Author: Phil Stafford

Phil is a long-standing Australian journalist with specialised experience in business, finance, travel and popular culture.

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Blockchain Crypto News DeFi

13-Year-Old Programmer Codes DeFi Project, Now Managing $1 Million in Crypto

Gajesh Naik designed a Decentralised Finance (DeFi) protocol that now manages around US$1 million in cryptocurrency – and he’s only 13 years old.

Gajesh, a schoolboy from Goa, India, is the chief architect and developer of PolyGaj – a DeFi protocol built on the Polygon blockchain. Last month PolyGaj was actually managing almost US$7 million, all under Gajesh’s entrepreneurial stewardship.

polygaj.finance assets under management – 18 June 2021

DeFi technology has been growing fast after emerging last year, with US$58 million locked into DeFi protocols. It is also gaining a keen following with billionaire Mark Cuban Calls DeFi The Start Of Personal Banking.

How Gajesh Cracked the DeFi Code

When you entrust your money to a DeFi protocol, you’re diverting it into a series of smart contracts – essentially code that dictates how your funds are invested. So how did Gajesh come up with that code?

I had the basic math skills, like addition, subtraction. Then I started learning all the programming languages.

Gajesh Naik

Those languages – Gajesh knows C, C++, Java, JavaScript and Solidity, the language used to write Ethereum-based smart contracts – were learned at a boot camp he attended five years ago, using a drag-and-drop tutorial program called Scratch. He was eight years old at the time.

Gajesh’s father, Siddhivinayak, a public servant with a degree in computer science, encouraged his son all the way.

Once the COVID threat in India eases, Gajesh hopes to devote “four to five hours” to schoolwork while continuing to work on PolyGaj.

Asked whether someone his age should be handling such large amounts of money, Gajesh has a simple answer: “Age is just a number.”

The project has a roadmap with plans to add new features, and has just launched an NFT marketplace. You can view the code on Github.

Other Crypto Superstars

Gajesh isn’t the first to achieve superstar status in the crypto world; earlier this year we saw a hardware hacker modify an old-school Game Boy to mine Bitcoin.

We also saw an Aussie programmer refinance his property using DeFi through crypto loans, which operates outside of the current banking system.

Categories
Australia Bitcoin Crypto News

An Estimated 19% of Bitcoin Supply Has Been Lost Forever

Of the approximately 18.5 million Bitcoins currently held (and of a total 21 million that will ever be created), it’s estimated that as many as 4 million have either been lost or stolen.

According to cryptocurrency data firm Chainalysis, 20 per cent of all Bitcoin accounts are owned by people who can’t access them.

Hard Drives, Hard Luck Stories

Stories are legion of lost Bitcoin, all of them sad though some not bereft of humour:

Very expensive landfill
  • British IT worker James Howells lost US$127 million in Bitcoin (BTC) when a forgotten hard drive containing a wallet with 7,500 BTC wound up in council landfill in 2013. Howells had spilt lemonade on his laptop and dismantled it, putting the hard drive in a drawer and later throwing it out after a clean-up. Those 7,500 BTC would be worth a cool $375 million today, if he could only convince council to dig up the landfill site to find the missing hard drive.
  • Earlier this year, a lost password locked San Francisco software developer Stefan Thomas out of his Bitcoin stash worth $US220 million. The secure hard drive, on which 7,002 BTC were stored, was an IronKey device that gives owners 10 chances to guess their password before encrypting the contents. Thomas only had two attempts left to guess correctly before the lockout occurred. His stash is worth about $350 million today.
  • When Gerald Cotten, CEO of Canadian crypto exchange QuadrigaCX.com, died unexpectedly aged 30 in 2018, he was the only person who knew the private keys used to access Quadriga’s crypto. An investigation by Ernest & Young identified six cold wallet addresses used by Quadriga to store Bitcoin. One of those wallets was since subject to an inadvertent transfer of Bitcoin. What happened to US$150 million in Quadriga crypto remains unresolved.

A Cautionary Tale From Closer To Home

Melbourne games developer Alex could have been a millionaire. In late 2009, when Bitcoin was still in its infancy and a single PC could “mine” a few coins in a day, the self-described technology enthusiast “got into it just for fun”. As it progressed, the Bitcoin program Alex was using grew to several gigabytes in size. “It kept on ballooning so eventually I deleted it [and] backed up the encrypted wallet file to keep on my USB stick.” That wallet contained the unique cryptographic keys for thousands of Bitcoins Alex had mined.

The thinking was that it’s offline, not on my PC, so in case something bad happened to the PC – [if] it blew up, or [was] hacked – I still had a backup.

‘Alex’, former Bitcoin miner

In late 2013, when the Bitcoin price peaked at just under $US980, Alex suddenly remembered his wallet. “[I plugged] the USB stick back in to access the file, but it died. It was one of those cheap made-in-China ones,” he said. His losses? Immeasurable. By the way, Alex is not his real name “because if my wife knows, I’m dead”.

World’s most valuable cheap USB?

Alex says now that if he “had the spare cash” he would consider getting back into Bitcoin, which he believes is a “fantastic gold substitute for long-term storage of wealth” that has many other useful applications.

Earlier this year, he mined “a lot” of Ethereum, the now second-most valuable cryptocurrency, which has similarly soared in value. “One day, maybe Ethereum might restore what I lost with Bitcoin.”

On average,  1,500 Bitcoins are lost every day. Again, those losses are permanent. As Bitcoin.com support has warned potential buyers, “All Bitcoin transactions are irreversible, so there is no way to reverse a transaction that has already been sent.” 

Categories
Australia Crime Crypto News Cryptocurrency Tax Superannuation

Australian Federal Taskforce Targets Crypto Fraud, Tax Avoidance

A multi-pronged taskforce that includes the Australian Tax Office (ATO), Federal Police, ASIC and the Australian Criminal Intelligence Commission (ACIC) is poised to investigate cryptocurrency transactions and their role in tax avoidance, fraud and money laundering.

The six-year-old SFCT (an acronym for the portentously named Serious Financial Crime Taskforce) claims responsibility for 40 current court cases involving individuals, along with 50 more operations it says are under investigation.

Focus On Money Laundering, Pandemic Stimulus Fraud and Misuse of Early Release Super Funds

Subjects of interest to the SFCT include the misuse of pandemic stimulus measures (such as JobKeeper), attempts to launder money via cryptocurrency, and fraud associated with last year’s early release of superannuation funds.

According to ATO deputy commissioner Will Day, who heads up the taskforce, “about 14” cryptocurrency exchanges are now sharing data with the SFCT.

Will Day, SFCT chief and ATO deputy commissioner

We’ve got a data matching program that we’ve had in place for a couple of years with digital currency exchanges … We are able to look at data matching to observe people’s spending habits, if they’re purchasing, say, luxury cars or real estate.

Will Day

In December 2018, the federal government injected $182 million in funding over four years to the ATO to extend its investigative brief. Also involved in SFCT activities are the federal Attorney-General’s department, the Commonwealth Director of Public Prosecutions, Border Force, and the Australian Transaction Reports and Analysis Centre.

Tax Time is Approaching in Australia

As tax time looms in Australia, the ATO is set to target Aussie crypto investors as they try to match data from crypto exchanges with taxpayers’ tax returns.

As well as investigating new crypto investors, the ATO may also target those who failed to declare their crypto holdings in previous years.

Categories
Crypto Art Crypto News NFTs

World Record Price Paid For CryptoPunk at Auction: $11.8 Million

Sotheby’s sold a non-fungible token (NFT) artwork for a whopping US$11,754,000 this week, setting what the London auction house described as “a new world record [price] for a single CryptoPunk”.

Sotheby’s tweet, June 11

Titled “Covid Alien”, CryptoPunk 7523 is considered to be a rare NFT collectible, one of nine “alien punks” in a series and the only one with a COVID-appropriate mask.

The buyer is believed to be Israeli entrepreneur Shalom Meckenzie, the largest shareholder of online sportsbook and daily fantasy sports company DraftKings. Meckenzie has a net worth of US$1.6 billion, according to Forbes.

Once Free, Now Worth Millions

There are a total of 10,000 CryptoPunks, with no two exactly alike. When launched in 2017 by Larva Labs, original CryptoPunks were made available for free but several have changed hands recently for millions of dollars.

Two other “alien punks” sold for more than $7.5 million each, according to CryptoSlam, and seven more have gone for over a million each. In May, a collection of nine CryptoPunks sold for almost $17 million at Christie’s.

CryptoPunks are now among the most sought-after NFTs on the market … We’re excited to continue to explore new and interesting ways to present these cutting-edge works.

Michael Bouhanna, contemporary art specialist at Sotheby’s

Anyone can view the artworks represented by NFTs, but only the buyer has official status as owner. Do NFTs have value? It is debatable whether NFTs actually have value, especially at the prices they are being sold for. All manner of digital objects – images, videos, music, text and tweets – can be turned into an NFT. American rock group Kings of Leon released their latest album in NFT earlier this year, allowing fans exclusive access to limited-edition vinyl or future concert seats.

Categories
Australia Banking Crypto News

Standard Chartered Bank To Provide Crypto To Aussie Institutional Investors

British-based multinational banking and financial services company Standard Chartered will launch a trading platform for institutional investors, with particular relevance to its Australian branch business and local banking in general.

SC Ventures is the innovation and ventures arm of Standard Chartered, which has 87,000 employees in more than 70 nations and US$789.050 billion in total assets. SC has partnered with Asian company BC Technology Group, owner of Hong Kong digital asset platform OSL, to establish a brokerage and exchange platform for clients in the UK and Europe, and ultimately Australia.

The joint venture is expected to be up and running in the fourth quarter of 2021, subject to regulatory approvals, and aims to deliver access to liquidity in Bitcoin, Ethereum and other digital assets.

Another Brick in the Digital Asset Wall

BC Group’s chief information officer Usman Ahmad, who will head up the new company, says that collaboration between market-leading firms is imperative to the continued development of robust global institutional digital asset infrastructure.

This joint venture will aid in maturing the digital asset ecosystem by combining OSL’s expertise in secure digital asset trading with SC Ventures’ capacity to develop future technology capabilities in banking and finance.

Usman Ahmad, SC/BC joint venture CEO

For the record, OSL subsidiary OSL Digital Securities made history in March when it executed Hong Kong’s first-ever licensed digital-asset trades.

Categories
Bitcoin Crypto News Cryptocurrency Tax

Libertarian Ron Paul Says “Bitcoin Should Be Legalised As Money”

Ron Paul, former US Congressman and Libertarian Party candidate for the 1988 US presidency, has put forward a strong case that Bitcoin should not be regulated.

In an interview last week with Michelle Makori of Kitco News, Paul told how supporters of one of his three presidential nominations designed a coin bearing his image called “the Ron Paul Dollar”.

They got into big trouble. They could not use the word ‘dollar’ as it encroached on the [US] government’s monopoly control of money.

Ron Paul

Referring to popular wisdom that Bitcoin will inevitably replace the US dollar, Paul expects the greenback to survive. “It’ll still be around, though it won’t be worth much,” he said.

Legal tender laws force you to use legal tender, so [the US government] won’t allow you to replace the dollar with cryptocurrency. There will be laws against that, but I want to legalise it.

Ron Paul

Ron Paul Interview

With Bitcoin facing regulatory pressures in countries such as China, investors worry that similar limitations will be placed on cryptocurrency in the US.

“Right now, if you buy and sell gold, it’s subject to tax,” Paul said. “If you make a profit in Bitcoin, you read stories about people getting taxed on it. You can’t tax money … If you bought a dollar a year ago and it went down 10 percent, you can’t take a loss because your dollar lost value.”

Governments will always try to suppress alternative currencies, Paul noted, but he said the free market ultimately should be allowed to decide. “I will argue more the case for legalisation of freedom of choice,” he said. “The people should make the decision, not the government.”

Categories
Australia Betting Crime Crypto News Gambling

Australian Serial Crypto Conman Will Strike Again, Warns Alleged Victim

A former commercial airline pilot defrauded of millions of dollars in Bitcoin has cautioned other cryptocurrency investors about notorious Australian serial scammer Peter Foster.

Peter Foster arrested by Queensland Police on Port Douglas beach, August 2020. Image: IFW GLOBAL/BLOG.IFWGLOBAL.COM

Konstantinos “Dino” Stylianopoulos, a resident of Hong Kong, claims he was defrauded of A$2 million in Bitcoin by Foster in an online gambling scheme, Sport Predictions, run by Foster under an alias.

Police allege bets made by Stylianopoulos and others participating in the scheme were never placed and instead diverted to Foster.

How a $2 Million Bitcoin Investment Ballooned Into An Estimated $8 Million Loss

“Getting anything back from somebody like this is very difficult,” says Stylianopoulos, who claims he lost an estimated A$8 million when the price of Bitcoin later soared. “The bigger objective is to stop (Foster),” he told The Australian newspaper. “In Australia, I don’t believe anybody else has hurt more people.”

“It’s like (the fable of the frog and) the scorpion … ‘Why did you bite me?’ ‘Because I’m a scorpion’.”

Konstantinos Stylianopoulos

Foster remains at large, released on bail in a jurisdictional mix-up between authorities in NSW and Queensland, where the Sport Predictions operation was based. He had been extradited to NSW as the operation’s Bitcoin transfers were made through a Sydney cryptocurrency exchange.

Police In Two States Lack Shared Jurisdiction

According to Stylianopoulos, NSW prosecutors contacted him the day before Foster was bailed by a Sydney court. “There was no chance for me to voice any opinion on it,” he told The Australian. “My biggest question is, why didn’t they coordinate with police in Queensland to just do a handover?”