Daily: Leaked spreadsheet linking Huobi and EOS voting proceeds, 1st regulated crypto bank by ex-UBS execs, SEC shuts down 1Broker (could target Binance and BitMEX next), Siam Commercial Bank's first to use multi-hop on RippleNet & more

Daily: Leaked spreadsheet on Huobi details mutual voting and sharing of EOS proceeds; former UBS execs raised USD104m to start first regulated crypto bank; SEC shuts down cryptocurrency exchange 1Broker and some predict Binance and BitMEX could be next; High-profile Block.One employees leave company and start Strongblock.io; Siam Commercial Bank (SCB) first financial institution on RippleNet; Oklahoma police arrests two men who stole millions in crypto via SIM jacking & Port of San Diego hit with cybersecurity attack requesting payment in Bitcoin.

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• Pumped-Up Dumps category:

• A spreadsheet has been leaked, allegedly authored by Shi Feifei, a Huobi employee.
• The spreadsheet is titled “Huobi Pool Node Account Data 20180911,” and details mutual voting and sharing of proceeds from producing blocks in EOS.
• The document shows Huobi votes for 20 Block Producers (miners) in EOS with 16 of them voting for Huobi in return.
• An analysis of the document further shows Huobi was previously supporting seven standby BPs which have “no public nodes, no website, no ownership information, no node interaction, etc.”
• They’ve however turned to supporting “normal” BPs in an arrangement with some of them whereby Huobi receives some of the proceeds.
• The document alleges Huobi votes for eosiosg11111 in return for 170 EOS, for cochainworld in return for 150 EOS and eospaceioeos for 50% of the returns.
• These arrangements allegedly earn Huobi 1,116 EOS per day, currently worth about $6,000 a day.
• In addition, Huobi is a block producer itself which earns them quite a bit more.
• It appears they are voting with the EOS tokens individuals deposit in their exchange.
• Bitfinex is another EOS block producing miner, and they said long ago they’ll be voting with their customer’s EOS.
• Ownership in EOS is highly concentrated, with just 10 addresses holding some 50% of all tokens.
• Exchanges tend to dominate for obvious reasons, but in other public blockchain they have no say in protocol rules and take no direct part in validation.
• In EOS, however, it appears exchanges effectively control the network with this very centralized blockchain having just 21 validators.
• Some of which are seemingly controlled by just one entity with Huobi allegedly able to act as a king maker.
• Source

• Mediasizing the Regulators category:

 

• Former UBS executives of the Swiss multinational investment bank raised $104 million this week to start the first regulated crypto bank.
• Launching such a fully licensed and regulated digital currency kind of a bank could prove just as vital as having a Bitcoin exchange-traded fund (ETF).
• In the last nine months, even after the 80% correction of the digital currencies market and the drop in the price of Bitcoin by 69%, the cryptocurrency industry infrastructure has continued to strengthen at a very fast rate.
• Coinbase and BitGo have been authorized by regulators in the United States (US) to run their operations as digital currency custodians, offering their services to institutional investors.
• Citigroup members, Goldman Sachs and Morgan Stanley, have established products to help curb the growing demand for digital currencies from institutions and are now only waiting for a go ahead signal from the regulators.
• A few days ago, Swiss financial services firm Seba Crypto AG, that is run by ex UBS Group AG officers won a mega-funding round valued at USD$100 million to launch the first cryptocurrency bank in the world.
• Seba is expected to file an application with the Swiss Financial Market Supervisory Authority (Finma), the body in Switzerland that is responsible for financial regulations.
• Once Seba receives the banking license, it plans to raise more capital to ascertain that there will be enough funds to provide full protection to investors.
• Source

 

• ​In a surprise announcement yesterday, the SEC decided to shut down cryptocurrency exchange 1Broker.
• Users lost millions of dollars in funds, but the next shutdown could be even worse: some analysts claim major crypto exchanges Binance and BitMEX will be shut down next.
• Yesterday, the SEC and CFTC announced that they were suing Marshall Islands-based securities dealer 1Broker for allegedly violating federal law through a bitcoin-based security swap scheme.
• The SEC announced the news in a press release.
• The company is registered under the name 1pool Ltd., although it was doing business as 1Broker.
• The SEC and CFTC claim that 1Broker and its CEO Patrick Brunner were selling security-based swaps to investors in the United States and elsewhere without following proper “discretionary investment thresholds.”
• 1Broker allegedly only allowed investors to purchase those swaps with bitcoin.
• Source

 

• Founders & Use Chains category:

 

• Four early employees and two contractors have resigned from the Hong Kong cryptocurrency company Block.one to start up StrongBlock, a new blockchain project that is currently under wraps.
• David Moss, Thomas Cox, Brian Abramson and Corey J. Lederer, the employees, were the second, third, fourth and fifth to be hired by Block.one, the corporate parent that created the decentralized operating system and application environment EOS.
• EOS, a computing protocol that competes with the technology behind the bitcoin and ethereum blockchains, supplies a native cryptocurrency of the same name and has a market capitalization valued at more than USD$5 billion today.
• At Block.one, the four employees took on overwhelmingly technical roles.
• Moss had been the senior vice president of technology operations, Cox the vice president of product, Abramson the vice president of infrastructure and Lederer the senior director of technology products. 
• Source 1
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• Source 3

• Siam Commercial Bank (SCB) will be the first financial institution on RippleNet to utilize a new feature called “multi-hop” that facilitates cheap international transactions. Ripple announced the news in a press release earlier today.
• SCB is one of Thailand’s largest banks.
• Thanks to Ripple’s multi-hop feature, the bank can settle payments on behalf of other financial institutions on the network, eliminating the need for a one-to-one connection between financial institutions to settle a payment.
• Thanks to Ripple’s multi-hop, SCB will be able to receive a payment, then forward that payment without needing a bilateral relationship between the originator and the final destination.
• The technology is expected to lower international transaction costs for banks, institutions, and customers.
• SCB plans to use multi-hop to facilitate transactions across the ASEAN region without exchanging currencies multiple times and paying heavy fees along the way.
• With Ripple, SCB can make international transfers between different financial institutions in different countries using RippleNet without transacting through multiple regional currencies and losing money along the way.
• Source

• Blockhead Lockdown category:

• Oklahoma police have arrested two men who reportedly stole millions of dollars from a California-based cryptocurrency company.
• Fletcher Robert Childers, 23, and Joseph Harris, 21, of Missouri, were arrested on suspicion of grand theft, a first-degree felony, and identity theft, a Class C misdemeanor.
• If charged for both, the duo could receive up to 35 years of prison time, according to Oklahoma state laws.
• Court documents filed by Crowd Machine, a San Jose-based decentralized IT company, named Childers and Harris for their alleged involvement in a $14 million theft.
• The report accused the twosome of swapping the victim’s mobile sim card with a fake to steal his identity and phone number.
• That allowed Childers and Harris to compromise a crypto wallet registered with the stolen sim and lift $14 million worth of CMCT tokens.
• An investigator with the Santa Clara County District Attorney’s Office and members of the state’s Regional Enforcement Allied Computer Team (REACT) worked with the local Oklahoma police in tracing the phone used in the hack.
• It was later tracked to a hotel, where the subsequent arrests were made.
• Source

• The Port of San Diego was recently hit with a cybersecurity attack, which led to the involvement of the Federal Bureau of Investigation [FBI] and the Department of Homeland Security [DHS].
• Their systems were hit with a ransomware attack, which led to the attackers asking for their ransom in Bitcoin [BTC].
• While how much money was demanded was not revealed, the involvement of the FBI and DHS may suggest that there is sensitive data at stake.
• Ransomware is a kind of cyber security attack that locks down the victims’ data and provides a message to them.
• The message usually contains details on how to pay attackers, who will then proceed to release the data to the victims.
• The data is held ransom until the user agrees to the attackers terms.
• The issue was reported first on 25th September, and was said to have “disrupted the agency’s information technology systems”.
• However, the Port of San Diego CEO, Randa Coniglio, assured the public that normal Port operations are continuing as usual, as this was mainly an administrative issue.​
• Source​​