Current State of The Crypto Market (November 4th, 2019)

Hackers:  Crypto exchange Bittrex is being sued over a SIM swap that netted criminals 100 bitcoin, currently worth nearly $1 million.  The case resembles other recent high-profile heists in which a hacker seizes control of a victim’s cell phone to then loot online crypto accounts: the swap was from cellular carrier AT&T, money was taken from Bittrex, and the hack took control over the victim’s online identity.  The hack against Seattle-based angel investor Gregg Bennett, however, has not been resolved by criminal investigators, as others have before being made public in legal filings.  In this case, Bennett filed suit in Washington state’s King County Superior Court, alleging that Bittrex violated its own published security protocols and ignored industry standards, missing the chance to stop the high-stakes burglary. He also alleged that Bittrex failed to act as the April 15, 2019 hack was in process or respond quickly enough once notified by him directly.  The financial legal examiner for the Washington state regulator handling consumer complaints, the Department of Financial Institutions, concluded that Bittrex did not “take reasonable steps to respond” to Bennett’s notice and “appears” to have violated its own terms of service, in a signed letter dated Aug. 30, 2019. 

Key Players:  France is about to introduce an educational module to its high school curriculum that covers Bitcoin and cryptocurrencies.  In June, the French Ministry of National Education amended its study plan to incorporate the world’s largest cryptocurrency. French educators are expected to teach an introductory course that will assist students in understanding the impact Bitcoin has on the French and global economies.  The ministry further provides teachers with three educational explainer videos that address questions such as “Is Bitcoin the currency of the future?”, “Can Bitcoin replace the Euro?” and “Do you have trust in your currency?”  According to the ministry’s outline, students will be required to compare Bitcoin with fiat currencies, which will eventually lead to basic knowledge about Bitcoin, cryptocurrencies and their role in the traditional financial world.

Banks & Institutions:  For much of Bitcoin’s 11-year lifespan, it has been laughed off as nothing more than an experiment— a worthless form of “magical internet money” for those on the fringe. But, according to a number of industry commentators, the cryptocurrency’s value proposition was just bolstered with news that a Chinese bank has been subject to what all bankers fear: a bank run.  On Oct. 31, it was revealed that Henan Yichuan Rural Commercial Bank—a rural bank servicing customers in the area around the Chinese city of Luoyang—is in the midst of a bank run. At the time of the report, depositors had rushed to the institution for the third consecutive bank, trying to withdraw everything could in fear of the institution’s demise.  The depositors feared that the bank was on the brink of insolvency after rumors circulated that the bank’s chairman was in hot water. This fear came in spite of the cries of the bank managers, who waved wads of cash in the air, assured that accounts were insured in a bid to calm clients, and asserted that their employer is backed by the Chinese state.  Enter Bitcoin. As Marty Bent, a prominent Bitcoin maximalist podcaster, quipped in a recent tweet, “Bitcoin: providing better savings technology than banks since 2009.”  Indeed, Bitcoin and other cryptocurrencies, through their systems of private keys and distributed ledgers, allows any user to “become their own bank.” They who hold the private keys hold the cryptocurrency.  As long as all users keep their own Bitcoin in their own wallets, there can’t be a “Bitcoin bank run,” or government intervention to save “Bitcoin banks” for that matter.

Adoption: Crypto.com, the pioneering payments and cryptocurrency platform, successfully hosted its first case competition, an inter-tertiary event aimed at developing university students’ business and analytical skills through devising new products that will drive crypto adoption.  The first of a kind event in the crypto industry was hosted in partnership with Singapore’s crypto and blockchain portal, IKIGUIDE and the Singapore Cryptocurrency and Blockchain Industry Association.  With over 90 students participating from various tertiary institutions, 25 teams were given the opportunity to test their creativity and technical skills in the real-world. Teams were required to do an analysis of Crypto.com’s product offerings and devise a new product recommendation.