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A little over a year into the Trump administration, it might be fair to say that the U.S. airline industry has mixed feelings about the businessman-turned-president.
Three of the country’s biggest airlines — United, Delta and American — and their labor unions praised Trump last month for reaching…
Late 2017 will long be remembered as the time when bitcoin went mainstream. Prices were mooning, and the general atmosphere was one of fear of missing out. That sentiment was especially true in trading circles, and more traditional outlets were experimenting with cryptocurrency divisions in order to take advantage. One such experiment went sour, as a trader attempted to play upon relative company ignorance by shorting bitcoin and covering personal margin calls, with the affair ending in million dollar losses and a first of its kind federal prosecution.
Also read: Citibank India Bans Bitcoin
Bitcoin Trader Faces 20 Years in Prison
Consolidated Trading, LLC’s Joseph Kim, according to federal authorities, emailed, “Until the end I was perversely trying to fix what I had already done. I can’t believe I did not stop myself when I had the money to give back, and I will live with that for the rest of my life. You have every apology I have to give, I am sorry to betray you all like this.”
John R. Lausch Jr, United States Attorney for the Northern District of Illinois in conjunction with the Federal Bureau of Investigation (FBI), insists Mr. Kim “worked as an assistant trader for…a Chicago trading firm that recently formed a cryptocurrency group to engage in cryptocurrency trading…Over a two-month period in the Fall of last year, Kim misappropriated at least $ 2 million of the firm’s Bitcoin and Litecoin cryptocurrency for his own personal benefit, and he made false statements and representations to the company’s management in order to conceal the theft.”
According to reports, Mr. Kim had previous experience in cryptocurrency by way of working in South Korea for a time after graduating from the prestigious University of Chicago. He joined Consolidated in the Summer of 2016 as an assistant bond trader. Employees describe him as having gone by the online name “degen,” as in ‘degenerative gambler’.
It’s the first federal criminal prosecution of its kind in Chicago, and Mr. Kim, 24, is being charged with one count of wire fraud punishable by up to 20 years in prison. U.S. v. Kim, 18-cr-107, states “from September through November 2017, Kim transferred more than $ 2 million of the trading firm’s Bitcoin and Litecoin to personal accounts to cover his own trading losses, which had been incurred while trading cryptocurrency futures on foreign exchanges.”
Attempting to Cover Tracks
By Fall of 2017, Mr. Kim was made part of a cryptocurrency wing of Consolidated, moving from its bond division. That was a heady time for crypto, especially bitcoin, and price action steeped to unheard of highs. Mainstream trading outlets were itching to be part of the market. Shortly after, the complaint alleges, Mr. Kim moved nearly 1,000 litecoin from company coffers to his own, an “intermediary holding space” he reportedly offered as excuse for the unorthodox maneuver due to Bitfinex exchange issues. Something like that, according to prosecutors, was also done with bitcoin, to the tune of 3.2 million USD, as a way to cover personal losses (1.2 million USD was eventually returned).
When questioned at the time by company officials, Mr. Kim is reported to have claimed he returned at least the litecoin (his alleged dealings in bitcoin hadn’t been discovered). When Mr. Kim was suspected of mishandling bitcoin, he again offered excuses that the company increasingly worried were not adding up, though Mr. Kim seemed to assure all was well. By late November, 280 bitcoin were suspected missing.
What seems to be clear is Mr. Kim used bitcoin for personal trading, and Consolidated and federal authorities believe he stole over 280 bitcoin at one time or another. Though he did manage to transfer some back, inevitably losses began to add up. Mr. Kim reportedly admitted to the company he indeed transferred 55 bitcoin from the company to his personal wallet. He also allegedly came forward to explain he was trying to short bitcoin, at times converting litecoin for that purpose. There are also allegations he used company bitcoin accounts to help cover margin losses.
As it stands, Consolidated was able to recover some 144 bitcoin, but claims to have lost as much as 600,000 USD as a result of Mr. Kim’s doings. Mr. Kim and his attorney have not been made available for comment. He is expected to face a federal judge today, 16 February 2018, in order to enter a plea.
What are your thoughts on this federal case? Let us know in the comments section below.
Images courtesy of Pixabay, LinkedIn, DOJ
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The post Trader at Chicago Firm Stole Millions in BTC – Faces 20 Year Sentence appeared first on Bitcoin News.
Chinese health authorities said the worst influenza season in recent years was straining the country’s resources and some experts warned that the Lunar New Year holiday, when hundreds of millions of Chinese go on the road, could make things worse.
WSJ.com: What’s News Asia
Iceland is the ideal place to mine bitcoin. Thanks to the cold coupled with relatively cheap electricity costs, the region has drawn its share of bitcoin mining operations. This year alone energy expended on crypto mining will exceed that of typical domestic usage, according to reports.
Iceland Mining Expected to Double to 100 Megawatts
“Four months ago, I could not have predicted this trend,” Johann Snorri Sigurbergsson, Hitaveita Sudurnesja’s business development manager, announced incredulously, “but then bitcoin skyrocketed and we got a lot more emails. Just today, I came from a meeting with a mining company seeking to buy 18 megawatts.”
Powering southwestern Iceland, Hitaveita Sudurnesja is a Svartsengi-based geothermal energy plant (about four km north of Grindavík). The area is also home to cryptocurrency mining, which is increasing at a pace to use more wattage than its residents combined, effectively doubling “its energy consumption to around 100 megawatts this year,” according to reports. In fact the National Energy Authority puts its usage at more than 340,000 households on the island.
Arguably, mining is the heart of the entire bitcoin affair – and due to its concept of baked-in digital scarcity, the computational problems associated with mining blocks, confirming transactions, building what is referred to as the blockchain or distributed ledger, mining has become a lucrative business.
To do so effectively, cooler climes are necessary, as are abundant sources of energy. Iceland is a natural home for the burgeoning industry, but not everyone is pleased. “Under normal circumstances,” Pirate Party legislator Smari McCarthy explained, “companies that are creating value in Iceland pay a certain amount of tax to the government. These companies are not doing that and we might want to ask ourselves whether they should.” Tapping a typical trope, the lawmaker continued, “We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.” The Pirate Party was once known as very pro bitcoin.
Iceland’s more timid hands might be forgiven due to its somewhat recent experience with so-called “speculation.” The 2008 Great Recession impacted it harshly, spreading to its banking system. When all was said and done, the island nation and government debt ballooned. Three of its major banks defaulted, and by some estimates it was considered the worst economic crisis in economic history relative to its size.
And especially in recent months, many people have soured on the digital asset, noting its volatility and lack of good user experience when it comes to basic transactions (fees and processing time). However, though Iceland’s economy has bounced back, it might not be wise to turn away the future of money so quickly.
What do you think about mining energy consumption? Let us know in the comments section below.
Images courtesy of Pixabay.
Need to calculate your bitcoin holdings? Check our tools section.
The post Iceland Bitcoin Mining to Double Energy Consumption This Year appeared first on Bitcoin News.
Cryptocurrency can be lost in a variety of ways, from hacking to forgotten passwords and failed flash drives. But in dollar terms, one of the biggest causes of crypto losses is bad code, and it’s not usually the fault of the coin’s developers. Instead, third parties, including shoddy smart contract developers and shady exchanges, are to blame for losses that have reached half a billion dollars in the last seven months.
Bitgrail Gets Railed for Dodgy Code
Last week, news.Bitcoin.com reported on the demise of Bitgrail, which contrived to lose $ 170 million of nano cryptocurrency. While the precise sequence of events that caused the catastrophic collapse of the exchange with the assets of thousands of customers is still being confirmed, poor code is being blamed. As reported at the time:
There are rumors that Bitgrail became insolvent following a withdrawal bug that was discovered by some users and then shared in Discord and other chat groups, causing the wallet balance to gradually diminish. One user explained: “There was a bug on Bitgrail where if you placed two orders you got double balance added to your account. You could then withdraw while the orders were up and steal the coins. You had negative balance in the end but you could just make a new account.”
In the aftermath of the incident, this theory has been bolstered by allegations that a bug was indeed responsible, and not in nano’s code, but in Bitgrail’s. One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element – console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”
There was another bug, you could request a withdrawal to your address – from another user-id, from another user-account. That would cause the other users balance to have “missing funds” or “negative balance”. Bitgrail bomber solved this bug by manually entering the “correct” numbers in his database. This is what you get for using a PHP website coded by same skill-level as CfB of IDIOTA.
Even the Best Cryptocurrencies Aren’t Immune to Poor Code
The cryptocurrency most commonly associated with catastrophic bugs is ethereum. That’s not due to its underlying code, but on account of the smart contracts that can be built on top of the ethereum framework. First there was the DAO, which led to ethereum being forked right out the gate, and then there was the Parity bug that caused 150,000 ETH to be stolen, followed by the other Parity bug that caused $ 168 million of ETH to be locked up.
In the past couple of weeks, ethereum bugs have surfaced once more, albeit on a smaller scale. Proof of Weak Hands (PoWH) was a joke scamcoin which turned into an actual scamcoin after a bug led to the loss of 900 ether worth $ 1 million that had been sent to the contract address. The developer then disappeared after receiving death threats from investors aggrieved to discover that the joke Ponzi they were buying into was even less legitimate than it had seemed.
PoWH has since spawned a new scamcoin called ethpyramid which is for “strong hands only”. To the question “Is Ethpyramid secure?” the site responds “Yes. Our dev team put a lot of time into refining and testing this contract to make sure your tokens are safe. Internal functions of the contract are not accessible to the end user.” There’s also PoWH420, “the world’s dank autonomous and self-sustaining 420 pyramid scheme”.
Even if joke coins and their joke developers are taken out of the equation, it’s evident that cryptocurrencies are only as strong as their weakest link. While altcoins such as ethereum and nano have undoubted potential, like every other crypto they’re hostage to bugs lurking in wallets, smart contracts, and exchanges. One bad line of code is all it takes.
Do you think Bitgrail was brought down by a withdrawal bug or is there more to this story? Let us know in the comments section below.
Images courtesy of Shutterstock, and PoWH420. Katie Webster assisted with this article.
Need to calculate your bitcoin holdings? Check our tools section.
The post Bad Code Has Lost $ 500 Million of Cryptocurrency in Under a Year appeared first on Bitcoin News.
A bigger convention center and two popular theme parks helped the city of Anaheim break its tourism record — again.
Anaheim welcomed 24.2 million visitors in 2017, about a 5% increase over the 23 million visitors in the previous year and more than 30% higher than 2012, according to Visit Anaheim,…
New York City police reportedly ignored more than 1,500 requests from federal authorities to detain immigrants.
An alimony deduction to be erased in 2019 under the new tax plan has lawyers preparing for a wave of divorces this year—and eying complications for recipients beyond. Payers have long received a tax break on alimony, while recipients have paid income tax on payments. But after Dec. 31,…
Williamson, W.Va., is home to 2,900 people. That’s one reason congressional investigators are flabbergasted by documents showing two local pharmacies received 20.8 million prescription painkillers from out-of-state drug companies over a decade, reports the Charleston Gazette-Mail . Ohio-based wholesaler Miami-Luken says it supplied 6.4 million hydrocodone and…