Billionaire Mark Cuban Issued A Serious Bitcoin And Crypto Warning Even As Bitcoin Nears A $50,000 Price

Bitcoin and cryptocurrencies have soared in recent days even after the U.S. Senate rejected a bipartisan compromise on a crypto tax provision in its $1 trillion infrastructure bill.

The bitcoin price has added almost 20% over the last week, climbing to over not $45,000—its highest since mid-May while smaller cryptocurrencies, including ethereum, dogecoin and uniswap, have climbed even higher (subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover crypto blockbusters poised for 1,000% gains).

Ahead of the Senate showdown yesterday, billionaire entrepreneur and investor Mark Cuban warned shutting off the bitcoin and crypto “growth engine” would be like “stopping e-commerce in 1995.”

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“Shutting off this growth engine would be the equivalent of stopping e-commerce in 1995 because people were afraid of credit card fraud,” Cuban told the Washington Post over the weekend. “Or regulating the creation of websites because some people initially thought they were complicated and didn’t understand what they would ever amount to.”


The provision proposes new rules on reporting crypto transactions to the IRS as part of the bill’s fundraising provisions—that could raise as much as $28 billion by encouraging the payment of more taxes. Broadly defined brokers would be required to provide information on bitcoin and crypto transfers, causing chaos for the industry.

Yesterday, after weeks of wrangling, a compromise crypto amendment in the bill was blocked. Introduced by senators Pat Toomey (R-Pa) and Cynthia Lummis (R-Wyo), the amendment sought to clarify language in the bill that would broaden the definition of a “broker” and increase tax requirements on software developers and those that secure blockchains in return for freshly minted tokens, known as miners.

The bill’s crypto provision sent shockwaves through the U.S. cryptocurrency community in recent weeks, with crypto lobbyists scrambling to alter it and crypto investors, industry experts and technologists roundly deriding it.

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“The bill has the potential to swamp cryptocurrency transactions in the country with an invasive dragnet,” Paolo Ardoino, the chief executive at British Virgin Islands-based crypto exchange Bitfinex, said in emailed comments.

Last week, tech investor and former Coinbase chief technology officer, Balaji Srinivasan, branded the latest amendment “a backdoor bitcoin ban,” while crypto lobbyist Jerry Brito, the executive director of the Coin Center think tank, called it “disastrous” and “ridiculous.”

“Forcing reporting rules on Americans who develop software and hardware, who mine and secure the network, or who run nodes to build resilience and efficiencies, is an impossible ask that will only drive development and operation of this critical technology outside the U.S.,” posted Twitter and Square SQ chief executive Jack Dorsey.


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CNBC’s Jim Cramer: Regulating Crypto Is a Step in The Right Direction

The American television host – Jim Cramer – believes that cryptocurrencies need more regulation or otherwise the market could collapse. Additionally, he praised Ethereum as the best-performing digital asset.

Regulation Could Prevent The Market from Falling apart

In an interview for TheStreet, Jim Cramer revealed that he is a huge proponent of cryptocurrency regulations. In his opinion, setting the right rules in the industry would be beneficial for the entire market as they would preserve its stability:

“If you have more regulation, all the exchanges would be like banks…of course no one wants to be like banks…but we need some sort of regulation because I have the feeling crypto will collapse if we are not careful.”

Mad Money’s host pointed out that proper legislation is essential for Tether as well. He compared the stablecoin to “some kind of exchange” and urged its management to explain the core of the operations and what they own. He reminded that Tether is no longer allowed to trade with New York citizens. At the same time, Cramer criticized the officials’ decision to impose a fine of $18.5 million to the executives, saying it is “too little.”

Speaking about bitcoin’s recent rise, the TV host opined that the digital asset managed to overcome its previous difficult months and now is set to a bullish future. However, Cramer argued that Ethereum is superior to BTC. He even admitted that he is a hodler:

“I have a very big position in Ethereum. I am thrilled today. I switched out of Bitcoin to Ethereum and I’m going to let it run.”

Jim Cramer
Jim Cramer. Source: CNBC

Cramer Turned to ETH Amid Bitcoin Crackdown

As CryptoPotato reported at the end of June, Jim Cramer swapped his preference from BTC to ETH out of fears that the Chinese authorities could reinforce the pressure on the primary cryptocurrency:


“The Chinese government has spoken and says they don’t like Bitcoin, So I’m sticking with Ethereum. They don’t seem to be attacking Ethereum right now… I just feel that Ethereum could escape the clutches of China…”

In addition, he pointed out that Ethereum is a better asset as people can employ it as a payment method for more things like non-fungible tokens.

This comes as a change of heart since in the middle of April – when BTC’s dollar value was near its ATH – Cramer went strongly in favor of the virtual asset. Furthermore, when asked if he would agree to receive his salary in bitcoin, he answered:

“Yes, absolutely I would! I think it’s a strong hold of value.”


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Why A Shocking Altcoin Season Could Be On The Horizon

Altcoin season is a phrase that is quite popular throughout the crypto market. The phrase refers to the run-up in the prices of altcoins after the price of bitcoin slows down. The altcoins usually see an uptick in their individual and collective market dominance, taking even more market share from the top cryptocurrency, bitcoin.

As the coins become more valuable, their prices soar following the increased market share. An altcoin season usually sees most of the altcoins in the market rallying at the same time. With Ethereum’s price mostly leading the charge once the prices start surging.

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At this point, altcoin prices are no longer following the price of bitcoin as they usually do in the market. Altcoins break away from bitcoin for a period of time and their prices move independently of the cop coin. Now, indications are pointing that an altcoin season is on the horizon. Movement on the charts point to the possibility of this following the current bull rally.

Bitcoin Market Dominance Continues To Decline

Bitcoin has held a majority share of the market dominance for the longest time. Over the years, this market dominance has seen a declining trend as coins like Ethereum gained more popularity amongst investors in the market. From an over 95% dominance, BTC dominance has gone down over the years to now sit at less than 50%.

Bitcoin market dominance chart from

Bitcoin market dominance chart from

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Bitcoin market dominance continues to decline | Source: Market Cap BTC Dominance from

Ethereum continues to steal more market share from the pioneer cryptocurrency following each bull market.  Steadily trailing behind bitcoin. Altcoins now collectively have over 50% of market dominance, which puts them in a significant position to start growing their prices on their own terms. Instead of being eternally connected to the price movements of BTC.

Ethereum alone now has over 20% of market dominance, a little less than half of what bitcoin has. Bitcoin market dominance has shown declining trends presently, and this puts alts in a position to see an uptick in their market prices, regardless of what direction the price of bitcoin takes.

Related Reading | Bitcoin Accumulation Patterns Shows Rally Might Only Be In Its Early Stages

Indicators like a broken rising wedge show that bitcoin’s current market dominance is headed for another retest. After this retest will most likely come a decline in the dominance percentage. Giving way for altcoins to take more market share from bitcoin. And as bitcoin continues to move in a perfect downtrend, alts are set to explode following this.

Altcoins On A Run-Up

Altcoins have so far continued to do well in the market. The recent rally hasn’t been limited to bitcoin alone. Alts all across the market continue to record massive gains on a daily. With some coins recording as much as a 15% price uptick in 24-hour periods as the rally rages on.

Related Reading | Ethereum Set To Explode According To Market Dominance, Crypto Analyst

Increase alt dominance in the market will see alts prices continue to go up even way past when the price of BTC has lost momentum. Investors are always looking for the next big thing and it usually seems to most that they have missed the boat on bitcoin. Hence, they tend to focus on alts in order to find the next coin that will give the same returns bitcoin has given.

This interest in the search for the next bitcoin has been one of the driving forces behind the high values of a lot of altcoins. Also, interesting technologies being built to back up altcoins emerging into the market sees investors putting money into these projects because of the promise of the technologies.

Featured image from Vecteezy, chart from


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Cardano Price Rallies to 2-Month High as Alonzo Anticipation Builds

A $600 million protocol hack, the advance of a bearish crypto bill in Congress, and a $100 million regulatory settlement by BitMEX have done nothing to dampen enthusiasm for cryptocurrency buyers.

Case in point: Cardano.

The Ethereum competitor, which is teasing the introduction of smart contracts, has watched its native coin, ADA, surge in price over 12% in 24 hours to plateau at above $1.65. It hasn’t seen such heights since the first week of June.

In an “announcement of the announcement,” Cardano founder Charles Hoskinson said today he expects to reveal the date on which smart contracts will be released on the Cardano mainnet. “We’ll be able to announce when the Alonzo hard fork is going to happen, and at that point you’ll be able to run smart contracts on Cardano,” he told viewers on Periscope.

Hoskinson said the hard fork would occur before the Cardano Summit, currently scheduled for next month.

Cardano has gradually added functions since it went live in 2017. Like Ethereum, for instance, it allows for non-fungible tokens (NFTs), which are blockchain-based tokens that signify a deed of ownership to a digital asset.

The Alonzo hard fork will be one of the most consequential upgrades for the proof-of-stake network because it will facilitate the introduction of decentralized finance (DeFi)—protocols that allow people to lend, borrow, and trade without any intermediaries. Instead of loan officers and underwriters, DeFi relies on smart contracts—programs that execute if certain conditions are met.

While ADA has had the largest movement of any asset in the top 10 in the last 24 hours, most coins have had a decent, if unspectacular day. Ethereum was slightly up, Binance Coin mustered a 4% increase, and Uniswap grabbed 3% gains. Bitcoin is down 1%.


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Bitcoin Remains Undervalued Despite Rally to $45,000, According to On-Chain Analyst Will Clemente

Popular analyst Will Clemente says Bitcoin remains undervalued based on the strength of the leading cryptocurrency’s on-chain fundamentals.

In his latest weekly overview, Clemente highlights two surging on-chain metrics, which he says are significantly outpacing the rise of BTC’s value.



“In blue, illiquid supply shock ratio, which compares the movement of coins from liquid (weak hands) entities to illiquid (strong hands) entities. In purple, exchange supply shock ratio, which compares the amount of supply held on exchanges relative to overall circulating supply. Both of these are trending strongly upwards, with price lagging behind.”

Source: Will Clemente/Glassnode

According to Clemente, the sustained rise of the illiquid supply shock ratio and exchange supply shock ratio suggest that market participants continue to accumulate BTC.

The on-chain analyst adds that he’s looking at retail traders, as the cohort shows signs of increased buying and holding behaviors.

“The little guys have been buying BTC like crazy. Their holdings have not only increased as a percentage of overall supply, but also as a percentage of supply held by entities with little spending history (strong hands).

Green: percentage of supply held by retail.

Blue: percentage of illiquid supply held by retail.”

Source: Will Clemente/Twitter



The on-chain analyst is also keeping an eye on the growth and behavior of new entities coming into the Bitcoin network. According to Clemente, investors who have entered the Bitcoin market are not looking to make a quick exit.

“New entities coming on-chain started trending down in March, while entities NET growth trended sideways/upwards. This means while new entities had been slowing down, there were even fewer dormant entities leaving. In other words, entities coming on the blockchain are staying.”

Source: Will Clemente/Twitter

As market participants flash signs of HODLing (hold on for dear life) efforts, Clemente says that BTC needs to rise over 20% from its current price of around $45,000 to address the supply and demand disparities in the market.

“Bitcoin still needs to go to $55,000 – $57,000 just to make up for the current imbalance of liquid supply.”

Although Clemente is seeing mostly bullish signals for BTC, he notes that there are still a few red flags on-chain.

“The main bear case for Bitcoin from an on-chain perspective is the big drop-off in transactional activity. We’re still a rut looking at things like the mempool (valid transactions waiting to be confirmed by the BTC network), number of transactions, active addresses, etc. Would like to see these things pick back up, which I personally see as lagging indicators to price.” 

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Coinbase Brought In $2.23 Billion Of Revenue, 8.8 Million Monthly Transacting Users In Q2

Coinbase brought in over $2 billion in revenue and saw monthly transacting users grow 44%.

In their quarter 2, 2021 earnings call, Coinbase announced that they’ve exceeded expectations by bringing in over $2.23 billion in revenue, which was was expected to be $1.78 billion, reported CNBC.

Their earnings resulted in $3.45 per share, adjusted, after expectations that it would be $2.33. Since last year, the company’s net profit is up over 4,900% with them bringing home over $1.6 billion in net profit.

One really interesting statistic that stood out was that the monthly transacting users grew 44% from last quarter up to 8.8 million. As this bull run continues and bitcoin adoption becomes more mainstream, more and more people are going to go down the Bitcoin rabbit hole.

This is how adoption grows. More people are interested in Bitcoin than ever before and one can only think this number will continue to rise throughout the year. This is very bullish.

Tied in with that, more people are trading. Trading volume grew to $462 billion, a total increase of 38% from last quarter. They also shared that 24% of the company’s total trade volume was in bitcoin. This is down 39% from Q1, 2021.


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Despite Bitcoin Drop, Coinbase Net Profit Doubles As Trading Volume Swells

The United States’ largest cryptocurrency exchange, Coinbase (COIN), just reported second-quarter earnings, highlighted by $2.0 billion in net revenue for the quarter, up 27% from Q1 and the addition of 12 million verified users to reach a customer base of 68 million. Its net income rose from $771 million in Q1 to $1.6 billion in Q2, a gain of 108%.  

Tuesday’s release is the company’s second earnings report since its public debut in April. Just as last quarter, transaction processing provided the overwhelming majority of its revenue. Of the $2.0 billion in revenue, $1.9 billion came from this segment with the rest derived from subscription and services revenue. In Q1, net revenue came in at $1.6 billion, consisting of $1.5 billion in transaction revenue and $56.4 million in subscription and services revenue.

These record numbers stand in contrast to the crypto market’s performance over the past three months, which have seen leading assets such as bitcoin and ether depreciate, largely on the back on further regulatory crackdowns in China, Tesla TSLA halting its acceptance of bitcoin as a payment method, and concerns that record levels of inflation would force central banks to rein in their loose monetary policies.

Following a second strong quarter, analysts will now look to see if COIN can break away from its close correlation with bitcoin. When the exchange went public in April 2021 in the largest direct listing ever, bitcoin was just about to reach  its all-time-high of $64,654. In turn, COIN reached as high as $429. Since then, the crypto market reversed course, punctuated by bitcoin falling below $30,000 and COIN dropping to a low of $208. However, the market has since recovered. Bitcoin is now trading at $45,582 and COIN has reached $269, down nearly 40% from its all-time-high four months ago. 


Looking forward, many analysts will evaluate whether Coinbase’s broadening set of trading pairs will make it the diversified crypto investment opportunity many expected. 

One positive sign is the fact that trading volume in ether passed that in bitcoin for the first time. In Q1 2021, Coinbase supported $335 billion worth of trading volume with bitcoin and ethereum comprising 39% and 21% of this activity, respectively. In quarter two, total trading volume jumped to $462 billion but most notably ether’s volume (26%) was higher than bitcoin’s (24%).

Still, despite this impressive growth and the crypto market strengthening, challenges remain. Earlier this month, Securities and Exchange Commission Chairman Gary Gensler argued that the regulator needed more power to regulate crypto products, signaling he is ready to take a more active role in crafting crypto policy. Additionally, the recent inclusion of onerous tax reporting requirements on everyone from bitcoin miners to crypto software developers threatens to create an exodus of crypto companies from the U.S. in the coming years, which could dampen investor enthusiasm.


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Inverse Relationship Between Gold And Bitcoin Continues To Widen

Bitcoin was trading north of the $40,000 levels, as it managed to break above key resistance. The first cryptocurrency by market cap sits at $45,044, at the time of writing, with small losses after a strong rally pushed it high from the lows at $30,000.


Bitcoin and the crypto market have been negatively reacting to the events coming from Washington as the Senates approved the infrastructure bill without the amendments to exclude certain entities from tax requirements. The fight will continue in other government institutions.

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Despite the news, BTC has held support at its current levels. In the meantime, other commodities as taken a turn to the downside. After a major rally during March and May 2021, Gold (XAU) fell from $1,800 to its current price at $1,731 strengthen the theory that there is an inverse correlation between the precious metal and Bitcoin.


Trader Adam Mancini believes Gold crashed after it failed to clear its 200 daily moving average (DMA) and losing support north of $1,830. Mancini expects the precious metal to hold support at $1,745 or it risked to dropped further to $1,690. The critical area to watch for the bulls stands at $1,795. The trader added:

If $1690 fails from here its a long way down to $1575 next major support. As posted bulls will need to recapture some levels to confirm a bottom. $1750 a good start, but getting back above $1770 would be massively bullish now and trigger a new leg higher.

Mancini noted that Gold has been showing signs of weakness as Bitcoin rallied from the bottom of its previous range. However, the trader doesn’t rule out a break in the inverse correlation as both assets are showing signs of possible future appreciation. He added:

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Bitcoin $BTCUSD is waking up. Technicals suggest rally is young. Key pattern is a rising channel from Sept 2020 which held at 29k. Likely path is 54-55k next, good pullback, then 75k channel resistance. 29k *must* hold


Bitcoin Rises As Gold Experiences One Of Its Worst Periods To Date

Arcane Research recently published a report supporting the inverse correlation between BTC and Gold. The precious metal has been “compounding losses” already accumulated in previous days with a major sell-off in the derivatives sector.

Around 24,000 Gold futures contracts were sold in a short span of time during the Asian trading session, Arcane Research added. This constituted Gold’s “fastest and second-biggest nominal drop ever”. The macro-economic outlook seems to be contributing to the price action on both assets.

Some speculate that the soon-to-be-published report by the U.S. on inflation, the measure by the Consumer Price Index (CPI), could “encourage a reduction in stimulus by the FED”. The lower the inflation expectations, the fewer investors feel the need to use Bitcoin and Gold as a hedge.


Senior Commodity Analyst for Bloomberg Intelligence Mike McGlone claimed that Bitcoin and gold could face a threat precisely from a macroeconomic event. In the meantime, McGlone believes BTC and XAU could “advance together” as digital and analog stores of value. The expert added:

Resurfacing deflationary forces indicated by declining U.S. Treasury bond yields and peaking commodities add underpinnings to gold and Bitcoin.


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Bitcoin IRAs Enable Tax-Shielded Investment And Propel The Circular Economy

In May 2021, I had just finished a pretty intense 12 months of helping take OC Bitcoin Network from a monthly meetup to a weekly meetup. In addition to the meetup work, over that same 12 months I independently consulted with over two dozen small businesses on how they could begin to implement Bitcoin payments and personally installed BTCPay Server at four brick-and-mortar restaurants as well as multiple e-commerce businesses.

All of 2020 felt like a real grassroots war to me. It made me open my eyes to the fact that the circular economy is at hand. It made me realize that Bitcoin isn’t a thing that’s happening in the future. Bitcoin is a thing that’s happening right now.

When the opportunity to come work at Choice App, a bitcoin-based individual retirement account (IRA) service, presented itself, I was obviously excited because I like talking about all kinds of Bitcoin products and my wife was thrilled too for us to get back to dual-income stacking after she had led the charge for a full year. But, I have to be honest, there was a small voice in my head telling me that I was selling out and going corporate, which caused me to think about a lot of things. It caused me to think a lot about what our path is to making bitcoin circulate as the currency in our lifetime and it caused me to open up the tactics that I had been focusing on.

Bitcoin fixes retirement accounts. This is obviously positive, but on its face can also be met with resistance and questions such as “why do I need an IRA if I have bitcoin?”

I asked myself that same question. The concepts of IRAs and retirement accounts in general feels like a vestige of the old world. To young people or old people who watched 2008 happen and who read the Bitcoin genesis block, the words do not leave a good taste.

The whole concept of a retirement account doesn’t make any sense when fiat is the base layer. This realization made me stop contributing to one a long time ago in favor of stacking bitcoin instead.

And I know from talking to lots of other Bitcoiners that some had gone this route as well, while others had taken the time to set up self-directed IRA accounts and were beginning to blur the two worlds. I didn’t hate that idea but I was just having a hard time wrapping my head around where that type of account fits into my bitcoin stacking plan.

Bitcoin Retirement Accounts, Capital Gains Taxes And Tying Both Worlds Together

To this day, talking about onboarding businesses to BTCPay Server and about using bitcoin as money is still a hard thing to work on. It’s work that you do for the love of the game and not for the paycheck. It’s work that you do for your kids and grandkids, who will hopefully live in a world where the Bitcoin circular economy has won and has become the standard.

Even with the advancement of Strike and the clever tool it has built, the “what about cap gains?” replies still come fast and furious on Twitter anytime the topic of circular economy is discussed.

The persistent capital gains tax problem and the IRS’s treatment of bitcoin as property instead of currency is a major hurdle between us and the Bitcoin standard.

The more I thought about the capital gains tax’s chilling factor on the circular economy, it made me start to see an overlap between what I had been doing with bitcoin payments consulting and my new role talking about Choice App.

Starting to see the overlap, I started to reinterview the Bitcoiners I knew who had been stacking bitcoin in their Roth IRAs and asking them more about it.

Certain self-directed IRAs come with what is called “checkbook control.” This means that you have a bank account and you have a checkbook and that outside of two to three prohibited transactions, you can literally invest the money in whatever you want and hold that investment and trade in and out of that investment, tax free.

Take this idea and now apply it to an IRA in which you set up an LLC or trust and then with that LLC or trust you purchase bitcoin and hold your own keys and have control over bitcoin in your own wallet. You now have bitcoin wallet control and, outside of those same two to three prohibited transactions, you’re now tax-shielded to use that bitcoin as money to make investments.

This is how the worlds collide. This is how you can begin to use bitcoin as your base currency now, in the present. and continue shifting yourself toward a personal Bitcoin standard.

Why Mining Bitcoin In An IRA Is Doubly Interesting

Among many, one of the things that’s most interesting to me about Bitcoin mining is that the revenue is denominated in sats. There are not many ways to get paid in sats available yet, but mining is one of them, and we know that getting paid in a currency is the number one way to start thinking in that currency.

When all of the mining infrastructure and hosting is wrapped in a tax-advantaged account, you can use bitcoin as the base currency on the income side as well as the expenses side with no penalties. The simple mindset shift on this will be enough to make this a good move for a lot of people. Seeing this type of budgeting in action will make your brain progress toward a personal Bitcoin standard.

Roth IRAs As Your Third Bitcoin Stack

Having bitcoin in a Roth IRA creates a guarantee that those sats can circulate as unencumbered currency in our lifetime. We have no idea what the future holds, but the landscape of Bitcoin apps and services is getting better every single day.

Imagine where BTCPay Server will be when a lot of us turn 59-and-a-half years old. Imagine, no matter what the political landscape throws at us, having a third stack to be able to use in the circular economy. (I have bitcoin from regular exchanges like Coinbase and Cash App as the way I started stacking bitcoin; and then I also stack bitcoin by earning it, mining it at home and from Bisq and ATMs; my Roth IRA stack is my third.)

My Roth IRA stack doesn’t replace anything that I’ve been doing, but it perfectly compliments it and it perfectly compliments the other ways that the Bitcoin standard is being pushed forward by showing that Bitcoin is taking ground in retirement accounts while also achieving circular economy goals.

There is a long, winding road filled with what I would consider “semi-advanced Bitcoin game theory” to get there, but I can honestly say I’ve never been more excited for the state of the Bitcoin circular economy. I can see clearly different stacks of bitcoin for different things and I can feel my budget and my family’s budget beginning to get denominated in sats.

This is a guest post by Brian Harrington. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


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How Did the PolyNetwork Hacker Steal $600 Million? Security Experts Point Fingers

In brief

  • Over $600 million in digital assets were pilfered from PolyNetwork.
  • Security experts are still trying to piece together what happened.

Over seven hours after it was first reported, details about an exploit that nabbed $600 million in digital assets from PolyNetwork have been slow to emerge. In the absence of a comprehensive audit, cybersecurity groups have uttered a common refrain to the programmers behind the cross-chain compatibility network: This is on you.

Funds linked to the attack have been traced to three separate addresses—one each on Ethereum, Binance Smart Chain, and Polygon.

As to the chain of events that got the misbegotten funds there, security experts have differing opinions—with some going as far as accusing their colleagues of misleading the public.

According to an initial analysis by China-based security auditor BlockSec, which it cautioned it had not yet verified, the theft could be the result of “either the leakage of the private key that is used to sign the cross-chain message” or “a bug in the signing process of the PolyNetwork that has been abused to sign a crafted message.”

Other researchers also insinuated poor security practices may have led to the theft of private keys used by the PolyNetwork team to authorize transactions.

Ethereum developer and security researcher Mudit Gupta wrote that PolyNetwork uses a multisig wallet for transactions. In its configuration, four people have access to the key for signing transactions, and three must sign: “The attacker got hold of at least 3 keepers and then used them to change the keepers to a single keeper.” In effect, the hacker locked them out. (Gupta initially thought Poly used a 1/1 multisig.)

Blockchain security team SlowMist says that’s not exactly what happened. Instead, it says, the attacker took advantage of a flaw in a smart contract function to change its keeper, rerouting the flow of funds to the attacker’s own address. “It is not the case that this event occurred due to the leakage of the keeper’s private key,” it reported.

PolyNetwork retweeted the blog post, while Gupta strongly disagreed with SlowMist, suggesting either gross impotence or corruption.

Regardless of whether the attacker obtained private keys or exploited a weak smart contract, one way to do either of those things is by being in charge. But was it an inside job? After all, according to blockchain analytics firm CipherTrace, so-called rug pulls, a type of exit scam, were the most popular form of crypto fraud last year. 

It’s too soon to tell. SlowMist says it “has grasped the attacker’s mailbox, IP, and device fingerprints through on-chain and off-chain tracking, and is tracking possible identity clues related to the Poly Network attacker.” But its investigation hasn’t yet led to an executive at Poly holding a smoking gun. (Or, if it has, SlowMist is not yet saying.)

In the meantime, it’s unclear whether the attacker will be able to use the funds. PolyNetwork has also asked “miners of affected blockchain and crypto exchanges to blacklist tokens” from the exploiter’s addresses. In response, Tether said it froze $33 million in USDT connected to the attack, while executives at Binance, OKEx, and Huobi pledged to help limit the damage.

The hacker, however, has taken to issuing taunts from the Ethereum blockchain, by appending messages to blocks. “WHAT IF I MAKE A NEW TOKEN AND LET THE DAO DECIDE WHERE THE TOKENS GO,” they wrote in one message.

Perhaps, but maybe someone else should write the smart contracts for that.


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Bitcoin (BTC) $ 27,407.34 0.83%
Ethereum (ETH) $ 1,642.26 1.56%
Litecoin (LTC) $ 64.24 3.13%
Bitcoin Cash (BCH) $ 228.45 7.78%