Crypto Community Watch Program Launched To Catch And "Punish Bad Actors"

  • Econmerce, ICOAlert and other crypto industry participants have created an Crypto Community Watch Program.
  • The program is aimed at obtaining anonymous tip-off information from anyone who is aware of criminal or fraudulent activity in the crypto space.
  • Whistleblowers might receive a reward if their tip-off leads to the arrest or "legal punishment" of the bad actors.

Ecoinmerce, a blockchain-based social e-commerce marketplace, has announced the launch of an “anonymous tip line” called the Crypto Community Watch Program that whistleblowers can contact to alert authorities about suspected criminal activity related to cryptocurrencies.

According to a press release published today, the Crypto Community Watch Program has been created through a collective effort by several crypto-related organizations, in order to clamp down on the large number of scams and fraudulent activities in the crypto industry.

"Cleaning Up" The Crypto Ecosystem

Crypto industry participants including ICO Alert, NewEconomies, Step VC, GZH, and Ecoinmerce have reportedly set up the anonymous tip line to “[punish] the bad actors in the space while rewarding those brave enough to stand up.”

Rex Chen, COO at Ecoinmerce, expressed serious concerns about the increasing number of hacks and scams in the crypto space. Chen remarked, 

“From the recent exchange hacks to the nearly-weekly reports of fraudulent projects taking off with investors’ money, it’s clear that crypto has a problem. Enough is enough. It’s up to the industry first and the regulators second to clean up the ecosystem. If you spend your time hacking, scamming, or intentionally misleading investors, your time is up.”

Rex Chen

100 Bitcoin Reward Pool 

A total of 100 bitcoins, currently valued at approximately $640,000, have been contributed by the crime-fighting group to an escrow account managed by a trusted third-party. The press release noted that the funds will be used to reward people who anonymously report crypto-related scams and fraudulent activity.

An anonymous online form has been provided so that people can report any illegal activity or fraudulent schemes they may come across in the crypto and blockchain business. Whistleblowers will also be able to include their Bitcoin (BTC) payment address in the confidential form, and if their tip-off “leads directly to the arrest or legal punishment of the wrongdoer”, then they will get “a portion of the reward pool.”

According to the press release, all information submitted via the anonymous tip line or online form will be investigated by those participating in the Crypto Community Watch program. Should the program members suspect any wrongdoing based on the findings of their investigation, then the related tip-off information will be forwarded to law enforcement authorities.

In order to maintain transparency and encourage active involvement from all members of the crypto community, the anonymous tip-off reports will be shared publicly on Ecoinmerce’s official website. Moreover, the program members have requested other crypto firms to join them in their effort to crack down on crimes in the space by creating their own watchdog groups.

Many Criminals Recently Arrested

Notably, the Crypto Community Watch program has been launched at a time when authorities have increasingly begun to arrest criminals involved in various fraudulent activities in the crypto industry. As CryptoGlobe recently reported, €2 million in counterfeit currency was handed to a South Korean businessman by a Serbian criminal in exchange for his bitcoins worth $2.3 million.

The fraudulent transaction took place at a 5-star hotel in France, however, local authorities were able track down and arrest the suspect.

In similar news, Divyesh Darji, the Asian head of BitConnect, was also arrested recently due to his alleged involvement in a large scam associated with the failed cryptocurrency.

Error in Time-Locked Bitcoin Contracts Allows for Miner 'Fee-Sniping'

Michael LaVere
  • Crypto researcher 0xb10c discovered an error in bitcoin "time-locked" transactions that could be used as an attack vector.
  • Miners can take advantage of the program to carry out "fee-sniping" and steal funds from one another. 

Users have discovered an error in bitcoin “timelocked” contracts that could potentially allow miners to steal BTC from one another. 

Anonymous crypto engineer 0xb10c reported discovering more than one million “time-locked” transactions made between September 2019 and March 2020. In a post, 0xb10c detailed how these special bitcoin transactions were not being accurately enforced by the network. 

As opposed to normal transactions, time-locked transactions prevent recipient bitcoin from being accessed after sending. Users must wait for a specific number of blocks to be added to the network in ten-minute intervals before gaining control of their bitcoin. 

0xb10c claimed the errant time-locked transactions provided an attack vector for miners to steal transaction fees  from one another via “fee-sniping.” According to the engineer, the backlog of time-locked transactions were being purposefully designed for a “potentially disruptive mining strategy” involving the theft of miner fees. 

In an interview with CoinDesk, 0xb10c said time-locked transactions represented a “low-priority” problem at present that could eventually balloon to involve the wider network. He explained that fee-sniping would become more lucrative in a few years as the majority of miner income shifts towards transaction fees. 

He continued, 

A fix for this has been released in early 2020. However, it will take a while before all instances of the currently deployed software are upgraded.

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