Crypto Exchange ShapeShift Is Moving Away From Its No-Account Model

Cryptocurrency exchange ShapeShift has launched a new membership program that will eventually become mandatory for its users.

Positioned as a loyalty program, the initiative will see the startup offer a range of benefits while also moving to start collecting some personal information from its users, essentially forming a pivot away from its "exchange without accounts" model.

In a blog post, CEO Erik Voorhees wrote that "that last detail sucks" in reference to the plan to make the membership program mandatory, which will take place sometime later this year.

Nothing that "we would prefer if the collection of personal information was not a mandatory element," Voorhees went on to write:

"We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy, just as they deserve the right to privacy in their thoughts, in their relationships, and in their communications. Such privacy is a foundational element of a civil and just society, and should be defended by all good people. We remain committed to that cause and it is best served if we are smart about our approach.

Members will receive discounts on exchange rates, volume-based rewards for transacting with the FOX token and higher transaction limits.

The broader changes, according to Voorhees, are a result of requests from ShapeShift users for account-related features, an "increasing interest in ... tokenization" and the regulatory uncertainty surrounding cryptocurrency exchanges at present, he said.

"Membership is, in essence, an advanced loyalty program. It will lead over time both to better pricing and a superior user experience," he wrote.

While ShapeShift is adding new features for the program, Voorhees stressed, it will remain a non-custodial exchange, meaning it will not hold customer funds.

ShapeShift image via Piotr Swat / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

02
Bitcoin Gold delisted from major cryptocurrency exchange after refusing to pay hack damages
a close up of a sign: Bitcoin Gold delisted from major cryptocurrency exchange after refusing to pay hack damages © ZDNet Bitcoin Gold delisted from major cryptocurrency exchange after refusing to pay hack damages bitcoingold.png © Provided by CBS Interactive Inc. bitcoingold.png
Bittrex, one of the largest cryptocurrency exchange platforms, has delisted Bitcoin Gold (BTG) from its trading platform over the weekend after BTG maintainers declined to pay half of the damages Bittrex suffered during a complex multi-stage cyber-attack earlier this year.

According to a statement from the BTG team, Bittrex asked the BTG team to pay 12,372 BTG (~$256,000) as reparations for the attacks.

The BTG team declined to pay the asked sum, stating that their private assets can't be used to cover "a private company's losses from their own security failures."

BTG maintainers said they did all that was possible on their end to help trading platforms prevent the attacks, but they did not have the legal power to intervene inside a private company like Bittrex.

South Korean cryptocurrency exchange hack sees $40m in altcoin stolen | Another hack rocks cryptocurrency trading: Bancor loses $13.5 million

The hack at the center of this dispute took place between May 18 and 22, according to an incident response report published this May.

The BTG team says the hack was a combination between a 51% attack and a double-spend attack.

BTG experts said hackers rented servers through the NiceHash cryptocurrency mining market to overwhelm the Bitcoin Gold network and take control of more than half the BTG network computational hashrate.

This is what cryptocurrency experts call a "51% attack," a dangerous scenario that grants attackers the ability to modify transaction details on the entire Bitcoin Gold network.

The BTG team says that during the 3.5 days attackers overwhelmed the Bitcoin Gold network, hackers deposited large quantities of Bitcoin Gold funds at cryptocurrency trading platforms.

Seconds after these deposits, hackers would convert the funds into another cryptocurrency and transfer the money to new accounts at other exchanges.

Once funds were converted and stolen, hackers would then use their 51% control over the BTG network to reverse the initial BTG deposit, invalidating the transaction and returning their original Bitcoin Gold funds to their personal wallets. This second stage is what's known as a double-spend attack.

Hackers repeated this operation several times between May 18 and 22. Money was never stolen from end users' accounts but trading platforms only.

At the time, BTG maintainers repeatedly warned cryptocurrency trading platforms to raise transaction confirmation thresholds, a solution that would have made it more costly for attackers to mount a 51% attack.

The BTG maintainers also warned trading platforms about the attacker's wallet address, telling them to refuse any incoming BTG deposits, and hence preventing the more devastating double-spend attack even if the 51% attack was successful.

Back in May, cryptocurrency experts said hackers successfully used this dual 51% & double-spend attack to steal over 388,000 BTG coins (worth over $18 million at the time) from several cryptocurrency exchanges, but they did not reveal which platforms suffered losses during the attacks.

Most platforms either stopped the attacks in time or swallowed the losses after failing to heed warnings coming from the BTG team.

This cryptocurrency phishing attack uses new trick to drain wallets | Hackers steal almost $400M from cryptocurrency ICOs

But according to a statement published over the weekend by the BTG team, the only platform that didn't follow normal practices was Bittrex, who, in an unprecedented move, tried to convince the BTG maintainers to pay for a hack's losses.

Something like this has never happened before, and the BTG team didn't want to hear it. Bittrex tried to meet BTG maintainers in the middle, but the BTG team also declined to pay a halved reparations fee of roughly 6,000 BTG coins (~$126,000).

Following the failure to strike an agreement, Bittrex delisted Bitcoin Gold trading options on Saturday, September 1, telling BTG maintainers they reached their final decision after the BTG team did not take a part of the responsibility for the hack.

The team behind Bitcoin Gold said the delisting doesn't impact BTG trading, as Bittrex was never a top exchange for BTG operations.

Bitcoin Gold is ranked as the 29th most popular cryptocurrency on cryptocurrency ranking site CoinMarketCap. Bittrex is ranked as the 23rd most popular trading platform on the same site.

03
Rakuten Plans to Acquire Crypto Exchange as Japan Tightens Registration
This story was shared from this site
RakutenJapanese eCommerce organization Rakuten is intending to procure the digital currency trade benefit called everyone’s bitcoin Inc., as indicated by a declaration. The arrangement could occur through a stock buy assertion between Rakuten backup Rakuten Card Co., Ltd.

In an announcement, Rakuten said it chose to procure everyone’s bitcoin shares so it can understand the early enlistment as a cryptographic money trade and join everyone’s bitcoin “know-how” as a crypto trade with its own as an organization that gives monetary administrations. As indicated by Rakuten, everyone’s bitcoin begun as a bitcoin exchange benefit in March of 2017.

Cryptographic forms of money were blended on Monday, with Bitcoin level as exchange stayed thin because of the US. Bitcoin rose 0.02% to $7,2327.40 on the Bitfinex trade, starting at 7:31 AM ET (11:31 GMT). Exchanges were required to be light, as merchants in the U.S. praised the Labor Day occasion.

Cryptographic forms of money were somewhat lower with the coin market top of aggregated capitalization was at $235 billion contrasted with $239 billion on Sunday. Ethereum, the second greatest elective cash by showcase top, fell 1.03% to $287.87 while XRP, the third biggest virtual money, diminished 1.17% to $0.33441 and Litecoin was at $64.762, up 0.14%.

Japan’s Financial Services Agency is presenting stricter enrollment rules for digital currency trades, The Japan Times gave an account. The guidelines are being presented to see whether crypto exchanges are appropriately directing non-dangerous administration. The progressions incorporate more application questions, minutes of executive gatherings, and audits of the organizations investors.

Japan was the principal nation on the planet to legitimize advanced money trades with its authorizing administration presented a year ago. After a progression of trade hacks, the controller has nearly observed existing virtual coin organizations and has given business change requests to a few.

Elsewhere in the world, internet browser Mozilla Firefox will before long square digital currency mining malware. As the advanced coins have developed in ubiquity, security stays one of the greatest obstacles to the business.

“Sites have deployed cryptomining scripts that silently mine cryptocurrencies on the user’s device. Practices like these make the web a more hostile place to be. Future versions of Firefox will block these practices by default,” Mozilla vice president of product Nick Nguyen said.

Get the latest in Asian Bitcoin news here at Coin News Asia.

The post Rakuten Plans to Acquire Crypto Exchange as Japan Tightens Registration appeared first on Coin News Asia.