The bank alleges that Buda’s service is used to “perpetuate fraud.” The exchange said that the theft of bank credentials had nothing to do with them.

New friction arises between bank Itaú and exchange Buda before the Free Competition Defense Tribunal (TDLC) in Chile, due to confrontation between both parties. On the one hand, the bank is accusing the cryptocurrency exchange of serving to “perpetuate fraud”. On the other hand, the exchange defends itself by saying that it is applying the relevant regulations.

Itaú filed the bank’s indictment with the TDLC last February, citing a case of identity theft and fraud of USD 26,000. The bank claims that someone transferred one of its customers’ money without authorization to a Buda account at the bank itself.

In late February, Itaú’s lawyers said that the criminal used forged bank details of the customer, a false e-mail account, and a digital copy of her identity card to transfer 20 million Chilean pesos (CLP) (equivalent to USD 26,000) from her checking account to the platform Buda.com, according to local media.

Once the detection of the fraud occurred, the customer filed a complaint with the Public Ministry. At the same time, Itaú pointed the finger at Buda by saying that the exchange does not have effective regulatory compliance systems.

Response from Exchange Buda to Itaú

Buda, which operates with cryptocurrencies such as Bitcoin (BTC) is on the other side of the shore. Concerning the accusation and the news report, the company regretted what happened to the bank’s customer and her case of identity theft.

Diego Vera, Head of Communications for Buda, explained that they do not know the reasons why they are being accused of promoting scams. He explained that the theft of the credentials was from the account with bank Itaú, not from their platform.

The criminal decided to spend the stolen money on cryptocurrencies but could have done so on anything else, according to the spokesperson. Vera compared what happened to a hypothetical case in which a thief robs a bank and buys a television with the money. He asked whether it was the fault of the person who sold the television or the lack of bank security.

Concerning the indications that they do not apply regulatory measures, the representative of Buda mentioned that it uses dynamic keys to access the platform, know-your-customer (KYC) measures to create accounts to be able to operate, the prohibition of logging in from unregistered IPs (until confirmed by e-mail) and sending of a selfie holding identity documents for the verification of accounts.

The long history of the confrontations between Itaú and Buda started in 2018. In April of that year, the cryptocurrency exchange, jointly with the CryptoMKT exchange, initiated actions against banks before the TDLC for closing checking accounts.

“Buda did not comply with regulations to prevent money laundering,” responded Itaú. The bank claimed that it was not an arbitrary decision, but rather a detailed investigation. In January 2019, the TDLC ruled in favor of cryptocurrency exchanges, implementing a protective measure to prevent banks from closing accounts of exchanges.

By Alexander Salazar

Bitcoin miners will have to pay 15% of any profit that they make. The low cost of electricity and the low temperatures in this Asian country favor mining.

Even though the Government of Kazakhstan had been hostile towards the miners of Bitcoin (BTC) and other cryptocurrencies, it now intends to promote mining in its territory. This mining promotion occurs after the enactment in June of laws that stipulate how they must pay taxes for their activity.

Miners will now have to pay 15% of the profits that they obtain as a product of the mining activity. The government explained that they will initially use the proceeds to alleviate the effects of the economic recession that the COVID-19 pandemic has caused.

Representatives of the Ministry of Digital Development negotiated with companies in the sector before deciding to promote the mining industry. They reported that they reached agreements with which they intend to attract investments of 300 billion tenges (KZT) equivalent to about USD 716 million.

According to local media, the Minister of Digital Development, Bagdat Mussin, said that thirteen mining farms in the country have already invested more than USD 190 million.

The dry climate and the long winters in which the temperature reaches -21 °C greatly benefit the operation of these farms. These conditions are ideal for cooling mining equipment, which led them to implement a filter system that reuses the cold air in the area.

Oil extraction and related industries are the main base of the economy of this Asian country. As a consequence, one of the main incentives for miners, in addition to the climate, is the low cost of electric power.

Paradigm Shift

As a result of the current negotiations, there has been a paradigm shift government in terms of cryptocurrencies by the Kazakh. The situation was different two years ago when they were evaluating the ban on mining.

Daniyar Akishev, Governor of the Central Bank of Kazakhstan at that time, expressed the need to introduce restrictions for the exchange of cryptocurrencies for local fiat currency, the pricing of goods in cryptocurrencies, and their acceptance as means of payment.

Given that the legal prohibition of cryptocurrency mining never achieved approval in the corresponding government agencies, this allowed the farms to continue their activity.

During the new government, which Kasim-Yomart Tokaev has chaired since 2019, miners will not only continue within the law. Their task, which will now require paying taxes to the treasury, will be welcomed and promoted.

They Can Mine Bitcoin But Not Use It

Anyway, these pro-mining laws do not change in any way the existing legal restrictions on the use of cryptocurrencies, particularly of Bitcoin, in the Asian country.

The current legislation states that “virtual currencies are outside the legal spectrum and their use for transactions, especially with Bitcoin, on the territory of Kazakhstan, may have negative consequences for the people who conduct the said operations.”

Something similar happens in Russia and Vietnam, where people can have crypto assets but cannot use them as a payment method.

By Alexander Salazar

The exchange states that its policy is to operate with the local fiat currency of each country. They explain that they adapt to the “current situation” of the place where they operate.

In recent days, Bitcoin and cryptocurrency exchange Bitex eliminated the possibility of sending US dollars to bank accounts in Argentina. The platform will reject and will not process the requested transfers, as they informed their users through e-mail communication.

Concerning explanations about the matter, María Eugenia Vázquez said that the online company Bitex decided to serve in Latin America operating in the local currency of each country.

Besides, she made it clear that the change “does not impact the operation of the Bitex International C.V. market with US dollars or the upload and download of balance in Argentine pesos.”

This explanation is in line with the objective that they had set in August 2018, when they started operations in Argentina, Uruguay, Chile, and Paraguay. “Bitex’s goal is to provide simple and efficient access to Bitcoin in local currency,” said Manuel Beaudroit, who served as the company’s marketing director.

Bitex Users’ Reaction

Until now, the reaction of users has been of understanding, according to Bitex. “They understood that we work to provide the best service while adapting to the current situation of each country in which we operate,” they stated.

Even so, some expressed their disagreement on social media. Among them, renowned bitcoiner Franco Amati commented on Facebook that “it would be good sometime to see a company saying things the way they are and explaining the reason for that. However, deep inside we know where the thing comes from.”

“Current Situation” in Argentina

The current Argentine situation to which Bitex refers is a progressive increase in state restrictions to access the US fiat currency. Also, some maintain that the government is preparing to restrict the possibility of accessing US dollars through the sale of cryptocurrencies (which is known as the “Bitcoin dollar”).

Several months ago, there was a circulating rumor that no exchange was confirmed officially. According to the unfounded report, the government intimidates (or “squeezes”) Argentine exchanges so that they stop operating with US dollars.

Even so, attorney Ricardo Mihura Estrada, a member of the NGO Bitcoin Argentina, explains that “there is no limitation to buy Bitcoin or any other cryptocurrency with US dollars.”

Alternatives to Operate with Bitcoin and USD in Argentina

Some months ago, another Argentine exchange, Buenbit, had canceled its operations in USD. However, a few days later it reversed the measure, and they are enabled again.

It is also possible to operate with this fiat currency through the bank at Decrypto, SeSocio, and Qubit. Concerning cash, they continue to accept SatoshiTango dollars (only in the City of Buenos Aires, since the user make the withdrawal of the banknotes in person) and at the Athena ATM located in the Walmart Constituyentes supermarket.

By Willmen Blanco

On the Ethereum network, there are bots specialized in anticipating and copying pending transactions. The bots are an inheritance from Wall Street and its automated trading robots.

Unbelievably, a lot of money on the Ethereum network is on the waiting list, and some programmers can steal. In this space, known as the mempool, there are thousands of transactions and smart contracts with vulnerabilities. Most users do not know which they are, but DeFi programmers can detect them and take advantage of them thanks to automated bots. According to Dan Robinson, a researcher at Ethereum, “these bots inhabit a dark forest.”

In the article entitled “Ethereum is a dark forest”, Robinson describes a world that many people are unaware of. This is precisely the world of “Ethereum arbitrage bots”, which monitor the smart contracts on the Ethereum network to locate pending transactions, aiming to steal the money locked in transactions.

Robinson begins this story by stating that he was browsing a Uniswap Discord channel when he found a message that caught his attention. Someone needed to recover Uniswap tokens valued at about USD 12,000. These tokens were accidentally locked as they were sent to Uniswap’s liquidity token base contract.

The researcher initially thought that the user could not recover the money, but he realized that anyone could claim it. It would be enough to execute a Uniswap function called burn for the smart contract to detect the duplicate tokens and return their value to whoever conducted the burn function.

Trying to “Get Ahead” of Arbitrage Bots on Ethereum

Philip Daian described the bots that Robinson feared in the Flash Boys 2.0 paper. In this document, Daian explained how “Arbitrage Bots” or “High-Frequency Trading Bots” had migrated from Wallstreet to the Ethereum blockchain to exploit the inefficiencies of Decentralized Exchanges (DEXs).

Generalized Frontrunners, one particular species of these bots, scan the Ethereum mempool in search of stuck transactions that they can copy and modify to include the attacker’s address and spread to the network with a much higher fee. With this, they seek to make miners prioritize them over legitimate transactions and thus can get ahead of them.

The existence of arbitrage bots that haunt the mempool led Robinson to consider the situation as a time bomb, with the stuck funds undetected for more than 8 hours in the Ethereum mempool. Although he had never seen bots in action, he knew that saving the transaction would not be easy. If he had called the burn function, it would have alerted the arbitrage bots to the existence of the waiting transaction.

He decided to proceed carefully, together with collaborators, to build a strategy to save the funds from the transaction. Then they designed a smart contract composed of several transactions that would be triggered one after another to save the USD 12,000. In this way, potential bots would not be able to notice or do the sequence correctly.

However, it did not go as expected, since a bot detected the operation and stole the USD 12 thousand that were in the mempool.

By Willmen Blanco

Zcash, Grin, and Monero account for just 6% of the transactions in Bitcoin that users conduct. The Bitcoin mix also has a low percentage of transactions on the network.

Users’ lack of interest is the biggest obstacle that private transaction systems are facing in the world of Bitcoin and other cryptocurrencies, according to a report from blockchain analytics firm Coin Metrics.

The report states that “user apathy towards privacy is probably the greatest deficiency of current anonymous transaction systems.” This occurs despite constant advances in privacy in Bitcoin and the existence of cryptocurrencies focused on maintaining private transactions.

The combined daily transactions between the cryptocurrencies Monero (XMR), Zcash (ZEC), and Grin, which are focused on privacy, only reach 6% of the transactions in Bitcoin that users conduct. In other words, for each transaction in these cryptocurrencies, 16 have occurred in Bitcoin, as the study highlights.

Monero and Grin offer privacy in their transactions, allowing hiding the amounts, addresses, and order of transactions on their networks. The former uses a mechanism called CryptoNote, which generates a kind of “decoy” that confuses transactions. The latter uses MimbleWimble, which merges inputs and outputs to confuse the sender and receiver details of transactions.

Concerning ZEC, users can trade this cryptocurrency in three different ways. Some transactions are transparent, others are partially private, while others — the so-called “shielded” ones — offer greater privacy. Less than 2% of the activity in Zcash belongs to the latter type, as Coin Metrics argues.

The number of privacy options in Bitcoin is also not as representative, states the report. However, the analysts consider that there is “a renewed interest in CoinJoin with providers such as Wasabi and Samourai Whirlpool.”

Bitcoin, Other Cryptocurrencies and Renewed Interest in Privacy

According to the publication, the use of these tools “is growing rapidly, beyond the low percentage.” The use of mixers such as Wasabi and Samourai has been steadily growing this year.

An increasing number of blockchain surveillance companies have even been listing privacy-focused cryptocurrencies to their tracking services. For example, Chainalysis and Elliptic have joined Zcash, while governments like that of the United States are seeking options to track these types of transactions.

The US Internal Revenue Service (IRS) knows the services of this type of company well and has its eye on cryptocurrencies such as Monero, Zcash or Grin, in addition to the Bitcoin Lightning network or side chains.

Institutions insist against privacy based on the alleged use of these tools to hide illicit activities. However, Chainalysis itself has previously stated that most mixed bitcoins are not involved in illegal activities.

There has been an observable increase in the use of cryptocurrency mixers on the darknet markets to improve privacy practices in payments.

Other studies reveal a clear interest in improving privacy in these types of markets. Some sales platforms in dark markets have even chosen to accept payments only in Monero, the same as a medium associated with ISIS did this year.

By Alexander Salazar

YFI tripled the price of Bitcoin in a month and a half, positioning itself above USD 33,000. The low supply of YFI is the main reason for its unusually high price.

In the world of cryptocurrencies, decentralized finance (DeFi) embodies a kind of “revolution within a revolution”. For example, the YFI token, from the DeFi yearn.finance platform has recorded unprecedented growth in just a month and a half. Furthermore, its price almost triples that of the main cryptocurrency.

The growth of YFI is largely due to its simplicity, which contrasts with the complexity of the various protocols governing decentralized finance. The intricate mechanisms of yield farming, the handling of deflationary tokens, and the various strategies for liquidity mining, seem indecipherable even to many bitcoiners.

In mid-July, when the DeFi value locked growth curve was booming, the innovative protocol yEarn emerged. It aims to automate many of the transactions that DeFi traders perform manually.

Last August 29^th, the token of this protocol YFI left behind Bitcoin’s all-time high, and almost doubled that all-time milestone on September 31^st when it reached USD 39,238. At the time of writing this article, YFI trades at USD 29,908. YFI has appreciated more than 2,900%, in a month and a half.

However, the explosive growth of YFI, even within the burgeoning DeFi environment, does not seem enough to justify the price, which is more than triple that of BTC and almost 70 times that of ETH. The explanation could be the meager supply of YFI set at 30,000 tokens, of which 29,964 are issued already. In other words, there only remain 36 tokens to be issued to complete that amount.

This low supply leads YFI’s market capitalization to be just over USD 1 billion, which is more than 220 times less than Bitcoin’s market value. For this reason, the token occupies 27^th place in the cryptocurrency ranking by market capitalization.

YFI and Associated DeFi Platforms

The creator of the yEarn protocol Andre Cronje described different tools associated with this protocol. These include an automated settlement service for Aave (yliquidate.finance) and an automated liquidity provider, yswap.exchange, which makes autonomous decisions depending on the incentives available.

Conje says that not all tools are available today. He mentions *.finance, which does not have a name yet. He defines it as “a protocol of credit delegation that transfers the ability to grant a loan from one smart contract to another.”

When depositing tokens in yearn.finance, the protocol converts them into yTokens, which it periodically “rebalances” to choose the loan service with the best benefits. The protocol continually reviews loan services like Aave, Compound, or dydx and decides which one to use. According to the creator of yEarn, the investor only provides liquidity and expects to obtain benefits.

He stated that this platform and all accompanying protocols are configurable, but he also revealed something interesting about the value of the token. There is a noticeable contrast between the statement of the person in charge of the yEarn protocol about the token that would be “totally worthless”, and the record price that it has reached in a few weeks.

By Alexander Salazar