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Philippine Crypto Exchange Demands Users Return Bitcoin Bought at $6,000 Following System Error

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Philippine Crypto Exchange Demands Users Return Bitcoin Bought at $6,000 Following System Error

Philippine crypto exchange Pdax recently suffered a costly technical failure – one that led to bitcoin trading at 300,000 Philippine pesos (around $6,000) – a discount of 88% to its current price.

In the melee, some users managed to buy at these ridiculously low prices and quickly moved the bitcoin (BTC) away from their exchange wallets before the error was detected, local news outlet Bitpinas reported. The actual amount of BTC hoarded at the $6,000 give-away price is not clear.

However, the Philippine Digital Asset Exchange, or Pdax, is now demanding that users return the bitcoin or face legal action. The exchange has since locked out several of its clients from their accounts for this reason. But the traders are having none of it.

“After almost 24 hours, they sent me a demand letter and SMS, requesting me to transfer back the BTC, or they ‘may’ be compelled to take legal actions against me.” said one trader who bought at the low price and is convinced he did not violate any of the trading platform’s laws during the purchase.

Rafael Padilla, a lawyer representing one of the Pdax users being asked to return the BTC and locked out of their accounts, said:

Our client’s trade transaction was legitimate under applicable laws, decided cases, and of course according to Pdax’s very own terms and conditions/user agreement.

According to Padilla, Pdax has opted to lock users out of their accounts because it cannot unilaterally reverse the transactions.

The exchange began to suffer outages from around Feb. 16, which it blamed on “unprecedented levels of trading and volatility”. An official statement from Pdax chief executive officer Nichel Gaba claims that 95% of accounts have been restored, but several users reportedly still remain locked out of their accounts.

On Feb. 23, Gaba told a virtual press conference that: “It’s very understandable that a lot of users will feel upset they were able to buy what they thought an order was there for bitcoin at very low prices. But unfortunately, the underlying bitcoins were never in the possession of the exchange, so there’s never really anything there to be bought or sold, unfortunately.”

What do you think about the technical failure at Pdax? Let us know in the comments section below.

Coinbase Files S-1 Registration Ahead Of Going Public

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Major cryptocurrency exchange Coinbase filed an S-1 registration today, disclosing pertinent company information to the U.S. Securities and Exchange Commission (SEC) ahead of its planned direct listing public offering. Per the filing, Coinbase’s class A common stock will be listed under the symbol “COIN.”

SEC Form S-1 is the initial registration form for new securities required by the SEC for public companies that are based in the U.S. Any security that meets the criteria must have an S-1 filing before shares can be listed on a national exchange (for Coinbase, this would be the NASDAQ). Companies usually file SEC Form S-1 in anticipation of going public. Form S-1 requires that filing companies provide information on the planned use of capital proceeds, detail their current business models and competition and provide a brief prospectus of the planned security itself, offering price methodology and any dilution that will occur to other listed securities. 

The S-1 details out how the direct listing would play out if approved:

“Once Goldman Sachs has notified Nasdaq that our shares of Class A common stock are ready to trade, Nasdaq will calculate the Current Reference Price (as defined below) for our shares of Class A common stock, in accordance with the Nasdaq’s rules. If Goldman Sachs then approves proceeding at the Current Reference Price, Nasdaq will conduct price validation checks in accordance with Nasdaq rules. As part of conducting its price validation checks, Nasdaq may consult with Goldman Sachs and other market participants (including the other financial advisors). Upon completion of such price validation checks, the applicable orders that have been entered will then be executed at such price and regular trading of our shares of Class A common stock on the Nasdaq Global Select Market will commence.”

Coinbase’s filling sparked attention and excitement around the cryptocurrency space. Traders on crypto futures exchange FTX.com bid FTX’s Coinbase pre-IPO contract up to over $435 following the announcement. 

A Glimpse Into The Bitcoin Userbase, Coinbase Earnings

Coinbase has been a significant player in onboarding North American users to bitcoin for years. As such, Bitcoin enthusiasts have been clamoring for details on Coinbase’s inner workings to better understand the size of the bitcoin market, among other things. To this point, Bitcoiners have frequently used Square’s quarterly earnings from its bitcoin sales through Cash App to better understand retail interest in bitcoin. But now that Coinbase is going public, it will be obligated, like Square, to disclose details around income, users and its treasury. 

“Today, our platform enables approximately 43 million retail users, 7,000 institutions and 115,000 ecosystem partners in over 100 countries to participate in the crypto economy,” Coinbase disclosed in the filing.

Coinbase’s filing also disclosed some of the company’s earnings details. It disclosed $1.1 billion in net revenue for 2020, up significantly from $282.9 million in net revenue for 2019.

Details On Coinbase’s Institutional Custody Acquisition

In 2019, Coinbase also saw its institutional volume officially flip retail volume, with the proportion of retail volume falling from 80 percent in Q1 2018 to 36 percent in Q4 2020, per The Block. Overall, both retail and institutional volume grew in the third and fourth quarters of 2020.

This emphasis on institutional volume may have stemmed from Coinbase’s acquisition of institutional cryptocurrency custody provider Xapo in 2019. More details about that acquisition were also released in this filing.

“The purchase consideration was comprised of cash and contingent stock consideration, which would be issued to the seller if certain conditions were met on the anniversary of the transaction,” per the filing. “This contingent consideration was accounted for as a liability measured at fair value, with subsequent changes in fair value being recognized in net income or loss. The total purchase consideration was $68.3 million, comprised of cash of $55.0 million, contingent consideration of $12.9 million, and direct acquisition costs of $0.4 million.”

The post Coinbase Files S-1 Registration Ahead Of Going Public appeared first on Bitcoin Magazine.

BitMEX Operator Continues Support Of Bitcoin Core Maintainer Fanquake With $100,000 Grant

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Today, 100x Group, the operator of cryptocurrency exchange BitMEX, announced its third grant to Bitcoin Core maintainer Michael Ford, aka Fanquake. This latest donation is for $100,000, bringing 100x Group’s total support of Ford to $250,000 over three years.

The grant was made in conjunction with an additional $18,500 being given to Ford by Australian cryptocurrency exchange Independent Reserve.

“100x Group is pleased to provide long-term financial support for open-source developers like Michael, who build the infrastructure on which our business and many others depend,” said Alexander Höptner, CEO of 100x Group, per the announcement. “The grant is provided without conditions to ensure Michael is free to work on projects of his choosing.”

The grant agreement was posted as an open-source contract on GitHub.

“I really appreciate the continued financial support from 100x Group and now also Independent Reserve,” Ford said in the announcement. “The stable funding 100x Group has provided over the last three years has allowed me to focus full time on open-source development. I’m looking forward to continuing to work on Bitcoin Core full time over the next year.”

100x Group (then called HDR Global Trading Limited) teamed with cryptocurrency exchange OKCoin to make a $150,000 grant to Bitcoin Core Developer Amiti Uttarwar in June 2020. Its Open-Source Developer Grant Program has also provided grants to Bitcoin developers Gleb Maumenko, Jeremy Rubin and Calbin Kim, as well as the MIT Digital Currency Initiative.

The post BitMEX Operator Continues Support Of Bitcoin Core Maintainer Fanquake With $100,000 Grant appeared first on Bitcoin Magazine.

Cryptocurrency Adoption Passes Another Milestone Surpassing 100 Million Users

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Cryptocurrency Adoption Passes Another Milestone Surpassing 100 Million Users

According to a new study conducted by Crypto.com, the total number of global cryptocurrency users has surpassed 100 million for the first time ever. The study, which measured the cryptocurrency marketplace’s size using onchain metrics, survey analysis, and internal data, recorded 106 million cryptocurrency users in January 2021.

January’s Bitcoin Rally Accumulated a 15.7% Jump in Global Users

Compared to December 2020, the 106 million users represent a 15.7% increase in just one month. What’s fueling the growth of the crypto market? According to Crypto.com’s research, it comes down to bitcoin adoption momentum.

Eric Anziani, Crypto.com COO had this to say to Bitcoin.com regarding the research’s findings:

Our study improves upon previously used methods to find a clear trend of growing cryptocurrency ownership. As more companies and merchants adopt cryptocurrencies as a treasury asset and means of payment, we expect 2021 to be a banner year for crypto mass adoption, bringing us ever closer to our vision of ‘Cryptocurrency in Every Wallet’.

Bitcoin smashed through its previous all-time high, pushing its market capitalization past $1 trillion. The growth shows no apparent signs of slowing down either as sentiment around cryptocurrency increases, especially as JP Morgan and BNY Mellon will start offering digital payment methods. Not even two full months into the year yet, investors are piling 10-digit figures into bitcoin. Tesla bought $1.5 billion of bitcoin at the beginning of February, and investment website Motley Fool announced a $5 million investment just a week later.

Cryptocurrency Adoption Passes Another Milestone Surpassing 100 Million Users

Bitcoin isn’t the only thing that’s fueling the demand for cryptocurrency. Several other factors are at play too. Crypto.com’s research attributes this rapid ascent to the growth of the decentralized finance (defi) market, the ability to buy, sell, and hold cryptocurrency through Paypal, and the institutional adoption of cryptocurrency are attracting new crypto users every day.

Defi Momentum is Growing

The defi market’s momentum is significant given the increased demand for ethereum and other altcoins like Binance’s BNB. The total market capitalization of coins locked in defi has grown from $690 million to over $11.7 billion, a significant number that’s encouraging new investors to enter the market.

According to Crypto.com’s research, ETH’s growth rate was higher than BTC in November and December 2020; BTC’s unique users grew by 1.5% in November compared to ETH’s 2.8% growth. In December, ETH’s change was nearly double that of BTC’s: 2.8% compared to 1.2%.

How accurate are all of these numbers? A total number of 24 exchanges were included in the research, and while Crypto.com has updated and improved its methodology since its last report, it does admit these figures may be subject to some small caveats.

How long do you think it will now take to reach 200 million users? Let us know in the comments section below.

Binance Suspends Ethereum and ERC-20 Token Withdrawals Before Quickly Reversing Course

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Binance Suspends Ethereum and ERC-20 Token Withdrawals Before Quickly Reversing Course

The rollercoaster-ride in cryptocurrency prices on Monday was accompanied by Binance’s fresh restrictions for ethereum and ERC-20 tokens.

Ethereum Network Congestion Fingered as the Culprit for the Temporary Halt

Through the official Binance Twitter account, one of the world’s largest cryptocurrency exchanges by volume, announced that it had “temporarily suspended withdrawals of $ETH and ethereum-based tokens” due to network congestion while underscoring that user funds were SAFU (Secure Asset Fund for Users).

Although Binance has since reversed its earlier decision and restored service in an announcement 37 minutes after its first tweet, traders were quick to pile on with the criticism. This latest move came amid a spike in Ethereum gas costs and a backlog that quickly escalated past 151,000 pending transactions. Binance CEO Changpeng Zhao corroborated the stress on the system, noting that gas shot past “+1200” during the latest congestion.

Binance has already become a big target among the crypto community after being blamed for persistently high gas costs. Some claim that the congestion is a concerted effort on the part of Binance to attract more users to its Binance Smart Chain. However, given the tremendous transaction volumes and gas fees that Binance pays to the Ethereum network weekly, this claim is hard to corroborate

Binance Outage Underlines the Need to Scale

Yet, together with other recent events like the AWS problems that surfaced last week, this latest service outage begs the question as to whether centralized exchanges are capable of handling the latest torrent of investor flows. Moreover, the rollout of Ethereum 2.0 has brought to light similar scaling issues and whether already clogged blockchains can keep pace with advancing adoption.

For some market participants, the answer lies in liquidity aggregators. While service interruptions have dotted the cryptocurrency landscape for years and become commonplace during periods of serious volatility, aggregators that pool liquidity from centralized (CEX) and decentralized exchanges (DEX) have cobbled together a patchwork solution. Still, questions linger about the security of their custody along with blockchain interoperability.

Offerings like Orion Protocol have addressed many of these challenges by aggregating liquidity in a hybrid fashion from CEXs, DEXs, and now automated market-makers (AMMs). Aggregators are attempting to help decentralize the pressure and reverse the load issue strain felt by exchanges during peak periods while avoiding the custody question.

Still, for traders on centralized exchanges, load balancing issues and volatility remain a scourge for the ecosystem as the latest Binance outage underlines.

Do you think withdrawal suspensions will become the norm or a solution to network congestion will be found? Let us know in the comments section below.