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A Dragonfly Researcher Breaks Mimblewimble’s Privacy, Proving That The Model Is Flawed

It is quite a pity that the esteemed privacy of Grin has been tampered with by a Dragonfly researcher who was able to unearth the real addresses of senders and receivers of up to 96% of transactions carried out in Grin’s blockchain. The researcher shared this on a Medium post on Nov.18.

The researcher claimed that some other researchers have sometimes said that the privacy model of Mimblewimble, a privacy-focused blockchain protocol, is suffering from some weakness and, therefore, flawed. His recent live testing on Grin has proved the speculation to be true since he was able to uncover the sending and receiving of transactions with an estimated success rate of 96%. This made the researcher conclude that Mimblewimble is not a reliable privacy chain.

One major thing of concern about this faulty privacy protocol is that it is part of Mimblewimble; it is inherent to the protocol without much hope of being fixed. This unfortunate event made the researcher warn that Grin/ Mimblewimble should not be taken as an alternative privacy protocol with reference to Zcash or Monero.

The researcher claimed that Mimblewimble developers are aware of the technical issues and feasibility of an attack, they did not do anything even though he warned them on a Reddit post last year.

In the said post, the researcher did not spare any information regarding the attack, how it works, and what it means for privacy tech. He then provided technical details into this attack with open-source code to reproduce it, data collected, and a technical Frequently Asked Questions.

Image via Shutterstock

KPMG Launches Patent Pending Crypto Analytics Suite KPMG Chain Fusion for Institutions

KPMG has announced the launch of its patent-pending crypto analytics suite, KPMG Chain Fusion to streamline crypto-related services for financial services and FinTech companies.

KPMG Chain Fusion uses a structured data model to combine data from blockchain infrastructures, and traditional systems to provide analytics for business, risk, and compliance purposes.

KPMG has observed that the growing trend of blockchain being used as the underlying technology of assets from Bitcoin to central bank digital currencies (CBDCs) is fundamentally different from the existing traditional information systems.

The Big Four firm believes that the resiliency of the crypto ecosystem has been tested thoroughly in 2020, and institutionalization has been accelerating globally. Blockchain technology has caught the eye of many global regulators, and has had macroeconomic impacts on investment trends.

As more decentralized applications are being built on blockchain, traditional businesses are faced with the challenge of integrating different data structures into a “consistent model” that supports the business and its compliance objectives. As these traditional organizations try to adopt tokenized assets and assets with the underlying technology being blockchain, this takes the challenge one step further.

KPMG Chain Fusion enables interaction across different blockchain protocols and traditional systems by taking structuring blockchain data from different protocols from the company’s existing data structures. This will then be moved into a core data architecture. Sam Wyner, the co-lead of KPMG Cryptoasset Services team said:

“Regulators and auditors expect fully implemented controls and processes within and across a cryptoasset business – whether they are cryptoasset or traditional systems or anything in between. If you are a blockchain or digital asset-based business, you will have separate systems for everything.”

Wyner added that there is a vast difference in technologies, including whether it is a permissioned or unpermissioned blockchain in a traditional front, middle, and back office system.

KPMG advocates for crypto institutional custody

KPMG estimated that at least $9.8 billion in cryptocurrencies had been stolen by hackers since 2017, due to security issues or poorly written code. According to the KPMG report, the cryptocurrency market will need to see huge improvements for the $245 billion industry to keep growing.

Due to the exponential rise in demand for major cryptocurrencies such as Bitcoin and Ether, KPMG emphasized that safeguarding digital assets would be a critical step for the industry to flourish.

According to KPMG, the industry must adhere to heightened rules on storing cryptocurrencies for customers, and follow financial transaction rules, such as Know Your Customer (KYC) and anti-money-laundering (AML) regulations.

Coinbase CEO Defends Decision to License Analytics Platform to US Secret Service

CEO of Coinbase Brian Armstrong sold his blockchain analytics software to US Secret Service, and addressed any worries investors might have concerning privacy issues.

Coinbase Analytics, the crypto firm’s proprietary blockchain analytics software, has been licensed out to the US Secret Service. As a specialized branch of the US Department of Homeland Security, the US Secret Service has been focusing more on cryptocurrency laundering and attempting to eliminate illicit cyber-criminal operations. As cryptocurrencies are currently on the rise, so are money laundering activities.

Is Coinbase Trustworthy Without its Analytics Software?

Coinbase CEO Armstrong took to Twitter to justify his decision to sell Coinbase Analytics blockchain software to the US government and attempted to appease Coinbase customers, who have voiced their concerns regarding their personal data. Armstrong said that regardless of his company’s decision to lease the software or not, people could still trace others’ transactions on a public blockchain. If investors were concerned with privacy, they should simply switch to privacy coins.

Why Sell Coinbase Analytics?

Armstrong also defended his decision of selling the blockchain analytics software by expressing his desires to recover his costs, stating that it is quite expensive to maintain an analytics platform. He also went on to advocate for the benefits of Coinbase Analytics and explained that it was a good platform that could be used to encourage fiat money and cryptocurrency interactions. Taking to his Twitter account, Armstrong explained:

“Exchanges that maintain connections into the existing financial system (i.e. ability to connect your bank account, do wires, etc so you can convert fiat to crypto) need to follow Anti-Money Laundering (AML) laws, and this often includes utilizing blockchain analytics software for transaction monitoring.”

Armstrong added that there are improvements still left to be desired of AML laws, but that cryptocurrency investors must nevertheless adhere to them in order to operate a fiat to crypto exchange legally.

Coinbase CEO Brian Armstrong

The Coinbase CEO has taken it upon himself in the past to educate his growing crypto fanbase, preferring to engage with his audience via blogs and platforms, as opposed to talking directly to journalists. He does however add that there are credible journalists out there, but believes that the best strategy in creating impact among the crypto community is to build a network comprised of a handful of respected journalists and to resort to modern social platforms the majority of the time.

New Darknet Markets Launch Despite Exit Scams as Demand Rises for Illicit Goods

Despite the recent amount of exit scams on dark web platforms, the darknet sector has seen increasing growth, with new marketplaces launching every year.

At the time of writing, crypto forensic firm CipherTrace has reported that it has been monitoring over 25 active darknet markets. Dark web platforms appear to have been on the rise, despite the numerous exit scams the sector has undergone this year.

Notorious exit scams

An exit scam that made headlines everywhere was that of Empire Market, one of the most successful darknet marketplaces out there before it suddenly went offline. Along with its disappearance, the dark web platform bagged a hefty profit of $30 million USD from Bitcoin funds, much to the outrage of its users.

Other exit scams flagged as significant by crypto intelligence firm CipherTrace includes that of Icarus Market. Unlike Empire Market, Icarus’ sudden shutdown was alleged to not have been planned, as the dark web market was making a sizeable profit from the influx of new users flocking to its platform after the disappearance of Empire Market. Per Ciphertrace’s official report:

“Icarus had been pushing high effort updates soon before the exit, leading CipherTrace analysts to believe that the exit likely wasn’t planned. Rather, it’s probable that the large influx of new users from Empire and their deposits made Icarus ripe for a profitable exit.”

In addition, DeepSea market is the most recent dark web to have gone offline. Due to the nature of its disappearance, moderators have concluded that the illicit goods platform exit scammed and is unlikely to return into service.

Despite the growing amount of exit scams, dark markets have been reported by CipherTrace to have been on the rise, as the cost of creating a darknet market is low and profits that could potentially be reaped from it are high. Furthermore, as exit scams have caused reputable dark webs to be non-operational, the demand for illicit goods and services have shifted to other platforms, with new dark web additions being Invictus Market and Lime Market.

Hydra is the largest dark web worldwide

Currently, the largest worldwide dark web market is estimated to be Hydra, which tops more than $1.2 billion in revenue. What is notable about it is the fact that the Russian-based darknet behemoth appears to be the top illicit platform leveraged worldwide, but most of its users are based exclusively in the Eastern European region.

CipherTrace has pinpointed that in the Western world, “DarkMarket and White House Market appear to be the largest darknet markets in the Western world with over 300,000 customer accounts each.”

Recently, the blockchain intelligence firm released a comprehensive guideline to help law enforcement detect whether cryptocurrency had been leveraged for foul play during crime.

With Recent $9.5 million Offering BTCS Gains Institutional Investor Interest

BTCS, a digital asset blockchain technology-focused company, recently closed an institutional investor-backed $9.5 million financing comprised of 9,500,000 shares of its common stock and common stock warrants to purchase up to 7,125,000 shares of common stock at a combined purchase price of $1.00 per share in a registered direct offering.

In 2014, BTCS became the first U.S. public company to mine bitcoin. In March 2021, the company announced the launch of 200 ethereum 2.0 nodes that will generate revenue before month end. With over seven years of experience, BTCS now has a balance sheet with over $8 million in cash and approximately $14.5 million in crypto-currencies to execute the company’s strategic plan.

The company focuses on three lines of business:

Transaction Verification Services: In its transaction verification services operation, BTCS secures and validates transactions on ethereum’s beacon “proof-of-stake” blockchain and plans to expand into securing other “proof-of-stake” blockchains;

Digital Asset Data Analytics: BTCS is developing a platform aimed at providing crucial information to users, enabling the tracking of multiple digital asset exchange holdings to aggregate portfolio holdings into a single platform to view and analyze performance and risk metrics, and;

Digital Asset Treasury Management: BTCS has launched a 200-node “staking” operation with a primary focus on disruptive non-security protocol layer assets such as ethereum.

As outlined above, BTCS has a business plan focused on meeting the needs of the crypto-currency sector as it shifts towards more efficient “proof-of-stake” blockchain protocols and the burgeoning investor demands for greater information and insight. Implementation of the company’s strategic plan is fueled by its enhanced financial position.

From this point, BTCS offers stakeholders a unique investment opportunity focused on digital assets and blockchain technology.

About BTCS:

BTCS is an early entrant in the digital asset market. The Company through its transaction verification services business actively verifies and validates blockchain transactions and is rewarded with digital assets for its work. The Company is also developing a proprietary digital asset data analytics platform that allows users to consolidate their crypto trades from multiple exchanges onto a single platform, enabling users to view and analyze their performance, risk metrics, and potential tax implications. The Company employs a digital asset treasury strategy with a primary focus on disruptive non-security protocol layer assets such as bitcoin and ethereum. For more information visit: www.btcs.com

Blockchain Analytics to Help Curb Crypto Misuse, Says HashCash CEO

Since the crypto industry is growing at a frantic pace, blockchain analytics can help fill the void of curbing money laundering and cybercriminal activities, according to Raj Chowdhury, the CEO of HashCash Consultants.

“There has been a conscious effort in implementing stricter crypto regulations worldwide. Blockchain analytics will play a crucial role in decision-making processes for organizations dealing with crypto and blockchain technology,” said Chowdhury. Blockchain analytics is believed to be constructive in establishing order and propelling sustainable growth in the crypto sector.

Blockchain analytics render actionable insights that help enterprises comply with regulatory protocols regarding cryptocurrencies. Chowdhury said:

“The playing field required for innovation must not compromise the achievements we have made so far. Like any technology, blockchain is not immune to misuse. Hence the regulation is a necessity not only for AML compliance but also for developing blockchain research and the global crypto-community.”

As the cryptocurrency space continues grappling with the challenge of various lending and DeFi projects facing bankruptcy, Chowdhury has advocated the importance of crypto education when averting high-APY DeFi scams.

Rand Low, a quantitative risk modeller and senior fellow at the University of Queensland Business School, recently highlighted the importance of regulation and capital controls in fast-growing crypto lending platforms.

Low acknowledged that this would prevent depression and crashes in the market because the uncertainty rocking crypto lending entities like BlockFi, CoinLoan, and Celsius Network was causing panic selling.

A recent Wall Street Journal (WSJ) report disclosed that Celsius took more risk than it could handle because it had a total asset base of $19 billion. In contrast, its equity contribution was pegged at just $1 billion. Therefore, blockchain analytics can help prevent such trends by rendering more transparency and insights.