Bitcoin Press Releases

Bloomberg News reporter Mathew Leising's new book, "Out of the Ether: The Amazing Story of Ethereum and the $55 Million Heist That Almost Destroyed It All", tells the story of the infamous DAO hack that almost brought down the world's second-largest blockchain.

In June 2016, a here-to-now unknown assailant (or assailants) began syphoning off funds from Ethereum's first decentralized autonomous organization, or DAO, a bit of software that functions like a corporation. Weeks earlier the DAO went live, following a $150 million crowd sale.

"[T]he DAO had a huge part to play in the early history of Ethereum," Leising writes. "It's not overstating it to say that the DAO made Ethereum." That's because it was one of the earliest examples that Ethereum's network of computers was resilient enough to support complex applications.

While the attack never broke Ethereum's code – it merely exploited a loophole in The DAO's smart contract – it cast doubt over the viability of a blockchain-based "world computer." It was also the beginning of Ethereum's two Ethereums.

Leising, who has been covering the crypto industry for the better half of a decade, had called out sick from work the day a hacker absconded with $55 million in stolen ETH. But he didn't let the story die. Over the past four years he has been reporting out the story told in the book, examining blockchain data, following through on cryptic tips and ultimately tracing a path towards his leading suspect.

In the excerpt below, readers find themselves in eastern Germany along with Christoph Jentzsch, one of The DAO's principle architects, who woke up to realize the project he has spent months building is being robbed "at the rate of about $8 million an hour."

A religious family man, Jentzsch takes this extemporaneous moment to reflect on the challenges that faced the DAO's creation – from securities worries that still plague token projects to the critical opinions of the early Ethereum community – before taking action. – Dan Kuhn

Chapter 7
The town of Mittweida in the state of Saxony in Germany escaped being bombed in the Second World War. In the middle of town, old stone streets divide rows of brightly colored buildings. If you leave the town square and walk for about 10 minutes you'll come to a quiet street with a police station; next door is a mint-green house with brown trim and shutters. On Friday, June 17, 2016, just after 8 a.m., Christoph Jentzsch lay on the beige carpet of the first-floor office inside. He tried to still his breathing, to take deep breaths, to not let the world get away from him. Thieves were inside the DAO, his creation, robbing it at the rate of about $8 million an hour.

One of the first things Christoph felt was relief: finally the DAO saga would come to an end. It had overtaken his life for the past six months.

He'd battled anxiety and depression and exhaustion; he'd neglected his wife and five kids. There had been moments when he froze at the thought of releasing the DAO code, because once it was out in the world it couldn't be changed. There could be a bug in the software, or maybe terrorists could figure out how to use it to fund an attack he'd be power- less to stop. The pressure made him physically ill several times. He'd puked under the strain. God, please, let this be the end of all that.

But Christoph also felt a strong sense of responsibility. It shook him that he'd messed up so badly and that people were losing money because of it. He believed in the ideas underpinning DAOs. (The language gets a bit confusing here as there were other DAOs around at this point, MakerDAO among them. DAO is a generic term for the structure that smart contracts fit into, but because of its eventual size and high profile, Jentzsch's DAO became the DAO.)

THERE WERE SO MANY FEARS," GRIFF SAID."DOES THIS DESTROY ETHEREUM? DOES THIS DESTROY DAOS? WHAT'S GOING TO HAPPEN TO ALL THIS MONEY?

A DAO is what got him into Ethereum in the first place, the moment he realized its potential. Vitalik's white paper had outlined a vision for how DAOs could democratize corporate structures to replace owners, employees, and investors with users who directly managed the firm's affairs with smart contracts encoded on the blockchain. That breakthrough is what made Christoph pause his PhD studies and start working for Ethereum in 2015. And then, improbably, he built one: the biggest DAO ever built, in fact, which made it a fat target. After all the security checks, Christoph couldn't understand why no one had found the right bug in time.

He got up from the floor of the office and went back to his IBM ThinkPad laptop. Christoph knew the cops next door couldn't help him. No, this was his mess and he'd have to clean it up.

In one sense, if toasters and door locks were allowed to have bank accounts the DAO never would have happened.

The Moment of Truth
The wait is almost over; Lamden's mainnet launch is fast approaching. September 16th, 2020 will be an inflection point, marking the transition from a technology promised to a technology delivered.

We at Lamden have been working nonstop to deliver on the unfulfilled promises of blockchain. Instead of modifying an existing technology, we decided to design and build a novel blockchain architecture from scratch. As a result, our Python-native modular blockchain delivers a revolutionary leap in performance, efficiency, and usability.

The moment of truth and the reveal is drawing near. Blockchain of today is one of complexity, high congestion, and outrageous fees. Lamden's mission is to unleash a disruptive solution upon these challenges and make blockchain fast, user-friendly, and cost-effective. One day, we will look back and remember September 16th, 2020 as a pivotal moment for blockchain and its revival.

The Road Traveled
We at Lamden took the road less traveled and it made all the difference. The imminent release of Lamden blockchain is the culmination of two and a half years of nonstop development and testing, and pushing the limits of what blockchain can do. We have worked hard to make life easier for developers by creating a Python-native platform that simplifies development and testing, and accelerates product deployment and monetization.

We have set our goals sky-high and refused to take a shortcut or compromise, and achieved results beyond our wildest expectations. We are deeply grateful to our amazing community for their unfailingly generous and enthusiastic support over the years. The mainnet would not have been possible without our team of developers and their unwavering commitment to deliver something extraordinary.

The Road Ahead
In the coming weeks, we will share more details on mainnet and exciting new plans with our community members. Our roadmap includes a developer on-boarding campaign, exciting new DeFi products, and a specification for Lamden version 2.0.

Lamden mainnet is just around the corner, but community members can start developing their ideas now using Lamden's Python-based smart contracting system. For an introductory period, developers will earn 90% of all TAU used to transact against their smart contract.

To our existing community members and those new to Lamden, we extend our warmest welcome to the Lamden Legion.

For more information, please visit:
https://lamden.io/  

https://www.youtube.com/watch?v=cFLtqJQ5LRc  

Mitiga, an incident readiness and response company, has discovered that a product available on Amazon Web Services Marketplace contained Monero mining malware. Mitiga published their findings, noting that they discovered the malware when conducting a security audit for a financial services company.

"Mitiga's security research team has identified an AWS Community AMI containing malicious code running an unidentified Monero crypto miner," according to the Mitiga's blog post. "We have concerns this may be a phenomenon, rather than an isolated occurrence."

Malware on AWS Marketplace
Unfortunately, the AWS marketplace allows anyone to sell virtual services on its marketplace. Although the marketplace is full of verified vendors, it also contains offerings from unverified community members.

Mitiga discovered that one community member was selling a Windows 2008 virtual server that secretly used the computing power of anyone who downloaded it to mine Monero in the background. Although it may come as a surprise that Monero mining malware was present on Amazon's AWS Marketplace, Amazon's policy clearly states that:

"Amazon can't vouch for the integrity or security of AMIs shared by other Amazon EC2 users. Therefore, you should treat shared AMIs as you would any foreign code that you might consider deploying in your own data center and perform the appropriate due diligence. We recommend that you get an AMI from a trusted source."

Reducing the attack vector
To avoid falling victim to malware that might live within community offerings on the AWS marketplace, Mitiga recommends "verifying or terminating these instances [unverified offerings], and seeking AMIs from trusted sources"

"As AWS customer usage is obfuscated, we can't know how far and wide this phenomenon stretches without AWS's own investigation," said Mitiga. "We do however believe that the potential risk is high enough to issue a security advisory to all AWS customers using Community AMIs."

Digital currency tax reporting service CryptoTrader.Tax suffered a breach, resulting in 13,000 rows of data and 1,082 unique customer email addresses stolen.

The breach reportedly took place on April 7, but the platform did not make an official announcement at the time. Instead, it contacted the individuals affected directly. The incident only came to light after CryptoTrader.Tax co-founder and CEO David Kemmerer confirmed that the data breach happened.

How it happened
An individual familiar with the matter was quoted by CoinDesk saying the hacker was able to gain access to a CryptoTrader.Tax employee's account. The employee worked in marketing and customer service, which allowed the hacker to access customer names, emails, payment processor profiles, and messages to customer service on the platform. Once the hacker accessed this information, they allegedly took screenshots of the data, and subsequently posted them on a dark net forum to show others that they had personal identification data for sale.

Why are we just finding out?
Although CryptoTrader.Tax did act relatively responsible after learning of the breach, it comes as a surprise that the April 7th hack is officially being made public for the very first time four months later in August.

Kemmerer told the new outlet that shortly after CryptoTrader became aware of the breach, they alerted the customers that were affected and took steps to improve security measures and monitoring systems across internal and third-party applications. Yet, it remains unclear why there was no official announcement, such as a blog that announced the data breach or even a post on a social media network alerting their users.

Although their team did take appropriate steps to warn customers and upgrade their system security after the breach took place, they did so in a rather intransparent way, which should make any individual that does business with CryptoTrader.Tax a bit weary of how the platform decided to operate.

A number of congressional lawmakers have written to the Internal Revenue Service (IRS), urging a proactive policy for taxing digital currency that avoids hampering proof of stake technology.

In a letter to IRS Commissioner Charles Rettig, Representatives David Schweikert, Bill Foster, Tom Emmer and Darren Soto set out how current policy is holding back progress in the sector.

Explaining how taxing staking rewards as income could lead to excessive tax burdens, the lawmakers appeal for an alternative approach that supports and encourages innovation.

"It is possible the taxation of 'staking' rewards as income may overstate taxpayers' actual gains from participating in this new technology. It could also result in a reporting and compliance nightmare, for taxpayers and the Service alike."

According to the letter, staking rewards can be more effectively taxed when they are sold, with those validating transactions rewarded by creating new tokens. The lawmakers argue that staking rewards should be treated like other kinds of taxpayer-created assets, which attract liability at the point of sale.

The language of the letter was drafted with support from the Proof of Stake Alliance (POSA), an industry organization established to promoting staking. Alison Mangiero, President of TQ Tezos and a member of the Proof of Stake Alliance, welcomed the proposals as a "common-sense solution."

"Staking rewards, similar to a farmer cultivating produce and selling it at market, should be assessed for taxation when they are sold: we don't tax an apple when it is plucked from a tree or a tomato fresh off the vine."

The signatories to the letter are members of the Congressional Blockchain Caucus, a bipartisan group committed to advancing policy around blockchain.

Amid online rumors of internal strife amongst company leadership circles over long-term direction, ASIC hardware manufacturer Canaan Creative reportedly removed four executives from its listing last week.

Co-Chairman Kong Jianping, Non-Executive Director Sun Qifeng, Founder and CFO Li Jiaxuan, and Public Affairs Director Tu Songhua were removed from the publicly listed company's registry according to changelog entries on July 6, 2020. The business registry now lists company CEO Nangeng Zhang as the organization's sole director.

The registry still lists both Kong and Li as part of Canaan's "core team." Zhang was given the new official role of executive director and general manager, dropping the chairman title. Canaan added Meng Lu as the new supervisor.

Canaan has not commented publicly on the reasoning behind the abrupt change to the listing of these senior executives. Chinese media outlets were swift to point out the parallels between the internal power struggles at Canaan with the bitter infighting at rival Chinese hardware manufacturer Bitmain Technologies Ltd.

The latter has had no shortage of controversies as co-founders battle publicly over control of the company.

In both situations, the CEO removed a company founder from a public leadership position within the organization because of disputes over internal management and the company's long-term strategy. This recent dust-up at Canaan follows reports from earlier this year in February when Xiangfu Liu resigned from his role as a board member over disputes with the firm's strategy. Liu was one of the three co-founders of Canaan.

The company has yet to publicly file paperwork with the U.S. Securities and Exchange Commission (SEC), acknowledging the management restructuring. The removal comes during a time where the company's NASDAQ share price is down significantly since the BTC halving event.

If rumors are right, it might indicate Canaan's CEO started to believe his own spin to the point he's having trouble recognizing when some ideas aren't good and shouldn't be pursued. Power struggles often arises when leaders struggle to adapt when they encounter contradictory evidence. They then tend to ignore evidence that conflicts with their worldview and seek proof that agrees with it.

Whether this upheaval is a precursor to Canaan's imminent meltdown or a hiccup as it rights itself towards a wise business strategy remains to be seen. If financial losses start to mount, it will reunite shareholders with their conscience forcing even more changes at the struggling hardware giant.

The block reward mining world is about to reset itself. Canaan would be wise to stay ahead of the curve. 

The FBI is leading an investigation into the July 15 Twitter hack, in which 31 high-profile Twitter accounts were compromised by a hacker and used to promote a digital currency investment scam.

According to Reuters, U.S. lawmakers that are concerned about future attacks on Twitter prompted the FBI's investigation.

"While this scheme appears financially motivated…imagine if these bad actors had a different intent to use powerful voices to spread disinformation to potentially interfere with our elections, disrupt the stock market, or upset our international relations," said U.S. Senator Ed Markey.

The hacker had the ability to take over any Twitter account, yet, used their power to promote a digital currency scam. The scam consisted of the hacker telling the millions of followers of the compromised accounts to send them digital currency, promising to send them double the amount that they were being sent.

However, it was a scam—the attacker did not send double the amount of digital currency to any of the individuals who participated. The attacker currently has a total of 7.411 BTC across the three wallet addresses they used to scam others (address 1, address 2, and address 3).

Timeline of attack
The hacker's first account takeover occurred at 2:16 p.m. EST when the hackers compromised @AngeloBTC, a well-known BitMEX trader's Twitter account.

In their first account takeover, the hackers requested that AngeloBTC's 150,000 followers send him a direct message, and send 0.1 BTC so that they could join his private Telegram group. However, there was no private Telegram group, and sender's got scammed out of their money.

Shortly afterward, the attacker began targeting Twitter accounts associated with well-known companies, executives, and celebrities, such as Apple, Jeff Bezos, and Kanye West.

Ultimately, the hacker was able to broadcast their digital currency investment scam to tens of millions of users and rake in more than $100,000.

We got lucky
We were honestly lucky that all the hackers did was promote a digital currency scam. Imagine if they used the compromised accounts, such as that of former U.S. President Barack Obama, or former Vice President Joe Biden, to start some sort of political conflict in which a foreign country retaliated.

When you consider all of the things the hacker could have done with the power that they had, it becomes concerning and alarming that they were able to breach Twitter in a way that gave them this power. That being said, it makes sense that the FBI is investigating Twitter, because if this were to happen again who knows what would happen.

Japan's blockchain industry has been growing rapidly in 2020 despite the economic struggles and the global pandemic. A new report by one of the country's largest digital currency companies revealed that the sector has grown by over 30% since 2019.

Japan has been a trailblazer in the blockchain industry for years, being one of the first countries to formulate and implement a regulatory framework for the industry. Its blockchain-friendly approach has led to a rapid growth of the industry, a new report now shows.

In the past year, the industry has grown by 30%, the report by the Monex Crypto Bank showed. The bank is a subsidiary of the Monex Group, the operator of Coincheck exchange which it acquired in 2018.

The report revealed that as of May this year, there were 430 blockchain companies in Japan. This is a 30.7% rise from the 329 companies reported in July last year.

64% of these companies focus primarily on blockchain technology, the report showed, with the rest being involved in a secondary capacity. The report further revealed that blockchain technology is not limited to startups, with 193 of the companies being labeled as large corporations. Of these, over half focus primarily on blockchain technology.

Moreover, there are 31 publicly-listed companies in Japan that are pursuing blockchain technology.

On the available blockchain products, the study found that finance had the highest share, accounting for 19% of the 422 active products. Entertainment accounts for 10%, with service, infrastructure, real estate and retail all accounting for less than 3%.

The digital currency exchange and mining sectors are still the biggest in the industry, the report notes. However, the gaming sector is quickly rising to prominence, using blockchain to change the experience for both the operators and the gamers.

While the Japanese blockchain and digital currency exchange industry has come a long way, it still faces challenges that have hindered its growth. Hacks and data breaches have been one of its biggest threats.

Zimbabwe's currency struggles don't seem to be coming to an end any time soon. In the latest update, the Reserve Bank of Zimbabwe has announced a ban on mobile money transactions. According to the regulator, mobile money operators have been taking advantage of the financial instability to overcharge the users.

Zimbabwe has been undergoing a currency crisis for the better part of the past two decades. The Southern African country has tried a number of solutions, from banning the local currency to using the U.S. dollar and introducing bond notes as a surrogate currency. However, none of them has given the country the monetary stability that the people so desperately need.

In its latest effort, Zimbabwe's central bank has cut off one of the most widely used payment methods. A majority of Zimbabweans have turned to mobile money for day-to-day transactions due to the shortage of cash in the banks. However, according to the regulator, the mobile money operators have been exploiting the people and overcharging them.

In its press statement, the bank announced that it had suspended all mobile money agents. It also suspended all bulk payer transactions as well as merchant transactions, except for utility payments.

Miner outflows of bitcoin have dropped to decade lows, with analysts suggesting a hoarding mentality is partly responsible.

The seven-day average of the total amount of bitcoin transferred out of miners' addresses declined to 987 on Thursday, hitting the lowest level since Feb. 3, 2010, according to data source Glassnode. The previous decade low of 988 was registered on May 23.

glassnode-studio_bitcoin-miners-outflow-volume-7-d-moving-average
Source: Glassnode
The number of coins being sent by miners to exchanges is also at its lowest point in over a year, as noted by Glassnode in its weekly report.

"It is a sign of efficient miners continuing to hoard (only selling a proportion of BTC)," said Asim Ahmad, co-chief investment officer at London-based Eterna Capital.

The increase in miner holding does not necessarily have long-term bullish implications for the cryptocurrency's price. Miners tend to operate mainly on cash and liquidate their holdings almost on a daily basis to fund operations.

As such, miner hoarding could be termed as temporary deferral of BTC sales, possibly due to fears that the market lacks the strength to absorb the regular amount of supply. Essentially, they may be waiting for the market to show strength and prices to rise before realizing their profits.

The market, therefore, could face an above-normal miner supply during the next meaningful price rise. That, in turn, could put the brakes on a price rally.

Hoarding aside, the other main reason for the decline in outflows is the reduction in bitcoin being mined since May's reward halving, said Ahmad.

Indeed, transfer volume from miner addresses fell from 2,334 BTC to 1,034 BTC in the nine days following the May 11 reward halving, which reduced the per block emission by 50% to 6.25 BTC.

That sharp decline in profitability forced out less inefficient miners, as evidenced by a drop in the seven-day average of the hash rate – the total computing power dedicated to mining blocks on the blockchain. That fell from 120 tera hashes per second (TH/s) to 90 TH/s in the two weeks following halving (though it's since climbed as more efficient machines were switched on).

Forced out miners, however, may return to bitcoin's blockchain if prices rise sharply, making older hardware once again profitable.

Bitcoin is currently trading largely unchanged on the day near $9,370, according to CoinDesk's Bitcoin Price Index.

The cryptocurrency has been largely restricted to a narrow range of $9,000 to $10,000 since mid May. The direction in which the range is breached will likely set the tone for the next big move.