The company stressed that its operations do not involve illegal activities. The miners of the OKEx pool withdrew due to the uncertainty.

The bitcoin and cryptocurrency exchange OKEx announced that it will reactivate withdrawals from its platform today, November 27, or even earlier, according to a statement on its website. The exchange house indicated that there will be no restrictions on operations and that it will apply a reward plan to its users for loyalty.

OKEx suspended withdrawals from its system on October 16 after one of its executives, of unknown identity, suffered detain by law enforcement authorities to launch an investigation into the operations of the company. The freeze occurred because the manager is the owner of one of the private keys of the company.

“Throughout this investigation, OKEx confirmed not being involved in any suspicious or illegal activity, and the holder of the private key just now returned to his normal business functions,” OKEx reported without identifying the executive, which was suspected detained about a month ago.

Before what will be the reactivation of its service, OKEx said that it will conduct strict security controls to guarantee the operation of its hot wallet system. OKEx admitted that it has not included in its contingency plan scenarios, such as one of the private key holders “becoming unreachable due to unforeseen circumstances.”

OKEx Mining Pool Collapse

Due to the situation with the OKEx executive, the processing power or hashrate of its bitcoin mining pool suffered a fall down almost in its entirely, going from 9,000 PH / s to only 20 PH / s ina very short amount of time. The collapse of the group of miners relates to the arrest of the manager who has been identified as Mingxing “Star” Xu, founder of the OKEx exchange.

According to figures from btc.com, the pool remained operational, mining between 150 and 320 blocks per month until October 2020. However, statistics now show that during, November the group mined only 1 block, which represents a fall of almost 100%.

In the last month of operations, the pool only extracted 12 blocks, and the last one has a registration that dates on November 2. That is, the group has 17 continuous days without mining any blocks, according to The Block. An update on OKEx’s Twitter account, published on Tuesday, indicates that withdrawals remain under suspension.

Reports on the release of the executive

From China, local media and reporters covering the bitcoiner source published Thursday that “Star” Xu  “gained some freedom”. Reporter @WuBlockchain reported on the release but did not clarify if it is a conditional release or if it is the end of the investigation.

“Star’ Xu, director of OKEx, one of the largest cryptocurrency exchanges in China, gained some freedom. This may bring a bit of optimism in the research storm hitting the crypto industry in China, ”the communicator wrote on Twitter.

The information about the executive’s release sent the price of OKB, an ERC20 token on Ethereum that receives a back up by the exchange, skyrocketing. According to metrics from the Live Coin Watch service, the crypto asset shows a 15.2% rise in the last 24 hours trading at $ 5.69 per unit.

By: Jenson Nuñez.

The vulnerability surged by mistakenly transferring the Liquid domain to a malicious actor. Liquid ensures that user funds are safe and that they took security measures.

Emails, real names, and even the passwords of Liquid exchange users are at risk of compromise due to a security breach. A press release from Mike Kayamori, CEO of the exchange, suggested it and also confirmed that the company suffered a security breach last week that affected the entire service.

The event occurred on November 13 of this year, but the company claims that it decided to reveal the details of the attack this week to confirm how much information was exposed. Although they believe it likely that the malicious actor has access to their users’ emails, as well as their names and addresses, they have not yet been able to ascertain whether identity or address documents suffered the exposure.

If this piece of information is true, Liquid management fears that its users could become an easy target for email phishing attacks, a form of fraud that seeks to obtain sensitive financial information from potential victims using deception. Likewise, the statement warns of the risks of identity theft to which Liquid users would also expose this security error.

Despite dire consequences to Liquid’s customer privacy, the exchange confirmed that all user funds are safe. “Client funds are accounted for and remain safe and secure,” the press release noted. The cold purses of the exchange house did not suffer any compromise either.

A domain of the Liquid Exchange Hijacked

The breach occurred after one of the Internet domain providers – web addresses – that Liquid uses mistakenly transferred one of the exchange’s domains to a malicious third party. This person took advantage of the mistake to change Liquid’s DNS records, taking control of several internal email accounts, and compromising the entire infrastructure of the exchange.

Due to the extent of the attack, Liquid executives believe that the malicious actor had access to private company documents, including sensitive user data. The attack was quickly detected and intercepted, according to the directive, and they took immediate measures to strengthen the platform’s security system.

In addition to all the above, the CEO of the company, Kayamori, stated that they informed the regulatory authorities about the event. The comment seems to suggest that the exchange will seek legal solutions to this event, a method that exchange houses have begun to use to deal with robberies at the hands of hackers. When the KuCoin platform suffered a hack, who has left their case – which amounts to $ 200 million in losses – to the law.

On October 16, the OKEx exchange reported about the indefinite suspension of withdrawals indefinitely amid a police investigation. The sudden disappearance of the executive and the suspension of withdrawals generated an atmosphere of uncertainty among the miners who decided to transfer the mining power to other pools.

“Although payments to its mining clients are not directly affected by OKEx’s suspension of withdrawals from business accounts, even the possibility of disbursement complications is reason enough for miners to switch pools,” he told Coindesk, Ethan Vera, co-founder of mining company Luxor Technology.

By: Jenson Nuñez.

The service includes a cold storage system that does not connect to the Internet. Prosegur integrates custody into its cybersecurity and cash management services.

The Spanish security company, Prosegur, announced the launch of a custody and management service for bitcoin and other cryptocurrencies, which it has called Prosegur Crypto. It is a service that focuses on institutional clients that manage or invest in digital assets.

Prosegur, which has been working since 1976 in various security areas, including physical security, surveillance, alarms, cash management, and cybersecurity platforms, will offer its clients the chance to store bitcoin and other cryptocurrencies. Also, Prosegur will offer to manage  them through a mobile application, says the release.

«Our platform satisfies a real and urgent need that exists today in the market. With this unique proposal, we offer a comprehensive and reliable custody solution with the level of protection and demand demanded by companies and institutions”, said the CEO of Prosegur Crypto, Raimundo Castilla.

The Prosegur Crypto storage and management system allows executing the digital asset management process, including sending transactions to the blockchain, without direct connection to the Internet, according to the statement from the security company.

An increase in cyberattacks is encouraging bitcoin custody services

In just one year, according to Prosegur, cyberattacks on blockchain-based assets have quadrupled, especially in the DeFi sector. “If losses were estimated at $ 1 billion in 2018, in 2019 they reached $ 4.6 billion, making the security of digital assets even more critical”, says the security company.

Castilla notes that organizations that are operating in the cryptocurrency industry are growing at an intense rate. “However, few institutional custodians are capable of providing an adequate level of protection. Prosegur Crypto aims to lead this market as the safest and most reliable partner for institutional investors”, says the executive.

The manager points that “Prosegur is the first global security company to enter the crypto-asset market and that it offers a comprehensive model and service, including one of the broadest insurance policies in the digital market.”

There is a wide variety of cryptocurrency storage and custody systems, mainly focused on institutional investors. Among those with the most market share are BitGo, Coinbase Custody, Anchorage, Kingdom Trust, Gemini Custody, and OSL.

Even though, there is an increase in users who accumulate bitcoin in their wallets, up to 50% of the bitcoins could be stored in custody platforms. For the renowned Bitcoin maximalist Jameson Lopp, this situation “could cause systemic risks.”

By: Jenson Nuñez.

The platform would also be used to store cryptocurrencies, pay taxes, and request loans. If the cryptocurrencies are withdrawn before 90 days, the user will be fined.

A bill presented by provincial deputy Roque Gervasoni, from Misiones, Argentina, seeks to create a bitcoin and cryptocurrency exchange in that province. This market will be “decentralized with majority state participation in the form of a public limited company.”

If this law gets its approval, the platform will also serve as a guard to the cryptocurrencies of its users, with which taxes, goods, and services can be paid. Besides, “registered persons will be able to access crypto-asset loan services that will pay for missionary entrepreneurship,” adds the text of the project.

The deputy, belonging to the Frente Renovador de la Concordia Social (FRCS), clarified in the document that any person living in Argentina may operate on this exchange. In the case of “foreign citizens” who want to participate, they must request a permit and accept that the deposited cryptocurrencies remain blocked on the platform for 90 days.

People with domicile in Argentina, on the other hand, will be able to withdraw their cryptocurrencies before 90 days but will suffer penalties for doing so. “Within the first 30 days the fine of 20% of the deposited capital corresponds to him; within the first 60 days, 15% of the deposited capital; and within 90 days, and 10% of the deposited capital”, says the text.

The project does not clarify what would be the competitive advantage of this platform over existing exchanges. These do not impose any temporary restrictions or penalties to withdraw the cryptocurrencies. Also, some of them grant loans and function as payment gateways for services.

Regulatory guidelines for the use of bitcoin in Argentina

The text presented by Gervasoni, consisting of 11 articles, indicates the rationale behind this proposal. “The invention of cryptocurrencies as a scientific and technological milestone represents one of the most salient events in the digital and traditional economy of recent times”, it is explained there. Because of that, according to the deputy, “legal sciences cannot remain outside of them, and it is their duties to analyze and provide their regulatory guidelines.”

An interesting point of this project, which could generate legislative antecedents, is the reference to “the denationalization of money”.

“Theorists affirm that, in a free-market economy, where the right to private property prevails, the right that each individual can issue and use the currency they want should also prevail, based on their autonomy, free choice, and property right”.

The text of the potential law does not deny this right, although it affirms that its exercise “is not a little conflictive”. Even so, it recognizes that “there is no deny that the use of alternative currencies, particularly digital ones, built its place in the market, both in developed and emerging economies.”

This is the 22nd bill that Gervasoni presented in the Chamber of Deputies of Misiones during 2020. His initiatives during the year addressed a variety of issues. Among them are gender equality education; the regulation of the delivery service; the guarantee of access to housing for people who are part of the “trans community”; and the proposal to “regulate female digital dignity.”

By: Jenson Nuñez.

While everyone awaits the new KYC and AML regulations, some are talking about keeping self-hosted wallets free from government controls.

The Blockchain Association published a new report showing policy options for self-hosted wallets to regulators. Coin Center also published an expert view of Jai Ramaswamy speaking in defense of such wallets.

The Blockchain Association is a trade organization for the crypto industry, while the Coin Center is a non-profit organization that focuses on advocating for decentralization before lawmakers. Both work in Washington D.C.

Ramaswamy is currently working in the compliance division of Celo’s parent company, C Labs, and was previously the head of the anti-money laundering (AML) division of the United States Department of Justice.

He played a protagonist role on the Banking Secrecy Act in cryptocurrencies and increasing regulatory efforts in decentralized finance and peer-to-peer (P2P) transactions. These areas lack the intercessors that regulators usually use to obtain financial data.

Ramaswamy and the Blockchain Association agree that AML enforcement efforts fit more to crypto-to-fiat ramps. Using the term from the Financial Action Task Force, VASP, or virtual asset service providers, the Blockchain Association singles them out as the area of ​​real concern:

“Given the non-compliant entities that are already subject to the global anti-money laundering and terrorist financing regime, that is, non-compliant over-the-counter exchanges and brokerages, represent the big ‘hole’ of the anti-money laundering and terrorist financing regime in the ecosystem of digital assets, the additional restrictions on self-hosted wallets would not address the substantially increased risk posed by non-compliant VASPs. “

Ramaswamy predicted that any aim to ban self-hosted wallets in the name of fighting money laundering would fail:

“A sobriety test of technology explains why those efforts are destined to fail and will only serve to undermine, rather than enhance, efforts to detect and dismantle illicit financial activities.”

The Blockchain Association report identified three possible policies that regulators could ratify to combat P2P transactions between wallets:

“Prohibit or deny the license of platforms if they allow transfers of unhosted wallets, introduce transaction or volume limits on peer-to-peer transactions, or require transactions to be made through a VASP or financial institutions.”

Like Ramaswamy, the people at the Association Blockchain show a sincere skepticism about the technical implementation in the real world. Miller Whitehouse-Levine, a policy manager at the Blockchain Association said:

“Limiting P2P transactions (between self-hosted wallets) would require changes to the underlying protocols.” CEO Kristin Smith continued: “The fear is that the only way to enforce them is to cut off transactions to and from self-hosted and hosted wallets.”

By: Jenson Nuñez.

According to the President of the ECB, overprinting would not pose a problem for price stability. This year, Europe has bought debt in response to the economic crisis that the COVID-19 pandemic has caused.

Christine Lagarde, President of the European Central Bank (ECB) recently stated that the financial institution would have no problem printing euros at will to cover losses. She highlighted that the US Federal Reserve (Fed) has already done it in recent times.

The representative of the entity claimed that the ECB could never go bankrupt or run out of money. Lagarde argued that that would not happen even in the event of losses on bonds or debt purchases to alleviate the economic crisis that the COVID-19 pandemic has caused.

Responding to an Italian member of the European Parliament, Lagarde said: “As the sole issuer of euro-denominated central bank money, the Eurosystem will always be able to generate additional liquidity as needed.”

The executive also stated that the financial institution would have no problem maintaining economic stability in the region. She added that no financial loss would affect their ability to seek and maintain price stability.

In October, Lagarde had already announced the possibility of executing a strategy to issue euros. It would be similar to the one that the US Fed had been applying in the United States. At the time, the policy would lead to exceeding the annual projected inflation rate above 2%.

The president of the ECB has taken this option into account, regardless of what the president of the Fed himself has said. Jerome Powell has acknowledged that the United States has been printing more money than it needs.

Europe Is Facing Debt and Recession Due to the COVID-19 Pandemic

In recent days, the president of the European currency-issuing entity referred to the current situation in the region, saying that it is a “very unusual recession.” Lagarde considers that this has been the result of the “deliberate closure of the economy as a consequence of the COVID-19 pandemic.”

In the face of the economic crisis, the ECB’s policy has been to buy more debt and to create a recovery fund. That fund would initially be EUR 750,000 million. However, the amount had an expansion of about EUR 1.35 billion.

In October, the ECB also talked about the possibility of creating a digital version of the euro. However, some people think that introducing a central bank digital currency (CBDC) would pose risks to users.

At the time, Lagarde said that “a digital euro will never be a substitute for cash. It is a very good supplement to it and a very good partial substitute for” what people were previously doing with physical money.

By Willmen Blanco