Digital Currency Weekly Recap 1-17-2016
Cryptsy: Hacker Theft Stole Millions; Bankruptcy Now an Option
In a blog post earlier this week, the cryptocurrency exchange Cryptsy reported that hackers executed a heist of more than $9 million worth of digital currency from the exchange last July. The thieves stole roughly 13,000 Bitcoin and 300,000 LiteCoin, which Cryptsy asserts has left the exchange in a state of insolvency. This news comes on the heels of two separate suspensions of trading over the last two weeks.
According to the posted explanation, Cryptsy had avoided going public with this news due to its belief that the exchange was profitable enough to simply cover customers’ losses - and thus avoid a public panic over the situation. In addition, the exchange alleges that its efforts to make law enforcement aware of the situation proved unfruitful. As trade volume on the exchange declined in recent months, Cryptsy came to the realization that those losses simply could not be covered.
When it Rains, It Pours: Cryptsy Facing Class Action Suit
This week in Florida, a class action lawsuit was filed against embattled digital currency exchange Cryptsy. The action was filed by a Cryptsy customer from Virginia, Jinyao Liu, and asserts that the exchange has violated Florida’s Deceptive and Unfair Trade Practices Act, unjustly enriched itself, and demonstrated negligence. The exchange’s failure to properly communicate with its customers is also at issue in the case.
MintChip Acquired by nanoPay
Canadian firm nanoPay has acquired the Royal Canadian Mint’s well-tested MintChip digital currency platform, a transaction processing system that is designed to enable users to exchange funds in any national currency, without the need for any middlemen. The Mint announced that the planned divestiture would now enable the platform to move beyond its test phase and begin to realize its commercial potential. That divestiture was the end result of a process that involved bids from ten different firms.
The founder of nanoPay, Laurence Cook, asserts that cryptocurrency will help to better facilitate the move toward cashless payments. To further that transition, the company intends to create partnerships with central banks, POS providers, retailers, and others whose buy-in will prove critically important if the move from cash to cashless is to succeed.
CoinDesk Acquired by Digital Currency Group
CoinDesk announced this week that it has been acquired by Digital Currency Group. In its announcement, CoinDesk noted that DCG’s broader vision and greater resources will help to enhance the publication’s ability to provide the information its readers need and expect, and that additional content and events would soon be offered.
That announcement also set the date for Coindesk’s Consensus 2016 at May 2-4. This event - the second Consensus conference - will take place in New York City, and is now taking registrations from those who wish to attend.
Emercoin Transaction Optimizer Reducing Blockchain Size
The digital currency community has been watching with varying levels of concern as Bitcoin’s developers and miners have struggled to achieve the consensus needed to resolve the blockchain’s block size challenges. Some within that community, however, are not waiting for Bitcoin to provide that solution. Coin Telegraph recently published an article detailing how one digital currency, Emercoin, is currently attempting to slow the increase in size of its own blockchain, using an algorithm it calls the Transaction Optimizer.
US Government-Funded RAND Research Examines Strategies for Disrupting Digital Currency
What do you do when your country is barreling towards twenty trillion dollars worth of debt, while facing abysmal workforce participation rates at home and massive foreign policy challenges abroad? Well, if you’re the US government, there’s really only one sensible option: you fund a research project to have RAND examine different ways to disrupt digital currencies.
Yes, that’s right: the federally-funded RAND National Defense Research Institute’s International Security and Defense Policy Center was asked by the Office of the US Secretary of Defense to examine the national security implications presented by digital currency implementation, as well as possible options the United States could use to disrupt such currencies should the nation determine that they somehow pose a national security risk.
The report manages to be both thought-provoking and chilling, and offers a wonderful opportunity for interested readers to sneak a peek behind the curtain at the types of concerns their tax dollars help to address.