Crypto-Mining Cyber Attacks Continue to Be the Weakest Link in the Cryptocurrency Ecosystem

Colleagues, following high profile cyber security breaches against CoinSecure and CoinCheck earlier this year, crypto-mining attacks have skyrocketed in 2018 representing a plague on the global crypto ecosystem. In its Mid-Year 2018 Security Report TrendMicro states “We also detected a significant number of new cryptocurrency miner malware families, showing that cybercriminals remained keenly interested in profiting from digital currencies.” The Necurs exploit kit, CVE-2017-10271 via port 7001/TCP and Web miner script in AOL ad platform are some of the more notable cyber security used by crypto-miner attackers. Moreover, while cyber-attacks related to crypto mining far outpace other types of attacks, direct attacks against crypto exchanges are on the rise. Where does this leave the integrity of the global cryptosphere? Bottom line: The nature and rise in these attacks will continue to hinder the mass adoption of cryptocurrencies around the world. While far easier said than done, cryptosphere security needs to take a quantum step forward to gain and maintain a proactive advantage over the crypto threat juggernaut. Send us your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Can the Petro Cryptocurrency Save Venezuela from Financial Collapse?

Colleagues, Venezuela announced its “Petro” cryptocurrency last December as a means of bolstering is crippled economy and yes, evade US economic sanctions. As reported by MarketCoinCap the Petro has fluctuated widely since its inception. President Maduro's government has claims to have raised billions of dollars during a presale I early 2018, however, evidence is tenuous at best. The Cryptocurrency Academy anticipates many state sovereign banks will launch their own digital currencies for legitimate reasons in the coming 12-36 months. The U.K., South Korea, Japan and possibly the Ukraine come to mind. Bottom line: With little if any reflection on the global crypto ecosystem the Petro represents little more than a desperate move by the Venezuela’s socialist government to save itself from finance ruin. With respect for all authentic cryptocurrencies and ecosystem players worldwide we strongly be that what Venezuela needs is competent and democratically elected government, not a cryptocurrency. We expect both the Petro and the current Venezuelan dictatorship to be short-lived. Send us your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

NASAA Regulators Zero In on Securities Fraud – What is the Impact of Operation Cryptosweep?

Colleagues, Operation Cryptosweep (aka “OC”) is a joint effort of regulators from the US, Mexico, Puerto Rico, Canada and the US Virgin Islands targeting unregistered ICOs and related securities fraud. Overseeing OC is The North American Securities Administrators Association (NASAA). At is core is the US SEC’s Cyber Taskforce which was launched in September 2017. To date OC has led to some 200 crypto-related investigations. Bottom line: While we support the appropriate regulation of the cryptosphere the question of OC’s effectiveness is more than valid. Noteworthy exceptions to the list of member states are Caribbean nations known for money laundering and non-transparent offshore bank accounts. Antigua and the Cayman Islands are top of mind. Bottom line: The OC will have a positive effect on reducing crypto-related securities and ICO fraud, however, further attention needs to be given to other countries known for their nefarious roles in the broader crypto economy. Send us your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Freedom of Speech in Peril as China’s Baidu Tieba Shuts-Down Cryptocurrency Online Forums

Colleagues, everyone in free and democratic countries knows that China’ Communist Party subjugates its citizen by placing severe restrictions on freedom of speech and expression. Enter the global crypto ecosystem. The PRC is home to the world’s largest crypto mining company – Bitmain. The PRC is not a haven for crypto exchanges. BitBox and Bit-Z are the most prominent exchanges based in China, whereas Binance, the world’s largest crypto exchange moved out of China. The exception is Hong Kong which home to Bitmex, OKEx, BitFinex and several other exchanges presumably due to less government scrutiny. Nonetheless, the PRC has forced the shut-down of cryptocurrency-related social media discussion forums in Baidu Tieba … a Chinese version of Reddit. The question is why? While information is scarce the Cryptocurrency Academy assumes the answer may be due to the prevalence of bad actors and nefarious purposes which are common among second and third tier cryptocurrencies used for money laundering, drug transactions and circumvention of trade sanctions. Send us your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Will Iran’s State-Backed Cryptocurrency Enable the Country to Evade US Economic Sanctions?

Colleagues, Iran has taken a major step toward the creation of a state-backed cryptocurrency. The primary goal of this effort is assumed to be the country’s circumvention of new US economic sanctions in the wake of US President Trump revoking support of the Iran nuclear arms accord in May 2018. Work on a national cryptocurrency dates back to late 2017 when the US President re-affirmed his campaign promise to revoke the accord and re-impose stiff trade sanctions. This initiative has the backing of Iranian President Hassan Rouhani and is led by their National Cyberspace Center. Back in January 2018 the US Treasury issued a severe warning against Iran’s use of cyber warfare and development of a cryptocurrency for this very reason. Bottom line: Iran, Russia and Venezuela has announced plans to develop digital currencies for the purpose of evading Western (aka US) trade sanctions. Transaction “transparency” is a vital factors in whether their efforts will be successful at essential protecting nefarious money laundering activities. We assume the currencies which be intentionally designed to avoid detection by the US and its allies. Details to follow in the coming months.

Share your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Will social media-based payment tools allow for “secure” cryptocurrency transactions and fundraising?

Colleagues, Google Pay, Alipay, WeChat Pay and Facebook Payments are among the most popular tools for online payments, money transfers and fundraising. Each tool is confronted with the dilemma of whether to accept cryptocurrency transactions. The Chinese Banking Regulatory Commission and the People’s Bank of China have release strong warnings against the so-called “crypto payments model”. In the US Google Pay and Facebook Payments are faced with similar challenges. They are global platforms and what is acceptable in one country or region may be prohibited elsewhere. The potential security risks are numerous – exchange fraud, money laundering, lack of transaction transparency along with the fundamental integrity of many second and third tier cryptocurrencies are bona fide concerns among government regulators, platform vendors and users alike. There is no “one size fits all” solution. Bottom line: We see marriage of online payment tools and cryptocurrencies as yet another ‘test’ as cryptos seek mass market adoption. Like other crypto related challenges we do believe that in time such issues will be resolved … although for now no one knows the precise solution. Share your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

How can Blockchain be used to secure digital documents and transactions in the public sector?

Colleagues, with good intensions the Japanese, Chinese, American and British governments are exploring the use of Blockchain to securely maintain and transmit documents containing sensitive information about their citizens. The latest example of the UK’ Ministry of Justice assessment of Blockchain for protecting its repository of digital forms of evidence. In the US Blockchain represents a means of securely processing records for Social Security, Medicare and other entitlement programs. Noble endeavors indeed. Nevertheless, the obvious dilemma is that such data and documents needed for smooth government processes will only be as secure as the Blockchains used to manage them. Protecting cryptographic keys remains a top concern. Using hardware security modules (HSMs) and trusted computers in place of digital wallets and as Blockchain nodes will give security-conscious users and organizations greater confidence. As reported by McKinsey and Company recent breaches of crypto exchanges clearly indicate that Blockchain participants and their access to the Blockchain represent a security weakness that must be addressed before the technology. Bottom line: As we have previously reported Blockchain adoption will be directly correlated to the level of both perceived and actual security. Such security is likely to increase as the technology matures. Share your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

What will it take for the US SEC to approve cryptocurrency ETFs?

Colleagues, the US SEC maintained its tough stance when it comes to its approval or denial of cryptocurrency ETFs when it refused to grant approval of two new funds submitted by NYSE-based Arca. The Cryptocurrency Academy knows that the US SEC, similar to the Federal Reserve Board, views cryptos as highly speculative investment vehicles. The underlying issue is that both the SEC and the Fed are not convinced that Bitcoin and its sibling Altcoins are bona fide “securities”. Neither of the two Arca proposals would hold “tangible crypto tokens”. Moreover, they are based on crypto “futures”. The combination of these two facts is a non-starter from their perspective. So what are potential crypto investors to do? We see two options. First, invest directly in the cryptocurrencies of choice. And second – as we have commented on over the past few months – invest in the underlying Blockchain software firms. Bottom line: We maintain our prediction that within the next 24-36 months as cryptos gain maturity and market adoption along with strict governance the SEC will much more positively predisposed to approve crypto-related funds. Share your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

What would be the impact of securing the Siacoin Distributed Storage Protocol have on Crypto Mining?

Colleagues, the global cryptosphere is rigorously debating the security of the Siacoin Distributed Storage Protocol (aka the Siacoin Blockchain). More security translates into higher trust and integrity of the platform … right? The answer depends on which segment of the crypto ecosystem you ask. The new security code would fork Siacoin and in turn disabling mining products offered by Bitmain and Innosilicon. At press time we are waiting for Nvidia and AMD to weigh-in on this matter. Both companies have seen demand for their mining ASICs slow during H1 2018. So what is the end goal? Some would say driving increased capacity around the world to create a data storage marketplace that is more reliable and lower cost than traditional cloud storage providers. Our view is that this inevitable debate represents just one more growing pain as cryptocurrencies and their underlying Blockchains mature. The issue will get resolved and yes there will be winners and losers. More to come. Share your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Are cryptocurrencies illegal in Islamic nations? They are banned in Saudi Arabia

Colleagues, here at the Cryptocurrency Academy we are not predisposed to playing politics. Yet, in the kingdom of Saudi Arabia we see the collision of cryptocurrencies, religion and government leading to the prohibition of crypto activity “within” the countries boarders. The Crown Prince Mohammad bin Salman has declared them as a fraud as well as a potential breach of Sharia law. The key question becomes how pervasive is the prohibition of cryptocurrencies across the Islamic world? Islamic nations are not all created equal and some governments are strictly conservative while others are more open to so-called Western trends. Qatar, the UAE, Indonesia and Malaysia are much more progressive in their thinking and business practices. Iran, for purely financial reasons, is launching its own government-back cryptocurrency as a means of evading US economic trade sanctions. Bottom line: The Cryptocurrency Academy views Saudi Arabia as the outlier when it comes to banning cryptocurrencies while other Islamic nations are racing to embrace them with the goal of giving their economies a viable position in the global financial system. Let us know your thoughts today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Mining Malware at Fault a Cryptocurrency Theft of Some $87B in China

Colleagues, as we have previously reported mining malware has far outpaced the growth of ransomware over the past year when it comes to cryptocurrency theft. The most recent example is the theft in China valued at $87B of cryptocurrency by mining malware at the hands of three cyber criminals. Although details are limited, we understand this malware crime to be launched by Chinese nationals against Chinese cryptocurrency investors. To date we have seen many mining malware crimes initiated from within China targeting cryptocurrency investors located abroad.  McAfee Labs’ Threats Report for June 2018 identified more than 2.9 million samples of crypto-mining malware in Q1 2018 alone versus 400k attacks in Q4 2017 Q4 with JavaScript being the tool of choice when targeting web browsers. Bottom line: Both individual as well as corporate crypto investors need to be proactive in preventing crypto theft. Individuals needs to ensure the security on their computers and smartphones is as robust and up-to-date as possible, while institutions (corporations and telecom carriers) need to focus on router security. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

How critical in SIM Swap Fraud theft to cryptocurrency investors?

Colleagues, when members of the cryptocurrency ecosystem assess security threats SIM Swap Fraud likely ranks quite low on the priority list. Nevertheless, for cryptocurrency investors who use software-based crypto wallets the impact of SIM Swap Fraud can be significant. Case I point is the $224m law suit filed against AT&T by crypto investor Michael Terpin. Such fraud is a form of identity theft in which thieves convince untrained or unsuspecting telecom carrier and smartphone vendor support staff of the need to upgrade a SIM card. In turn the thieves gain access to most all of the phones apps and security information. The US Federal Trade Commission has been aware of this scheme for at least two years, however, there is little evidence that phone manufacturers and carriers have implemented protocols (e.g. human factors prevention methods) to reduce such crime. SIM Swap Fraud takes advantage of the rise of cryptocurrency software wallets and identify theft schemes. Cryptocurrency investors need to assess the risk-reward level of software vs. hardware vs. paper wallets along with their vulnerability to ID theft. Bottom line: SIM Swap Fraud is one more weakness is the broader crypto ecosystem which traders and investors need to mitigate. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

What impact will Axoni’s AxCore distributed ledger have on Blockchain auditing and assurance?

Colleagues, the holy grail of Blockchain-based distributed ledgers is likely to be auditability and assurance for domestic and trans-border financial transactions. Auditability and assurance in the Blockchain world are synonyms for “transparency” … the elusive element that has been a critical barrier to adoption for cryptocurrencies. Enter AxCore, the new auditable distributed ledger technology from Axoni which has raised some $55m venture capital in total from the likes of Andreessen Horowitz, Goldman Sachs, JP Morgan, Wells Fargo and other firms with a vested stake in fintech. While still in its infancy AxCore’s auditable distributed ledger technology is a potential breakthrough which could propel Blockcain in general and leading cryptocurrencies in specific from early adopter to mass market adoption. A recent report from AICPA entitled “Audit & Assurance Alert — Blockchain Technology and Its Potential Impact on the Audit and Assurance Profession” could be a forerunner to such a technology paradigm shift with major implications for the broader cryptosphere and fintech ecosystem. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Crypto Money Laundering, Fraud and Mining Malware Drive Increase in FinCEN SARs

Colleagues, over the past year Financial Crimes Enforcement Network (FinCEN) – a branch of the US Treasury - has reported a significant increase in Suspicious Activity Reports (SARs). Money laundering, fraud and mining malware complaints by financial institutions have all contributed to a rise in SARs to over 1500 per month. It is no wonder that the rise in SARs is directly correlated with in growth in cryptocurrency market capitalization. And in turn, cybercrime – which are at the core of SARs – also correlates the number and trading volume of cryptocurrencies. FinCEN offers an online SAR Stats reporting tool in their web site. Bottom line: The Cryptocurrency Academy and Cyber Security Defender propose the formation of cybercrime protection alliance between the US Treasury, financial institutions, crypto exchanges and security vendors with the goal of reducing cybercrime related to the cryptocurrency ecosystem. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

How will Bitcoin’s emerging crypto monopoly impact global cryptocurrency markets?

Colleagues, despite an aggregate decline in total cryptocurrency market cap since early CY2018, Bitcoin’s percent of total market value has reached staggering 50% threshold. Data also reveal that the top 5 cryptocurrencies – Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ripple – control almost 60% of the global crypto market. View the data from CoinMarketCap tracking stats. The Cryptocurrency Academy and the Cyber Security Defender draw two key conclusions from these numbers. First, is the definitive market vale concentration – which is nearing monopoly status – around Bitcoin. Thus, the extended crypto ecosystem needs to serve customers by developing tools and applications which are purpose-built for Bitcoin. Second, is the rapid bi-furcation of the global cryptocurrency market between the “Big 5” and the second-tier cryptocurrencies which serve niche geographic- and application-specific markets. We believe that bad actors – such as Russia, Iran, North Korea, Syria, ISIS, and AOAP - will be the primary users of this cryptocurrency underclass of as they seek to evade economic sanctions and conduct nefarious financial transactions with little-to-no transparency. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Does Bitmain’s Plans Signal a Major Wave of Crypto IPOs?

Colleagues, by most accounts China-based Bitmain is the world’s largest cryptocurrency mining operator and manufacturer of mining CPU-GPUs. Potentially valued at some $18 B Bitmain’s IPO could usher in a major trend for crypto-blockchain companies with plans to move out of the shadows and go public. Bitmain controls about 40% crypto mining pools and over 66% of mining equipment. The Cryptocurrency Academy does not find this move a surprise. Rather, we fully expect several IPOs over the coming 12-24 months of industry-leading crypto and blockchain ecosystem players to go public. This includes crypto exchanges, mining equipment vendors and mining operators, blockchain software firms and custody service companies as the industry matures. Which firms come to mind? Crypto exchange Binance and OKEx, Mining pools and Bitmain competitors BTC.com and AntPool. Blockchain software players Kik Interactive, Coindesk and EOS.io just to name a few. Such IPOs are in addition to the tsunami of cryptocurrency ICOs witnessed during the past two years. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Cyber Attacks Targeting Crypto Mining Continue to Infect Hundreds of Thousands of Devices

Colleagues, 2018 has seen the meteoric rise in cyber-attacks focusing on crypto mining applications. Thus, it is no surprise that over 170,000 consumer devices in Brazil which operate under MicroTik routers were infected with Coinhive mining software. Both SkyBox and Trustwave security firms affirms such attacks. We reported earlier this week that some 32% of cyber-attacks now involve crypto mining which far outweighs the relatively modest 8% of ransomware attacks. The weakest link in the crypto ecosystem appears to be network routers. Our previous post cited Cisco routers. Now MicroTik is also on the target list. Bottom line: Whether corporate or service provider networks, router hygiene is of utmost importance. Keeping all security software and patches up-to-date has become more critical than ever. We recommend that IT professionals managing routers increase their vigilance by:  A) Tracking security threats, and B) Maintaining security software. Each router vendor maintain security threat alerts and mitigation tactics on their web sites. Bottom line: The cyber threat against network routers by nefarious crypto miners is likely to get much worse until vendors can make a quantum leap forward in their security measures. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

How susceptible are Twitter and Facebook to spreading malicious cryptocurrency botnets?

Colleagues, yesterday Duo Security reported that some 88 million Twitter accounts fell prey to a malicious botnet spreading a fraudulent cryptocurrency giveaway program. Many of us, myself included, saw messages from this botnet and simply paid no attention. Nonetheless, the security issued a paper at the Black Hat 2018 conference entitled “Don’t @ Me – Hunting Twitter Bots at Scale.” The paper describes the “Anatomy of a Twitter Bot” on page 14 of the report. We know that Facebook and Twitter have purportedly taken major steps to reinforce their platform and account security in recent months given pressure from the US Congress and the European Union. Bottom line: How secure are social media platforms against penetration by and in turn spreading malware such as the Twitter botnet? The fact that the about 88 million accounts we effected strongly suggests that social media take a quantum leap in security to ensure their users remain secure. As of this writing Twitter has not publically affirmed this attack. Duo Security plans to publish mitigation tactics for this malware on GitHub in the coming days. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

Will the LevelTradingField Derivatives Exchange Offer More Opportunity Than Risk for Cryptocurrency Traders?

Colleagues, crryptocurrencies are commonly viewed as a high risk asset among traders and investors alike. Moreover, crypto exchanges are very susceptible to fraud and cyber security vulnerabilities. To top it offer, derivatives – not unlike options trading – is only for the most sophisticated financial professionals. Enter the new LevelTradingField Derivatives Exchange is based upon the Ethereum Blockchain. Known as CADE this new exchange will cater to elite financial pros who have both extensive crypto and derivatives expertise. The launch of CADE is yet another proof-point in the ever expanding cryptocurrency ecosystem. Bottom line: While CADE may be attractive to less experienced crypto traders, the exchange and crypto traders much be approached with caution and only allow elite financial professionals to participate. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)  

What impact will NASDAQ’s moves to regulate cryptocurrencies have on speeding market adoption?

Colleagues, the Cryptocurrency Academy has previously reported that Nasdaq CEO Adena Friedman anticipates that cryptocurrencies will rapidly move out of the shadows and into the mainstream of financial trading and investing on the NASDAQ … and likely other traditional financial exchanges. Nonetheless, she also sees formal regulation of Bitcoin, Ethereum, EOS, Litecoin, etc. as a vital prerequisite for crypto trading on the NASDAQ. Therefore it comes as no surprise that Friedman recently met with leaders of several leading crypto ecosystem entities. The nexus of NASDAQ and cryptos is clear: Both want legitimate and sustainable growth that is credible for traders and institutional investors alike. Bottom line: How and when with the US SEC implement a viable securities framework for cryptocurrencies? The Cryptocurrency Academy predicts that the US SEC will offer its proposed regulations for comment by the US cryptosphere within the next 12 months and then rapidly push for Congressional approval in 2020. Share your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

Do Coinbase Commerce and WooCommerce signal a new era of the “Cryptosphere Triple Play"?

Colleagues, the new Coinbase Commerce plug-in will enable Woocommerce platform users to make eCommerce payments via cryptocurrencies. While this model is nothing new it does represent a significant step in the market adoption of cryptocurrencies which seek to cross the chasm from early adopters to the mass market. The broader issue is the integration of three vital elements of the global cryptosphere – the marriage of top currencies, high volume exchanges, eCommerce technology vendors and eCommerce platforms. Bitcoin is the world’s most valuable cryptocurrency. Coinbase is the largest crypto exchange. And Woocommerce is the market share leader among eCommerce software vendors. The open issue is how aggressively commercial B2C and B2B players Amazon, Alibaba will and eBay adopt cryptocurrencies as a method of payment. The Cryptocurrency Academy predicts a potential “crypto triple play” by Amazon, Alibaba and eBay in the coming 12-24 months. First, is the high probability they will accepts crypto payments. Second, Amazon and Baba could likely acquire or launch their own crypto exchanges. And third, we would not be surprised to see Amazon and Baba introduce ICOs. Send us your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/) 

What is the risk-reward trade-off for Ethereum’s migration to the Casper Proof-of-Stake model?

Colleagues, the Ethereum ecosystem is facing a hard fork this October with the implementation of two EIPs currently under consideration – EIP 1240 and EIP 1276.  At stake are the so-called difficulty bomb and the security model used by the cryptocurrency. Bitcoin has limited its currency to 21 million tokens, whereas Ethereum lacks consensus regarding the number of coins to be issued. All of the above pose a significant risk-reward junction for the world’s second most valuable cryptocurrency. Decisions will impact the broader ETH ecosystem in a big way. The Cryptocurrency Academy would like to hear from Ethereum developers, traders and ecosystem partners on their preferred approach to resolving these major issues which are legitimate growing pains for the global cryptosphere. Send us your comments today! Lawrence – Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com/)