San Francisco-based digital currency exchange Kraken is calling Bitcoin SV (BSV) an “extremely high-risk investment.”
What Is BSV?
Bitcoin SV is the “child” of Bitcoin Cash, the new currency that’s resulted from the recent hard fork. Just as Bitcoin Cash emerged from a Bitcoin fork in August 2017, it now seems Bitcoin Cash is producing spawn of its own. However, Kraken – one of the most popular digital currency exchanges in the western hemisphere – doesn’t seem to trust it and is warning investors to think twice if they decide to engage in BSV trading.
In a recent blog post, Kraken officials state that Bitcoin SV doesn’t satisfy all the exchange’s listing requirements and that traders should be extremely careful. It reads:
WARNING: Bitcoin SV does NOT meet Kraken’s usual listing requirements. It should be viewed as an extremely high-risk investment. There are many red flags that traders should be aware of… Custodial losses taken on due to attacks originating from nChain or its affiliates will be socialized among all BSV holders on Kraken. Given the volatile state of the network and threats that have been made, Kraken cannot guarantee perfect custody of BSV.
The Issues at Hand
The blog identifies several problems associated with Bitcoin SV. One issue is that the currency boasts no support in any major block explorer. Also, there are no known wallets supporting replay protection, and the representatives of the currency have been relatively threatening or openly hostile towards other blockchains. The present supply of BSV is heavily constrained due to limited wallet support, and Kraken has only managed to do minimal code review on the currency.
Kraken is warning investors further by saying that if BSV is compromised on Kraken for any reason, all BSV investors will be held accountable. This makes it an even higher risk as holders of BSV may be required to face consequences for a coin they have little to no control over.
Trade at Your Own Risk
BSV trading went live on Kraken on November 18, 2018. The blog post advises all customers to trade, sell, and invest with caution, stating:
Listing an asset or token on the exchange does not constitute an endorsement by Kraken, nor in any way a recommendation to buy (or sell) the asset or participate in the associated network. Our research does not in any way consider whether the price is currently justified, or likely to go up or down in the future. Do your own research and invest at your own risk. You should always consider the available liquidity when trading in any market and manage this risk accordingly.
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