Former Coinbase Executive Joins Bitstamp Exchange as Head of US Operations

Bitstamp, a London-based cryptocurrency exchange, has reportedly hired Hunter Merghart, the former Head of Trading at Coinbase. Merghart, who also previously worked as Head of Equity Trading at Barclays, has now been appointed as Head of US Operations at Bitstamp.

Merghart had left his job at San Francisco-based crypto exchange Coinbase in October 2018 after spending only 6 months there. According to Merhart, he resigned from his role at Coinbase because he did not receive adequate resources and information regarding how to build cryptocurrency-related solutions for institutional investors.

Merghart Is The “Perfect Person To Lead US Operations”

In his new role as Head of US Operations at Bitstamp, Merghart will be expected to assist institutional clients at Bitstamp’s New York office. This, after the exchange operator was granted a BitLicense from the New York Department of Financial Services (NYDFS) last month.

Nejc Kodrič, the CEO at Bitstamp, said that Merghart is:

the perfect person to lead our U.S. operations, which includes making sure our retail and institutional investors have a platform and service that is equal to what they would find at any traditional exchange anywhere in the world.

Notably, Bitstamp is now the 19th crypto and blockchain-related firm to have received a BitLicense - which gives legal permission to businesses to provide financial services to New York residents.

After having acquired regulatory approval, Bitstamp’s management now intends to expand its operations in the US. Commenting on the exchange operator’s plans to serve US-based customers, Kodrič said that his firm had been looking to enter American markets but its plans were in a “passive” phase due to regulatory restrictions.

“This Is An Amazing Opportunity For Me”

In statements shared with Coindesk, Merghart noted that he “really believes in the strategy that the team has put in place and can’t wait to help execute it.” He also mentioned: 

This is an amazing opportunity for me to take what I’ve learned in both traditional finance and crypto to a larger role where I can help grow the U.S. business of the largest European crypto exchange.

In order to accommodate new institutional clients, Bitstamp’s developers have upgraded the trading platform’s matching engine and they’ve also integrated various surveillance tools. The new surveillance platform was reportedly developed by Cinnober, a fintech firm that provides proprietary software for large-scale financial markets (such as stock exchanges).

Bitrue Hacked: $4.5 Million in XRP and ADA Stolen, User Funds Will Be Replaced

At around 17:00 UTC on June 26 or 01:00 on June 27 in Singapore, where digital asset exchange Bitrue is based, a security breach occurred, which resulted in a loss of $4.5 million in crypto from the exchange's hot wallets.

Bitrue, which was founded in 2018, has quickly become a favorite with members of the XRP community because of the high degree of enthusiasm, support, and transparency shown by its management towards XRP. One interesting fact about Bitrue is that it supported XRP as a base currency on the day that its trading platform was launched (19 July 2018). 

At press time (07:57 UTC on June 27), visitors to the Bitrue website are greeted with this message:

Bitrue Hack Announcement.png

Around 02:16 UTC on June 27, Bitrue issued an official statement (via a series of tweets) that explained what exactly had happened, how this impacted its users, and what it was going to do next:

  • At approximately 17:00 UTC on June 26, a hacker or group of hackers "exploited a vulnerability" in the exchange's "Risk Control team's 2nd review process" to "access the personal funds of about 90 Bitrue users."
  • The hackers "used what they learned from this breach" to steal around $4.5 million in crypto—more specifically 9.3 million XRP and 2.5 million Cardano (ADA)—from the exchange's hot wallets and moved these coins to various other exchanges.
  • Shortly after the security breach, this attack was detected and trading, withdrawals, and deposits were all suspended on Bitrue, and the three exchanges where the stolen funds were moved to—Huobi Global, Bittrex, and ChangeNOW—were alerted and asked to freeze "the affected funds and accounts." Bitrue has also "contacted the relevant authorities in Singapore to assist us in tracking down the culprit and retrieving the stolen funds."
  • Because initially it was not quite clear what exactly had happened, the message shown above (about "system maintenance") was posted on the Bitrue website... Bitrue wishes to apologize for "this miscommunication" with its users.
  • Bitrue wants to reassure its users that all "heir personal funds are insured, and anybody affected by this breach will have their funds replaced by us as soon as possible."
  • Bitrue is currently "conducting an emergency inspection of the exchange and hope to be live again as soon as possible with log in & trading functionality." As for withdrawals, they will be "offline for a slightly longer period" while the investigation continues.
  • The flow of stolen XRP can be tracked via the XRP Ledger tool at Bithomp: https://bithomp.com/explorer/rwSvajJ4ZNhjgzcfaJWkEuLh4VURTFHuka

In communication with CryptoGlobe, Bitrue's support team confirmed that:

  • all user funds are "insured up to a maximum value of 1 million USD per user"; and
  • "trading should be back up within a few hours, and at that time users who were affected will already have their lost funds back in their accounts"

A few hours ago, Bitrue CEO Curis Wang posted this message on Twitter:

UPDATE (08:15 on June 27): Bitrue has just released a statement to media outlets to provide further details about this incident:

  • Of the $4.5 million in stolen crypto, 50% was "moved to private wallets," and the other 50% was moved to five crypto exchanges: Huobi, Bittrex, ChangeNOW, Exmo.me, and Coinswitch.co. The first three have frozen the stolen funds that were moved there (worth around $1.35 million). 
  • "This frozen amount should be recoverable by Bitrue in the future after working with the authorities and exchanges."
  • "After recovering the frozen assets, the net loss will be $3.15 million USD." This total "includes $1.89 million USD lost from individual user accounts, and $1.26 million USD lost from Bitrue’s own hot wallet."
  • "The funds lost by user accounts were insured and will be replaced by Bitrue as soon as the exchange resumes service."
  • "Bitrue plans to re-enable log in and trading services by midnight (Singapore time) June 27, i.e. by 16:00 UTC on June 27.
  • "Withdrawals from the exchange will not be possible until the Bitrue team is confident that any security vulnerabilities have been addressed."
  • "Bitrue will continue the planned launch of the trading of their platform token, Bitrue Coin (BTR), on Sunday 30 June 2019."
  • "Bitrue will analyze their automated systems and manual processes to identify any potential vulnerabilities and patch them before they can be exploited."

Featured Image Credit: Photo via Pexels.com