Crypto scams have been the public enemy number one in the United States (U.S) posing more risk than online romance and payment theft frauds, a recent report reveals. Better Business Bureau, a nonprofit organization, recently published a report about risks and scams related to emerging technologies.

The findings of the report were centered on the risks associated with emerging technologies. A key finding was that victims ranging from age 25 to 44 faced with an average dollar loss in crypto-related fraud of $3000.

This somewhat high figure was the consequence of not having a fundamental knowledge of digital assets; the nefarious actors took advantage of this lack of knowledge and scammed the clueless folks.

Recently PlusToken scam had left most of the cryptocurrency angelish investors in awe while they witnessed one of the largest cryptocurrency scams in history.

Crypto scams by area

About 32 percent of the crypto scams involved cryptocurrency exchange for goods and services, and even fiat currency, while 23.4 percent of scams involved buying of digital assets as supposed investment opportunities.

Approximately one-third or 31 percent of these cryptocurrency scams leading to a financial loss involved a firm called C2CX, based in China.

It is noteworthy that the crimes related to cryptocurrency measured in scam statistics include the loss of funds caused due to the hackers infiltrating the vulnerable exchanges. The report does not provide detail of data about how much of risk-rated rose from these types of hacks as compared to the fraudulent schemes.

The report mentioned ten different kinds of scams, and crypto was ranked right above the frauds related to an online purchase, which was ranked as third.

Nonetheless, cryptocurrency was behind the employment scams that ranked as the second most risky kind with 93.8 index rating: internal measurement mechanisms that measure the variants including exposure, monetary loss, and susceptibility.

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The company that almost broke DeFi is asking for a new beginning.

When the decentralized lending protocol bZx was hacked to the tune of some $1 million last month, some started questioning the future of decentralized finance, commonly referred to as DeFi.

On March 9, bZx co-founder Kyle Kistner published a post on the company’s website titled “Mea Culpa: A New Beginning.” The post retraces all the steps that led to the hack, with Kistner taking full responsibility for the vulnerability.

Users will not lose money

Kistner states that the protocol users will not bear any losses. Instead he writes that “the company and the protocol stakeholders are absorbing the losses.” Furthermore, the collateral that the attacker left “was liquidated into 4099.31 [Ether], which is now streaming into the iETH pool as interest.” The company will be able to service this debt for 265.14 years ‒ until 2285:

    “Given the current value of the insurance fund and its annualized rate of growth, it should be more than able to cover the loss at the time it needs to be realized in the year 2285 AD.”

bZx is making changes

To make sure that in the future of the protocol is less vulnerable to cyber attacks, Kistner pledges that the company will make important changes. The company will increase the reward for its bug bounty program, as well its visibility. BZx will also be “delegating judgment to an independent panel to remove any conflicts of interest.” Possibly its most important promise is to “never deploy unaudited code, no matter how minor.”

Since inadequate price data was among the root causes of the exploit, the company will “use Chainlink to provide reference prices” because it “represents one of the best-decentralized oracle solutions on the market.”

A crypto startup owning up to its mistakes is always a welcome sight.

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Decentralized finance project Paradigm Labs — backed by veteran crypto investors Polychain Capital, Dragonfly Capital, and Chapter One Ventures — is shutting down.

In an announcement yesterday, March 10, CEO and co-founder Liam Kovatch said the closure was due to Paradigm’s “failure to carve a viable niche in the DEX [decentralized exchange] marketplace” and to factors both “within and outside” of the team’s control.

Out of step with a fast-evolving DeFi landscape

Founded in 2018, Paradigm Labs raised an undisclosed amount in seed funding for the development of a product dubbed Kosu — a liquidity aggregation protocol for DEXs.

In the span of these past two years, Kovatch wrote, the DEX landscape has “evolved considerably,” with the result that many of Paradigm’s early efforts and investment in Kosu were “made obsolete” by changes in DEX market structure:

    “We’ve been able to observe significant developments such as the launch of Uniswap, the establishment of the decentralized finance (DeFi) movement and more. While exciting and positive for the community at large, these developments have made the DEX space incredibly fluid, and challenging for an organization like ours to navigate.”

Kovatch revealed that Paradigm Labs began to doubt Kosu’s viability in the rapidly changing DEX ecosystem by early to mid-2019, due not only to Uniswap’s popularity but also to early developments on the DEX protocol 0x (ZRX).

Amid an increasingly “crowded liquidity protocol/networking ecosystem,” Kovatch noted, the team designed a new product — a non-custodial request for quotation system dubbed Zaidan, built on 0x. This idea, however:

    “Came to us late in the company’s life cycle at which point we were under-resourced to fully develop Zaidan [...] were quite hesitant to pivot completely away from Kosu due to the investment we had made in the project. In retrospect, this hesitation was a mistake. ”

Overall, Kovatch attributes Paradigm Labs’ failure to being “a bit too early” an entrant into the DeFi space, and the project has now found itself unable to secure the necessary funding to develop Zaidan into a live trading system.

Breaking down the acronyms

DEXs — or non-custodial, decentralized crypto exchanges — enable users to trade peer-to-peer, using smart contracts to automate deal matching and asset liquidation in order to allow users’ funds to remain under their control. Their sluggish adoption has to date broadly been attributed to their low liquidity rates relative to established centralized counterparts.

Meanwhile, DeFi is used to designate the decentralized finance market — or the use of blockchain, digital assets and smart contracts for financial services such as credit and lending.

DeFi in 2020

In early February, locked-up assets in the DeFi market — i.e. across its spectrum of smart contracts, protocols and decentralized applications — hit a milestone $1 billion in value. This represented a fourfold increase year-on-year.

Later that month, however, the sector saw a setback, falling by $140 million from its peak of $1.2 billion on Feb. 18. This followed a series of back-to-back “flash loan” attacks on the decentralized lending protocol bZx.

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Bitcoin’s price has been slipping with every passing day. On 10 March, the Bitcoin market tried to recover from its fall under $8k, managing to succeed only momentarily. The king coin had climbed to a value of $8,518, following which it noted a 5% fall over the next couple of hours, bringing its valuation down to $7,748.36. While the world’s largest cryptocurrency did touch $8k briefly following a short recovery effort, at press time, Bitcoin was valued at only $7,857.75.


As the price of the world’s largest crypto-asset struggles, an analysis of Market Value to Realized Value [MVRV] becomes more critical towards understanding speculators’ and holders’ behavior. Realized Value, a metric created by Coin Metrics, is calculated by valuing each unit of supply at the price it last moved on-chain i.e. price it was last transacted at.

MVRV is the ratio of a crypto asset’s market cap [aka market value] to realized cap [aka realized value] and can be used to compare the speculator and holder valuation of an asset.

Under the mentioned interpretation, the market cap can be considered as an “estimation of speculators’ current market value (assuming sudden market cap changes are mostly driven by speculation).” On the contrary, the Realized Cap can be used to understand the holders’ market valuation as it reflected price at the time of the last transaction and might not be as affected by sudden price swings.

MVRV has been key to understanding the tops and bottoms of the BTC market historically, according to Coin Metric’s recent research report. Thus, an MVRV ratio above one indicates that speculators have a higher average market valuation than holders, whereas a lower ratio means that holders have a higher market valuation than current speculators.


The attached chart reflected that BTC’s MVRV has mostly remained above one, and of the three times it dropped below 0, it managed to rebound. This rebound indicated that long-term support was provided by holders, something that has been balanced out by cycles of speculation. The MVRV analysis of the same reflected healthy patterns of growth, followed by an accumulation period, with the same staying above 1.

Contradictory to Bitcoin’s chart, Ethereum’s MVRV sunk to 0.3 and remained mostly under 1 throughout 2019. It noted an upwards swing in 2020, but it was falling again at press time.


On the other hand, XRP‘s MVRV was well above 1 until mid-2018, after which it fell under 0, without having broken the level since. This indicated that speculative enthusiasm for XRP was waning and holders may be underwater.


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Noelle Acheson is a veteran of company analysis and CoinDesk’s director of research. The opinions expressed in this article are the author’s own.

Back at the dawn of our evolution, one thing that helped us survive was our sensitivity to noise. If something startled us it was probably a threat and we had best deal with it, or at the very least pay close attention.

That’s still the case, and the noise in markets yesterday is a case in point.

Stock market crashes, oil price spillages and travel bans are indeed worth paying close attention to, even though there’s not much we can do to stop them.

Yet, noise is distracting. A misdirect, if you will. While we’re focusing on the sound of twigs snapping over here, something else is sneaking up on us from behind.

What I’m talking about is not necessarily sinister or even bad, and it has been going on for some time. It will, however, fundamentally change how our economies work, and it is very likely to have a significant impact on crypto assets.

I’m talking about the role of central banks.

Strong base

The first central banks emerged in Europe in the 17th century, in the form of Sweden’s Riksbank, which was intended to be a central lender and clearing house, and the Bank of England, founded as a joint stock company to purchase government debt. The U.S. Federal Reserve was created just over 100 years ago to manage the money supply and to act as a lender of last resort. (An interesting aside: The Fed, in its current structure, is a network of regional central banks, because the powers-that-be back then didn’t trust the idea of centralized finance. Go figure.)

The generally accepted role of central banks has in recent times been to manage a country’s currency and interest rates. Starting around the 1980s, it gradually expanded to cover capital flows, markets and the health of the banking system. And ever since Mario Draghi’s “whatever it takes” moment, in which he promised the European Central Bank would see the euro through its existential crisis back in 2012, central banks have been completely upfront about their changing role.

After central banks stepped into the void in the last crisis and did what they could to prop up flailing economies by lowering rates and “printing” money, we came to expect them to manage the economy.

It’s worth remembering that is not their original role. And that expectation is, in part, what has led us to the mess we are in today.

Tough choices

But what does this have to do with crypto assets, you ask? Bear with me a moment longer, we’re getting there.

First, let’s look at where central banks are today, in their role of “responsible parent.”

Since the general perception is that they pulled us out of the last crisis, we expect them to do the same again. But their most important tool last time was the ability to drastically lower interest rates. They can’t do that this time – rates are historically low, and in some regions even negative. Not much to drop there.

Perhaps they can stimulate demand by printing more money? That hasn’t worked well yet, in spite of trillions being pumped into the economy. It’s a stretch to think it will suddenly start to kick into gear now.

How about inflation, surely they can control that? That is, after all, one of their traditional roles. Yet, the unwinding of globalization, under way even before the coronavirus shut down supply chains, will also unwind the cost savings the freedom of movement of goods brought. With uncertainty leading to potential hoarding, and central banks trigger-happy with the consequence-free creation of new fiat funds, the stage is set for runaway inflation, difficult to control at the best of times.

And their coveted independence is likely to increasingly come under assault from politicians desperate for monetary stimulus, however ill-advised.

So, what will the central banks be able to do?

Big moves

If the central banks are unlikely to be effective going forward in managing capital markets, boosting demand or controlling inflation, what will we come to expect of them?

Regular readers of CoinDesk will know that central banks around the world have been exploring the concept of cryptocurrencies as a potential evolution of the current system. Some have even been experimenting, and Facebook’s announcement of its Libra project, which hopes to create a global digital currency, has accelerated plans almost everywhere.

I’m not saying that digital currencies issued by central banks are the answer to the global economy’s structural problems – I don’t think they are. And I am certain that any innovation, especially in finance, brings unexpected problems.

But if ever there was a time for central banks to make bold moves, it is now. By pushing forward with new ideas, they could establish a new kind of leadership. In times of extreme uncertainty, the understandable wall of resistance should be lower. And public sentiment is eager for any change that could bring hope of a new path of development.

With that, our perception of their role will shift again. They could go back to being managers of currency rather than stewards of the whole economy. The trust in the payments and settlement systems that broke in 2008 has not yet been repaired – now might be a good time to rebuild it. And by introducing a new type of currency, they could perhaps engineer a disentanglement of economic activity from capital markets, which could solve for some of the systemic vulnerabilities that have been building up over the decades.

These are seemingly impossible asks. They would require a reconfiguration of the complex wiring that binds markets, economics and politics. It could take decades, perhaps even a generation. 

But the role of central banks needs to continue evolving. It’s not about saving face or making up for past mistakes. It’s about survival in a time of change.

We must sincerely hope central banks don’t become the “bad guys” in this unfolding drama. After all, we collectively let them take on more and more responsibility, and placed unreasonable expectations on their power. We have been in an “emperor has no clothes” moment for some time now – but over the coming months, more lights will be shined on our financial institutions and the nakedness will become hard to ignore. It’s time to find some new clothes.

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Paradigm Labs, a startup working on decentralized finance (DeFi) projects, is shutting down its business, citing the inability to come up with a market-resilient product.

Announced on Wednesday, the decision was propagated by Liam Kovatch, CEO of the project, on a Medium blog in which he admitted that the team was unable to find a market fit product even after the development process of two years.

“After almost two years of active research and development, our team has come to the decision that without significant product-market fit and limited resources to pursue emergent opportunities, the kind of success we envisioned for Paradigm Labs is unlikely,” Kovatch noted.

“Out of respect to all of our stakeholders, we assessed this situation as quickly as we believed we could responsibly do and converged on the decision to sunset the company.”

Shall the development of a redundant product be continued?

Founded in 2018, the company was working on a decentralized ecosystem and worked on multiple products over a couple of years.

The project also raised an undisclosed amount in a seed round in the same year of its launch and is backed by well-known venture capitals including Polychain Capital, Dragonfly Capital, and Chapter One Ventures.

The company initiated its development with a liquidity aggregation protocol for decentralized exchanges (DEX) – Kosu – which the team found to be obsolete after a year due to the changing market structure of DEX.

Though the developers took a new project called Zaidan, a request-for-quotation system built on the DEX project 0x, the resources of the company were focused on Kosu.

“Many of our early efforts and investment on the Kosu project were made obsolete by broader developments in DEX market structure. The idea for Zaidan, our non-custodial RFQ system, came to us late in the company’s life cycle at which point we were under-resourced to fully develop Zaidan,” the official announcement added.

Despite Zaidan being promising, its development process is costly, forcing the startup to shut it abruptly.

“It is important to note that this decision will affect the broader 0x staking ecosystem as Zaidan’s War Chest (ZRX staking pool #6) will no longer collect protocol fees beyond March 16th, the end of staking epoch 12,” Kovatch added. “Stakers of this pool should reallocate staked ZRX onto other active pools.”

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The crypto boom of 2017 exposed the world to the tremendous potential of cryptocurrencies. Some experts believe that crypto prices will return to these highs again. Why not acquire a handful of coins to get prepared for the rally in advance? 

If this is your line of thinking, you’re gonna need a helpful tool to handle your crypto. What you should look for is a service that’ll give you a full-featured, reliable crypto wallet with a comfortable user interface. Ideally, the wallet will have a web version, simple credentials and a strong security system.

To simplify the process, we’re going to review one of the most popular wallet options out there in Freewallet, as it seems to have all the functions and coin options you’d need to safely set out on your path in crypto.

So, how can the Freewallet: Currency Wallet be used to get the most of your crypto savings?


Buy cryptocoins

At Freewallet, you can buy crypto with VISA and MasterCard. This applies not only to classics like Bitcoin and Ethereum but also includes Litecoin, Binance Coin, Ripple, Tron and Bitcoin Cash.


Store coins

If you’re looking to stock up before the surge, this is the place to do it. On Freewallet: Currency Wallet you’ll have access to over 40 coins and over 100 Ethereum-based tokens.

Receive and send coins

You can send and receive coins with ease, using this multi-coin app. More than that, Freewallet users have access to free and instant off-chain transactions.

Convert coins cross-chain

What if you’re looking to cash out a certain coin but no service provider is able to do that for you? Or perhaps you’re looking to find a more beneficial exchange rate that what the market is offering. On Freewallet, the built-in exchange will take care of these issues for you. On the exchange you’ll find over 150 cryptocurrencies and you’ll be able to send crypto to almost any altcoin wallet address.


Top up your phone

The best crypto wallets are often equipped with extra capabilities, and with Freewallet, that comes in the form of the “top up phone” feature, which you can use to pay off your phone balance with bitcoins. This feature covers more than 400 mobile operators across the world.

Conclusion

Although it may seem tricky at the outset, acquiring and handling digital coins is not a tough task to do if you are equipped with an intuitive and easy-to-navigate app.

Find the wallet that’s perfect for you and use it as your one stop shop when buying, sending and exchanging your crypto funds! Since 2016 Freewallet has proven itself as a reliable and useful tool for those looking to get involved with crypto and navigate this exciting space. If you’re looking to get involved, it might be the ideal choice for you.

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