• General Bytes, the largest cryptocurrency ATM manufacturer, experienced a security incident on March 17 and 18. The hacker was able to liquidate 56.28 bitcoins, worth approximately $1.5 million from about 15-20 crypto ATM operators in the U.S.
• This forced a majority of U.S.-based crypto ATM operators to temporarily shut down as General Bytes urged customers to take immediate action to protect their funds and personal information.
• General Bytes is transitioning crypto ATM operators to self-hosted servers and has discontinued its cloud service while also conducting multiple security audits since then.
General Bytes Security Incident
General Bytes experienced a security incident on March 17 and 18 that enabled a hacker to remotely access the master service interface and send funds from hot wallets, according to the company and sources. The breach forced a majority of U.S.-based crypto automated teller machine (ATM) operators to temporarily shut down.
Hacker Liquidates $1.5M in Bitcoin
The hacker was able to liquidate 56.28 bitcoins, worth approximately $1.5 million, from about 15 to 20 crypto ATM operators nationwide .Crypto ATM Operators Temporarily Shut Down After General Bytes Security Breach Enables Hacker to Liquidate $1.5M in Bitcoin and Other Cryptocurrencies
General Bytes ATMs Around The World
According to Coin ATM Radar statistics, General Bytes has produced 9,505 such machines globally with thousands located in the United States alone .On Saturday ,March 18 ,the company informed the public of a serious security incident that occurred on March 17 as well .
Security Measures Taken by General Bytes
We released a statement urging customers top take immediate action to protect their personal information said at 4:42 p .m .(ET) on Saturday .General bytes stated that they are discontinuing its cloud service and have conducted multiple security audits since then .They are also transitioning crypto ATMs operators into self-hosted servers which can be a lengthy process for some users .
Upto Date Crypto Safety Tips:
It is important for all cryptocurrency users especially those who use services like automated teller machines (ATMs) regularly ,to stay up-to-date with safety tips regarding their funds & personal information such as setting strong passwords & making sure 2FA is turned on whenever possible etc
• Billionaire Bill Ackman has warned of „vast and profound“ consequences if the U.S. government does not guarantee all Silicon Valley Bank (SVB) depositors by Monday morning.
• Ackman stressed that unless JPMorgan, Citibank, or Bank of America acquires Silicon Valley Bank before Monday’s market open, or the government provides a guarantee for all deposits, “the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ’systemically important banks‘ (SIBs).”
• He warned that these withdrawals would drain liquidity from community, regional and other banks and begin the destruction of these important institutions and drive short rates lower complicating the Federal Reserve’s efforts to raise rates to slow the economy.
Billionaire Warns of Imminent Bank Runs
Billionaire Bill Ackman has warned of „vast and profound“ consequences for the U.S. government if it fails to guarantee all Silicon Valley Bank (SVB) depositors by Monday morning. Unless JPMorgan, Citibank, or Bank of America acquires SVB before Monday’s market open, or the government provides a guarantee for all SVB deposits, Ackman warns that „the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ’systemically important banks‘ (SIBs).“
Expected Impact on Banking System
Ackman believes that these withdrawals would drain liquidity from community, regional and other banks and begin the destruction of these important institutions while also driving short rates lower complicating the Federal Reserve’s efforts to raise interest rates in order to slow down economic growth. He added that thousands of venture-backed companies in America could fail to make payroll due to this situation.
Government Has Until Monday Morning
The billionaire has stated that there is until Monday morning for the U.S. government to fix its „soon-to-be-irreversible mistake“. He explained that allowing SVB to fail without protecting all depositors would create an understanding among people about what an uninsured deposit is – an unsecured illiquid claim on a failed bank – thus increasing pressure on transferring cash into UST money market accounts with higher yields than bank deposits offer.
Consequences Are Dire
Ackman cautioned that failing to provide protection for SVB depositors would have dire consequences for both businesses and individuals across America as well as cause disruption in financial markets worldwide . Therefore he urged authorities take action quickly before it was too late in order avoid such catastrophic results which could potentially ripple throughout global economies due lack of trust between customers and financial institutions once again .
Cause Of The Problem
The issue stems from Silicon Valley Bank senior management investing short-term deposits into longer-term fixed rate assets causing a bank run when short term interest rates began falling , leaving many customers unable trust their investments any longer .
• Silvergate Bank has discontinued its cryptocurrency payments network, the Silvergate Exchange Network (SEN).
• The decision followed the withdrawal of banking relationships by several major crypto firms, including Coinbase, Gemini, Paxos, and Circle.
• Silvergate’s financial stability and future prospects have been put in question as it is being investigated by the U.S. Department of Justice.
Silvergate Bank Terminates Crypto Payments Network
Silvergate Bank has discontinued its cryptocurrency payments network, the Silvergate Exchange Network (SEN). This decision followed the withdrawal of banking relationships by several major crypto firms such as Coinbase, Gemini, Paxos and Circle.
Share Prices Plunge to Record Low
The discontinuation of SEN sparked concerns over Silvergate’s financial stability and future prospects. In response to these concerns, shares of Silvergate (NYSE: SI) hit a new all-time low on Thursday.
Investigated By US Department Of Justice
In addition to this market reaction, the bank is reportedly being investigated by the U.S. Department of Justice (DOJ) over accounts tied to FTX co-founder Sam Bankman-Fried (SBF). On Wednesday, Silvergate informed the SEC that it is unable to file its annual report with the regulator for reasons related to these investigations.
Additional Debt Securities Sold At Loss
The filing further states that the bank has sold additional debt securities at a loss this year which raised questions about its ability to operate as a going concern. As a result, Silvergate is currently reevaluating its businesses and strategies in light of current business and regulatory challenges it faces..
Overall, despite assurances from Silvergate that FTX represented less than 10% of total deposits from all digital asset customers as of September 20th 2022; investors remain wary due to ongoing investigations into links between SBF and accounts held with Silvergate Bank