Bitcoin traders making 700pc returns lose millions in hack attack |
- Bitcoin traders making 700pc returns lose millions in hack attack
- Petrobras swings to profit on rising output, exports
- Yow Ng second Malaysian to win world junior squash title
- Police charge US teen over dramatic Trump Tower climb
- Johor hostage taker shot dead by police
| Bitcoin traders making 700pc returns lose millions in hack attack Posted: 11 Aug 2016 06:39 PM PDT
The 29-year-old Beijing-based programmer had US$440,000 (RM1,752,300) on deposit at the Hong Kong bitcoin exchange Bitfinex until last week and, on good days, would wake up to find a couple thousand more dollars in his account than when he went to sleep. The earnings came from lending his dollars to traders who wanted to leverage their bets. The exchange allowed lenders like Tian to set their own rates, and he says margin traders paid as much as 700 per cent annualised interest to borrow dollars. At times, he earned as much in one day as holders of U.S. Treasuries earn in a decade. "The returns were really great," Tian said. "Bitfinex was quite innovative and among the first to come out with products including margin lending." That lucrative practice came to a stunning halt last week after Bitfinex said it was hacked for 119,756 bitcoins, worth about US$70 million at current prices. While his U.S. dollars were not stolen, Tian is being forced to forfeit 36 per cent of his deposit—about US$160,000—as part of a rescue plan the exchange is imposing on all its customers. He said that will more than wipe out the profits he made through lending money. Bitfinex, which was the largest bitcoin exchange for U.S. dollar trading prior to the attack, says leaning on its users to cover the loss is the best way to avoid insolvency that would tie up deposits with legal proceedings for years. The exchange hopes to repay the lost money: Customers are receiving tokens that Bitfinex says will one day be redeemable for shares in its parent company, which would give its customers a stake in future profits. The unusual proposal has triggered legal consultations and soul-searching among Tian and others like him. Whether they accept the exchange's offer or fire back with lawsuits will determine the latest chapter in bitcoin's colorful history. "Some users are still reaching out to lawyers to weigh their options, but going through litigation does mean a lot of risks," Tian said. "The losses aren't as bad as I initially expected, but there are still a lot of questions regarding the method of compensation." Among the unanswered questions: How did Bitfinex calculate the 36 per cent haircut? Is the exchange itself shouldering any losses? What are the legal guarantees that the new tokens will be redeemable in the future? The exchange did not reply to multiple inquiries from Bloomberg. The tokens, which were issued at a total value of about US$70 million, immediately fell to about US$21 million in their trading debut yesterday on Bitfinex. The discount suggests little confidence in the exchange's future. "Bitfinex has to prove that it can survive first," said Peter Ng, a Hong Kong-based user who is facing more than US$200,000 in losses. "We need to see how transparent the company is going forward. If you lose trust, then you lose your customers." Still, he says he had feared even worse. In February 2014, Tokyo-based Mt. Gox—then the world's largest bitcoin exchange—announced that US$480 million was stolen by hackers and filed for bankruptcy weeks later. Its users are still waiting for liquidators to return a fraction of the deposits that did not disappear. Litigation against Bitfinex could also drag out since Hong Kong, like most countries, has little legal infrastructure in place for regulating bitcoin exchanges or protecting owners of digital currencies. The city's central bank has said bitcoin falls outside its authority. KC Chan, the secretary for financial services and the treasury, has said the government doesn't yet see a need for legislation. Bitcoin exchanges could still face legal liabilities under general anti-money laundering laws, and bitcoin transactions may be subject to rules on commodity trading, according to the law firm Kobre & Kim. Customers may also try to recover funds based on claims of negligence or manipulation on the part of the exchange, according to Jef Klazen, a New York-based partner at the firm. "If your account wasn't actually hacked but received this 36 per cent haircut, you might be able to pursue a legal claim on the theory that Bitfinex misappropriated your funds because it made a unilateral decision to take money out of your account," Klazen said. Still, he says a lot will depend on what kind of legal contracts users signed with Bitfinex when opening accounts. He reviewed the terms and conditions on the exchange's website and thinks that disputes may need to be resolved using an arbitrator selected by the exchange. "Depending on what jurisdiction you're trying to sue in, a court might view that as foreclosing your ability to pursue a lawsuit," said Klazen. While security experts have stressed for years that users should minimize deposits at bitcoin exchanges—a painful lesson from Mt. Gox—many ignored that advice due to Bitfinex's unique margin lending system. The platform allowed traders to multiply the size of their bets by borrowing money, but the practice required both lenders and borrowers to keep their funds at the exchange. That made it a prime target for hackers. Among those who borrowed heavily is 34-year old Zhuo Shuoji. The Beijing-based trader says his annualized borrowing rates were usually less than ten per cent, but would jump to extraordinary levels when bitcoin volatility rose. Despite the high cost, he says he made good profits until the hack. Now, he just wants to get back whatever money he can. "The key is for us to get our remaining funds back first," said Zhuo, adding that he is facing about US$700,000 in potential losses. "Then we need to see that this exchange can remain in operation for the tokens to have any value." The risk for Bitfinex is that if too many customers like Zhou pull their money out and don't come back, profits from trading fees and margin lending will tumble, throwing into question the exchange's plan to earn back the loss over time. Still, Bitfinex's ability to begin restoring operations, defend against follow-up attacks, and keep users from completely giving up hope has earned it some credibility. "The way the whole thing was handled is already an improvement compared with older cases where either the exchange went bust or let users shoulder all the loss," said Tian. "They found a middle way and solutions created could become a road map for the future." — Bloomberg  |
| Petrobras swings to profit on rising output, exports Posted: 11 Aug 2016 06:36 PM PDT
The rising crude output and shipments helped compensate for falling fuel demand amid Brazil's ongoing recession, the company said in a filing yesterday. Petroleo Brasileiro SA, as the Rio de Janeiro-based producer is formally known, also reduced spending on offshore well interventions. "Petrobras is one of the very few companies in the world that has succeeded at increasing output even amid the oil downturn," Luana Siegfried, an equity research associate at Raymond James, said by phone from Houston. Petrobras is trying to emerge from the combination of a domestic recession, persistently low oil prices and a sweeping corruption scandal that has triggered a series of write-offs and a class-action lawsuit in the U.S. The company is pursuing spending cuts and is negotiating discounts with oil rig suppliers to help reduce debt. "Petrobras is becoming more predictable," Chief Financial Officer Ivan Monteiro told reporters in Rio. Pedro Parente, who took over as chief executive officer on June 2, has made progress on a $15.1 billion divestment program designed to reduce the largest debt load in the industry. The producer's debt surged during the commodities boom because the company was selling imported fuel at a loss to help the government control inflation, and invested heavily in unprofitable refineries. Reducing debt through partnerships and asset sales is one of the company's biggest challenges, Parente said on Aug. 3. The producer reported a second-quarter profit of 370 million reais ($118 million), compared with 531 million reais a year earlier, according to the filing. The state-controlled oil company posted 20.3 billion reais in adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda. That was in line with the 21 billion-real average of four analyst estimates compiled by Bloomberg. Petrobras booked a 1.2 billion-real impairment after reviewing its Comperj refinery project. A voluntary dismissal program cost the company 1.2 billion reais during the quarter. The company also returned some licenses to the oil regulator. Those charges were the reasons why the company's net income missed some forecasts, Monteiro said. "These three non recurrent items explain the difference between what analysts expected and the company's results," Monteiro said. Potential buyers have expressed growing interest in assets Petrobras plans to sell, including the propane unit Liquigas Distribuidora SA and BR Distribuidora, a fuel distribution unit, Monteiro said. The company continues to hold talks with Brookfield Asset Management Inc. to sell a stake in the Nova Transportadora do Sudeste SA pipeline network, he said. Petrobras is sticking to its divestment target and has already agreed to sell almost $4.6 billion assets in Argentina, Chile and Brazil, including a majority stake in the Carcara offshore oil field to Statoil ASA for $2.5 billion. The company plans to release a new strategic plan in September. |
| Yow Ng second Malaysian to win world junior squash title Posted: 11 Aug 2016 06:33 PM PDT
Yow Ng who is the second seed, put up a splendid performance by pulling off an upset against the top seed Saadeldin Abouaish of Egypt, winning 11-3, 9-11, 11-7 and 11-5 in the final match of the boys' category which lasted about 54 minutes, according to the tournament website. The victory made up his disappointment after losing in the semifinals to Diego Elias of Peru who went on to capture his second consecutive world junior title, last year in Eindhoven, Netherlands. For the record, former international Ong Beng Hee became the first Malaysian to win the World Junior title back in 1998 when the championship was held in the United States. Yow Ng will now lead the country's challenge in the team event later today, where Malaysia are drawn in Pool F alongside South Africa, Spain and also the United States. Earlier, world number five and the top seed Nouran Gohar of Egypt lived up to the billings after edging teammate Rowan El Araby, 11-5, 11-6, and 11-7; thus defending the girls' title she won last year in Eindhoven, Netherlands. — Bernama |
| Police charge US teen over dramatic Trump Tower climb Posted: 11 Aug 2016 06:29 PM PDT
NEW YORK, Aug 12 — The US teenager who used suction cups to scale Trump Tower, the New York home and headquarters of the Republican nominee for US president, has been charged, police said yesterday. Stephen Rogata, 19, from Great Falls in Virginia, was captured and dragged through a window on the 21st floor of the 68-story skyscraper around three hours after he embarked on his dare-devil stunt Wednesday. New York police said Thursday that he had been arrested and charged with reckless endangerment and criminal trespass. Real estate tycoon Donald Trump, whom police said Rogata wanted to meet, was out of town at the time on the campaign trail. In a tweet late Wednesday, the Republican nominee praised the "great job" done by police in "protecting the people and saving the climber". Rogata's climb, on a hot and humid afternoon, was captured live on television and mesmerized onlookers who gathered below, where police deployed airbags in case he fell. The teenager was initially taken by paramedics to Bellevue Hospital to be checked over by medics. Television footage showed him being wheeled out of Trump Tower on a stretcher Wednesday evening. In an anonymous YouTube video, titled "Message to Mr Trump (why I climbed your tower)," a young man dressed in a black hoodie with his face partially obscured exhorted Americans to vote for the Republican in November. "The reason I climbed your tower was to get your attention," the man said. "Please help make this video go viral so that it gets to Mr Trump and be sure to get out and vote for Mr Trump in the 2016 election," he added. — AFP |
| Johor hostage taker shot dead by police Posted: 11 Aug 2016 06:24 PM PDT
Johor Criminal Investigation Department chief Datuk Kamarul Zaman Mamat said the suspect, 44, was believed to have entered the shop at 8.20pm and demanded money from the victim. Failing to get the cash, the suspect confined the victim in a room at the shop. Police tried to negotiate with him for four hours. Kamarul Zaman said although the victim's family paid the RM300,000 demanded by the suspect, he still refused to let her go. "It was when the suspect tried to shoot the victim that police took action and fired at him," he told reporters at the scene here, early today. Kamarul Zaman said police fired two shots which hit and killed the suspect, around 12.30am. The victim is safe but traumatised and has been sent to Sultanah Nora Ismail Hospital here. Police recovered two pistols, a revolver and a semi-auto Smith and Wesson which were loaded. "We are investigating the connection between the victim and suspect. They probably knew each other," he said, adding, police were still investigating the motive. — Bernama |
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