Month: July 2020

For those who use PayPal, there is one more good news as this platform has also entered the segment of Virtual currency which is the Bitcoin System. PayPal is all set to get into the crypto trading platform through its partnership with Paxos. This is great news for cryptocurrency supporters as it will provide a good platform for them to trade Bitcoin and other currencies. Paxos is a stable coin operator, and it offers brokerage service. PayPal will now use this platform to push crypto trading. Hence it will gain some more users on its platform then the present user base.

Paxos launches crypto brokerage

With this move, Paxos will enable other entities to integrate the trading options for cryptocurrencies. The new service will be used by PayPal to provide crypto trading facilities for its users across the world which will facilitate many users. It will help both entities as PayPal will get to add new services for its growing customer base, and Paxos will also get the brand association of PayPal. In this way, it can boost the overall growth in the cryptocurrency market.

PayPal’s association with the digital currency market

PayPal is actively involved in the cryptocurrency market in recent months, and it has also hired various experts to develop cryptocurrency capabilities within the organization. It was initially not so keen on this platform as it can contradict its original business. But after seeing the huge demand in the digital currency segment, they have taken the plunge into this market. It was an earlier member of the Libra Association which was planning to introduce stablecoin through Facebook. However, it did not go down well with regulators, and PayPal had to step back from the association in 2019.

After this, PayPal has started to work on its own platform where it can provide cryptocurrency trading options, and this new partnership with Paxos will only be a big boost for this cause. This is good news for PayPal users as they will not get to use cryptocurrencies along with the regular payments, and this will be very useful for international transactions. There is no need to use the regular currencies when you can easily process various transactions at lesser fees. The charges for processing cryptocurrencies are far lesser than the regular currencies in most cases, and users will prefer Bitcoin and other currencies while dealing with international transactions.

Finance is a world full of ups and downs. For every penny earned, there is always the risk of losing five more of them. Now, finance has had a drastic facelift with the introduction of Crypto-currency. Altcoins like bitcoin cash and Ethereum have entered the game and are playing well. Innovative technology like blockchain and peer to peer transparent networks have brought a newer and stronger level of security. But the problems such as price volatility and value fluctuation become major issues. And the worst happens when greed and human error mix to produce disastrous outcomes. Such a case has come into the eye of the media where a fraudster has duped its clients of 7 million dollars in crypto-currency.

Details of the case

The deed was done by one crypto-currency based firm. He operated phony monetary exchange services. The firm was responsible for duping its clients of millions of dollars (seven million dollars to be exact). Two of their unfortunate customers found themselves in these crypto tangles, which have sued the firm. The accused is going to plead guilty and is looking at years of prison time. The firm is said to accept a plea deal that is going to be carried out in September of the year 2020. The prosecutors are looking to finalize and implement proceedings on this date.

The prosecution letter indicated that the disposition of the case is sought by both parties, and the request for a decision date in the next two months of this year has been sent to the courthouse. The last update by the accused’s lawyer has assured that all groups involved have substantially gravitated towards a mutually agreed upon disposition.

Counts of fraud

The conman was arrested in early September of 2019. The financial services provided through his company have been embroiled in four cases of dishonesty claims related in its crypto-currency dealings. The allegations entailed that Thompson had acquired three million dollars by a client to purchase bitcoin cash and had wired the sum to a separate middle-man without receiving the crypto-currency beforehand. This had apparently resulted in the accused losing the money, which had started the whole conflict.

This action was repeated by the accused when he again acquired four million dollars from another firm by lying about the previous transactions. These four million dollars was again given to another middle-man with the client’s intent to exchange it for bitcoins. But the funds were lost similarly to the previous transaction.

All these shady businesses had accumulated two claims of illegal finance practices, which each entails ten years of prison time while also committing two claims of illegal monetary transfer. These two additional counts each cause two score years of prison time.

The accused thus faces more than fifty years of incarceration but presently has been released on bail of five hundred thousand dollars after being arrested in Pennsylvania.

The official financial claims department has charged the accused’s company for the frauds committed. An Irish firm by the name of Symphony FS has also filed a separate lawsuit against Thompson, who had given him the second four million dollars that had been duped.

Crypto-currency has been a new avenue full of possibilities and opportunities to blaze the finance industry with the new light of security and safe investments. Exceptions like this should not be the reason to lose hope. The Crypto-currency industry is set to be the next big thing in various spheres of business and services. As with any such ventures, serious steps should be taken in caution, and investments should be made carefully.

The Philippines have seen a growing number of crypto-related crimes in the past, and now the Philippines are taking note of it. On July 1, the Securities and Exchange Commission (SEC) of the Philippines published a Press Release on its website to create awareness of the fraudulent crypto investment schemes going around in the country.       

The SEC also has names three companies that are operating illegally and offering unsanctioned investments. SEC has not provided these companies licenses to operate or to offer any investment products. The three companies are Forsage, RCashOnline, and also the Saint John of Jerusalem Knights of Malta Foundation of the Philippines Inc. Forsage is a crowdfunding company that offers income based on the memberships and referrals through its participants. According to the SEC, the company needs to have prior approval before offering any smart contracts to the public. Even RCashOnline offering similar contracts should be offering any investment product without obtaining the necessary licensing.

The Saint John of Jerusalem Knights of Malta Foundation of the Philippines Inc does have regulatory approval, but they are not complying with the requirements provided to them. It has led them to have their license revoked, but still, they continue to defy the rules and operate illegally for 17 years. Forsage and RCashOnline both operate on pyramid schemes where the participants have to recruit other people to earn money. Saint John, on the other hand, is defying SEC rules and operating even after revocation of its license. Even though SEC has not made any arrests till now, it has issued a warning to them that anyone who violates their rules will face a huge fine and 21 years in prison or both. In the Press Release issued by SEC, anyone caught acting as a broker, salesperson, agent, or dealer with these three companies would have to pay a maximum fine of P5 million or face imprisonment up to 21 years or both.    

It seems that the Philippines are fighting off a number of crypto scam efforts in the past years. In April 2020, the SEC has warned about another crypto company with the name The Billion Coin. It has been operating for a few years in the country and was the third company that was flagged by the institution that month. Then, the next month the Filipino Ministry of Finance alerted its citizens about Bitcoin Revolution, another fraudulent Ponzi scheme that used the Filipino President Rodrigo Duterte and Secretary of Finance Carlos Dominguez III to promote themselves. The company claimed that the government created the assets and urged citizens to invest in them.

The statement issued by SEC further stated that any unauthorized and illegal investment schemes, like the ones mentioned above, are being monitored by them and is ready to take legal and regulatory action against them. It has been doing its part to prevent citizens from falling into the traps of these Ponzi schemes. It also asked the citizens to be more alert and avoid quick-money schemes as most of the people end up losing their hard-earned money due to them.

For the world economy development of cryptocurrencies is a new dimension, and that is why every facet of the same need to be strong and perfect. Though many users have started using this virtual currency, there are still some questions that haunt many aspirants, and there is also news that may increase the worry of such potential users. As per some experts, the crypto wallets are not technically sound, and their security can be a big question for the data and privacy of users. A survey was done by some of the leading companies, and they have found improper security to these wallets. Many vulnerabilities were recently found in popular crypto wallets like Ledger, BRD, and Edge by the startup company ZenGo which works in the mobile crypto wallet sector. These vulnerabilities are often used by attackers and malicious users to commit fraud and other activities. It is the time when these issues need to be fixed by the developers as users will lose confidence about the overall security of the blockchain currency if these continue for a long time. There is no response from the promoters of these blockchains regarding these vulnerabilities, and it would be interesting to see their reaction in this situation.

BigSpender Vulnerability

In this situation, the balance is not shown correctly in the wallet. It can create a lot of confusion, and users may believe that they have received some money while it is still in process. The reason this happens is that the unconfirmed transactions are taken into account while calculating the total balance in the user’s wallet. In this way, the attackers who usually target vulnerable people revoke the transactions before they can be confirmed, creating a lot of confusion about the total balance. Many users are reporting such frauds happening in Craigslist and other marketplaces.

How does this work?

The attackers are using a Bitcoin feature known as Replace by Fee. in this option, users have the option to cancel an earlier transaction with low transaction fees with a new transaction with higher transaction fees. In that case, the original transaction gets canceled, and it is replaced with a new one. This loophole is used by fraudsters who initially send payment and later on cancel it after receiving the goods or services from the other person. Earlier, such methods were used with PayPal transactions, and attackers used to send fake PayPal transactions.

Fake transactions in crypto

Some crypto wallets have this vulnerability wherein they consider the transactions that are not yet confirmed into the total account value. Attackers usually send some Bitcoins and quickly cancel them or replace them with another transaction. In this way, the earlier balance may still reflect in the account, and this can be used to process a new purchase. When multiple such transactions are processed in a quick time, it can lead to large amounts of fraud. Although there are some methods to correct the balance by clearing the app cache, it may not be done in every case, and attackers may use such vulnerabilities in the long run.

ZenGo discovered vulnerability

ZenGo, a mobile crypto startup, recently figured out these loopholes and mentioned them in their publication. It has led to a huge sensation in the crypto world, and BRD and Ledger have even handed over rewards to this company for discovering such loopholes. While BRD has announced that they have fixed the issue, there is no confirmation from Ledger. It may take some more time before such crypto wallets are completely secured from all sorts of vulnerabilities. Till then, users have to limit their transactions and monitor them carefully.

With a global implementation of Blockchain in various fields, it is also gaining popularity in political applications. Russia is the use case of this technological application. Earlier this month, Russia allowed its citizens to vote by using blockchain.

Soon after the launch of the blockchain-enabled voting system, it crashed. The voting held at Moscow and Nizhny Novgorod. The remote web portal that was handling the voting crashed when the traffic increased beyond the limits.

According to the reports, the constitutional amendments were disturbed as it was the first time the officials were using blockchain for presidential elections. Although the government is using blockchain for many other solutions such as remote plenary, this initiative was a failure.

The official website to vote using blockchain technology was developed by the Moscow Department Of Information Technologies. The blockchain platform developed by Bitfury is known as Exonum. It was used to make constitutional changes in Russia.

The online voting was set to made available from June 25 to June 30. However, offline voting was held on July 1. Central Election Commission member Anton Lopatin explained that the citizens of Moscow and Nizhny Novgorod immediately joined the website to vote. It crashed due to the peak load on the official voting website.

Otkritiye Media had another report on the Russian voting. According to the media report, there were only 494 residents from Moscow who voted for the election. Russian news agencies also reported that the results mismatched in some regions.

Troitsky Administrative Okrug, for instance, had 7,300 people who registered to vote online. But when the locals tried to vote to their respective choice, there were only 2,358 residents eligible to give their vote. This was a technical malfunction according to the election commission officials.

A local journalist, Pavel Lobkov managed to deceive the voting system by successfully filing his vote twice on the same day. First, he voted offline at a local polling station and an hour later he was again able to vote through the online voting website. This can be a quite intolerable flaw in a voting system.

The website was restored soon after the crash but the head of Public Headquarters for Monitoring and Observation of All-Russian Voting in Moscow, Ilya Massukh was dissatisfied with the voting platform. There should have been a solution to handle the peak number of voters at the start and end of online voting, the head said.

Why Blockchain And Remote Voting Is Needed?

To curb the virus outburst, it is essential to keep people distant. But since voting cannot wait there has to be a system that allows the residents to vote online. There are some pros and cons of online voting. Hackers can hack the votes and there can be an unwanted consequence of online voting.

But if the blockchain technology is used for online voting, there are absolutely no chances of tempering with the submitted votes. It is impossible to hack a vote in a blockchain system because the blockchain doesn’t have a single server. It can provide transparency and security that is needed in any election.

There is also a possibility to anonymize and encrypt the votes at a certain level. Since every vote will be masked the election can take place safely and no one can change the votes. The blockchain technology ensures there are no inconsistencies in the election whatsoever.

Putin’s Term And The Constitutional Amendments

The constitutional amendments have already allowed Putin to serve for 12 more years. That is until 2036. But if Russian people are against this amendment and vote against it, he can only serve the country for two years. It means he will have to leave his presidential designation in 2024.

Although he has been issued many deadlines to adopt the crypto framework in Russia. But still, the Russian President has failed to introduce crypto legislation in the country. Russia is still at the top in cryptocurrency exchanges among every other country in the world.