Crypto Custodian BitGo Adding Support for Stellar (XLM) and Dash (DASH)

Siamak Masnavi

On Friday (5 October 2018), Mike Belshe, co-founder and CEO of BitGo, a "qualified custodian" for cryptoassets headquartered in Palo Alto, California, revealed during an interview with Fortune's "Balancing the Ledger" (Fortune’s video series on the intersection of finance and technology), that his company had added support for Dash (DASH) and that support for Stellar (XLM) would be ready "very soon."

Jen Wieczner, a Senior Writer for Fortune, started the interview by asking Belshe about what BitGo does. This was Belshe's answer:

"We are now a qualified custodian. That's through the Division of Banking in South Dakota. We were granted that a few weeks back actually.  And this allows us to help customers that need us to meet the 'Custody Rule'. So, the custody rule is part of the Investment Advisors Act of 1940. If you are a hedge fund... or somebody with fiduciary responsibility for someone else's money, when you hold their money or their asset, you are required to use what's called a 'qualified custodian'.

The exchanges are sometimes offering custodianship, but they are not qualified custodians themselves. And in fact, what they are really doing is trying to hold funds so that you'll use their exchange... In other asset classes, you don't have the exchange hold the funds. You just never do it. In fact, if the NYSE went to the SEC and said 'Let us be a custodian for the assets we trade, the SEC would laugh them out of the room... And this is because we know there's been a number of abuses that happen when you start to put these things together. You need a kind of separation and checks-and-balances between the different parties that are involved in trading... I am not saying that the exchanges are operating in a malicious way today; however, it does open up that potential for abuse.

The exchanges are primarily focused on retail investors, right? They are interested in signing up 100,000 users a day... They have a small team that works on security, but BitGo has the largest dedicated research and development team solely purposed toward security of any company in the world. And that's because that's all we do."

Wieczner then asked about the "big news" that Belshe wanted to announce. Belshe replied:

"This week, we are happy to announce that we are now supporting Dash, and Stellar is coming; it's in final test but it'll be out very soon... Both of these offer some advances, particularly around payments. In the case of Dash, they offer instant payments. That's one of their big focuses. They also have some privacy payments they do. And so, that's unique. In the case of Stellar, they've done a lot in terms of tokenization. They are also targeting global payments, more for consumers, a little bit different than what Bitcoin does."

It is also worth noting that Wieczner asked Belshe what he thinks about stablecoins. Belshe said:

"Well, first off, the industry has realized that creating a digital form of the dollar is better than the dollar... So, Tether was the first to do this is some regard, but it doesn't have the backing that people need in order to feel really safe about it. In spite of not having good backing and all kinds of doubt about it, people are using it at tremendous volumes because you move the money very quickly... So, the value is there... So, for me personally, if you want to have a stablecoin, it's got to be backed by a dollar...

So, Circle has got a new coin out, Paxos has got a new coin out, Gemini has a new coin out... all three of those are supported through BitGo wallets.

We don't support Tether. Tether is based on a different protocol: ... the Omni protocol... Also, the backing of it, frankly, I think, it has got some problems. There's been, just this last week, a decline of the price of Tether on certain exchanges to below a dollar... I don't think anyone knows the full story behind Tether, but my own opinion is that if I own tethers and I knew there was a dollar in the bank for every coin, if somebody wanted to sell me a dollar for 95 cents, I would be buying them, right? So the fact that they are not out on Kraken buying those, tells me that there is something wrong with it."

Featured Image Courtesy of BitGo

Bitcoin Ransomware Attack: Google Disables Baltimore Officials’ Gmail Accounts

The Baltimore City government has been under siege since May 7, as it was hit with a ransomware attack that saw hackers demand $100,000 in bitcoin and officials refuse to pay the ransom. In a new development, Google disabled officials’ Gmail accounts being used as a turnaround.

According to The Baltimore Sun, the Baltimore City government created Gmail accounts to work during the ransomware attack, as the city’s servers have been disrupted to the point their baltimorecity.gov emails aren’t working.

Recently, however, emails sent to several of the newly created Gmail addresses returned messages claiming the “email account that you tried to reach is disabled.” It was found that Google has considered these business accounts that need to be paid, instead of free individual Gmail accounts.

James Bentley, a spokesperson for Mayor Bernard C. “Jack” Young, noted Baltimore planned to purchase a business plan from Google so the accounts could be restored. The news outlet quoted him as saying:

They disabled them because they deemed them to be business accounts. Their position is these accounts are circumventing their paid service

City Council President Brandon Scott added that meanwhile his staff was appealing the suspension with Google, although he hadn’t been briefed on the problem. A spokeswoman for Baltimore’s health department claimed she was able to see received old emails, but not send or receive new ones.

Per her words, there as no notice on why the account was disabled. On its website, Google claims it’ll suspend accounts used for sending spam, distribute malware, abuse children, violate copyright, or for other illicit purposes.

As CryptoGlobe covered, Baltimore was hit with a ransomware attack earlier this month that brought its real estate industry to a halt and crippled some of its essential systems. So much so the city’s collection and transfer of property taxes and water bills have been affected.

The hackers attacked the city’s servers with a new type of ransomware known as “Robbinhood,” and are demand a 13 BTC ($102,900) ransom to stop the whole attack. They also gave the city the option to pay 3 BTC ($23,700) to decrypt a specific system.