Weekly Blockchain Industry Report-12th Issue: Syscoin API hack on Binance
(June 30th–July 6th, 2018)
This week, major cryptocurrency exchange platform Binance experienced an API attack in which it pushed the price to a peak of 1 SYS to 96 BTC.
We hope this report provides you with insights into your investments and knowledge of cryptocurrencies. We have also attached a list of upcoming ICOs at the end of this article if you’re interested in any of the new projects.
Market Overview
The past week’s daily average global market capitalization of cryptocurrency was $261.95 billion and the daily average transaction volume was $14.47 billion, indicating a decline of 4.91% and 3.02% respectively. The daily average market capitalization of the top five cryptocurrencies decreased by 4.42% from the previous week. Among the top five, EOS has experienced the greatest price increase in the past week with a high of $9.39, a decrease of 21.32%.
Analysis of Top 200 Market Cap Projects
The market capitalization of top 200 projects increased by 11.47% compared with that of last week. Based on the main categories of cryptocurrency and payment, public chain and protocol, vertical chain and protocol, and vertical industrial application, the vertical chain and protocol sector increased the most, increasing by 18.34%.
Through further classification of the vertical chain and protocol, it was found that this week’s corporate services and social network verticals were on obvious increases at a rate of 55.62% and 39.24%. Cloud services and entertainment verticals experienced the greatest decreases with a rate of 29.70% and 10.81% respectively.
Analysis of Newly Listed Projects
There were 10 new projects in the market last week (mainly of the content copyright vertical), 90% of which dropped in price within 24 hours of listing. Most of the newly issued tokens were listed on IDEX and HitBTC.
Analysis of Closed Public Sales Projects
There have been 43 closed public sales projects this week, totaling nearly 510 million USD. Among these projects, projects of the asset management field received most funding. This was closely followed by projects of the cryptocurrency and payment field.
Important News on Global Governmental Policies this Past Week
Below is a list of some of the most important global news on governmental policies on blockchain and cryptocurrency. The picture below is for reference to how strict/loose some countries are with their regulations.
United States
The US Internal Revenue Service (IRS) formed an international special operations group to work with tax enforcement agencies in Australia, Canada, Netherlands and the United Kingdom to combat criminal activities using digital currencies.
Switzerland
The Swiss Banking Association, Swiss National Bank, and Swiss Financial Market Regulatory Authority formed a group to formulate recommendations on how banks should treat blockchain companies.
Uzbekistan
The President of Uzbekistan has signed a decree on the development of blockchain technology, digital assets and digital currency mining to promote the modernization of the country’s administrative system and the digital economy.
Thailand
The Thailand Securities Regulatory Commission announced a new regulation, which will come into effect on July 16, requiring ICO issuers to not exceed 300,000 baht in funding, and ICO can only accept baht and bitcoin and 6 other coins.
South Africa
The South African Central Bank (SARB) successfully completed the interbank transfer test using Quorum, a platform based on Ethereum. The 70,000 transactions processed by South Africa’s Business Settlement System (SAMOS) was completed within two hours.
India
From July 6th, Indian banks will stop providing services to digital currency exchanges.
Philippines
The Cagayan Economic Zone Authority (CEZA) website of the Philippines issued a notice stating that digital currency trading licenses will be issued to 25 digital currency trading operators within its tax jurisdiction.
South Korea
According to CNN, the Korean government officially recognized cryptocurrency exchanges to be regulated by financial institutions and banks for the first time.
Keeping Up with the Blockchain Giants
June 30th
QBT, a subsidiary of Russia’s leading electronic payment company Qiwi, announced that it will launch HASH, the first digital currency investment bank in Russia.
July 1st
The Cross-Straits Blockchain Alliance (CBA) was established in Taipei and recommended “Pre-Executive Dean”, Professor Chen Chong, Professor of Law and Business at Soochow University, Chairman of China Digital Assets Institute, and well-known economist Zhu Professor Jia Ming, to be co-chairman.
July 2nd
Coinbase announced that the hosting service had accepted its first deposit last week, but did not disclose the amount. Previously, Coinbase project leader Sam McIngvale predicted that once the service was approved, about $20 billion of digital assets would flow into the hosting service.
July 3rd
HSBC and other European banks announced that they have completed the first cross-border financial blockchain transaction bthrough the jointly developed we.trade blockchain platform. The platform is based on IBM’s blockchain platform. The deal was jointly conducted by Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Societe Generale and Yuxin Bank to improve the efficiency of cross-border financial transactions.
July 4th
Xunlei officially announced that it has officially joined the Linux Foundation’s Hyperledger project, becoming the newest member of the organization’s international blockchain alliance.
July 5th
Zebpay (one of India’s largest digital currency exchanges) announced that it will freeze the customer’s Indian rupee access from July 4th until the bank is allowed to provide unfreezing services. From July 6th, Indian banks will stop providing services to digital currency exchanges.
July 6th
Bittrex and London financial technology startup invest.com announced a partnership to launch a cryptocurrency trading platform focused on the European market, designed to provide investors with a platform for trading cryptocurrencies in a secure environment.
Hot Topic of the Week: Binance was attacked by hackers, and the SYS coin increased in price by 3.2 million times
- At about 4:18 am on July 4, 2018, some Binance users reported that the SYS transactions displayed abnormal trading behavior. At about 4:30 am, the price of SYS/BTC on Binance was increased to around 1SYS=96BTC, which was the highest price of SYS. The previous price of SYS was about 0.00003BTC. The price was increased 3.2 million times. Binance issued an announcement at 8:00 am on July 4th: announced temporary maintenance, suspension of trading and withdrawal.
- On the evening of July 4, Binance issued an announcement stating that the incident was due to some API users. The API is an interface that can perform automated transactions. By controlling the API interface, the hacker manipulated the user’s account trading, thereby manipulating the price. The purpose of the hacker was not to steal the BTC from the Binance platform. Instead, their purpose was to increase the price of a coin, and then sell it at a high price on other trading platforms for profits.
- It can be seen that the 24-hour volume of SYS has surged since the early morning of July 4. On trading platforms other than Binance, SYS’s trading volume reached hundreds of million dollars, and hackers were very likely to buy SYS ahead of these trading platforms, waiting for the opportunity to sell at a high price.
Binance’s plan for this abnormal trading event is as follows:
- Binance deleted all API records and users can recreate and keep their API KEYs. Transactions that involved abnormality were rolled back.
- Transactions that involved active participation from users who experienced great loss will be exempt from handling fees from 2018/07/05 to 2018/07/14.
- The Binance Investor Protection Fund (SAFU) was established. From 2018/07/14, 10% of the transaction fees will be used as the investor protection fund, and the platform will pay the users first.
The issue Binance experienced has always been one of the most concerned topics for the users of the blockchain space. As the global transaction scale of digital assets continues to expand, the risk of hacker-attacks on cryptocurrency trading platforms are also increasing, and the current security incidents are frequent. The trading platforms must prevent hacker-attack and ensure the security of user assets through a series of risk control measures and security systems. Strengthening transaction security should be the primary task of cryptocurrency trading platforms and should be an important goal for the long-term development of the blockchain industry.
Appendix: Upcoming Crowdfunding Projects（7.7–7.13)
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*Credits go to Lingling Lei for her superb research!
