As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
$50M IN ETHER STOLEN FROM EXCHANGE: South Korean cryptocurrency exchange Upbit revealed that 342,000 ether coins worth roughly $49.2M were sent to an unidentified wallet on Wednesday, the Wall Street Journal’s Eun-Young Jeong and Steven Russolillo reported Thursday. The company disclosed the wallet address where the coins were sent and reported the theft to authorities who are investigating the incident. The exchange said it has barred all withdrawals and deposits since the loss, which could last at least two weeks. An official at the Korea Internet & Security Agency said that the situation at Upbit has been registered as “an irregular withdrawal” and that it isn’t clear whether the exchange was hacked.
CRYPTO CRIME RISES: According to a report from blockchain forensics firm CipherTrace, losses from cryptocurrency crime rose to $4.4B in the first nine months of the year, up over 150% from $1.7B in all of 2018, Reuters’ Gertrude Chavez-Dreyfuss reported Wednesday. “The 150% increase in crypto theft and fraud reflects how criminals are adapting for bigger and better scores,” CipherTrace CEO Dave Jevans said. “Criminals chase money and the money is right here and ripe for the taking. Little attacks are often easy to defend against, but targeted attacks are far more lucrative.” The firm said two big thefts were the main drivers for the increase this year with the loss of $2.9B from an alleged Ponzi scheme involving PlusToken and a $195M loss from crypto exchange QuadrigaCX. “Even without the two biggest thefts and scams, we are still witnessing many multi-million dollar crimes,” Jevans said. “There is a relatively consistent increase in criminal activity year over year and we don’t expect that to change overnight.”
CHINA EXCHANGES HALT OPERATIONS: At least five local Chinese cryptocurrency exchanges have halted operations or announced they will not longer serve domestic users following regulators’ warnings and notices on digital currency, Bloomberg’s Zheping Huang and Olga Kharif reported Wednesday. Watchdogs including the Chinese central bank have ordered crypto firms to close and cautioned investors to be wary of virtual currencies. Exchange operators Bitsoda and Akdex announced termination of service last week, while Biss said it halted operations amid a government investigation. In addition, Btuex said it will shutter in response to government orders by reopen to serve overseas users and Idax said it will no longer serve Chinese users but focus on users abroad.
HSBC TO USE BLOCKCHAIN TO TRACK $20B IN ASSETS: HSBC (HSBC) is planning to move $20B worth of assets to Digital Vault, a blockchain-based custody platform, by March, Reuters’ Tom Wilson and Lawrence White reported Wednesday. The platform offers real-time access to records of securities purchased on private markets and aims to capitalize on rising interest in such investments. The platform will digitize paper-based records of private placements, using blockchain to decrease the time it takes investors to make checks or queries on holdings.
PARETEUM TERMINATES CEO: Pareteum (TEUM) announced a CEO transition and a restructuring of its leadership team on Monday. The company said Robert Turner has been terminated as chairman and CEO of Pareteum. Bart Weijermars has been appointed interim CEO and independent director Mary Beth Vitale has been appointed interim chairman for the transition period. Weijermars formerly served as CEO EMEA of Pareteum and will remain chief strategy officer.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin rose roughly 8.9% this week to $7,755 in U.S. dollars, according to TradeBlock.
