This week, Bloomberg wrote an article claiming that the co-founders of Africrypt have disappeared, along with Bitcoin worth $3.6B. The company’s COO announced that the exchange was hacked in April, asking that clients not report the loss. Attorneys for a group of clients are not unable to find the exchange operators and have alerted police. The law firm found that the exchange’s funds were transferred into tumblers and mixers, which made the assets nearly untraceable. Currently, the website is down.
“This is nearly $4 billion worth of assets wiped out by bad actors. Such bad acts must be stopped, and exchanges need to operate under a regulatory environment that holds them accountable. There should be an industry standard — a framework that helps operators run their exchanges in compliance with the rules, while deterring bad actors and their chicanery,” explained 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.
“We’re still waiting on many governments to act rather than simply stick their heads in the sand and try to pretend that cryptocurrency will go away. It won’t. It is here to stay. However, the bedrock of any exchange is its reputation. For too long, exchanges have been in the news for all the wrong reasons — even the large ones. Traders deserve to know that their assets are secure,” opined Gardner.
According to reports, Hanekom Attorneys stated, “We were immediately suspicious as the announcement implored investors not to take legal action… Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”
“Unfortunately, in South Africa, cryptocurrencies are not legally classified as financial products. What this means is that the country’s Finance Sector Conduct Authority is prohibited from launching a formal investigation. In such a situation, they are best equipped to deal with what’s happening here. But, because the government doesn’t acknowledge crypto, they can’t do their job,” Gardner said.
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 NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago. Earlier this year, the company launched its Exchange Trust Score System, which allows exchanges to provide proof that they are operating above board.
“We decided it was time for industry to create an answer after government failed to act. Using our system, Modulus can verify that an exchange is operating in compliance with regulatory requirements and in good faith. That information can be made available to regulators, or even investors — a seal of approval that the exchange is operating according to a certain set of guidelines and that they aren’t fudging their numbers or reports. This helps provide solace that a particular exchange isn’t engaging in nefarious activity — something which is even more important when faced with the prospect of nearly $4 billion in losses,” explained Gardner.
Bitcoin, Ethereum Hash Rate Slowly Recovers as Chinese Miners Redeploy Overseas
The hashing power securing the world’s two largest blockchains is on track of a slow recovery, as some Chinese miners have gradually completed their relocation after the crackdown.
Based on The Block’s Dashboard, the seven-day moving average of Bitcoin’s hash rate has slowly climbed up to and remained at the 100 exahashes per second (EH/s) level over the past three weeks.
Following China’s crackdown on the bitcoin mining industry, power stations across multiple provinces have been ordered to suspend energy supply to mining facilities. Bitcoin’s hash rate initially plunged to below 90 EH/s, a level not seen since early 2020. With the slow recovery, bitcoin’s mining difficulty is expected to post a 4 percent growth in its next adjustment, after having recorded four consecutive drops since mid-May.
Although China’s initial crackdown comment specifically said it was about bitcoin mining, the shutdown orders that were eventually handed down locally also affected the mining farms that housed graphic cards and ASIC miners securing the Ethereum network. That situation sparked Ethereum miners to dump their used GPUs on the secondhand marketplace.
Similarly, the hash rate on Ethereum also took a hit by over 20 percent after China’s crackdown orders but has steadily recovered to above 500 terahashes per second.
The hash rate rebound suggests that at least some Chinese miners have completed their relocation process and subsequently plugged in.
For instance, Shenzhen-headquartered BIT Mining, previously known as online sports lottery firm 500.com, had over 50,000 bitcoin ASIC miners in Xinjiang and Qinghai as of April this year. It also owned two operational mining facilities in Sichuan.
After the crackdown, the New York Stock Exchange-listed bitcoin miner said it would ship 3,000 units to Kazakhstan by July. In a statement on Wednesday, BIT Mining said it has shipped and deployed 3,819 units of bitcoin mining equipment with a total hash rate of 172 PH/s at facilities in Kazakhstan. It announced earlier this week that it has completely exited its lottery business to focus entirely on mining.
“A further 4,033 bitcoin mining machines with a total hash rate capacity of 121 PH/s have been shipped to data centers in Kazakhstan and are awaiting deployment,” BIT Mining said. In addition, it has signed a purchase agreement to acquire 2,500 new bitcoin miners that are expected to be delivered within seven days and it plans to deploy them in Kazakhstan as well.
Apart from bitcoin mining equipment, BIT Mining has started Ethereum mining operations outside of China with 86.4 gigahashes per second (GH/s) deployed. “An additional hash rate capacity of 4,713.6 GH/s is expected to be deployed by the end of October 2021,” the firm said, which accounts for about 0.7 percent of the total hash rate on Ethereum.
BIT Mining purchased 2,000 Ethereum miners for $30 million in February that are due for shipment throughout this year.
Russia-headquartered colocation provider BitRiver told The Block that after China’s shutdown orders, it signed contracts with Chinese mining clients for a capacity of 150 megawatts, which are expected to go online in batches over the coming four months.
Taking a step back, BitRiver’s founder and CEO Igor Runets said with a worldwide supply crunch for bitcoin mining hosting capacity, it may take much longer for bitcoin’s hash rate to fully recover to the all-time-high 180 EH/s level.
Meanwhile, BIT Digital, another U.S.-listed bitcoin mining firm that previously had operations in China, is in the process of shipping over 14,500 units of bitcoin miners to the U.S.
Burger King Accepts DOGE In Brazil
Burger King is now accepting Dogecoin in Brazil… for something rather unexpected.
The fast-food chain says DOGE can be used to purchase Dogepper, a snack that has been purposely designed for four-legged friends.
Buying one of the dog treats will set you back 3 DOGE, which is worth about $0.62 at the time of writing.
All interested users need to do is check the availability of the dog treats in their region, select how much Dogepper they would want to purchase, transfer the DOGE to Burger King’s wallet, and get the delivery schedule.
Dogepper — which, of course, is named after the outlet’s Whopper burger — is meat flavored and can also be ordered alongside value meals.
An advertisement that’s doing the rounds in Brazil says: “What is the best way to pay for a product aimed at dogs? Obviously, Dogecoin.”
Dogecoin’s publicity stunts are nothing new, and the joke cryptocurrency has certainly gained a higher profile around the world thanks to endorsements from the likes of Tesla CEO Elon Musk.
Burger King plans to use a portion of the profits generated by the sale of Dogpper to support non-governmental organizations protecting animals — and the treats will be available for a limited time only.
The chain added: “We know that enjoying a Whopper in peace, in the comfort of your home, is not an easy task for a mother or father of a pet. But also, how can we blame them? The smell of grilled barbecue meat goes far and gives the dogs a stir.”
Burger King has dabbled briefly with Bitcoin payments in a number of countries where it operates — including Germany, Venezuela and Russia. However, in most cases, this has ended up being short lived.
Binance Sets New Daily Withdrawal Limits, Rolls Out Tax Reporting Tool
Binance, the world’s biggest cryptocurrency exchange by trading volumes, continues its efforts to maintain dialogue with global regulators by introducing withdrawal limits and a new tax reporting system.
On Tuesday, the company officially announced a major update to its Know Your Customer policies, significantly reducing maximum withdrawal amounts for users who have not completed full identity verification.
Effective immediately for new Binance accounts, users who have completed only basic account verifications will be unable to withdraw more than 0.06 Bitcoin (BTC) per day, worth roughly $2,400 at the time of writing. Previously, the maximum daily withdrawal amount was capped at 2 BTC, or about $80,000, Binance CEO Changpeng Zhao noted on Twitter.
According to the announcement, Binance will continue applying new withdrawal limits for existing users in phases starting from Aug. 4. The exchange expects to have adopted new withdrawal restrictions entirely by Aug. 23. Binance users who have completed full identity verification will be still able to withdraw up to 100 BTC in a day, or nearly $4 million at BTC prices at the time of writing. “Withdrawal limits refresh daily at 00:00 AM,” the announcement notes.
Binance also rolled out its new tax reporting tool. The reporting system is an Application Programming Interface that enables Binance users to track their crypto transactions, transfer their transaction history to third-party vendors, and obtain instant overviews of their local tax liabilities. The new initiative is part of the exchange’s broader strategy to expand user protection and risk management protocols.
According to Binance’s tax reporting instruction page, users can now select a third-party tax tool to transfer their transaction history. “Binance is not endorsing any particular third-party tax tool software. Please exercise your own discretion and/or consult your personal tax adviser based on your personal tax circumstances and requirements when selecting the third-party tax tools,” the exchange warned.
Binance did not immediately respond to a request for information on the usage of the new tool for Binance US users.
The news comes amid Binance aggressively adopting new trading restrictions in an apparent effort to respond to the ongoing global regulatory crackdown on the exchange. This week, the exchange delisted margin trading pairs for three fiat currencies, including the euro, the Australian dollar and the British pound sterling. Binance’s futures trading platform has also started reducing maximum leverage positions from 125x to 20x.
Zhao also hinted that he might be willing to step down as CEO should someone “with a strong regulatory background” be available. “There are no immediate plans to replace me as CEO,” he noted.
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