Posted on

South Korean Internet Giant Kakao Invests in Blockchain Startup Orbs

Orbs, an Israeli blockchain startup, has received an investment from South Korea’s largest messaging app operator Kakao.

South Korea’s largest messaging app operator Kakao has invested in Orbs, an Israeli blockchain startup, Reuters reports Dec. 13.

The report states that Orbs did not disclose the size of the investment. Moreover, the startup reportedly explained that this investment “builds on its existing partnership with Kakao blockchain subsidiary Ground X.”

As Cointelegraph reported in October, Ground X released the testnet of its DApp platform Klaytn ahead of its scheduled release next year. The aforementioned partnership gave place to a collaboration “on blockchain applications and research and development projects.”

According to CrunchBase data, Kakao has raised a total of $1.5 billion in four funding rounds. In addition to KakaoTalk, arguably the Kakao’s most well-known project, the conglomerate includes mobile payment application KakaoPay and internet bank KakaoBank.

Orbs, according to its official website, is developing a “hybrid blockchain” that is interoperable with Ethereum (ETH).

Ground X is also involved in raising funds for Kakao’s own projects. As Cointelegraph recently reported, the subsidiary has already secured the majority of the $300 million Kakao is looking to raise to develop a token for its blockchain platform.

Posted on

Bitmain Closes Israeli Blockchain Development Center Citing Crypto Market Conditions

Chinese mining giant Bitmain will close its Israeli blockchain and AI development center, letting its 23 local employees go.

Chinese crypto mining giant Bitmain is closing its development center in Israel and firing local employees, Israeli business news outlet Globes has learned Monday, Dec. 10.

Bitmaintech Israel — founded in 2016 to explore the use of blockchain technology, work on the Connect BTC mining pool and develop the infrastructure behind Bitmain’s artificial intelligence (AI) project Sophon — will close this week. All 23 employees will be fired, the Globes reports.

Gadi Glikberg, head of the Israeli branch as well as Bitmain vice president of international sales and marketing, is also leaving. The Globes reports that Glikberg linked the closure to the recent crypto market collapse:

“The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”

Bitmain is also currently facing two lawsuits. The first one, a class action lawsuit of $5 million focused on unauthorized mining, was filed in the North District Court of California against Bitmain’s United States– and China-based entities.

The second suit was purportedly filed against Bitmain, Bitcoin.com, Roger Ver and the Kraken Bitcoin Exchange. The case alleges that the defendants jointly used unfair methods and practices to manipulate the BCH network for their benefit.

In early December, Israel has seen a crackdown on unreported crypto earnings. According to local business newspaper Calcalist, Israeli tax authorities opened tax accounts for hundreds of Israelis who allegedly concealed cryptocurrency related revenues. As cryptocurrencies are treated as a financial asset in Israel, they are subject to a 25 percent tax for private investors.

Posted on

Israel: Former PM Calls Crypto a ‘Ponzi Scheme,’ But Underlines Importance of Blockchain

Cryptocurrencies are “Ponzi schemes,” while blockchain is “important,” says former Israeli prime minister.

Ehud Barak, a former Israeli Prime Minister, has compared digital currencies to Ponzi schemes, Israeli media agency Arutz Sheva reported on Dec. 3.

Barak had participated in the Camp David Accords in 2000 as part of an attempt to solve the Israeli-Palestinian conflict, and now serves as the chairman of medical marijuana producer InterCure.

Speaking an event hosted by Israeli financial outlet Globes in Tel-Aviv this Sunday, Barak fielded a question comparing the alleged marijuana investment “bubble” to crypto by underlining that “he would never invest” in cryptocurrencies as “Bitcoin and cryptocurrencies [are] a Ponzi scheme.”

Meanwhile, Barak underlined that blockchain technology and smart contracts are important and useful technological and mathematical concepts, noting:

“Anyone who has patience and understands the depth of blockchain will find many uses, from holding sensitive medical information to smart contracts.”

Earlier this year, the Bank of Finland, the country’s central bank, had published a study calling cryptocurrencies not real currencies but instead “accounting systems for non-existent assets,” Cointelegraph wrote Jul. 2.

Back this fall, Israel’s central bank had also announced that it did not intend to issue its own digital currencies. A similar negation has been expressed by Masayoshi Amamiya, the deputy governor of the Bank of Japan (BOJ), who has doubted in the effectiveness of central bank-issued digital currencies (CBDC).  

Meanwhile, Christine Lagarde, the head of the International Monetary Fund (IMF), has urged international financial institutions to “consider the possibility to issue [state-backed] digital currency,” as Cointelegraph wrote Nov. 14.

Posted on

Iranian Crypto Ransomware Threat Will Rise in Today’s Geopolitical Climate, Report Predicts

Iran-based malware that demands a digital ransom in cryptocurrencies is on the rise and will further escalate in the present geopolitical climate, according to a report published by global management consulting firm Accenture on August 7.

After two years of analysis, Accenture Security iDefense predicts that emerging trends in the Iranian cyber threat landscape will intensify as the country is forced into a defensive and economically straitened position in the wake of the U.S. exit from the Obama-era Iran nuclear accord this spring.

With the US set to imminently to reimpose tough economic sanctions, Accenture has warned that the ransomware it has found “could have been created by government-backed actors or Iranian criminals, or both,” as the Wall Street Journal (WSJ) further reports.

Accenture has tracked five new types of ransomware — some of which demand “staggering” crypto ransoms — that its analysis has traced back to hackers in Iran based on samples that contain messages in Farsi as well as other clues pointing to Iranian computer systems.

“WannaSmile” —- a zCrypt variant that Accenture discovered in November 2017 — asks for a 20 Bitcoin (BTC) payment in a Farsi ransom note and also advertises local Iran-based payment processors and exchanges through which victims can acquire the cryptocurrency.

Another sample, “Black Ruby,” has been programmed to spare computers with an Iranian IP address, but otherwise encrypts and scrambles the target’s files, as well as infects the machine with a resource-hungry Monero (XML) miner. The ransom for so-called Black Ruby, which Accenture discovered in February 2018, is $650 in BTC.

The report says that the increase in ransomware activity suggests that Iran-based actors are “financially motivated to target global organizations by using ransomware and cryptocurrency miners for financial gain,” although it notes that

“Based on current Iranian policy, the feud may not lead to any disruptive or destructive cyberattack against the United States or European counterparts in the near future.”

Accenture’s report adds that the Iranian government might instead target its neighbors — like Saudi Arabia, the United Arab Emirates, Bahrain, and Israel —as they supported the U.S. decision to pull out of the nuclear agreement.

Jim Guinn, head of Accenture’s industrial cybersecurity business, told the WSJ that stealth crypto-mining attacks — also known as cryptojacking — have already caused “significant issues in some oil and gas facilities in the Middle East,” estimating that “millions of dollars of compute cycles have been hijacked over the past 12 months and continue to be hijacked every day.”

Amid the geopolitical fallout, economic turmoil in Iran has seen some citizens turn to crypto in an attempt to protect their funds. As of May, Iranians were estimated to have siphoned $2.5 billion out of the country in crypto, notwithstanding the central bank’s move to ban local financial institutions from dealing in crypto earlier this spring.

Posted on

Enigma’s Guy Zyskind: ‘I’m Pro-Whatever Kind of Blockchain Fits Decentralization Ideals’

This interview has been edited and condensed.

Cointelegraph recently spoke to Guy Zyskind, the founder and CEO of decentralized blockchain company Enigma and graduate of the Massachusetts Institute of Technology (MIT), about the future of blockchain protocols and where Enigma fits in.

During TechCrunch’s recent Ethereum Meetup in Zug, Switzerland, Zyskind elaborated on his successful experience teaching a blockchain course at MIT, as well as his regrets over missing out getting into crypto way back in 2010.

Molly Jane: First off, could you explain what the Enigma protocol is and how you originally ended up in the blockchain world?

Guy Zyskind: I’m Guy Zyskind, co-founder and CEO of Enigma. Enigma is building a platform for privacy-preserving smart contracts. We call it “secret contracts’” for the fact that no one’s internet network can actually see the data they are computing on. This is in contrast to public blockchains like Ethereum and pretty much everything there is today.

My background is that I was born and raised in Israel, moved five years ago the States and went to grad school at MIT. That’s really where I got interested in blockchain and the intersection of privacy. I published a few papers — one of them was the Enigma white paper — which was the predecessor to the platform that we’ve been building today.

MJ: How closely do Enigma and MIT work together?

GZ: I am working on Enigma full time. We are affiliated with MIT, so the MIT E14 fund [part of the MIT Media Lab] and the Engine Fund have invested in us. 

My professor, MIT’s advisor Sandy Pentland, is a co-founder and advisor to the company. We’re still very often at MIT, very connected to the ecosystem, but we’re not directly affiliated to MIT today.

MJ: Is what Enigma is doing with secret contract the first of its kind?

GZ: As far as we know, we’re the first of our kind. Definitely, when we started in 2015, that was like the first-time that privacy-preserving smart contracts came to us even as an idea, and I believe we have the first implementation in the world right now.

MJ: When was the first time you heard about Bitcoin? When was the first time cryptocurrency became a real concept for you?

GZ: That’s an unfortunate story. That was 2010. We had our own geeky, closed secret group of people and my friend was like, “Oh, there’s that cool thing Bitcoin. You should download it and we should start mining.” And we were all like, “Yeah, sure. Forget about it,” and it was 2010. Could have been really interesting.

I seriously got into it around 2013, so I started working on it in 2012. 2013 was when I got really hooked and, since then, I’ve been working on it full time.

MJ: You didn’t end up mining Bitcoin back in 2010, but are you investing in it now?

GZ: I hold some Bitcoin, I hold some Ethereum. Obviously, I hold Enigma. That’s pretty much it when it comes to the space.

MJ: So, you don’t like to play around with the market?

GZ: Honestly, I don’t have the bandwidth. I’m more in this for the tech. I’m more interested in building, I’m less in for investing. I think I’m a really poor investor.

MJ: On your website profile it says you’re a Bitcoin evangelist, so what are you doing at an Ethereum meetup today?

GZ: Well, I’m not a Bitcoin maximalist. I’m pro-decentralization, basically. I got hooked on Bitcoin because of the idea that you can do consensus at scale — at internet-scale — for the first time. That’s what took me in Bitcoin. I’m very much pro-Ethereum, pro-whatever blockchain that can fit those kind of ideals.

MJ: Could you explain in layman’s terms the difference between the Ethereum blockchain and the Bitcoin blockchain?

GZ: When Ethereum started, people were saying that Bitcoin does not allow you to do any type of computation, any type of application. It’s only mildly true. It’s true that Ethereum built a way to build more kinds of applications than just sending payments. I still think that both Bitcoin and Ethereum are basically giving us internet-scale consensus.

Having a system where you have different actors, different machines that can reach the same conclusion on some problem. In Bitcoin, the problem is starting the ledger in a way that everyone agrees on, even if they are dishonest or malicious.

To me, the big difference between Ethereum and Bitcoin is the ecosystem. Ethereum really made it possible and accessible for developers to start developing applications that can run not in one place, but in many places at once.

MJ: I’ve read that you taught a course on blockchain at MIT. Can you tell me how that went over?

GZ: Right. That was a few years ago. It was when the Digital Currency Initiative (DCI) was formed, and we were like, we have great students, great talent. There were a few of us. I and a few others were talking about it, we need more people working on blockchain at MIT, and they said, ok, let’s open a class.

I taught a class together with basically the head developer in our circle and another person from the DCI, which was very successful and — as I mentioned — published a few papers on the topic of blockchain privacy.

[embedded content]

MJ: How did the students like the class? Did you see a lot of enthusiasm for blockchain?

GZ: Oh yeah. We had about 40 people, which, for a first-time class that was arranged two weeks before the start of the semester, was a really good number. We got really good projects, what we did was we taught the students what blockchain is, what consensus is. Ethereum was only beginning, so we didn’t teach as much about Ethereum as we did with Bitcoin, but we wanted people to experiment a little bit with Serpent back then, that was before Solidity.

And then we had the finals where people presented their projects and that was really cool. All of the works were great. One of the projects actually became a paper of its own and the first project of the DCI, which, I believe, was about blockchain in the medical industry.

MJ: When you taught the class on blockchain, how did you introduce the concept of this technology?

GZ: I just explained Bitcoin. Let’s say there is a new company that says, “We are maintaining a new kind of money,” right? It’s totally not on a database. And you could transact. We could give $1 to every person in the world and you can start transacting with it.

But then, after that point, if you want to buy more, you’re going to start depositing money. And this is an untrusted company, not a bank, not affiliated with a country. And I ask people in the class, “Are you comfortable trusting and continuing to pour money into that kind of system?” And the answer is always “no” from everyone.

And then I start to explain how Bitcoin works in a very high-level way, and how even though you don’t trust one entity, if you have many of them and you don’t trust them individually, but somehow, collectively, you can trust them to actually transact and approve any transaction you send to people. And that kind of clicks and from that we go more technical.

MJ: Do you see MIT offering this class again in the future?

GZ: I know that after we taught it, there was a bit of a break. But from what I’ve heard recently, the class is now returning and there are actually even more people working on it and more researchers. Blockchain at MIT has really evolved in those spheres, which is amazing.

MJ: Can you tell me more about Enigma’s recent announcement of a partnership with Intel?

GZ: Basically, what we offer — that others do not — is to create scalable, privacy-preserving smart contracts. Right now, when you look at blockchains, the way they’ve been developed — Ethereum included — is that you take a computation and verification and you do them in the same place. In Ethereum, you have an application running as a smart contract on the blockchain: Basically, every node in the network has to run every computation and validate that computation, which is very, very costly.

We’re trying to split that, and we’re trying to make sure that all computations that are happening are working on data that the nodes themselves cannot see. There are several ways to do it. There are hardware-assisted ways and there are purely cryptographic ways. At Enigma we’re developing both because we want to give developers the choice.

When it comes to hardware system techniques, that’s known as trusted execution environments. Intel has been developing one of the leading examples of that, which is called the Intel SGX. And we used that to build our first situation of a test. We partnered with Intel together to develop that further, to see how far this technology can go, how helpful it can be for Enigma and for blockchains in general, also to continue researching and improving the systems and even make them more trustless and permissionless.

MJ: In the future, 10 years down the line, which blockchain protocols do you think will be left standing?

GZ: I think it’s safe to say that most protocols won’t exist. Most tokens won’t exist. I think there will be more than one to two winners. I think there’s a place for like 10, 20, maybe even 50, but what I’m really curious about is to see how protocols and projects will start merging with each other.

Because, obviously, it’s not possible to have 2,000 projects. If you look at 2014, there were all these outcomes of Bitcoin in all these forms, and most of them didn’t survive. But some did. So, I think some will survive and those are the ones that are doing really legit work and actually advancing the tech and the applications.

MJ: Great! Thank you so much.

Posted on

Benson Oak Raising $100 Million for Blockchain-Focused Fund

Benson Oak, a Prague-based investment bank, has announced it is raising $100 million to launch an investment fund dedicated to the Israeli market with a focus on blockchain startups.

According to a report from Israeli media outlet Calcalistech on Sunday, the new investment arm, called Benson Oak Ventures, has already secured $25 million and aims to reach the goal of $100 million by the end of this year.

The new venture’s capital will come from private investors and family offices, excluding institutional investors, the report said. With a focus on seed-stage blockchain and consumer-facing startups, Benson Oak said in the report it anticipates to release the names of two portfolio companies in the coming days.

According to Benson Oak Ventures’ website, the fund will be interested in blockchain startups which can offer consumer products or create a platform that enables community growth, in an effort to boost blockchain’s use at a consumer level.

Currently several ongoing blockchain application initiatives in Israel are mostly taken by large financial institutions that focus more on a business-to-business setting.

As previously reported by CoinDesk, Bank Hapoalim, Israel’s largest bank, is working with Microsoft to develop a blockchain-based platform for creating digital bank guarantees.

Meanwhile, the Tel Aviv Stock Exchange (TASE) is also teaming up with Accenture to build a blockchain securities lending platform aimed to allow direct lending of all financial instruments.

Israeli shekels image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Czech Investment Bank Raising $100 Million for Blockchain Fund

Benson Oak, an investment bank based in Prague, Czech Republic, has announced it is raising $100 million to launch an investment fund dedicated to the Israeli market and taking a focus on blockchain startups.

According to a report from Israeli media outlet Calcalistech on Sunday, the new investment arm, called Benson Oak Ventures, has already secured $25 million and aims to reach the goal of $100 million by the end of this year.

The new venture’s capital will come from private investors and family offices, excluding institutional investors, the report said. With a focus on seed-stage blockchain and consumer-facing startups, Benson Oak said in the report it anticipates to release the names of two portfolio companies in the coming days.

According to Benson Oak Ventures’ website, the fund will be interested in blockchain startups which can offer consumer products or create a platform that enables community growth, in an effort to boost blockchain’s use at a consumer level.

While the site of a thriving blockchain startup scene, several of the more major initiatives in Israel are being driven by large financial institutions that focus more on a business-to-business setting.

As previously reported by CoinDesk, Bank Hapoalim, Israel’s largest bank, is working with Microsoft to develop a blockchain-based platform for creating digital bank guarantees.

Meanwhile, the Tel Aviv Stock Exchange (TASE) is also teaming up with Accenture to build a blockchain securities lending platform aimed to allow direct lending of all financial instruments.

Israeli shekels image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Posted on

Czech Firm Reveals $100 Mln Venture Fund for Israeli Startups With ‘Emphasis’ on Blockchain

Investment banking firm Benson Oak revealed it would pump “around $100 mln” into Israel-based startups with an “emphasis” on blockchain, local Israeli news outlet the Jerusalem Post reported today, July 9.

The Czech-headquartered giant’s subsidiary Benson Oak Ventures will focus specifically on the Israeli market.

Having already raised $25 mln, a further $75 mln is expected, with the company expressing its belief in the potential of both Israel as a jurisdiction and local business projects.

“I believe that there are great entrepreneurs in Israel who are leading the platforms of the future, with creating [sic] and disruptive use of blockchain technologies,” Benson Oak managing partner Robert Cohen told the Jerusalem Post, adding:

“I moved to Israel six years ago, and with a passion to build companies, I have established Benson Oak Ventures as a new platform to provide financial and operational capital to the best entrepreneurs in Israel and around the world.”

While just the latest step in the firm’s Israeli activity, blockchain forms a new direction, with details of potential participants in the fund still to be released.

Benson has raised over $5 bln since 2003, with its first fund including support for internet security company AVG.

Blockchain technology meanwhile continues to become ever more popular in the country this year. As Cointelegraph reported in March, Israel’s government has adopted a hands-on stance towards blockchain-based innovation in government services and beyond.

Posted on

Tel Aviv Stock Exchange Develops ‘First Of A Kind’ Blockchain Lending Platform

The Tel Aviv Stock Exchange (TASE) has developed a “first of a kind” blockchain-based securities lending platform, according to a press release May 16. The new platform was completed in partnership with Israeli fintech firm The Floor, global professional services company Accenture, and Intel.

The exchange will reportedly create one central platform called Blockchain Securities Lending (BSL), which aims to revolutionize the securities lending market in Israel “by enabling direct lending among all the major financial instruments.” The platform will be designed as a “one-stop-shop” for all operations with securities lending and provide access to larger securities volumes in shorter terms.

By employing blockchain, the TASE intends to profit from its advantages such as direct peer-to-peer transactions, smart contracts, and enhanced security.

The platform will be built on Hyperledger Sawtooth that utilizes Intel Software Guard Extensions (Intel® SGX) technology to encrypt transaction data. Accenture will be working on the development of smart contracts on the platform, which is one of Hyperledger Sawtooth’s major business attributes.

Rick Echevarria, Vice President of Software and Services Group at Intel, noted the significance of blockchain for the financial services market, saying that Intel “believes blockchain can transform business processes”, while Accenture is working on a solution that “accelerates blockchain adoption.”

The project will be deployed in a production environment after a successful implementation of initial Proof of Concept (PoC).

Major indices that trade on TASE are the T-35, the T-125, and the TA BlueTech Index. The exchange has a market capitalization of $212 bln.

Traditional financial institutions have begun to see the advantages blockchain can add to their business processes. Last month, Banco Bilbao Vizcaya Argentaria (BBVA) became the first global bank to issue a loan using blockchain technology. The bank conducted the entire loan process, from the negotiation of terms to the signing, on a mutually distributed ledger, claiming that it cut the negotiation time for the €75 mln loan from “days to hours”.

Recently, Sberbank CIB, the corporate and investment banking business of Russia’s largest bank Sberbank, conducted the first blockchain-based commercial bond transaction in Russia. Sberbank CIB organized the issue corporate bonds using smart contracts, while the transaction was carried out on the Hyperledger Fabric 1.1-based blockchain platform.