Crypto Trading Firms Propose Blacklist to Keep Bad Actors at Bay

Francisco Memoria

Various cryptocurrency trading firms have recently met to discuss ways to prevent the rising number of hacks and scams plaguing the crypto industry, and proposed the creation of a blacklist that could keep bad actors at bay.

According to Bloomberg, firms like Ripple, market maker Cumberland, and Michael Novogratz’ Galaxy Digital Holdings, as well as more than 30 other firms, met at a round-table event in Chicago to discuss possibilities.

During the event, the creation of a list of entities involved, directly or indirectly, in illicit activities was considered, as well as giving companies with a good reputation some form of accreditation.

Other options considered included standards to verify the identities of customers, and sharing information on those who default on derivatives trades. The event, organized by Crypto OTC Roundtable Asia (CORA) didn’t see the firms reach a final decision. CORA is set to meet again in the near future.

Darius Sit, a Singapore-based managing partner at crypto trading firm QCP Capital who helped organize the meeting, stated:

A community-wide effort to improve compliance standards would prevent liabilities that might stem from trading with bad actors or dealers that trade with bad actors.

He added that a self-governance initiative such as this one is “something that regulators are keen to see.” Yoshi Nakamura, a senior member of Galaxy Digital’s trading team, noted that the willingness of the firms to work together “bodes well for the future.”

Notably on the same day the meeting occurred, leading cryptocurrency exchange Binance revealed it suffered a major security breach, that saw hackers take over 7,070 BTC (worth over $40 million) from its hot wallet.

Earlier this year, research from US-based data security firm CipherTrace revealed that in the first quarter of this year $1.2 billion worth of cryptocurrency were lost to theft and fraud. The figure, which already included Bitfinex’s missing $850 million, is nearly equivalent to 71% of last year’s total $1.7 billion loss.

IOTA Foundation to Reopen Mainnet by March 2 after $2 Million Hack

The IOTA Foundation, the non-profit organization behind the IOTA network, has announced it plans to reactivate the IOTA Network by March 2 after halting it over a $2 million hack.

According to the non-profit organization, it’s working on creating transition tools for users to transfer funds from their existing wallets to new ones so they can avoid any further losses and bring the network back online.

As CryptoGlobe reported, the IOTA Foundation turned off its Coordinator node, which is responsible for validating individual transactions on the network, earlier this month after users started reporting their funds were being stolen from the Trinity wallet, a wallet designed by the Foundation.

Since it turned the coordinator off, it has been working with law enforcement agencies, including the German Center for Cybercrime and the U.S. Federal Bureau of Investigation, to identify the cause. A total of “8.55 Ti”, or $2.3 million worth of IOTA tokens were lost.

In a post-mortem report, the Foundation detailed the vulnerability was the result of an integration with a fiat-to-crypto onramp platform called MoonPay that was being used with the Trinity wallet. Its investigation found a hacker was able to take over MoonPay’s content distribution network, and using it infiltrated the Trinity Wallet to distribute malicious Software Development Kits (SDKs).

The Foundation’s internal analysis of affected Trinity caches found irrefutable proof that they had been compromised with one of several illicit versions of Moonpay’s software development kit (SDK), which was being loaded automatically from Moonpay’s servers (their content delivery network) when a user opened Trinity.

The attacker, according to the Foundation, made sure he avoided triggering cryptocurrency exchanges’ know-your-customer (KYC) checks when sending funds to cash out, keeping the threshold below $10,000.

The IOTA Foundation was, according to the report, only able to identify 50 victims from the attack, and doesn’t know exactly how many users were affected by the attack. As such, it’s asking those who used the Trinity desktop wallet to use a migration tool.

The organization’s move to shut down the Coordinator node and essentially bring the mainnet to a halt was a controversial one, as various cryptocurrency users are now on social media claiming the IOTA network is centralized.

Featured image via Pixabay.