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How Crypto Markets Are Reacting to the Tether-Bitfinex Allegations

news The cryptocurrency markets endured a loss of as much as $10 billion around 21:00 UTC on Thursday, following allegations that the Bitfinex exchange covered up an $850 million shortfall using the U.S. dollar-pegged Tether (USDT) stablecoin. The New York Attorney General’s office alleged in a statement on Thursday that Bitfinex lost $850 million and used customer…

How Crypto Markets Are Reacting to the Tether-Bitfinex Allegations

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The cryptocurrency markets endured a loss of as much as $10 billion around 21:00 UTC on Thursday, following allegations that the Bitfinex exchange covered up an $850 million shortfall using the U.S. dollar-pegged Tether (USDT) stablecoin.

The New York Attorney General’s office alleged in a statement on Thursday that Bitfinex lost $850 million and used customer and corporate funds from the affiliated stablecoin operator Tether in a coverup.

The allegations appear to have affected USDT’s peg to the U.S. dollars, and have shaken market confidence that triggered an overall sell-off with larger cryptos by market cap such as ether and XRP down 6.99 and 4.8 percent, respectively.

Based on data from CoinMarketCap, the overall crypto market’s capitalization dropped by $10 billion to as low as $167 billion around early Friday morning UTC time, and has since then climbed back above $172 billion as of press time.

Daily chart – Tether

At 21:00 UTC on Thursday, the price of USDT began to fall from the desired set price of $1.00 to as low as around $0.955, according to data from the Kraken and OKCoin U.S exchanges – the two that provide trading pair for USDT against the U.S. dollars.

The USDT price has since then climbed back and is currently changing hands around $0.97 on both Kraken and OKCoin, and may see further price uncertainty as the day continues to develop.

Other stablecoin assets such as USDC, TrueUSD and GUSD are all in the green up between 0.25 and 3 percent as a result of shifting investor funds toward some of the other more regulated alternatives.

Interestingly, Maker (MKR), the crypto asset behind the MakerDAO stablecoin project is down 14.65 percent over a 24-hour period, having dropped $73 in value and is currently the worst performer among the top 25 crypto. All despite recent upgrades to stabilize its value through a fee increase.

Daily chart – Other markets

Meanwhile, as seen above, the reaction to the Bitfinex and tether allegations has been negative with the majority of cryptocurrencies flashing red today.

Bitcoin has since recovered slightly and is changing hands at $5,138 after dropping to a low of $4,953 on the Coinbase exchange late Thursday.

And Whale Alert, a Twitter service that monitors blockchain transactions, notified that hours after the news, 3,999 bitcoin, which was worth $20 million, got moved out from Bitfinex’s exchange wallets to unknown addresses.

Such recent moves are indicative of trader’s sentiment who are currently seeking to reduce their risk by transferring funds away from the allegedly troubled exchange.

However, others have fared better than some with the majority of stablecoins seeing upside action as investors shift their preference away from Tether to other viable options such as Circle’s USDC or Gemini’s GUSD.

Ether is today’s worst performing asset amongst the top 3 major networks, down 6.91 percent and is struggling to find a strong bid beyond $152 after falling from $165 at 21:00 UTC yesterday.

Disclosure: The author holds no cryptocurrency at the time of writing.

Untethered image via Shutterstock; charts via TradingView

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Moonday Mornings: Binance to resume deposits and withdrawals after $40M Bitcoin hack

It’s time for Moonday Mornings, Hard Fork’s wrap-up of the weekend’s top cryptocurrency and blockchain headlines. Here’s what happened. 1. Binance says it will resume deposits and withdrawals on its platform on Tuesday. The cryptocurrency exchange had suspended the functions following an attack in which hackers stole over $40 million worth of Bitcoin. 2. The…

Moonday Mornings: Binance to resume deposits and withdrawals after $40M Bitcoin hack

It’s time for Moonday Mornings, Hard Fork’s wrap-up of the weekend’s top cryptocurrency and blockchain headlines.

Here’s what happened.

1. Binance says it will resume deposits and withdrawals on its platform on Tuesday. The cryptocurrency exchange had suspended the functions following an attack in which hackers stole over $40 million worth of Bitcoin.

2. The figureheads of the fake cryptocurrency scheme, OneCoin, are being sued. Brother and sister duo, Konstantin Ignatov and Ruja Ignatova are facing a class action law suit for their involvement in the scam which was “based completely on lies and deceit,” ZDNet reports.

3. A Bitcoin BTC fueled ransomware attack hit the Baltimore City government last week. Despite being cleaned of the ransomware, hackers are allegedly still accessing the infected computers, ZeroHedge reports. The Federal Bureau of Investigation is now investigating the attack.

4. The creator of the Bitcoin treasure hunt Satoshi’s Treasure is claiming nearly 60,000 people are following the global challenge, CoinDesk reports. One player has already claimed the first prize, and didn’t even have to go anywhere to claim it.

And finally.

5. William Shatner is putting William Shatners on the blockchain. The former Star Trek actor is joining Mattereum, a legaltech firm, to document the authenticity of science collectibles and memorabilia from a range of franchises on the blockchain.

That’s another weekend’s headlines for you. Live long and prosper.

Published May 13, 2019 — 07:58 UTC

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Amazon granted patent for Bitcoin-style system to fight DDoS attacks

Cryptocurrency rumor mongers are likely to be dancing today as Amazon has successfully filed a patent for a Bitcoin-styled Proof-of-Work system. But don’t get ahead of yourself, it doesn’t look like the Seattle-based ecommerce giant will be accepting Bitcoin for payments. Despite first being filed in December 2016, Amazon’s patent application was granted earlier this…

Amazon granted patent for Bitcoin-style system to fight DDoS attacks

Cryptocurrency rumor mongers are likely to be dancing today as Amazon has successfully filed a patent for a Bitcoin-styled Proof-of-Work system. But don’t get ahead of yourself, it doesn’t look like the Seattle-based ecommerce giant will be accepting Bitcoin for payments.

Despite first being filed in December 2016, Amazon’s patent application was granted earlier this week and appears to outline a system that uses Proof-of-Work to prevent distributed denial-of-service (DDoS) attacks.

“One way to mitigate against such attacks is to configure a service such that requests to the service incur some sort of expense, thereby providing a disincentive to participating in the attack,” the application reads.

Planting a Merkle Tree

Amazon proposes to use Merkle Trees to present a Proof-of-Work challenge and make it too costly for a series of computers to perform a DDoS attack.

But what’s a Merkle Tree? In short, Merkle Trees are cryptographic tools where blocks of data are manipulated to give them a unique identifier also known as a hash.

These hashes are then manipulated again to create a parent hash. Parent hashes are always a combination of two or more child hashes. It’s layers on layers of hashed data.

Since computing power is required to build a Merkle Tree, performing such hashes could get very costly in terms of time, electricity, and resources. In turn, this makes DDoS attacks economically unfeasible.

In the case of Amazon’s patent, imagine having to construct a Merkle Tree before you’re allowed to access a website hosted on one of its servers. To an individual the cost might be insignificant, but to an organization trying to carry out a DDoS attack – which might involve many hundreds of computers – it could become prohibitively expensive.

Amazon’s Merkle Tree

Merkle Trees are also used in Proof-of-Work blockchains like Bitcoin as part of its consensus mechanism. But for now that’s as close as Amazon will get to Bitcoin.

Indeed, with this news it seems Amazon is still of the “blockchain, not Bitcoin” mantra. Earlier this month, the web giant said that AT&T, Accenture, and Nestlé are all using its cloud-based blockchain tools.

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South African voters fear mobile political campaigns will steal their personal info

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