Updated on 2022-11-15
In one of the most tumultuous weeks in crypto, the formerly second largest crypto exchange FTX collapsed, with a potential rescue deal from competitor Binance ending in 48 hours. The exchange is now facing criminal misconduct charges in the Bahamas, questions are being thrown around about what this means for crypto regulation, and the entire industry is bearing the brunt. Investors face huge losses with FTX’s $8 billion shortfall, and other exchanges are being pressured into sharing proof of their reserves, leading to some cases of mass withdrawals amidst distrust.
NY Federal Reserve, Singapore’s MAS partner for cross border CBDC
The Monetary Authority of Singapore and the New York Innovation Center (NYIC), part of the NY Federal Reserve have announced joint experiments for a cross border central bank digital currency project, Project Cedar Phase II x Ubin+. The project aims to explore the potential efficiencies of using wholesale central bank digital currencies (CBDCs) for cross border payment. #CBDC #DigitalCurrency #ProjectCedar #ProjectUbin #ProjectMariana
Crypto exchange FTX collapse, Binance rescue deal falls apart in less than 48 hours
After FTX, which had formerly been the second largest crypto exchange, announced it would collapse without further help, Binance initially stepped in with CEO CZ announcing his intention to bail out his troubled competitor. However, less than 24 hours after this announcement Binance stated that it would not be pursuing the deal, citing “reports regarding mishandled customer funds and alleged US agency investigations.”. Binance said the issues facing FTX were “beyond our control or ability to help.” Two hours later, FTX’s website went back up and has since been live with a banner warning ‘FTX is currently unable to process withdrawals. We strongly advise against depositing.’ It has since been reported that FTX had $900 million in easy-to-sell assets but $9 billion in liabilities the day before it imploded. This $8 billion shortfall could see big potential losses for investors. #Blockchain #CryptoCurrencies #Business #Binance #FTX
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
Sad day. Tried, but 😭
— CZ 🔶 Binance (@cz_binance) November 9, 2022
FTX Faces Criminal Misconduct Probe in Bahamas
Collapsed crypto exchange FTX will be investigated by financial investigators from the Royal Bahamas Police Force. They have confirmed that they are currently working with the Bahamas Securities Commission and looking into possible criminal misconduct surrounding the surprising implosion of plafform. “In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” the Royal Bahamas Police Force said. The Bahamas Securities Commission have frozen FTX’s assets and suspended its registration to “preserve assets and stabilize the company.”
— Royal Bahamas Police Force (@RBPFPolice) November 13, 2022
🚨BREAKING – SBF was seen with authorities in the Bahamas at the Albany tower which is where he lives. His father is seen with him.
Waiting for photo evidence
Source: A reliable contact from the Bahamas, by @benzenlife
We did not yet verify this information. Awaiting images.
— Mario Nawfal (@MarioNawfal) November 12, 2022
1) We're really excited to be setting up @FTX_Official's headquarters in The Bahamas!
a) The Bahamas is one of the few places to set up a comprehensive framework for crypto; FTX is registered
b) The Bahamas has emerged from COVID lively, safe, and without quarantine
— SBF (@SBF_FTX) September 24, 2021
‘FTX Has Been Hacked’: Outflows Exceeding $600M
FTX officials appeared to confirm rumours that the exchange had suffered a $600 million hack, instructing users to delete FTX apps and avoid its website, in the latest saga for the bankrupt exchange. Over $600 million was siphoned from FTX’s crypto wallets on Friday, soon after which the exchange stated in its official Telegram channel “FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don’t go on FTX site as it might download Trojans”. Members of the crypto community have however been speculating that the outflows could have been coordinated by a member of CEO Sam Bankman-Fried’s inner circle. #FTX #Regulations
Following the Chapter 11 bankruptcy filings – FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening – to mitigate damage upon observing unauthorized transactions.
— Ryne Miller (@_Ryne_Miller) November 12, 2022
FTX’s empire reportedly run by 10 roommates in the Bahamas who dated each other
CoinDesk, the site that brought about the downfall of FTX by leaking that the balance sheets of FTX and sister company Alameda Research has assets that were largely wrapped up in FTT, the in-house crypto token of FTX, has now reported that FTX was run by a “cabal of roommates.” CoinDesk has said that the ten roommates also were reportedly in and out of dating relationships with each other. This latest revelation set off a panic among traders bringing the price of FTT crashing down. Of the management, CoinDesk said “The whole operation was run by a gang of kids in the Bahamas”. The consensus among all the sources was that “It’s a place full of conflicts of interest, nepotism and lack of oversight” CoinDesk said. #FTX #Crypto
$3 billion in Bitcoin left exchanges this week amid FTX contagion fears
Bitcoin (and other cryptocurrency) investors are withdrawing funds from exchanges at a rate not seen since April 2021. Nearly $3 billion in Bitcoin has been withdrawn over the past seven days with on-chain analytics firm Glassnode showing almost 90,000 wallets have received BTC from exchange addresses. This is a sign of crypto holders losing trust in centralised crypto exchanges as a model and worried about the security of their funds. #Bitcoin #CryptocurrencyExchange #FTX
Crypto exchanges under fire for allegedly sharing snapshots using loaned funds
Several crypto exchanges are coming under fire amidst rising distrust from investors following the FTX collapse. To counter this mistrust, crypto exchanges have started sharing proof of reserve with the public as a way to showcase legitimacy. However, these public displays have shown certain anomalies during on-chain investigations which investors say suggest foul play and market manipulation. Two days after Crypto.com made its cold storage information public, investigators found that 320,000 Ether was sent to Gate.io on Oct. 21, 2022, with crypto .com’s CEO saying the funds were transferred accidentally and were eventually returned back to the original storage. Nonetheless, this led to many investors withdrawing their Eth. When Gate.io released its proof of reserves snapshot, Solidity developer Shegen alleged that the funds shown were those that Crypto .com had supposedly accidentally sent. The crypto community also suspects Huobi of attempting a similar manipulation. A wallet address linked to the exchange was found transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot. A blockchain investigator showed transactions on Etherscan, which shows that Huobi had shown 14,858 ETH in its latest snapshot, which since went down to 2,463.5 ETH. #CryptoCurrencies #Huobi #Transactions #Assets #Community #CryptocurrencyExchange #Regulation
After Huobi released the asset snapshot of the asset reserve, 10,000 ETH was transferred from 0xca…c3fc (Huobi 34) to Binance and OKX deposit wallets. The Huobi 34, which had 14,858 ETH at the time of the snapshot, currently has only 4,044 ETH left. https://t.co/wrphZxadBM pic.twitter.com/B2lRXMF8su
— Wu Blockchain (@WuBlockchain) November 13, 2022
Check the proof belowhttps://t.co/iCCKCb94kL
— Lin Han (@han_gate) November 13, 2022
Huobi Asset Transparency Report Reveals $3.5B in Crypto Holdings
Huobi Global, once China’s top crypto exchange, has published an asset transparency report to reassure users that its funds remain safe. The report said the exchange has total estimated value of reserves of $3.5 billion. The exchange has promised to perform a Merkle Tree Proof of Reserves audit with a third party within 30 days. This comes days after FTX, which until recently was the third largest digital assets exchange by volume, imploded in response to a CoinDesk report that showed its sister company Alameda Research’s balance sheet was primarily made up of FTX’s native token, FTT. #FTX #FTT #Huobi #CryptoCurrency
Trading volume plunges 75% on Coinbase, but could benefit from FTX’s Bankruptcy
Trading volume on crypto exchange Coinbase plunged roughly 75% in the hours following FTX’s bankruptcy announcement early Friday, according to data from Nomics. The ongoing crypto winter, but most specifically, the increasing distrust in any centralised crypto exchanges following a few major collapses, has led to less retail investors wanting to trade, and many to want to withdraw their crypto to safer cold storage options. There is a chance for Coinbase to pick up market share since the collapse of FTX.
Sam Bankman-Fried denies rumours that he fled to Argentina
FTX founder Sam Bankman-Fried has denied rumours that he’s fled the Bahamas for Argentina since the collapse of his FTX Group. He denied the rumours in text message to Reuters. Users have been speculating whether SBF was on the run after filing for Chapter 11 bankruptcy for FTX Group, amidst speculation that flight trackers had traced his private jet using the flight tracking website ADS-B Exchange. Lots of rumours are currently circulating… #Bankruptcy #FTX
— 0xMeTaNeeR 🍥 (@0xMetaNeeR) November 12, 2022
The rumour is SBF on his way to Argentina.. pic.twitter.com/Jnxm3bprm9
— CoinMamba (@coinmamba) November 12, 2022
Miami HEAT Arena Balks at FTX Naming Rights, Ending 19-Year Deal Early
Miami HEAT Arena has reportedly started taking down FTX sponsorship logos, for which FTX had paid $135 million for a 19 year sponsorship contract. Photos on social media already seem to show the FTX signs being removed from the arena. A few hours after FTX filed for bankruptcy, the Miami HEAT and Miami-Dade County issued a joint statement announcing they were cutting ties with the exchange, effective immediately. “The reports about FTX and its affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena,” a press statement issued Friday reads. #FTX
Crypto lender BlockFi suspends withdrawals in FTX contagio
Digital asset lender BlockFi is yet anther platform to be affected by the collapse of FTX. The crypto lender had given an unspecified amount of loans to Alameda Research. BlockFi reportedly had been in the process of moving its assets to FTX for custody, according to a person familiar with the matter, who added that the majority of BlockFi’s assets had not yet been moved. BlockFi, once worth $3 billion, has said it will pause client withdrawals, citing “a lack of clarity” over the status of FTX US and FTX.com. The New Jersey-based company asked customers to refrain from depositing funds into their BlockFi wallets or interest accounts.
Binance holds $74.7b of crypto in its reserves, ~40% are in the firm’s own tokens
A Bloomberg report claims that crypto exchange Binance holds $74.7 billion worth of crypto in its reserves of which roughly 40% are in the firm’s own stablecoin and native token. Co-founder CZ (Changpeng Zhao) said that Binance would be more transparent and provide proof of reserves. According to the report, of its total reserves, $23 billion was in BUSD and $6.4 billion was in Binancecoin. Binance also held 10.5% of its reserves in bitcoin and 9.8% in ether.
Crypto.com’s Preliminary Glimpse of Token Reserves Reveals 20% in Shiba Inu Coin
As large crypto exchanges have been pushed to prepare “proof-of-reserves” audits, an initial report has shown 20% of Crypto.com’s reserves to be in the dog-inspired meme token, SHIB. This sparked a bank run on the exchange, with Sunday seeing a huge number of withdrawals. It also looks as if the exchange is taking a few measures to slow down the flow of withdrawals. Crypto .com shared wallet addresses with blockchain analysis firm Nansen to show $2.88 billion in and other assets of which roughly $558 million, or about 20%, are in SHIB. The exchange’s SHIB holding ranks second only to the $872 million of bitcoin which represents 31% and exceeds the $487 million in ether.
Genesis to Get $140M Equity Infusion from Parent Company after $175M locked in FTX
Cryptocurrency brokerage Genesis will reportedly get an equity infusion of $140 million from its parent company after its derivatives business has $175 million locked in a trading account of FTX, which has filed for bankruptcy protection. Genesis sent an email saying “While the operation of our lending and trading businesses has not been impacted by recent market events, Genesis has taken steps to strengthen its balance sheet with an additional equity infusion of $140M from our parent company, Digital Currency Group”.
Crypto Fund Galois Capital Has Half of Its Capital Trapped on FTX
Crypto fund Galois Capital has said it has about half of its capital trapped on now bankrupt exchange FTX. The locked funds total around $40 million, according to co-founder Kevin Zhou. Galois has said it could take “a few years” for the firm to recover “some percentage” of its funds. “We will work tirelessly to maximize our chances of recovering stuck capital by any means,” Zhou told investors. Galois earned acclaim earlier this year for predicting the crash of stablecoin ecosystem Terra. #Trading #FTX
FTX US Warns of Trading Halt Hours After Bankman-Fried Says It’s ‘100% Liquid’
The US branch of failed crypto exchange FTX, FTX US, warned its users to close their positions as it might halt trading in the coming days hours after tweeting that FTX US was “100% liquid,” in contrast to FTX International. “Announcement 2022-11-10: trading may be halted on FTX US in a few days. Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them,” a banner on its website said. Soon after, the entire FTX Group folded into bankruptcy, locking all users’ funds.
A crypto lawyer’s take
We’re at a fork in the road. Retail customer facing exchanges will see lot of pressure from regulators. Choices will most likely be: be regulated, or DeFi. The space in between will get difficult. The EU will see these events as making the case for MiCA, which assumes that banks are a safe place for the market to develop. For lawyers, the litigation on the customer terms that say the company holds “your” crypto” is the big point. What does this mean? The worst position for a customer is to be an unsecured creditor of a bust company. That’s what you will be if you sent funds to FTX and they had permission to use it and owe you the balance represented by the underlying tokens you “invested” in. The best position for a customer is that the tokens you invested in are yours, because the terms say so and nothing else in the relationship changes that. In this case, you can track your assets through transactions that FTX put them through but you didn’t authorise. All this is about the same point that caused a fuss when Brian Armstrong explained it to much controversy in May.
FTX Collapse Has US Regulators Sharpening Pencils
The crypto exchange’s stunning collapse and bankruptcy filing has US regulators and lawmakers making the case for an even more burdensome regulatory framework for crypto. Nevermind that the SBF-championed legislation would dismantle De-Fi while creating a regulatory wall around existing centralized exchanges. Senator Elizabeth Warren tweeted in support of stricter rules.
The implosion of FTX must be a wake up call for Congress and financial regulators to hold this industry and its executives accountable.
Too much of the crypto industry is smoke and mirrors. It's time for stronger rules and stronger enforcement to protect ordinary people.
— Elizabeth Warren (@SenWarren) November 11, 2022
Frauds and Scams Make up 40% of Crypto Complaints
40% of crypto-asset complaints handled since 2018 were about frauds and scams. “Hacks by malicious actors have marred crypto-assets, and led to significant financial loss by consumers with no recourse for recovering stolen funds,” the US Consumer Finance Protection Bureau said. The CFPB also cited other risks including romance scams, fraudulent transactions and greater market volatility. Crypto hacks have cost users $3 billion in the first 10 months of 2022. Hackers stole $730 million this October alone. One imagines bad centralised crypto exchanges will form the majority of complaints for the rest of this year.
Nike Dives Deeper Into Metaverse With ‘.Swoosh’
Nike is doing more in the metaverse by launching a new blockchain-powered meeting place for athletes, collectors, creators and consumers called ‘Swoosh’. The platform will allow Nike to share its virtual creations including shoes and jerseys for users to wear in digital games. “We are shaping a marketplace of the future with an accessible platform for the Web3-curious,” said Ron Faris, general manager of Nike Virtual Studios. Read more: Nike Launches .SWOOSH, a New Digital Community and Experience
Updated on 2022-11-08
A slightly tumultuous week in crypto with a squabble between Binance and FTX CEOs leading to market unrest and fears of big sell offs. Crypto companies in the UK will now need FCA approval to advertise. Santander bank will join almost half of other UK banks to block payments to crypto companies from next year. A new blockchain project launched by an Ethereum co-founder aims to bring blockchain nodes to a wider audience and Google Cloud goes further into blockchain by running a Solana node. And, the latest on the US Fed and the ECB’s trails and plans to bring out programmable digital money.
Ethereum Co-Founder, Project to Bring Blockchain Computers to a Wider Audience
Anthony Di Iorio, the co-founder of Ethereum has revealed a project which aims to make it easier for anyone to run a full blockchain node on their computer. The project aims to counter blockchain centralisation by enabling crypto users to run full nodes that store the complete transactional history of a blockchain network, with little to no technical expertise. Di Iorio hopes the plug-and-play nature of The Cube project, with its gamification, will make it easy and fun for users to a full node, and in doing so, further decentralise blockchain infrastructure. Di Iorio has been working on the project, dubbed Andiami, for over a decade. Read More: Ethereum Co-Founder Di Iorio Unveils New Project to Bring Blockchain Computers to a Wider Audience
Google Cloud running a Solana node, in a sign of backing the blockchain firm
Google Cloud is now running a Solana validator in a move that sees Google strengthen its commitment to blockchain. Google plans to bring Solana to its recently-launched Blockchain Node Engine, which aims to help make Web3 product development easier with fully-managed nodes, in 2023. Google Cloud also said that it will index Solana data in order to bring it to BigQuery in 2023, which it hopes will “make it easier for the Solana developer ecosystem to access historical data.” Read More: Google Cloud just backed one of the biggest blockchain firms around
UK Crypto Firms Will Need FCA Approval to Advertise
The U.K.’s House of Commons has passed new regulations that limit how cryptocurrency assets can be promoted in the country. The latest amendments to the Financial Services and Markets Bill enshrine the powers of the FCA and the Treasury when it comes to the regulation and legal status of crypto assets. Crypto firms in the UK still need FCA approval to operate in the UK, an approval which still isn’t often given. Crypto firms seem to be worried that these regulations will leave them struggling to advertise in the UK. Crypto advocates also feel the rule may be too restrictive for a country that claims it wants to support the digital asset industry. Read more:
- UK Crypto Firms Will Need FCA Approval to Advertise
- Proposed UK Rules Will Make Advertising Crypto a Lot Harder, Industry Warns
The spat between Giants FTX and Binance Spill Into Public View with sell-offs
The public spat between two of the biggest names in crypto has intensified. Until now, the relationship between Binance founder and CEO CZ (Changpeng Zhao) and SBF (Sam Bankman-Fried), the founder of crypto trading firm Alameda Research and crypto exchange FTX, had been publicly civil. That changed Sunday after Binance said it was poised to sell what it held of FTX’s FTT native token, following rumours about liquidity issues at SBF’s companies. A report indicated that much of Alameda’s balance sheet was made up of FTX’s FTT token, which is relatively illiquid. This sparked fears that any large sell off of FTT could cause the token’s price to plummet, potentially harming the financial health of FTX. CZ tweeted that Binance would liquidate its FTT holdings for “risk management” purposes. CZ also tweeted “We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs” to which SBF retaliated that Binance was trying to go after its rival “with false rumors.” Read More: Tensions Between Crypto Giants FTX, Binance Spill Into Public View
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
Coinbase Loses Half Billion Dollars and Half Million Customers in Q3
Crypto exchange Coinbase has reported a tough third quarter of 2022, losing $545 million and missing earnings targets. Coinbase has seen its revenue cut in half from Q3 2021, with this quarter’s revenue of $590 million reportedly below the $654 million analysts predicted. Coinbase share price is down about 70% from its November 2021 all-time-high. User numbers, down 500,000 to 8.5 million, dropped far less than analysts expected. Brian Armstrong, Coinbase CEO, also has said he believes the USD Coin (USDC) stablecoin Coinbase issued together with Circle “will end up being kind of the de facto central bank digital currency in the U.S.’ Read More: Coinbase Loses Half Billion Dollars and Half Million Customers in Q3
Fed Completes First Test With Digital Dollar, Releases Results
The New York subsidiary of the U.S. Federal Reserve has completed the first test of its central bank digital currency (CBDC) initiative, Project Cedar. The New York Innovation Center carried out this first phase and highlighted the potential for digital assets and blockchain technology to improve legacy payment rails. The NYIC is developing a “technical framework for a theoretical” implementation of this digital asset. The first test of the CBDC was reportedly successful. It says the digital dollar would reduce time and risk in legacy financial rails. Read More: Fed Completes First Test With Digital Dollar, Releases Results
ECB canvases for digital euro programmable money use cases
The European Central Bank has opened a call to payment industry experts for digital euro use case ideas around programmable money for retail payments. It is also seeking input on standards and the back-end IT architecture needed to launch a fully central bank controlled currency. The ECB isn’t the only central bank looking at programable money, The Monetary Authority of Singapore (MAS) has also launched experiments for purpose bound money. Programmable money means more control to governments, Terrifying. Read More: ECB canvases for digital euro programmable money use cases
Do Kwon Ordered A Staff To ‘Doctor’ LUNA’s Price, South Korean Prosecutors Claim
South Korean prosecutors have made a discovery that they say is evidence of Do Kwon, co-founder and CEO of now collapsed Terraform Labs, manipulated the prices of its stablecoin. According to Korean news reports, Kwon allegedly gave specific instructions to one of his employees to manipulate the market price of their TerraUSD algorithmic stablecoin. Korean prosecutors claim to have incriminating evidence, particularly messages exchanged between Do Kwon and the Terraform Labs employee he ordered to carry out the artificial price adjustment. “I can’t reveal the details, but it was a conversation history where CEO Kwon specifically ordered price manipulation,” an official from the prosecutor’s office said. Read More: Do Kwon Ordered A Staff To ‘Doctor’ LUNA’s Price, South Korean Prosecutors Claim
European Parliament Delays Vote on MiCA
The EU’s Markets in Crypto Assets (MiCA) legislation that was set to be voted on in December looks set to be delayed by several months. A spokesman for the European Parliament said that the length and complexity of the text mean the vote is unlikely to take place until the new year. Amongst the proposed changes is a cap on the market share of non-euro-denominated stablecoins, in what is seen as a bid to grant a greater role to euro-pegged stablecoins and protect the eurozone’s monetary sovereignty. However, given that USD backed stablecoins currently account for the vast majority of stablecoin transactions, there are concerns that such a cap would be unnecessarily burdensome to the European crypto industry, with rumours circulating that the limit could be adjusted or scrapped. Read More: Report: European Parliament Delays Vote on MiCA
UK Bank Santander Will Block Payments to Crypto Exchanges
Santander has joined almost half of the UK’s banks to block payments sent to crypto companies. The bank has said it will block real-time payments to crypto exchanges at some point next year, although it hasn’t yet specified a date. Until then, from November 15, the bank will enforce a more limited set of restrictions with payments to cryptocurrency exchanges using mobile and online banking limited to £1,000 per transaction with a total limit of £3,000 in any rolling 30-day period. It says the new rules will not impact the ability of customers to make withdrawals. Santander is citing fraud and scams as the reason behind this ban, with a spokesperson saying “In recent months we’ve seen a large increase in UK customers becoming victims of cryptocurrency fraud”. The thing is, when people have fallen for a scam, many are going to find a way to send their money to it because they believe the claims made and want what it promises. So this block could just move the problem away from being directly a Santander problem and will push those customers to find other ways to send money to scams. A study from comparison side Finder found 47% of the UK’s major banks don’t support cryptocurrency. Read More: UK Bank Santander Will Block Payments to Crypto Exchanges
UK lawmakers’ inquiry into NFT regulation, ‘there are fears that the bubble may burst’
Members of the United Kingdom’s DCMS (Digital, Culture, Media and Sport Committee) in the House of Commons have opened an inquiry to hear from the public on the potential benefits and risks of NFTs on the country’s economy. The committee said its inquiry was related to the sudden growth of the NFT market, responding to fears the assets may be overvalued and at risk of the collapsing. It says that NFT regulation in the U.K. is “largely non-existent”. The committee added “Our inquiry will investigate whether greater regulation is needed to protect these consumers and wider markets from volatile investments. This inquiry will also help Parliament understand the opportunities presented by an exciting new technology which could democratise how assets are bought and sold.” “MPs are expected to consider whether NFT investors, especially vulnerable speculators, are put at risk by the market,” the DCMS committee said. “The inquiry may also look into the wider benefits that NFTs and the blockchain could provide the U.K. economy.” Read more:
- UK lawmakers open inquiry into NFT regulation — ‘There are fears that the bubble may burst’
- U.K. parliament group starts NFT inquiry as crypto scrutiny grows
$1B+ Crypto Hack, firm tried to say it was attacking itself as a safeguard
Concerns developed at play-to-earn platform Gala Games after a single blockchain address appeared to mint over $1 billion worth of its GALA token out of thin air. It was feared the transaction was the result of a billion dollar hack, or a rug pull, and the token price dropped by 20%. The platform later said it had effectively attacked itself to prevent bad actors from absconding with users’ money, it isn’t clear yet why the firm felt the need to mint these tokens. “All GALA tokens on Ethereum as well as the underlying bridge collateral are SAFE,” an affiliated firm tweeted. Read More: $1B Crypto Hack Fears Spur 20% GALA Plunge, but Firm Implies It Attacked Itself as a Safeguard
Report: GALA token exploit resulted from public leak of private key on GitHub
It appears that last week’s $2 billion token exploit of GameFi project Gala Games resulted from a public leak of applicable security keys on GitHub. Blockchain security firm SlowMist posted a screenshot alleging that the plaintext private key for the proxy admin owner address was exposed and publicly viewable on GitHub. This meant that any user with access to the private key could have manipulated the contract at any time, making the protocol vulnerable to an attack. The Gala Games token bridge was exploited after a single wallet address appeared to have minted over $2 billion in its GALA tokens out of thin air and dumped the tokens on decentralised exchange PancakeSwap. Read More: Report: GALA token exploit resulted from public leak of private key on GitHub
Monkey Drainer Scammer Strikes Again, Steals $800K of NFTs
A wallet tagged as Monkey Drainer has stolen its second batch of NFTs in as many weeks. This week, the entity stole seven Crypto Punks and 20 Otherside NFTs. On 25th October, the phishing scammer stole $1 million worth of crypto and NFTs. The hacker flushed the proceeds through anonymous coin mixer Tornado cash. Read More: Monkey Drainer Scammer Strikes Again, Steals $800K of NFTs
SEC Charges Trade Coin Club Foundings With Operating a $295 Million Ponzi Scheme
The US SEC has charged the founding members of a MLM (multi-level marketing) organisation with operating a $295 million crypto Ponzi scheme. The scheme duped investors with promises of 0.35% returns a day on their crypto through a bot. The scam raised 80,000 Bitcoin from 100,000 investors which at the time was worth $295 million and now would over $1.6 billion. The team apparently just enriched themselves with the money. A reminder of the risks of mixing crypto with MLM and promises of trading bots and high returns- always steer clear. (CoinDesk) Read More: SEC Charges Trade Coin Club Founding Members With Operating a $295 Million Ponzi Scheme
Renewed Crypto Lobbying in the US
Former ranking politician Paul Ryan, a former Republican speaker of the House, will join venture capital firm Paradigm’s new council to influence lawmakers as they debate crypto legislation. According to Paradigm, next year will be pivotal in US crypto law, when Congress is likely to draft and approve a slate of legislation. Read More: Ex-House Speaker, Former Justice Official Join US Policy Crew Assembled by Paradigm
Luxury watchmaker Hublot to launch metaverse football stadium
Swiss luxury watchmaker Hublot is the latest to make a new mark in the metaverse by launching a virtual football stadium. It launched its ‘Hublot Loves Football Metaverse Stadium’ ahead of the FIFA World Cup 2022 taking place in Qatar later this month. Hublot partnered with stadium architects MEIS and metaverse builders Spatial to build the virtual stadium. Hublot isn’t the first World Cup partner to launch in the metaverse, Visa, Crypto .com and Algorand have also launched Web3 campaigns. Read More: Luxury watchmaker Hublot to launch metaverse football stadium
Google Introduces Cloud-Based Blockchain Node Service for Ethereum
Google will be launching a cloud-based node engine for Ethereum projects. It said its Google Cloud Blockchain Node Engine will be a “fully managed node-hosting service that can minimize the need for node operations,” meaning that Google will be responsible for monitoring node activity and restarting them during outages. Initially, Google will only support Ethereum nodes. This is the latest sign of the technology giants paying attention to blockchain, crypto and Web3 projects. Read More: Google Introduces Cloud-Based Blockchain Node Service for Ethereum
World Bank backs blockchain project to harmonise carbon registry data
A new Singapore-based entity founded by the International Emissions Trading Association, the World Bank, the Singapore government, other governments and public and private sector organisations will use blockchain to log carbon credits. The Climate Action Data Trust (CAD Trust) uses blockchain to create a decentralised log of carbon credits to store data from multiple major carbon registries. It is creating an open source metadata system and decentralising the data using distributed ledger technology. Read More: World Bank backs blockchain project to harmonize carbon registry data
Elon Musk’s Twitter takeover could see crypto wallet, and Dogecoin soars 44%
Shiba Inu inspired cryptocurrency dogecoin went up 44% since Monday as Elon Musk bought Twitter. Elon Musk has been vocal in supporting dogecoin. Its recent gains can also be linked to speculation that Musk may develop a crypto wallet that would accept deposits and support withdrawals on Twitter. Read More: Dogecoin has soared 44% in the past week as Elon Musk’s Twitter takeover lifts hopes for expansion in payments
Crypto Markets See Largest Short Liquidations in 15 Months; Ether Leads Token Surge
Crypto markets saw over $700 million in liquidations on short trades, or bets against price rises, reaching levels not seen since July 2021. Crypto exchange FTX saw $519 million in liquidations alone, followed by OKX at $71 million and Binance at $46 million. Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin and doesn’t have sufficient funds to keep the trade open. Read More: Crypto Markets See Largest Short Liquidations in 15 Months; Ether Leads Token Surge
Terra co-founder Do Kwon faces $57-million lawsuit in Singapore
Investors in failed stablecoin Terra are seeking compensation for $57 million worth of “loss and damage” based on the value of UST tokens they purchased and held or sold amid the market downturn in May. They also requested an order to pay for “aggravated damages.” The lawsuit, filed in Singapore’s high court in September claims founder Do Kwon, the Luna Foundation Guard, Terra founding member Nicholas Platias, and Terra made fraudulent claims including that Terra’s stablecoin TerraUSD (UST) — now TerraUSD Classic (USTC) — was not “stable by design” and unable to maintain its U.S. dollar peg. Read More: Terra co-founder Do Kwon faces $57-million lawsuit in Singapore
What the MiCA Bill Could Mean for the Future of Decentralization
The European Parliament is due to vote on the Markets in Crypto-Assets (MiCA) bill before the end of the year, when the bill will become law within 12 to 18 months. The proposed legislation however could risk a very difficult future for many decentralized finance (DeFi) entities to operate effectively in Europe. Read More: What the MiCA Bill Could Mean for the Future of Decentralization
UK police council reports having officers in every unit trained for crypto enforcement
The detective chief superintendent for the United Kingdom’s National Police Chiefs’ Council, Andy Gould, has said all police forces in the country have officers trained for investigations involving the enforcement and seizure of cryptocurrencies. However, he added that the country’s police force has the capability to address economic crimes involving crypto, but not the capacity. “We are in a position where we have actually seized hundreds of millions of pounds worth of cryptocurrency assets within the last year or so. The challenge we have is that it is getting harder and harder to do. The assets themselves are becoming more diverse and more technically complex, so our officers are in a bit of an arms race trying to keep up.” Read More: UK police council reports there are officers in every unit trained for crypto enforcement
United Kingdom banks are a threat to crypto, and that’s bad news for everyone
In 2018, the United Kingdom’s Financial Conduct Authority wrote to the country’s biggest high street banks to emphasise the importance of due diligence when dealing with crypto businesses, due in large part to the many scams in crypto. However, by barring crypto businesses from accessing “mainstream” banking, crypto companies have been forced to use payment service providers, which are rated higher risk by banks because they’re also used by the gambling industry which leads to banks tending to blanket block transactions through PSPs. There’s also a sense that banks are reluctant to derisk crypto and make crypto-to-bank payments easier because they see it as competition and worry it cannibalizes their own market. Read More: United Kingdom banks are a threat to crypto, and that’s bad news for everyone
UK Stablecoin Rules Approved by Lawmaker Committee
Rishi Sunak’s government has said it wants to ‘tentatively seize’ crypto opportunities as it prepares to widen the regulatory net. Lawmakers have agreed on new rules for stablecoins and the government promised to consult on further crypto regulations and a digital pound in the coming weeks. “Certain crypto assets and distributed ledger technology could drive transformational changes in financial markets,” recently appointed Economic Secretary to the Treasury Andrew Griffith said. Read More: UK Stablecoin Rules Approved by Lawmaker Committee
Indian Minister Reports Rising Use of Crypto in Drug Smuggling
Indian authorities are reportedly investigating allegations of illegal drug transaction facilitation by three unidentified Indian crypto exchanges. Indian Home Minister Amit Shah has reportedly said that those responsible for drug smuggling and terrorism in India are increasingly making use of the darknet and cryptocurrencies. “Digital currency was used to buy and sell drugs and some of these companies facilitated it,” a senior government official quoted in a report. The alleged transactions took place over three years and were worth about $3.4 billion. Read More: Indian Minister Reports Rising Use of Crypto in Drug Smuggling
Crypto Lender Hodlnaut Lost Close To $190M In TerraUSD Collapse
Reports have shown that Singapore-based crypto lender Hodlnaut has lost close to $190 million due to its exposure to the collapsed Terra algorithmic stablecoin UST. It had initially downplayed its exposure to Terra’s UST despite the fact that it had suffered a huge loss from its collapse. According to new reports, Hodlnaut has been misstating the facts with data indicating that the crypto lender had deleted more than 1000 key documents, which could have been revealed before the exposure. Some employees also withdrew over $500,000 worth of assets before the the lender suspended withdrawals, deposits, and token swaps in August, stating the “difficult market conditions”, indicating that at least some employees knew of the problems. Read More: Crypto Lender Hodlnaut Lost Close To $190M In TerraUSD Collapse
Core Scientific reveals financial distress in SEC filing, says its end may be near
Bitcoin miner Core Scientific has filed forms with the United States SEC (Securities and Exchange Commission) indicating that will not make payments due in late October and early November. The mining firm blamed low Bitcoin prices, increased electricity costs, an increase in the global Bitcoin hash rate and litigation with the bankrupt crypto lender Celsius for the situation. The filing also warned that Core Scientific has engaged legal and financial advisers and is negotiating with creditors and considering restructuring its capital, and may initiate bankruptcy proceedings. Read More: Core Scientific reveals financial distress in SEC filing, says its end may be near
Race to the Bottom as NFT Marketplaces Refuse to Pay Artist Royalties
NFT marketplaces seem to be in a race to the bottom on artist royalties. LooksRare, the second-largest NFT marketplace on the Ethereum blockchain announced that it would no longer collect and distribute artist royalties but instead creators will get a 0.5% cut of sales. Which is a small fraction of the royalty fee that artists generally choose to levy. LooksRare is the latest in a growing line of NFT marketplaces that are eroding giving out these royalties, a tool that has been used as a way to attract artists to the NFT market. “The growth of zero-royalty marketplaces has eroded the general willingness to pay royalties throughout the NFT space,” LooksRare said in a blog post announcing the change. “Good news for traders, but with a big downside: the move away from royalties has removed an important source of passive income for most creators.” Read More: Race to the Bottom as NFT Marketplaces Refuse to Pay Artist Royalties
Interpol says the metaverse could open up a whole new world of crime
Interpol has issued a new warning that the metaverse could be used to facilitate new forms of cybercrime. Interpol’s executive director for technology and innovation, Madan Oberoi said phishing could take on a whole new meaning when virtual reality and augmented reality are thrown into the mix. Also, the question of child safety cannot be understated. Read More: Interpol says the metaverse could open up a whole new world of crime
Norwegian government agency opens metaverse office in collaboration with EY
A Norwegian government agency, The Brønnøysund Register Center, has partnered with EY to open a new virtual office location in the Metaverse. The virtual office plans to offer users information on crypto reporting and information on how to start an enterprise. Magnus Jones, Nordic innovation lead at EY, said “More and more authorities see a clear need of being present at the platforms where mainly younger generations are both for tax and legal purposes with regards to information.” Read More: Norwegian gov’t agency opens metaverse office in collaboration with EY
First Metaverse Shopping Mall Set To Rise In Mexico
Mexico has turned into a crypto-centric regime with the national adoption of digital assets, due in part to a friendly regime and rising inflation issues in the state. The country has introduced its first shopping mall in the Metaverse space. Island Shopping Mall currently features around 80 brands. Read More: First Metaverse Shopping Mall To Rise In Mexico