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Binance Hack, Bitfinex IEO, Facebook New Blockchain Ads Policy and etc
May 13  |  11 min read

Crypto Week #19 Overview

The COIN360 Editorial Team

Last week featured more broken records, as Bitcoin not only crossed the $6k mark, but ended up reaching $7.5K yesterday, in its first run over $7K since last September. The rest of the top 5 cryptocurrencies in the market all closed the week with gains, with Bitcoin and Bitcoin Cash leading the pack with reported gains of over 20%. The market capitalization for the top 5 also expanded remarkably, with all five closing the week in the green. Elsewhere, TRON’s vulnerability issues could crush the net, Facebook revises its blockchain tech ads policy and Binance’s CEO Changpeng Zhao addresses latest exchange hack.

Here’s what you need to know about last week’s happenings in crypto.

1. Cryptocurrency Market Analysis

Bitcoin (BTC) opened the week at $5,791.69. Monday held the week’s low at $5,653.69 and the next two days did not show great changes as BTC’s price went up to $5,989.98 on Wednesday. On Thursday the cryptocurrency surpassed the $6k threshold for the first time since last year, peaking at $6,183.04. By Friday, Bitcoin’s high was already over $6,4k and on Saturday, BTC jumped over $7k for the first time since September 2018, to reach $7,333 and storm to its high for the week on Sunday at $7,503.87, 32.7% higher than Monday’s low. By the end of the week, Bitcoin had receded back under 7K USD to close Sunday at $6,972.37 with a 3.2% loss for the day and a 20.4% gain for the week. Bitcoin’s market capitalization also experienced a huge growth this past week, starting the week at $101.6B and gaining 21.4% throughout the week to close at $123.4B on Sunday.

Bitcoin 7-day price chart. Source: COIN360

Bitcoin 7-day price chart. Source: COIN360

Ethereum (ETH) started Monday with its price at $163.34 and later that day the cryptocurrency hit its low of the week at $159.99. Tuesday featured a 10.4% surge from the week’s start culminating in a $180.39 peak for the day. The rest of the week saw Ether tread in the $170 area until Saturday, when the coin had a major rise and achieved its high for the week at $203.47, a 27.2% jump from Monday’s low and the first time the currency has reached $200 since last November. Sunday also peaked over $200 and then subsided to close the week at $187.33, for a 3.5% loss for the day and a 14.7% gain for the week. ETH’s market capitalization closed Monday at $18.3B, and then grew 8.6% throughout the week to close at $19,9B on Sunday.

Ethereum 7-day price chart. Source: COIN360

Ethereum 7-day price chart. Source: COIN360

Ripple (XRP) started the week at $0.302275 and closed Monday seamless at $0.302389. Unlike the two aforementioned cryptocurrencies, the rest of the week showed XRP hovering in between $0.294 and $0.306, without much change. The low of the week came on Friday at $0.294114, although by the end of the day, the coin had climbed up to close at $0.300387. The weekend saw XRP above $0.3, experiencing its high of the week on Saturday at $0.336324, 14.4% higher than the week’s low from the day before, and closing Sunday at $0.310074, with a 4.4% loss for the day and a 2.6% gain for the week. Ripple’s market capitalization was $12,7B on Monday, growing 2.7% throughout the week to close Sunday at $13,1B.

Ripple 7-day price chart. Source: COIN360

Ripple 7-day price chart. Source: COIN360

Bitcoin Cash (BCH) opened Monday at $293.96, and over the course of the day faltered to its second lowest price of the week at $277.51. Tuesday’s high was at $298.44, and Wednesday saw the low of the week at $276.66. Thursday performance was similar to what preceded it but towards the weekend BCH picked up the pace, joining the rest of the top 5 cryptocurrencies in the market with its Saturday peak at $377.01, 36.3% higher than its low for the week three days earlier. Sunday featured the highest opening, starting the day at $356.27. The coin’s price remained high throughout the day and closed the week at $354.03, with a 0.6% loss for the day and a 20.4% gain for the week. The market capitalization for Bitcoin Cash was $5.1B on Monday and $6.3B on Sunday, meaning it grew 23.1% throughout the week.

Bitcoin Cash 7-day price chart. Source: COIN360

Bitcoin Cash 7-day price chart. Source: COIN360

Litecoin (LTC) started the week at $76.03, bottomed out for the week later on Monday at $72.33, and then went up a little to close the day at $74.98. Tuesday, Wednesday and Thursday opened and closed somewhere around the $74 mark, barely experiencing losses. Friday closed a little bit higher, at $77.17 and Saturday featured the peak of the week, with LTC reaching $94.54, 30.7% higher than its low from the beginning of the week. Sunday opened high at $89.54, went up to $93.18 during the day, and then closed the week at $84.57, with a 5.6% loss for the day and an 11.2% gain for the week. Litecoin’s market capitalization grew by 13% this past week, going from $4.6B on Monday to $5.2B at Sunday’s closing bell.

Litecoin 7-day price chart. Source: COIN360

Litecoin 7-day price chart. Source: COIN360

2. Binance Suffers $40 Million Hack; CEO Changpeng Zhao Discloses Details

Changpeng Zhao, the CEO of Binance, hosted a May 8 AMA where he addressed the $40.7 million hack that Binance had suffered the previous day. The hack reportedly involved undetected transactions constituting a withdrawal of 7,070 BTC from Binance’s hot wallets, making it the sixth largest crypto exchange hack in history. According to Zhao, the hackers amassed stolen account data, 2FA codes and API keys before the attack. Along with outpouring of community support following the hack, Justin Sun offered to deposit 7,000 BTC back into Binance, but in the end the lost funds were covered by Binance’s SAFU (Secure Asset Fund for Users).

3. Binance Addresses Measures to Be Adopted After Hack

In a security update, Changpeng Zhao stated that the Binance team is working on revamping its security measures and practices, making changes that will be implemented this week. The areas to be improved are their API, 2FA and withdrawal validation protocols along with back-end security measures, including risk management, user behaviour analysis, KYC procedures and anti-phishing tactics.

4. 60% of Bitcoin Full-nodes Still Vulnerable to Inflation Bug

According to data published by Bitcoin core developer Luke Dashjr, 60.22% of Bitcoin’s full nodes are still running software that makes them vulnerable to an inflation bug labeled CVE-2018-1744, which can be exploited to artificially inflate Bitcoin’s supply. This data is for both listening and non-listening nodes, bringing the total of nodes that are taken into account by the report to 99,638.

5. Facebook Revises Its Blockchain Ads Policy

Facebook is now displaying blockchain tech industry news ads without prior approval. Last year, Facebook implemented a policy in which crypto and blockchain promoters were required to get prior consent to run advertisements. In a press release, the company stated that the regulation would be changed, but that ICO ads and ads promoting particular cryptocurrencies are still required to have prior consent, which consists of undergoing a rigorous background screening including licenses and other relevant public background information. The measure, adopted in January 2018, looked to protect people and to “make it harder for scammers to profit from a presence on Facebook”.

6. Diar Report: Bitcoin and Ether Soar to New Heights

The latest Diar report shows that average Bitcoin transaction fees increased by roughly 200% in April compared to the previous month. Additionally, miners earned almost $14 million from fees (a 250% increase from March), bumping the overall mining earnings of April to $291 million. Ether, on the other hand, registered an all-time high when it comes to transaction volumes in DApps, reaching 776,000 ETH which surpassed the previous record from December 2018. However, the amount of new DApps deployed on-chain is currently trending in retrograde, with only 88 new DApps.

7. Coinome to Stop All Operations

Coinome, Indian crypto exchange backed by Indian online payments gateway Billdesk, will put a halt to their services on May 15. Last year, the Reserve Bank of India (RBI) issued a ban on dealings with crypto business, which has been followed by exchanges like Zebpay closing their doors to Indian customers, as well as Indian exchange Coindelta ceasing all operations for good last April. In a Twitter announcement, Coinome stated that all of their crypto markets will be suspended this Wednesday and requested that its users withdraw their crypto assets “at the earliest”. An alleged email from the exchange to its customers named India’s lack of favorable crypto regulation and the government’s indecision “on the regulatory framework for crypto exchanges or wallets” as the reasons for the exchange’s regulatory difficulties.

8. Fidelity to Start Institutional Bitcoin Trading Soon

According to a May 6 Bloomberg report, American investment firm Fidelity will rollout BTC trading for institutional clients in a matter of weeks, through its crypto venture Fidelity Digital Assets. The primary target for the institutional Bitcoin trading, according to the source, is large-volume traders, such as other OTC offerings. This move is a part of Fidelity’s campaign of integrating Bitcoin and crypto into Fidelity and its Digital Assets subsidiary.

9. Bitfinex Allegedly Conducts $1 Billion IEO

Previous remarks from the Bitfinex CEO about Bitfinex conducting an IEO became official on May 8, when a whitepaper was published listing the details of an IEO of LEO tokens. The sale of 1 billion LEO tokens, each worth 1 USDT, has seemingly sealed all 1 billion tokens to private investors in both hard and soft commitments. These commitments mean that a first come, first served sale open to the public is unlikely. On May 13, Bitfinex CTO Paolo Ardoino took to Twitter to state that the Bitfinex private token sale had sold out on May 11.

10. Phase 0 Testnet of Ethereum 2.0 Is Live

A May 7 Medium post announced the release of a public testnet for Ethereum 2.0’s Proof-of-Stake beacon chain. Ethereum 2.0 will bring improvements in terms of security, scalability and decentralization, but it will not be introduced via a hard fork. Rather, there will be a one-way smart contract that will help users in the process of transferring from the current Proof-of-Work chain. Another highlighted feature of Ethereum 2.0 is shards, which are described as individual chains that manage smart contracts and transactions and which will help with the horizontal scalability of Ethereum 2.0.

11. MakerDAO Announces Critical Vulnerability Issue in Voting Contract

As described in an official statement from MakerDAO made on Reddit, the company discovered a vulnerability issue during the process of auditing the Maker voting contract, which prompted MakerDAO to make a critical update. The statement specifies that the nearly 200 accounts that staked MKR in the current MakerDAO Governance Voting Contract are not in danger of losing their MKR, but it is still advised to move the MKR out of the old contract, back into their personal wallets as soon as possible through a special website that MakerDAO has set up. Users who did not participate in this process don’t have to move their MKR.

12. Tron: Vulnerability Issue Could Crash Its Blockchain With One Computer

A recent Hackerone report disclosed a bug in Tron that could have rendered the entire network unusable or unavailable. According to the disclosure of the vulnerability issue, a single computer could have consumed all available memory through a DDOS (Distributed Denial-of-Service) attack by submitting smart contracts with malicious code. The report states that if the DDOS had attacked more than 51% of the SR node, it would have crashed the entire Tron network. This bug was found back in January, but it was disclosed only recently now that it has been fixed, netting the researcher who found the bug $1,500.

13. SEC to Review New Bitcoin and Ethereum ETF Application

According to documents that were released on May 9, the Securities and Exchange Commission is in the process of reviewing a new application for a crypto exchange-traded fund, coming from Crescent Crypto Index. The ETF would feature both a BTC and ETH portfolio, and would be active on the New York Stock Exchange as “XBET”.

14. US Congressman Brad Sherman Calls for a Ban on Crypto

Brad Sherman, the representative of California's 30th congressional district, recently rallied his colleagues to outlaw cryptocurrencies during a House Committee on Financial Services meeting. During the meeting, he said that crypto is a threat that could disempower American foreign policies and influence, and in effect diminish the rule of traditional law. According to Sherman, crypto as an extra-national currency poses a threat to the hegemony of the US dollar, which is described by Sherman as “the standard unit of international finance and transactions”.

Final Thoughts

The Binance hack marks the latest in a string of hacking attacks that multiple exchanges have suffered in 2019, a grim fact that only looks worse when we take into account all of the vulnerability issues that were highlighted last week. Despite this, Binance, Tron, and MakerDAO were able to fix these problems successfully, something that should be taken as an example by fellow crypto businesses. Total immunity from hacking is a utopian thought, it is always better to be prepared for the worst and react accordingly.

We wish you a great week,
The COIN360 Editorial Team