- The BCH fork currently has no replay protection, meaning anyone making an SV transaction could end up sending any BCH they may have as well
- Craig Wright and the Bitcoin Cash ‘Hash War’ has tarnished SV’s image out the gate
- Deposits and withdrawals remain disabled for now, as neither the SV nor the ABC chain is deemed ‘safe’ enough at this time.
A leading U.S.-based cryptocurrency exchange has called the new Bitcoin Cash fork BCH SV a risky investment. Kraken raised several “red flags” for traders asking them to be careful about it.
Does not meet usual listing requirements
In an official blog post on Sunday November 18th, Kraken said Bitcoin Cash SV, a competing version of the digital currency created during last week’s hard fork upgrade did not meet the company’s “usual listing requirements and that users should view it as a “ high-risk investment.” The company stated:
“Bitcoin SV does NOT meet Kraken’s usual listing requirements. It should be seen as an extremely high-risk investment. There are many red flags that traders should be aware of.”
Even though the cryptocurrency exchange had already credited BCH SV tokens to its clients, it has raised several “perceived risks” that include that there isn’t a single wallet yet that supports replay protection, a method that prevents a single transaction from occurring on both Bitcoin Cash blockchains simultaneously.
Kraken explained further in its blog post that the limited wallet supply had the potential to temporarily constrain the token’s supply while miners were likely running a loss. The future existence of BCH SV, according to Kraken, is likely to remain mutually exclusive with other blockchains because of the threats and open hostility of its representatives towards other blockchains. The word already on the grapevine is that some major holders had shown they were planning to dump the token as soon as it becomes practically possible.
The Bitcoin Cash hard fork occurred on November 15, 2018, after both versions of the code pushing diverse technical roadmaps garnered enough support from their respective miners. The split resulted in two new tokens namely Bitcoin ABC (BCH ABC) and Bitcoin Cash SV (BCH SV).
Kraken Exchange had initially announced it would only support BCH ABC but as per their latest post, it is clear the exchange was already planning to support BCH SV following the publication of a protocol and roadmap by nChain, the company that was spearheading the development of implementing the BCH SV fork. Talking about possible losses from SV-holding users, Kraken said:
“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.”
Kraken will closely monitor both networks and will shut down deposits and withdrawals for both until they believe it has become safe to proceed.