More Troubles for Bitcoins, Ripple, Ethereum As Authorities Raid Cryptocurrency Exchange After Massive Heist

Whether it’s a bubble or a transformation of the industry, nothing has possibly ever attracted as much attention as cryptocurrency has in the past few months. This attention has increasingly started to result in unsavory activities, including criminal hacks, heists, and much more. Coincheck is the latest of the cryptocurrency exchanges, having suffered one of the biggest hits in history as the company lost over $500 million in what some are calling a historic hack. Reports from Japan suggest that the country’s Financial Services Agency raided Coincheck offices earlier on Friday hauling out documents and computers as evidence.

This the first time that the FSA has raided a cryptocurrency exchange. The agency said that this first of its kind swoop was to monitor Coincheck’s response to the hack in real time. The exchange was ordered to set up a risk management system and report to the authorities by February 13. “The investigation is being conducted to protect the current users,” Finance Minister Taro Aso said. “We have launched an on-site inspection to ensure preservation of clients’ assets.”

The FSA will look into the company’s finances, its ability to pay back to over 260,000 victims, to see how the hack took place, and if there were proper security measures in place. The company had promised to reimburse all customers who lost their coins at a rate of 88.549 yen per NEM. The refund amount has been fixed at 46.3 billion yen ($422 million, around 90% of the original loss).

The Singapore-based NEM Foundation behind the coin said that it is monitoring the stolen funds. “None of the stolen funds have been sent to any exchanges,” the firm said. “As long as those funds are off public exchanges they will be very difficult to liquidate, especially in large amounts.”

Cryptocurrency troubles – regulation coming?

While policymakers around the world are struggling to regulate cryptocurrency, Japan probably takes the most heat. Following restrictions in China and South Korea, the country saw a rise in cryptocurrency trading. The Coincheck raid by the FSA investigators is one of the first steps taken by the country to regulate the as-yet highly unregulated industry.

Following the notorious Mt Gox hack in 2014, the country started to pass regulations that would control exchanges. Japan also started to require cryptocurrency exchange operators to register with the government early in 2017. However, since Coincheck was already operating before these rules were passed, it wasn’t yet registered with the government. The company did submit an application to the FSA for a license and was awaiting a decision.

This is potentially also the reason why FSA raided Coincheck’s offices because the agency allowed an exchange to continue operating without license and is facing criticism in the country.

Since the hack, several other currencies, including Bitcoin, Ethereum and Litecoin have suffered losses after some massive peaks in the past few months. The dips, however, started before the Coincheck theft. “It’s been long said that cryptocurrencies are a solid system but cryptocurrency exchanges are not,” Makoto Sakuma, research fellow at NLI Research Institute, told Reuters.

“This incident showed that the problem has not been solved at all. If Coincheck screws up its crisis management, that could deal a blow to the current cryptocurrency fever.”

Ripple, Ethereum And Bitcoin Crashes More, About $120 Billion Wipe Off Crypto Market

Cryptocurrency markets are swung wildly on Friday, after a major early morning crash gave way to an afternoon rebound.

During European morning trade on Friday, the price of virtually every major cryptocurrency dropped more than 15% as investors remained spooked following bitcoin's fall below the key $9,000 support level on Thursday.

"The wheels are coming off the bitcoin bandwagon," Neil Wilson, a senior market analyst with ETX Capital, said in an email this morning.

"The regulatory crunch appears closer than ever and sooner or later this market could be headed back down to earth. Selling pressure at the moment is intense as there has been nothing but bad news for bitcoin bulls of late."




Bitcoin crashed as low as $7,700 during the collapse, losing roughly 15% of its value at one point. Other major cryptos fell even further, with Ethereum down as much as 23% at one point.

By the European afternoon, however, prices have bounced back sharply, and by 4.50 p.m. GMT (11.45 a.m. ET) bitcoin was actually in positive territory on the day, trading at $9,130.

Although there was no immediately obvious catalyst for the rebound, it coincided with the East Coast of the USA waking up, suggesting that American traders were engaging in a bout of dip-buying.

Market capitalisation is an inexact measure of cryptocurrencies (as Business Insider Australia's Sam Jacobs has outlined), but it at least gives a good idea of the scale of the ongoing sell-off.

The crypto market has been on the back foot since the start of the year, hit by fears of a regulatory crackdown and slipping Asian volumes. Bitcoin is now at less than half its December peak of over $19,000.

More concerns have emerged about the sector this week as Facebook banned cryptocurrency advertisements and US regulators began investigating tether, a cryptocurrency that some fear has been used to inflate the value of bitcoin.

India's finance minister also said this week that the Indian government "does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system."

What Is Ripple and Why Is It Beating Both Bitcoin and Litecoin?

Forget Bitcoin. So long Litecoin. There’s a new cryptocurrency on the rise.

Ripple, which was designed for banks and global money transfers, has seen the value of its XRP digital currency skyrocket in the past three days. On Dec. 10, the company had a market capitalization of just over $9 billion. As of Wednesday morning, that market cap had more than doubled to $18.1 billion.

Prices for an individual Ripple XRP are considerably more affordable than its alternatives, making it even more attractive to cryptocurrency speculators. As of late Wednesday morning, a single XRP cost just 47 cents, a 66% jump from yesterday’s close, according to CoinMarketCap.

This surge has pushed Litecoin down to the fifth most valuable cryptocurrency. Both Ripple and Litecoin are still far below Bitcoin and Ethereum, however.

What is Ripple?

While it wasn’t released until 2012, Ripple is actually older than Bitcoin. The original version of the company was created in 2004, according to Bitcoin Magazine. It never really went anywhere, though, until it put a professional management team in place, which included E-Loan co-founder Chris Larsen and Jed McCaleb, founder of MtGox.

Ripple’s cryptocurrency has been adopted by banks and other financial institutions. Those companies believe Ripple’s system offers both better prices and is more secure than other digital currencies, including Bitcoin. It allows users to send, receive, and hold any currency in a decentralized way via the Ripple network. The company is cash-flow positive and holds a vast store of XRP, which it periodically releases into the market.

But the real appeal of Ripple’s XRP for banks is its liquidity.

“The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalize on that. Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds,” Ripple CEO Brad Garlinghouse told said this year

Why is Ripple surging?

Ripple’s rise seems to be a (pardon the pun) ripple effect from the surge of interest in Bitcoin. Investors who believe cryptocurrency may be reaching a peak are looking for others that could provide a greater return in the long term. The company has hit some notable milestones in recent months, though.

As of October, Ripple had licensed its blockchain technology to over 100 banks. Last month, American Express came on board. And Michael Arrington’s $100 million cryptocurrency hedge fund will be valued in Ripple’s XRP.

How much has Ripple grown in 2017?

Year to date, Ripple’s XRP has seen its value jump more than 7,000% and its market cap increase by nearly 7,700%.

Marketers Please Pay Attention to Cryptocurrency Now And Here's Why

Although the technology is relatively new, cryptocurrency is already making waves in multiple industries. In fact, there are some who argue that it will change the face of finance and marketing forever.

Despite its relative infancy, cryptocurrency has already impacted the marketing world pretty significantly, even as experts work to understand the risks and benefits involved. Here are some reasons you should be paying attention to cryptocurrency, as well as some explanations of this groundbreaking technology, to get you started on mastering it.

First off, what is cryptocurrency?
Before you dive into why cryptocurrency is important for marketing, you need to understand what it is in the first place.

Cryptocurrency is a form of blockchain technology, the technology that bitcoin and other distributed ledger systems are based on. Basically a gigantic ledger of transactions, blockchain is an open and shared database that operates in a decentralized network format. It allows users to transfer and add information to it anonymously, without security compromises.

In other words, cryptocurrency, like Bitcoin, is an anonymous financial system that employs blockchain technology to operate. Instead of using a credit card to pay for an item online, users can use Bitcoin or another form of cryptocurrency. And it's getting pretty popular -- in November 2016, the market capitalization of Bitcoin and other cryptocurrencies reached$13.8 billion.

It's important to remember that many uses of cryptocurrency in advertising are still a few years away, as there isn't much happening in this area yet. However, there's no harm in being ahead of the trend.

Cryptocurrency may make it tougher to access consumer information.
The use of cryptocurrency might make it more difficult for marketers to collect the kind of data on consumers that often informs advertising strategies.In this regard, 86 percent of internet users have tried to remove or decrease their digital footprint online; and cryptocurrency will make this more possible than ever, because it will deplete the amount of consumer data available

Currently, it's pretty easy to collect huge amounts of information on potential customers to attract leads. This is largely because the platform you use, like Facebook or Google, owns the data and sells it to you. Marketers can use this information to figure out audience segments, test which ads work better than others, predict customer behavior and more.

With cryptocurrency, however, many leads and buyer information will become anonymous, secure and encrypted -- making it difficult for marketers to figure out who bought what, and how customers are responding to marketing tactics. Individuals will be in more control over their personal information, which could make it nearly impossible for marketers to gather it and design marketing strategies accordingly.


For these reasons, marketers need to start figuring out new ways to collect information to inform their strategies, if they want to keep up with consumer wants and needs.

Consumer attention and information may cost more.
One way marketers could navigate the potential lack of consumer data is by paying users directly for their personal information, to be allowed to market to them online, instead of paying the platforms they use.

Since the blockchain technology behind cryptocurrency means that no single entity can own or control networks, users will be in control. Cryptocurrency itself further complicates this picture, as businesses eventually will be unable to tell who bought what product or service. Companies may need to pay users directly for their information and for the opportunity to market to them, instead of platforms like Facebook or Instagram.

For instance, new social media platforms like 21.co and Steem (which has over 30,000 current user accounts and is growing) allows marketers to engage with users for the opportunity to get the purchasing and other personal information about them that would otherwise be unavailable due to cryptocurrency. Businesses have to do the legwork to reach out to users, and the users can then decide if they want to engage.

The tricky part here is that the average customer is going to want more compensation for his or her purchasing and other information than a platform might charge for that same information now. The plus side, however, is that if the customer allows you to access his or her information, that person is more likely to be interested in your brand.

Final thoughts
We know that discussions on cryptocurrency involve a lot of hypotheticals, largely because we don't yet completely understand what it's going to do to marketing.

However, although cryptocurrency may not affect your own business marketing model, it's a strong representation for where digital trends are heading in the next few years. Even if the changes aren't as dramatic as now believed, it's a good idea to prepare and explore the potential of cryptocurrency so that you aren't taken by surprise.

What are some other ways you think cryptocurrency might affect marketing in coming years?