The U.K.-based exchanges agreed to move Coinfloor customers over to CoinCorner “to further bitcoin adoption.”
CoinCorner acquired Coinfloor’s customer base and internet domains (coinfloor.co.uk and coinfloor.com).
Coinfloor customers have one month to decide whether to migrate or close their accounts. If they choose to close their accounts, they have to withdraw all their funds.
CoinCorner will offer Coinfloor customers a broader range of services, including bitcoin cashback.
CoinCorner, a bitcoin exchange and service provider in the U.K., announced today that it had acquired the customer base and the internet domains of another British BTC exchange, Coinfloor.
“We’re very excited to welcome Coinfloor customers to CoinCorner,” said Danny Scott, CoinCorner CEO, in an announcement shared with Bitcoin Magazine. “Customers will now have access to our wide range of offerings, including Lightning payments, Bitcoin cashback, and many more features coming soon, such as debit cards and Bitcoin backed loans.”
Coinfloor customers will have one month, starting from October 4, to either migrate their accounts, contracts, and balances to CoinCorner or close their Coinfloor accounts and withdraw all available funds after fees. If the user doesn’t manually choose one route, their accounts and balances will be automatically migrated.
Coinfloor was founded in 2013 and has been the longest-running bitcoin exchange in the U.K. During the transition period, the company’s CEO Obi Nwosu will take on an advisory role at CoinCorner.
“CoinCorner and Coinfloor have always stood for the same principles: the growth and support of the Bitcoin technology philosophy and community; focus on helping customers as our highest priority; and providing safe and simple ways to buy Bitcoin,” said Nwosu. “Above all, we are both focused on making Bitcoin simple, secure and reliable for our users.”
CoinCorner, founded in 2014, offers a broader range of bitcoin-related services, including buying and selling BTC, a bitcoin payment solution, and the first bitcoin cashback service available for the U.K.
Hackers leveraged a vulnerability in the bitcoin exchange’s SMS recovery system to steal cryptocurrency from 6,000 customers.
Coinbase, a major U.S.-based bitcoin and cryptocurrency exchange, disclosed today that a hacker was able to bypass the company’s SMS multi-factor authentication mechanism and steal funds from 6,000 users, Bleeping Computer reported.
The breach of Coinbase customers’ accounts happened between March and May 20, 2021, in a hacking campaign that combined phishing scams and a vulnerability exploit on the company’s security measures.
The U.S.-based exchange, which has approximately 68 million users from more than 100 countries, reportedly said that in order to conduct the attack, the hackers needed to know the user’s email address, password, and phone number, as well as have access to their email accounts. It is not clear how the hackers gained access to that information.
“In this incident, for customers who use SMS texts for two-factor authentication, the third party took advantage of a flaw in Coinbase’s SMS Account Recovery process in order to receive an SMS two-factor authentication token and gain access to your account,” Coinbase told customers in electronic notifications.
Beyond stealing funds, the hackers also exposed customers’ personal information, “including their full name, email address, home address, date of birth, IP addresses for account activity, transaction history, account holdings, and balances,” per the report.
Security should be a priority for online services, but most especially for financial services. Companies that deal with customers’ money, either in USD or cryptocurrency, should not offer SMS as a recovery option at all since it is the most easily exploited. And when they do, users should abstain from using SMS for account recovery or multi-factor authentication.
Better options for protecting your account are authentication apps and physical hardware such as YubiKeys. More importantly, you can and should protect your accounts with strong passwords and a suitable password manager like Bitwarden.
Nonetheless, users can also take back their sovereignty by opting out of centralized services altogether. Bitcoin exchanges like Coinbase represent a single point of failure, effectively becoming a hotbed for data exploits, regardless of the security standards they claim to live by. Centralized custodians and providers often get exploited; decentralized alternatives exist and should be leveraged. Think very carefully before handing your personal information to a third party.
When Brian Brooks took the role of Acting Comptroller of the Currency for the Office of the Comptroller of the Currency (“OCC”) in May 2020, many in the industry knew some of Brooks’ focus would be on fintech and blockchain technology.
Since that time, the OCC has provided interpretive letters and guidance clarifying that banks can custody cryptocurrency and stablecoins, as well as engage in stablecoin activity. The OCC also created a Special Purpose Payments Charter for FinTech companies. In December the Chief Economist of the OCC, Charles Calomiris, published a paper titled “Chartering the FinTech Future,” in which Calomiris set out the benefits of the OCC providing bank charters to stablecoin providers.
Today’s Interpretive Letter
Today the OCC published Interpretive Letter 1174, which explains banks may use new technologies, including independent node verification networks (INVNs) and stablecoins, to perform bank-permissible functions, such as payment activities. Said simply, a bank may use stablecoins (cryptocurrencies designed to minimize the price volatility) to facilitate payment transactions for customers.
In doing so, a bank may issue stablecoins, exchange stablecoins for fiat currency, as well as validate, store, and record payments transactions by serving as a node on a blockchain (INVN).
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Today’s OCC news is innovative and exciting. Not because it is a huge pivot from how banks have traditionally functioned but because the OCC is doing a notable job keeping up with the changing technology and landscape. Many criticize the US for stifling innovation and not allowing companies to evolve with innovative technology that would improve our financial system. Well, the OCC is doing just the opposite. Brooks continues to move carefully but quickly.
As today’s OCC interpretive letter notes, “over time, banks’ financial intermediation activities have evolved and adapted in response to changing economic conditions and customer needs. Banks have adopted new technologies to carry out bank-permissible activities, including payment activities. . .The changing financial needs of the economy are well-illustrated by the increasing demand in the market for faster and more efficient payments through the use of decentralized technologies, such as INVNs, which validate and record financial transactions, including stablecoin transactions.”
Banks have always been a place where customers could store valuables for safe-keeping and, over time, became a critical part of our financial and payments infrastructure. The history of the American banking system (from the passage of the National Bank Act in 1863, Federal Reserve Act in 1913 and the creation of the FDIC in the Banking Act of 1933) tells a story of regulation adapting to economic realities and changing technology.
Stephen Palley, a partner in the Washington D.C. law firm of Anderson Kill drew the analogy to demand for internet banking, explaining “early internet banking was met with approval by the OCC and is now ubiquitous, in spite of early concerns about the safety or practicality of such technology for secure banking services. The OCC continues to show an interest in and desire to engage with new financial technology that consumers demand.”
Seen against this historical backdrop, the OCC’s latest letter fits squarely into the framework of a conservative prudential regulator creating rules of the road for new and powerful technology and adapting to changing times and customer needs.
What It Really Means
So what does this really mean for the payment systems as we know it today?
While the United State’s financial system functions relatively smoothly, traditional payment rails are still slow, expensive and subject to banking hours and holidays.
The OCC’s guidance opens the possibilities that banks will use INVNs and stablecoins to transfer funds between financial institutions faster and without the need of a government intermediary.
Kristin Smith, Executive Director of the Blockchain Association noted to me, “ The OCC’s interpretive letter shows that there are those in government who actually understand that cryptocurrency networks are the foundation of a next generation payments system. Stablecoins, like USDC, can power faster, 24-hour real time payments in a way that existing US payments infrastructure can’t handle.”
Nic Carter, Partner of Castle Island Ventures added, this will allow banks “to take advantage of the always-on features of public blockchains.”
Banks adopting the use of INVNs and stablecoins could also vastly increase the efficiency of cross-border transactions, but that will require banks in the US and abroad to implement a lot of technology.
Carter cautioned, “I don’t see stablecoins imminently replacing traditional financial rails, but this is a vital first step in normalizing the notion of public blockchains as an alternative settlement infrastructure that banks can freely adopt.”
@Bhaaltazar No you can’t. Jewelers and computer chip manufactures will always need gold, and their customers will always want it. No one needs #Bitcoin, and some people only want it now because they think the price will keep rising. Once that fantasy ends, they will no longer want any.
@cryptoblock192 @davidgokhshtein We don’t accept #Bitcoin as payment. No merchants do. We allow customers to use Bitpay to sell their Bitcoin prior to making a purchase. So Schiff Gold is paid in dollars, not in Bitcoin.
@gutiman18 Facebook is a company that provides its users with services they value, advertisers with a way to reach their customers, and generates profits for its shareholders. What does that have to do with #Bitcoin?
Banks around the world are beginning to soften their stance on cryptocurrency and offer digital asset services to their customers.
FV Bank just received the go-ahead from the Puerto Rico Office of the Commissioner of Financial Institutions (OFIC) to provide custodial services for digital assets like Bitcoin and Ethereum.
FV (fintech ventures) Bank sought permission from the Puerto Rico OFIC, reports Coindesk. The move comes after the U.S. Office of the Comptroller of the Currency (OCC) opened the door for traditional banks to hold digital assets for their customers in July.
Says FV Bank CEO Miles Paschini,
“When the OCC came out with their opinion back in July, we saw that as an opening and went to our regulator and sought clarification and permission as a bank to provide custodial services to our customers. Our goal is to allow anyone, from an individual to an institution, to custody their digital assets and also have seamless banking services related to that custody.”
FV Bank joins several challenger banks that are beginning to offer crypto services. Major banks including Standard Chartered, DBS Bank of Singapore, and Argentina-based BBVA have also recently added crypto services.
In October of this year, DBS hinted at three new offerings for clients: cryptocurrency trading, custody, and a platform for conducting security token offerings. Three months later, DBS established its cryptocurrency exchange division known as the DBS Digital Exchange.
With a target launch date set for the first quarter of 2021, FV Bank has partnered with an unnamed custody tech infrastructure firm and will work with a few different over-the-counter (OTC) trading desks to gain liquidity in the market.
The banking institution will start out with a $20 million insurance cover that will grow commensurate with its assets under management, Paschini tells Coindesk.
FV Bank’s custodial services are available to institutional and retail customers who will be able to open encrypted private accounts that can hold both fiat and digital currencies, exchange between currencies, and use the bank’s internal real-time platform to settle institutional payments.
In addition, FV Bank will provide its account holders with cryptocurrency deposit addresses for every digital asset, as well as offer both online and mobile banking services.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.