 Hey everyone, today we've got a multi-billion dollar Ponzi scheme, Coinbase making a whole lot of money, Binance returning to the US, and the largest dusting attack in history. This is Jackson, and I'm Molly Jane, bringing you the Daily Crypto News at Cointelegraph. A $3 billion Chinese Ponzi scheme has been linked to the latest Bitcoin market crash, which saw a price drop of 15% from August 13th to August 15th. Since then, Bitcoin has been hovering around $10,000. As one of our news editor has said, it's like a wrecking ball against anyone taking positions on either side of 10K. Dovi Wan, the founding partner of blockchain-based investment company Primitive Ventures, linked the price drop to an unknown address that has been incessantly liquidating 100 Bitcoin batches on crypto exchange Binance. Dovi often posts hot tips from China. She's pretty reliable for digging up that little-known news from Asia. Anyway, Wan believes this address is linked to PlusToken, a Chinese Ponzi scheme that she believes scammed around 200,000 Bitcoin from its users and is now trying to liquidate its holdings following the arrest of its core team members by Chinese police about two months ago. However, research by token analyst co-founder Sid Shikhar suggests that none of the addresses associated with PlusToken are exchange-owned. This is from Bloomberg. Although Cointelegraph has been covering this with research from CypherTrace, check out our article here. So in a tweet on August 15th, the token analyst said, we take a look at the addresses associated with the PlusToken team and solve it out of the involved addresses only if you had any material Bitcoin balance and or moved funds recently. Check back on our site for a more in-depth analysis from our editorial team into whether or not Wan's hypothesis holds water. So Barclays has reportedly cut ties with Coinbase. This may end Coinbase's user access to the UK's faster payment service, a service that typically reduces payment times between different bank accounts from three days to just a few seconds. This new development is adding to real a time of turmoil for Coinbase in the UK because there were previous announcements this month the exchange will be dropping support for Zcash in the UK. There were also some accusations online that the Spanish bank Santander is blocking UK customers from depositing their fiat funds to the exchange platform. However, the Santander news was denied by the bank itself, who said that they do not block payments to any legitimate company. However, in certain circumstances, we will refer payments for additional security checks where we believe there may be a higher risk of fraud. Also this week, Coinbase Custody acquired Zapo's institutional business. So Coinbase just acquired Zapo, but what actually is Zapo and why is this a big deal? So Zapo itself is a major crypto wallet provider and it's actually been in talks with Coinbase Custody since this spring about this acquisition. And Zapo is actually kind of cool because they store their crypto in literal vaults built in the Swiss Alps. Literal vaults? Not virtual. No, like an actual vault built into a mountain. This puts Coinbase Custody's assets under custody at $7 billion, making it the world's largest crypto custodian by assets under custody. So Coinbase Custody now claims that it stores on behalf of more than 120 clients in 14 different countries and according to a tweet from CEO Brian Armstrong, they are seeing $200 to $400 million a week in new crypto deposits come in from institutional customers. I guess we're going to have to see if there are any competitors coming up to be as big as Coinbase in the US. One competitor possibly we know is Binance, which apparently is going to be coming back to the US within two months according to CZ. In an interview yesterday, he said, I don't want to promise any fixed dates, but there's a lot of work being done and there's a lot of things going on in flux. But I would say in a month or two. So CZ right now is very optimistic about the ability for crypto to thrive in the US and this is going on right now despite the government's regulatory ambiguity. He also cited the country's clear legal framework for traditional financial services as evidence that the environment for crypto will eventually improve. I mean, we've been seeing this in the US recently with all of the Senate and congressional hearings about Facebook's Libra and then about just cryptocurrency, blockchain privacy in general. So I think that there is room in the US for them to become really a good leader in regulation. But there's also danger, which is why they need regulation. On August 10th, Binance actually tweeted that a dusting attack had occurred on Litecoin and this is the first time an attack of this large of a scale has occurred. Can you explain what a dusting attack is, Jackson? A dusting attack essentially is when someone sends a small amount of crypto, like a small amount of Litecoin to many different wallets. And it's just so small that you would probably not even notice it. And once you spend or transact with that crypto, the person who sent it originally is then able to trace all of your transactions that you make with that. And that opens you up to a whole host of issues. People gain information about you and they can use that to blackmail you. Like what are some examples of how they could blackmail you? So I guess some examples would be if you had previously used cryptocurrency to buy something online, perhaps from an illegal marketplace. They don't have to know your name and address in order to get information about you that you don't want known. So that's what a dusting attack is. But what really happened is on the 10th, Binance identified 50 addresses, at least their Litecoin addresses that received a very small amount of Litecoin as part of this large-scale dusting attack. This is the first time a large-scale attack of this nature has occurred. Jan Hoppel, co-founder of blockchain data provider Glassnode, looked into the dusting attack to confirm the extent of it. So although Binance had initially reported that 50 users had been affected, Hoppel believes the scale was much larger with almost actually 300,000 Litecoin addresses, very large difference, showing signs of this dusting. As to the motivation of the attack, Hoppel told Cointelegraph in a recent interview, quote, the person behind the dusting attack owns a mining pool based out of Russia, EMCD IO. They reached out to express that their intent was to advertise their mining pool to the users of Litecoin. However, it's unclear from our perspective or anyone else's as to whether there were alternative motives. The owner of the pool was not aware that he was subjecting all these users to a dusting attack and spreading fear among the Litecoin community. It's not nice. No, and he actually has more to say. It's interesting to note that even if this was not the intent of the mining of the mining pool owner, he provided a base for malicious actors to analyze. You see, the person responsible for conducting the dusting attack doesn't necessarily have to be the one collecting the data. They can just merely be providing a service so that someone else can collect all the information and analyze it at a later date. So, Jackson, even if this mining pool didn't do it maliciously, what are some of the consequences that this, you know, dusting attack means? Well, like Mr. Apple said, another service could piggyback off of the information that was gained from this mining pool spreading this dust. And that could be used for malignant purposes. We could also potentially see this as a way to almost data mine cryptocurrency users, which is something that we haven't really seen before on a large scale. This could be a serious threat to people's privacy and it will make people feel very unsafe about how they spend their Litecoin. So far, the market does not seem to be affected by this. Trading volumes have actually been up 4%. But as terms for privacy and what this means moving forward, it's definitely something that people will have to keep an eye on.