Almost $300 Million Stolen From Crypto-Exchanges In 2019
ZeroHedge.com Mon, 01/06/2020 - 18:25
Authored by Patrick Thompson via CoinTelegraph.com,
Twelve major cryptocurrency exchange hacks occurred in 2019. Of these, 11 hacks resulted in the theft of cryptocurrency while one only involved stolen customer data. In total, $292,665,886 worth of cryptocurrency and 510,000 user logins were stolen from crypto exchanges in 2019. Cryptocurrency exchanges experienced more hacks last year than in 2018, when only nine cryptocurrency exchanges fell victim to security breaches.
As time goes on, you might think that cryptocurrency exchanges would become more secure. The reality, however, is that more hacks on cryptocurrency exchange are taking place year after year. In general, crypto exchanges remain unregulated, and it’s still unclear which regulatory agency has jurisdiction over the crypto markets.
Although there are no established rules regarding how cryptocurrency exchanges should safeguard customer funds, there are crypto-friendly countries and states. Canada, Malta and the American state of Wyoming have created crypto-friendly legislation that makes it easier for businesses to operate and gives them guidelines regarding security practices.
Sadly, not all countries have created guidelines or laws that help crypto businesses operate and reduce the risk for consumers. The way cryptocurrency exchanges store and protect their customer’s wealth differs from exchange to exchange; unfortunately, this makes cryptocurrency exchanges a hotbed for hacks that result in the theft of cryptocurrency or customer data. Let’s take a closer look at the cryptocurrency exchange hacks of 2019 and how much cryptocurrency, fiat and customer data was stolen in each incident.
Date: Jan. 14, 2019
Headquarters: New Zealand
Amount stolen: $16,002,108
Just two weeks into the year, the first hack on a cryptocurrency exchange took place. New Zealand-based Cryptopia was hacked for over $16 million worth of cryptocurrency at the time. Social media users started their own investigation, according to which, over 20 different cryptocurrencies were taken from the exchange’s hot wallet.
Date: Jan. 26, 2019
Amount stolen: $27,000
A few weeks later, the popular over-the-counter Bitcoin exchange LocalBitcoins was the victim of a security breach. Attackers were able to replace the official link to the exchange’s forum with a fraudulent link that led users to a fake page that resembled the discussion board but collected the information of the users who attempted to log in.
The attackers used the information they obtained to steal 7.9 Bitcoin — worth $27,000 at the time — from at least six user accounts.
Date: Feb. 15, 2019
Amount stolen: 450,000 account usernames and passwords
In just the second month of the year, Israel-based cryptocurrency broker Coinmama learned that its database had been breached. As a result, an estimated 450,000 user account logins and passwords had been compromised and posted on a darknet registry.
Date: March 24, 2019
Amount stolen: $7.09 million
On March 24, Singapore-based exchange DragonEx posted in its official Telegram group that it had experienced a hacking attack, and as a result, a portion of the users’ and the platform’s crypto assets had been stolen. Days later, DragonEx released an announcement on its website, saying: “On March 24th, DragonEx suffered APT attack, which is the greatest challenge since DragonEx was first launched in the year of 2017. 7.09 million USDT assets are stolen.”
Date: March 25, 2019
Amount stolen: $105 million
Just two days after the DragonEx hack, another cryptocurrency exchange in Singapore, CoinBene, was hacked. Many CoinBene users became suspicious of a hack when the CoinBene site unexpectedly went down for maintenance. Individuals who were tracking the CoinBene hot wallet noticed that a whopping $105 million worth of crypto assets had been removed. Even though all of the evidence is on the blockchain, CoinBene continues to deny that it was ever hacked.
Date: March 30, 2019
Headquarters: South Korea
Amount stolen: $18.7 million
March was a bad month for cryptocurrency exchanges. Just a few days after the CoinBene hack, Bithumb was hacked for an estimated $18.7 million — $12.5 million in EOS tokens and $6.2 million in XRP. Unlike other exchange hacks, Bithumb believed that the theft was an inside job committed by a former Bithumb employee who had access to its hot wallets.
Date: May 7, 2019
Amount stolen: $40 million
On May 7, Binance — the world’s biggest cryptocurrency exchange — experienced a security breach. As a result, 7,000 BTC, equivalent to $40 million at the time, was stolen. In addition, Binance said that hackers were able to obtain user API keys, two-factor authentication codes and possibly more user information.
Later, on Aug. 7, it was revealed that hackers were in possession of over 60,000 pieces of Know Your Customer data from the Binance exchange. An individual going by the name “Bnatov Platon” said he or she hacked the individuals that hacked Binance back in May and discovered that the original hackers had also gained access to 60,000 pieces of customer KYC data, including the photo IDs of 10,000 Binance users.
Date: June 1, 2019
Headquarters: United Kingdom
Amount stolen: $10 million
In June, GateHub made an announcement, saying 100 of its users’ XRP wallets had been compromised. A GateHub community member took a deep dive into the hack and discovered that by June 5, 23,200,000 XRP had been stolen from 80–90 of these wallets — the equivalent to about $10 million at the time.
Date: June 26, 2019
Amount stolen: $4.23 million
At the end of June, Bitrue was hacked, and roughly $4.23 million was stolen. Hackers learned of a vulnerability in Bitrue’s security that gave them access to about 90 user accounts. Afterward, hackers used what they learned from their 90-account takeover to successful compromise Bitrue’s hot wallet. As a result, 9.3 million XRP and 2.5 million ADA were stolen.
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Date: July 11, 2019
Amount stolen: $32 million
On July 11, Japan-based cryptocurrency exchange BITPoint was alerted of an irregular outflow of XRP from its hot wallet. Several hours later, BITPoint became aware that Bitcoin, XRP, Ether, Bitcoin Cash and Litcoin had been moved from the exchange’s hot wallet without authorization. In total, $32 million worth of cryptocurrency was moved out of BITPoint’s hot wallet — $23 million of which belonged to BITPoint users.
Date: Nov. 5, 2019
Amount stolen: $500,000
For the most part, the VinDAX hack is a mystery. VinDAX is a small cryptocurrency exchange based in Vietnam that primarily hosts token offerings for unheard of companies. Information regarding this security breach is scarce. However, The Block took a deep dive into this mysterious hack and learned from the VinDAX support staff that roughly 23 cryptocurrencies — worth $500,000 in total — had been removed from its hot wallet without authorization.
Date: Nov. 27, 2019
Headquarters: South Korea
Amount stolen: $49,116,778.00
And finally, the last hack of the decade: Upbit. Upbit is a South Korea based cryptocurrency exchange that was hacked for 342,000 ETH — equivalent to $49,116,778 at the time — on Nov. 27. All that is really known is that hackers were able to gain access to Upbit’s hot wallet and move Ether without authorization. However, Upbit released a statement shortly afterward telling users that it would be covering all of the losses with the exchange’s assets.
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In total, $292,665,886 worth of cryptocurrency was stolen from 11 cryptocurrency exchanges and 510,000 pieces of user information were taken from the database of one exchange — a total of 12 cryptocurrency exchanges experienced security breaches.
So, what does this all mean? It means that cryptocurrency exchanges have to do better in terms of industry standards and security practices. Sadly, we did not see enough legislation and security improvement in 2019, and we experienced even more cryptocurrency exchange hacks than in any previous year. But hopefully, these things will change in 2020 and the cryptocurrency markets will be safer for every party involved in the cryptocurrency ecosystem.
How Inflation, Prudence, And Fundamentals Are Setting Up Gold To Soar
Sun, 12/01/2019 - 20:30
Authored by Dave Forest via InternationalMan.com,
International Man: Governments around the world, including the United States, are printing trillions of currency units. This will continue to significantly devalue these paper currencies and create inflation.
Doug Casey recently said:
With all the money that’s been created by governments and central banks, the chances are excellent we’re going to have a gigantic bull market. Maybe the last one, since I expect the world is going back to using gold as money—at which point we’ll have a stable gold price.
In the meantime, I think mining stocks could go absolutely insane. The prices will have no relation to fundamentals, because everybody will want to own them.
How do you think the situation is going to play out for gold and precious metals?
Dave Forest: Inflation is a given. I see it every day in commodities, although many mainstream investors don’t recognize it. Yet.
In the 2000s, investors were over the moon when gold broke above $1,000 per ounce and copper passed $1.50 per pound. During the previous commodities bear market, those levels were unthinkable.
But now, $1,000 gold is peanuts. Hardcore bullion investors were distraught in 2016 when gold “plunged” close to $1,000. That’s seen as a depressed and unsustainable price.
Same with copper. That sector’s been in the doldrums, because the price fell below $2.50 per pound. If you’d told a copper miner in 1999 they’d have $2.50 copper, they would have popped the champagne! Today, it’s seen as scraping the bottom of the barrel.
The thing is, back in the “old” days, you could mine and process an ounce of gold for $100. Today, production costs are more like $600 per ounce. Closer to $1,000 per ounce if you add in sustaining and expansion capital.
That’s the real reason metals, including gold, have to go higher. The gold price isn’t arbitrary. The price must exceed production costs—or mines will shut down and supply will run out.
The massive inflation in production costs is driven by lots of things: rising fuel prices, increasing wages and benefits for workers, and higher steel prices. Barrick Gold, the world’s largest public gold miner, saw costs for one of its new mines, Pascua Lama, rise by billions of dollars within just a few months!
Politicians can’t sleight-of-hand those costs away—they’re real. So, the only conclusion is gold—and all metals—need higher prices in order to keep supply coming.
International Man: What other factors are affecting gold right now?
Dave Forest: We think of gold as a “safe haven”: Break glass and use when things really fall apart.
But many players in the financial sector are already using gold day-to-day, as a financial instrument.
In China, for example, many exporters don’t have access to currency hedging. They’re exposed to fluctuations in the exchange rate between the dollar and yuan while they’re waiting for dollar-denominated payments to come in.
If you can’t hedge currency rates through the banks, what do you do? Chinese firms found an alternative: Buy gold. The idea is, if the US dollar depreciates, the value of gold holdings will go up, because gold is globally sold in US currency.
In effect, these firms hold gold as a short-term hedging instrument. They could actually do the same thing with sheets of copper cathode or barrels of oil, but gold is the easiest major commodity to purchase, hold, and eventually sell once currency has been converted.
Of course, the root cause here is currency instability: people fearing a breakdown in the US dollar. So, it’s not far off the reasons doom-and-gloomers buy gold. Just that Chinese buyers are doing it in the short term, for purely commercial reasons.
International Man: The mining business is extremely volatile and risky. There are thousands of mining companies out there, and most of them are junk. What is your approach to separating the winners from the losers?
Dave Forest: First off, recognize that “junk,” in terms of mining stocks, comes in several forms.
There are of course, outright scams. That ranges from full-on fraud (not that common) to huckster promoters who legitimately take people’s money but then use it to pay themselves huge salaries while doing little or no technical work (much more common).
Looking at salaries is a good way to spot those latter cases. Public companies in Canada disclose their officers’ wages. It’s not uncommon to see CEOs of a company with $1 million in the bank making $400,000 per year. When 40% of your firm’s budget is going to pay one person, there’s not a chance the company is going to perform. Never mind that these people generally would be unemployable, even for $1 yearly, in any other industry.
A much more subtle form of junk is the “hobby farm” company. You know how people, often older, will buy a farm for the fun of being outdoors? They’ll putter around doing a little work here and there, but the whole thing is mainly for enjoyment rather than serious commercial endeavor.
A significant number of junior mining stocks are like this. Exploration companies, after all, are just a couple of guys with a pickup or maybe a helicopter walking around picking up rocks.
Older geologists will often do this for the fun of it. It’s nice to have shareholders pay for your summer fishing trip up north. While there, these “execs” might walk into the bush and grab a few samples, but they’re not pushing to run a real business. Those companies go absolutely nowhere, very slowly.
You have to really watch out for those, because the people will seem sincere and often credible. But their heart isn’t in it, so they never accomplish much.
Once you weed out those, you’re left with a small group of more-interesting stocks. These are the companies that have good ideas about where new mineral discoveries might be made. They’re motivated and hungry; they usually have their own money invested in the hunt.
They run the company like a business. That means they consider whether the cash they’re spending will add value to a project. It also means they know what value looks like in a mineral property!
International Man: As a geologist, you’re on the ground in obscure places like Colombia, Russia, Mongolia, etc., searching for new deposits and breakthroughs. What are some of the most interesting places on your radar right now and why?
Dave Forest: North America, minus Mexico. As you say, I’ve spent a lot of my career in obscure places. Ten years ago, you would go abroad, because it was tough to break into established spots like Ontario or Nevada.
But the recent downturn in exploration’s changed all that. I spend a lot of my time in Nevada now, and it’s astounding how little exploration work is going on, despite the state being ranked number one in the world for mining.
Today, you can get acreage and try new ideas. I’ve even seen companies stake out whole districts that were abandoned during the downturn.
Building a mine anywhere is tough these days. Environmental activism (or commercial interests masquerading as such) and “not in my backyard” (NIMBY) concerns are rising everywhere. Places like Nevada or northern Saskatchewan have the advantages of having established mining sectors, relatively stable governments, and—most importantly—very few people. No backyards, no NIMBY.
That said, I still love travel. And I do keep an eye out for emerging opportunities abroad—they just have to be big opportunities to make up for the increased political risk.
One spot I checked out recently was Uzbekistan. The country has the world’s largest gold mine, called Muruntau, which has something like 200 million ounces.
Uzbekistan’s dictator died in 2016, and the new prime minister seems very sincere in accelerating free-market reforms. That includes opening the mining sector to foreign exploration and development.
I visited last summer and couldn’t believe what’s happening. Government officials couldn’t meet until 10 PM, because they were too busy working at the office to get the prime minister’s orders done. There have been reported cases of government staff dying from overwork! These people are serious. It’s one to watch.
International Man: You recently came across a new technology that could change the way mining companies find gold deposits. What exactly is this and what is the potential?
Dave Forest: A few years ago, I was introduced to a PhD mathematician. He’d been an executive consultant for 25 years to one of the world’s largest mining companies. He had a corner office and a green light for three-hour, two-bottles-of-wine lunches whenever he wanted.
Because he could do something I’ve never seen before (and apparently this mega-mining firm never had either).
He could use satellite data to find gold, copper, or zinc.
Now, there are lots of geologists who try to use satellite data to pinpoint ore deposits. This “remote sensing” has been in use since the 1980s.
I’ve always been a skeptic. Most times, satellite geologists just torture the data until it fits their preconception of the target. I never saw a convincing case where satellite imaging revealed a new discovery.
But when I met this PhD, I was intrigued. It wasn’t just his impeccable credentials in the industry—his approach is elegantly simple in a mathematical sense. He didn’t torture the data with interpretations. He just ran his algorithm and let the results speak for themselves.
I wanted to find out more. So, I gave him a test. It was a gold project in dense jungle in eastern Myanmar. I knew the gold mines are there, only because I’d been on the ground, under the tree canopy. But from the satellite view, you couldn’t see anything. There was no way to cheat.
He used his techniques and sent me a “heat map” that pinpointed the mine locations almost exactly. I was floored.
Since then, we’ve used this “digital treasure map” in Mongolia, Colombia, Nevada, and eastern Canada. The results, when field checked, have been excellent.
We started thinking about how this could benefit investors. What if you knew about a big mineral find on a company’s property before the company did? That’s what we can do with this satellite system. We can scan anyone’s property, almost anywhere on Earth.
Using the system, we recommended three stocks to International Speculator readers. One stock was bought out by a larger gold company within months of our recommendation, for a 219% profit. Another stock has risen more than 200% since our recommendation, on excellent gold drill results.
The last stock is still moving toward drilling. I think we knew they had a potentially major discovery before they did!
This also shows why now’s the perfect time to invest in mineral exploration. Why was this PhD genius available and not squirreled away in the bowels of a major mining firm? Only because the company he was working for laid off their entire exploration department during the most recent industry downturn. Crisis = opportunity.
Authored by John Mauldin via RealInvestmentAdvice.com,
You really need to watch this video of a recent conversation between Ray Dalio and Paul Tudor Jones. Their part is about the first 40 minutes.
In this video, Ray highlights some problematic similarities between our times and the 1930s. Both feature:
Maybe it was in his rush to finish as their time is drawing to a close, but it certainly sounded a more challenging tone than I have seen in his writings.
It brought to mind an essay I read last week from my favorite central banker, former BIS Chief Economist William White.
He was warning about potential currency wars, aiming particularly at the US Treasury’s seeming desire for a weaker dollar. Ditto for other governments around the world. He believes this is a prescription for disaster.
One possibility is that it might lead to a disorderly end to the current dollar based regime, which is already under strain for a variety of both economic and geopolitical reasons. To destroy an old, admittedly suboptimal, regime without having prepared a replacement could prove very costly to trade and economic growth.
Perhaps even worse, conducting a currency war implies directing monetary policy to something other than domestic price stability. There ceases to be a domestic anchor to constrain the expansion of central bank balance sheets.
Should this lead to growing suspicion of all fiat currencies, especially those issued by governments with large sovereign debts, a sharp increase in inflationary expectations and interest rates might follow. How this might interact with the record high debt ratios, both public and private, that we see in the world today, is not hard to imagine.
I called Bill to ask if he thought this was going to happen. Basically, he said no, but it shouldn’t even be considered. It was his gentlemanly way of issuing a warning.
Currency devaluations against gold were part of the root cause of the Great Depression. Coupled with protectionism and tariffs, they devastated global economic growth and trade.
The Repeat of the 1930s?
Do I think it will happen in any significant way in the next few years?
It is not my highest probability scenario. But imagine a recession that brings the US deficit to $2 trillion, possibly followed by a governmental change that raises taxes and spending.
This could bring about a second “echo” recession with even higher deficits. This would force the Federal Reserve to monetize debt in order to keep interest rates from skyrocketing, thereby weakening the dollar. Couple this with a concurrent crisis in Europe, potentially even a eurozone breakup, resulting in countries all over the world trying to weaken their currencies with the potential for higher inflation in many places.
In such a scenario, is it hard to imagine a desperate president and Congress, toward the latter part of the next decade, regardless of which party is in control, instructing the US Treasury to use its tools to weaken the dollar?
Can you say beggar thy neighbor? Can you see other countries following that path? All as debt is increasing with no realistic exit strategy except to monetize it?
Wells Fargo plans to close 800 more branches by 2020
by Matt Egan @MattEganCNN money.cnn.com January 12, 2018: 1:48 PM ET
Wells Fargo draws bipartisan anger from Congress
Wells Fargo, scrambling to cut costs and offset soaring legal expenses, plans to pull the plug on 800 more bank branches by 2020.
The planned closings, announced on Friday, will leave Wells Fargo (WFC) with about 5,000 branches. The bank closed more than 200 branches last year, but still finished the year with more than 5,800, the most in the United States.
On a conference call with Wall Street analysts, Wells Fargo execs pinned the closings on Americans' increasing preference for online and mobile banking.
"We will have as many branches as our customers want for as long as they want them," said John Shrewsberry, the chief financial officer.
But analysts also see a link to Wells Fargo's infamous legal troubles. The bank's litigation expenses more than tripled to $3.3 billion last quarter. The legal costs stem from the bank's fake-account debacle, investigations into pre-crisis mortgages and "other consumer-related matters."
Those mounting expenses have unnerved Wall Street. The bank plans to cut $2 billion in expenses this year and another $2 billion in 2019.
Related: Wells Fargo's legal troubles down out huge tax windfall
Another problem: Wells Fargo's branches likely aren't the profit machines they were before the scandal. The bank abandoned its notoriously aggressive sales goals following the revelation of 3.5 million potentially fake bank and credit card accounts.
In a statement to CNNMoney, Wells Fargo said it evaluates its branch network "solely on customer trends, market factors and economic changes."
Wells Fargo did not release an estimate of how many employees will lose their jobs as a result of the planned branch closings. The bank pledged to help employees "identify opportunities within Wells Fargo, as well as within the community."
Last month, Wells Fargo announced plans to share its tax cut windfall with workers and customers by raising its minimum wage to $15 an hour and giving 40% more to charities.
Before the scandal, Wells Fargo had been much more reluctant than rivals to close branches. Between 2012 and 2016, Wells Fargo only shut about 2% of its branches, according to brokerage firm CLSA.
By comparison, JPMorgan Chase (JPM) closed 9% of its branches over that span, while Bank of America (BAC) shuttered 15%.
That trend has shifted. Wells Fargo close almost twice as many branches in 2017 as JPMorgan, according to figures released on Friday.
Wells Fargo plans to shut another 250 branches this year.
In Bizarre Admission, ECB Warns Its Policies Threaten Financial Stability, Could Lead To A Crash
ZeroHedge.com Thu, 11/21/2019 - 04:15
Is the world's largest hedge fund central bank finally starting to appreciate the devastating consequences of its asset reflating ways? In some ways it is almost ludicrous to presume that a central bank which at the beginning of the year laughably "found" that its QE has reduced inequality in the eurozone...
The ECB also "found" that QE which has led to record inequality and unprecedented social upheaval has "reduced inequality" may have finally looked in the mirror objectively, and yet on Wednesday, it was the ECB which admitted that historically low eurozone interest rates - which it is solely responsible for - and which are expected to persist into the foreseeable future (and beyond) are causing increased risk-taking that could threaten financial stability.
"While the low interest rate environment supports the overall economy, we also note an increase in risk-taking which could… create financial stability challenges," ECB vice-president Luis de Guindos said non-ironically in a statement... which to us sounds an awful close to a mea culpa. Then again, we know that central banks never admit responsibility for "increases in risk-taking" so we wonder if he was just trolling everyone.
Or perhaps he isn't: "Signs of excessive risk-taking" were spotted by the Frankfurt central bank among non-bank financial players like "investment funds, insurance companies and pension funds." Indeed, many "have increased their exposure to riskier segments of the corporate and sovereign sectors" the central bank said. Of course, it is the ECB's own policy of negative yields has prompted investors to seek out riskier bets in search of returns.
Curiously, while the ECB’s twice-yearly update to its risk assessment shifted focus from May’s trade war concerns, “downside risks to global and euro area economic growth have increased” in the meantime, it warned. Such dangers included “persistent uncertainty, an escalation in trade protectionism, a no-deal Brexit and weak performance of emerging markets,” notably China, the ECB said.
In another stark admission of reality, the ECB said that an economic downturn - one which is virtually assured for Europe - could crash prices for riskier and less liquid assets as actors like asset managers or hedge funds sell up in a hurry.
"This may have implications for the ease and cost of corporate financing which could exacerbate any real economy downturn," the ECB warned, adding that elsewhere in the economy, lower interest rates also "appear to be encouraging more borrowing by riskier firms" in non-financial sectors, as well as inflating property prices in some parts of the eurozone.
If only there was something the ECB could do to prevent this...
Alas it won't, because returning to a far more familiar place, the ECB judged that authorities in the 19 eurozone countries were already taking steps to head off financial stability risks from property bubbles.
Meanwhile the central bank found that “bank profitability concerns remain prominent” as growth has weakened and eurozone policymakers further lowered a key interest rate in September. As well as outside pressure, banks “have made slow progress in addressing structural challenges."
Here, for some odd reason, the ECB valiantly refuses to admit that keeping the yield curve consistently negative is catastrophic for bank profitability, and instead of admitting fault, the central banks points to silly diversions such as banks that do not have Apple apps. The central bank also points to "slow improvements" on multiple fronts to explain lack of bank profits, like disposing of so-called “non-performing” loans, where borrowers have fallen behind on payments.
Lenders must also cut costs and reduce overcapacity, and are largely failing to diversify their businesses, the ECB judged, effectively urging banks to keep firing people. Because it's not like the Eurozone has an unemployment problem.
The good news according to the ECB: most banks have the liquid assets on hand to withstand any foreseeable financial shocks.
We'll find out soon enough.