To this extent the real reasons behind this remain unknown. Is this a new attempt to cripple blockchain and its descendant coins?
No, I doubt that. The Russian government has been blacklisting cryptocurrency-related sites and exchanges for at least 5-6 years. They have blocked access to hundreds of sites, so Binance is in good company. Site operators usually just spin up mirror sites to prevent downtime and loss of access. In this case, they didn't even block access. They just added Binance to the official blacklist. You still don't even need a VPN to access Binance from Russia. That's why nobody even noticed this until now. This all happened 3 months ago, in June. |
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Wasn't a 3 year window passed for the US where a company knew that after the ico they had that time to innovate? If they haven't, its probably good they've been forced to close..
Hester Peirce proposed a 3-year safe harbor provision, but I don't believe it was ever implemented. This is one of the things I don't like about her, she is ready to give the green light to every project just because it has the word crypto somewhere in the whitepaper, rather than a crypto mom she should be called token nanny. She really needs to put the brakes on her enthusiasm and realize not every crypto project will be a success, and with that people are losing money, the same people that's her job to protect. Investing in startups is quite risky as it is. The SEC regulates the pink sheet stock market too, which is notorious for startup failures and rampant micro-cap stock fraud. If it doesn't meet the qualifications to be listed on a registered national exchange, the SEC just doesn't pay all that much attention. In a sense, one could say she wants to see token markets treated equally to the rest of the stock market, instead of seeing it specifically cracked down on. |
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The investigation is apparently at an "advanced" stage, so the SEC must have been looking into their relationships with high-speed trading firms long before that suicide happened. Supposedly they are looking at a $10 million fine, which is a drop in the bucket compared to the $200 million they just raised in another round of seed funding. It will make for a rough quarter for Robinhood whenever they settle the case, but I'm sure they made much more than $10 million selling their customers' orders to these firms. Now they basically just need to pay a fine and put something in the fine print about it. |
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I am not critical of the cash amount he wants to be paid. I reckon free stock option are granted for a consultancy work, or board membership you are not paid for, a common scheme in startups/newco with high mortality rate, as Dr. Back taught us multiple times during the last hours. The things change when you use your reputation (Mr. Lopp) to shill such Token.
The "advisor" title is just a front. What they are really paying him for is his ringing endorsements of the token sale to his Twitter following -- they have been around long enough to know that. There is no pleading ignorance on this one. I too was especially disappointed to see Jameson Lopp shilling this way. This is really, really embarrassing:  |
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I started to use Binance app not a long time ago, and I have noticed that the app is logging me out and asking me to type my email, password, and 2FA from time to time. I haven't cleared the cache/data nor do I use "cleaner apps" so not sure what is causing this. Has anyone faced a similar issue?
Users -- both Android and iOS -- have been reporting this issue for a long time. Binance has said in the past that it's a bug they've attempted to fix, but I think it may just be a security precaution where they force logouts every so often. Here is some discussion on Reddit about the issue: Android app logging outBinance App has logged out me periodically (iOS 13.3)Frequent Logouts on Binance App |
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Okay so this means you don't have to pay taxes on airdrops unless you sell/trade them for something else right? I believe for bitcoin cash and gold and those forks... if you didn't sell them for usd or trade them for anything... well you don't have to do anything for it. Don't consider this legal advice, but if you're talking about forks where you held the private keys in your own wallet, then yes. Given that no secondary spot markets existed at the exact time the Bitcoin Cash or Gold ledgers were created -- exchanges only launched spot markets for them afterwards -- I think this is a strong legal position, although it hasn't been tested in court yet. The trouble really arises when you're dealing with forks that were credited by an exchange. Coinbase and Bitstamp took months before they credited users with Bitcoin Cash. By the time customers received them, they had significant fair market value. In this case, customers in the US really can't escape the tax consequences. They would be on the hook for ordinary taxable income up to the equivalent amount they received. Because it wouldnt make sense say you earned 500 dollars in airdrops when you received it. Let say you didnt even know you received it... or even if you did... say its worth almost nothing at the end of the year... what happens then? It would be great to get some clarity from the IRS as to whether knowledge of an airdrop or affirmative steps taken to claim it are required to establish "dominion and control." We don't know for sure yet. Members of Congress, the American Bar Association, and others have been asking for clarity because of the obvious problems with the IRS guidance. |
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Their real genius is offloading the backing onto everyone else too. Every person who trades USD/USDT is now their backer. Every exchange who says they'll make good on the peg even if Tether don't is their backer as well.
What exchange is promising that? If the value of USDT goes to $0, I assume Kraken will let their customers withdraw all the USDT they want -- but they won't be making good on any peg.  |
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In fiat I can't check the previous owners of the money. As far as I know, with bitcoin, one can trace the path of transactions to the time they were mined. I thought that if bitcoins were used for criminal acts and then sold to someone like me, they could get to me in a possible investigation. Everyone says that bitcoins are only used to scam people.
The way Bitcoin works makes it very hard for individuals to receive clean coins which hasn't been mixed with a "tainted" coin. Every Bitcoin that you receive is likely to have been linked to a illicit activity in its history, just like fiat. Innocent until proven guilty, law enforcement cannot arrest you solely based on the fact that you're in possession of tainted coins because it doesn't mean that you're involved in the activity. That doesn't mean that exchanges won't freeze or close your account or launch an investigation for proximity to darknet market transactions, for example. One should always be aware of the AML/KYC policies of any given exchange, and accordingly, whether your outputs might be flagged upon deposit. For example, Binance Singapore, Bitfinex, and others I'm sure have frozen or closed accounts for proximity to CoinJoin transactions. Coinbase has done the same for proximity to casino transactions. To cut any such associations, you can use a reliable third party mixer. Alternatively, you could use what Chainalysis might call "risky" services or exchanges -- those with weak or nonexistent AML/KYC policies, who permit tainted coins to mix back into circulation. Gambling services, P2P exchanges, and centralized exchanges who allow unverified trading occupy this niche. For selling, the better option is to use peer to peer exchange where KYC isn't required like LocalCryptos. So you shouldn't have any problems at all during buying and sell.
I also strongly recommend non-custodial P2P exchanges like LocalCryptos that don't require KYC over LocalBitcoins and the like. |
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Not so fast -- lets unpack at what the IRS is saying here: When you receive cryptocurrency from an airdrop following a hard fork, you will have ordinary income equal to the fair market value of the new cryptocurrency when it is received, which is when the transaction is recorded on the distributed ledger, provided you have dominion and control over the cryptocurrency so that you can transfer, sell, exchange, or otherwise dispose of the cryptocurrency. This is actually written in a way that confuses airdrops with hard forks, but let's ignore that for now since the OP is only interested in airdrops. The key point is about fair market value when the cryptocurrency is received. In most cases, airdropped tokens have no value at the time of the airdrop since they aren't listed on secondary exchanges yet. This means there is no taxable income at the time of receipt. Capital gains tax would be due on the full realized value of the tokens when sold. In the case that airdropped tokens do actually have value when received, there is also a question as to what constitutes "dominion and control."Specifically, the Congresspersons write that the IRS appears to adopt a “dominion and control” standard to determine whether a taxable event occurs with respect to airdrops and hardforks. The letter continues that the IRS “appears to suggest that taxpayers may have dominion and control, and thus be taxed on forked or airdropped assets when the fork or airdrop occurs, even if the taxpayer has no knowledge, and even if the taxpayer takes no affirmative step, or manifests any intention to claim or access those forked or airdropped coins.” The Congresspersons posit that this standard is inconsistent with established rules applicable to the income tax treatment of unsolicited prizes or samples.
The letter then specifically requests answers to the following questions:
Does the IRS intend to clarify its standard for finding dominion and control over forked assets wherein some level of knowledge and actual affirmative steps taken are necessary to find that the taxpayer has dominion and control? You can file for a loss, so not necessarily.
In general, you can only file for capital losses up to $3,000 per year. Anything past that has to be deferred to future tax years, at the same limit. This is especially problematic if your exchange credits a hard fork or airdrop at an overinflated valuation and you don't -- or are unable to -- immediately sell. You could incur lots of ordinary income at the time of receipt, but won't be able to deduct all the capital losses in the same tax year, resulting in a large tax bill. |
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Lana Schwartzmann, chief compliance officer for Paxful, said regarding the Twitter hack “It’s quite amazing how different this is from what we’d see in the traditional fiat world. You’d never have this resolved so quickly.” This is only true because the Twitter hackers were especially careless. They were using their own KYC-verified Coinbase accounts to transact on a hacking forum, OGUsers -- while doing nothing to hide their IP addresses. Then they tried to broker access to hacked Twitter accounts through the same forum. It took just one central point of failure -- the forum database, which had been previously hacked. Law enforcement acquired a copy of it, and the rest is history. I thought this was an especially vomit-worthy response from Coinbase: Also speaking about Twitter, Coinbase’s chief compliance officer Jeff Horowitz agreed that it was part of a shifting narrative around crypto: “The story quickly changed to ‘how is crypto partnering with law enforcement to track this issue?’” |
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Now in Russia, every 5 people work unofficially according to Rosstat https://www.rbc.ru/economics/05/09/2019/5d6e74fb9a794709eeba4f8cIn practice, the situation is even worse, and as a result of the pandemic, many people have lost their jobs. The government is trying to "bring people out of the shadows" by offering citizens preferential tax regimes (4% tax on income in the next 10 years + a moratorium on changing legislation) Therefore, cryptocurrencies are unlikely to be criminalized. That's an excellent point, and it probably applies to a bundle of other countries, not just Russia. Tax revenues are taking a nosedive everywhere, all across the world. Offering preferential tax schemes is one way to soften the blow, if it can rein in tax avoidance and the informal economy to any degree. As an example, South Korea just revised the tax code, subjecting cryptocurrency gains to a 20% tax. In comparison, the tax rate on gains made on the transfer of stocks is 22%. One has to wonder if this preferential treatment is a tacit admission that the government has difficulty enforcing the tax code against cryptocurrency traders. It looks like an indication that they are hopeful to "bring cryptocurrency traders out of the shadows" like you mentioned. |
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Indeed. While we're at it, let's write some software that tells you exactly how much you need to bid to win an auction before the auction has taken place, you have no idea who the other bidders are, or what their bids will be. Easy, right?  the auction isn't going to happen in the future, it is ongoing so there is no need to predict it just to look at what others have bid. That would only work if a block were found precisely after you submit your transaction to the network. The auction closes when a block is found. Fee estimation requires more than just placing your transaction at the top of the queue or 1MB from the tip. It requires estimating the likelihood of finding another block within a given time, and also infers from past blocks what future users will pay. Both of those things are unpredictable on a fundamental level. Looking back at previous blocks and the mempool just provides a guesstimate. the problem is that when someone bids $50 for example the next dude bids $100 and the next $200 while they could have won the auction with $51 just as easily. I agree, this is a major problem. |
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Hardware wallets are also exposed to various threats such as fake versions of wallets (fake Ledger Live) or phishing (fake Trezor sites), and clipboard malware. But this is not a weakness of the device but of each individual user who uses it.
I'm also concerned about things like possibly insecure RNG for key generation and bugs at the software or firmware level. More than anything else, I'm worried about supply chain attacks. The ideal for long term storage is a method that leverages open source software, general purpose hardware, and a source of entropy than can be verified. |
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Automatic fee algorithms on wallets, exchanges, and sites, are to blame for this. They all try to outdo each other, and just endlessly and unnecessarily push the fees higher and higher. There's too much emphasis on guaranteed next block confirmation. It's a cultural problem as much as a technical one. I've withdrawn from exchanges that paid 100+ satoshis/byte when they only needed to pay 5-10, apparently just so they can never worry about congestion. It's like they're at a toll booth requiring a 25 cent payment, and they're throwing away $5 bills. Meanwhile, the exchanges are making so much money that network fees are a write-off to them, so nothing ever changes. It's a tragedy of the commons situation. That's also why BitMEX continues to abuse the network with their daily flurry of un-optimized transactions, broadcast all at once. They have very little incentive to improve things in a timely manner. |
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You should also shift some attention to companies like Bitmex. They use multisig (with uncompressed keys) P2SH on their addresses and broadcast the transaction from it everyday, resulting in a huge unnecessary bloat on the mempool at certain points of the day.
I've been saying it for a long time -- they are a plague on the network, the worst of any service. I'm amazed at how no one seems to care. Coinbase was a contender for that spot, but they finally started batching transactions a few months ago. if people campaigned devs to implement a better fee calculator. and even a new fee formulae. that would have saved more than 10%
That is easier said than done. The fee market is dynamic and not predictable. No algorithm can predict when a giant influx of transactions will suddenly occur, or when the network will go an hour or two without finding a block, or what other users are willing to pay in the future. It's impossible to write perfect fee estimation algorithms. |
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The safest option is by far a paper wallet, if you have a clean OS that is never connected to the Internet and a dumb printer then you could print your wallets with no issue, the problem is that they are very impractical for daily use but you could always have a wallet with some funds for your daily expenses. PSA: Not all paper wallets are created equally. Securely generating and writing down a 12 or 24-word seed is a good way to do cold storage. Third party paper wallet software, printers, using raw private keys, etc. -- these are not. Hardware wallets were supposed to be the best of both worlds, a device that was completely secure and that you could use whenever you want ... I never thought that was a realistic way to characterize things. To me, hardware wallets always occupied a niche between desktop wallets and cold storage. They come with their own set of security trade-offs and risks. Hardware wallets are useful for new users who would otherwise get their bitcoins stolen, but I think most users who are serious about security are using general purpose hardware to secure their bitcoins -- at least for their long term cold storage. |
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@squatter. Do you use Paxful regularly? I have read a news article that Paxful has required KYC on everyone because of an all time high in scams during that time hehe.
No, Localcryptos is the only P2P exchange I use. I was just speculating about why Paxful might be growing compared to LBC. From the look of things, you're right that they have gotten more rigid recently. There are still loopholes, though. You can avoid KYC by avoiding the escrow system, using the escrow system only from non-flagged jurisdictions, posting sell offers (not buy offers), or responding to buy offers -- up to $1,500 in aggregate volume. Once you make a trade or two getting near that limit, you can dump the account and make a new one. |
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Does anyone have some information on what the more detailed email contains for one of the 9,500 that have been affected? I assume it is something along the lines of your personal data was one of the few taken, blah blah blah, investigators are on the case, etc etc.
I found this on Reddit: Security Notice - Your detailed personal information has been exposed
Dear client,
On the 14th of July 2020, a computer researcher that participated in our bug bounty program notified us of a potential data breach on the Ledger website. We immediately fixed the breach after receiving the researcher’s report and undertook an internal and external investigation of the situation. While conducting the investigation, we discovered an unauthorized third party had gained access to customer information.
While the majority of the data breach concerned email addresses, we regret to inform you that you are part of the approximately 9500 customers whose detailed personal information were accessed by the unauthorized third party. Specifically, your name and surname were exposed.
This data breach is not linked to our hardware wallets’ security and your cryptocurrency funds are safe. Due to our detailed security measures, attackers cannot steal your sensitive information like your recovery phrase and private keys. You are the only one in control and able to access this information.
We deeply apologize for this security breach and are working with law enforcement to undergo an investigation
Pascal Gauthier, Ledger CEO The person who received this email only had their name leaked. I assume others will have received emails stating that their phone numbers or home addresses were compromised too. |
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Can anyone from ledger users confirm here if ever you got emailed from them about the qoute aboved? I think they should aplogize to those 9500 users who were affected and give them compensation and assurance just in anycase their profile has been caught doing any illegal activity as scammer can used their details.
Ledger doesn't appear to have enough customer information for identity theft. The main concern is phishing given that that 1 million email addresses were compromised. There may be a theoretical chance of $5 wrench attacks, but since there is no association between Ledger customers and actual cryptocurrency holdings -- no way to target big holders -- the chances seem remote. |
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I just always pony up a the recommended fee amount if its something I don't want to wait to see if it is going to confirm quickly or not.
Sometimes that's not enough. This morning, a typical mempool increased about 30-35% in size over just a few hours, with the majority of transactions paying 100-120 satoshis per byte. Directly prior to that, 20 satoshis per byte would have gotten you into the next block. There is no fee estimation algorithm that properly accounts for this. That's what replace-by-fee is for. |
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