Category Archives: Hack or Fraud Alert

Capital One data breach shows why it shouldn’t be a tech company that does banking

ComplianceX | The Compliance Exchange | Aug 8, 2019

digital rainfall - Capital One data breach shows why it shouldn’t be a tech company that does bankingOnce upon a time, any financial institution entrusted with your money and sensitive information would be housed in an imposing building made of granite. Its vault, often visible from the lobby, was formidable. And its managers would always be prudent, conservative types. Think Fidelity Fiduciary Bank, the fictional institution in the Mary Poppins movies, whose chairman in the original film sang: “Invest your tuppence wisely in the bank, safe and sound, soon that tuppence, safely invested in the bank, will compound.”

The idea was to convey a sense of security so that people would feel good about depositing their hard-earned cash and storing their prized possessions in safe deposit boxes. It spilled over to investors who saw bank stocks as prudent, though hardly spectacular, investments.

Nowadays, though, banks can’t do enough to shed the dowdy images, perhaps none more so than Virginia-based Capital One Financial Corp. During an earnings report this year, CEO Richard Fairbank all but said that he did not view his bank as, well, a bank:

“What we’re doing at Capital One is building a technology company that does banking, instead of a bank that just uses technology.”

Which brings us to the company’s announcement that a lone hacker — allegedly a troubled 33-year-old woman in Seattle — had managed to penetrate its firewall to acquire sensitive data on more than 100 million card customers and applicants.

The sad truth is that many modern banks don’t much care about people’s private information. The same apparently goes for companies that work with banks. On the same day the Capital One breach was reported, credit rating agency Equifax agreed to pay $700 million to settle a 2017 data breach.

Institutions might say they do care, but what really matters is how fast they can digitize everything about their company and migrate it to the cloud. By doing this they increase their profit margins and rates of growth, and become Wall Street darlings.

It’s not hard to see the financial pressure on banks. Since the Great Recession, their stock performance has been so-so, while tech companies have done extremely well. Anything that they could do to function more like tech companies that do finance, rather than vise versa, could make them hot properties.

See: 

Tech companies, however, are bad examples to follow. They collect data on people’s habits that allow advertisers, political operatives, hostile foreign powers and others to glean valuable insights. And banks hold even more sensitive information than do most tech outfits.

It’s one thing to be lax and self-interested with people’s web surfing histories or social media contacts. It’s quite another to be cavalier with account information, Social Security numbers and credit scores. These can be sold to people interested in taking out fraudulent loans, making fraudulent purchases and engaging in other forms of identity theft.

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NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does banking The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Capital One data breach shows why it shouldn’t be a tech company that does bankingFF Logo 400 v3 - Capital One data breach shows why it shouldn’t be a tech company that does bankingcommunity social impact - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Fintech Confidential Issue 2 FINAL COVER - Capital One data breach shows why it shouldn’t be a tech company that does banking

 

Hackers Steal $40.7 Million in Bitcoin From Crypto Exchange Binance

Coindesk | Nikhilesh De | May 7, 2019

Binance exchange hacked - Capital One data breach shows why it shouldn’t be a tech company that does bankingHackers stole more than 7,000 bitcoin from crypto exchange Binance, the world’s largest by volume, the startup reported Tuesday.

Binance announced that a “large scale security breach” was discovered earlier on May 7, finding that malicious actors were able to access user API keys, two-factor authentication codes and “potentially other info,” the exchange’s CEO, Changpeng Zhao, said in a letter. As a result, they were able to withdraw roughly $41 million in bitcoin from the exchange, according to a transaction published in the security notice.

The disclosure comes hours after Zhao tweeted that the exchange was undertaking “some unscheduled server maintenance,” writing that “funds are #safu.” After the disclosure announcement, Zhao tweeted that the exchange would “provide a more detailed update shortly.”

See:  Binance Coin Burn Is Around The Corner – How The Coin Burn Works

The exchange may not yet have identified all impacted accounts, he said. And according to Binance’s statement, the breach only impacted Binance’s hot wallet, which contains roughly 2 percent of the exchange’s total bitcoin holdings.

“All of our other wallets are secure and unharmed,” he said, adding:

“The hackers had the patience to wait, and execute well-prepared actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.”

The withdrawal triggered internal alarms after it was executed, and Zhao said the exchange froze withdrawals following the discovery. While deposits and withdrawals will remain suspended for the next week, trading will be re-enabled, though he cautioned that “the hackers may still control certain user accounts.”

Binance will conduct “a thorough security review” encompassing its systems and data during the next week.

The exchange will use its Secure Asset Fund for Users (SAFU fund) to cover the loss, which won’t impact users, according to the notice.

See:  FCA reveals findings from first cryptoassets consumer research

The fund consists of 10 percent of all trading fees absorbed by the exchange, and was initially launched to protect Binance’s users “in extreme cases,” according to a previous notice. It is stored in its own cold wallet.

“In this difficult time, we strive to maintain transparency and would be appreciative of your support,” Zhao said Tuesday.

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NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does banking The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Capital One data breach shows why it shouldn’t be a tech company that does bankingFF Logo 400 v3 - Capital One data breach shows why it shouldn’t be a tech company that does bankingcommunity social impact - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Fintech Confidential Issue 2 FINAL COVER - Capital One data breach shows why it shouldn’t be a tech company that does banking

Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
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China coin crypto - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
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ExpoG logo final600 - Capital One data breach shows why it shouldn’t be a tech company that does banking
MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
Read More
money laundering rules - Capital One data breach shows why it shouldn’t be a tech company that does banking
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
Read More
cash payments - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
Read More
fintech IPO shortage - Capital One data breach shows why it shouldn’t be a tech company that does banking
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
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unicorn - Capital One data breach shows why it shouldn’t be a tech company that does banking
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
Read More
banking with AI - Capital One data breach shows why it shouldn’t be a tech company that does banking
Guest Post | Aug 14, 2019 You see a need. You know that your new business can fill that need. The problem is that it takes an incredible amount of capital to start a business. Besides purchasing equipment, raw materials, and computer systems, you also have the expenses that no one ever thinks about when opening a shop. Did you figure in the cost of hiring an accountant, a lawyer, and paying for workers compensation insurance? Instead of heading to the bank with your business plan in hand, you may consider whether working with a crowdfunding site might be another feasible way to raise cash for your business expenses. Here’s how crowdfunding sites work. Cash in Exchange for Equity Have you seen Shark Tank? On this TV show, investors decide whether or not they would like to provide capital for startups in exchange for a piece of the company. Sometimes the hosts compete against each other for the opportunity to invest. Sometimes they pool resources and form investment partnerships for a portion of ownership in the company. Occasionally budding entrepreneurs are sent away empty-handed. See:  Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much ...
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Funding meeting - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Biser Dimitrov | Aug 13, 2019 2019 is the year when the blockchain ecosystem and the crypto industry as a whole had to get sober. After a wild 2017 and a bear 2018, the blockchain space is back on an upwards trajectory with new developments. There are no more Initial Coin Offerings (ICOs) to distract the crypto ecosystem and the building mentality is back on. This post-ICO and post-useless-PR-partnerships age urges the blockchain community to be less focused on the current price of bitcoin and more focused on producing meaningful services and advancements. Big projects from established enterprises like Facebook Libra are taking all the media space now and this is net positive for the enterprise blockchain space as well. The first half of this year was full of blockchain developments led by large enterprises in almost all important sectors, including insurance, financial services, supply chain, healthcare and trade finance. There is a huge benefit in joining a specialized industry-focused blockchain consortium because you sit at the same table with your main competitors but at the same time you work toward the same goal. You are not alone in figuring out the benefits, implementations and roll-out of distributed ...
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Blockchain and enterprise - Capital One data breach shows why it shouldn’t be a tech company that does banking
Wired UK Gov | Information Commissioner's Office | Aug 12, 2019 Reuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects. This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk. The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects: to obtain human intervention; to express their point of view; and to contest the decision made about them. See:  How Data-driven Strategies Can Improve Impact Investing Outcomes These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant ...
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Automated AI decisions - Capital One data breach shows why it shouldn’t be a tech company that does banking

 

Criminal Past Haunts Surviving Founder of Troubled Crypto Exchange

Bloomberg | By Doug Alexande and Matt Robinson | March 19, 2019

quadrigaCX - Capital One data breach shows why it shouldn’t be a tech company that does bankingHis crimes: identity theft related to a bank-and-credit card scam. His sentence: 18 months in U.S. federal prison and, later, deportation to Canada.

Once there, Omar Dhanani underwent a remarkable transformation -- into a new identity and the wild world of cryptocurrencies.

Dhanani, now known as Michael Patryn, has emerged as an enigmatic figure in the strange case of Quadriga Fintech Solutions Corp., the digital exchange owner that hasn’t been able to find C$260 million ($195 million) of clients’ cash and cryptocurrencies. Patryn co-founded Quadriga five years ago with the late Gerry Cotten, whose sudden death in December at age 30 left the Vancouver-based firm in shambles.

Patryn denied he was Dhanani in a Feb. 8 report in Canada’s Globe and Mail newspaper and disputed a subsequent report linking him to a criminal past. But Canadian records obtained by Bloomberg News confirm he legally changed his name -- twice: in 2003 and in 2008.

The revelation adds a new layer to the mystery surrounding Quadriga, whose closure in January left 115,000 clients wondering if they’ll ever get their money back. Cotten ran the operation mostly from his laptop, so his death while traveling in India threw the business into disarray. The firm has been under creditor protection since February, with Ernst & Young working to unravel the firm’s dealings. Digital storage accounts used by Quadriga to hold Bitcoin for clients had been empty for months before the CEO’s death, according to E&Y.

See:  Another Canadian Crypto Exchange Under Fire

Patryn declined to comment about his criminal record or his name change.

Patryn changed his name from Omar Dhanani to Omar Patryn with the British Columbia government in March 2003. Five years later, he registered a name change to Michael Patryn in the same Canadian province.

In the U.S., Dhanani had been charged with numerous crimes. He pleaded guilty to conspiracy to commit credit-and-bank card fraud at the age of 22 in 2005, according to a statement from the U.S. Justice Department. Dhanani helped operate shadowcrew.com, a now defunct marketplace for trafficking stolen credit and bank card numbers. Dhanani also admitted guilt in 2007 to separate criminal cases for burglary, grand larceny and computer fraud, according to California state court records.

After serving his time, the U.S. deported him to Canada, where he reinvented himself as a Bitcoin entrepreneur. Patryn calls himself a "fintech advisor and portfolio manager" in his LinkedIn profile, which also lists him as founder and chairman of Vancouver-based Fintech Ventures Group since 2015, described as “Canada’s first incubator for blockchain related startup companies".

Patryn has been trying to bury his past. Last July, he hired a firm to purge unflattering material about him from the internet. One of the posts was a complaint about Omar Dhanani and a defunct online business called Midas Gold Exchange Inc., which the Canadian government listed Omar Patryn as its sole director. Documents filed in a related lawsuit mention a Reddit post that linked Patryn to Quadriga.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does banking The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Capital One data breach shows why it shouldn’t be a tech company that does bankingFF Logo 400 v3 - Capital One data breach shows why it shouldn’t be a tech company that does bankingcommunity social impact - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Fintech Confidential Issue 2 FINAL COVER - Capital One data breach shows why it shouldn’t be a tech company that does banking

Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
Read More
China coin crypto - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
Read More
ExpoG logo final600 - Capital One data breach shows why it shouldn’t be a tech company that does banking
MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
Read More
money laundering rules - Capital One data breach shows why it shouldn’t be a tech company that does banking
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
Read More
cash payments - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
Read More
fintech IPO shortage - Capital One data breach shows why it shouldn’t be a tech company that does banking
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
Read More
unicorn - Capital One data breach shows why it shouldn’t be a tech company that does banking
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
Read More
banking with AI - Capital One data breach shows why it shouldn’t be a tech company that does banking
Guest Post | Aug 14, 2019 You see a need. You know that your new business can fill that need. The problem is that it takes an incredible amount of capital to start a business. Besides purchasing equipment, raw materials, and computer systems, you also have the expenses that no one ever thinks about when opening a shop. Did you figure in the cost of hiring an accountant, a lawyer, and paying for workers compensation insurance? Instead of heading to the bank with your business plan in hand, you may consider whether working with a crowdfunding site might be another feasible way to raise cash for your business expenses. Here’s how crowdfunding sites work. Cash in Exchange for Equity Have you seen Shark Tank? On this TV show, investors decide whether or not they would like to provide capital for startups in exchange for a piece of the company. Sometimes the hosts compete against each other for the opportunity to invest. Sometimes they pool resources and form investment partnerships for a portion of ownership in the company. Occasionally budding entrepreneurs are sent away empty-handed. See:  Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much ...
Read More
Funding meeting - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Biser Dimitrov | Aug 13, 2019 2019 is the year when the blockchain ecosystem and the crypto industry as a whole had to get sober. After a wild 2017 and a bear 2018, the blockchain space is back on an upwards trajectory with new developments. There are no more Initial Coin Offerings (ICOs) to distract the crypto ecosystem and the building mentality is back on. This post-ICO and post-useless-PR-partnerships age urges the blockchain community to be less focused on the current price of bitcoin and more focused on producing meaningful services and advancements. Big projects from established enterprises like Facebook Libra are taking all the media space now and this is net positive for the enterprise blockchain space as well. The first half of this year was full of blockchain developments led by large enterprises in almost all important sectors, including insurance, financial services, supply chain, healthcare and trade finance. There is a huge benefit in joining a specialized industry-focused blockchain consortium because you sit at the same table with your main competitors but at the same time you work toward the same goal. You are not alone in figuring out the benefits, implementations and roll-out of distributed ...
Read More
Blockchain and enterprise - Capital One data breach shows why it shouldn’t be a tech company that does banking
Wired UK Gov | Information Commissioner's Office | Aug 12, 2019 Reuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects. This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk. The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects: to obtain human intervention; to express their point of view; and to contest the decision made about them. See:  How Data-driven Strategies Can Improve Impact Investing Outcomes These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant ...
Read More
Automated AI decisions - Capital One data breach shows why it shouldn’t be a tech company that does banking

 

Another Canadian Crypto Exchange Under Fire

Chainbits | Nathan Rodriguez | March 14, 2019

warning against canada bitcoin exchange - Another Canadian Crypto Exchange Under Fire

After the ongoing saga of Canada’s largest cryptocurrency exchange QuadrigaCX’s downfall, another Canadian cryptocurrency company is now coming under scrutiny. Canada Bitcoin Exchange Inc. is now being investigated as a possible scam.

Warning Against Canada Bitcoin Exchange

The British Columbia Securities Commission (BCSC), a Canadian financial regulator, has issued a warning against Canada Bitcoin Exchange. The watchdog stated that the company was offering overly attractive BTC (Bitcoin) investment plans to its customers.

Canada Bitcoin Exchange was offering 4 different BTC investment plans on its website. Each of the programs asked users to invest a certain amount of capital for a period of 24 to 48 hours. In return, the company offered returns that started at 3.586% and went as high as 7.985%.

The website stated that Canada Bitcoin Exchange would reinvest customers’ BTC in other stocks as well as cryptocurrencies. The company claimed to have a team of professional market analysts in place who knew how to find hot stocks. The company also stated that this project was run by the Canada Bitcoin Exchange Group.

Signs of a Scam

Upon investigating the company, the BCSC found that Canada Bitcoin Exchange was an unregistered entity and therefore did not have the required licenses to offer any form of trading services, securities or exchange contracts or even conduct investment consultations.

See:  BCSC Investment Caution List - Warning on Canada Bitcoin Exchange

Added to that, it was revealed that a search of the company’s BTC address on Blockchain.info came up with nothing. There was no transaction history for the company. On top of that, the company raised even more suspicious as the same BTC address was found on BCH’s (Bitcoin Cash’s) Blockchain.

Information about the company was also sketchy. The company’s domain was registered US domain registration portal based out of Arizona. Besides that, no other information was available about the company or even who the backers of the company were. There was a work address given on the company’s website that listed a Vancouver address.

The BCSC warned customers to exercise caution when dealing with companies such as Canada Bitcoin Exchange were not registered either to trade or to advise.

Continue to the full article --> here

 


NCFA Jan 2018 resize - Another Canadian Crypto Exchange Under Fire The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Another Canadian Crypto Exchange Under FireFF Logo 400 v3 - Another Canadian Crypto Exchange Under Firecommunity social impact - Another Canadian Crypto Exchange Under Fire
NCFA Fintech Confidential Issue 2 FINAL COVER - Another Canadian Crypto Exchange Under Fire

Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
Read More
China coin crypto - Another Canadian Crypto Exchange Under Fire
NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
Read More
ExpoG logo final600 - Another Canadian Crypto Exchange Under Fire
MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
Read More
money laundering rules - Another Canadian Crypto Exchange Under Fire
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
Read More
cash payments - Another Canadian Crypto Exchange Under Fire
Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
Read More
fintech IPO shortage - Another Canadian Crypto Exchange Under Fire
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
Read More
unicorn - Another Canadian Crypto Exchange Under Fire
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
Read More
banking with AI - Another Canadian Crypto Exchange Under Fire
Guest Post | Aug 14, 2019 You see a need. You know that your new business can fill that need. The problem is that it takes an incredible amount of capital to start a business. Besides purchasing equipment, raw materials, and computer systems, you also have the expenses that no one ever thinks about when opening a shop. Did you figure in the cost of hiring an accountant, a lawyer, and paying for workers compensation insurance? Instead of heading to the bank with your business plan in hand, you may consider whether working with a crowdfunding site might be another feasible way to raise cash for your business expenses. Here’s how crowdfunding sites work. Cash in Exchange for Equity Have you seen Shark Tank? On this TV show, investors decide whether or not they would like to provide capital for startups in exchange for a piece of the company. Sometimes the hosts compete against each other for the opportunity to invest. Sometimes they pool resources and form investment partnerships for a portion of ownership in the company. Occasionally budding entrepreneurs are sent away empty-handed. See:  Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much ...
Read More
Funding meeting - Another Canadian Crypto Exchange Under Fire
Forbes | Biser Dimitrov | Aug 13, 2019 2019 is the year when the blockchain ecosystem and the crypto industry as a whole had to get sober. After a wild 2017 and a bear 2018, the blockchain space is back on an upwards trajectory with new developments. There are no more Initial Coin Offerings (ICOs) to distract the crypto ecosystem and the building mentality is back on. This post-ICO and post-useless-PR-partnerships age urges the blockchain community to be less focused on the current price of bitcoin and more focused on producing meaningful services and advancements. Big projects from established enterprises like Facebook Libra are taking all the media space now and this is net positive for the enterprise blockchain space as well. The first half of this year was full of blockchain developments led by large enterprises in almost all important sectors, including insurance, financial services, supply chain, healthcare and trade finance. There is a huge benefit in joining a specialized industry-focused blockchain consortium because you sit at the same table with your main competitors but at the same time you work toward the same goal. You are not alone in figuring out the benefits, implementations and roll-out of distributed ...
Read More
Blockchain and enterprise - Another Canadian Crypto Exchange Under Fire
Wired UK Gov | Information Commissioner's Office | Aug 12, 2019 Reuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects. This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk. The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects: to obtain human intervention; to express their point of view; and to contest the decision made about them. See:  How Data-driven Strategies Can Improve Impact Investing Outcomes These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant ...
Read More
Automated AI decisions - Another Canadian Crypto Exchange Under Fire

 

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Bitcoin Prices Hold Steady After Sudden Canadian Exchange Shutdown

Forbes | | Oct 29, 2018

maple exchange hack - Capital One data breach shows why it shouldn’t be a tech company that does bankingBitcoin prices, along with the wider cryptocurrency market, have held steady following the sudden shut down of a relatively minor cryptocurrency exchange in Canada yesterday.

MapleChange revealed via Twitter that a software "bug" had allowed all of the 913 bitcoin (worth some $6 million at current exchange rates) it was holding to be stolen.

MapleChange attempted to reassure users that it would be conducting a “thorough investigation” but warned it would be unable to make refunds before deleting its social media accounts and taking its website offline. Users now attempting to access maplechange.com are met with a timeout error.

The bitcoin price was little moved on news of the loss, with the market trading sideways over the last 24 hours, according to CoinDesk data.

See:  Cryptocurrency exchange Coinsquare announced it is set to expand into Europe in Q4 2018

The price of bitcoin and other major cryptocurrencies have remarkably stable over recent months, as investors and traders await decisions by regulators, signs of growing user adoption, and interest from some of the world's biggest banks.

Bitcoin exchange hacks remain common around the world despite attempts to better regulate the industry and protect users and investors.

In the UK, where the cryptocurrency sector has been branded a "wild west", the government has promised to improve protections for users by moving bitcoin companies and exchanges under the remit of the Financial Conduct Authority, which looks after the country's extensive banking industry.

While bitcoin and cryptocurrency exchange hacks are never good news, MapleChange's small size will mean the damage is somewhat contained. The MapleChange Twitter account had fewer than 2,000 followers, compared to Binance's 880,000.

Prominent bitcoin and cryptocurrency experts and industry leaders were quick to weigh in on the supposed hack, warning users to avoid smaller or unknown exchanges.

Changpeng Zhao, the chief executive of the world's largest crypto exchange by volume Binance, advised consumers to not use exchanges if they do offer cold wallets.

It was also suggested that MapleChange may have pulled off a so-called exit scam, building up reserves of bitcoin before claiming its funds have been lost or stolen.

See:  FINTECH FRIDAY$ (EP.15-Oct 26): Gearing up Hyperion Exchange, Hybrid Models and Security Tokens with Michael Zavet, CEO and Founder, Hyperion Technologies

Many others repeated the mantra: "If you don't control the private keys, it's not your bitcoin," a phrase used to warn people that keeping their cryptocurrencies with businesses often means they have little proof of ownership.

Continue to the full article --> here


NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does banking The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Capital One data breach shows why it shouldn’t be a tech company that does bankingFF Logo 400 v3 - Capital One data breach shows why it shouldn’t be a tech company that does bankingcommunity social impact - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Fintech Confidential Issue 2 FINAL COVER - Capital One data breach shows why it shouldn’t be a tech company that does banking

Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
Read More
China coin crypto - Capital One data breach shows why it shouldn’t be a tech company that does banking
NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
Read More
ExpoG logo final600 - Capital One data breach shows why it shouldn’t be a tech company that does banking
MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
Read More
money laundering rules - Capital One data breach shows why it shouldn’t be a tech company that does banking
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
Read More
cash payments - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
Read More
fintech IPO shortage - Capital One data breach shows why it shouldn’t be a tech company that does banking
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
Read More
unicorn - Capital One data breach shows why it shouldn’t be a tech company that does banking
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
Read More
banking with AI - Capital One data breach shows why it shouldn’t be a tech company that does banking
Guest Post | Aug 14, 2019 You see a need. You know that your new business can fill that need. The problem is that it takes an incredible amount of capital to start a business. Besides purchasing equipment, raw materials, and computer systems, you also have the expenses that no one ever thinks about when opening a shop. Did you figure in the cost of hiring an accountant, a lawyer, and paying for workers compensation insurance? Instead of heading to the bank with your business plan in hand, you may consider whether working with a crowdfunding site might be another feasible way to raise cash for your business expenses. Here’s how crowdfunding sites work. Cash in Exchange for Equity Have you seen Shark Tank? On this TV show, investors decide whether or not they would like to provide capital for startups in exchange for a piece of the company. Sometimes the hosts compete against each other for the opportunity to invest. Sometimes they pool resources and form investment partnerships for a portion of ownership in the company. Occasionally budding entrepreneurs are sent away empty-handed. See:  Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much ...
Read More
Funding meeting - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Biser Dimitrov | Aug 13, 2019 2019 is the year when the blockchain ecosystem and the crypto industry as a whole had to get sober. After a wild 2017 and a bear 2018, the blockchain space is back on an upwards trajectory with new developments. There are no more Initial Coin Offerings (ICOs) to distract the crypto ecosystem and the building mentality is back on. This post-ICO and post-useless-PR-partnerships age urges the blockchain community to be less focused on the current price of bitcoin and more focused on producing meaningful services and advancements. Big projects from established enterprises like Facebook Libra are taking all the media space now and this is net positive for the enterprise blockchain space as well. The first half of this year was full of blockchain developments led by large enterprises in almost all important sectors, including insurance, financial services, supply chain, healthcare and trade finance. There is a huge benefit in joining a specialized industry-focused blockchain consortium because you sit at the same table with your main competitors but at the same time you work toward the same goal. You are not alone in figuring out the benefits, implementations and roll-out of distributed ...
Read More
Blockchain and enterprise - Capital One data breach shows why it shouldn’t be a tech company that does banking
Wired UK Gov | Information Commissioner's Office | Aug 12, 2019 Reuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects. This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk. The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects: to obtain human intervention; to express their point of view; and to contest the decision made about them. See:  How Data-driven Strategies Can Improve Impact Investing Outcomes These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant ...
Read More
Automated AI decisions - Capital One data breach shows why it shouldn’t be a tech company that does banking

 

Global Governance Insights on Emerging Risks

Bleu Azur Consulting | June 17, 2018

Direct and indirect costs of cyberattacks - Capital One data breach shows why it shouldn’t be a tech company that does bankingA HEIGHTENED FOCUS ON RESPONSE AND RECOVERY

Over a third of directors of US public companies now discuss cybersecurity at every board meeting. Cyber risks are being driven onto the agenda by

  • high-profile data breaches,
  • distributed denial of services (DDoS) attacks,
  • and rising ransomware and cyber extortion attacks.

The concern about cyber risks is justified. The annual economic cost of cyber-crime is estimated at US$1.5 trillion and only about 15% of that loss is currently covered by insurance.

MMC Global Risk Center conducted research and interviews with directors from WCD to understand the scope and depth of cyber risk management discussions in the boardroom. The risk of cyberattack is a constantly evolving threat and the interviews highlighted the rising focus on resilience and recovery in boardroom cyber discussions. Approaches to cyber risks are maturing as organizations recognize them as an enterprise business risk, not just an information technology (IT) problem.

However, board focus varies significantly across industries, geographies, organization size and regulatory context. For example, business executives ranked cyberattacks among the top five risks of doing business in the Asia Pacific region but Asian organizations take 1.7 times longer than the global median to discover a breach and spend on average 47% less on information security than North American firms.

REGULATION ON THE RISE

Tightening regulatory requirements for cybersecurity and breach notification across the globe such as

  • the EU GDPR,
  • China’s new Cyber Security Law,
  • and Australia’s Privacy Amendment,

are also propelling cyber onto the board agenda. Most recently, in February 2018, the USA’s Securities and Exchange Commission (SEC) provided interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents.

Regulations relating to transparency and notifications around cyber breaches drive greater discussion and awareness of cyber risks. Industries such as

  • financial services,
  • telecommunications
  • and utilities,

are subject to a large number of cyberattacks on a daily basis and have stringent regulatory requirements for cybersecurity.

See:  Bithumb $31 Million Crypto Exchange Hack: What We Know (And Don’t)

Kris Manos, Director, KeyCorp, Columbia Forest Products, and Dexter Apache Holdings, observed, “The manufacturing sector is less advanced in addressing cyber threats; the NotPetya and WannaCry attacks flagged that sector’s vulnerability and has led to a greater focus in the boardroom.” For example, the virus forced a transportation company to shut down all of its communications with customers and also within the company. It took several weeks before business was back to normal, and the loss of business was estimated to have been as high as US$300 million. Overall, it is estimated that as a result of supply chain disruptions, consumer goods manufacturers, transport and logistics companies, pharmaceutical firms and utilities reportedly suffered, in aggregate, over US$1 billion in economic losses from the NotPetya attacks. Also, as Cristina Finocchi Mahne, Director, Inwit, Italiaonline, Banco Desio, Natuzzi and Trevi Group, noted, “The focus on cyber can vary across industries depending also on their perception of their own clients’ concerns regarding privacy and data breaches.”

LESSONS LEARNED: UPDATE RESPONSE PLANS AND EVALUATE THIRD-PARTY RISK

The high-profile cyberattacks in 2017, along with new and evolving ransomware onslaughts, were learning events for many organizations. Lessons included the need to establish relationships with organizations that can assist in the event of a cyberattack, such as l

  • aw enforcement,
  • regulatory agencies and recovery service providers
  • including forensic accountants and crisis management firms.

Many boards need to increase their focus on their organization’s cyber incident response plans. A recent global survey found that only 30% of companies have a cyber response plan and a survey by the National Association of Corporate Directors (NACD) suggests that only 60% of boards have reviewed their breach response plan over the past 12 months. Kris Manos noted, “[If an attack occurs,] it’s important to be able to quickly access a response plan. This also helps demonstrate that the organization was prepared to respond effectively.”

Experienced directors emphasized the need for effective response plans alongside robust cyber risk mitigation programs to ensure resilience, as well as operational and reputation recovery. As Jan Babiak, Director, Walgreens Boots Alliance, Euromoney Institutional Investor, and Bank of Montreal, stressed, “The importance of the ’respond and recover’ phase cannot be overstated, and this focus needs to rapidly improve.”

Directors need to review how the organization will communicate and report breaches. Response plans should include preliminary drafts of communications to all stakeholders including customers, suppliers, regulators, employees, the board, shareholders, and even the general public. The plan should also consider legal requirements around timelines to report breaches so the organization is not hit with financial penalties that can add to an already expensive and reputationally damaging situation. Finally, the response plan also needs to consider that normal methods of communication (websites, email, etc.) may be casualties of the breach. A cyber response plan housed only on the corporate network may be of little use in a ransomware attack.

Other lessons included the need to focus on cyber risks posed by third-party suppliers, vendors and other impacts throughout the supply chain. Shirley Daniel, Director, American Savings Bank, and Pacific Asian Management Institute, noted, “Such events highlight vulnerability beyond your organization’s control and are raising the focus on IT security throughout the supply chain.” Survey data suggests that about a third of organizations do not assess the cyber risk of vendors and suppliers. This is a critical area of focus as third-party service providers (e.g., software providers, cloud services providers, etc.) are increasingly embedded in value chains.

More:  The growing cost of cybersecurity

FRUSTRATIONS WITH OVERSIGHT

Most directors expressed frustrations and challenges with cyber risk oversight even though the topic is frequently on meeting agendas. Part of the challenge is that director-level cyber experts are thin on the ground; most boards have only one individual serving as the “tech” or “cyber” person. A Spencer Stuart survey found that 41% of respondents said their board had at least one director with cyber expertise, with an additional 7% who are in the process of recruiting one. Boards would benefit from the addition of experienced individuals who can identify the connections between cybersecurity and overall company strategy.

A crucial additional challenge is obtaining clarity on the organization’s overall cyber risk management framework. (See Exhibit 1: Boards Need More Information on Cyber Investments.) Olga Botero, Director, Evertec, Inc., and Founding Partner, C&S Customers and Strategy, observed, “There are still many questions unanswered for boards, including:

  • How good is our security program?
  • How do we compare to peers?

There is a big lack of benchmarking on practices.” Anastassia Lauterbach, Director, Dun & Bradstreet, and member of Evolution Partners Advisory Board, summarized it well, “Boards need a set of KPIs for cybersecurity highlighting their company’s

  • unique business model,
  • legacy IT,
  • supplier and partner relationships,
  • and geographical scope.”

Nearly a quarter of boards are dissatisfied with the quality of management-provided information related to cybersecurity because of insufficient transparency, inability to benchmark and difficulty of interpretation.

EFFECTIVE OVERSIGHT IS BUILT ON A COMPREHENSIVE CYBER RISK MANAGEMENT FRAMEWORK

Organizations are maturing from a “harden the shell” approach to a protocol based on understanding and protecting core assets and optimizing resources. This includes the application of risk disciplines to assess and manage risk, including quantification and analytics. (See Exhibit 2: Focus Areas of a Comprehensive Cyber Risk Management Framework.) Quantification shifts the conversation from a technical discussion about threat vectors and system vulnerabilities to one focused on maximizing the return on an organization’s cyber spending and lowering its total cost of risk.

Cyber risk management process - Capital One data breach shows why it shouldn’t be a tech company that does banking

See:  FSB warns of third-party FinTech risk

Directors also emphasized the need to embed the process in an overall cyber risk management framework and culture. “The culture must emphasize openness and learning from mistakes. Culture and cyber risk oversight go hand in hand,” said Anastassia Lauterbach. Employees should be encouraged to flag and highlight potential cyber incidents, such as phishing attacks, as every employee plays a vital role in cyber risk management. Jan Babiak noted, “If every person in the organization doesn’t view themselves as a human firewall, you have a soft underbelly.” Mary Beth Vitale, Director, GEHA and CoBiz Financial, Inc., also noted, “Much of cyber risk mitigation is related to good housekeeping such as timely patching of servers and ongoing employee training and alertness.”

Boards also need to be alert. “Our board undertakes the same cybersecurity training as employees,” noted Wendy Webb, Director, ABM Industries. Other boards are putting cyber updates and visits to security centers on board “offsite” agendas.

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Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
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MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
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NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does bankingThe National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with cryptocurrency, blockchain, crowdfunding, alternative finance, fintech, P2P, ICO, STO, and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: ncfacanada.org

Bithumb $31 Million Crypto Exchange Hack: What We Know (And Don’t)

Coindesk | Wolfie Zhao | June 20, 2018

bithumb Korean exchange hacked - Capital One data breach shows why it shouldn’t be a tech company that does bankingOn Wednesday, roughly 35 billion Korean won (around $31 million) in cryptocurrency was stolen by hackers from the South Korea-based exchange Bithumb.

Although the breach may not be as severe as the $530 million hack of the Coincheck exchange earlier this year, the fact that Bithumb now ranks as the sixth biggest trading venue in the world still marks it as a notable, and worrying, incident.

While more details about the heist have surfaced in the hours following the event's confirmation, providing a glimpse into Bithumb's internal operations, some important questions about the hack still remain unanswered.

Here's what we know about the hack so far, and some details we still don't.

What we know

XRP compromised

While Bithumb has not yet disclosed full details of the stolen coins, news emerged following the hack that XRP, the native token of the XRP ledger and the world's third-largest cryptocurrency, has been targeted, according to a report from CoinDesk Korea.

Based on data from CoinMarketCap, Bithumb accounted for 10 percent of the global trading volume of XRP over the last 24 hours, with a total of $32 million-worth changing hands.

Bithumb has so far not responded to CoinDesk's request for comment.

IT improvement failed

While Bithumb officially confirmed the breach early Wednesday morning local time, it appears that security issues were already drawing attention from the exchange at least several days ago.

According to a follow-up report from CoinDesk Korea, Bithumb conducted a security enhancement checkup on June 16, just days before the confirmed hack.

The exchange explained at the time:

"Recently, the number of unauthorized access attempts has increased. As such, an urgent server checkup was conducted to strengthen the security of all system."

At the same time, Bithumb also started moving users' assets to a cold wallet to store cryptocurrencies in a more secure offline environment.

The CoinDesk Korea report indicated that the hack comes at a time when Bithumb is spending 10 billion won, or around $9 million dollars annually on security measures. Another report from Yonhap further suggests that Bithumb beefed up its security measures by implementing so-called "5.5.7 regulations" last month.

Under this requirement, at least 5 percent of a financial institution's staff should be IT specialists. Among those, 5 percent should focus on information security, while at least 7 percent of the firm's total budget should be on information security.

See:  The growing cost of cybersecurity

The report from Yonhap stated that 21 percent of Bithumb's employees are technology specialists as of May, and 10 percent of those are responsible for information security. Further, about eight percent of the annual spending budget is used for data protection activities.

Although Bithumb appears to have fulfilled the 5.5.7 requirements, the report said the fact that it has 300 employees means it may not be able to cope with the increasing amount of trading volume and user numbers on its platform.

Government weighs in

An hour before Bithumb confirmed the hack on its website and official Twitter account, the exchange reported the case to the Korea Internet & Security Agency (KISA), a government organization that supervises internet and cybersecurity issues in the country.

An official from KISA said a dedicated analysis team is currently in the process of investigation the hack. As of press time, the agency has not yet disclosed any details from its investigation so far.

Bithumb to refund users

Immediately after announcing the hack, Bithumb confirmed it will pay back victims using its own reserves.

Industry experts later weighed in, including bitcoin pioneer Charlie Shrem, who praised the move despite the unwelcome incident.

"Bithumb hacked for $30 million but covering all losses. Out industry is getting better and stronger," he tweeted.

In addition, litecoin creator Charlie Lee also commented that he believes the smart move is to "keep on exchange coins that you are actively trading. It's best to withdraw right after trading."

This is not the first time that Bithumb was reportedly hacked. As previously reported by CoinDesk, the platform was compromised last year with as many as 30,000 users impacted.

At that time, Bithumb later announced that it would repay each victim with 100,000 Korean won each, an amount worth about $85.

Bitcoin price dips by $200 

According to data from CoinDesk, the price of bitcoin dropped by nearly $200 to a daily low so far of $6,561 an hour after Bithumb initially published the statement. As of press time, the price had bounced back to $6,640.

In addition, as Bithumb has so far only suspended asset deposits and withdrawals, trading activity on the exchange actually appears to be increasing since the news broke. Based on data from CoinMarketCap, 24-hour trading volume was initially seen at around $350 million at the time of the news and later climbed to $380 million around noon local time on Wednesday.

Check out:  Prices Aside, Crypto’s Tech Stack Is Steadily Improving

As of press time, Bithumb still remains the sixth largest platform globally.

What we don't know

Extent of the breach

It appears that XRP is one of the assets stolen in the hack, yet it's still unclear at the moment if other assets have been taken and in what quantities. In addition, it's also not clear the number of users on Bithumb that have been impacted.

In its announcement, Bithumb refrained disclosing these details, adding that it may disclose the hacked tokens today. It has not made any statement on that at press time.

Further, it's not publicly known at this time which wallet addresses the hacked cryptocurrencies have been sent to, or whether any have been liquidated or not.

Currently, there are over 37 cryptocurrency assets on Bithumb that are available for trading against the Korean won. Among them, EOS and TRON together account for over half of the total trading volume on Bithumb, at 31 and 22 percent, respectively.

Continue to the full article --> here

 

latest news - Capital One data breach shows why it shouldn’t be a tech company that does banking

 

Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
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NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
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MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
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money laundering rules - Capital One data breach shows why it shouldn’t be a tech company that does banking
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
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Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
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fintech IPO shortage - Capital One data breach shows why it shouldn’t be a tech company that does banking
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
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unicorn - Capital One data breach shows why it shouldn’t be a tech company that does banking
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
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banking with AI - Capital One data breach shows why it shouldn’t be a tech company that does banking
Guest Post | Aug 14, 2019 You see a need. You know that your new business can fill that need. The problem is that it takes an incredible amount of capital to start a business. Besides purchasing equipment, raw materials, and computer systems, you also have the expenses that no one ever thinks about when opening a shop. Did you figure in the cost of hiring an accountant, a lawyer, and paying for workers compensation insurance? Instead of heading to the bank with your business plan in hand, you may consider whether working with a crowdfunding site might be another feasible way to raise cash for your business expenses. Here’s how crowdfunding sites work. Cash in Exchange for Equity Have you seen Shark Tank? On this TV show, investors decide whether or not they would like to provide capital for startups in exchange for a piece of the company. Sometimes the hosts compete against each other for the opportunity to invest. Sometimes they pool resources and form investment partnerships for a portion of ownership in the company. Occasionally budding entrepreneurs are sent away empty-handed. See:  Regulation Crowdfunding Surpasses $250,000,000 in Commitments The Model is Working but its Potential is Much ...
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Funding meeting - Capital One data breach shows why it shouldn’t be a tech company that does banking
Forbes | Biser Dimitrov | Aug 13, 2019 2019 is the year when the blockchain ecosystem and the crypto industry as a whole had to get sober. After a wild 2017 and a bear 2018, the blockchain space is back on an upwards trajectory with new developments. There are no more Initial Coin Offerings (ICOs) to distract the crypto ecosystem and the building mentality is back on. This post-ICO and post-useless-PR-partnerships age urges the blockchain community to be less focused on the current price of bitcoin and more focused on producing meaningful services and advancements. Big projects from established enterprises like Facebook Libra are taking all the media space now and this is net positive for the enterprise blockchain space as well. The first half of this year was full of blockchain developments led by large enterprises in almost all important sectors, including insurance, financial services, supply chain, healthcare and trade finance. There is a huge benefit in joining a specialized industry-focused blockchain consortium because you sit at the same table with your main competitors but at the same time you work toward the same goal. You are not alone in figuring out the benefits, implementations and roll-out of distributed ...
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Blockchain and enterprise - Capital One data breach shows why it shouldn’t be a tech company that does banking
Wired UK Gov | Information Commissioner's Office | Aug 12, 2019 Reuben Binns, our Research Fellow in Artificial Intelligence (AI), and Valeria Gallo, Technology Policy Adviser, discuss some of the key safeguards organisations should implement when using solely automated AI systems to make decisions with significant impacts on data subjects. This post is part of our ongoing Call for Input on developing the ICO framework for auditing AI. We encourage you to share your views by leaving a comment below or by emailing us at AIAuditingFramework@ico.org.uk. The General Data Protection Regulation (GDPR) requires organisations to implement suitable safeguards when processing personal data to make solely automated decisions that have a legal or similarly significant impact on individuals. These safeguards include the right for data subjects: to obtain human intervention; to express their point of view; and to contest the decision made about them. See:  How Data-driven Strategies Can Improve Impact Investing Outcomes These safeguards cannot be token gestures. Guidance published by the European Data Protection Board (EDPB) states that human intervention involve a review of the decision, which “must be carried out by someone who has the appropriate authority and capability to change the decision”.  The review should include a “thorough assessment of all the relevant ...
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Automated AI decisions - Capital One data breach shows why it shouldn’t be a tech company that does banking

 


NCFA Jan 2018 resize - Capital One data breach shows why it shouldn’t be a tech company that does bankingThe National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with cryptocurrency, blockchain, crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: ncfacanada.org