund at ING Furman Selz.” Prior to commencing her career in the private sector, she clerked for US District Court Judge John E. Sprizzo in the Southern District of New York.

A number of executives have moved on from Coinbase in the last year, including COO Asiff Hirji and CTO Balaji Srinivasan.

Coinbase Considering Initial Exchange Offering (IEO) Platform for Asia

Coinbase is considering launching an initial exchange offering (IEO) platform in Asia. This would allow it to launch and broker “a proprietary exchange token” and other tokens in the region, Coindesk reports.

The crypto trading platform’s possible plans were announced this week by Kayvon Pirestani, head of institutional sales for Coinbase in Asia, as he spoke on a panel Invest: Asia conference in Singapore about the current state of cryptocurrency capital formation.

“We think there’s a really interesting opportunity there for Coinbase,” Pirestani said. “In a nutshell, Coinbase is carefully exploring not only the IEO space but also STOs [security token offerings]. But I can’t make any formal announcements right now.”

Since the crypto boom of 2017 and subsequent bust in 2018, initial coin offerings have largely fallen out of favour as numerous firms that conducted ICOs have been compelled by the SEC and other regulators to pay fines or return capital to investors.

ICO’s were very lucrative for the platforms listing them at the time, and the urge is still there.

Major exchanges reportedly charged fees of up to half-a-million dollars USD from ICO purveyors for the right to a prime listing, and then went on to collect profitable fees on trades.

It is through this lucrative combination that Binance founder Changpeng Zhao, for instance, became a billionaire in less than a year after opening his platform, thanks in part to the exchange’s fortuitous launch in the midst of the boom.

But circumstances have become much leaner in the past year-and-a-half as investors become more cautious, rules tighten and compliance costs escalate.

Exchanges have attempted to keep the money coming in by offering to help startups conduct “IEO” token sales directly through the platform, often at a fee. In exchange, the platform has promised to “curate” investment opportunities for investors while helping projects with KYC/AML.

Major crypto trading platforms Bitfinex, Binance, OKEx, and KuCoin have already launched IEO programs.

Issuers and investors still appear to be bearing most of the risk in the new normal of crypto capital formation.

According to Decrypt, “Low-tier IEOs are generating ruinous losses for investors.”

The outlet claims:

” ‘(I)nitial exchange offerings’ are doing terribly. Just last week, research firm Longhash found that the briefly insurgent funding mechanism—which saw hundreds of crypto startups run token sales from the ‘launchpads’ of willing exchanges—has yielded returns of around minus 80 percent for the thousands of investors that took part in the offerings.”

As well:

“While the larger, more established exchanges charge no upfront fees, the other, lower-tier exchanges demand payments that can exceed tens of thousands of dollars. And for those who want their IEOs seen by more than just a handful of investors, projects have to pony up additional fees for external marketing, hemorrhaging yet more thousands.”

Coinbase UK Settles Lawsuit After Being Forced to Freeze Stolen Bitcoins Settles Lawsuit

Coinbase UK has settled a lawsuit with the CEO of Alphabit regarding Coinbase’s alleged handling of Bitcoins worth almost $1 million USD that were allegedly stolen from Alphabit by hackers in July, Law 360 reports.

Alphabit is UK-based “crypto-asset investment company” that claims to manage $195 million USD in cryptocurrencies and tokens.

In an interview with Decrypt in August, Alphabit CEO Liam Robertson said he agreed in July to purchase algorithmic trading services from an unnamed fund in exchange for 100 Bitcoins. (Bitcoins are currently trading for around $10 ooo USD.)

Decrypt says Robertson told them in an interview that the negotiation was conducted with an executive from the algorithmic trading fund on a phone line that Robertson later concluded was bugged.

Decrypt says a hacker then, “used complex spyware to clone the (unnamed) CIO’s email address,” impersonated the CIO and advised Robertson in an email to send negotiated bitcoins to a digital wallet controlled by the hacker.

When the CIO of the algorithmic trading company figured out he had been hacked, he promptly contacted Robertson to warn him.

But by then it was too late: Robertson had already sent 100 Bitcoins to the hacker’s address.

The hacker quickly moved 80 of the stolen Bitcoins to a Coinbase UK account, 15 Bitcoins to LocalBitcoins.com and 5 Bitcoins to a “cold wallet” (hardware storage device).

The case is being reported as historic in the UK, in that Robertson’s lawyers successfully convinced London’s Commercial Court to issue an Asset Preservation Order compelling CoinBase UK to freeze stolen funds while the dispute was underway.

The instance is being described as unique in British legal history because it establishes Bitcoin as legal property in the UK for the first time.

Robertson’s lawyers also managed to successfully argue that, “Since the theft of (Robertson’s) Bitcoin didn’t entail a transfer of the property title, Robertson still ‘owned’ the stolen Bitcoins…”

Bitcoins have in fact been seized as proceeds of crime in Britain in another recent case involving hacks on more than 1000 UK, US, and European companies.

Notably, crypto investor Michael Terpin is listed as an advisor to Alphabit on the company’s website.

Terpin is currently suing AT&T Mobility for $224 million USD for allegedly allowing hackers to “SIM-swap” his cellphone and use credentials on the phone to steal $24 million USD of his crypto holdings.

In a SIM-swap attack, hackers impersonate victims or use collaborators inside telcos to arrange the transfer a victim’s cellphone SIM data to a cellphone controlled by the hacker.

Controlling a victim’s phone can then allow hackers to access victims’ crypto wallets and any funds therein.

Report: Coinbase Processing Majority of Public-Facing USD-to-Tether Trades, Binance Hosting Most Public BTC-to-Tether Action

America and Asia’s two largest public-facing crypto trading platforms, Coinbase and Binance, also bear the most exposure to Tethers, a synthetic form of USDs introduced into crypto trading markets to give liquidity.

This is the conclusion of CoinMetrics, a blockchain data analysis firm, which recently completed an analysis, “of how Bitcoin and Tether trading volume is distributed among…Nine Bitcoin-U.S. Dollar (BTC-USD) markets and nine Bitcoin-Tether (BTC-USDT) markets.”

This analysis and others are available through the company’s newsletter.

Data portrayed in charts from CoinMetrics spans from April 1, 2019, to the present.

As well, the chart provided, “shows the volume of Bitcoin-U.S. Dollar markets by exchange where volume is defined as hourly units of Bitcoin, smoothed with a 7-day rolling average.”

It should be noted that a fair amount of tether action takes place in OTC markets and is therefore not represented in CoinMetrics current analysis.

According to the company:

“The majority of (public facing tether) trading takes place on Coinbase, Bitfinex, Bitstamp, and Kraken. In total, these four exchanges consist of roughly 85 percent of total traded Bitcoin-U.S. dollar volume. The remaining exchanges, including Gemini, itBit, and Bittrex each have volumes that are an order of magnitude less than Coinbase, the leading exchange.”

CoinMetrics notes that:

“Average hourly volume can vary greatly depending on price action and news-related catalysts. For example, Coinbase’s average hourly volume ranges from a low of 300 BTC to a high of 2,000 BTC during this time period.”

The company also found that Coinbase appears to have picked up some tether business following Bitfinex’s recent brushes with the New York Attorney General’s office, which is investigating Bitfinex and sister company Tether for alleged fraud:

“Coinbase gradually increased its market share from 24 percent to 32 percent during this period, taking share primarily from Bitfinex which fell from 25 percent to 19 percent. Bitfinex’s reduction in market share is understandable given its longstanding issues with timely withdrawals and a heightened regulatory environment.”

CoinMetrics also expects that Coinbase will pick up US traders expelled from offshore platforms being increasingly careful about not crossing the American SEC:

“As more exchanges limit access to U.S.-based traders, we expect more trading activity to concentrate on Coinbase, the primary Bitcoin-U.S. Dollar market.”

Notably, tether-to-bitcoin trades on Binance are twice a voluminous as USD-to-tether trades on Coinbase:

“Volume in Bitcoin-Tether markets are greater than Bitcoin-U.S. Dollar markets – Binance’s peak average volume is roughly twice the magnitude of Coinbase’s peak average volume.”

Professor John Griffin and others have accused Bitfinex et al of using tethers to prop up the price of bitcoins at strategic moments.

The coin is also believed to have been used to manipulate the price of smaller cap cryptos.

Man Facing 20 Years in Connecticut for Alleged Theft of Mobile Phone and Cryptocurrency

A man named Darren Carter has been charged with Identity Theft 1st Degree in Connecticut for stealing a man’s phone in California and then using it to access that victim’s Coinbase cryptocurrency account to steal $15,472.31 USD.

The Westport Police Department alleges that Carter stole the victim’s phone at a California airport on April 17, 2019, while the victim was traveling.

The accused appears to have been familiar with using cryptocurrencies. Within hours, Carter had removed the victim’s Coinbase funds:

“A few hours after the theft of his phone, (the victim) became aware that $15,472.31 had been transferred out of his Coinbase account; an application in which crypto-currency is managed.”

The accused allegedly sold the victim’s crypto for cash and then moved it off the exchange using PayPal:

“It was learned that funds from (the victim’s) account were converted into United States currency which was then moved into a PayPal account.”

Evidence turned up through the execution of “multiple” search warrants by the investigating officer eventually led directly to Carter.

The accused even accidentally sent a confessional email intended for the victim to the investigator:

“Among various financial transaction records allegedly connecting Carter to the crime, he additionally sent an apology e-mail intended for the victim to the investigating detective. In this message, he not only confessed to taking the victim’s phone while he was also traveling in California, but additionally admitted to transferring the victim’s Coinbase funds into a personal account.”

A nationwide active warrant was issued for Carter’s arrest, and on, “Monday, August 26, 2019 detectives traveled to Salem County Correctional Facility in Woodstown, New Jersey to take custody of Carter.”

He was then extradited back to Connecticut where he was charged with 53a-129b Identity Theft 1st Degree, and a bond for his release was set at $150,000 USD.

Unable to pay, Carter remains in custody.

Connecticut lawyer Mark Sherman, who partly specializes in defending against identity theft charges, wrote in a blog post that parties accused of 53a-129b Identity Theft 1st Degree in the state face a possible 20 years prison sentence.

According to Sherman, “one of most widely committed non-violent crimes in recent years is Identity Theft… a crime that can result in permanent damage…to a victim’s personal and professional lives, soiling their reputation, and detrimentally affecting their ability to find employment, obtain housing, insurance and mortgages.”

Sherman also claims there can be incidents of false charges relating to identify theft:

“Too often, top Stamford criminal lawyers have seen their clients arrested for crimes they did not commit, but were actually committed by someone who stole their identity in another part of the country.”

Santander Still Banking Coinbase, Barclays Out, Clearbank Steps In

Coinbase, a large, US-based cryptocurrency trading platform, experienced a shake up of its UK banking services this week.

On Wednesday, an anonymous “rBitcoin” forum participant on Reddit posted that (Banco) Santander was refusing to deposit money to the individuals’ Coinbase UK account, probably because of an “increase in fraud related to Coinbase”:

U.K. Bank Santander blocks all payments to Coinbase from Bitcoin

The following day, a Santander representative told The Block that the bank is not observing a blanket ban on all transactions to Coinbase, but may be flagging certain transactions for additional scrutiny.

“We do not block payments to legitimate companies,” said the representative, “however in certain circumstances we will refer payments for additional security checks, where we believe there may be a higher risk of fraud.”

Coinbase does appear to have lost banking at UK legacy bank Barclays, however, meaning Coinbase customers have temporarily lost access to the U.K. Faster Payments Scheme (FPS), a system that allows for instant deposits and withdrawals of pounds on the exchange.

According to crypto media outlet Coindesk, Coinbase has embarked on a new relationship with UK ‘challenger bank’ Clearbank, however, and, “ClearBank is expected to restore Coinbase’s FPS access by the end of the third quarter.”

Many banks across the world have refused to bank cryptocurrency companies because of espoused concerns about possible money laundering or funds of shady origin.

Numerous crypto companies have cried foul about the loss or refusal of services and have accused banks of being anticompetitive. Some launched lawsuits.

At the same time, many cryptocurrency trading and payment startups have historically observed loose customer identification protocols or allowed anonymous use. This means that even exchanges that carefully identified users might still be receiving funds from exchanges that did not.

Banks in FATF-observing countries across the world may soon be increasing their attention to the crypto-related business being done under their auspices.

In June, finance ministers and central bankers at G20 meetings in Japan unanimously adopted a set of FATF (Financial Action Task Force) recommendations designed to bring transparency to the global cryptocurrency sector.

The FATF is a transnational, policy-advising body established in 1989 at the Group of Seven (G-7) Summit in Paris. The FATF advises its 38 member countries, the financially-strongest in the word, on the prevention of money-laundering and anti-terrorist finance controls.

Membership is voluntary, but countries that flout FATF guidance risk sanction.

The FATF new guidelines regarding “Virtual Asset Service Providers” oblige cryptocurrency trading platforms to share identifying information about customers trading large amounts of “crypto assets” and cryptocurrency and to report larger transactions to national oversight bodies.

Coinbase Announces Bug in Signup Page That Resulted in Some Registration Details Being Stored in Clear Text in Internal Web Server Logs

Cryptocurrency exchange platform Coinbase announced on Friday it recently began emailing a total of 3,420 of its customers to let them know that a bug in its signup resulted in some registration details being stored in clear text in its internal web server logs. Coinbase reported that under a “rare error condition,” the regstristation form on its sign up wouldn’t load correctly. This meant that the signup individual’s name, email address, proposed password, and state of residence (if in the U.S.) would be sent to Coinbase’s internal logs.

“If the individual reloaded the page and then submitted the form for a successful registration, their registration information would (correctly) notbe logged, and the password would be securely hashed. However, in the 3,420 instances referenced above, the user successfully registered using a password with a hash that matched the one previously logged.”

Coinbase further explained that after its team identified and fixed the bug, they traced back all the places where theology might have ended up.

“We have an internal logging system hosted in AWS, as well as a small number of log analysis service providers. Access to all of these systems is tightly restricted and audited. A thorough review of access to these logging systems did not reveal any unauthorized access to this data.”

Coinbase’s team then triggered a password reset for impacted customers. The platform went on to add:

“We maintain incredibly high standards for securing the Coinbase platform, and any time we fall even slightly short of those standards, we mobilize a team to figure out what went wrong, and how we prevent it from happening again. We also believe in being transparent with our customers, which is why we’re sharing the results of our investigation today.”

Coinbase Custody Completes Acquisition of Xapo’s Institutional Businesses

Coinbase announced on Thursday that its Coinbase Custody has completed the acquisition of Xapo’s institutional businesses. Coinbase claims that the acquisition caps off a tremendous period of growth and innovation for Coinbase Custody.

“In just over one year since launch, Coinbase Custody has grown to over $7 billion in Assets Under Custody (AUC) stored on behalf of more than 120 clients in 14 different countries, making it the largest, most globally recognized and most trusted institutional custodian in the world. From the start, our goal has been to build the trusted foundation for institutional investment in Bitcoin (BTC) and crypto assets in general.”

Also according to Coinbase, Xapo was founded with the mission of making Bitcoin more secure and accessible. Coinbase noted it will extend Xapo’s legacy and bring it yet another step closer to achieving its mission.

“Through the acquisition of Xapo’s institutional businesses, we’re now proud to act not only as the gateway for millions of people to cryptocurrency, but also as the world’s largest and most trusted steward of digital assets. Xapo has been a tremendous flagbearer for Bitcoin and the economic equality it can offer to billions across the globe. We’re honored to carry this flag onward.”

Coinbase further stated that it is committed to serving a wide spectrum of institutional clients, including hedge funds, family offices, endowments, and proprietary trading desks as they decide to onboard crypto. Sam McIngvale, CEO of Coinbase Custody, also shared;

“This acquisition caps a tremendous period of growth and innovation for Coinbase Custody. From the start, we set out to build the world’s safest and most trusted institutional-grade custodian and today is an important milestone on that journey. Coinbase Custody now stores more than $7B in digital assets from more than 120 institutional customers across 14 countries, and we’re just getting started. We’re proud to welcome Xapo’s institutional clients and look forward to bringing what we believe is the world’s best institutional-grade crypto custody platform to many more customers around the world.”

Wences Casares, CEO and Founder of Xapo, added:

“In choosing Coinbase, we are confident that the Institutional Custody Business is going to a company that can provide great insurance, borrowing and investment alternatives. We believe that Coinbase will take this opportunity to prove to our customers that they deserve their business.”

Coinbase UK Delisting “Privacy Coin” ZCash

The UK division of US-based cryptocurrency exchange Coinbase has sent letters to customers telling them to convert their ZCash coins or remove their balances by August 26th, Coindesk reports.

Balances not relocated will be converted to British pounds.

ZCash is a so-called “privacy coin” that allows users to “shield” (obscure) transaction details using a type of cryptography called zk-SNARKs.

Proponents say privacy coins allow cryptos to behave more like real-world cash, which can be transacted in private. Cash-like features have serious implications online (global subversion, transnational crime), however, and this feature may have led to the coin running afoul of regulators.

In July, the UK’s Financial Conduct Authority published “Guidance on Cryptoassets” which established that trading of “exchange tokens” like bitcoins and ether must abide by anti-money laundering rules.

Regulators wrote that they were concerned about “market integrity harms” implied by opacity in crypto networks:

“A combination of market immaturity, volatility, and a lack of credible information or oversight raises concerns about market integrity, manipulation and insider dealing within cryptoasset markets. This may prevent the market from functioning effectively and damage its reputation.”

Last week, a report emerged that a small pool of 300 crypto “whales” control 80% of the global supply of tethers, a so-called “stable coin” cryptocurrency pegged to the US dollar. Over $4 billion USD in tethers have been issued, and they are widely used for exchange arbitrage, and, allegedly, for market manipulation.

Electric Coin Company, developers of ZCash, tweeted to reassure customers that the delisting affects Coinbase UK only, stating that other UK exchanges are still hosting the coin:

 

Bitcoin Cash: Negligence Case Against Coinbase to Proceed, Fraud Claims Dismissed

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A civil case against American crypto trading platform Coinbase alleging the exchange bungled its listing of Bitcoin Cash (a fork of Bitcoin) will proceed on grounds of possible negligence in California.

Fraud and unlawful conduct allegations have been dismissed after the judge determined that the problems with the Bitcoin Cash listing were likely unintentional.

Coinbase had been trying to have the case moved to arbitration.

In the words of Judge Vince Chhabria, Plaintiff Jeffrey Berk alleges that, “Coinbase breached its duty to maintain a functional market,” when it listed Bitcoin Cash in December 2017.

The exchange is accused of causing a massive spike in the price of Bitcoin Cash by announcing the listing only one hour before markets opened when, “only purchase orders were pending.”

Ultimately, the judge dismissed “shadowy inferences of scienter” (theories of deliberate wrongdoing) posited by the plaintiff, including allegations that Coinbase founder Brian Armstrong “‘pumped’ the value of Bitcoin Cash with his bullish public statements so that unnamed insiders could ‘dump’ at inflated prices.”

Instead, the judge favoured the more “plausible” allegation that the launch was mismanaged due to “incompetence born of haste” as Coinbase raced to bring a product to market one day after the much anticipated launch of Bitcoin futures on the Chicago Mercantile Exchange.

Regardless, buyers were injured by the missteps, the judge determined:

“The complaint properly pleads that this alleged breach caused the buyers’ injuries, since Coinbase’s launch of Bitcoin Cash trading under these circumstances is a plausible reason why the buyers’ market orders were filled by such high-priced limit orders.”

The judge dismissed claims of injury by sellers, who said they were deprived of the chance to sell high when Coinbase halted trading. Halting trading, “wasn’t itself negligent,” the judge writes. “Indeed, Coinbase would have been exposed to claims from yet more buyers absent the halt in trading.”

Coinbase appears to have claimed that traders caught up in the BCH affair at Coinbase were experiencing ‘slippage’ they were warned about in the platform’s Terms of Service. The judge did not concur with this take:

“Slippage is the natural expression of supply and demand that exists in a functional exchange where people place market orders. The plaintiffs’ claim for negligence is not that the plaintiffs suffered injury from the natural expression of supply and demand on the exchange; it is that Coinbase engaged in conduct that would ensure a dysfunctional market where there was no natural expression of supply and demand at all.”

Coinbase lawyers also appear to have argued that the case should go to arbitration because the company has policies against insider trading.

The judge argued that promises do not mean malfeasance might never occur:

“True enough, Coinbase maintains a policy against insider trading and market manipulation…But Coinbase’s adoption of this policy does not make these disputes arise under the user agreement, any more than a company’s general policy against sexual harassment by its employees would subsume a Title VII claim into contract law. To the extent the negligence, fraud, and Unfair Competition Law (UCL) claims are based on insider trading and market manipulation, Coinbase’s actions ‘would constitute an independent wrong from any breach’ of the user agreement. Tracer Research Corp. v. National Environmental Services Co., 42 F.3d 1292, 1295 (9th Cir. 1994).”

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Report: British Tax Authority Requests User Crypto Trading Records from Coinbase, eToro and CEX

A source to Coindesk is claiming that Britain’s tax authority, HM Revenue & Customs, has sent letters to three cryptocurrency exchanges requesting access to the trading records of British customers served by the platforms.

According to the source, Coinbase, eToro, and CEX.IO have all received the letters in the past week though none of the exchanges have confirmed the news.

Notably, the source claims that HM Revenue & Customs is only seeking records for the past few years, meaning very early (and likely most profitable) crypto trades will probably not be investigated (due to insufficient data).

“HMRC is looking to work with exchanges when it comes to finding information on people who have been buying and selling crypto. I think they will only go back a couple of years, two or three years,” the source commented.

“If they [HMRC] do only go back two or three years, I think the interesting thing here is, that the individuals who went into crypto very early on in 2012-13 will not be affected. The ones who probably made the largest gains won’t be affected, it will be the people who came in around the time crypto peaked.”

HRMC would not provide particulars about what info it is seeking but did confirm that the information requests are within the agency’s purview, stating:

“These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.”

In mid-July, the American Internal Revenue Service (IRS) sent thousands of “educational letters” to suspected cryptocurrency traders there whose names had been acquired “through various ongoing IRS compliance efforts.”

Regarding the letters, IRS Commissioner Chuck Rettig stated:

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties. The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”

Information requests to crypto exchanges and wallet services are a regular occurrence.

According to a previous report, in 2017 Coinbase received a judgment by the US District Court of Northern California ordering it to hand over all account information to the IRS for any transaction with the equivalent of $20,000 or more during the years 2013 to 2015. In the case of United States v. Coinbase, the Court ordered the company to produce the following information: taxpayer ID; name; birth date; address; records of account activity; all periodic statements.