$8M in cryptocurrency bizarrely goes missing from bank-protected wallets

Swiss digital asset exchange Trade.io claims hackers have stolen nearly $8 million worth of cryptocurrency directly from its cold storage devices, which were supposedly kept under lock and key in a bank.

The team behind the exchange confirmed the losses in a message posted to its Medium blog on Sunday.

“ Around 08:40 EST, our security team was alerted to a large transaction from one of our wallets held in cold storage,” the announcement reads. “We can confirm that […] 50M TIO ($7.8M) […] being held in cold storage has been withdrawn, and an estimated 1.3M ($201K) of that had been transferred to both Bancor & Kucoin respectively.”

Kucoin and Bancor are cryptocurrency exchanges, and both services have since disabled withdrawals and deposits of the TIO token.

The team estimates hackers successfully smuggled anywhere from 200,000 to 400,000 TIO ($30K – $60K) onto Bancor’s exchange before the deposits were disabled. The hackers also managed to send a similar amount to Kucoin.

Bancor later delisted the cryptocurrency, dodging exposure to any further collateral damage.

The TIO token is an internal cryptocurrency, intended for use as a liquidity tool by the exchange when trade activity peaks. The stolen supply belongs entirely to the development team, which means the hackers have mysteriously left user funds untouched.

Mission Impossible: Cryptocurrency Boogaloo?

The situation is very strange . For one, Trade.io claims the hackers were able to remove the millions of dollars worth of cryptocurrency from wallets that were supposedly being protected by a bank.

But, the team later confirmed that “ the safety deposit boxes were not compromised.”

Even they must know how odd that sounds.

Cold wallets are hardware devices used specifically for storing digital assets like cryptocurrencies. Usually, they are suped-up USB drives with little-to-no internet connectivity, typically thought to be substantially more secure than storing keys in online storage apps, or “hot wallets.”

“ While this is an extremely strange situation, unfortunately breaches of cold storage is not unprecedented even when following security protocol to a ‘T’,” the Trade.io team implores. “We use industry recommended cold storage which are maintained in safety deposit boxes in banks, along with all corresponding materials.”

However weird, it’s technically true – it is possible to steal cryptocurrency from a hardware wallet, but only if an attacker is able to compromise the device with a ‘man-in-the-middle’ style attack.

For example, not long ago, an unfortunate cryptocurrency HODLer had $34,000 worth of cryptocurrency taken directly from his Ledger hardware wallet, after a reseller loaded their own seed phrase into the device, returning later to empty the device remotely.

This kind of attack is generally the hallmark of an “inside job,” but as this situation is ongoing, it is still unclear exactly how the hackers managed to be so successful.

Regardless of whether Trade.io’s story holds weight, its dev team has proposed a hard fork , which would re-create the stolen supply and render what’s left of the pilfered cryptocurrency completely valueless.

I guess that’s one way to sweep this whole, bizarre story under the rug.

TRON redefines ‘shitcoin’ by putting smart toilets on the blockchain

I shit you not! Budding blockchain startup TRON has entered into a strategic partnership with smart toilet supplier Moshroom that culminate in the production of blockchain-powered lavatories.

Ok, there’s obviously more to this story than meets the eye. Blockchain in this instance is used to provide infrastructure for micro-payments – to pay for the use of one of these toilets. Moshroom will provide the toilet, Tron provide the blockchain.

Joking aside, TRON and Moshroom are addressing some of the most challenging issues for developing socieities. In many developing countries, people do not have easy access to clean and safe places to, err, do their business. The partnership aims to offer that – at a cost.

TRON and Moshroom will be targetting Southeast Asia and India first with this new technology, where useage and payments of the toilets will be supported through the use of blockchain.

While the announcement doesn’t explicitly mention whether the toilet integration will support TRX payments (or any other cryptocurrencies for that matter), the statement does suggest that the intended use case is for micro-transactions.

Moshroom are best known for their eco-friendly portable toilet solutions, which can be deployed anywhere and operate entirely off grid.

One of my conerns is that the time, location, and duration of my – or shall we say people’s – “bathroom moments,” will be recorded, forever, for all to see, on the blockchain.

Let’s hope that unlike its misleading “partnership” with Chinese Netflix clone Baofeng, TRON’s toilet integration is legit.

As people have already said on Twitter: “the shitcoin jokes literally write themselves.”

Mastercard will support cryptocurrencies – as long as they’re backed by governments

It seems Mastercard is gradually softening its stance on cryptocurrency, after CEO Ajay Banga downplayed non-government mandated digital currencies as “junk” back in October last year.

In a conversation with Financial Times, Ari Sarkar, Mastercard co-president for the Asia-Pacific region, said the company is open to explore cryptocurrencies created and backed by governments.

“If governments look to create national digital currency we’d be very happy to look at those in a more favourable way [compared with existing cryptocurrencies],” Sarkar told Financial Times .

“So long as it’s backed by a regulator and […] it is not anonymous, it is meeting all the regulatory requirements,” Sarkar continued, “I think that would be of greater interest for us to explore.”

It is interesting to note that while multiple countries and their central banks have flirted with the idea of creating a government-backed cryptocurrency, few have actually followed up on their plans to do so.

Central banks and governments in England , China , India , Russia , Dubai , Isreal , Venezuela , and Estonia have all announced plans to launch their own centralized cryptocurrency.  Despite such plans though, Venezuela is the only country from that list which has successfully launched its own cryptocurrency.

In an earlier conversation with Economic Times in October 2017,Mastercard’s Banga compared cryptocurrencies to ‘junk’:

Earlier last month, VISA and Mastercard reclassified the credit card transactions for Cryptocurrency from “purchases” to “cash advance.” As a result, buyers are now tacked an additional five-percent fee charged by the credit card merchant – that is next to the credit card fee charged by the exchange desks.

However, the aversion of Mastercard towards decentralized cryptocurrencies has not stopped them from working with blockchain technology and cryptocurrency on their own.

Indeed, Sarkar said that its research arm, Mastercard Labs, has filed for more than 30 patents related to blockchain technology and cryptocurrency.