Tag: coinbase

Crypto Criminals Not on Holiday, Scams Like 3Commas and ‘Pig Butchering’ Continue to Strike

The crypto sector, thriving in several parts of the world, was struck with several hack and scam attacks this year. Even a couple of days before the industrially quaky year of 2022 ends, news and warning around crypto crimes have made it to the headlines. This week, the private API keys of around 1,00,000 crypto users were leaked on public domains. The victims were all users of 3Commas, an Estonia-based crypto trading service. The incident added more stress to the already disturbed crypto sector that has drastically dropped down in valuation to a yearly low to $795 billion (roughly Rs. 65,87,830 crore).

3Commas lets users set up an automated feature that has bots initiate trades on third party exchanges like Binance, Coinbase, and KuCoin on behalf of the users.

An anonymous hacker, as confirmed by 3Commas, had been at work since October that reportedly resulted in a loss of user funds up to $12 million (roughly Rs. 100 crore) via unconsented transactions. These transactions were processed via 3Commas on exchanges like Binance and Coinbase.

Previously, the company was exploring if these unverified transactions were being triggered by phishing attacks.

Several members of the crypto community, including Binance CEO Changpeng Zhao, shared awareness and safety suggestions for others.

The incident comes in the backdrop of crypto crimes gaining more and more pace around the world.

US’ Federal Bureau of Investigation (FBI) has warned crypto investors there about a new technique of ongoing scams — called the ‘pig butchering’. In these instances, scammers get potential victims to move their investments to cryptocurrency. Once their digital wallet ‘fattens’, these scammers hack and steal the funds.

“Be very careful when you go on social media and dating apps and somebody starts developing a relationship with you, and wants you to start investing. Don’t get butchered,” Bitcoin.com quoted Frank Fisher, public affairs specialist at the FBI’s Albuquerque division, as saying.

Back in November, the authorities in the US reportedly claimed to have identified and confiscated seven domain names that were exploited in pig butchering scams.

In a recent report, Chainalysis claimed that the month of October has been the worst in terms of crypto-related crimes. The crypto sector lost over $718 million (roughly Rs. 5,890 crore) owing to such crimes.

Back-to-back hack attacks on the digital assets sector contributed heavily to how the market turned-out to reach its current low valuation of $795 billion (roughly Rs. 65,87,830 crore).

Glassnode, in its latest report, has claimed that most Bitcoin holders have moved their holdings to self-custodial crypto wallets. Glassnode has estimated that around 550,000 Bitcoin worth $9.2 billion (roughly Rs. 76,760 crore) have left crypto exchanges.

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Coinbase Ventures-Backed Mara Crypto Wallet to Launch in Nigeria, Kenya

A new cryptocurrency wallet called Mara is ready for launch in the African markets of Kenya and Nigeria. This digital wallet is backed by Coinbase Ventures and Alameda Research, a Hong-Kong based private equity firm founded by Sam Bankman-Fried, the CEO of FTX crypto exchange. Mara is a digital financial ecosystem project that is entering the African market with this crypto wallet. Huobi, the Seychelles-based crypto exchange, is also backing this project in the backdrop of the crypto-friendly sentiment prevalent in the African fintech market.

The wallet will be made available for over two million people in Kenya and Nigeria.

The wallet will offer cryptocurrency brokerage services through its app, allowing users to buy, send, sell and withdraw fiat and crypto. The app will also provide access to educational resources focused on cryptocurrencies and personal finance management.

A non-profit body called the Mara Foundation intends to drive blockchain development in Africa. Euro Coin (EUROC) and Circle Pay, the issuer of the USD Coin stablecoin, has partnered with the foundation to drive uptake of the stablecoins.

The authorities of these areas are exploring ways to facilitate online payments for the Masai communities that thrive in around the tourist-favourite Masai Mara region in East Africa.

In its later stages, the Mara Foundation will initiate free educational community offering on financial literacy, cryptocurrency, Web3, and blockchain in more than one language.

Around the end of 2022, the project will launch a layer-solution called the Mara Chain, which is intended to run decentralised applications.

Binance crypto exchange is also coordinating with Nigeria to establish a special economic zone, powered by the crypto sector.

This crypto hub will make for the only such entity to exist in all of West Africa. This initiative is also being supported by the Nigeria Export Processing Zones Authority (NEPZA).

The crypto market in Nigeria, Kenya, Tanzania, and South Africa together saw a growth of 1,200 percent, reaching a market valuation of $105.6 billion (roughly Rs. 775 crores) in one year, a report by Chainalysis claimed in September last year.

Kenya, out of all the other African nations, is ranked first for peer-to-peer cryptocurrency trading volume and fifth worldwide for total cryptocurrency activity, as per research firm Triple-A.

It is estimated that over 8.5 percent of the Kenyan population, making for more than 4.5 million people, own cryptocurrencies. The Bitcoin search interest in Kenya topped at a whopping 94.7 percent, making it one of the hottest markets for BTC.

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Coinbase Sued by Veritaseum for $350 Million Over Alleged Crypto Payment Transfer Patent Violation

Coinbase has found itself in legal trouble after blockchain-based software firm Veritaseum Capital filed a lawsuit in the US District Court in Delaware. Alleging that Coinbase has infringed on one of its patents, Veritaseum has asked for $350 million (roughly Rs. 2,850 crore) in damages. The patent in question is around “novel devices, systems, and methods that enable involved parties to enforce value transfer agreements with little or no trust in each other”. In its lawsuit, Veritaseum has claimed that Coinbase has used this technology for many of its blockchain infrastructure services.

Veritaseum Capital has hired US law firm Brundidge & Stanger for the lawsuit against the crypto exchange. The filing states that Coinbase infringed on its cryptocurrency payment transfer technology under US Patent No. 11,196,566, also known as the ‘566 Patent’.

“Defendant’s infringing activities include but are not limited to its website, Coinbase Android mobile wallet, iOS mobile wallet, its Coinbase Cloud, Coinbase Commerce APIs, Query and Transact, Participate, Delegate and Validator software, Coinbase Pay, Coinbase Wallet and Coinbase Operated Public Validators,” the lawsuit states.

Veritaseum has claimed that it had been trying to reach out to Coinbase bringing this alleged patent violation to its notice, before filing the lawsuit.

“Defendant had prior knowledge, should have known, or at least been willfully blind of the ‘566 Patent. Defendant has been on notice of the ‘566 Patent at least as early as July 3, 2022, if not earlier from other sources or parties,” CoinTelegraph quoted the attorneys handling the case as saying.

The said patent had been awarded to Vertiaseum founder Reginald ‘Reggie’ Middleton by the US Patent and Trademark Office on December 7, 2021.

While Coinbase is yet to issue a statement on the development, Vertiaseum has requested a trial by jury in the case.

Coinbase, in recent month, has found itself facing increased legal scrutiny in more than one case.

The company is facing a probe by the US Securities and Exchange Commission (SEC) over its yield and staking products, according to its quarterly filing. The SEC is investigating yield and staking products of the crypto exchange.

The price of Coinbase shares had plummeted by 21 percent after the SEC opened its investigation on the exchange.

In August, the company was sued for ‘improperly and unreasonably’ locking users out of their accounts, especially amid days of market volatility.

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Coinbase Prime Now Allows Institutional Investors to Stake Ether Among Other Options

Institutional clients of Coinbase Prime based in the US will now be able to stake ETH on the platform, with funds secured in the firm’s cold storage vault. Staking allows investors to earn a yield on their cryptocurrencies by committing them to a pool of assets, which helps support the liquidity and operations of a blockchain ecosystem. The offering allows another avenue for financial institutions who wish to enter the crypto space but are unsure of how to do it.

Aaron Schnarch, Vice President of Product, Custody, stated in a blog post, “We’re launching Ethereum staking to US domestic institutional clients on Coinbase Prime. Using our industry-leading cold storage, clients can now generate yield by staking ETH.”

Coinbase Prime aims to provide an end-to-end staking experience to its clients. They can create a wallet and make decisions on how much they want to stake. Also, they can initiate staking from the ETH asset page from their Coinbase prime account.

In order to secure users’ staked ETH and yield, Coinbase Prime will lock withdrawal keys in their cold storage custody vault during the entire staking process.

Furthermore, the transactions will first go through a consensus, and only then and then it will be executed. The reason behind this is to provide an additional layer of security to client accounts.

That said, the practice isn’t without risks. Staking often requires investors to store their funds with a third party known as a “custodian,” who, in some cases, technically owns the funds while they are being staked. Earlier this year, investors saw billions wiped away as custodians like Voyager and Celsius went bankrupt in response to the collapse of TerraUSD.

At present, Ethereum is transitioning from a proof-of-work to a proof-of-stake blockchain system, meaning that both validation processes are running concurrently. Known as “The Merge”, the transition is expected to happen in September, at which point Ethereum mining will be phased out.

Coinbase Prime also allows staking for cryptocurrencies such as Solana, Polkadot, Cosmos, Tezos, Celo, and others.

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Foreign Crypto Players May Fear Navigating in India’s Uncertain Legal Climate: Unocoin Chief

Brian Armstrong, the CEO of one of world’s largest crypto exchanges — Coinbase, addressed a rather unpleasant event that his firm recently encountered in India. Days after launching a UPI-based crypto-buying feature in India, Coinbase had to suspend it because the government denied to recognise the move. Armstrong said, Coinbase faced “informal pressure” from the Reserve Bank of India (RBI) to roll back the feature. Due to this confusion of what’s allowed and what’s not allowed in the nation, foreign crypto players may delay their investments and engagements with Indian industry players in the times to come.

The observation was highlighted by Sathvik Vishwanath, one of India’s earliest adopters of crypto and the Co-Founder, CEO of India’s own Unocoin crypto exchange, in conversation with Gadgets 360.

Vishwanath has been advocating fair policies for crypto players in India for a while now.

While accepting that the government of a nation cannot function as a ‘start-up’ and experiment with risky decisions, the Unocoin chief said Indian government must align its priorities around crypto, that benefits the sector all together and not just the treasury.

“We will have to see crypto like an investment instrument. The decision that we will take now can actually, you know, make or break the future prospect as far as crypto in India is concerned,” Vishwanath said.

In recent times, after COVID-19 cases decreased globally, a number of crypto-related conferences and events have been organised in different parts of the world, including US’ Miami, Dubai, Croatia, Thailand, and Mexico among other nations. It came as a disappointment that not a lot of Indian crypto players marked their presence on these global forums.

Vishwanath, who did represent India’s crypto community at some of these events, believes that it is only a matter of time before Indians take centre stages at all these global crypto conferences.

The strong economy of India cannot keep investors away for too long, Vishwanath has predicted. Only, the laws need to be favourable for industry players to foray into the Indian crypto market with the surety of not harming their brand values. As these networking with global crypto insiders increases, Indian crypto community will steal the light at global crypto stages, he said.

“Taxing crypto incomes should not have been on the top of the agenda. Yes, it is imperative that the booming sector contributes to India’s economy. But, for the authorities to create a stable ecosystem for an industry to establish itself is important as well. India should not lose out on the opportunity that a new industry like crypto is bringing to the table. Crypto is not bad and does not deserve to be punished with unfair taxes,” said the Bengaluru-based cryptopreneur.

As one of the earliest crypto moguls from India, the Unicoin head has observed that India has already lost some years in finding out about cryptocurrency and trying out the investments.

He does however feel, that India’s start up ecosystem is incubating the crypto sector in well-maintained conditions, the results of which will be startling in the years to come.

Vishwanath has “congratulated” his fellow Indian crypto players for having raised tonnes of capital and big fat customer-bases despite the regularity unclarity, shadowing the space all-together.

As per data by industry tracker Tracxn, India attracted crypto funding and blockchain investments worth $638 million across 48 rounds in 2021.

Moving beyond crypto, Vishwanath has advised the people and government of India to finetune our blockchain networks and start migrating to the decentralised future.

“People must stop going with completely centralised systems anymore because errors in these traditional systems come with too many excuses. For tariffs, for political pressures for money pressures for whatever threats. People should understand the difference and see like wherever there is an opportunity for decentralisation that is the way going forward anyway,” the alum of Melbourne Business School noted.

At this point, India stands at the cusp of walking into the Web3 world. Blockchain startups in metaverse, NFTs, cryptocurrencies, and gaming are cropping up rapidly in the country.

The valuation of Unocoin iteslf, that launched in 2013, exceeded $20 million (roughly Rs. 155 crore) last year.

Regulatory laws that would shape India’s crypto sector remain awaited as of now.

Meanwhile, Indian crypto players are introducing newer features like recurring buying plans to drive crypto adoption among Indians while batting for higher returns to the investors.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article. 

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