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Look who’s joined the anti-encryption posse: Germany, come on … – The Register

Germany has joined an increasing number of countries looking to introduce anti-encryption laws.

Speaking on Wednesday, German interior minister Thomas de Maizire said the government was preparing a new law that would give the authorities the right to decipher and read private encrypted messages, specifically citing encrypted messaging apps such as WhatsApp and Signal.

Such services were allowing criminals and terrorists to evade surveillance, de Maizire said, adding: "We can't allow there to be areas that are practically outside the law."

He did not specify how the encryption breaking would be achieved, but did note that among the options under consideration was forcing phone operators to install software on phones that would effectively bypass encrypted apps by granting access to the phone itself.

That stance reflects a very similar one taken earlier this week by Australian prime minister Malcolm Turnbull, who told Parliament: "The privacy of a terrorist can never be more important than public safety never."

Turnbull revealed that the Five Eyes nations would be meeting next month to discuss how to prevent "terrorists and organized criminals" from "operating with impunity ungoverned digital spaces online" the exact same line pushed by the German interior minister.

In addition, earlier this month, German chancellor Angela Merkel argued in Mexico City for global restrictions and "sensible rules" to deal with online content, stating that Germany would use its presidency of the G20 to develop a concrete set of digital policies at the forthcoming summit in Hamburg next month.

When it comes to encryption issues, much of the focus has been on the UK's Investigatory Powers Act, which introduced a placeholder for a subsequent "technical capability notices paper" that would oblige telecom operators and ISPs to provide content access to law enforcement and require them to unencrypt content wherever possible.

A draft of the paper that was provided only to the telecom industry was leaked, and it revealed that the UK government wants real-time access to the full content of any named individual within one working day, as well as any "secondary data" relating to that person.

The system would oblige operators to provide real-time interception of 1 in 10,000 of its customers: in other words, the government would be able to simultaneously spy on 6,500 folks at any given moment.

That law has been spoken of favorably by the Australian government and it is reportedly considering introducing a similar version.

This rash of anti-encryption legislation comes in the wake of new terrorist attacks in Europe and a determined push by the security services to be able to maintain their current spying capabilities into modern smartphone technologies.

In Germany's case there is also the added factor of an election in September, and the expectation that the country will become a target of terrorist activity as a result of that.

There is a big problem at the heart of the issue however, and that comes in two parts: first, the apps that offer hard-to-crack, end-to-end encryption to users are almost all based in the United States and so outside the legislative reach of Europe and Australasia; and second, encryption is a mathematical process, so introducing a backdoor into any system also leaves that door open for others.

Broadly speaking there are three ways to read people's private, encrypted messages:

It is clear from the German interior minister's comments that it is focusing on the third, most pragmatic solution: gaining access to someone's phone or other device.

No doubt someone in the NSA is currently putting together a PowerPoint presentation that outlines how it has been able to hack into people's phones and bypass protections (including the Russian ambassador to the US?).

We'll have to wait until the next Snowden to find out exactly how it does that, but in the meantime, you can expect new legislation built around successful phone hacks to find its way in the capitals of most Western nations.

PS: A German court has ordered Google to stop linking to Lumen Database, formerly the Chilling Effects website.

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Quantum-encrypted communication satellites could be a reality within five years – Wired.co.uk

Google/ESA

A laser in space has measured quantum states on Earth, 38,000km away, for the first time.

This means a network of satellites communicating through quantum encryption could become a reality within five years, according to researchers behind the breakthrough experiment.

"We were quite surprised by how well the quantum states survived traveling through the atmospheric turbulence to a ground station," said Christoph Marquardt from the Max Planck Institute for the Science of Light, Germany, and lead author of the new paper.

Cracking quantum measurements at long distance is crucial to developing a network for quantum-encrypted communication.

Quantum-encrypted communication would be much more secure than the mathematical algorithms used currently. This is because of the properties of quantum mechanics called Heisenbergs uncertainty principle.

Currently, information can be encrypted with techniques based on mathematical algorithms. It is difficult to figure out the exact algorithm used to encrypt a piece of data, making the approach largely safe for now.

However, experts anticipate computers powerful enough to crack the codes will surface in the next 10 to 20 years. This development would mean current encryption methods would be redundant as they could easily be broken.

Last year, researchers at Chatham House's International Security Department said satellites and other space communications technology are at significant risk from hackers and cyber attacks.

But there is a potential solution - and this is where quantum mechanics comes into it.

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Heisenbergs uncertainty principle means the act of observing a particle creates certain changes in its behaviour. Specifically, it means we cannot know both the momentum and position of a particle to the same degree of certainty at once.

Quantum encryption uses this to create encoded data in the form of light that, if intercepted, will change its behaviour. This can alert the people communicating that the security key is not safe to use.

The problem comes when sending data over long distances. Researchers have been moving towards satellite-based systems because previous attempts at using optical fibres have proven difficult due to signal losses.

Marquardt and his team measured quantum states encoded in a laser beam sent from one of the satellites already in space, working with satellite telecommunications company Tesat-Spacecom GmbH and the German Space Administration.

The satellites had been designed for laser communication, but was not ideally suited for the task.

"From our measurements, we could deduce that the light traveling down to Earth is very well suited to be operated as a quantum key distribution network," Marquardt said. "We were surprised because the system was not built for this. The engineers had done an excellent job at optimizing the entire system."

The team created quantum states in a range the satellite normally does not operate, and were able to make quantum-limited measurements from the ground.

Based on the results, Marquardt says we could see quantum-encrypted communications via satellites within five to ten years.

"The paper demonstrates that technology on satellites, already space-proof against severe environmental tests, can be used to achieve quantum-limited measurements, thus making a satellite quantum communication network possible. This greatly cuts down on development time, meaning it could be possible to have such a system as soon as five years from now."

But there is much work left to do, he added. "There is serious interest from the space industry and other organizations to implement our scientific findings," said Marquardt.

"We, as fundamental scientists, are now working with engineers to create the best system and ensure no detail is overlooked."

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Telegram founder: US intelligence agencies tried to bribe us to weaken encryption – Fast Company

Donald Trump is expected to announce his administration's Cuba policy in Miami today. According to the White House, he will roll back some of the two-year-old Obama-era policies that made it easier for Americans to travel to the island nation. Trump also plans to impose stiffer rules for American travelers visiting Cuba, doing away with many of the person-to-person visas, and prohibiting transactions with hotels and tourist groups controlled by the Cuban military, according to the New York Times.

The rule change is expected to make it much harder for American tourists to visit Cuba, cutting into Airbnb's remarkable growth there, as well as that of high-end hotels that rely on well-heeled tourists. For instance, Havana's brand new five-star Kempinski hotel is run by a Swiss hotel chain under a management contract with Cuba's Grupo de Turismo Gaviota, the tourism group run by the Cuban military. Staying there could be forbidden under Trump's revised policy that is intended to keep American dollars away from Cuba's military.

As the Washington Post points out, the move could also help undermine the Trump hotel chain's competitors around the world. In addition to the new Kempinski hotel,Starwood Hotels and Resortswhich merged with Marriott Internationalopened a hotel in Cuba last year, the first by a U.S. company in nearly 60 years. If it's harder for American tourists to visit the island, hotel rooms could go emptycutting into Starwood's bottom line.

The change is also likely to have a negative effect on the Cuban people, who have been able to earn a living while hosting or aiding American travelers.

Trump's press conference will be streaming live here at 1 p.m. ET.

[Photo: DOD photo by U.S. Air Force Tech. Sgt. Brigitte N. Brantley] ML

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Germany Ready to Undermine Encryption in Terror Fight – Infosecurity Magazine

Germany has become the latest Western nation to signal its intent to undermine encryption in the name of preventing terrorism.

Central and state-level ministers have apparently expressed dismay that terrorists are using apps such as WhatsApp and Signal to communicate out of the reach of the authorities.

We can't allow there to be areas that are practically outside the law", said interior minister Thomas de Maiziere, according to Reuters.

He reportedly added that Berlin is planning a new law which will effectively give the authorities the right to view private messages.

Its not known how the government intends to achieve its ends. Its unlikely it would be able to force companies like Apple and Facebook to put backdoors in their products or services and a ban is most likely unworkable.

One option being mooted is "source telecom surveillance", where the authorities would force telecoms providers to install software on their customers devices which effectively bypasses the encrypted app to intercept messages before they are scrambled.

Germany has suffered its fair share of terror incidents of late, most notably when a lorry ploughed into a Christmas market in Berlin last December, killing 12.

However, the country has always been resistant to heavy-handed state surveillance given what it endured under the Nazis and in East Germany after the war.

The UK, on the other hand, appears to be blazing a trail with its Investigatory Powers Act, widely regarded as granting the most intrusive state surveillance powers of any Western democracy.

The Australian government is said to be considering implementing its own version of the law, while the European Commission has indicated it is willing to introduce legislation which would undermine end-to-end encryption.

Security experts maintain that doing so would fail to have the intended effect, as terrorists will migrate to more secure platforms, while ordinary users and businesses are left exposed.

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Backdoors, encryption and internet surveillance: Which way now? – ZDNet

Theresa May wants the UK government to get a backdoor into devices.

The UK government has once again raised the issue of online surveillance and internet regulation. But it's unclear exactly what the Conservatives want to do, while cybersecurity experts accuse the government of naivety in its current approach.

"We cannot allow this ideology the safe space it needs to breed -- yet that is precisely what the internet, and the big companies that provide internet-based services provide," said Prime Minister Theresa May, following the recent terrorist attacks in Manchester and London.

"We need to work with allied democratic governments to reach international agreements to regulate cyberspace to prevent the spread of extremist and terrorism planning," May added.

A similar statement appeared in a section of the Conservative Party manifesto for the recent election, which resulted in a hung parliament: "Some people say that it is not for government to regulate when it comes to technology and the internet. We disagree," it read.

However, there's little clarity on what the new minority government intends to do: that will have to wait for the Queen's Speech, which is due next week. Another factor is whether, lacking an overall majority, the government will want to expend limited political capital on this controversial topic.

It's also worth remembering that the UK government massively expanded its surveillance powers only recently. This policy was introduced by Theresa May herself when serving as Home Secretary; the resulting Investigatory Powers Act 2016 was dubbed the 'snooper's charter' by critics because it forces tech companies to store the 'internet connection records' (websites visited) of every UK internet user for a year.

Another area that the government seems keen to gain control over is is end-to-end encryption.

Neither of these moves met with a positive response from those in the information security sector at the recent Infosecurity Europe conference in London.

"Where I think it goes wrong is that when a government starts to talk about regulating the internet, they don't get it. We don't own the internet and no one nation, no one government, and no one state owns and can influence the internet," said Rik Ferguson, VP of security research at Trend Micro.

Part of the problem is that governments and legislation haven't caught up with the fast-paced evolution of the internet and the services built around it.

"A lot of the world's governments were formed at a time when we were still largely an agricultural society: 120 years ago if you worked for the government at the US Postal Service, you were probably better educated than anyone within 100 miles of your post office," said Paul Vixie, CEO at Farsight Security.

But now, the expertise of individuals within the technology and internet sectors has far outstripped the knowledge of the lawmakers -- and governments don't necessarily have the wherewithal to catch up.

"The assumption that the government should know and should see what everyone is doing has to be reopened. We have to ask that question again," argued Vixie.

Even those with some understanding of the situation "don't necessarily have the right security tools to keep your information secure" -- especially in situations where zero-day exploits are being stockpiled.

That was clearly demonstrated by the WannaCry ransomware attack, which was so effective because the US National Security Agency (NSA) lost control of hacking tools which were then used to make the ransomware spread even faster.

If internet regulation is tricky, then what to do about the widespread use of end-to-end encryption is even harder to deal with. If the UK or US insist on tech companies introducing a backdoor into the encryption they currently use to protect communications across the internet, then more authoritarian nations will certainly demand the same.

"I don't think the option of completely dismantling encryption is an option. There's privacy implications that need to be considered, individual rights which need to be considered," said Liviu Arsene, Senior E-threat Analyst at Bitdefender.

Then there's also the risk that severe regulation of the internet will only hamper regular users, while criminals remain unaffected as they continue to find new ways of staying under the radar.

"How completely stupid is that? Every time we see regulation, we see regular folks being impacted and criminals not being impacted", said Peter Wood, an ethical hacker and member the ISACA London Security Advisory Group.

"How is banning an encrypted algorithm from the US going to sort out criminals in any way? Do they really think terrorists will think 'I'm not allowed to, so I won't use it," he continued. "The naivety astounds me."

That's not to say the government shouldn't be able to regulate anything at all. There are numerous aspects of the internet on which governments have established rules and procedures -- including hate speech, exploitation and more -- that help to keep people safe, said Ferguson.

"These are illegal, people do get prosecuted. That's regulation and I'm happy with that, we need that -- many people need to be protected from themselves," he said.

However, Ferguson continued, "It's got to be with public agreement and it's got to be targeted. There is a line we have to be careful not to cross when regulation becomes censorship."

Not only is large-scale censorship a massive infringement on individual civil liberties, it could also also have large-scale economic consequences. According to Vixie, China's 'Great Firewall' is harming its economy and any leaders -- like Theresa May -- who are looking to follow suit should heed that warning.

"If China's experiment is ending by teaching them they should be more open and the government should have less control, then I'd like Theresa May to talk to some of the people that are there and find out what they've learned, rather than insisting Britain run its own parallel experiment to get the same results."

"In other words," Vixie said, "it's crazy talk".

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Wyo. Sec of State unveils new crowdfunding platform – Wyoming Business Report

Thanks to changes in federal and state statutes, Wyoming residents will be able - as of July 1 - to make investments through crowdfunding options. Information released by Secretary of State Ed Murray's office notes that crowd funding occurs when a business raises capital by seeking and receiving monetary investments by a large number of people.

The practice had not been available to investors until the Wyoming Legislature amended state securities statutes. Federal legislation was also changed a few years ago enabling individuals to invest in a non-publicly traded company if they were an "accredited investor" with $200,000 in hand or $300,000 in annual income or net worth over $1.0 million. Now, residents of Wyoming can invest in Wyoming businesses by joining others as investors.

The Secretary of State's information notes "crowdfunding platforms serve as portals where contributors can view, research and fund projects in various sectors, including technology, manufacturing and more." The office notes, "numerous crowdfunding platforms are active and raise millions of dollars for various projects."

There are five basic forms of crowdfunding:

1.Donations are a philanthropic gift with no expectation of a return.

2. Rewards are contributions in exchange for a possible pre-order of a product or other premiums.

3,4 and 5 Lending, Equity and Royalty all involve capital repayment, an ownership in a business or a share of revenue earned in return for an investment.

There have already been various crowd-funding operations that help non-profits in Wyoming, including the Powell Economic Partnership that used part of a $100,000 in federal funding to kickstart local efforts.

Will Dinneen of the Secretary of State's office said donation-based crowdfunding has been around for years in Wyoming and across the U.S. "WIN is different as it allows for the offer and sale of financial securities through crowd funding. Instead of receiving a gift or a possible tax deduction for a contribution, under WIN and other equity based models an investor would receive ownership shares in a business." Only Wyoming based companies and Wyoming investors can participate in WIN authorized efforts.

Wyoming statutes were changed in 2016 when Secretary of State Ed Murray noted that securities-based crowd funding would be incorporated into modernization of the Wyoming Securities Act. The agency included in proposed legislative changes WIN, the acronym for Wyoming Invests Now. The Cowboy State joined 36 other states in allowing crowd funding as a method individuals can use to invest in companies in Wyoming.

Once a business entity is registered with the Secretary of State's office they can initiate a crowd-funding model, which allows for equity or debt-based forms of securities or a combination of both. In return, investors are eligible to see a financial return on their money. Murray's information released earlier in June notes that "WIN opens new opportunities for potential adult investors."

Secretary Murray said, "WIN will open the door to community investors and allow them the opportunity to evaluate a good business idea, invest [their money] and seek a return on that investment." There are still risks with WIN investments, as there are with any participation in buying stocks, mutual funds or a variety of other products. Kelly Janes is director of the Secretary of State's Compliance Division. In an interview with AARPs Wyoming Newsletter she said "crowd funding is an exciting opportunity to raise capital but we want to caution investors to do their homework and contact our office to check the legitimacy of any investment offering."

The Secretary of State's office in Cheyenne can be reached at 307/777-7370 or atcompliance@wyo.gov.

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Don’t Ignore Technical Analysis If You Are Trading Bitcoin – Forbes


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Don't Ignore Technical Analysis If You Are Trading Bitcoin
Forbes
Bitcoin tumbles 19%, the most in more than two years, reported Bloomberg news. As a person who uses Elliott Waves, which is a form of technical analysis, I would like to demonstrate to you how traders can benefit enormously by paying attention to ...

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Opinion: Stay away from bitcoin it’s complete garbage – MarketWatch

If youve ever wondered what cryptocurrencies such as bitcoin, litecoin and ethereum are for, ask one of their legion of techie-libertarian fans.

And its dollars to dogecoins (yet another one) that the conversation will go something like this:

You: So whats the purpose of bitcoin?

Fan: The technology is absolutely amazing!

You: Yes, but whats it for?

Fan: Really, the blockchain technology is a total masterpiece, way ahead of its time!

You: Yes, yes, I understand that. But what is it actually for?

Fan: You dont understand! Its a completely decentralized money system! Totally revolutionary!

You: Honestly, does it have a purpose? Any purpose at all?

Fan: Its the wave of the future!

And on it will go.

Its now a $100 billion market

Cryptocurrencies, or cybercurrencies, which have been in a massive financial mania until their sudden selloff this week, have two actual applications: online gambling and money laundering. Neither is the heart of a major business model. But thats it.

And these, preposterously, are the fundamentals behind a mania that has driven these currencies up thirtyfold, so that today, in aggregate, the market for them is a staggering $100 billion.

None of the defenders other arguments stack up.

Online currencies are hardly a store of value when they have fallen about 30% in a week.

See: Bitcoin is suddenly on pace for its worst week since 2015

Are they really protections against the ravages of inflation and monetary debasement imposed by wicked governments? If so, how come people who keep their money in bitcoin and ethereum and the like have experienced Weimar Republic levels of consumer-price inflation just this week?

That is, after all, what it means when the price of your currency plunges. Bitcoins arent just down 30% against the dollar in the past week. Theyre down 30% against the potato, the sack of rice, the gallon of gasoline and the new car.

Pure speculation

Admittedly, before all this, the price of these cybercurrencies had skyrocketed. Those who got in at the start of the year have turned $1 into $30. But this looks more like a speculation than a currency. And what will tomorrow bring? I have a pretty good idea how many potatoes I can buy with my dollars next week. Bitcoins? Good luck with that.

You notice, incidentally, that these bitcoiners continue to measure the market price of their beloved new currencies in terms of, er, old-fashioned U.S. dollars.

Cybercurrencies may make online purchasing and international money transfers marginally more efficient in theory, if hardly in practice. Would you risk moving your money from dollars into bitcoins just to save a few percentage points in transaction fees? Youve seen that wiped out many times over this week just in price fluctuations.

Competition from all sides

Bitcoin, the grandaddy of them all, might at one point have claimed value as a unique entity. If it held a monopoly among the people who wanted to use a cryptocurrency so they could play online poker or finance international crime, it would have some worth. Yet in the past few years multiple competitors have erupted. There are now 25 with individual market values above $100 million, several above $1 billion. Yet all the bitcoins in the world are still valued at around $40 billion.

Fast-growing rival ethereum was worth bupkis at the start of the year. Today its valued at $31 billion, or almost 10 times as much as the company ESRT, +0.11% that owns the Empire State Building.

Preposterous? You make the call.

Read on: Bitcoin needs government regulation, says Morgan Stanley

Also: The chart that points to ethereum overtaking rival cryptocurrency bitcoin

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Opinion: Stay away from bitcoin it's complete garbage - MarketWatch

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Surging bitcoin gets tarnished, dropping 19% in a day – CBS News

The cryptocurrency bitcoin tumbled 19 percent on Thursday, halting for now its torrid advance this year. Previously, the digital currency has more than tripled this year, recently nearing $3,000.

On Thursday, though, it slid to almost $2,000, according to Bloomberg. That fall, to $2.039, puts bitcoin on a path to matching its worst week since January 2015.

Bitcoin is notoriously volatile. The bitcoin market tanked three times between 2011 and 2014, falling more than 50 percent each. The last time prices slipped came earlier this year after the U.S. Securities and Exchange Commission denied a request by twin-brother entrepreneurs Tyler and Cameron Winklevoss to offer a bitcoin exchange-traded fund. Then prices headed up anew.

Increasing numbers of people are using the digital currency, because among other things it gives them anonymity. Criminals are using it for schemes such as for ransom payments when hackers locked up computer systems at hospitals. Tax evaders and drug peddlers employ it, too.

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But at the same time, many legitimate businesses have started to accept it, such as the electronic payment system PayPal, travel service Expedia and software giant Microsoft (MSFT). It is enjoying popularity in economically unstable places like Venezuela and Nigeria. Also helping bitcoin's latest rise was the end of a four-month moratorium on digital money on Chinese exchanges.

Elsewhere, however, problems erupted, which have done digital currency no favors. Talk of a U.S. government crackdown hasn't helped bitcoin and its other digital brethren, like ripple and manero. In a recent report, Morgan Stanley argued that bitcoin needs government regulation if it is going to keep climbing. A bill is pending in the U.S. Senate that would do just that.

Also hurting bitcoin was an outage Monday on the digital currency exchange Coinbase because of high trading volume. The bitcoin slide comes amid a downdraft for tech stocks, which may have bottomed out Thursday.

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Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them – Fortune

After both hit all-time highs earlier this week, Bitcoin and Ethereum prices plummeted as much as 25% Thursday but many investors were unable to trade for much of the selloff.

Coinbase, a leading cryptocurrency exchange, confirmed that it was completely offline by 9:35 a.m., though the outage appears to have begun several hours earlier, with investors reporting problems on Twitter throughout the night. The company blamed "sustained heavy traffic," likely caused by intense Bitcoin and Ethereum trading, for crashing the Coinbase website and mobile app, which remained completely down for at least four hours.

As has become a familiar frustration to blockchain enthusiasts in recent days, Coinbase went offline at the worst possible time, just as extreme price swings in the cryptocurrencies made investors desperate to buy or sell.

Around 10 a.m. Thursday, the Bitcoin price fell as low as $2079, a more than 30% drop since breaking the $3,000 milestone last weekend (and a 19% decline in the previous 24 hours alone).

At the same time, Ethereum, a rival cryptocurrency whose eye-popping 40-fold gain this year has far outpaced Bitcoin's returns , was down as much as 25% from its price a day earlier. The Ethereum price dipped below $274, just three days after it traded above $400 for the first time.

Coinbase had a similar outage in late May while Bitcoin was trading at record highs, illustrating that new systems for trading blockchain currencies are not yet as reliable as traditional stock market exchanges a lesson a number of investors were learning the hard way, based on their tweets. (While Coinbase initially said it had restored full access to the exchange by mid-afternoon Thursday, it was still trying to repair service for at least some users after 5 p.m., according to a status report on its website.)

Bearish comments by influential investors have triggered several recent selloffs in Bitcoin and Ethereum, such as when Mark Cuban said he thought they were "in a bubble" last week. Morgan Stanley likely contributed to this week's declines by publishing a couple of research notes casting doubt on whether the surge in cryptocurrency prices is justified. "Market likely getting ahead of itself as we have not seen exponential rise in use case yet, but value is rising exponentially," Morgan Stanley analysts wrote in a note Wednesday.

That followed an even more skeptical research report the bank released a day earlier titled "Blockchain: Unchained?" "The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency," another group of Morgan Stanley analysts wrote, citing the SEC's rejection of a Bitcoin ETF , among other factors. "Their values are too volatile and too hard to actually use for payment for most to consider them currencies," they added.

The cryptocurrencies prices bounced back later in the day. As of 6 p.m. Thursday, Bitcoin was down less than 3% and Ethereum was down just under 8% over a 24-hour period.

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Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them - Fortune

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