One-third of cryptocurrency exchanges are now offering users margin trading options, according to CryptoCompare’s Exchange Benchmark. Many exchanges may also not have the necessary web security in place to prevent hacks.

The IOTA Foundation has paused its network as reports suggest users have lost between $300,000 and $1.2 million worth of IOTA tokens. Victims were all using the Trinity wallet software.

A cryptocurrency software developer has been arrested for allegedly running a bitcoin mixing service, as it’s believed to have been recommended by the now-defunct darknet marketplace AlphaBay.

Top stories in the Crypto Roundup today:

• One-Third of Crypto Exchanges Offer Margin Trading, Only 4% Offer Insurance
• IOTA Foundation Pauses Network Amid Reports $300,000 to $1.2 Million Were Stolen
• Bitcoin Mixing Deemed ‘a Crime’ in Arrest of Software Developer

At the time of writing, bitcoin (BTC) is trading at $10,153.54 (-0.09%) with a daily Top Tier volume of $2.630 billion. As for ether (ETH), it is trading at $265.85 (1.85%) with a daily Top Tier volume of $1.86 billion. The MVIS CryptoCompare Digital Assets 10 Index is currently tracking at 4,158.73 (0.28%)

One-Third of Crypto Exchanges Offer Margin Trading, Only 4% Offer Insurance

CryptoCompare’s updated cryptocurrency Exchange Benchmark has revealed one-third of cryptocurrency exchanges offer their users margin trading options, while only 4% offer some form of insurance.

 

The report also found 6% of crypto exchanges failed to score an ‘A’ on its web security test. It analyzed over 160 spot exchanges and found that 16% stated they hold over 95% of their crypto in cold wallets.

The document also shows that 3% of cryptocurrency exchanges were hacked last year, a somewhat concerning figure taking into account well-known hacker group are known to target cryptocurrency businesses.

CryptoCompare’s Exchange Benchmark ranks the lowest risk cryptocurrency exchanges by assigning them a grade. In its updated release, U.S. and Japanese regulated exchange itBit ranked number one, followed by Gemini, Coinbase, Kraken, and Bitstamp.

IOTA Foundation Pauses Network Amid Reports $300,000 to $1.2 Million Were Stolen

The non-profit organization behind the IOTA network, the IOTA Foundation, has turned off the Coordinator node that it controls this week, which under normal circumstances ensures the validity of individual transactions on the network, over reports users’ funds have been stolen of the Trinity wallet software.

According to an announcement the Germany-based organization made, the move was made to “make sure no further theft can occur until we find out the root cause of these thefts. Further investigation taking place from here on."

The affected users who spoke with the Foundation all used the Trinity wallet. The organization’s co-founder Dominik Schiener revealed that between $300,000 and $1.2 million worth of IOTA were stolen. Speaking to TheBlock he added that the Foundation has engaged with relevant law enforcement agencies and is working with security analysts to find out what happened.

He clarified the issue wasn’t with IOTA itself, but with the Trinity wallet and added:

“Most likely we are looking at a malicious dependency or even more sophisticated attack related to a third-party integration.”

Bitcoin Mixing Deemed ‘a Crime’ in Arrest of Software Developer

Authorities in the U.S. have arrested software developer Larry Harmon, founder of Bitcoin wallet DropBit and CEO of media site Coin Ninja, for allegedly running a bitcoin mixing service that helped darknet users launder $311 million in BTC.

According to prosecutors Harmon was running Grams, a darknet search engine allowing users to find goods and services on marketplaces, and Helix, a bitcoin mixing service that made it harder to trace transactions on the blockchain.

In a statement issued by Justice Department Assistant Attorney General Brian Benczkowski authorities’ views on bitcoin mixers were made clear:

“This indictment underscores that seeking to obscure virtual currency transactions in this way is a crime.”

In the case it’s claimed Helix laundered “at least 354,469 bitcoins” which at the time were worth about $311 million. The service charged a 2.5% fee which means it could have made 8,900 BTC in profit, worth over $90 million at today’s prices.

Harmon’s brother, Gary Harmon, revealed to podcast host Peter McCormack that DropBit’s assets were frozen by the FBI, which removed $4,000 worth of bitcoin from its Lightning Network node. As a result, the app is running thanks to his own funds.

Flipside Friday

The Flipside Crypto Disparity Ratio is a tool helping you find out which cryptoassets are undervalued and overvalued. The crypto disparity ratio scores cryptoassets based on market capitalization and FCAS ratings, with a score over 1 showing it’s undervalued, and under 1 showing it’s overvalued.

 Peerplays (PPY), a gaming blockchain project aiming to disrupt the global gaming industry through Graphene technology, tops the undervalued list with a score of 2.37. XYO, an ERC20 token used for a decentralized network of devices that anonymously collects geospatial data, has topped the undervalued list with a score of 2.01.

It’s followed by the Raiden Network’s token at 1.41. The Raiden Network is an off-chain transfer network for ERC20 tokens in the Ethereum network, providing users a scalable, cheap alternative to on-chain token transfers. Behind it is Polymath, a blockchain-based system incentivizing participants to launch financial products-

On the overvalued side we have Insight Chain’s INB token at 0.31. Insight Chain is a commercial public blockchain that’s looking to establish the world’s first data ecosystem public blockchain with infinite scalability.

It’s followed by Monacoin, the once-popular cat meme cryptocurrency MonaCoin, which has even been used to buy land in 2014, and Qubitica (QBIT). Qubitica is a community of over 1,000 developers, IT companies and investors working to advance blockchain technology. Its community is working on blockchain and AI projects, and the QBIT token represents participation shared in Qubitica and related projects.

State of the Crypto by Top Tier Exchange Volume

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