21-Year Old American Purported SIM Swapper Arrested for Alleged Theft of $1 Mln in Crypto

Authorities in the U.S. state of California have arrested a 21-year old New Yorker for the alleged theft of $1 million in crypto using “SIM-swapping.”

Authorities in the U.S. state of California have arrested a 21-year old New Yorker for the alleged theft of $1 million in crypto using “SIM-swapping,” U.S. broadsheet the New York Post reported Nov. 20.

SIM-swapping — also known as a “port-out scam” — involves the theft of a cell phone number in order to hijack online financial and social media accounts, enabled by the fact that many firms  use automated messages or phone calls to handle customer authentication.

The arrested suspect, Nicholas Truglia, is accused of having targeted wealthy Silicon Valley executives in the Bay Area, and of successfully persuading telecoms support staff to port six victims numbers to his an alleged “crew” of accomplice attackers. Deputy DA Erin West, of Santa Clara Superior Court, told the Post the ruse was “a new way of doing an old crime.”

Truglia had previously made headlines in September, when he alerted police claiming to have been the victim of violent attempts by four of his friends to rob him of hardware that would enable them to swipe $1.2 million worth of his crypto holdings.

One of Truglia’s alleged SIM-swapping victims, San Francisco-based Robert Ross, was allegedly robbed of $500,000 worth of crypto holdings on his Coinbase wallet “in seconds” on Oct. 26, and at the same time a further $500,000 was taken from his Gemini account. West said the $1,000,000 was Ross’ “life savings” and his two daughters’ college fund.

While Ross was allegedly the only victim of the six targets from which Truglia managed to siphon crypto, he is accused of successfully taking control of the phones belonging to Saswata Basu, CEO of the blockchain storage firm 0Chain; Myles Danielsen, vice president of Hall Capital Partners, and Gabrielle Katsnelson, co-founder of startup SMBX.

The California authorities reportedly flew to New York City Nov. 14 to arrest the suspect at his apartment, recovering a hardware wallet and $300,000 of stolen funds. West told the post, “the takeaway here to the hackers is, ‘We don’t care where you’re located, we are a task force based in Silicon Valley, and our reach is nationwide.”

Truglia is since being held Manhattan Detention Complex pending extradition to Santa Clara in California. Formal charges relate to a seven-day “hacking spree” beginning Oct. 8, specifically entailing “grand theft, altering or damaging computer data with the intent to defraud and using personal information without authorization.”

As recently reported, the rising prevalence of SIM swap-related incidents has prompted a California-based law enforcement group to make it their “highest priority.” In more than one high-profile instance, victims have acted to sue telecoms firms such as AT&T and T-Mobile for their facilitation of the crime.

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Winklevoss Twins’ Gemini Crypto Exchange Gets Regulatory Green Light for Litecoin Trading

U.S.-based cryptocurrency exchange Gemini, owned by the Winklevoss twins, has sealed regulatory approval to add Litecoin custody and trading.

U.S.-based cryptocurrency exchange Gemini, owned by the Winklevoss twins, has sealed regulatory approval to add Litecoin (LTC) custody and trading. The news comes from an official Medium blog post published Friday, Oct. 12.

Gemini’s vice president of engineering, Eric Winer, informs Gemini traders that they can begin depositing Litecoin into their exchange accounts as of 9:30 am EDT Saturday, Oct. 13. Litecoin trading will reportedly go live Tuesday, October 16th at 9:30 am EDT.

The coin is set to be the fourth crypto supported on the platform, alongside Bitcoin (BTC), Ethereum (ETH), and Zcash (ZEC). Consequently, LTC trading pairs will be available against all three cryptos, as well as against the U.S. dollar.

Winer’s post underscores Gemini’s thoroughgoing “banking compliance and fiduciary obligations” under oversight from the New York State Department of Financial Services (NYDFS). It notes that Litecoin trading support comes as the result of close cooperation with the watchdog, and that the exchange continues to expand with a “security-first” approach.

Lastly, the post reveals that support for Bitcoin Cash (BCH) had also been slated for today. However, due to high levels of “uncertainty” within the Bitcoin Cash community about “one or more possible hard forks” planned for mid-November, Gemini has decided to delay its support of the asset:

“Some of [the] forks [currently under discussion] lack the replay protection feature that would be required for Gemini to safely support Bitcoin Cash. Because of this situation, we are delaying our launch of Bitcoin Cash deposits, withdrawals, and trading until late November, after the forks have passed and we can evaluate the health of the Bitcoin Cash ecosystem.”

Earlier this month, Gemini announced it had secured insurance coverage for custodied digital assets from lending services firm Aon, which will complement its already available Federal Deposit Insurance Corporation (FDIC) coverage for U.S. dollar deposits.

The Winklevoss twins have also recently sealed the approval of the NYDFS to launch their own U.S. dollar-backed stablecoin, the Gemini dollar, the same day as U.S. Trust company Paxos announced its own NYDFS-approved stablecoin.

Shortly after the news, the brothers reportedly started to hire advisors to oversee Gemini’s potential expansion to the U.K. market.

As of press time, Gemini is ranked the world’s 38th largest crypto exchange by CoinMarketCap, seeing over $34 million in daily traded volumes.

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Former NASDAQ Subsidiary Exec Joins Crypto Exchange Gemini’s Client Service Team

Jeanine Hightower-Sellitto, a former COO of a NASDAQ subsidiary, will develop Gemini’s marketplace to attract institutional investors.

Former COO of major U.S. stock exchange NASDAQ subsidiary Jeanine Hightower-Sellitto has joined crypto exchange Gemini, the company revealed in a Medium post on Wednesday, Oct. 10.

The U.S.-based Gemini, launched by the Winklevoss twins back in 2015, has hired Hightower-Sellitto as a managing director of operations to lead its client services team. As per the release, she spent 13 years as a chief operating officer at the International Securities Exchange, transforming the startup into a major exchange purchased by NASDAQ in 2016 for $1.1 billion.

According to financial magazine Banking & Finance Review, Gemini expects Hightower-Sellitto to develop its marketplace along with enhancing the crypto exchange experience for institutional investors.

Hightower-Sellitto is not the first high-ranked Wall Street professional hired by Gemini. As Cointelegraph wrote in June, former chief information officer at the New York Stock Exchange (NYSE) Robert Cornish joined the crypto exchange’s team to control tech initiatives and to monitor the deployment of Nasdaq’s SMARTS Market Surveillance technology.

Other Wall Street execs have also recently joined various crypto-related projects.

For instance, former Goldman Sachs executive director Priyanka Lilaramani joined the Maltese crypto startup HOLD, the head of Central Europe at Fujitsu Dr. Rolf Werner moved to blockchain non-profit IOTA Foundation, and crypto exchange Coinbase hired former PayPal and Facebook executive David Marcus to be among its directors.

Gemini, ranked as world’s 49th largest crypto exchange by CoinMarketCap, last month got approval from New York regulators to launch their own U.S.-backed stablecoin, Gemini dollar. Shortly after the move, the Winklevoss brothers reportedly started to hire advisors to oversee its potential expansion to the U.K.

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Winklevoss’ Crypto Exchange Gemini Eyes Entrance Into UK Market, Sources Report

The Winklevoss twins’ crypto exchange Gemini is eyeing entrance into the U.K. market, according to a new report from the Financial Times.

Tyler and Cameron Winklevoss, creators of U.S.-based cryptocurrency trading platform Gemini, are looking to expand the platform to the U.K. market, sources told the Financial Times (FT) September 24.

The Gemini Trust Company, founded in New York in 2014, is currently ranked the 58th largest crypto exchange globally by adjusted daily traded volume, according to CoinMarketCap.

The FT cites two unnamed insider sources as reporting that Gemini has now hired advisors to oversee its potential expansion to the U.K. The firm itself is quoted on record by the FT as saying that while Gemini has no “immediate plans” as such:

“[We] continue to explore potential jurisdictions around the globe to provide a best-in-class digital asset exchange and custodian which will enable growth and infrastructure to the entire digital asset community.”

One source has further claimed that the firm is currently “close to” filing an application with the U.K. markets watchdog — the Financial Conduct Authority (FCA) — to seek a green light for the move.

Just last week, U.K. Members of Parliament (MPs) had urged the FCA — which does not broadly regulate crypto except for certain derivatives — to step up its actions and bring the nascent crypto sector under the purview of existing regulatory frameworks.

While the MPs castigated the current state of the crypto spot markets as a “Wild West,” they argued that with the appropriate regulatory guidance, the U.K. could come to serve as a “global centre” for the crypto industry.

As the FT notes, Gemini already operates as a fully compliant crypto custodian and trading services provider in the U.S., having received formal approval from New York’s Department of Financial Services (NYDFS) to operate under the state’s exacting BitLicense framework in 2015.

Just last week, the NYDFS gave its official sanction to the Winklevoss twins’ new fully U.S. dollar-backed stablecoin — dubbed Gemini dollar — where the fiat currency reserves will reportedly be held at a U.S.-based bank that is “eligible for FDIC ‘pass-through’ deposit insurance.”

The news — which broke on the same day that the NYDFS gave its approval for a separate dollar-backed stablecoin from American Trust company Paxos — triggered a flush of bullish sentiment across the crypto markets.

The twins nonetheless faced a high-profile setback this July, when their application to launch a Bitcoin (BTC) exchange-traded fund (ETF) received its second rejection from the U.S. Securities and Exchange Commission (SEC).

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Two US-Audited Stablecoins Debut, Experts See Massive Impact on Crypto Market

New York approved two fully audited stablecoins from Gemini and Paxos, which experts say may largely impact the crypto market.

As Cointelegraph reported on Sept. 10, with the approval of the New York Department of Financial Services (NYDFS), Paxos and Gemini officially announced the introduction of two stablecoins called the “Gemini dollar (GUSD)” and the “Paxos Standard (PAX).” Both stablecoins are backed by the U.S. dollar on a 1:1 basis, with every unit of GUSD and PAX representing the value of one U.S. dollar.

Experts believe that the emergence of fully audited, legitimate and licensed stablecoins will have a profound impact on the crypto market, especially in the long-term, as it provides investors a way to retain value without being exposed to the volatility of the market.

Significance of GUSD and PAX deploying on Ethereum

Cameron Winklevoss, the co-founder and president of United States-based regulated cryptocurrency exchange Gemini, said in an official statement that it has launched GUSD on the Ethereum blockchain network utilizing the ERC-20 token standard.

Prior to the launch of GUSD and PAX, only two stablecoins — Tether (USDT) and TrueUSD (TUSD) — existed in the market, both of which have been integrated by major cryptocurrency exchanges like Binance, Bitfinex, OKEx, Huobi and HitBTC.

Tether and TrueUSD deployed USDT and TUSD on the Omni and TrustToken blockchain networks rather than relying on the reputable ERC-20 token contract of Ethereum.

Brandon Arvanaghi, the core developer of GUSD, stated that the Gemini dollar is the first stablecoin, alongside PAX, to be deployed on Ethereum as an ERC-20 token, with the entire system being integrated into the smart contracts of Ethereum.

The compatibility of GUSD and PAX with the Ethereum blockchain allows for the transfer of the two stablecoins through the Ethereum network with the existing infrastructure designed for tokens. For instance, the Gemini dollar can be transferred on the Ethereum network through wallets like MetaMask and systems such as MyCrypto and MyEtherWallet, without relying on third-party service providers and exchanges.

Tether and TrueUSD have their own wallets on their respective blockchain networks. But, for usability and accessibility, it is advantageous to have stablecoins that can be seamlessly sent and received on an infrastructure that the vast majority of cryptocurrency users are already familiar with. The white paper of GUSD reads:

“Gemini dollars are created at the time of withdrawal from the Gemini platform. Gemini customers may exchange U.S. dollars for Gemini dollars at a 1:1 exchange rate by initiating a withdrawal of Gemini dollars from their Gemini account to any Ethereum address they specify. The U.S. dollar amount of Gemini dollars is debited from a customer’s Gemini account balance at the time of withdrawal.”

Charles Cascarilla, the co-founder and CEO of Paxos, emphasized that immutability and transparency in the structure of stablecoins is crucial for decentralized accounting. As PAX operates as a token on the Ethereum network, anyone on the Ethereum blockchain can verify and evaluate the smart contract of GUSD and PAX.

“In the current marketplace, the biggest hindrances to digital asset adoption are trust and volatility. As a regulated trust with a 1:1 dollar-collateralized stablecoin, we believe we are offering an asset that improves on the utility of money.”

Integration of Global Finance to Crypto Finance

In the early days of Bitcoin, many investors in the cryptocurrency market called for an autonomous economy that operates independently from the broader financial market and government-controlled markets.

As the market started to grow and regulated financial institutions began to take interest in the market, the cryptocurrency market has become more intertwined with the global finance sector.

In terms of value, cryptocurrencies generally make up a practical store of value due to their lack of correlation to the broader financial markets, as Bitwise Asset Management vice president of R&D Matt Hougan explained:

“Non-correlation is not the same as inverse correlation, so there’s no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist.”

The lack of correlation between cryptocurrencies and the global market has been considered to be one of the strongest points of the asset class that may enable major cryptocurrencies to potentially find competition in the offshore banking market, given the increasing crackdown on overseas savings accounts by governments like China and the ability of cryptocurrencies to hold value in a secure and efficient manner.

But, the integration of global finance into crypto finance through the adoption of fiat currency-backed cryptocurrencies, custodian solutions offered by banks and strict financial regulations will not lead to an increase in correlation of the value between cryptocurrencies and conventional assets.

Rather, it will ease the process for institutional investors to commit to the cryptocurrency market and individual users, like merchants and casual users, to escape extreme volatility in the market to utilize decentralized financial networks.

Erik Voorhees, the CEO of ShapeShift, noted that the integration of global finance into crypto finance is monumental and that it needs to continue for the asset class to survive and eventually compete against reserve currencies and traditional stores of value.

“It’s a big deal and an important step. Global finance is becoming further integrated with crypto finance. All that crypto needs in order to win is for this to continue.”

The role of Gemini in the institutionalization of crypto

Throughout 2018, Gemini and the Winklevoss twins have directed their efforts toward institutionalizing the cryptocurrency sector, enabling digital assets to be more favorable toward institutions and large-scale investors.

The Bitcoin exchange-traded fund (ETF) proposal by the Winklevoss twins filed with the U.S. Securities and Exchange Commission (SEC) is well documented. To increase the probability of its approval, Gemini secured various partnerships with regulated financial institutions, including Nasdaq, to better monitor and oversee the cryptocurrency market.

In July, the SEC ultimately rejected the Bitcoin ETF proposal of the Winklevoss twins filed by Bats BZX Exchange, Inc. (BZX), citing issues in its pricing model, saying that it will not allow ETFs to base the value of Bitcoin on a cryptocurrency exchange, which is vulnerable to manipulation:

“Rather, the Commission is disapproving this proposed rule change because […] BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act […] in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.”

Still, despite the rejection of the ETF, the partnership between Gemini and Nasdaq stands, and the disapproval of the ETF allowed other companies that have filed Bitcoin ETFs with the SEC to revise their filings accordingly, further increasing chances of approval.

Since April of this year, Gemini has been working closely with Nasdaq to integrate market compliance and surveillance programs to appeal to regulators and to legitimize the cryptocurrency exchange market.

The first step toward the institutionalization of a market is to create trusted custody solutions and appropriately regulate the spot market of the asset class to ensure stability and transparency.

The efforts of Gemini and other financial institutions like ICE — the parent company of the New York Stock Exchange (NYSE) — and Nasdaq to evolve cryptocurrencies into a well-regulated, structured and transparent asset class are expected to have a large impact on the long-term growth of the industry. Tyler Winklevoss, the CEO of Gemini, said:

“Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole. Our deployment of Nasdaq’s SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants.”

Controversy around Tether, investors happy to see alternative stablecoins

For nearly four years, since its launch in 2014, Tether has been the dominant force in the cryptocurrency exchange market as the most widely utilized stablecoin.

However, many analysts and investors in the cryptocurrency space have heavily criticized Tether since its inception due to the lack of transparency and clarity on its origin, audit reports and structure.

The controversy around Tether began in 2017, when a set of 13.4 million confidential electronic documents relating to offshore investments called the “Paradise Papers” were released by German reporters Frederik Obermaier and Bastian Obermayer.

The Paradise Papers disclosed a connection between Tether and Bitfinex officials Philip Potter and Giancarlo Devasini, who established Tether Holdings Limited in 2014.

Tether was brought into the cryptocurrency market by the integration of Bitfinex, one of the leading cryptocurrency exchanges in the global market. As the volume of Tether continued to increase and more investors started to rely on USDT to hedge the value of their holdings to U.S. dollars, major exchanges like OKEx, Huobi and Binance adopted USDT as the primary stablecoin.

For many years, investors have publicly expressed their dissatisfaction in the opaque structure of Tether, as it became one of the core components of the cryptocurrency exchange market. Throughout this year, Tether consistently demonstrated a daily trading volume of over $3 billion, which is twice larger than that of Ethereum, the second most valuable cryptocurrency in the world.

Top 10 cryptocurrencies by market cap

Hence, in a hypothetical situation in which Tether Holdings files for bankruptcy and the stablecoin does not represent several billion dollars — contrary to its balance sheet — then the entire global cryptocurrency market could suffer greatly.

In response to criticisms, Tether Holdings released audit results in June through law firm Freeh Sporkin & Sullivan LLP, demonstrating that it has more than enough funds to cover the billions of dollars its balance sheet portrays. At the time, Tether CEO J.L. van der Velde said:

“Despite speculation, we have consistently stated that Tether is backed by USD reserves at or exceeding the Tethers in circulation at a given moment, and we’re glad to have independent verification of this to answer some of the questions posed by the public.”

However, the fact that the audit result was not published by a widely recognized accounting firm and that Tether canceled the audit from Friedman LLP led the controversy around the stablecoin to intensify.

Speaking to Cointelegraph, American accountant and auditor Abhishek Shah said in March:

“The reason given by Tether was certainly not clear and precise, neither acceptable. An audit is to be allowed as much time as required, albeit the audit needs to be concluded before the due date. It is not a reasonable ground, and I’ve personally not heard of such a reason in my auditing career.”

For over four years, Tether has always been at the center of controversy and has struggled to definitively prove its legitimacy through trusted third-party audits. As such, investors such as Multicoin Capital partner Tushar Jain said that GUSD and PAX can be considered as improvements over Tether:

“This is such a huge improvement over Tether. It reduces systemic risk in the whole crypto ecosystem. Tether is a systemic risk in that, if it explodes, billions of dollars could effectively disappear and cause exchange insolvencies. An alternative to Tether hugely reduces that risk.”

Professor at the University of California is not convinced

In an op-ed published in The Guardian, Barry Eichengreen, professor of economics and political science at the University of California, Berkeley, firmly stated that he believes stablecoins do not solve the stability issue in the cryptocurrency sector.

As an example, Eichengreen offered the dilemma of cryptocurrency-accepting merchants. He stated that merchants are not able to price goods based on Bitcoin, given the extreme volatility rate of the currency. But, stablecoins can be accepted by merchants as a primary currency because their value is backed by fiat currencies.

“Stablecoins purport to solve these problems. Because their value is stable in terms of dollars or their equivalent, they are attractive as units of account and stores of value. They are not mere vehicles for financial speculation. But this doesn’t mean that they are viable.”

Still, regardless of the stability in the value of stablecoins, Eichengreen said that stablecoins are still not viable for various reasons, with the main factor being the vulnerability of the market to tax evaders and criminals.

“This exchange may be attractive to money launderers and tax evaders, but not to others. In other words, it is not obvious that the model will scale, or that governments will let it.”

The approval of GUSD and PAX by NYDFS directly refutes the two arguments of Eichengreen. A distinguished government body — in this case, the state of New York — regulated and licensed the launch of the two stablecoins.

Moreover, due to their compatibility with Ethereum as ERC-20 tokens, GUSD and PAX do not need to depend on an exchange. Even if they did, cryptocurrency exchanges are so heavily regulated in most major markets that it is highly impractical for criminals to attempt to utilize cryptocurrencies to launder money with stablecoins.

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Winklevoss’ Gemini Dollar a ‘Solid’ Bridge That ‘Will Span Decades,’ Says Charlie Shrem

Charlie Shrem Talks Bitcoin, Hodling, and the Future of Cryptocurrency

Shortly after New York regulators gave the green light to Cameron and Tyler Winklevoss’ stable coin, Charlie Shrem shares his two cents on the matter. He thinks the cryptocurrency represents the “Golden Gate Bridge” in the field. A ‘Solid Stable Coin’ As Bitcoinist reported September 10, the investment bank State Street will back the Gemini Dollar – a token pegged to the US dollar 1:1. It’s the first cryptocurrency from early Bitcoin investors, Cameron and Tyler

The post Winklevoss’ Gemini Dollar a ‘Solid’ Bridge That ‘Will Span Decades,’ Says Charlie Shrem appeared first on Bitcoinist.com.

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