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Romanian Programmer Confesses to Orchestrating BitClub Crypto Scam Worth $722 Million

Silviu Catalin Balaci, a 35-year old Romanian citizen living in Germany, has confessed to helping create BitClub Network, a crypto mining Ponzi scheme that siphoned off investors’ funds worth $722 million.

As per the announcement by U.S. Attorney Craig Carpenito, the Romanian computer programmer Silviu Catalin Balaci has admitted to conspiring to carry out wire fraud by aiding the sale of unregistered securities through the BitClub Network Ponzi scheme.

Plea made via videoconference

Following the revelation made through videoconferencing, Balaci was charged with one count of dual-object conspiracy in the BitClub Network scam. This could attract a $250,000 fine and a maximum five-year sentence.

In December 2019, four other men, namely, Russ Albert Medlin, Joseph Frank Abel, Jobadiah Sinclair Weeks, and Matthew Brent Goettsche, were found answerable for their involvement in the scheme.

Medlin, who was the fraudulent network’s ringleader, and he initially managed to evade authorities until he was arrested in Indonesia on separate charges of child sex crimes mid last month. However, it was not clear whether he was extradited to face the crypto scam charges in the United States.

Coercing investors

The BitClub Network was operational from April 2014 to December 2019, and investors were sweet-talked into investing in the scheme with the promise of getting shares of purported Bitcoin mining pools. Additionally, these investors were promised rewards for recruiting new members to the scheme.

According to the announcement, “As a part of the scheme, Balaci and Goettsche discussed that the target audience for the BitClub Network would be “dumb” investors, referred to them as “sheep,” and plotted that they would be “building this whole model on the backs of idiots.”

Balaci helped Medlin and Goettsche in establishing and operating the scheme as a programmer. For instance, he could manipulate the Bitcoin mining earning figures to the tune of 60% higher to dupe investors.

Ethereum Releases Validator Launchpad for ETH 2.0 Testnet

Ethereum software developers finally released the validator launchpad for ETH 2.0, which enabled users to participate in the testnet’s Proof-of-Stake.

Leveling up And Unlocking “Medalla”

The testnet, dubbed “Medalla,” is said to be released on August 4, if all goes well. Ethereum developers behind Medalla have also set up certain criteria that need to be fulfilled for the alternative blockchain to be unlocked.

The test run of the network will be in the hands of the community, and a minimum of 16,385 validators are required for the launch. Each of these users is required to deposit 32 Ether (ETH) coins to access the multi-client testnet. Also, “minimum genesis time” needs to be accomplished, which basically outlines when the earliest launch of ETH 2.0 testnet can be held.

If requirements are not fulfilled, Medalla’s launch will be delayed for 48 hours. The multi-client testnet will only launch if the two criteria are met.

Progress On Unlocking Medalla

So far, it was reported that roughly more than 150,000 ETH tokens have been deposited, meaning that Medalla testnet has achieved 30.5% of the total number of validators it needs for a successful launch next week. Ethereum collaborated with blockchain tech company Consensys and DeepWork Studio to release the ETH 2.0 validator launchpad.

Ethereum Announces Its Testnet Strategy

The blockchain network told its Ethereum crypto community that the multi-client testnet Medalla, they will continue “fine-tuning the interface” in anticipation of the release of the mainnet. In addition to this, Ethereum also explained that as it was transitioning from Proof-of-Work to Proof-of-Stake, Ethereum 2.0 will be launched in at least 3 phases to make sure that all aspects are covered methodically before release.

By breaking up the phases, a different aspect of Ethereum 2.0 can be focused on at each phase and the mainnet can consequently be perfected.

Phases of ETH 2.0

Phases 0, 1, and 2 each outlines a different concept. Phases 0 focuses on all the machinery behind ETH 2.0’s consensus, and it tracks the validators and their transaction balances.

Phase 1’s main objective is to handle the addition and storage of new and old data associated with ETH 2.0.

Finally, Phase 2 adds execution to ETH 2.0, and this simply allows programs to be run on top of it.

Co-Founder Vitalik Pushed for Phase 1

Co-founder of Ethereum Vitalik Buterin has been actively pushing for phase 1 to begin. The Ethereum mastermind wants to get a better grasp of how phase 1 will work in practice. On Reddit, he said that the “clients team” working on Medalla was behind on phase 0, and though that may be the case, they should still start working on phase 1. Buterin justified his strategy, saying:

“There’s no unfinished research required for phase 1; it’s all spec optimization and development.”

Ethereum And Bitcoin “Bull Races”

This year has been a really good year for Ethereum. With their plans of launching ETH 2.0 mainnet, the blockchain platform has also managed to outrank Bitcoin earlier this month, sitting at approximately $2.5 billion and making it the first time since early 2019 that it has outdone its rival BTC.

The latter has however been picking up its pace on the crypto market after months of staying stagnant. Yesterday, it was reported that BTC surged past the $10, 000 mark. BTC as a hedge has also recently been even more of a hot topic, with the depreciation of USD due to economic stimulus packages released by the US government.

Ready, Set, Launch

With Medalla testnet set to launch on August 4, the year 2020 has been good for Ethereum. Medalla is to be the last testnet produced by the dominant cryptocurrency platform before ETH 2.0 mainnet is officially in service and open for public use.

Think Tank Releases Report on the Blockchain-Based Genetic Data Network

Think Tank, dGen, releases a new report entitled, “AI, Privacy, and Genomics: The Next Era of Drug Design”. It tackles the issue of privacy and access to genetic data for companies using AI to speed up and improve drug design.

Where the average drug today takes 10-12 years and cost $2 billion, Covid-19 forced this timeline to 12-18 months. Whether or not the cure will be delivered in the next six months remains unclear.

The bottom line is that more companies need access to more genetic data. We spoke with industry leaders from Aidence, Gero, Iktos, Alphanosos, e-Estonia, Qunatlib, Turbine, and more.

With a blockchain-based access network, our top predictions for 2030 are:

● Better collaboration networks will emerge.

● Genetic privacy laws will be overhauled.

● AI will become a fundamental part of drug discovery.

● Pharmaceutical giants won’t be toppled, but they won’t get out unscathed as biotech startups take the field.

Genetic information is central to many AI-enabled drug discovery startups. To expand this innovation, several issues with genetic data must first be resolved:

● ownership

● secure storage

● availability to multiple research parties.

Ultimately, many privacy-preserving technologies leave the issue of ownership and auditing this system undisturbed. We propose a blockchain-based, decentralised pan-European biobank network to make information available to researchers, but log all access requests. This would also empower individuals to grant or deny these requests and track the use of their information.

Quotes:

Maxim Kholin, Gero Co-Founder

‘We believe that AI can accelerate the drug discovery process by proper understanding of human diseases from large biomedical data. The data-driven approach should help establish the genetic determinants and molecular markers of the disease’.

Pascal Mayer, Alphanosos Founder

‘While currently working really well on bacteria, we are confident [AI-enabled plant-based drug discovery] shall be successful in fighting viruses as well’.

‘Using edible plant extracts, like we do, in the development process of drugs, the risks of side effects are quite low[…] possibilities 10^10 or 10^30 [are available]. This is such a huge number that we use AI to quickly drive us through these possibilities’.

Tamás Török, Turbine Head of Business Development

‘Turbine is able to identify novel molecular targets to overcome the disease, and precisely select patients for whom the therapies will work best. Turbine’s Simulated Cell platform therefore generates novel biological knowledge through simulations rather than mining available biological data’.

Florian Marcus, e-Estonia Speaker

‘The patient will then see in the logbook, that this particular doctor looked at this particular patient dataset at this time for this and that reason. This can be challenged in court […] when the system was introduced, some doctors lost their licence over it’.

‘This logic of a rights-based access system is fundamental to the operation of e-Estonia, as is the notion of truth-by-design so I can always see who checked my data and hold them to account’.

Image source: dGen. Org

Ripple Outpaced Other Blockchain Companies on Inc's List of Fastest-Growing US Companies

Ripple has outpaced other indigenous blockchain companies on a recently published list of 5000 fastest-growing private companies in the United States. Inc, one of America’s leading business magazines ranked Ripple in the 123rd Position.

The business magazine revealed that Ripple has recorded a significant milestone in the past three years spanning 2016 -2019 with about 3,039% growth, and a median growth of 165% within the same period.

The United States of America is replete with notable blockchain companies including Kraken, Bakkt, and Coinbase which makes the Ripple ranking applaudable.

Ripple’s Growth Was Fueled By its On-Demand Liquidity Service

Ripple’s growth in recent years was fueled by the company’s two unique products, its On-Demand Liquidity service, and the Ripple (XRP) coin. The former offering has gained massive traction as it is seeing increased adoption by financial institutions around the world. The On-Demand Liquidity service offered through the RippleNet platform helps bring instant payment settlement, particularly in cross border transactions to customers around the world.

To boost its On-Demand Liquidity service provisions, Ripple entered into a partnership with payment service giant MoneyGram in a deal worth over USD 70 million. As MoneyGram CEO said, the partnership helped the two companies expand the use of On-Demand Liquidity which has thus far helped in ‘creating better customer experiences’.

Ripple’s Chief Executive Officer, Brad Garlinghouse has also rightly noted that world governments are now seeing blockchain as a viable solution to addressing transparency and settlements, a position that has further fueled his campaign of Ripple’s On-Demand Liquidity service.

As the major coin used for the On-Demand Liquidity settlements, the Ripple (XRP) coin, has seen impressive growth in recent days. Thus, it has regained its place as the third-largest cryptocurrency by market capitalization. While the XRP coin has seen some pushbacks due to low adoption, it remains a key component of the company value offerings, and indirectly its future prospects

Facebook-Backed Association Picks Another Former HSBC Executive as Libra Network's CEO

The Libra Association has appointed former chief executive of HSBC Europe, James Emmett, as the new managing director and CEO of Libra Networks. He will lead Libra’s operating subsidiary tasked with operating and developing the project’s crypto payments system.

Earlier this year, Emmett left HSBC amid a strategy overhaul. He will now join the Libra Network, the Libra Association’s operating subsidiary, as the new CEO and managing director on October 1.

Emmett is a veteran financial service leader with a great wealth of global experience in operations, technology, strategy, and business. He worked at HSBC for 25 years, holding the chief operating officer’s position at the HSBC bank and the chief executive role of HSBC Europe.

Scaling Back Libra To Win Regulatory Approval

In June 2019, Facebook formally introduced the Libra project to the world, unveiling an ambitious vision of an autonomous, decentralized organization to oversee the project and an easy-to-transfer, borderless means of exchange. However, regulators and central banks had fears, claiming that Libra’s original plan for a single coin backed by government debt and various currencies could erode the power and control national sovereignties over money if adopted widely by Facebook’s 2.7 billion active users.

Since announcing an overhaul and formally applying for a Swiss payments license in April, the Libra project started reinforcing its staff with experts from the field of traditional finance. The project has brought in a number of high-level hires, several of them have ties to the U.S government and authorities and have specialized in financial compliance.

In May, Libra appointed Stuart Levey, HSBC’s former chief legal officer, as its CEO to head the Association overseeing the project. Levey was the first Undersecretary for financial and terrorism intelligence at the U.S Department of Treasury. He was one of the only a few high-ranking Bush administration officials asked to remain in his post by the Obama administration.

In April, the Libra Association revamped its white paper and pulled back from its original plans for a single stablecoin backed by a basket of different currencies. Instead, the Association announced scaled-back plans for a cryptocurrency network linked to individual national currencies and overseen by global watchdogs in hopes of winning regulatory approval.

Stuart Levey, a former colleague of Emmett’s at HSBC, mentioned that he is confident that Emmett would assist in making Libra’s vision to become a reality.

Challenges Facing Libra

Libra cryptocurrency is in a delicate phase of its development. Facebook will have to solve some critical challenges before Libra becomes a reality. A digital currency being used by about 2.7 billion people across the world would be a threat to national sovereignties and even disrupt their ability to control money. Some countries are not comfortable with Bitcoin and other cryptocurrencies because of similar threats.

Although cryptocurrency itself is characterized by anonymity, digital platforms that consumers use to make payments would be based on Facebook, Instagram, and WhatsApp. But consumers have not forgotten the breach of trust issues facing Facebook. Therefore, Facebook faces an uphill task to rebuild consumer trust around data privacy.

Lastly, the Libra project is facing stiff competition from CBDCs issued by central banks and other stablecoins like Tether. Libra cryptocurrency appears to have entered a race against time. However, it has the possibility of being linked to Facebook and hence already has 2.7 billion potential users across the world.

Google Cloud Joins EOS Blockchain Network as a Block Producer Candidate

Google Cloud will join the EOS community and has begun the process of becoming a block producer candidate for Block.one’s EOS network.

According to an email shared with Blockchain.News on Oct 6, tech giant Google’s hyperscale cloud and infrastructure provider, Google Cloud, is set to join the EOS community and is taking steps to become a block producer for the public blockchain network built on the EOSIO blockchain protocol.

What is a Block Producer?

Block producers are a core component of the EOS network. According to the EOS white paper, the blocks in the EOS.IO software will be produced by 21 producers which are called “Block Producers”. EOS architecture uses Delegated Proof of Stake (DPOS), which creates blocks through trusted accounts (also called “trustees”) that are selected by the community. The features of DPOS include short block production time, high efficiency and almost no chance of forking.

All the EOS token holders in the EOS mainnet vote for 21 trusted accounts to make decisions for them and act as Block Producer. The top 21 Block Producer Candidates with the most votes are selected as Block Producers.

Having a giant of technological innovation like Google Cloud apply to become a block producer on a public blockchain network like EOS underscores the importance of blockchain to the future of business, government and society.

Allen Day, Developer Advocate for Google Cloud confirmed the application for block producer candidacy. He said:

“As organizations begin to incorporate distributed ledger technology into their infrastructures, we are committed to ensuring that the information on public blockchains are securely stored, reliably available, and can be accessed in meaningful ways.”

As mentioned, as a block producer candidate, Google Cloud will need to be selected by token holders to secure a position within the block producer ranks on the EOS network.

Brendan Blumer, CEO of Block.one expressed his excitement in having the opportunity to assess Google’s candidacy. Blumer said:

“The Google Cloud team understands the thriving EOS community and the highly performant EOSIO technology on which it builds create the best entry point into the blockchain industry. We welcome Google Cloud to the EOS community and are excited for their contributions to the EOS network.”

In joining the EOS community Google Cloud will provide its highly provisioned, low-latency infrastructure to Block.one. Dan Larimer, CTO at Block.one explained:

“Through secure oracles, inter-chain transaction reporting, key management, and high-integrity full-node validation, Google Cloud’s confidential computing infrastructure will enhance the security, scalability, and decentralization of blockchain technology.”

ZCash Celebrates First Halving, Unveils Canopy The Network's Fifth Upgrade

ZCash has undergone its first-ever halving, an event that coincides with the launch of Canopy, the fifth network upgrade for the ZCash privacy coin protocol.

As announced by the Electric Coin Company, the tech company behind the development of the ZCash privacy coin, the first halving was activated at block 1046400, more than four years when ZCash was first mined on October 28, 2016.

The first halving event of ZCash which comes after Bitcoin’s fourth halving event reduces the reward that goes to the network’s miners in order to reduce the rate at which the coin is mined. Following this halving event, the reward that goes to miners is now reduced from 12.5 ZEC per block to 3.5 ZEC per block according to nicehash.

The halving event as noted earlier also coincides with the launch of the network’s fifth upgrade ‘Canopy’. With Canopy comes unique changes to the network most notably the removal of the controversial Founder’s Reward and ushers in the creation of a new development fund. The developed fund is targeted at enticing new community members who wish and have the capabilities to improve, build upon, extend, and support Zcash.

ZCash Seen as a Threat, Can Canopy Make a Difference?

The privacy model of ZCash has constantly attracted backlash from regulators around the world. Recently, Europol identified ZCash among a list of other privacy coins as an emerging threat in cybercrime. Due to its private nature, cybercriminals are more likely to demand payment using ZCash as such transactions are untraceable.

Besides the threats seen by Europol, the US Internal Revenue Service continues to devise means to deanonymize ZCash and Monero in a bid to prevent cybercrime. With the backlash that surrounds ZCash, the rollout of the Canopy network upgrade by the Electric Coin Company, aims at building the network’s transparency within its community.

Whether the network upgrade will have much impact on the authorities’ perception of the potential threat of ZCash remains unclear.

Image source: blockchain.news

Visa CEO Says the Payment Giant Will Add Cryptocurrencies to Its Payments Network

Al Kelly, Visa chairman and CEO, has hinted that the payment giant could add cryptocurrencies to its list of more than 160 currencies as they could enhance its payment network and create greater access.

Kelly was speaking on the firm’s fiscal first-quarter 2021 earnings call where he described cryptocurrencies like Bitcoin as “digital gold” that are “not used as a form of payment in a significant way at this point.”

He mentioned that the card giant is positioned to help make cryptocurrencies become more useful, safe, and applicable for payments.

Kelly said that Visa could make this possible by making use of its trusted brand, partnership approach, and global presence.

He revealed a specific strategy that the company intends to adopt. He stated:

“Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally.”

The payment CEO classifies blockchain assets into two categories: cryptocurrencies such as Bitcoin that serve as a store of value and stablecoins, which are directly backed by existing fiat currencies, could be utilized for global commerce, just like any other fiat currency.

Of late, Visa is aggressively pursuing cryptocurrency payments, including investing in Zap, a crypto payments startup, and forming partnerships to enable crypto debit cards. Kelly informed investors that the company would be poised to take advantage of cryptocurrencies that emerge as a dominant force in payments because of relationships that have already existed whereby over 35 of major digital currency platforms and wallets providers like BitPanda, Fold, BlockFi, and Crypto.com, among others, have chosen to partner with Visa to issue crypto payments.

Kelly said:

“These wallet relationships represent the potential for more than 50 million Visa credentials.”

He stated that digital currency has become a recognized means of exchange, and there is no reason why Visa cannot add it to its network, which today already supports over 160 currencies.

Cryptocurrencies Building A Better Future

While several financial institutions still remain skeptical about Bitcoin and cryptocurrencies at large and instead focus on its underlying technology, blockchain, Visa corporation has embraced both blockchain and digital currency. The company believes that virtual currencies provide an exciting avenue for it to continue doing what it does best. Visa operates in 230 nations and territories and wants to win as many transactions as it can.

Cryptocurrency is one of the digital accelerants during the coronavirus pandemic. Bitcoin is particularly making a huge record and the company sees virtual currencies playing a greater role in its business in the years ahead.

Bitcoin Network Breaks Record With 22.3 Million Unique BTC Addresses in January

The Bitcoin network was busy in January with over 22.3 million active BTC addresses sending or receiving the cryptocurrency.

On-chain Bitcoin activity surged during January, with more than 22.3 million unique BTC addresses according to crypto market data aggregator Glassnode

Glassnode tweeted out the milestone to the crypto community, as January was a record month for both Bitcoin’s price and network activity.

According to Glassnode on Twitter:

“Bitcoin network activity at ATH. In January, more than 22.3 million unique addresses were active in the network sending or receiving $BTC – the highest monthly number in Bitcoin’s history to date.”

Source: Glassnode

During Bitcoins bullrun in 2017, the Bitcoin network’s activity peaked with 21 million active BTC addresses in December of that year. January’s surge in active users on the Bitcoin network trumps the previous record by 1. 3 million.

While the unique active wallets grew in January, there was a decrease in the number of “active entities” on the Bitcoin network—which are defined by Glassnodes as being a group of addresses being controlled by a single entity.

Bitcoin Price Showing Strength

Despite hitting an all-time high in January, the Bitcoin price has been in a stage of consolidation for the past couple of weeks and today has mainly stagnated, trending sideways between $32,000 and $34,000.

Despite the sideways price action, Ki Young Ju, the CEO of the cryptocurrency analysis firm CryptoQuant, identified a potential bullish indicator yesterday that may be signaling a BTC price breakout in the crypto’s near future.

According to the CryptoQuant CEO, more than 15,000 Bitcoin were recently withdrawn from Coinbase Pro with the outflows going “into custody wallets”—this indicates that OTC deals from institutional investors are likely occurring. Bitcoin price rallies have followed similar outflows in the past, and Ju sees this as a sign BTC will at least be able to “protect $33,000 in the short-term.”

The influx of institutional and corporate buyers into Bitcoin has added to the strong hands that currently make up the market. Industry data has consistently shown that more than 60% of BTC’s circulating supply is being held for the long-term.

The Bitcoin price has begun to show slight strength and has broken just above the $34,000 level—currently trading at $34,193.66 according to CoinMarketCap.

TRON Credited with Powering Record USDT Growth

With all the speculation around future growth of cryptocurrency protocols, it can be hard to gauge fundamental network health accurately. However, one metric that never fails is user adoption, an indicator that can be measured onchain. When applied to TRON, this metric shows that the network’s user base proliferates very rapidly, with USDT accounting for a significant tranche of all onchain activity.

TRON Takes Tether to New Levels

To understand the health of TRON’s layer-1 network, all you have to do is analyze its relationship with USDT. Stablecoins are extremely useful because they provide the same functionality as pure cryptocurrencies in terms of P2P transactions while mitigating risks associated with price volatility.

Tether, the infrastructure that facilitates USDT trading, started out on its own Omni blockchain before moving to the Ethereum network. As the top smart contract platform by market capitalization, users, and total number of decentralized applications, this was an intelligent starting point for Tether, but it has been able to branch out into multi-chain interoperability, expanding its reach. Etheruem, with its almost $200 billion market cap, has nearly 2.5 million USDT holders. TRON, whose more scalable architecture supports much cheaper transaction fees, has 1.8 million USDT token holders, although its market cap is only about one percent of Ethereum’s.

Continuing to Crunch the Numbers

Considering that USDT is the largest stablecoin on the market, regularly generating over $100 billion in daily transaction volume, TRON is doing its share of heavy lifting by accounting for a major slice of all stablecoin flows. TRON has proven to be a vital cog in supporting Tether’s growth and adoption, holding over $8.5 billion of this $37.5 billion market. Even when ignoring other stablecoins operational on the TRON network, user holdings of USDT represent over one-fifth of the entire sector.

With Ethereum fees at all-time highs, breaking an average of $20 per transaction for the first time in history, users are looking for alternative ways to store and transfer their value.

Total Transactions Are Trending Up

Although still not at its peak of over five million transactions per day seen in mid-2019, the number of daily transactions on the TRON network has been on a noticeable uptrend since its inception. From a recent low of around 800,000 to the current daily level of 3.5 million, TRON has expanded its user base and platform utility.

The team behind TRON is also working hard to reach new community members. During the GameStop uprising, Reddit users took to the market against Wall Street, buying out all the available GME stock to short squeeze the institutions. Justin Sun, the founder of TRON, made a decisive move to show his support.

Redditors noticed that venture capital firms were putting artificial price pressure on GameStop stock, GME, to cash in on short positions they had previously made. After noticing this possible market manipulation, Redditors banded together and pushed the stock to sky-high prices. While this was happening, trading platforms banded together to disallow the purchasing of select stocks, GME, AMC, and NOK, which would directly benefit hedge funds.

To stand with the people and fight against Wall Street manipulation, Justin Sun pledged to purchase $10 million worth of GameStop stock. Such gestures show what TRON wants to represent: a platform for the people, not institutional control. As USDT continues to gain more users and people flock to TRON to take advantage of its low fees, the network looks set to become a cornerstone of the cryptoconomy, forming a layer-1 that will anchor stablecoins, decentralized swaps, dApps, and much more.

Image source: TRON Media