Binance Delists Bitcoin SV, CEO Calls Craig Wright A ‘Fraud’ (#GotBitcoin?)
Binance, the world’s largest crypto exchange by reported volume, will delist bitcoin SV (BSV) after a week of controversy around the cryptocurrency’s creator, Craig Wright. Binance Delists Bitcoin SV, CEO Calls Craig Wright A ‘Fraud’ (#GotBitcoin?)
The exchange announced Monday that it would be delisting all BSV trading pairs on April 22, just days after Binance CEO Changpeng Zhao (CZ) threatened to do so if Wright did not cease attacks on Twitter users claiming the latter is not Satoshi Nakamoto, the pseudonymous creator of bitcoin.
In Binance’s announcement, the exchange says “we periodically review each digital asset we list to ensure that it continues to meet the high level of standard we expect,” citing a number of factors it weighs.
These include the commitment of a team to the project, the level and quality of its development activity, its network and smart contract stability, the level of public communication, responsiveness to periodic due diligence requests, evidence of unethical or fraudulent conduct and its contribution to the crypto ecosystem.
However, it is likely that BSV is being deleted at least in part due to Wright’s attacks on Twitter user hodlonaut (who started the Lightning Network “torch“) and other individuals. Specifically, Wright placed a bounty on hodlonaut’s identity after the latter claimed Wright is not Satoshi. CZ said Binance would delist BSV if Wright continued these attacks.
Wright has for the last several years claimed he is the person behind the pseudonym Satoshi Nakamoto, but his evidence for this claim has been widely disputed.
In a series of follow-up tweets, CZ said “Craig Wright is a fraud,” that “the real Satoshi can digitally sign any message to prove it,” and that doing so would be simple.
Wright has sent legal cease-and-desist letters to other individuals claiming he is not Satoshi, including Peter McCormack, the host of the “What Bitcoin Did” podcast.
Binance will continue to support BSV withdrawals until July 22.
Later Monday, ShapeShift CEO and longtime crypto entrepreneur Erik Voorhees announced that his crypto-to-crypto exchange would also delist bitcoin SV, for the same reasons.
“We stand with Binance and CZ’s sentiments,” Voorhees tweeted. BSV will be removed from ShapeShift in 48 hours, he said.
Another influential exchange, San Francisco-based Kraken, indicated it is at least considering delisting BSV, asking Twitter users in a poll whether it should do so.
Bitfinex To Delist Nearly 50 Cryptocurrency Trading Pairs On March 6
Bitfinex, the 11th largest cryptocurrency exchange by daily trading volume, will remove dozens of cryptocurrency trading pairs later this week.
According to a March 2 blog post, Bitfinex will remove 46 crypto trading pairs on Friday, March 6 due to low liquidity on the platform.
The cryptocurrency exchange noted that the delisting of the trading pairs is a common measure that is expected to improve liquidity on Bitfinex platform and lead to a “more streamlined and optimized trading experience for our users.”
The majority of trading pairs that are planned to be removed on Friday include a wide list of altcoins trading against Ether (ETH), the second-biggest cryptocurrency by market cap. That list includes about 30 trading pairs including altcoins like OKEx token (OKB), Verge (XVG) and Nucleus Vision (NCASH).
Another 16 trading pairs include altcoins trading against Bitcoin (BTC), including pairs like Hydro Protocol (HOT)/BTC and Medicalchain (MTN)/BTC. Other trading pairs include two altcoins traded against Dai (DAI): OmiseGO (OMG)/DAI, 0x (ZRX) /DAI, and one trading pair with Japanese Yen, XVG/JPY.
Bitfinex recommended users to cancel any open orders with the above trading pairs before March 6 10:00 AM UTC, noting that all remaining open orders will be automatically canceled by the system.
According to data on cryptocurrency tracking service CoinGecko, Bitfinex currently supports about 350 trading pairs on its platform. As of press time, Bitfinex’s daily trading volume accounts for about $118 million, according to data from Coin360.
Cointelegraph reached out to Bitfinex for additional comments but did not receive an immediate response. This story will be updated should they respond.
As reported by Cointelegraph, liquidity in cryptocurrency refers to the level of ease with which a crypto asset can be exchanged for cash without affecting the price of that asset. Delisting is a common measure for increasing liquidity for cryptocurrency exchanges. Back in 2019, Binance delisted about 30 trading pairs in a move to improve liquidity and user trading experience, noting that the choice of the trading pairs was as “requested by most project teams.”
Bitcoin SV Rocked By Three 51% Attacks In As Many Months
Bitcoin SV has been under the hammer of rogue actors in a series of attempted 51% attacks against the network. Where next for BSV?
Bitcoin Satoshi’s Vision, the fork of another Bitcoin (BTC) fork, has for the third time in three months suffered a blockchain reorganization (reorg) attack. With a call to all stakeholders to mark the malicious network branch as invalid, Bitcoin SV (BSV) developers say the attacks have been repelled and all fraudulent chains identified.
The flurry of attacks against Bitcoin SV, though reportedly repelled, highlight the risks associated with proof-of-work (PoW) blockchains that have a low amount of hash rates backing their existence. Indeed, apart from Bitcoin SV, several chains, like Ethereum Classic (ETC) and Firo — formerly known as Zcoin — have been victims of such attempted blockchain reorg exploits.
While not all of such attacks are successful, some proceed with significant economic consequences for honest participants and the network, in general, as the rogue actors responsible for the malicious exploit on the network can double-spend “coins.” The problem has reached the extent that it is theoretically possible to launch these attacks with a few thousand dollars worth of rented hashing power.
Another blockchain reorg attack
Earlier in August, Bitcoin SV suffered a suspected 51% attack that was similar to previous incidents that occurred between the end of June and the first week of July. At the time, it was said that the malicious network exploit resulted in three versions of the main chain being mined simultaneously amid a deep blockchain reorg attack.
This type of attack occurs when a malicious actor controls 51% of the network’s hash rate and can use that hashing power majority to control and prevent block production as well as double-spend coins. The Aug. 3 incident is reportedly the largest-scale exploit against BSV since it forked from Bitcoin Cash (BCH) back in 2018.
At one point during the exploit, the attacker reportedly compromised about 10 hours’ worth of transactions on the Bitcoin SV chain, according to Nikita Zhavoronkov, lead developer at blockchain explorer Blockchair. Reacting to the event, the Bitcoin Association — a Bitcoin SV advocacy organization — advised honest node operators to mark the false chains initiated by the hacker as invalid.
Marking split chains initiated by 51% attackers as invalid is necessary to prevent the hackers from accruing any economic benefit, such as double-spending. Usually, the goal of such incidents is to send mined coins from the fake chain to the exchanges, thereby extracting monetary value from “thin air.”
In its incident update report, the Bitcoin Association stated that the hacker’s attempted 51% attacks were unsuccessful, while urging network participants to ensure that their nodes are only interacting with the chain supported by honest miners. As part of its report, the Bitcoin Association stated that all relevant stakeholders, including the Bitcoin SV Infrastructure Team, will continue to monitor the network to prevent any further attacks.
In a conversation with Cointelegraph, Steve Shadders, chief technology officer of Bitcoin SV developer nChain, stated that both stakeholders are implementing “a range of proactive and reactive measures” to prevent further attacks.
“Together with the Bitcoin Association team, we also worked with exchanges, miners and ecosystem businesses to quickly invalidate the fraudulent chain containing the illegal double-spends by using the invalidateblock command — an RPC code introduced to Bitcoin in 2014 and still part of the codebase for both BTC and BCH.”
According to Shadders, this move invalidated the attacker’s efforts, allowing honest participants to direct their hashing power to the correct chain. Shadders also stated that the attack had galvanized more hashing power to the Bitcoin SV chain to “defend the network.” Indeed, data from BitInfoCharts shows an increase in Bitcoin SV hash rate between Aug. 3 and Aug. 4, with the network’s hashing power growing by almost 15%.
Three Attacks In As Many Months
The fact that there have been three attacks in three months, each using similar methods, has brought up talk of whether there is an agenda against Bitcoin SV. Between June 24 and July 9, Bitcoin SV suffered four separate attempted 51% attacks that resulted in double-spent coins being sent to Bitmart crypto exchange.
In July, Cointelegraph reported that Bitmark was seeking a restraining order from a New York judge to prevent the hackers responsible for the 51% attacks on Bitcoin SV from selling their double-spent coins. As of this writing, it is not apparent whether the August attacker was able to send double-spent BSV to any exchange.
In a note sent to Cointelegraph, the Bitcoin Association clarified that the existence of double-spend transactions in the June and July attacks did not have any detrimental effect on Bitcoin SV users, adding:
“It is possible that the malicious actor has been double-spending their own transactions. No losses have been incurred and nobody has had anything stolen.”
The June 24 and July 1 attacks reportedly went unnoticed, with investigations starting only after the July 6 incident. At the time, some exchanges, including Huobi, paused deposit and withdrawal services for BSV, thereby setting off inaccurate speculations that trading platforms were moving to delist the coin.
Commenting on the likelihood of the August attacks being connected with the earlier incidents, Shadders told Cointelegraph: “At this stage, while we do not have definitive proof that the same malicious actor is responsible for both these latest attacks and the earlier attempts in June and July, the similarity in attack vector and methodology would indicate that it is likely to again be the same attacker.”
The only difference between the two sets of attacks is that the June and July exploits used the pseudonym “Zulupool” — not connected to the legitimate Hathor Network miner of the same name — while the August hacker impersonated the Taal mining pool. Indeed, the June and July attacker is believed to have impersonated Zulupool and has also been linked to the block reorg exploit against Bitcoin ABC back in March.
Given the suspected links between all the attacks, Shadders told Cointelegraph that legal steps were being taken, stating:
“Bitcoin Association and its legal representatives are actively engaged with law enforcement in affected jurisdictions — a process which the Bitcoin SV Infrastructure Team is supporting on an ongoing basis by collecting and collating all of the forensic evidence that the attacker has left behind.”
Vulnerable PoW Networks
PoW networks with significantly lower hash rates are vulnerable to 51% attacks since the required hashing power required to commandeer the network only costs a few thousand dollars. In some cases, a few hundred dollars worth of rented hashing power from NiceHash is enough to stage a blockchain reorg exploit on some PoW chains.
According to data from Crypto51 — a platform that tracks the theoretical cost of a 51% attack on PoW chains — it costs about $5,200 to rent the hashing power needed for a 51% attack on Bitcoin SV for one hour.
Ethereum Classic, another PoW network, also suffered multiple 51% attacks in 2019 and 2020. In one incident, an attacker reportedly siphoned over $5 million from the network while only spending $192,000 on hashing power to carry out the attack. However, it is important to note that while such attacks remain a possibility, network actors can take steps to mitigate the vulnerability.
Indeed, in the absence of the superior network effect and massive hashing power of Bitcoin, other PoW chains need to create secondary security protocols to detect malicious blockchain reorgs. To put the hash rate disparity in stark contrast, the total Bitcoin network hashing power is currently more than 320 times greater than that of Bitcoin SV.
Crypto exchanges also need to increase the network confirmation requirement for coins whose chains do not hold sufficient hashing power. Most 51% attackers strive to double-spend their transactions via exchanges, trading their fake coins for the legitimate funds held by trading platforms often on behalf of their users.
Thus, even if the blockchain does eventually fight off the attack, the hacker can siphon value from the exploit by trading their fake coins on exchanges that fail to adopt the necessary minimum confirmation protocols.
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