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Bitcoin Sinks After Hackers Steal $65 Million

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An illustration photo shows a Bitcoin (virtual currency) paper wallet with QR codes and a coin

Bitcoin plunged after one of the largest exchanges halted trading because hackers stole about $65 million of the digital currency.

Bitcoin slumped 5.3 percent against the dollar as of 10:17 a.m. on Wednesday in Tokyo, bringing its two-day drop to 13 percent. Prices also sank 6.2 percent on Monday, although it was not clear if that initial move was related to the hack.

Hong Kong-based exchange Bitfinex said on Tuesday that it halted trading, withdrawals and deposits after discovering the security breach. The exchange said it was still investigating details and cooperating with law enforcement, but acknowledged that some bitcoin have been stolen from its users.

“Yes – it is a large breach,” Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform, wrote in an e-mail. “Bitfinex is a large exchange, so it is a significant short term event, although Bitcoin has shown its resiliency to these sorts of events in the past.”

Bitfinex confirmed in a message to Bloomberg News on Wednesday that the hackers took 119,756 bitcoin, or about $65 million at current prices. More than $1.5 billion has been wiped out from bitcoin’s market capitalization this week, according to research from CoinDesk.

“We will look at various options to address customer losses later in the investigation,” Bitfinex wrote in a blog post. “We ask for the community’s patience as we unravel the causes and consequences of this breach.”

The Hong Kong exchange was the largest for U.S. dollar-denominated transactions over the past month, according to bitcoincharts.com. Chinese exchange OKCoin was the largest overall bourse for trading in the digital currency, over 90 percent of which is denominated in the Chinese yuan.

The price drop was reminiscent to the market reaction after Tokyo-based Mt. Gox — then the largest bitcoin exchange in the world — disclosed it was hacked in February 2014 and filed for bankruptcy weeks later. Bitcoin prices plunged 30 percent that month.

Bitfinex halted trading in all digital currencies, including ethereum, but said losses were limited to bitcoin. It did not immediately respond to questions whether deposits in non-digital currencies such as U.S. dollars were safe.

“Bitfinex is in lockdown/investigation mode, so we’re not going to know anything for sure for a few days,” Peter Todd, one of the key developers who work on bitcoin, wrote in an e-mail.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Technology

Gov. Sule Joins the Digital Economy and E-government Council

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digital economy - Investors King

Nasarawa State Governor, Abdullahi Sule has been appointed a member of the Digital Economy and E-government council by the President, Muhammadu Buhari.

The Chief Press Secretary to Governor Sule, Ibrahim Addra, disclosed this in a statement he issued to journalists in Lafia, the state’s capital.

According to the release, the governor’s appointment was announced in a letter signed by Isa Ali Ibrahim Pantami, Minister of Communication and Digital Economy.ica.

Part of the statement reads “ the constitution of the Presidential Council is in an effort to implement the National Digital Economy Policy (NDEPS) and the Nigerian E-government Master Plan (NEGMP).

“The Minister of Communication notes that Nasarawa State is critical to the success of Nigeria’s Digital Economy Agenda.”

The statement stated that Governor Sule and other members of the council would be inaugurated on a date to be announced by the council’s chairman, President Buhari.

The National Digital Economy Policy and Strategy (NDEPS) was developed in line with the Presidential directives given to the Minister of Communications on his assumption of office in 2019.

Accordingly, the aim was to enable Nigeria to take advantage of digital technologies are transforming every aspect of modern life,  in order to become a global leader in the digital economy and serve as a catalyst for economic diversification and the achievement of key national goals such as improving security, reducing corruption, and expanding the economy.

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Social Media

United States Federal Trade Commission Fines Twitter $150 Million Over Privacy, Security Violations

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The United States Federal Trade Commission (FTC) has ordered Twitter Incorporation to pay a sum of $150m as a fine for violating the 2011 administrative order of the Commission over its decision to use the email addresses and phone numbers of its users for targeted advertising.

The suit noted that the misrepresentations violated the FTC Act. Therefore, the commission and Twitter agreed to a settlement of $150 million after Twitter had earlier told users that the data was gathered for security purposes.

Checks by Investors King show the verdict was announced by the U.S Department of Justice (DoJ) on Wednesday.  The US DoJ in its 20-page count filed in the US District Court alleged that Twitter asked users for their contact information to make their accounts more secure. The social media giant failed to tell users that it would also use their phone numbers and email addresses to help companies send targeted ads to them.

“Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads,” FTC Chair, Lina Khan accused.

Khan further said the practice affected more than 140 million Twitter users while boosting Twitter’s primary source of revenue.

The 2011 FTC order stated that Twitter “engaged in deceptive acts or practices” by misrepresenting how it handled user data and that the company lacked reasonable safeguards to keep accounts and data secure. Additionally, the order barred Twitter from misrepresenting “the extent to which [it] maintains and protects the security, privacy, confidentiality, or integrity of any nonpublic consumer information,” the order read in part.

Twitter’s settlement covers allegations that it misrepresented the “security and privacy” of user data between May 2013 and September 2019, according to the court documents.

In addition to the monetary settlement, the agreement requires Twitter to improve its compliance practices,” according to the statement of order.

According to the complaint issued, “Specifically, while Twitter represented to users that it collected their telephone numbers and email addresses to secure their accounts, Twitter failed to disclose that it also used user contact information to aid advertisers in reaching their preferred audiences.”

Twitter is a free service that generates its revenue majorly through advertising

The company generated $5bn in revenue in 2021 and said in a filing earlier in May that it had put aside $150m after agreeing” in principle” upon a sanction by the FTC.

 

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Telecommunications

TELCOS Decry Government’s Decision on Telephone Tax

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MTN

The Association of Licensed Telecoms Operators of Nigeria (ALTON) has said the recent move by the Federal Government to add a one kobo per second tax on phone calls is a misplaced priority. 

Investors King recalls that the Federal Government of Nigeria had, on Monday, said it will implement a one kobo per second tax on phone calls in the nation to fund free healthcare for the vulnerable. 

ALTON said it is a “bad fate” on the part of the Government and it is badly intended. “This is because when we came out that the government should look at our cost of operations and give us room to review tariffs, everybody treated us like an outcast. 

“The same government is now coming in a matter of days to say they are introducing new taxes. So, when they were saying to us that we cannot increase tariff because it is insensitive to the plight of the people and now, they brought another tax thing through the back door, we think it is bad fate and badly intended. So if we cannot review based on the impact it will have on subscribers, why are they bringing in another tax, still on subscribers. 

“Government cannot act in one way and say another thing”, ALTON said.

According to ALTON, this will affect subscribers because they get less value for what they pay for.

“It means now that when you buy a 100 recharge card, the percentage will be deducted from it and paid to the government. So it is shortchanging the people. What will happen is that operators will be mandated to collect this tax on their behalf and remit it to the government”, the association noted.

ALTON suggested that although the motive for the tax rate is understandable, the government should have looked elsewhere to source it.

It said: “Not telecoms subscribers whom the government has said its suffering because of living lately 

“We will not complain as operators because we will definitely remit, it is the subscribers that will bear the brunt”.

A Lagos State resident, Taiwo Popoola, in a conversation with Investors King, said the decision to increase the tax rate will be too hard for an average Nigerian to bear if implemented. According to him, only the upper class of the society will conveniently afford it. 

“On the part of the users, buying airtime will drastically reduce. People would resolve to use social media channels to reach each other and may, in turn, reduce the income of these telecommunication companies,” Taiwo said. 

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