The Weekly Hash – February 10 – 14

This digest is prepared for informative purposes only and does not represent an investment recommendation or investment advice. Please see our full disclaimer at the bottom for more information.

  See below all the important happenings this week in the world of crypto, presented by the experts at Kraken:

  1. Ukraine Ministry of Digital Transformation: Crypto Mining Doesn’t Require Governmental Oversight
  2. BitGo: BitGo Expands Global Presence With Regulated Custody in Switzerland and Germany
  3. Reuters: Japan Ruling Party Panel Aims to Put Digital Yen on Government’s Mid-Year Policy
  4. IBM Blockchain VP: Every Dollar Spent on Blockchain Yields $15 on Cloud
  5. DMCC: DMCC Signs Strategic Membership Agreement with Al Khaleej Sugar and Universa to boost Sugar Trade Through Dubai
  6. Reuters: JPMorgan in Talks to Merge Blockchain Unit Quorum with Startup ConsenSys
  7. Ledger Insights: French Regulator AMF Seeks EU Legislation to Encourage Digital Assets
  8. Finance Magnates: Belgium’s FSMA Calls for Crypto Regulations
  9. The Block: Fed Chair Powell Says Facebook’s Libra ‘Really Lit a Fire’ on the Question of a Digital Dollar
  10. Google: Working With Hedera Hashgraph to Support the Next Generation of DLT
  11. Decrypt: North Korea is Mining Way More Monero Than Last Year
  12. Kraken: Kraken Announces New OTC Electronic Dashboard to Let Traders Get Automated Price Quotes in Seconds
  13. Poloniex: Poloniex Crypto Exchange Forced to Roll Back Trades After Update Error
  14. CoinDesk: US Military Contractor BAE Systems Wants to Hire ‘Cryptocurrency Exploiters’
  15. IOTA & Eclipse Foundation: IOTA and the Eclipse Foundation Launch Working Group to Develop Commercial Applications on Distributed Ledger Technology
  16. XRPArcade: The National Bank of Egypt joins RippleNet
  17. CoinDesk: Trump’s 2021 Budget Proposal Seeks to Optimize Crypto Policing
  18. Bloomberg: Mnuchin Says U.S. Planning Cryptocurrency Rules on Transparency
  19. Bloomberg Tax: IRS Rejects Request to Clarify Crypto Foreign Reporting Rules
  20. Decrypt: China Has Filed 84 Patents for a Digital Yuan
  21. CNBC: Wells Fargo Backs a Start-Up That Helps Banks Manage Cryptocurrency Risks
  22. The Block: Lionel Messi-Led FC Barcelona Set to Have its Own Token for ‘Over 300M’ Fans Worldwide
  23. Kraken: Better Trading Performance with Kraken’s WebSockets Private API
  24. IOTA: Investigating Stolen Funds on Mainnet
  25. CoinDesk: Novogratz’s Crypto Investment Firm Galaxy Digital Shrinks Workforce 15%
  26. U.S. DOJ: Ohio Resident Charged with Operating Darknet-Based Bitcoin “Mixer,” Which Laundered Over $300M
  27. CoinDesk: Ether Futures Volume Highest Since June 2019
   
  1. Ukraine Ministry of Digital Transformation: Crypto Mining Doesn’t Require Governmental Oversight
    • Ukraine’s Ministry of Digital Transformation stated that mining doesn’t require regulation by state authorities because it is regulated by the protocol itself and network participants
    • The agency will contribute to the development and implementation of decentralized tech, establish sandboxes for their evaluation and verification, and assess potential risks to the market
    • The ministry also pledged to promote interaction between the financial market and virtual assets and their effective development, int’l best practices on taxation of virtual assets, as well as establish effective mechanisms to prevent abuse and offense from business and law enforcement
    • Coverage by CoinTelegraph
  2. BitGo: BitGo Expands Global Presence With Regulated Custody in Switzerland and Germany
    • Crypto custodian BitGo, which allegedly has +$2B in clients’ assets, is expanding to Europe with new custodial entities in Switzerland and Germany
    • The Swiss entity, BitGo GmbH, is a member of the FINMA-supervised Financial Services Standards Association (VQF)
    • The German entity, BitGo Deutschland GmbH, provides custody services in Germany and will apply for regulatory approval when the application window opens in Nov. 2020
    • BitGo CEO Mike Belshe said, “We saw a lot of demand in Europe last year and it was clear that clients there needed to be able to work with European based firms that were regulated within specific jurisdictions. Switzerland and Germany have both become important European centers for digital assets as well as for forward-thinking regulatory frameworks. Regulatory compliance is a prerequisite for our clients, and we have been impressed with the understanding and support of Swiss and German regulators.”
  3. Reuters: Japan Ruling Party Panel Aims to Put Digital Yen on Government’s Mid-Year Policy
    • Kozo Yamamoto, a senior lawmaker from Japan’s ruling Liberal Democratic Party, said the country should create its own yen digital currency within 2-3yrs and include the plan in the government’s mid-year key policy guidelines, “The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years.”
    • Yamamoto said he will work with Akira Amari, former economy minister who recently proposed issuing a digital yen to counter China’s digital currency initiative, to push the gov’t to adopt their proposals
    • The lawmaker added that the spread of digital currencies may undermine the dollar’s supremacy, but it could help stabilize emerging markets such as Cambodia which heavily relies on the dollar, “If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.”
  4. IBM Blockchain VP: Every Dollar Spent on Blockchain Yields $15 on Cloud
    • IBM’s VP of blockchain, Jerry Cuomo, said enterprise blockchain is a catalyst for further spending at Big Blue, “It is driving additional spend. When you look at the direct attribution of the actual dollars spent on blockchain, we are seeing that for every dollar spent, $15 is spent on other cloud services.”
    • IBM has been bringing enterprise blockchain closer into the company’s cloud offering, which some commentators have described as a reprioritization or even consolidation following the dissipating hype surrounding DLT, “Blockchain is a new class of enterprise application. It plays into trends like app modernization and new cloud-native applications, data and analytics. It crosses all those things.”
    • Cuomo added that the blockchain part of a blockchain application only accounts for ~20% of the overall solution, leaving 80% in other tech for bringing the network to life
    • IBM’s 4Q2019 results show that cloud and cognitive software revenue were up +9%, while Red Hat (acquired by IBM for $34B in 2019) posted +24% revenue growth
    • IBM CEO Ginny Rometty is stepping down from her role and will be succeeded by Arvind Krishna, the head of the cloud and cognitive business and architect of the Red Hat deal; Krishna takes over officially on April 6
  5. DMCC: DMCC Signs Strategic Membership Agreement with Al Khaleej Sugar and Universa to boost Sugar Trade Through Dubai
    • DMCC, the world’s flagship free zone and Dubai’s commodities trade and enterprise authority, partnered with the world’s largest standalone sugar refinery, Al Khaleej Sugar, and blockchain startup Universa to support the development of a blockchain-based sugar trading platform in Dubai to enable traders to purchase, store, and trade the sugar of Al Khaleej Sugar through smart contracts on a blockchain provided by Universa, “The DMCC Tradeflow platform will act as the central registry of ownership of the sugar through enforceable warrants to prove existence of reserves, and enable secure and transparent international trade”
    • DMCC COO Feryal Ahmadi said, “This partnership will come as welcome news to investors, businesses and the international sugar trade as a whole. We are confident that when complete, this new platform will help drive significant international sugar trade volumes through the emirate of Dubai.”
    • Al Khaleej Sugar’s Managing Director, Jamal Al Ghurair, said, “As the largest standalone sugar refinery in the world, with capacity to hold more than 1.6 million tons of sugar, we are delighted to be able to set up a sugar platform on such a robust and established platform as DMCC Tradeflow. And as the world leading commodity trading hub, we look forward to working with DMCC to further boost the sugar trade in Dubai.”
  6. Reuters: JPMorgan in Talks to Merge Blockchain Unit Quorum with Startup ConsenSys
    • According to sources familiar with the matter, JPMorgan is in talks to merge its marquee blockchain unit Quorum with Ethereum development studio ConsenSys
    • The deal is likely to be formally announced within the next six months, but financial terms are still unclear
    • Roughly 25 people work on the Quorum team globally and it’s unclear whether they will join ConsenSys after the merger
    • A merger wouldn’t impact the firm’s Interbank Information Network, a payments network that involves +300 banks, nor other JPM projects running on Quorum
    • JPM has allegedly been considering spinning off Quorum for ~2yrs and has evaluated options including establishing an open-source foundation, creating a new startup, or merging it with another company; a merger with ConsenSys was chosen as the best path forward as both organizations work with Ethereum and have been involved in joint initiatives in the past
    • A merger with Quorum would align with ConsenSys’ recent shift toward growing its software division
    • The sources said the plan after the merger is to maintain the Quorum brand and keep the tech open source
  7. Ledger Insights: French Regulator AMF Seeks EU Legislation to Encourage Digital Assets
    • The French financial regulator AMF has asked the EU to remove legal impediments to tokenization and to enable stablecoins for interbank settlements because blockchain can “significantly increase the efficiency of the financial markets”
    • The AMF asked whether it’s necessary to require banks to be used for settlement and questions the role of aftermarket intermediaries such as custodians and brokers
    • While most institutional financial blockchains are permissioned, the paper suggests a regulatory framework should remain tech neutral and not exclude public blockchains
    • The paper emphasizes, “Tokenization of finance is a major trend, which should not be fought but rather supported by a framework that allows it to develop in a secure environment.”
    • The regulator highlights three challenges: 1) Legislation usually identifies a manager that runs a settlement system, which is difficult on a decentralized platform, 2) An intermediary must be used to access the settlement system, such as an institution or investment firm, while there is direct access to settlement with a blockchain and 3) The medium of exchange for settlement which is cash, central bank or commercial bank funds, needs to enable tokenized cash
    • The AMF will publish a more comprehensive document soon
  8. Finance Magnates: Belgium’s FSMA Calls for Crypto Regulations
    • In a Senate hearing, Belgium’s FSMA chairman Jean-Paul Servais urged lawmakers to establish a “legal framework for the sale, purchase, and use of virtual currencies and all related financial products”
    • Servais pointed out the Belgian authorities’ inefficiency in addressing the burgeoning industry, “The sheer size of the market is enough to raise alarms.”
    • The chairman emphasized the market being flooded with +1,000 digital currencies with a combined value of +$320B, adding that if this isn’t regulated, fraud using these currencies can impact the investors, “Due to their non-traceability, the bitcoins are and other virtual currencies very popular in the context of cyber crime: they are ubiquitous on darknet, since they can become cyber crime committed without leaving traces.”
  9. The Block: Fed Chair Powell Says Facebook’s Libra ‘Really Lit a Fire’ on the Question of a Digital Dollar
    • At a hearing today before the House of Reps FSC, chairman of the Fed Jerome Powell was questioned about the central bank’s digital currency efforts, as well as the competitive pressures the Fed would face from China’s central bank and private companies like Facebook
    • In response to Rep. Bill Foster’s question about the progress on the topic of central bank digital currencies, Powell said, “We’re working hard on it, we have a lot of projects going on, lot of efforts going on that right now.”
    • Powell acknowledged that Facebook’s Libra “really lit a fire” under the bank’s work, “It was a bit of a wakeup call that this is coming fast, and could come in a way that is quite, you know, widespread and systemically important fairly quickly if you use one of these big tech networks like Libra did.”
    • The chairman added that the Fed hasn’t officially embarked on the creation or launch of a digital dollar, “We have not decided to do this. It is not — there are many questions that need to be answered around a digital currency for the United States, including issues of, cyber issues, privacy issues, many many operational alternatives present themselves. And so we’re going to be working through all of that and doing that work thoroughly and responsibly.”
    • Coverage by Decrypt
  10. Google: Working With Hedera Hashgraph to Support the Next Generation of DLT
    • Google is now a member of the governing body for DLT startup Hedera Hashgraph, “As part of our council membership, Google Cloud will operate a Hedera network node, and make the ledger data available for analytics alongside GCP’s other public DLT datasets, bolstering GCP’s position as the cloud provider of choice for DLT networks and decentralized applications.”
    • Google Cloud developer advocate Allen Day said, “We’re inspired by what Hedera has accomplished to date, and look forward to providing the infrastructure and technologies to support what’s possible with distributed ledger technology.”
    • Hedera’s SVP of products Atul Mahamuni commented, “We initially turned to Google Cloud for its ease of use, networking advantages and overall platform performance. The Google Cloud Platform was the perfect foundation to help us achieve our goals to bring enterprise-ready DLT adoption at scale.” 
    • Other members of the Governing Council include IBM, Deutsche Telekom, Boeing, Nomura and Tata Communications
  11. Decrypt: North Korea is Mining Way More Monero Than Last Year
    • According to Recorded Future, North Korea was mining equal amounts of BTC and XMR as of May 2019, but has since rapidly accelerated its XMR mining efforts, “We have observed an at least tenfold increase in Monero mining activity from North Korean IP ranges since May 2019. We believe that Monero’s anonymity and lower processing power requirements likely make Monero more attractive than Bitcoin to North Korean users.”
    • The report added that North Korea has used XMR since at least Aug. 2017 when BTC proceeds from a cyberattack were exchanged for XMR, “We assess that cryptocurrencies are a valuable tool for North Korea as an independent, loosely regulated source of revenue generation, but also as a means for moving and using illicitly obtained funds.”
  12. Kraken: Kraken Announces New OTC Electronic Dashboard to Let Traders Get Automated Price Quotes in Seconds
    • Kraken will launch an automated Request For Quote (RFQ) dashboard on Feb. 13 that is designed to boost ease-of-use for its growing OTC user base
    • OTC customers will be able to request quotes for buy/sell orders for all fiat and crypto trading pairs, accept/decline quotes, and view their tx history all in one simple dashboard
    • Each active OTC client will automatically receive login credentials for the OTC dashboard, which can be used immediately to start requesting quotes
  13. Poloniex: Poloniex Crypto Exchange Rolls Back Trades After Update Error
    • Crypto exchange Poloniex introduced a bug on its platform during a system update that “briefly caused trades to be executed erroneously” and has since rolled back all trades from 17:53 – 18:05 UTC (12mins) on Feb. 10 to address inaccurate accounting
    • The exchange added that its automated audits spotted the error and put the site into maintenance mode, “We have identified the bug and deployed a fix.”
  14. CoinDesk: US Military Contractor BAE Systems Wants to Hire ‘Cryptocurrency Exploiters’
    • BAE Systems – one of the largest contractors for the U.S. Dept. of Defense, supplying it with military hardware, advanced electronics and tech solutions, is looking to hire “cryptocurrency exploiters” who can “demonstrate proficiency in cryptocurrency” and can move to Washington to “support a client’s operational requirements”
    • Candidates must either be a certified bitcoin professional or expert (CBP/X) or have a “substantive understanding” of crypto, including expertise in elliptic curve algorithms, zero-knowledge proofs, and “hands-on experience analyzing Smart Contract vulnerabilities”
    • Candidates must undergo security clearance from a Polygraph lie detector test; new hires will be expected to interact with personnel at “all levels” within the client organization and will require experience in “supporting operations or familiarity with the Intelligence Community”
  15. IOTA & Eclipse Foundation: IOTA and the Eclipse Foundation Launch Working Group to Develop Commercial Applications on DLT
    • The IOTA Foundation and the Eclipse Foundation, an open-source software foundation for commercial innovation and collaboration, launched the Tangle EE Working Group (WG) to work on projects that can help develop viable commercial use-cases for IOTA’s “Tangle” DLT
    • 15 companies joined the WG as founding members including Dell, German electronics provider STMicroelectronics and the University of Magdeburg
    • Eclipse Foundation executive director Mike Milinkovich said, “The Eclipse Foundation will provide a vendor-neutral governance framework for open collaboration, with IOTA’s scalable, feeless, and permissionless DLT as a base. By doing so, we will accelerate the development of new applications built with this transformative technology.”
    • IOTA Foundation co-founder Dominik Schiener said multiple companies wanted to see code tested and reviewed before they would go about integrating it
    • Decentralized identities and decentralized marketplaces will be the WG’s initial projects
    • Dell’s Steve Todd believes data marketplaces will be on the rise by the end of the decade, “By 2030, trillions of dollars of data will be exchanged and one of the reasons for joining Tangle is to help our customers move towards that reality.”
  16. XRPArcade: The National Bank of Egypt joins RippleNet
    • The National Bank of Egypt (NBE), the country’s largest bank by total assets, joined Ripple’s blockchain-based payments network RippleNet to facilitate faster and cheaper cross-border payments
    • Egypt is one of the top five remittance recipient countries, according to the World Bank; migrants sent $29B worth of funds in 2018 alone to the country
    • It’s unclear whether NBE will use RippleNet’s On-Demand Liquidity solution, which utilizes XRP for processing remittances
    • Ripple recently said it has crossed 300 customers and has seen +10x YoY growth in txs on RippleNet
  17. CoinDesk: Trump’s 2021 Budget Proposal Seeks to Optimize Crypto Policing
    • U.S. President Donald Trump’s $4.8T FY2021 budget proposal seeks to expand the Treasury Department’s crypto oversight by returning the U.S. Secret Service from the Dept. of Homeland Security to the Treasury Dept., its original jurisdiction
    • The reshuffling would “create new efficiencies” in the Secret Service’s investigation of crypto-related criminal acts and the financial marketplace, and give Treasury more fire power to “disrupt terrorist financing, hold rogue states and human rights abusers accountable, and detect and deter financial crimes.”
    • The document continues, “Technological advancements in recent decades, such as cryptocurrencies and the increasing interconnectedness of the international financial marketplace, have resulted in more complex criminal organizations and revealed stronger links between financial and electronic crimes and the financing of terrorists and rogue state actors.”
    • The IRS wants $40.54M to “Expand Cyber and Virtual Currency Compliance Efforts” by hiring 108 special agents to conduct more cyber- and virtual currency-related criminal investigations, “As a result, about 450 additional criminal investigations are projected to be completed from FY 2023 – FY 2025 once the new hires reach full potential. Additionally, CI estimates that as a result of the additional special agents, CI will identify $197.3 million annually in tax revenues either not reported to the IRS or fraudulently refunded by the IRS.”
    • The Office of Foreign Assets Control (OFAC) wants four full-time employees and an additional $812,000 to hire “virtual currency investigators […] Presently, OFAC has a single investigator focused on the illicit use of virtual currency, and this investigator is often pulled away from purely investigative duties in order to share virtual currency expertise across [Terrorism and Financial Intelligence], since this area is of high concern but also an uncommon area of technical competency. Meanwhile, investigators across most sanctions programs are reporting increasing exposure to the use of virtual currencies by the targets of their investigations. Additional virtual currency investigators will allow investigations involving cryptocurrency across all of OFAC’s sanctions programs to be able to exploit this investigative arena.”
    • According to budget documents, U.S. Financial Intelligence Unit FinCEN is seeking $819,000 and three full-time employees to support “Building Out FinCEN’s Virtual Currency and Cyber Threat Mitigation Program […] These funds will allow for international capacity building to ensure that accessibility of critical information exists for investigations that include an international component. The utilization of software tools will allow FinCEN to double the number of virtual currencies analyses, corroborate findings, and increase big data analytics capability, allowing for automated analytics and visualization of financial and cyber data. The program enhancement strengthens direct support for law enforcement cases to 130 cases per year, the development of 37 strategic intelligence products, and the provision of 50 training sessions per year.”
    • According to the CFTC’s budget documentation, the Division of Risk & Clearing and the Division of Enforcement are both seeking more money to support their FY2021 crypto-related efforts, “This budget request supports the Commission’s efforts to examine the different approaches to protecting digital assets used by DCOs. In addition, there is a need to supply technical training to our systems risk analysts so they are better equipped with the knowledge needed to identify these novel and unique risks.”
    • Presidential budget proposals have minimal legal bearing on the budget process; rather, it’s a political document outlining Trump’s priorities
    • Coverage by The Block
  18. Bloomberg: Mnuchin Says U.S. Planning Cryptocurrency Rules on Transparency
    • U.S. Treasury Secretary Steven Mnuchin told the Senate Finance Committee that the Trump administration will soon announce “significant new requirements” for crypto, “Specifically on cryptocurrencies, we are spending a lot of time on this, on both an interagency basis and with the regulators […] We want to make sure that technology moves forward, but on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.“
    • Mnuchin noted that the effort is being undertaken “so that law enforcement can see where the money is going and that this isn’t used for money laundering.”
    • FinCEN, a bureau of the Treasury Dept. that collects and analyzes info about financial txs for domestic and int’l AML/CFT purposes, is preparing the announcement
    • Commenting on stablecoins, Mnuchin remarked, “We do think technology can be used to reduce payment processing quite considerably, particularly for small dollar payments cross-border.”  
  19. Bloomberg Tax: IRS Rejects Request to Clarify Crypto Foreign Reporting Rules
    • The Government Accountability Office (GAO), the government’s top auditing institution, published a report evaluating the IRS’ existing approach and public guidance surrounding crypto
    • The IRS rejected recommendations to clarify how foreign asset reporting laws apply to virtual currency and whether some of the IRS’ 2019 guidance isn’t binding or authoritative, saying such action would be premature, “Part of the 2019 guidance is not authoritative because it was not published in the Internal Revenue Bulletin (IRB). IRS has stated that only guidance published in the IRB is IRS’s authoritative interpretation of the law. IRS did not make clear to taxpayers that this part of the guidance is not authoritative and is subject to change.”
    • The GAO noted that clarifying how foreign reporting requirements apply to virtual currencies “could improve the data available for tax enforcement and make it less likely that taxpayers will file reports that are not legally required.”
    • The IRS agreed to clarify third-party reporting requirements, but disagreed on recommendations to add a note saying its 2019 FAQs aren’t binding guidance as well as to clarify the foreign asset reporting requirements
    • U.S. Financial Intelligence Unit FinCEN agreed to the GAO’s recommendation to share more info about applying foreign account reporting requirements under the Bank Secrecy Act
    • Coverage by CoinDesk
  20. Decrypt: China Has Filed 84 Patents for a Digital Yuan
    •  According to the Chamber of Digital Commerce (PDF), the Chinese gov’t has filed 84 patents since 2017 for its upcoming central bank digital currency (CBDC), the digital yuan
    • The patents suggest that the gov’t can alter the supply after certain “events,” that it’s integrated into regularbank accounts, and that it could be connected to digital wallets or digital currency chip cards
    • Marc Kaufman, a Rimon Law patent attorney who worked with the chamber to find the patents, said, “Virtually all of these patent applications relate to integrating a system of digital currency into the existing banking infrastructure.” 
    • Perianne Boring, president of the chamber, said there’s no mechanism to prevent the gov’t from tracking users’ txs
  21. CNBC: Wells Fargo Backs a Start-Up That Helps Banks Manage Cryptocurrency Risks
    •  Wells Fargo invested $5M into Elliptic, a U.K. startup which helps banks manage crypto-associated risks, as an extension of the firm’s $23M Series B funding round in September; the investment brings the company’s total funds raised to +$40M
    • Elliptic co-founder and CEO James Smith said the firm has been increasingly working with financial institutions to onboard them onto its Discovery platform, which helps banks identify whether clients’ funds are passing through crypto platforms without the appropriate compliance checks, “If they see payments going between their customers and one of a long list of crypto entities, they can understand more about who that entity is and whether it’s something they should be concerned about.”  
    • The new capital will be invested in Elliptic’s Discovery product to help it expand geographically, with a focus on Asia
  22. The Block: Lionel Messi-Led FC Barcelona Set to Have its Own Token for ‘Over 300M’ Fans Worldwide
    • Spain’s soccer club FC Barcelona partnered with blockchain startup Chiliz to launch its own token that will give voting power to its “over 300 million” global fans by 2Q this year
    • FC Barcelona board member Josep Pont said, “This agreement will give us the chance to set up innovative marketing and partnership activations with a clear focus on the digital realm to take the Club closer to our fans around the world.”
    • The BAR token will be initially priced at $2.15, with a total supply of 40M Chiliz founder and CEO Alexandre Dreyfus added that token holders can vote for certain club decisions, which will be announced when the token launches, “It is all about fan engagement and how to offer a voice, an influence to 99.9% of fans that are NOT in the stadium/arena.”
    • Coverage by Bloomberg
  23. Kraken: Better Trading Performance with Kraken’s WebSockets Private API
    •  On Feb. 18, Kraken will upgrade its WebSockets Private API to allow clients to trade entirely within its WebSockets environment, “Kraken’s WebSockets API provides a faster, more efficient interface for clients who build software applications for trading and accessing market data. Clients use the WebSockets API to establish a durable, low-latency connection with Kraken’s servers. The servers then push data incrementally to clients when updates are available. The Websockets Private API is used for trading because it specifically handles a client’s private data and actions.”
    • Kraken will include two new messages on its Private API to do the following: 1) addOrder – provides a faster way to add orders; and 2) cancelOrder – provides a faster way to cancel an order or list of orders
    • Kraken Websockets API 0.3.0 documentation 
  24. IOTA: Investigating Stolen Funds on Mainnet
    • IOTA halted its entire mainnet due to an ongoing hack in which an attacker is exploiting a dependency of Trinity Wallet, “As a precaution we ask you to keep your Trinity wallet closed for now.”
    • The IOTA core protocol wasn’t breached
    • The mainnet halt interrupted the attacker’s attempts to liquidate funds on exchanges
    • The conclusions so far: most evidence points towards seed theft, although the cause is still unknown and under investigation; there are ~10 victims, all who have recently used Trinity; and IOTA will share a full transparent report of all events once this has concluded, but will limit info sharing for now to not provide the attackers with additional insights
    • IOTA Foundation co-founder Dominik Schiener said $300,000 – $1.2M worth of IOTA was stolen
    • The team noted, “With the safety of the users’ funds being the highest priority in a Major Incident like this, we stand by our decision to make use of the coordinator’s security features and halt all value transfers during the ongoing investigation, in order to protect the users […] This not only stops the perpetrator from exploiting more captured seeds but ensures the time needed to fully understand the intrinsics of the attack and enact a mitigation strategy.”
    • Coverage by The Block
  25. CoinDesk: Novogratz’s Crypto Investment Firm Galaxy Digital Shrinks Workforce 15%
    • Crypto investment bank Galaxy Digital fired 15% of its global workforce in what it claims to be part of “standard year-end activity”
    • A former employee said Galaxy, which has struggled to turn a profit since launch, hired people expecting that the digital asset markets would develop more quickly than they actually did, and later realized it had overbuilt
    • 13 people were laid off as part of the cuts, leaving a staff of ~80
  26. U.S. DOJ: Ohio Resident Charged with Operating Darknet-Based Bitcoin “Mixer,” Which Laundered Over $300M
    •  Ohio resident Larry Harmon was arrested for allegedly operating crypto mixing service Helix from 2014-2017, “Harmon advertised Helix to customers on the Darknet as a way to conceal transactions from law enforcement.“
    • Harmon was charged for money laundering conspiracy, operating an unlicensed money transmitting business and conducting money transmission without a D.C. license
    • The indictment alleges that Helix moved +350,000 BTC (+$300M at the time of the txs) on behalf of customers, with the largest volume coming from Darknet markets
    • Assistant AG Brian Benczkowski of the Justice Department’s Criminal Division said, “Helix allegedly laundered hundreds of millions of dollars of illicit narcotics proceeds and other criminal profits for Darknet users around the globe. This indictment underscores that seeking to obscure virtual currency transactions in this way is a crime, and that the Department can and will ensure that such crime doesn’t pay.”
    • Don Fort, Chief of IRS Criminal Investigation, added, “There are bad actors and then there are criminals who facilitate hundreds of other crimes. The sole purpose of Harmon’s operation was to conceal criminal transactions from law enforcement on the Darknet, and because of our growing expertise in this area, he could not make good on that promise. Working in tandem with other sites, he sought to be the ‘go-to’ money launderer on the Darknet, but our investigators once again played the role of criminal disrupters, unraveling the interlinked web from one tentacle to another. We thank the Belizean authorities and other law enforcement agencies for their assistance on this case.”
    • The investigation was led by the IRS-CI and the FBI’s Washington Field Office with assistance from the FinCEN
  27. CoinDesk: Ether Futures Volume Highest Since June 2019
    • According to Skew Markets, the aggregate daily volume in ETH futures sharply rose +500% over the past three weeks from $750M to +$4.5B on Feb. 12, hitting a 7-month high since June 27, 2019
    • During that time, ETH price rallied by ~70% from $160 to $280
    • Skew co-founder Emmanuel Goh said, “It seems the market has been gradually warming up and willing to revisit altcoins this year after a long sequence focusing on bitcoin and upcoming halving.” 
    • In response to BTC’s +90% gains in 2019 compared to ETH’s -1% loss, Goh said the tide has now turned with ETH price doubling YTD while BTC lags behind with +41% gains
    • Aggregate ETH Futures OI hit a record high of $750M on Feb. 12, an increase of +130% from the Jan. 1 figure of $320M

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