US-based digital asset exchange, Kraken, has issued a warning against the potential risks associated with trading Bitcoin Cash SV (“Satoshi Vision”).
Kraken Issues Strict Warning Against BCHSV
As covered, the Bitcoin Cash (BCH) blockchain has split (after a hard fork) into two separate chains: Bitcoin Cash ABC (BCHABC) and Bitcoin Cash SV (BCHSV) – due, among other disputes, to heated arguments between two opposing community groups over block sizes.
In response to the emergence of two new coins, Kraken warned in a blog post on November 18th:
WARNING: Bitcoin SV does NOT meet Kraken’s usual listing requirements. It should be seen as an extremely high risk investment [because it is not] supported in major explorers, [there are] no known wallets supporting replay protection, [and] miners [have] apparently [been] subsidized or [may be] operating at a loss.
BCHSV Community Is “Openly Hostile”, “Threatening”
Moreover, Kraken’s management team pointed out that BCHSV’s representatives had been “threatening and openly hostile toward other chains.”
Although Kraken acknowledged that it had “done only very minimal code review” – meaning that its developers had not carefully analyzed how secure BCHSV and BCHABC’s respective codebase is at present – the exchange’s post cautioned that BCHSV’s “survival may be mutually exclusive with other chains.”
Additionally, Kraken’s blog mentioned that BCHSV’s “supply is temporarily constrained because of limited wallet support”, and warned that “some large holders have indicated they’d be dumping everything ASAP.”
Very Limited Support For BCHSV
Notably, Bitcoin Cash’s (BCH) blockchain officially split into two chains on November 15th, following the emergence of two main versions of new code (for BCH) and also after finding adequate support from major digital currency mining pools.
Prior to the BCH chain split, Kraken had clarified that it would only be supporting BCH ABC, however, the exchange has now stated that it ended up supporting BCH SV as well. Kraken’s blog explained that it decided to list BCHSV only after the coin’s protocol and roadmap had been published by nChain.
nChain and CoinGeek are notably among the very few miners that are seriously involved in the ongoing development of the SV protocol.
Kraken “Cannot Guarantee Perfect Custody Of BSV”
Because of the turbulent nature of the Bitcoin Cash hard fork, Kraken noted:
Custodial losses taken on due to attacks originating from nChain or its affiliates will be socialized among all BSV holders on Kraken. Given the volatile state of the network and threats that have been made, Kraken cannot guarantee perfect custody of BSV.
The exchange also said it would continue to carefully monitor both BCHSV and BCHABC, and would only open withdrawals and deposits when it thinks “it is safe to do so.”
Data from CryptoCompare shows that BCHSV is currently trading at around $86 while BCHABC is trading at about $228.