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Raising the bar - Scam Coins

Over the course of the last month, we have seen an increasing number of scam coins in the marketplace.  Bittrex has had the unfortunate displeasure of hosting a few of these.  As such, we had a discussion with some members of the community (influential people, pool operators, coin devs, etc) to see what we, as a community, can do about it.  This is a crypto currency problem that the community needs to work together to solve.  

First, the raw logs can be found here: http://pastebin.com/iZ6uYk7R

Out of the conversation today, we came up with 3 action items:

  1. We will be supporting a community run scam bounty.  If a scam coin is listed at an exchange, and we are able to stop it before any users get hurt, a bounty will be paid out.  We already have support from a couple big pools and will be talking to others. @CryptoCobain will hold the wallet and lead this effort - ETA 8/1
  2. We will make available a feature to show when a coin has been "vetted".  This is just a designation that someone has looked at the code and is willing to put their name to it.  This will be a community driven effort.  - ETA 8/15
  3. We will be adding additional security checks around markets and wallets similar to our forking and double spend checks. False positives may shutdown markets and currencies while we investigate. We will not be publishing specifics since that will notify attackers. These gates are not a substitute for due diligence by traders but will raise the bar on scammers.

These are not 100% solutions, nor do I think there are any. We are committed to raising the bar and I think these are the right first steps.

[Update 7/29 - 11:30pm]

Just to clarify some points I saw today.

  • We are announcing coins to EVERYONE at the same time - no one is getting advanced notice. You will see these in the form of tweets like we have always done.
  • We are encouraging EVERYONE to review the code. @CryptoCobain is one of many who has offered.  This is NOT about one individual.
  • The reason I call [email protected] is because I did not want the exchange to own the "Scam Bounty". I'd like a community group to run the bounty program eventually.  In the short term, he has offered to own the wallet.  

 

Thanks

Richie

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8 Comments

  • 0
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    saban

    So now a coin will have to be "cobain aproved" to be worthy of trading...pf. A joke.
    The market should balance it self out. I see why this is in the best interest for Bittrex....they make money on new coins. I dont, because of the risk. If an "investor" is investing crazy amount of money into a fresh coin he is the one that should order an audit to make sure his investment is safe. That would also make a life span of a coin a lot longer. This kind of "vetting" only makes cobain and other big players able to accumulate a coin before issuing an approval. You are making a morally controversial game easier for people making crazy amount of money. They should know risk=reward.

  • 0
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    Simon Levesque

    Saban, like you say it's a free market so if you don't like these needed reforms gtfo

  • 0
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    saban

    i didnt said its a free market(there are fees so obviously its not free). But it is a self regulated market. No need for intervention. And like that it doesnt need reforms. it just needs smarter people. Weeds will isolate itself.

    greetings.

  • 0
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    Simon Levesque

    Saban, sorry to come off as harsh, but I see your point and am not in total disagreement... But clearly when devs can scam people for $250k and doing it again and again no again it's eventually going to bring the worst kind of regulation. Govt regulation. Bittrex obviously has a vested interest here and it's sad that's what it took to get us here but as the market stands, it's not a market... The only ppl making money are scamming devs, pumpers and exchanges

  • 0
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    Imajstorovic

    It is easy to solve this problem.
    All of this is bitcointalkcoin forum fault because they allow newbie users to make an OP in ANN part of the forum.
    All you need to do is to add coins of trusted developers who have high ratings on mentioned forum. Every other new developer needs to prove himself first and then add coin.

    But all of this is not quick money, instead of adding some coins like AIDEN you are adding bunch of fraud POS coins making bittrex looks silly. Look up the developers who published few nice coins not changing their nicks on the forums. That's a start.

  • 0
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    dan bren

    Think you have lost the plot. Cobain is a trader, so he is now going to know if any coins are scams before any other traders? Think about what you are suggesting. It's called collusion. It's called insider trading. Hardly raising the bar.

  • 0
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    Richie Lai

    I've updated the post to clarify a couple misconceptions.

  • 0
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    Aliaop

    "We will be adding additional security checks around markets and wallets similar to our forking and double spend checks. "

    Realy would be nice to check supply amount for new coins and find if it suddenly changed in unnormal way.. to prevent add big blocks and hidden post mine..
    And best things is auto block withdraw for suspisions accounts who deposited and sold unnormal big amount of new coins... like 1/3 of max cap or something..

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