How Has Crypto Failed In 2018? Here Are Five Of The Biggest Bitcoin Blunders Of The Year
Though cryptocurrency saw a major boom at the end of 2017, this year has been incredibly lackluster in the changes. Regulations are still up in the air, and nearly every coin in the industry has become a victim of the bear market. While there’s been some scattered stories about positive developments, it looks like the bad has outweighed the good.
Five Of The Biggest Bitcoin Blunders Of 2018
5. Hacking In Korea
Cryptocurrency attacks are fairly common, as hackers look for ways to steal private information and funds, and South Korea was the subject of a high number of them. In June, their crypto market saw two major attacks on Coinrail and Bithumb. Together, there was a loss of $71 million for investors, with the larger amount ($40 million) coming from Coinrail.
North Korea was accused of being the cause of multiple attacks with cryptojacking, with local group Lazarus being the cause of at least five separate hacks.
4. Volatility In Bitcoin As The Year Draws To A Close
Once reports started to arise that Bitcoin reached its lowest low since mid-2016, the crypto asset has been speeding through a downward spiral. The first low it reached was $5,000, and investors thought the drop was over. Soon after came $4,000, and investors thought it was a good time to relax. However, as of 1:00pm PST, Bitcoin is even lower at $3,278.78, which is a loss of $28 in just the last 6 hours.
To make matters worse, there are plenty of investors and analysts that believe that Bitcoin still has a ways to go and could reach $1,000 before it comes back to life.
3. $1 Billion Stolen Through Crypto-Related Crimes
A group in Moscow, Group-IB recently held research on the crypto industry, finding a total loss of $1 billion in the last two years, though the majority of the losses happened in 2018. Everything from false initial coin offerings (ICOs) to identity theft to gain access to wallets have ruled cybercrime. These losses have forced the Securities and Exchange Commission to take note and strengthen their approach to dealing with ICOs, primarily through punishing exchanges that don’t follow registration requirements.
Two of the most notable actions taken by the SEC have been against Paragon Coin and Airfox, who apparently didn’t register as securities, which is a requirement for ICOs. As such, they were assigned $250,000 in fines, and were required to refund their investors.
2. The Tether Report By John Griffin
John Griffin, a finance professor for the University of Texas, released a report in June this year that suggested that the only cause of the 2017 Bitcoin price spiked had to do with price manipulation. In the report, he says that Tether was used to purchase Bitcoin whenever it dropped slightly to bring up the value, which indirectly attached Bitcoin to USD, even though Tether is the stablecoin.
1. The Hacking Of Coincheck
The biggest fail of the year is easily the Coincheck hack that happened right in the first month of the year, which makes it even more significant. Formerly, Mt. Gox set the biggest hack, but Coincheck pushes it out of the way.
This hack stole $500 million in crypto in just a single night, which made the entirety of Japan nervous about the future for investors and the exchange alike. At the time, Coincheck received a lot of criticism for their lack of action in the protection of their customers and to safeguard their investments.
The Financial Services Agency (FSA) of Japan took note, and this single theft forced them to be aggressive in improving security protocols. They even threatened non-compliant exchanges with shutdowns if they weren’t willing to do the same. However, this makes Japan the home of both of the top crypto hacks, which will probably continue to make them strict in their security protocols going forward.