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The Mt.Gox Story: Where has it reached? What’s the future?

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A survey conducted on the users of Mt.gox revealed that nearly 70% of users have not received their funds yet even after complaining and placing the request

Mt.Gox was a Japanese based bitcoin exchange program, which stands for “Magic: The Gathering Online Exchange”. It handled over the 70% bitcoin transactions of the world. It was the largest ever bitcoin exchange. It held in 2014. In the February end, it was bankrupt. It was a massive hack happened ever in the history of transactions. It was the monetary massacre which has ever happened in history. On average, it lost about 740,000 bitcoins which is 6% of the total existence at that time. The monetary tangible value of that lost 740000 bitcoin was 460 million euro and above $3 billion of the amount had no records in the bank transactions. After meticulous sleuth somewhere near 200000 bitcoins got recovered but till date, there is no record of 650000 bitcoins, it has not been recovered yet.

 

Mt.Gox was hacked in the year 2011 June. The source is reported to be the computer of an auditor of the company. The hacker manipulated the monetary value of the bitcoin to one cent artificially and transferred 2000 bitcoin on an aggregate value and sold it. It was not just for once rather it was the spatial skulduggery of the hacker. Not just this, later on, the hacker purchased around 650 bitcoins from the exchange by artificially manipulating the price to be lower than that of the actual value and till date, the amount has not been returned.  

In spite of such a massacre, Mt.Gox re-established itself and turned up to become the largest bitcoin exchange in the world. It came to be the largest bitcoin exchange in the world but apparently, the event was facing the disturbing struggle. The security structure became poor on when it had to be strongest and it was disorganized in many of its sectors.

 

How did U.S.A react?

The US Department of Homeland Security sleuthed the matter meticulously and ramified that one of the subsidiaries operating in US of Mt.Gox was illegal and was operating on the not registered monetary transmitter. After the US discovered the skullduggery it seized $5 million from the company’s bank account. And Mt.Gox announced the temporary suspension of transactions in US dollars. This mischief leads to certain delays in the transactions and lost its position of the largest bitcoin exchange in the world. After the suspension of dealings in US dollars, Mt.Gox incurred significant losses because of credit deposits.

In February Mt.gox had to halt all the bitcoin withdrawals in order to receive the clear picture and identify the massive loopholes in the operations to draw the structured report and get a technical display of issues. The company after scrutiny stated that massacre was the result of transactional malleability. The company after such massacre was trying to grow gradually and one such concern reported again was of a security breach. After the accumulation of data the financial status of the investors still displayed the disparity. Coindesk indicated that 3000 customers reported that 68% were still waiting for the funds from Mt.Gox.

 

Where has Mt.Gox reached?

After the survey conducted by CoinDesk on the users of Mt.gox revealed that nearly 70% of holders have not received their funds yet even after complaining and placing the request. The wait has not finished yet still people are waiting to receive returns of their amounts invested. After the mischief, that survey reported that Mt.Gox has lost many of its high-level executives vanished. This issue was faced not only by customers and but the banking associated faced the same concern too. After so long hold on Mt.Gox now it has become somewhat stable. But after such massive felonious transactions reported the Mt.Gox lost its credibility in the market of bitcoin exchange. There had been multiple prices reported in the nominal value of bitcoin. Too many fluctuations in the value of bitcoin is a breach and are considered a flagrant violation of the law of uniform price. In economics, the persistence difference in price is atrocious for the flow of bitcoin in the market. But according to the CoinDesk survey, the spatial failure of withdrawal of funds has been reported yet.  

Later on, it was transpired that Mt.Gox along with its founder Mark Kerpeles are ensnared in the US lead operation. The escalated volume of bids for bitcoin on Mt.Gox apparently the bitcoin price began to rise gradually. The way transactions are propagated in the network the company has lost its customers. And the scalability issue has exacerbated.

After the scrutiny, Mt.Gox’s books seem to have plenty of fiat currencies in the bank. But after so much of instability Mt Gox managed to stabilize itself and called the new customers on the platform by reintroducing its market credibility. It will definitely take a lot of time for the brand to be recovered completely. The impact of this skullduggery was gigantic on the operations of bitcoin exchange because of which Mt.Gox lost its title of largest Bitcoin exchange in this world.

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The Death of Cryptopia: How it all Happened?

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Cryptopia has now gone into liquidation and suspended trading operations with them saying that they have been unable to reduce costs and to be profitable.

After the Cryptopia exchange was hit by a big hack back in mid-January which resulted in a loss of around $16 million in Ethereum and other ERC20 tokens, it has been struggling to reopen and find any kind of relevance.

 

Cryptopia decides to liquidate:

The matter of hack was made worse by the fact that the exchange was already becoming completely irrelevant at the time of the hack. Cryptopia has now gone into liquidation and suspended trading operations with the company saying that they have been unable to reduce costs and to be profitable.

 

It was decided that liquidation was the best path forward for all the stakeholders. While the liquidation takes place, all trading and withdrawals have been suspended and the process may take months to resolve.

 

The users still have their funds locked up in the exchange and they are unable to withdraw them because Cryptopia controls the private keys. If ever it becomes possible for the users to withdraw their cryptocurrencies remains to be seen.

 

What kind of obligations will the exchange have to the stakeholders may impact the kind of obligations they have to their users and the funds of the users that are stuck on the exchange.

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Will Bitfinex and Tether Fail? The IEO Chaos, LEO Token and Affect on BTC

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Bitfinex IEO is happening just a few days after the New York attorney general announced that they were taking action against iFinex.

The upcoming Bitfinex IEO is something that is being discussed all around the cryptocurrency space. It is quite surprising that the Bitfinex IEO is happening just a few days after the New York attorney general announced that they were taking action against iFinex, who owns both Tether and Bitfinex.

 

Tether and Bitfinex: The Same Entity

Tether and Bitfinex are largely the same entity. It is worth remembering of course that they lied and said that they were not connected before we had the whistleblower leak called the Panama Papers, which actually revealed their lie and that the audits have never been delivered despite being promised. In an industry in which we are striving so hard for transparency, Tether and Bitfinex have done everything possible to be opaque at every opportunity that they can get.

 

The Issue of $850:

It seems that Bitfinex has misplaced $850 million in corporate and customer fund which has resulted in some rather fancy accounting work which essentially saw an equal amount of Tether underlying dollars used by Bitfinex to cover that loss of $850 million with Bitfinex putting up shares in the company as collateral resulting in Tether only being 74% backed. Bitfinex of course casually forgot to mention all of this to investors or the holders of Tether that Bitfinex had $850 million seized.

 

The 2016 Bitfinex Hack:

Back in 2016, Bitfinex got hacked for 120,000 bitcoin which at that time was worth about $72 million and the losses were spread to users who experienced a generalized loss of 36%. They enforced a bail-in on exchange users and took 36% of account holders funds and the users were given a Bitfinex token in place of their stolen funds. The BFX token was redeemable for shares in Bitfinex. However, the cryptocurrency market was quite different and small at that time with the total market cap of $12 billion (at the time of hack). So, Bitfinex being hit $72 million or 120,000 bitcoins was pretty big because Bitfinex was the king of cryptocurrency exchanges back then, which now stands at #49.

 

The Bitfinex IEO:

Bitfinex is looking to raise $1 billion from big money investors. Each token that they are putting up is going to be worth $1 purchasable with Tether. The token will be called LEO and will be a utility token. According to documents LEO token holders will enjoy reduced crypto to crypto trading fees on Bitfinex and the companies decentralized exchange EOSfinex. Moreover, the token will also reportedly grant decreased lending fee, reduction withdrawal, and deposit fee, discounts and derivatives fees reductions.

Bitfinex has announced that $600 million is already taken in terms of allocation by private investors and the rest $400 million will be available for retail investors on May 10th.

 

If Bitfinex and Tether fail, How will it affect the price of Bitcoin?

If somehow BItfinex and Tether crumble due to the New York attorney general taking action against the company, bitcoin price might be affected at all with only Bitfinex crumbling especially at the current stage in the cryptocurrency game where Bitfinex stands at the 49th position in the top crypto exchanges list. However, if Tether fails, that could be potentially disastrous of a Mt.Gox level proportion if it happens overnight.

Competitors, of course, are scrambling to get bigger and bigger by the day trying to get people over to their services and people are already moving into those alternatives. Every time that happens, the impact of a Tether collapse becomes less and less relevant. However, there is a massive exposure to Tether across the markets with most major cryptocurrency exchanges having massive volumes in Tether pairs and much lower volumes in other stablecoin pairs.

 

What are your thoughts on the upcoming Bitfinex IEO? Let us know in the comments section below.

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5th Largest Korean Cryptocurrency Exchange: Coinnest Shuts Down

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Coinnest which is one of the largest cryptocurrency exchanges in Korea made an announcement that it is going to shut down its operations in the midst of some financial, admin and legal problems.

 

Coinnest Shuts Down:

According to a recent publication by Coinnest, bitcoin exchange, the exchanges is shutting down its operations. Coinnest had earlier closed down its new account creation services on 16th April 2019.

 

According to the exchange, it is going to terminate the trading and deposit features at the end of this month. However, the users shall be able to withdraw their cryptocurrencies from the exchange until 30th June 2019.

 

coinnest-screenshot

website screenshot

 

Following the decision to shut down its operations, the exchange has made an announcement regarding the decrease of the minimum withdrawal amount as well the withdrawal fees. Coinnest warned the users that no user shall be able to withdraw their funds after 30th June 2019.

 

Last year, the CEO of the exchange, Kim Ik-hwan was arrested by the South Korean police for fraud and theft. Since then, the exchange had been facing a bad time. The CEO was found guilty by the court and was sentenced to prison along with a fine of $2.5 million.

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