Largest Dusting Attack in Litecoin History, Ponzi Scheme Causes Bitcoin Crash? | Cryptocurrency News

Hey, everyone, today we’ve got a multibillion-dollar
Ponzi scheme, Coinbase making a whole lot of money, Binance returning to the US and
the largest dusting attack in history. This is Jackson. And I’m Holly Jane. Bringing you the daily crypto news at Cointelegraph. A three billion dollar Chinese Ponzi scheme
has been linked to the latest Bitcoin market crash, which saw a price drop of 15 percent
from August 13th to August 15th. Since then, Bitcoin has been hovering around
ten thousand dollars, as one of our news editor has said, It’s like a wrecking ball against
anyone taking positions on either side of 10K. Dovey Wan, the founding partner of blockchain
based investment company Permanent Ventures, linked the price dropped to an unknown address
that has been incessantly liquidating one hundred bitcoin batches on crypto exchange
Binance. Dovey often posts hot tips from China. She’s pretty reliable for digging up that
little known news from Asia. Anyway, Wan believes this address is linked
to Plus Token, a Chinese Ponzi scheme that she believes scammed around two hundred thousand
bitcoin from its users and is now trying to liquidate its holdings following the arrest
of its core team members by Chinese police about two months ago. However, research by TokenAnalyst co-founder
Sid Shekhar suggests that none of the addresses associate with Plus Token are Exchange-owned. This is from Bloomberg, although Cointelegraph
has been covering this with research from Cipher Trace. Check out our article here. So in a tweet on August 15th, the TokenAnalyst
said we take a look at the addresses associated with the PlusToken team and solve it out of
that involved addresses only if you add any material bitcoin balance and or moved funds
recently. Check back on our site for a more in-depth
analysis from our editorial team into whether or not one’s hypothesis holds water. So, Barclays has reportedly cut ties with
Coinbase. This may end Coinbase’s user access to the
UK faster payment service, a service that typically reduces payment times between different
bank accounts from three days to just a few seconds. This new development is adding to a time of
turmoil for Coinbase in the UK because there were previous announcements this month. The exchange will be dropping support for
Zcash in the UK. There is also some accusations online that
the Spanish bank Santander blocking UK customers from depositing their fiat funds to the exchange
platform. However, the Santander news was denied by
the bank itself, who said that they “did not block payments to any legitimate company. However, in certain circumstances we will
refer payments for additional security checks where we believe there may be a higher risk
of fraud”. Also this week Coinbase custody acquired Xapo’s
institutional business. So Coinbase just acquired Xapo. But what actually is Xapo and why is this
a big deal? So Xapo itself is a major crypto wallet provider
and it’s actually been in talks with Coinbase Custody since this spring about this acquisition. And Xapo is actually kind of cool because
they store their crypto in literal vaults built in the Swiss Alps. Literal vaults? Literal vaults. Not virtual. No, like an actual vault built into a mountain. This puts Coinbase Custody’s assets under
custody at seven billion dollars making it the world’s largest crypto custodian by assets
under custody. So Coinbase Custody now claims that it stores
on behalf of more than 120 clients in 14 different countries and according to a tweet from CEO
Brian Armstrong, they are seeing two hundred four hundred million dollars a week in new
crypto deposits come in from institutional customers. I guess we’re going to have to see if there
are any competitors coming up to be as big as Coinbase in the US. One competitor possibly we know is Binance,
which apparently is going to be coming back to the U.S. within two months, according to
CZ. In an interview yesterday he said:” I don’t
want to promise any fixed dates, but there’s a lot of work being done and there’s a lot
of things going on in flux. But I would say in a month or two.” So CZ right now is very optimistic about the
ability for capital to thrive in the U.S. And this is going on right now despite the
government’s regulatory ambiguity. He also cited the country’s clear legal framework
for traditional financial services as evidence that the environment for crypto will eventually
improve. I mean, we’ve been seeing this in the U.S.
recently with all of the Senate and congressional hearings about Facebook’s Libra, and then
about just cryptocurrency, blockchain privacy in general. So I think that there is room in the U.S.
for them to become really a good leader in regulation. But there is also danger, which is why they
need regulation. On August 10th, Binance actually tweeted that
a dusting attack had occurred on Litecoin. And this is the first time a attack of this
large of a scale has occurred. Can you explain what a dusting attack is,
Jackson? A dusting attack essentially is when someone
sends a small amount of crypto, like a small amount of Litecoin to many different wallets. It’s just so small that you would probably
not even notice it. And once you spend or transact with that with
that crypto, the person who sent it originally is then able to trace all of your transactions
that you make with that. And that opens you up to a whole host of issues. People gain information about you and they
can use that to blackmail you. Like what are some examples of how they could
blackmail you? So I guess some examples would be if you had
previously used cryptocurrency to buy something online, perhaps from an illegal marketplace. You know, they don’t have to know your name
and address in order to get information about you that you don’t want known. So that’s my dusting attack is. What really happened is on the 10th Binance
identified 50 addresses at least. Their Litecoin addresses that received a very
small amount of Litecoin as part of this largest dusting attack. This is the first time a large scale attack
of this nature has occurred. Jan Happel, co-founder of blockchain data
provider Glass Node, looked into the dusting attack to confirm the extent of it. So although Binance initially reported that
50 users have been affected, Happel believes the scale was much larger, with almost actually
300,000 Litecoin addresses – very large difference – showing signs of this dusting. As to the motivation of the attack, Happle
told Cointelegraph in a recent interview, quote, The person behind the dusting attack
owns a mining pool based out of Russia. They reached out to express that their intent
was to advertise their mining pool to the use of Litecoin. However, it’s unclear from our perspective
or anyone else’s as to whether there were alternative motives. The owner of the pool was not aware that he
was subjecting all these users to a dusting attack and spreading fear among the Litecoin
community. It’s not nice now and he actually has more
to say. It’s interesting to note that even if this
was not the intent of the mining and the mining pool owner, he provided a base for malicious
actors to analyze. You see, the person responsible for conducting
the dusting attack doesn’t necessarily have to be the one collecting the data. They can just merely be providing a service
so that someone else can collect all the information and analyze it at a later date. So Jackson, even if this meaningful didn’t
do it maliciously, what are some of the consequences that this dusting attack means? Well, like Mr. Happle said, another service
could pay back off of the information that was gained from this mining pool, spreading
this dust, and that could be used for malignant purposes. We could also potentially see this as a way
to almost data mine cryptocurrency users, which is something that we haven’t really
seen before on a large scale. This could be a serious threat to people’s
privacy and it will make people feel very unsafe about how they spend their Litecoin. So far, the market does not seem to be affected
by this. Trading volumes have actually been up 4 percent,
but as terms for privacy and what this means moving forward, it’s definitely something
that people have to keep an eye on. Thank you guys for watching. I’m Molly Jane. And this is Jackson. And this was some cryptic daily news. Always remember to like, subscribe and Hodl.

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