Cryptocurrency

Fintech CEO: The Paxful Data Leak that Wasn’t: A Cautionary Tale in Vendor Selection

Published

3 years ago

April 16, 2021

Last week, it was reported that cryptocurrency exchange Paxful released a firm denial of an alleged data leak with 4.8 million entries. The company noted that the data from the supposed leak, which contained employee information among other items, was actually data which was illegally stolen from a third-party vendor.

“If you take Paxful at their word, and I’m not aware of any reason that we shouldn’t at this point, users can be relieved that the exchange wasn’t successfully hacked. But, the issue of incompetent vendors is one which all too often plagues cryptocurrency exchanges,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges. “It’s tough because the cryptocurrency space is relatively new, so most vendors are new, too. Those are the vendors who compete on cost, instead of on their industry success.”

“Fundamentally, however, cryptocurrency exchanges are, at their core, financial exchanges. The technology required to ensure they run flawlessly and with appropriate security measures in place — those things require experience in providing technology for exchanges. Building online auction sites or websites, dabbling in development… those kinds of vendors aren’t capable of handling the kinds of stress put onto a cryptocurrency exchange,” explained Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“What happens here is that these technology vendors watched Bitcoin explode, and they wanted to cash in on that opportunity. They built technology that’s shiny and works until put under stress. Then they charge rock bottom prices for it. Crypro-preneurs, looking to get to market fast and cheap, find themselves enamored with the offering. For years, the exchange runs without issue because the exchange never saw peak traffic. Once it’s successful and bringing in significant money, hackers will become interested in it. Even worse, the technology stack that powers the exchange isn’t set up to handle the volume demanded by success. Bad things happen. We’ve watched this movie before,” Gardner continued.

“How does this stop? Our industry needs to stop normalizing sub-par, cheap technology provided by suppliers without any experience in the field in which they’re now practicing. We need to normalize and prioritize security. In this case, if the vendor couldn’t secure their own house, how can they be trusted to work on exchange technology in any capacity? Luckily, Paxful executives noted that the vendor is no longer under contract. But, that vendor is very likely still supplying technology to dozens, or even hundreds, of other exchanges. It’s time to flip the script and value experience over sticker price,” opined Gardner.

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Samed Olukoya

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

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Cryptocurrency

SEC Director General Lauds KuCoin’s Action, Urges Compliance with National Guidelines

Published

19 hours ago

May 17, 2024

Samed Olukoya

The Securities and Exchange Commission (SEC) Director General, Dr. Emomotimi Agama, has commended KuCoin, a prominent cryptocurrency exchange platform, for its proactive measures to delist the Nigerian naira (NGN) from its trading options.

This move aligns with recent directives aimed at safeguarding the nation’s economic interests and combating illicit financial activities.

In an official statement released by the SEC on Thursday, Dr. Agama expressed satisfaction with KuCoin’s decision to suspend peer-to-peer (P2P) transactions involving the Nigerian currency.

This decision comes as part of KuCoin’s ongoing efforts to adjust its platform to comply with regulatory directives issued by the Office of the National Security Adviser and the SEC.

The SEC’s stance underscores a broader initiative by Nigerian authorities to address concerns related to foreign exchange manipulation and safeguard the integrity of the nation’s financial system.

Dr. Agama emphasized the importance of adherence to established guidelines, emphasizing that regulatory compliance is essential for maintaining national security and economic stability.

The delisting of the naira by KuCoin follows similar actions taken by other cryptocurrency exchanges, including Binance, in response to regulatory scrutiny from Nigerian authorities. These measures signal a concerted effort within the crypto industry to cooperate with regulatory agencies and promote responsible trading practices.

Peer-to-peer cryptocurrency trading platforms have come under increased scrutiny due to their potential for facilitating illicit financial activities, including money laundering and fraud. By delisting the naira and suspending related trading activities, KuCoin demonstrates its commitment to upholding regulatory standards and fostering a secure trading environment for users.

Dr. Agama reiterated the SEC’s commitment to collaborating with stakeholders, including the Economic and Financial Crimes Commission (EFCC), to address challenges within the cryptocurrency space and combat financial crimes effectively.

He emphasized the importance of regulatory cooperation in tackling illicit trading practices and maintaining investor confidence in the market.

Furthermore, Dr. Agama highlighted the SEC’s ongoing efforts to implement the Revised Capital Market Master Plan, aimed at enhancing the resilience and competitiveness of Nigeria’s capital market.

He highlighted the potential of the capital market to drive economic growth and attract foreign investment, emphasizing the need for regulatory measures to protect investors and promote market integrity.

In response to Dr. Agama’s comments, the EFCC Chairman, Ola Olukoyede, reaffirmed the Commission’s commitment to combatting financial crimes and emphasized the importance of regulatory collaboration in addressing emerging challenges.

He commended the SEC’s efforts to enforce regulatory compliance within the cryptocurrency sector and pledged the EFCC’s support in safeguarding Nigeria’s financial interests.

Cryptocurrency

KuCoin Announces Temporary Pause on NGN Services to Prioritize Compliance

Published

3 days ago

May 15, 2024

Samed Olukoya

KuCoin, one of the leading cryptocurrency exchanges globally, has announced a temporary pause on its P2P Nigerian Naira (NGN) services and Fast Buy service via Naira cards.

This move, set to commence from 2024-05-15 08:00 (UTC), aims to prioritize compliance measures within the platform.

In a message addressed to its valued users, KuCoin expressed its dedication to providing a robust and secure trading environment.

The temporary suspension of NGN services is part of the exchange’s commitment to accelerating the compliance process.

During this period, ongoing orders will be completed normally, and all other services on the platform will remain available.

KuCoin assured its users that their assets are safe and secure on the exchange. While acknowledging that adjustments might be required in trading preferences, KuCoin explained that this decision is a step toward enhancing the overall trading experience for its users.

The exchange reiterated its focus on compliance and creating a secure environment for all users. KuCoin aims to resolve the compliance-related matters swiftly and efficiently to ensure a seamless transition back to full functionality of NGN services.

The decision to temporarily suspend NGN services underscores KuCoin’s proactive approach to regulatory compliance, reflecting its commitment to maintaining transparency and trust within the cryptocurrency ecosystem.

KuCoin expressed gratitude for the understanding and cooperation of its users during this period of change.

Cryptocurrency

Crypto Exchange Giant Coinbase Grinds to a Halt in System Meltdown

Published

4 days ago

May 14, 2024

Samed Olukoya

One of the world’s largest cryptocurrency exchanges, Coinbase, has been plunged into chaos as it experienced a catastrophic system-wide outage, leaving traders and investors stranded and unable to access their accounts.

The disruption, which commenced at 4:15 am UTC on May 14, has rendered both the desktop and mobile platforms of Coinbase completely unusable.

Users attempting to access the exchange are greeted with a frustrating “503 Service Temporarily Unavailable” error message, indicative of the severity of the situation.

Coinbase, known for its reliability and user-friendly interface, has been a cornerstone of the cryptocurrency market for years.

However, this unprecedented outage has shaken the confidence of countless traders who rely on the platform for their daily transactions and investments.

Coinbase swiftly notified its user base of the issue through its official status page, acknowledging the severity of the problem and assuring customers that their funds remain secure.

The exchange’s support team took to social media to disseminate updates, pledging to investigate the issue and work tirelessly to find a resolution.

This isn’t the first time Coinbase has faced technical difficulties during periods of heightened market activity.

Just months prior, on February 28, the exchange experienced temporary outages alongside several other platforms amidst a frenzy of trading activity during a Bitcoin flash crash. Such incidents highlight the strain that surges in traffic can place on even the most robust of systems.

While outages like these are undeniably frustrating for users, they often spark speculation within the crypto community.

Some enthusiasts view these disruptions as a bullish sign, interpreting the influx of traffic and subsequent downtime as indicators of growing interest and adoption in the cryptocurrency space.