CoinDesk Crypto

Blockchain company Neptune Digital Assets (TSX-V: NDA) and mining firm Link Global Technologies have signed a letter of intent to co-develop a bitcoin mining facility partly powered by green energy in Alberta, Canada.

• In an announcement Friday, TSX Venture Exchange-listed Neptune Digital Assets and Link Global said they expect to sign a definitive agreement expected by April, with construction starting immediately thereafter.
• The joint venture will be 50-50 with both firms splitting costs and revenue.
• The new mining facility will be built in Alberta, where Link Global operates a majority of its bitcoin facilities. The 5-megawatt site will be solar-, wind- and natural gas-powered.
• The agreement comes amid rising criticism for the energy used by the crypto mining industry and its impact on climate change.
• “We expect there to be substantial global pressure to develop sustainable bitcoin mining operations around the world, said Cale Moodie, Neptune CEO. “We hope as a team to become a major powerhouse in low-cost, carbon-neutral mining and tapping available carbon credits for exchange in that burgeoning marketplace.”
• On March, 4 the two firms partnered for Link to procure and operate 1,500 ASIC mining machines on behalf of Neptune.

Read more: Can Bitcoin Survive the Climate Change Revolution?

• Bitcoin IRA Reports Clients Invested Over $100M in ‘IRA Earn’ Program
• Tau Protocol Debuts Hashrate Token Staking for Bitcoin Rewards
• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time High Within Reach Around $61K

Vlad Tenev, CEO of brokerage platform Robinhood, said the company is planning to grow its crypto team “hugely” this year.

• Speaking in an video Q&A with customers, Tenev said that Robinhood wants to “make a huge investment and hire a ton of people” for its crypto business.
• He referred to the recent spike in demand the platform has witnessed with 6 million new customers trading crypto for the first time this year just by the middle of February.
• The Robinhood CEO had been answering a question from a customer who wished to see the platform “take a bite out of Coinbase.”
• “We hear you on that,” Tenev responded, adding that the platform’s focus is to ensure the system is stable and reliable to be able to respond to exponential growth.
• Robinhood announced Wednesday that it has hired former Google executive Arpana Chennapragada as its first chief product officer.

See also: JPMorgan Posts 34 Blockchain Jobs as It Beefs Up JPM Coin

• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Thai Central Bank to Regulate Stablecoins This Year
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones
• Canadian Property Firm Buys Bitcoin in Hopes of Eventually Scrapping Condo Fees

The short-term uptrend for bitcoin (BTC) is improving, with next resistance at the March all-time high around $61,000. Traders continue to experience choppy price action on intraday charts, but buyers remained active at trend support around $56,000.

• Bitcoin is currently battling resistance from its February price high around $58,000 while lower support levels continue to attract buyers.
• The month-long uptrend from $43,000 remains intact, although longer-term signals are weakening.
• Momentum on the daily chart continues to diverge from price, defined by lower highs on the relative strength index (RSI).

• Bitcoin IRA Reports Clients Invested Over $100M in ‘IRA Earn’ Program
• Tau Protocol Debuts Hashrate Token Staking for Bitcoin Rewards
• Canadian Firms to Develop Bitcoin Mining Facility Partly Powered by Wind, Solar
• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO

The short-term uptrend for bitcoin (BTC) is improving, with next resistance at the March all-time-high around $61,000. Traders continue to experience choppy price action on intraday charts, but buyers remained active at trend support around $56,000.

• Bitcoin is currently battling resistance from its February price high around $58,000 while lower support levels continue to attract buyers.
• The month-long uptrend from $43,000 remains intact, although longer-term signals are weakening.
• Momentum on the daily chart continues to diverge from price, defined by lower highs on the relative strength index (RSI).

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Thai Central Bank to Regulate Stablecoins This Year
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones
• Canadian Property Firm Buys Bitcoin in Hopes of Eventually Scrapping Condo Fees

Thailand’s central bank said it will issue regulations on asset-backed stablecoins this year after warning against the illegal use of a new baht-denominated stablecoin that was created outside the country.

• The bank’s assistant governor said Friday there are plans to regulate asset-backed stablecoins only, not bitcoin, according to a Reuters report.
• “The central bank is receiving opinions from market regulators and participants before announcing regulations,” Siritida Panomwon Na Ayudhya, assistant governor of Payment systems policy and financial technology group, Bank of Thailand, said at a briefing.
• Siritida stressed the new regulations will not cover those cryptocurrencies without asset backing such as bitcoin and ethereum adding that “investors will have to take their own risks.”
• On Wednesday, the Bank of Thailand warned against the use of the Thai baht-denominated stablecoin (THT), labeling it a threat to the stability of the national currency system.
• The bank said the general public needs to exercise caution and refrain from participating in any activity involving THT, alleging users could be at risk of cybertheft and money laundering.
• The baht stablecoin is created on the South Korean stablecoin platform Terra.

Read more: Thai SEC Backtracks on Unpopular Proposal for New Crypto Investor Qualifications

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones
• Canadian Property Firm Buys Bitcoin in Hopes of Eventually Scrapping Condo Fees

A Canada-based communications provider has been indicted in for allegedly facilitating criminal organizations to launder millions in cryptocurrency with encrypted phones.

• According to the indictment filed March 12 in the Southern District of California, Sky Global sells encryption devices to criminal organizations to facilitate activities such as drug trafficking.
• The company is alleged to have helped these organizations transfer illegally obtained funds into bitcoin and other cryptocurrencies.
• The indictment also alleged that Sky Global obstructed investigations of drug trafficking and money laundering through remotely deleting evidence on said devices when seized by law enforcers.
• Sky Global issued a statement March 14 refuted the allegations.
• According to CEO Jean-François Eap, Sky Global technology “was not created to prevent the police from monitoring criminal organizations; it exists to prevent anyone from monitoring and spying on the global community.”
• Eap added that authorities have not informed Sky Global of any legal proceedings against it and that the only information gleaned of the indictment has been via the media.

See also: US Man Pleads Guilty to Money Laundering Charges Involving $13M in Bitcoin

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Thai Central Bank to Regulate Stablecoins This Year
• Canadian Property Firm Buys Bitcoin in Hopes of Eventually Scrapping Condo Fees

Saskatchewan-based Thornton Place Condominium Corp is hoping to eventually do away with condo fees by investing in bitcoin.

• In an announcement, Thornton Place said it has purchased 0.4 bitcoin with CAD$25,000 (US$20,050) through the exchange Kraken at an average price of CAD$62,500 (US$52,104) per bitcoin including fees and expenses.
• The buy is the first of an ongoing series of planned purchases, the company said, with Thornton Place having allocated an added CAD$700.00 per month to the purchase of bitcoin going forward
• The company said it has taken direct physical custody of the bitcoin purchased instead of using a custodial service or exchange-traded fund with a management fee.
• Thornton Place Condominium said it sees a 10-year time horizon for the investment and it has “taken the first steps” which it hopes will lead to the elimination of fees for residents.
• “Our board determined that a small investment of approximately 5% of the overall reserve fund and 6% of the monthly operating fund contributions into bitcoin will permit Thornton Place to gain a limited exposure to a high-performing asset class without jeopardizing any of the long-term goals of the corporation and its owners,” said the firm.

Read more: Canada’s CoinSmart Crypto Exchange Raises $3.5M for European Expansion

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Thai Central Bank to Regulate Stablecoins This Year
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones

A Russian man has pleaded guilty to conspiracy to hack a U.S. company’s computer network in which he attempted to bribe an employee with bitcoin in a thwarted extortion attempt.

• Egor Igorevich Kriuchkov, 27, traveled to the U.S. to recruit an employee to his scheme to introduce malware into the unnamed company’s network.
• According to an announcement Thursday, Kriuchkov offered to pay the employee in bitcoin for doing so.
• The defendant made numerous trips between California and Nevada in August 2020 to entice the employee, before the employee reported him to his employer who in turn alerted the FBI.
• Kriuchkov pleaded guilty to conspiracy to intentionally cause damage to a protected computer.
• He is scheduled to be sentenced on May 10.

See also: New Zealand Stock Exchange Hit Repeatedly by Cybercriminals Demanding Bitcoin

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Thai Central Bank to Regulate Stablecoins This Year
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones

Ripple has hired Goldman Sachs and Uber tech veteran Brooks Entwistle to expand its operations in Southeast Asia.

• In an announcement posted Thursday, Ripple said Entwistle has been appointed as the new managing director of its Southeast Asia business headquartered in Singapore.
• Prior to joining Ripple, Entwistle worked for three decades for finance and technology firms, most recently at Uber, where he was chief business officer (international). Before that, he spent more than 20 years at Goldman, including a stint as chairman of the bank’s Southeast Asia business.
• The appointment comes as Ripple is expanding its presence across Southeast Asia, which includes 14 countries for its RippleNet and saw the volume of transactions in the region grow ten-fold in 2020.
• Growth in Asia is particularly important to the company in light of its legal woes in the U.S. Ripple was sued by the Securities and Exchange Commission in December for allegedly failing to register its XRP token as a security or seeking an exemption before beginning to sell the token seven years ago. 
• “The adoption of RippleNet among the region’s many fintechs, payments service providers and SMEs makes Southeast Asia our biggest market for both customer demand and transaction growth,” said RippleNet general manager Asheesh Birla.

Read more: Ripple Execs Ask Court to Block SEC Requests for Personal Financial Records

• Bitcoin IRA Reports Clients Invested Over $100M in ‘IRA Earn’ Program
• Tau Protocol Debuts Hashrate Token Staking for Bitcoin Rewards
• Canadian Firms to Develop Bitcoin Mining Facility Partly Powered by Wind, Solar
• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO

Ripple has hired Goldman Sachs and Uber tech veteran Brooks Entwistle to expand its operations in Southeast Asia.

• In an announcement posted Thursday, Ripple said Entwistle has been appointed as the new managing director of its Southeast Asia business headquartered in Singapore.
• Prior to joining Ripple, Entwistle worked for three decades in finance and technology firms, most recently at Uber, where he was chief business officer (international). Before that he spent more than 20 years at Goldman, including a stint as chairman of the bank’s Southeast Asia business.
• The appointment comes as Ripple is expanding its presence across Southeast Asia which includes 14 countries for its RippleNet and has seen transactions in the region grow 10 times in 2020.
• Growth in Asia is particularly important to the company in light of its legal woes in the U.S. Ripple was sued by the Securities and Exchange Commission in December 2020 which alleges the firm violated securities law, arguing the company failed to register its XRP token as a security or seek an exemption before the company began selling it seven years ago. 
• “The adoption of RippleNet among the region’s many fintechs, payments service providers and SMEs makes Southeast Asia our biggest market for both customer demand and transaction growth,” said RippleNet general manager Asheesh Birla.

Read more: Ripple Execs Ask Court to Block SEC Requests for Personal Financial Records

• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO
• Bitcoin Maintains Trend Support at $56K, All-Time-High Within Reach Around $61K
• Thai Central Bank to Regulate Stablecoins This Year
• Firm Allegedly Facilitated Crypto Money Laundering With Encrypted Phones

Tony Hawk has performed his last 540-degree “ollie” and has decided to sell the moment as a non-fungible token (NFT).

According to an Instagram post from the 52-year-old skateboarding legend, the last instance of the one and half-circle flip he first performed in 1989, will be sold via NFT marketplace Ethernity Chain.

An ollie is a skateboarding trick where the rider and board leap into the air without the use of the rider’s hands. Ollies are necessary to leap onto, over, or off obstacles. A miss can be painful, to say the least.

Related: Bitcoin IRA Reports Clients Invested Over $100M in ‘IRA Earn’ Program

“Today I decided to do [the trick] one more time … and never again,” Hawk said. “My willingness to slam unexpectedly into the flat bottom has waned greatly over the last decade.”

See also: Lindsay Lohan Partners With Justin Sun to Release NFTs on Tron

The stunt, deemed scary by Hawk in recent years, will be immortalized as an NFT after a winner is declared in an auction. A portion of the proceeds from the sale will go to charity, as yet unspecified.

Related: Tau Protocol Debuts Hashrate Token Staking for Bitcoin Rewards

The sale is in line with the recent craze in the sector where digital versions of everything from the Brooklyn Bridge to dance moves are being sold to anyone with the money to pay for it.

• Canadian Firms to Develop Bitcoin Mining Facility Partly Powered by Wind, Solar
• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO

Tony Hawk has performed his last 540-degree ollie and has decided to sell the moment as a non-fungible token (NFT).

According to an Instagram post from the 52-year-old skateboarding legend, the last instance of the one and half-circle flip he first performed in 1989 will be sold via NFT marketplace Ethernity Chain.

“Today I decided to do [the trick] one more time … and never again,” said Hawk. “My willingness to slam unexpectedly into the flat bottom has waned greatly over the last decade.”

Related: Man Pleads Guilty to Trying to Bribe Worker With Bitcoin in Would-Be Extortion Attempt

The stunt, deemed scary by Hawk in recent years, will be immortalized as an NFT after a winner is declared in an auction. A portion of the proceeds from the sale will go toward charity.

The sale is in line with the recent craze in the sector where a digital version of everything from the Brooklyn Bridge through to dance moves is being sold to anyone with the money to pay for it.

See also: Lindsay Lohan Partners With Justin Sun to Release NFTs on Tron

• If Stock-to-Flow Is Right, Bitcoin Volatility Should Wane
• Uber, Goldman Sachs Veteran Joins Ripple as Asia MD
• SBI Crypto Opens Mining Pool Services for the Masses

The general public can now access SBI Crypto’s mining pool services.

• Following a limited release earlier this year, mining pool services will now be available to both institutions and individual customers, the wholly owned subsidiary of Japanese conglomerate SBI Holdings said in a press release on Friday.
• “While many of the developed features target institutional customers, the service is also available to individual customers as well,” the firm said.
• Starting on Friday, new users can gain access to the mining pool services by requesting an account, while access will be open for all without requests starting next month, the press release said.
• Ranked 11th, the SBI Crypto’s mining pool currently generates a hash power of around 1.1 exa hashes per second (EH/s). The firm has been self-mining digital assets in overseas mining farms since August 2017.

Also read: SBI Is Offering Shareholders Option of Getting XRP as Reward for 2nd Year

• Bitcoin IRA Reports Clients Invested Over $100M in ‘IRA Earn’ Program
• Tau Protocol Debuts Hashrate Token Staking for Bitcoin Rewards
• Canadian Firms to Develop Bitcoin Mining Facility Partly Powered by Wind, Solar
• Robinhood Growing Its Crypto Team ‘Hugely’ This Year Says CEO

The general public can now access SBI Crypto’s mining pool services.

• Following a limited release earlier this year, mining pool services will now be available to both institutions and individual customers, the wholly owned subsidiary of Japanese conglomerate SBI Holdings said in a press release on Friday.
• “While many of the developed features target institutional customers, the service is also available to individual customers as well,” the firm said.
• Starting from Friday, new users can avail of services by requesting an account, while access will be open for all without requests from April 2021, the press release said.
• Ranked 11th, the SBI Crypto’s mining pool currently generates a hash power of around 1.1 exa hashes per second (EH/s). The firm has been self-mining digital assets in overseas mining farms since August 2017.

Also read: SBI Is Offering Shareholders Option of Getting XRP as Reward for 2nd Year

• Man Pleads Guilty to Trying to Bribe Worker With Bitcoin in Would-Be Extortion Attempt
• If Stock-to-Flow Is Right, Bitcoin Volatility Should Wane
• Uber, Goldman Sachs Veteran Joins Ripple as Asia MD
• Tony Hawk Skates His Last Ollie 540, Puts the NFT of It up for Auction

It might be a great business move – or maybe just jumping on the NFT bandwagon; either way, investors appeared to be pleased.

WISeKey (NASDAQ: WKEY), a cybersecurity company based in Zug, Switzerland, announced Thursday it’s developing an application for non-fungible tokens (NFTs), which would be used to authenticate physical and digital objects of value.

Within hours of the announcement, its U.S. shares, listed on Nasdaq, had soared more than 80% in price, the most in TradingView’s price history dating back to 2019.

Related: First Mover – Mar 23, 2021

The price move is unusual for WKEY, which was still trading below its 52-week high of $18.49 at the time of writing. And the company is relatively small, with a market cap of only $244 million, even after Thursday’s price surge – so it’s not exactly a blue-chip, though it’s not a Pink Sheets penny stock either.

But the market reaction is unsurprising given that NFTs have become wildly popular recently, creating millions for digital artists and reaching celebrity status practically overnight. And according to Reuters, all sorts of NFT-related stocks are jumping.

• All About Bitcoin – Mar 22, 2021
• The Hash – Mar 22, 2021
• First Mover – Mar 22, 2021

Traders are getting used to bitcoin (BTC) buying that is concentrated during European hours, with North America lagging behind, and Asia inviting more sellers. And yesterday’s Asia trading session was no exception.

“Overnight, the Bank of Japan announced that they would reduce asset purchases in a move that signaled marginal tightening of policy. By the time European markets opened, they digested this news and immediately went into defensive move…[which also] put a damper on the strong price action in BTC,” wrote Chad Steinglass, head of trading at CrossTower, a digital asset trading firm.

• The BoJ is considering ditching its 6 trillion yen purchase target of buying exchange traded funds (ETFs), as reported by Bloomberg. The ETF purchase program is expected to only be used in times of market turmoil, which could be interpreted as marginal tightening.
• And the quick risk-off reaction to the BoJ news during Asian and European hours is not unusual.
• “It’s not uncommon for Europeans to be more skittish than others. Since Lunar New Year, Asian markets have been relatively weak,” Steinglass told CoinDesk in a phone interview.
• “Crypto will trade with risk [assets] intraday. Over the last few weeks, bitcoin has been affected by rocky markets, but has been resilient, which is encouraging.”

The recent bounce above $58K is consistent with rising price floors in BTC as the long-term trend remains intact. “Every time we break into a new range, old resistance becomes support – consistently over the last several months,” said Steinglass.

• This (Small-ish) Swiss Cybersecurity Stock Jumped 80% After NFT-Related Press Release
• First Mover – Mar 23, 2021
• All About Bitcoin – Mar 22, 2021
• The Hash – Mar 22, 2021

Bitcoin’s (BTC) price slid Thursday, retreating along with U.S. stocks and oil prices as U.S. Treasury yields touched some of the highest levels in a year.

The 10-year Treasury note yield, which moves in the opposite direction from the price, breached 1.75% for the first time since January 2020. The rising yield has been seen by investors as a sign of market worries over future inflation.

A growing number of investors say bitcoin might serve as a good hedge against inflation, but the largest cryptocurrency is also seen as a risky asset. In recent weeks, commentators have warned that higher yields on bonds, typically viewed as a safe investment, might reduce the appeal of bets on riskier assets like stocks and bitcoin.

Related: This (Small-ish) Swiss Cybersecurity Stock Jumped 80% After NFT-Related Press Release

Read more: Bitcoin’s ‘Rich List’ Shrinks Amid Continued Price Rally

“$57,400 remains our pivotal spot,” Matt Blom, head of sales and trading for the cryptocurrency exchange firm EQUOS, wrote in an email. “Should bitcoin remain above this level, then the bulls will feel happy exploring and pushing prices to the upside, with $60,780 the target.” A break lower could see the market trade down to as low as $53,360, he wrote.  

Bitcoin briefly touched $60,000 early Thursday but proved unable to hold that market level.

Federal Reserve Chair Jerome Powell told reporters at a press conference Wednesday he saw no need to react to rising Treasury yields.

Related: First Mover – Mar 23, 2021

Some analysts say it may not matter too much for bitcoin – if central banks and governments keep plying financial markets with an unprecedented level of stimulus.

The Japanese brokerage Mizuho recently estimated that some $40 billion of the latest round of direct $1,400 stimulus checks from the U.S. government might be spent on bitcoin and stocks. The German lender Deutsche Bank published a report this week stating that bitcoin is “now too important to ignore” given its $1 trillion market capitalization.

Read more: The US Government Sold Some Bitcoin – And the Winning Bidder Got a Bargain

Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, wrote Thursday that central banks are likely to “double down and ‘support the economy’ by debasing the currency, even as federal governments hand out helicopter money directly to their respective citizens.”

Ether (ETH) slid 2.6% to $1,776, moving in harmony with bitcoin.

For the past couple weeks, the second-largest cryptocurrency has stayed in a range between roughly $1,660 and $1,940.

The price is still well off the all-time high above $2,000 reached in late March.

Read more: Ether Cards Banks $3.7M in Presale of ‘Supercharged’ NFTs

• All About Bitcoin – Mar 22, 2021
• The Hash – Mar 22, 2021

A key reason bitcoin‘s price has doubled this year, according to many analysts, is so few holders want to part with the cryptocurrency: “more buyers than sellers,” as the old Wall Street adage goes.

Unless you’re the U.S. government, which this week sold some bitcoin for dollars.

The amount was tiny in relative terms – not even an entire bitcoin, just 0.7501 BTC, worth a little over $40,000. Compare that to the current federal budget deficit, projected during the current fiscal year to exceed the record $3.1 trillion reported for 2020. A veritable drop in the bucket.

Related: This (Small-ish) Swiss Cybersecurity Stock Jumped 80% After NFT-Related Press Release

However, the winning bidder got a good deal.

The Washington Post reported the U.S. General Services Administration (GSA), which held the two-day event that ended on March 17, often holds auctions, usually of surplus federal assets such as office furniture, school buses and aircraft parts.

However, GSA told the Post the federal government has been auctioning bitcoin since 2014, after the FBI shut down the online black market Silk Road and seized more than 170,000 bitcoin in the crackdown. 

In this week’s auction, the winning bidder got the bitcoin for $53,104.

Related: First Mover – Mar 23, 2021

According to CoinDesk’s Bitcoin Price Index, the cryptocurrency never fell below $54,200 on Wednesday, and it has since jumped to about $59,000.

The government told the newspaper the auction commanded a premium relative to the market price. The GSA didn’t immediately respond to a request for comment from CoinDesk.

“Auctioning off this share of cryptocurrency broke new ground for our GSA Auctions platform, and we’re extremely pleased by the enthusiasm we’ve seen from our bidders,” Acting Regional Administrator Kevin Kerns, with GSA’s southeast sunbelt region, said in a statement to the Post.

• All About Bitcoin – Mar 22, 2021
• The Hash – Mar 22, 2021

The very problem Bitcoin’s proof-of-work design was meant to stop just took place on the Filecoin (FIL) network – well, sort of.

According to Filecoin miners at Filfox and FileStar, Filecoin’s network processed a semi-double spend on Wednesday worth millions of dollars. The double spend did not happen on-chain, but Binance credited the miners’ FIL deposit twice due to a “serious bug” in Filecoin’s remote procedure call (RPC) code. 

A “double spend” occurs when the same funds on a blockchain are spent twice; Bitcoin’s proof-of-work algorithm was designed to make this a virtual impossibility. But it appears a bug in Filecoin’s code, a blockchain project for distributed storage built by Protocol Labs, allows users to trick exchanges into accepting a deposit twice.

Related: The Art of Scarcity

“The RPC channel is the information channel for exchanges to verify deposits are legitimate. They don’t verify directly — instead they send a message through the channel saying, ‘Hey, is this guy’s deposit any good?’ And they get a response back from FileCoin’s software saying ‘yes’ or ‘no,’” Bitcoin developer Dustin Dettmer explained in a message to CoinDesk. 

However, he added, the process Filecoin developers gave to exchanges to verify deposits includes a critical flaw that allows users to deposit the same coins repeatedly.

“This allows hackers to write a single check but re-deposit it as many times as they like — similar to how kids, in the arcade, used to tie strings to quarters to play forever using a single coin,” said Dettmer. “Except here the consequences are more drastic, unlimited amounts of real funds could be stolen.”

The mishap could more correctly be called a “double deposit,” since this bug did not result in a true double spend, and the miners who discovered it believe they have found other instances, as well. 

Related: YouTube Star Jake Paul Reportedly “Discussed” Creating His Own Crypto: Good or Bad Idea?

The Filfox and FileStar mining collective discovered the bug yesterday after accidentally exploiting it. After a 61,000 FIL transaction (worth roughly $4.6 million) to the exchange was taking too long, the team bumped the fee with a “replace-by-fee” (RBF) transaction to speed it up. 

A replace-by-fee transaction takes place when a user broadcasts a new transaction to replace an older, unconfirmed transaction and attaches a higher mining fee to it, with the goal of speeding up its confirmation.

This RBF transaction, however, resulted in the deposit showing up in their Binance account twice, effectively turning 61,000 FIL into 120,000 FIL. The problem is that the second 61k FIL never actually hit Binance’s wallet – Binance was tricked into crediting the deposits twice because of a bug in Filecoin’s RPC codes. The team immediately alerted Binance and Protocol Labs. 

Essentially, the bug meant that Binance saw both transactions, ignored that they were conflicting and accepted both (for a replace-by-fee transaction, usually, the second, higher fee transaction is considered valid while the first is rejected).

Every exchange with Filecoin trading pairs uses the same `StateGetReceipt` RPC code to process deposits, so the bug is theoretically exploitable on any exchange that trades the token, the team said.

“Protocol Labs suggested that exchanges fetch message receipts from RPC StateGetReceipt, which has a serious bug. When there are two messages with the same sender and same nonce on chain, (which means a double spend), StateGetReceipt returns the same result for both of them,” a Filecoin developer told the mining firms in their correspondence.

Filecoin developers have opened a GitHub issue to work on a fix for the bug.

Deposits for Filecoin at Binance, Huobi and others have been halted as a result, the miners said. CoinDesk has reached out to popular exchanges Binance, Huobi and OKEx to verify these claims, but has not yet received a response.

“The team has investigated the issue and haven’t identified any problems with the Filecoin network. We are confident that there is no double-spend on the blockchain itself. We understand that the exchange in question is reviewing their deposit processing logic to understand what went wrong, and avoid any future issues,” the Filecoin team said in a statement to CoinDesk.

This is a developing story.

• Investment Giant BlackRock Has “Started to Dabble” in Bitcoin
• Are BTC and U.S. Stock Indices Decoupling?

Federal Reserve Chair Jerome Powell said Thursday central bank digital currencies (CBDCs) will need to coexist with cash.

Speaking at a virtual payments conference hosted by the Basel Committee on Banking Supervision, Powell cited a report on CBDCs from the Bank for International Settlements and a group of seven central banks, including the Fed. 

“One of the three key principles highlighted in the report is that a CBDC needs to coexist with cash and other types of money in a flexible and innovative payment system,” Powell said. “Improvements in the global payments system will come not just from the public sector but from the private sector as well.”

Related: $4.6M in Filecoin ‘Double Deposited’ on Binance; Exploit Open on Other Exchanges

Powell added the Fed Board of Governors is conducting experiments on CBDCs along with the Federal Reserve Bank of Boston, which is working researchers at the prestigious Massachusetts Institute of Technology (MIT).

In recent months, Powell has emphasized several times that the U.S. would not act fast on issuing a digital dollar because of the physical dollar’s status as the global reserve currency. 

The latest comment, though, is in line with Powell’s previous remarks about the Fed taking the prospects for a digital dollar seriously. Powell has said the Fed will engage with the public on the topic in 2021 and will seek congressional approval before issuing one. 

CBDCs are an early-stage payments innovation that governments hope can increase payments efficiency and lower costs by running them on blockchains. The details on CBDCs are still murky, and detractors argue most transactions today involve money that’s already digital. 

Related: The Art of Scarcity

There’s a fear some governments may use CBDCs for increased financial surveillance. At the moment, it looks like the U.S. could favor privacy in its CBDC development.

• YouTube Star Jake Paul Reportedly “Discussed” Creating His Own Crypto: Good or Bad Idea?
• Investment Giant BlackRock Has “Started to Dabble” in Bitcoin