BTC-e on Refunds, the FBI and Alexander Vinnik

On July 31 the bitcoin exchange BTC-e sent a message over Twitter and on the forum Bitcointalk concerning the company’s recent website seizure by U.S. law enforcement. Additionally, the statement claims that Alexander Vinnik was not the head operator of BTC-e and further states the detained Russian was never an employee.


BTC-e Reveals Information on FBI Takedown recently reported on the recent takedown of the exchange BTC-e and the arrest of its alleged operator Alexander Vinnik. According to U.S. law enforcement Vinnik operated the trading platform and laundered $4B worth of bitcoins tethered to illicit activities since 2011. The exchange domain was seized following the arrest of Vinnik by six law enforcement agencies working on the investigation, and now many innocent BTC-e traders are concerned about their holdings. Then on Monday someone who had access to the company’s Twitter handle and Bitcointalk account sent out a message to the public.

“On July 25, FBI staff came to the data center where our server equipment was located and seized all of the equipment, the servers that contained databases and the purses of our service,” explains the translated BTC-e message on the Bitcointalk forum. “For almost six days now we could not get sane information from our hosting provider on what happened to our servers and because of this information we publish now.”

BTC-e Makes a Statement on Refunds, the FBI and Alexander Vinnik
BTC-e announces its statement via Twitter on July 31, 2017.

The Exchange Claims it Will Process Refunds Soon

BTC-e also states that other employees servicing the facility were also taken into custody by the FBI. Moreover, the trading platform says it will soon be revealing how it might be able to come back online and start a refund process.

“The next update will include information on what options are available to restore the service, and also the procedure for obtaining funds, in the event that the service is not started. In the current situation, if the service is not started before the end of August, then from September 1 we will start the process for refunds.”

In the next 1-2 weeks, we will evaluate and publish information about how much money fell into the hands of the FBI and what amount of funds is available for return.

The exchange explains that the company has always worked on trust and “funds will be returned to everyone.” After the company provides some refund assurance, the exchange details that Alexander Vinnik was not an employee nor the head of the organization. The company’s statement also reveals that BTC-e will be answering questions in the Bitcointalk thread. However, there are no other statements from BTC-e within the thread or on Twitter at the time of writing.

BTC-e Makes a Statement on Refunds, the FBI and Alexander Vinnik
BTC-e’s statement.

Spectators Still Unsure of BTC-e’s Latest Statements

Many bitcoin proponents are uncertain of the legitimacy of BTC-e’s recent statements and especially the claim that Vinnik was not involved with the company. One reason people are skeptical is because of the recent Wizsec article detailing Vinnik’s alleged participation in many crimes. The bitcoin security specialists say “Vinnik is our chief suspect for involvement in the Mt Gox theft” and further ties him to BTC-e accounts. Wizsec says they will be releasing more information on the matter in the near future.

For now, BTC-e customers and spectators will just have to wait for more information to come to light either from the exchange itself, U.S. law enforcement, or blockchain forensic experts like Wizsec.

What do you think about BTC-e’s recent statements? Let us know in the comments below.

BTC-e Domain Seizure by U.S. Law Enforcement Sparks Jurisdiction Questions

On July 28, 2017, the bitcoin-exchange BTC-e domain was seized by six U.S. law enforcement agencies including the Secret Service. Many international bitcoin proponents are questioning why the U.S. is claiming jurisdiction over an exchange registered in another country.


BTC-e Domain Seized by U.S. Law Enforcement

Last week we reported on the U.S. Department of Justice’s (DOJ) charges against the alleged operator of the exchange BTC-e, Alexander Vinnik. The agency has charged Vinnik with nineteen counts of illegal money transmission and money laundering. According to the indictment Vinnik and the bitcoin trading platform, BTC-e helped launder over $4B in illicit funds since 2011. Since Vinnik’s arrest, the website BTC-e has had an “Under Maintenance” static page showing up when visiting the trading platform’s domain.

Bitcoiners worldwide wondered what would happen to the exchange that stopped operating a few days before Vinnik’s detention. According to the DOJ charges, the trading platform faces a fine of $110M, but no one was sure if the site was officially closed. Now visitors of the website see a seizure notice when visiting the domain. The site says the seizure is pursuant to its warrant and was issued by U.S. Homeland Security, the DOJ, the Treasury, the Inspector General, and the nation’s Secret Service.

BTC-e Domain Seized by U.S. Law Enforcement Sparks Jurisdiction Questions
The seizure notice on BTC-e started on July 28, 2017.

‘So did I just get robbed by the US Government?’

Of course, much of the discussion from bitcoiners across forums and social media was about the U.S. and its jurisdiction over this exchange. Like many other alleged crimes in the past with well-known characters like Kim Dotcom, the U.S. seems to think it can charge any person or organization even though they never operated on U.S. soil. For instance, Alexander Vinnik was a Russian native who spent time in Cyprus but never lived or operated in the U.S. Secondly, the website BTC-e is registered in New Zealand alongside the platform’s shell company Canton Business Corporation.

Another topic people have been discussing is the amount of funds left on BTC-e by customers who are completely innocent of any wrong doings. At the moment no one knows how much bitcoin was left on the exchange, but already people are complaining about losses on forums. Some of these customers are not from the U.S. and think it’s outrageous the country is acting like the world’s police once again. One bitcoiner explains his frustrations with the U.S. stepping in and closing BTC-e down;

So did I just get robbed by the US Government? Had a large amount of savings in BTC-e and it looks like the U.S. government stole it from me. 100% legal funds. Not even an American.

Ficen: ‘Regardless of its Ownership or Location, the Company is Required to Comply With U.S. Law Enforcement’

BTC-e Domain Seized by U.S. Law Enforcement Sparks Jurisdiction QuestionsSome bitcoiners have said the website (New Zealand portal) is working from time to time and users still may have a chance to retrieve funds. However, the domain is often down due to connection issues and also show the same static maintenance page. Further, there is also a petition asking the DOJ to allow innocent users access to their BTC-e funds.

The U.S. Treasury Department for Financial Crimes (Ficen) believes it maintains jurisdiction over the domain because many of the transactions on BTC-e’s platform derived from customers located in America.

“The transactions included funds sent from customers located within the United States to recipients who were also located within the United States,” Ficen explains. “BTC-e also concealed its geographic location and its ownership. Regardless of its ownership or location, the company was required to comply with U.S. AML laws and regulations as a foreign-located MSB including AML program, MSB registration, suspicious activity reporting, and recordkeeping requirements.”

What do you think about the U.S. policing an international exchange and charging its operator with crimes? Do you think U.S. law enforcement has the right to do this? Let us know in the comments below.

Bitcoin’s Relationship With the ‘Mark of the Beast’ Theories

Over the past eight years bitcoin has been involved in a few conspiracy theories, and even though they are highly improbable, they are pretty humorous, to say the least.


The New World Order and Bitcoin

Bitcoin's Relationship With the 'Mark of the Beast' Theories
Lots of people thought this man’s company purchased Bitcoin the other day. Baron Jacob Rothschild, of the Rothschild Family Baronetcy, allegedly the richest family on earth for three centuries.

Just recently we reported on the Rothschild Investment Corporation purchasing bitcoin shares and how some people thought it was Lord Rothschild, the alleged owner of the world’s largest fortune for three centuries.

Since the end of time, humans have always liked to tell ‘tall tales.’ Bitcoin itself is often considered a weird subject because an anonymous developer made the software and this has led to many conspiracy-like discussions involving the digital currency. Some have said the protocol was created by the CIA or some underground government agency plotting to rule the world. Today we will discuss two tales that have often been tethered to bitcoin by those who wear tin foil hats. After reading this, you may find yourself in a Faraday cage with your ‘bug-out bag’ waiting for the next EMP, so please proceed with caution.

The Mark of the Beast

Bitcoin's Relationship With the 'Mark of the Beast' TheoriesThis particular tale is tied to a religious belief based on the Christian’s book of Revelations where bitcoin could be considered the “Mark of the Beast.” Yes, there are a couple of random people on this earth who believe that the digital protocol may be the tool of the Antichrist that allows you to purchase food and survive under the Devil’s rule. The Illuminati has many tricks up their sleeve, and this one is fantastically clever.

The Mark of the Beast comes from a story in the Bible’s New Testament, in the book of Revelations chapter 13. In that section, particularly 13:17, it says that people on earth will have to get a mark on their bodies in order to purchase living necessities. The mark is forced upon everyone from “the great, the small, the poor and the rich.” Now because society is gravitating toward a cashless society some curious characters believe bitcoin will be the notorious mark.

“And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name,” explains Revelations 13:17

Bitcoin's Relationship With the 'Mark of the Beast' Theories
Microchip implants with bitcoin wallets have helped fuel the ‘Mark of the Beast’ and Bitcoin theory.

So you might be still asking yourself — How the hell is bitcoin associated with this mark? Well, more recently the subject of “biohacking” and microchip implants have become a popular trend. Some people in this movement have installed chips into their hands with a bitcoin wallet inside. Because Revelations states people will “receive a mark in their right hand, or in their foreheads,” some consider this the missing link to bitcoin and the mark.

However, there are those in religious circles that think this theory of bitcoin being the mark might be the opposite of what’s really happening. The publication Christian Money says bitcoin might be a way people can fight the beast.

“One of the key elements of the Mark of the Beast is to be able to prevent those that refuse to take the Mark from buying and selling. Bitcoins are decentralized and prevent any such control,” explains Christian Money.

The One World Currency

Bitcoin's Relationship With the 'Mark of the Beast' TheoriesAnother story conspiracy theorists have up their sleeves is the “One World Currency” scheme. Another speculative theory thinks that the whole globe will share one single currency, likely owned by the Rothschilds and the Bilderberg group. Now, this conjecture is again tied to the ‘cashless society’ progression, and if you want to be even more clever, this theory can be related to the Mark of the Beast. The one world currency will be trackable, and everyone on the globe will likely be forced to use these funds. That’s where bitcoin comes in, and some speculators believe that because the blockchain is traceable and the technology is part of the ‘cashless society’ paradigm shift — Bitcoin will be the one world currency. For instance, the website Occupy Corporatism believes this may be the case.

“The technocratic push toward cyber-currency or e-money, is a march toward complete control over global currencies with the development of supporting technologies and the distribution of such that facilitate an online representation of money that can be used for exchange with another fiat system,” explains Susanne Posel, of Occupy Corporatism.

The reason why conspiracy theorists believe a global currency is on its way is because many Keynesian economists have bolstered this idea over the years. Even John Maynard Keynes himself has been cited as a single world currency advocate. This school of economic thinking believes it would help the global economy and improve international trade. The introduction of the Euro, a currency that covers many countries was considered the beginning of this effort. However, in recent times certain countries like Britain, for example, have distanced itself from the Euro during the Brexit vote. As far as bitcoin is concerned becoming the world’s reserve currency, some forecast it to be the sixth largest reserve currency by 2030.

So to some of these theorists, bitcoin is just another catalyst towards the cashless one world currency secretly crafted by the elite. In essence, any electronic currency is suspect for being part of the ‘1 percent’s’ plan to enslave the ordinary plebs of society. Even the other day on July 25, 2017, the publication Beforeitsnews published a report called “The globalist one world currency will be very similar to bitcoin,” so these theories still run rampant.

It’s Highly Improbable Bitcoin Will be a One World Currency or the Mark of the Beast

Bitcoin is indeed a strange phenomenon filled with curious characters like Satoshi Nakamoto. However it doesn’t mean bitcoin was created by the CIA, will be used for a one world currency or even the mark of the beast.

What do you think about conspiracy theories tied to bitcoin? Let us know in the comments below.


According to a report revealed by the U.S. Department of Justice, formal charges against Alexander Vinnik are waiting for him on American soil. It seems Vinnik has many money laundering related charges against him and the exchange he allegedly operated — the long standing bitcoin exchange called BTC-e.


‘BTC-e Was the Principal Means By Which Cyber Criminals Laundered Proceeds from Illicit Activity’

BTC-e Operator Indicted and Connected With Missing Mt Gox Funds
Alexander Vinnik, the alleged operator of BTC-e.

The U.S. Department of Justice (DOJ) believes the Russian native, Alexander Vinnik, and the exchange BTC-e laundered billions of dollars worth of bitcoin since 2011. The indictment details that “BTC-e was an exchange used for criminals worldwide” and Vinnik used this tool to liquidate bitcoin into U.S. dollars, Rubles, and Euros.

Vinnik was arrested on July 26, and according to DOJ the exchange operator allowed money from ransomware funnel through BTC-e, as well as hacking incidents, tax fraud, and drug trafficking money.

“BTC-e was an international money-laundering scheme that, by virtue of its business model, catered to criminals — and to cyber criminals in particular,” explains the DOJ’s charges. Through Vinnik’s efforts, BTC-e emerged as one of the principal means by which cyber criminals around the world laundered the proceeds of their illicit activity.”

The indictment describes Alexander Vinnik, 37, a Russian citizen, as the owner and operator of multiple BTC-e accounts, including administrator accounts, and also a primary beneficial owner of BTC-e’s managing shell company, Canton Business Corporation.

Alleged BTC-e Operator Faces 17 Counts of Money Laundering Charges

Vinnick has seventeen counts of money laundering and two charges of operating a business that facilitates unlawful monetary transactions. Further, the DOJ indictment also states BTC-e accounts “received substantial proceeds” from the hacked Mt Gox exchange. Additionally, the exchange netted funds from one of the biggest ransomware attacks called “Cryptowall.”

BTC-e Operator Indicted and Connected With Missing Mt Gox Funds
Mark Karpeles celebrates the arrest, also states he had problems in the past with Russians.

“Cryptocurrencies such as bitcoin provide people around the world new and innovative ways of engaging in legitimate commerce. As this case demonstrates, however, just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies to serve their own nefarious purposes,” said U.S. Attorney Brian J. Stretch for the Northern District of California.

This office will continue to devote the necessary resources to ensure that money launderers and cyber-criminals are detected, apprehended, and brought to justice wherever and however they use the internet to commit their crimes.

The paperwork further states that despite the fact that BTC-e was not registered as “money service” in the U.S. with Fincen (financial crimes enforcement network), it did a “substantial” amount of business in the country. BTC-e relied on “shell companies” says the indictment and most of these affiliated businesses were also not registered with Fincen. These companies clearly disregarded the “Know Your Customer” and anti-money laundering policies explains the DOJ. The report also reveals that BTC-e facilitated money laundering services for the two rogue Silk Road-related officers Carl Force and Shaun Bridges.

BTC-e Operator Indicted and Connected With Missing Mt Gox Funds
U.S. Department of Justice indictment against Alexander Vinnik.

The ‘Vamnedam’ account

The substantial proceeds stemming from the Mt Gox hack was approximately 300,000 BTC (US$765M) according to the DOJ indictments, and funds were deposited into BTC-e accounts named “Vamnedam, Grmbit, and Petr.” Vinnick along with “others” controlled the Vamnedam account and funneled funds into Bitstamp. The coins were then exchanged into fiat currency and sent to bank accounts in Latvia, and Cyprus.

The takedown of this large virtual currency exchange should send a strong message to cyber-criminals and other unregulated exchanges across the globe. ~ Chief Don Fort, IRS Criminal Investigation

Vinnick is facing over 55 years in prison for these crimes and could be extradited to the U.S. in the near future. The BTC-e exchange’s future operations are currently unknown, but the trading platform has been fined for approximately $110 million by the U.S. Attorney’s Office and the Criminal Division’s Computer Crime and Intellectual Property Section.

“The arrest of Alexander Vinnik is the result of a multi-national effort and clearly displays the benefits of global cooperation among US and international law enforcement,” added FBI Special Agent in charge Hess.

What do you think about the charges against Alexander Vinnik? Let us know what you think in the comments below.

Greek Authorities Arrest Suspected BTC-e Mastermind

123Suspected BTC-e mastermind, Alexander Vinnik, was arrested on Wednesday whilst vacationing with his partner in Northern Greece. The 38-year-old Russian is suspected of directing a criminal organization accused of laundering over $4 billion through BTC-e since 2011. Accusations of Vinnik’s involvement in laundering bitcoins that were stolen during the devastating hack that resulted in Mt.Gox’s insolvency are also mounting.


BTC-e Is Currently Offline, Hosting a Static Front Page Displaying the Message “Site Is Under Maintenance. We Apologize for the Inconvenience.”

Greek Authorities Arrest Suspected BTC-e Mastermind

A 38-year-old Russian man has been arrested in Northern Greece for his suspected role in the operation of the shadowy bitcoin exchange BTC-e. The man, Alexander Vinnik, is accused of having facilitated the laundering of over $4 billion worth of bitcoin since 2011. Vinnik is currently in the custody of the Thessaloniki Court of Appeals, pending an application for his extradition to the United States to commence.

BTC-e is currently offline, hosting a static front page displaying the message “Site is under maintenance. We apologize for the inconvenience.” Updates are being provided via the exchange’s Twitter account.

The arrest was carried out by Greek authorities working in partnership with US agencies. The FBI had been surveilling Vinnik for over a year, as documents pertaining to his arrest make reference to a Webmoney account that was accessed from a luxury Abu Dhabi hotel in May 2016. Electronic equipment is reported to have been seized from his hotel room.

Evidence Is Compiling Linking Vinnik to the Mt.Gox Hack That Saw $2.1 Billion Worth of Customers’ Bitcoin Stolen

Greek Authorities Arrest Suspected BTC-e Mastermind

Greek have police made an official statement regarding the arrest, stating that “an internationally sought ‘mastermind’ of a crime organization has been arrested. Since 2011 the 38-year-old has been running a criminal organization which administers one of the most important websites of electronic crime in the world.” The US Department of Justice has described BTC-e as “one of the largest entities in the field of electronic money laundering and money laundering in the world”, stating that the company’s “illegal proceeds come from a number of high-level piracy, ransom repayment systems, drug trafficking and tax systems”.

Evidence is also compiling that links Vinnik to the infamous of Mt.Gox hack that saw approximately $2.1 billion worth of customers’ bitcoin stolen. Wizsec claims that approximately 300,000 bitcoin stolen in the hack was laundered via BTC-e. Crucially, their reports suggest that many of the stolen bitcoins were immediately moved from wallets owned by Vinnik to BTC-e internal storage, rather than customer deposit wallets. Similar patterns have also been identified in the circulation of bitcoin “stolen from Bitcoinica, Bitfloor and several other thefts from back in 2011 and 2012.”

Do you think that Vinnik will be extradited to the United States? Share your thoughts in the comments section below!

BIP91 Activates While Fork Still Looms In the Backdrop

On July 22, 2017, at approximately 04:46:31 UTC at block height 477120 — BIP91 was activated on the Bitcoin network. As of this point, if the Segwit2x plan is successful, blocks that don’t signal Segregated Witness (BIP141) will be rejected.


Segwit2x Progresses Forward

BIP91 has activated on the Bitcoin network after it was enforced by a collaborative effort of mining pools. Over the course of the past 24-hours, nearly every block on the network has been signaling for the protocol change. The threshold for Segwit activation is 80 percent of the network, and 88.2 percent has shown signaling support in the last 24 hours.

Mining pools showing BIP91/Segwit activation include:

  • BIP91 Activates While Fork Still Looms In the BackdropBW Pool
  • Antpool
  • F2pool
  • Viabtc
  • Bixen
  • Canoe
  • Telco214
  • BTCC
  • GBminers
  • Slush
  • Bitclub
  • Bitfury

BIP91 Activates: Grace Period Ends

The past two and half days have allowed miners time to upgrade their nodes, as from now on every block not signaling Segwit (bit-1) should be rejected. If all goes well and everybody is on board with Segwit (bit-1) blocks, then it will ensure Segwit’s lock-in period. All of these signaling phases make sure everyone agrees, and the next chapter of consensus commences. Roughly around the end of August, the Segwit protocol will be officially implemented and active on the Bitcoin network.

BIP91 Activates While Fork Still Looms In the Backdrop

BIP91 was activated on July 22, 2017, at approximately 04:46:31 UTC at block height 477120.

Many community members seem pleased with the Segwit2x progress so far, while others are very doubtful – showing lots of skepticism in forum discussions. Both small blockers and big blockers are still fighting. Further on social media, many bitcoin-business executives, developers, and luminaries are still showing contempt for those disagreeing with their subjective valuations. There’s a lot of narratives to follow with people talking about blockchain re-orgs, replay protection, the user-activated hard fork (Bitcoin Cash), exchange contingency plans, and the biggest of all: whether or not the network will upgrade to 2MB this November.

The User-Activated Hard Fork (Bitcoin Cash)

BIP91 Activates While Fork Still Looms In the BackdropThere are those with the opinion that the user activated hard fork (Bitcoin Cash/BCC) will happen regardless of the Segwit2x working groups progress. There are many bitcoiners discussing this scenario and a recent Medium post written by Juan Manini-Rios goes into great detail about the subject.

“Segwit2X locked-in on July 21st with +90% miner support so many people could now be tempted to assume that the scaling debate is over and Bitcoin is now good to scale to the masses,” explains Manini-Rios.

Unfortunately, that is not the case at all, and a Bitcoin fork is still almost certain.

Manini-Rios says even though people believe the UAHF was just a contingency plan against the user-activated soft fork (UASF), it still will happen. Bitcoin Cash developers have recently added a ‘slow’ mining difficulty reduction algorithm if they don’t get many miners to back the minority branch. Further, it seems Bitcoin Unlimited, Classic, and ABC will be assisting the chain with their separate clients.

BIP91 Activates While Fork Still Looms In the Backdrop

Segwit2x developer Jeff Garzik has also been discussing the possibility of a BCC fork.

“Now that everybody sees Segwit2x being activated on schedule and as agreed, the UASF disruption to BTC holders should be near-zero,” explains Garzik. “One remaining question is the amount of hashpower that will be dedicated to BCC vs. BTC. Seems like small-but-noticeable bitcoin diff dip is possible.”

BCC will be a responsible chain split, not noticeable to BTC holders. To coin a new term, ‘chain cloning’ — Not disruptive like UASF.  

Bitcoin Cash Trading Begins in China

As well as talking about Bitcoin Cash, the start-up Viabtc has added two digital assets called BCC and “BTC_FROZEN2” to their newly launched exchange. “BTC_FROZEN2 represents all tokens besides BCC that may split from the original BTC chain, and is not available for trading,” explains the China-based company. Since Viabtc launched the digital token Bitcoin Cash, the market did quite well on July 22 trading at nearly $900 (¥6000). At press time the price is $533 (¥3600) per BCC and is up over 80 percent over the past 24-hours.

BIP91 Activates While Fork Still Looms In the Backdrop

Viabtc’s exchange BCC/CNY markets.7/23/17

Alongside this, the UASF node count has increased, and supporters of that movement say they will continue running BIP148 nodes until Segwit gets activated. Many UASF supporters believe miners will renege on Segwit activation. Coincidently, hard fork proponents believe small blockers will also renege on the November 2MB hard fork. Additionally, some exchanges like Coinbase may not honor BCC tokens, so those looking to acquire coins from the BCC branch should hold their own private keys.

Throughout the next few weeks, will be sure to inform our readers of all the events that are taking place with the network proposals and possible implementations.

What do you think about the BIP91 activation and the progress with Segwit2x? What do you think about the possibility of a Bitcoin Cash branch? Let us know what you think in the comments below.

How Time-locked Bitcoins Could Incentivize Smooth Hard Forks

There’s been a lot going on as far as development goes with the latest alternative clients and the Segwit2x plan also known as BTC1 on Github. One particular subject that came up on the BTC1 repository was the idea to incentivize the development community with time-locked bitcoins to smoothly activate a hard fork.


Time-locked Incentive for a Bitcoin Hard Fork

Could Time-locked Bitcoins Incentivize Hard Forks?
Chain engineer Oleg Andreev.

The hard fork has gotten a bad name over time mostly because of the contentious fork that took place with the Ethereum network. Hard forks aren’t forward-compatible, which means that the entire ecosystem of miners, wallet providers, exchanges, and merchants need to upgrade to the new code. The Segwit2x plan aims to activate Segregated Witness (Segwit) and follow up with a hard fork a few months down the line.

This week Oleg Andreev, product architect of the blockchain network company Chain introduced Issue #72 to the Github repo called “Time-locked incentive for Bitcoin hard fork.” The scheme Andreev says is to incentivize the community with coins that cannot be spent for a period of time until after the completion of a successful hardfork. The idea comes at a time when Segwit2x offers a compromise of both Segwit and a 2MB hard fork, but the problem is some people think the second part of the agreement won’t be fulfilled.

“It is well-known that cryptocurrency development can be incentivized by long-term time-locked coins,” explains Andreev. “Meaning, that the coins cannot be spent in the peak of a bubble, or right before a disaster that was not prevented or worked around. For instance, Greg Maxwell claims that Blockstream uses such scheme.”

What Are Time-locked Bitcoins?

Time-locked bitcoins cannot be spent until a specified time or block height by using a distributed contract recorded on the blockchain. Over the years there have been added improvements to this type of time-locking infrastructure with code development like Check-Lock-Time-Verify, Relative locktime, and Check-Sequence-Verify. Bitcoin luminary and author Andreas Antonopoulos discusses the subject of time-locked bitcoins in his book “Mastering Bitcoin: Programming the Open Blockchain.” Moreover, in 2016 Thomas McCabe gave instructions on how he successfully spent a time-locked bitcoin transaction.

“Bitcoin’s scripting language is very powerful, but access to resources with regards to learning how to build a script is scarce,” details McCabe.

Could Time-locked Bitcoins Incentivize Hard Forks?

‘Measuring the Amount of “Skin in the Game” to Gauge Responsibility’

Chain engineer Andreev believes this technology could smooth the process of completing a successful hard fork.

“Considering that any hard fork by definition carries an increased systemic risk: from producing chain splits inadvertently (due to overlooked software incompatibility), to splitting the market and shattering the faith in the technology and perspectives of our social experiment.”

It makes sense to introduce a special kind of time-locked incentives that get unlocked only on a hard-forked chain. Such incentives allow community to measure the amount of “skin in the game” to gauge the responsibility of the people behind a hard fork proposal.

Forward Compatibility

Andreev gives specifications to his idea, and a few other developers including Jeff Garzik thought the concept was interesting. Additionally, Andreev’s proposal offers forward compatibility and “the code is expected to be modified to preserve the spirit of the proposal for the future hard forks,” explains the developer. Adding an incentive to smoothly activate a fork or fund bitcoin development, in general, is a unique concept but it’s likely this plan won’t be included in the Segwit2x working group’s current roadmap. There are multiple comments and suggestions made by developers that won’t make the final cut including funny ones like finding the Mt Gox missing bitcoins.

What do you think about incentivizing hard forks with time locked bitcoins? Let us know in the comments below.

Thousands of Japanese Stores May Suspend Bitcoin Payments on August 1

Over 5,000 retail stores and restaurants across Japan that currently accept bitcoin payments may suspend bitcoin use in their stores on August 1 if their bitcoin payment processors halt services.


Retail Stores May Suspend Bitcoin Payments

Thousands of Japanese Stores May Suspend Bitcoin Payments on August 1Ever since the Japanese government started recognizing bitcoin as a legal method of payment, a large and growing number of retail stores and restaurants have started accepting the cryptocurrency. However, “some Japanese retailers and restaurants that accept bitcoin are considering halting transactions using the digital currency, which faces a potential split amid competing plans for its future,” according to Nikkei on Thursday.

Restaurant chain Heichinrou and leading electronics retail chain Bic Camera accept bitcoin payments through Bitflyer, Japan’s largest bitcoin exchange by volume. They are both planning to stop accepting bitcoin should Bitflyer shut down its services, the publication detailed.

In addition, Nikkei reported that e-commerce site Bitcoinmall, which accepts digital currencies, is also considering suspending bitcoin transactions for several days beginning on August 1. “We will rely instead on monacoin and other virtual currencies for a while,” said Bitchange, the company which operates the site. Monacoin is an altcoin that has gained popularity in Japan.

Announcements by Bitflyer and Coincheck

Over 5,000 retail stores and restaurants accept bitcoin payments through either Bitflyer or Coincheck which offer payment services for merchants.

Thousands of Japanese Stores May Suspend Bitcoin Payments on August 1Bitflyer recently helped Bic Camera stores roll out a bitcoin payment option nationwide. Meanwhile, Coincheck claims to have helped over 5,000 stores accept the cryptocurrency and is in the process of helping over 260,000 stores nationwide accept bitcoin through a partnership with Recruit Lifestyle. Earlier this month, the two partners started rolling out bitcoin payments, starting with eyeglasses retail chain Meganesuper which has 334 locations.

Bitflyer posted a notice on Wednesday, stating that it may halt bitcoin deposits and withdrawals as well as its payment services on July 31 at 22:00 Japan time until about August 2. Coincheck separately announced on Tuesday:

On August 1, 2017, we may temporarily suspend bitcoin deposit and withdrawal for Coincheck exchange and payment services to protect users assets…The resume date is unspecified, but we expect several hours to several days. Also, if we decide that a Bitcoin fork will not take place on August 1, 2017, 12:00 am, the suspension of services will not happen.

Thousands of Japanese Stores May Suspend Bitcoin Payments on August 1However, on Thursday the possibility of a network split was significantly reduced as the scaling compromise for Segregated Witness (Segwit) was locked in with a strong consensus.

Nonetheless, the exchanges are still prepared to suspend bitcoin services, should a network split occur.

Coincheck announced on Friday that “it is highly likely that ‘Bitcoin Cash‘ hard fork will happen around 9:20 pm (JST) on August 1st, 2017.” In addition, “On July 23, 2017, the event of a fork of the Bitcoin protocol may happen. Initially, it was intended to happen on August 1st, but it may happen faster than anticipated,” the exchange added. However, the suspension of services will not happen if Coincheck decides that a Bitcoin fork will not take place.

Retailers are expected to see little impact from halting bitcoin payments, since most of their business is conducted in cash or credit card, Nikkei concluded.

How do you think retailers will be affected on August 1? Let us know in the comments section below.

How Exchanges Plan To Deal With a Possible August 1 Fork

Over the past week, many bitcoin exchanges have revealed plans for the possibility of a network fork on August 1, 2017.


In about a week there still may be a possibility of a network fork come August 1, even though Segwit2x is showing strong consensus. If miners fail to continue joining forces to enact BIP91 and Segregated Witness, then the UASF and UAHF plans could still happen, in fact, the UAHF may happen regardless. Below is a compiled list of exchanges that have detailed their contingency plans for an upcoming fork, as some of them will be halting deposits and withdrawals and taking the necessary steps to secure their trading platforms and customer assets.

A List of Current Exchanges That Have Issued Statements Concerning a Possible August 1 Fork


The bitcoin company Xapo has issued a statement about August 1 telling customers that bitcoin transactions during a fork will be suspended. Xapo says if users need to do transactions during a fork, customers should get their bitcoins off Xapo before August 1. Coins held on the exchange will be available after the network change and “Xapo will keep your bitcoins safe,” explains the firm.

GDAX/ Coinbase

Coinbase and GDAX have made similar statements because they are the same company. The San Fransico-based firm has detailed that it will suspend deposits and withdrawals during an August 1 fork scenario and may halt trading. As far as the user-activated hard fork is concerned GDAX and Coinbase have also announced they will not support that chain and its associated token. Coinbase recommends that those interested in acquiring UAHF tokens should remove their bitcoins from their exchanges.


The Chinese exchange Huobi has issued a report on its plans to suspend bitcoin deposits and withdrawals on August 1 due to “potential technical risks.” The exchange details, “if there is no fork, and the network is stable, we will resume deposits and withdrawals from Bitcoin.” Further, the company says that if customers are not comfortable with their wallet or feel they are not protected with anti-replay attack software, then they should deposit funds on Huobi before August 1.


BTCC has also announced its contingency plan stating that the exchange will honor both a minority and majority chain. However, the trading platform has not detailed if it will suspend deposits and withdrawals at this time. “In the case of a hard fork, BTCC will give existing customers tokens on the minority chains based on how many tokens they have on the majority chain at the time of the hard fork. We will update users as the situation progresses,” explains the Chinese exchange BTCC.


Another Chinese exchange, Okcoin has announced that it will suspend deposits and withdrawals. The company’s statements are nearly identical to Huobi’s contingency plan. The company does say that if Bitcoin splits into several blockchains, the exchange will honor “every blockchain and give users their rightful ownership of their Bitcoin.” Further Okcoin says that if anything “unexpected” happens the trading platform will suspend bitcoin trades as well.


The Gemini exchange issued its statement concerning August 1 saying the company will do their “best to support chain withdrawals.” However, the exchange details that unlike the Ethereum / Ethereum Classic bifurcation last year they cannot “guarantee” they will be successful as there is a lack of “bidirectional repetition protection in the different bifurcations of Bitcoin Core (including Segwit2x, UASF, BitcoinABC, and Bitcoin Unlimited).”


The Switzerland based cryptocurrency exchange Bity has detailed it will be suspending deposits, withdrawals, and trading as soon as the 29th of July approaches. The company says it is preparing replay-protection and will “start bitcoin trading as soon as the dust settles and we know which chain(s) is(are) surviving.”


The exchange Kraken has not officially given any statements about the fork. However, during a recent podcast, Krakens CEO Jesse Powell details that the trading platform will have to freeze deposit and withdrawal funding. “Everybody with a balance on Kraken would have two coins” in the event of a fork says, Powell. Depending on the risks of replay attacks customers should receive both tokens.

Thirteen Japanese Exchanges

According to Japan’s Cryptocurrency Business Association (JCBA), thirteen exchanges have announced suspending bitcoin services on August 1. This means participating exchanges will suspend deposits, withdrawals, and possibly trading. The exchanges suspending services include Bitbank, Bitpoint, Quoine, Fisco, Coincheck, Btc Box, Tech Bureau (Zaif Exchange),, Campfire Corporation, Bit Trade, Bitcrements, Tokyo Bitcoin, and Minnano Bitcoin.


Japan’s largest exchange that wasn’t included in the JCBA list, Bitflyer published its plan on July 21. Bitflyer says that customer assets will be protected and a “coin made by each of the two (or more) chains after branching will be given to customers.” Additionally, Bitflyer is taking countermeasures for replay attacks that may occur during blockchain branching. Alongside this, the Japanese exchange will also temporarily stop deposits and withdrawals until the protocol changes are complete.

Many More Exchanges Still Haven’t Told Customers Their Contingency Plans, But Have Issued Statements in the Past

That sums up the list of exchanges that have issued statements concerning a potential split and suspension of services. There still are many exchanges that have not revealed their plans such as Poloniex, Bitfinex, Bitstamp, Bithumb, Korbit, and a host of other trading platforms. At the moment people speculate that certain exchanges may be relying on the issued statements many trading platforms made last March or during the Ethereum split.

Are there any exchanges that you’ve heard from that’s not on this list? Let us know about it in the comments below.

Ethereum’s Parity Client Users Lose Millions in a Multi-Sig Hack

On July 19 the ethereum community was warned that the Parity client version 1.5 and above contained a critical vulnerability in the multi-signature wallet feature. Further, a group of multi-signature “black hat exploiters” has managed to drain 150,000 ether from multi-sig wallets and ICO projects.

new eth

A Vulnerability Found in the Multi-Signature Contract “Wallet.sol” Used in Parity Clients

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackAccording to the company Parity and the firm’s founder Gavin Wood, the startup’s product the Parity wallet version 1.5 and above contained a bug that enabled the theft of $30 million worth of ETH. The vulnerability discovered in these specific Parity wallets used a multi-signature contract called “wallet.sol” and the contract was utilized by a few initial coin offerings (ICO) as well. Circulating reports believe that three particular ICO projects were compromised including Swarm City, æternity, and Edgeless Casino.

The Parity startup had issued a security warning on its website on July 19 detailing the extent of the issue stating;

A vulnerability in Parity Wallet’s variant of the standard multi-sig contract has been found — Immediately move assets contained in the multi-sig wallet to a secure address.

The Mysterious ‘White Hat Group’ Returns to Rescue Funds

Ethereum's Parity Client Users Lose Millions in a Multi-Sig HackFollowing this incident, a group of unknown “white hat group” hackers took it upon themselves to drain the rest of the vulnerable multi-sig wallets by sweeping the network. According to the group, they recovered 377,105 ether worth about $85M at the time of writing. The group says they will be returning the funds to accounts that have been drained and are using the DAO rescue donations for the gas to send the ether forward.

“The White Hat Group were made aware of a vulnerability in a specific version of a commonly used multisig contract,” explains the hacker’s announcement. “This vulnerability was trivial to execute, so they took the necessary action to drain every vulnerable multisig they could find as quickly as possible. Thank you to the greater Ethereum Community that helped finding these vulnerable contracts.”

If you hold a multisig contract that was drained, please be patient. We will be creating another multisig for you that has the same settings as your old multisig but with the vulnerability removed and we will return your funds to you there. We will be using the donations sent to us from The DAO Rescue to pay for gas.

How Many More Faulty Contracts Will Be Found in the Future?

The news of the vulnerability comes just after the Coindash ICO hack last week which saw the loss of $10M worth of ether. The malicious hacks from that event last week and yesterday’s multi-signature wallet drain has had little effect on the price of ethereum. However, the cryptocurrency community is once again discussing the issue of faulty contracts held within the Ethereum network that currently hold millions of dollars in funds. Close to a quarter of a billion dollars in ether has been drained by either the “black hat exploiters” or the “white hat group” since the notorious DAO debacle last year.

What do you think about the latest multi-signature wallet ethereum hacks? Let us know in the comments below.