Market Watch | Bitcoin | $15,763 | 7 day: +12.5% | | Ethereum | $470 | 7 day: +18.2% | | All crypto | $455b | 7 day: +12.6% | | Bitcoin dominance | 64.1% | 7 day: -0.4% | Prices as of 12 p.m. EST
| |
A small group of Ethereum (ETH) developers programmed an "unannounced hard fork" into Ethereum's network. It worked. The $52b cryptocurrency hard-forked today. Surprise! Not even Ethereum Co-Founder Joe Lubin was ready for it. Important: - "At some point, Ethereum developers introduced a change in the code that led today to a chain split starting from block 11234873," explained one developer.
- ETH block explorer service Blockchair began reporting discrepancies between the ETH blocks it detected and the ETH blocks published by Etherscan, the world's most popular ETH block explorer.
- Joe Lubin is the billionaire investor and Ethereum co-founder behind Etherscan, Metamask, and many other Ethereum services.
- After block 11234873 at 7:08 a.m. UTC, the two explorers began showing two different blockchains.
- The issue was not limited to software providers. Actual ETH node operators reported seeing two chains.
- Binance froze all ETH and ERC-20 withdrawals and downplayed the event, which is central to confidence in most of its listed tokens.
- Metamask suspended operations.
- Coindesk, owned by one of the world's largest Ethereum tokenholders ⏤ Barry Silbert's Grayscale and his trust that holds 2% of all circulating ETH ⏤ was quick to downplay the importance of the event, which has far-reaching implications.
This story continues in Part 2 below...
| |
 Silbert's trust owns 2% of ETH. He also owns Coindesk. What follows are my own views on what happened as an individual, not as a reporter: - I woke up this morning stunned at the reporting about this issue in mainstream media.
- There are serious problems at Ethereum that originate with its extremely questionable ICO, its contentious group of co-founders (there are eight, 12, or more, depending on who you ask), and Ethereum's struggle to appear decentralized.
- Fawning media - including Coindesk, Decrypt, and other major crypto news services - are owned by millionaire ETH tokenholders. As a result, there are few media companies that have any incentive to report on Ethereum's problems.
- What happened today with the world's second-largest cryptocurrency ⏤ a contentious hard fork that was not sequestered and appeared as the real ETH for several hours ⏤ will likely be buried under the rug quickly.
- I will not forget what happened today: its double-spending implications and the fork's ability to compromise millions of "smart contracts." I regret the lack of time I have to write more about this, but I hope to do so in the future. Stay tuned.
- Almost no one, including Binance which claims to process $1t in annual transactions, was prepared to defend against this attack by a tiny number of unnamed Ethereum developers.
- Beware the term "decentralization."
| |
 A message from THE GREAT COURSES PLUS Go from Binge-Watcher to Genius. Sign up for a FREE Trial to The Great Courses Plus today to get unlimited streaming access to over 13,000 on-demand videos on topics like business, investing, science, history, art, personal development, and more. Start Binge-Learning Today! Start Your Free Trial Now
| |
Cred (LBA) is bankrupt and took hundreds of millions of dollars down with it. - Cred operated a digital asset called LibraToken (LBA).
- Cred Inc. and four affiliates filed for bankruptcy on Nov. 7, 2020, seeking Chapter 11 protection. CEO and co-founder Daniel Schatt cited several factors that eventually caused the company's financial downfall.
- Two ex-PayPal (NASDAQ: PYPL) employees, Daniel Schatt and Lu Hua, formed the company.
- Schatt's statement blamed improper behavior by its former Chief Capital Officer, James Alexander, who was dismissed in June, as the main reason for the bankruptcy.
- As things began to unravel, Cred's top executives reportedly sought legal protection from the District Court of Delaware.
- Cred has a tremendous amount of outstanding liabilities. A Ch. 11 bankruptcy filing estimates its assets at $50-$100m and liabilities at $100-500m.
300 bitcoin: - James Alexander is accused of overtaking a newly-opened entity called Cred Capital. He awarded voting shares to an unnamed investor and also refused to return a $3m bitcoin loan to Cred, instead transferring them to a personal wallet.
- Cred Capital limited Cred Inc.'s hedging abilities during the bitcoin market crash of March 2020.
- Lu Hua, Daniel Schatt's business partner, loaned a stunning 300 bitcoin to rectify Cred's hedging positions, some of which are still missing.
- Cred is suing Alexander in California state court for stealing funds.
- Cred Inc. has won a temporary restraining order against Alexander which requires him to preserve any assets he received from Cred Capital while the litigation proceeds.
- This story continues below...
Law360 
| |
James Alexander's version of the events: - In November, Alexander filed a lawsuit accusing Schatt and Cred CFO Joseph Podulka of toppling the company in a power grab for Cred Capital.
- According to the Delaware Chancery Court filing, Cred Capital was a separate company from the beginning, but Schatt chose to oust Alexander during a disagreement.
- Alexander seeks a legal declaration naming him the director and president of Cred Capital. He wants to invalidate Schatt's attempts to combine it with Cred Inc.
- Alexander's legal counselor, Gary Lincenberg, told Bloomberg that Schatt's filing aims to distract the court from ongoing lawsuits against him.
Backdrop: - The troubled crypto lending company ran into an "irregularity" while handling particular corporate funds reported in October. We reported on that here at Inside Cryptocurrency.
- According to a Coindesk report, an unnamed perpetrator caused the irregularity, which forced Cred to halt incoming and outgoing funds related to its CredEarn program.
- The action resulted in Uphold, a cryptocurrency wallet and trading services provider, to discontinue its business with Cred.
- Uphold tweeted on Nov. 8 that it is seeking legal actions against Cred, citing breach of contract, fraud, and related crimes as reasons.
Law360
| |
 Elon Musk On the evening of the U.S. election, hackers again misappropriated Elon Musk's Twitter likeness to propagate another cryptocurrency scam. - Mashable reported that by the morning after the U.S. election, hacker(s) were staying under the radar and promoting a cryptocurrency scam - not via standalone tweets, but via replies to Donald Trump's tweets.
- The Internet Archive reveals that the hacker(s) overtook another verified ("blue checkmark") Twitter account belonging to Emma Isaacs, CEO of a company named Business Chicks.
- The hacker(s) overtook her account, then changed her display name to "Elon Musk" for a few minutes, and finally changed her display name to "." after victims had sent cryptocurrencies.
Methodical: - Amid the U.S. election commotion, the hacker(s) replied to Donald Trump, saying, "It is all but decided by now."
- In a series of replies, the hacker(s) then shared instructions that directed victims to a fake Medium blog post. Then, like many classic cryptocurrency scams, visitors saw instructions for "donating" cryptocurrencies under the guise of receiving more money in return.
- The hacker(s) extracted approximately $56,000 worth of bitcoin and $10,000 worth of Ethereum.
Historical examples: - This is not the first attempt by hackers misappropriating Elon Musk for a cryptocurrency scam on Twitter.
- A massive cryptocurrency scam overtook Twitter on June 15, 2020.
- A similar incident took place two years ago, after which Twitter vowed to lock any account that changed its display name to "Elon Musk." (Twitter failed to honor that promise during this month's incident.)
- Writer's note: Although Inside's CEO, Jason Calacanis, has no involvement in the content of this newsletter, I find this occasion makes it apropos to share Calacanis' comedic rant about Twitter's security ineptitude. Enjoy, and despite Twitter's serious editorial reckoning that is now unfolding, try not to take it too seriously!
Mashable
| |
QUICK HITS: - Hedge fund manager Stan Druckenmiller, founder of Duquesne Capital, reiterated his endorsement of bitcoin on CNBC.
- Blockchain-based data startup Blocknative raised $5m led by Brock Pierce's Blockchain Capital.
- Amber Group, a cryptocurrency market-maker that claims to process $100-$200m in daily transactions, will provide BitGo Trust's custody for its institutional traders. Amber Group's products, such as Amber Pro and Amber App, have utilized BitGo's security technologies since 2018.
- One first-time founder just raised $1,400,000 after finding an early market signal from this website.*
- Binance's U.S. arm announced a partnership with Silvergate Capital Corporation (NYSE:SI) to onboard Silvergate Exchange Network, which is Silvergate's 24/7 instant settlement system with network participants like Gemini, Kraken, and ErisX. For more on Binance see Forbes' landmark investigation into Binance's schemes.
- Anchorage successfully cleared a third-party SOC 1 Type 1 audit from the American Institute of Certified Public Accountants.
- Hiring trend: Vettery reports 53% of employers are open to remote work while only 12% market this benefit, download remote hiring guide for insights.*
* This is sponsored content.
| |
 |  | Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia. |  | | Editor | Alexander Huls is a Toronto-based journalist. He has contributed articles about true crime and pop culture to The New York Times, Men's Health, Popular Mechanics, and other fine publications. Follow him on Twitter @alxhuls. | |
| |
