Market Analysis Report (16 Jan 2019)

European Blockchain Startup Launches Trading in Tokenized Securities

Belarus-based blockchain startup Currency.com has launched a trading platform for tokenized securities. Yesterday, the firm announced that the platform would allow investors to directly trade and invest in financial instruments using the Bitcoin or Ethereum, without first converting to fiat. The platform will initially host over 150 tokenized securities, tracking the underlying market price of financial instruments such as equity and commodities, while over 10,000 similar offerings could be available in the future. Currency.com explained that the service lets investors buy a token that would reflect the performance of, for example, an Apple share on the Nasdaq stock exchange, at the “same economic costs and benefits of an Apple share.” The company stated:

“To offer these capabilities, Currency.com leverages the technology of Capital.com, its sister platform regulated by the FCA [U.K. Financial Conduct Authority] and CySEC [Cyprus Securities and Exchange Commission], to offer users access to a tokenized version of a contract for the exchange of specific equity, commodity or index”

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Crypto Exchange Cryptopia Hacked, Suspends Trading, Reports ‘Significant Losses’

Yesterday, New Zealand-based cryptocurrency exchange Cryptopia announced that on Monday it had “suffered a security breach which resulted in significant losses.” Cryptopia is a cryptocurrency exchange in New Zealand with over two million users. Yesterday at 10:15 UTC, the company made a post on its homepage announcing unscheduled maintenance. However, at 08:00 UTC on January 15th, Cryptopia did finally announce via Twitter that it had been hacked the day before, that it had alerted New Zealand Police, and that it had gone into maintenance mode (with all trading suspended):

“Yesterday, the Cryptopia Exchange suffered a security breach which resulted in significant losses. Once identified by the staff, the exchange was put into maintenance while we assessed damages.”

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Ethereum’s Constantinople Hard Fork Delayed Due to Discovery of Critical Bug

Yesterday, Zurich-based blockchain security firm ChainSecurity announced that it had discovered a critical bug in Ethereum’s code changes for the Constantinople upgrade. According to the firm, this bug could leave some smart contracts vulnerable to attacks that could lead to loss of user funds. Consequently, the Constantinople hard fork, which was expected to be activated around 20:00 PT on January 16th (i.e. 04:00 UTC on January 17th) at block number 7,080,000, has had to be delayed. ChainSecurity explained:

“The upcoming Constantinople Upgrade for the ethereum network introduces cheaper gas cost for certain SSTORE operations. As an unwanted side effect, this enables reentrancy attacks when using address.transfer(…) or address.send(…) in Solidity smart contracts. Previously these functions were considered reentrancy-safe, which they aren’t any longer.”

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