A hacker responsible for a $196 million attack on Euler Finance has moved some of the stolen funds into the crypto mixer Tornado Cash, just hours after a $1 million bounty was launched to identify the perpetrator. The attack, carried out through a flash loan on the Ethereum noncustodial lending protocol, resulted in the theft of a range of cryptocurrencies including Dai, USD Coin, staked ETH and wrapped Bitcoin. Blockchain analytics firm PeckShield reported on Twitter that the hacker had transferred 1,000 ETH, equivalent to around $1.65 million, via the sanctioned mixer. Euler Labs had previously sent a message to the attacker’s address warning of the bounty and offering amnesty if 90% of the funds were returned within 24 hours. However, the hacker’s movement of funds suggests that they are not swayed by this offer.
Victims of the attack have been appealing for the return of their funds, with one message on the blockchain claiming that a group of 26 families from jobless rural areas had lost a total of $1 million in the attack. Another message was sent by an apparent victim who congratulated the hacker on their “big win”, but begged for help as they had invested funds they “desperately needed” for a house. “My wife is going to kill me if we can’t afford our house. Is there anyway you can help me? I have no idea what to tell my wife,” they wrote.
The hacker’s use of a crypto mixer is a common tactic for obscuring the source of funds, and is likely to make it harder for authorities to identify them. However, the blockchain trail may still provide some clues, and the bounty may encourage individuals to come forward with information. The incident highlights the risks associated with DeFi and the importance of robust security measures.
Amid the ongoing banking crisis in the United States, cryptocurrencies have emerged as a safe haven, according to Cathie Wood, CEO of asset management firm ARK Invest. Wood criticized the Federal Reserve’s inability to prevent bank runs and blamed their policy failure for the current crisis, which has led to the downfall of banks such as Silicon Valley Bank (SVB) and Signature.
In a Twitter thread on March 16, Wood pointed towards the asset-to-liability mismatch, which is typical for banks but was untenable in the current scenario. Deposits were leaving the banking system for the first time since the 1930s, and securities earnings for banks were only 1-2% against deposits paying 3-5%, which eventually became untenable as deposits started leaving the system. Some banks were forced to sell held-to-maturity securities, recognizing losses that depleted their equity accounts.
Wood argued that the ongoing crisis wasn’t forced by cryptocurrency, as the ecosystem has been under heavy scrutiny since FTX’s downfall, leading to a severe regulatory crackdown. She said that regulators are using crypto as a scapegoat for their own lapses in oversight of traditional banking.
Wood has long been a known crypto proponent, often reflected in her company’s investment in emerging markets – especially crypto. She projected crypto as a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. As the scapegoat for policy mistakes, crypto will move offshore, depriving the U.S. of one of the most important innovations in history.
The current banking crisis would not have been possible in the decentralized, transparent, auditable, and overcollateralized crypto asset ecosystem, according to Wood. Cryptocurrencies have shown themselves to be a safe haven amid the U.S. banking crisis, with Bitcoin and Ether touching new multimonth highs. As traditional banking continues to struggle, it’s clear that cryptocurrencies will play an increasingly important role in the financial landscape of the future.
The United States District Court for the Southern District of New York has approved Binance.US’s acquisition of bankrupt brokerage company Voyager Digital, rejecting the US government’s motion to halt the deal. Judge Michael Wiles ruled that any delays in the acquisition would harm Voyager’s former clients who are waiting to return their funds. The court also confirmed its prior approval of Voyager Digital’s Chapter 11 bankruptcy plan, which involves selling billions of dollars in assets to Binance.US to regain liquidity and pay back customers.
The government’s appeal for a stay of the confirmation order was denied, as Judge Wiles deemed the accusations of fraud, theft, or tax avoidance as exaggerations and mischaracterizations. The appeal had also demanded the removal of a provision preventing US authorities from pursuing anyone involved with the sale. The court’s decision allows Binance.US to close the sale and issue repayment tokens to impacted Voyager customers.
The US Securities and Exchange Commission had objected to the redistribution of funds from Voyager to Binance.US, citing violations of US securities laws. However, Judge Wiles rejected their arguments, stating that 97% of 61,300 Voyager account holders favored the restructuring plan. The bankruptcy plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds.
This ruling is a significant win for Voyager Digital and Binance.US, as it allows them to move forward with their acquisition plans and repay impacted customers. It also sets a precedent for future bankruptcy cases involving crypto-related companies, as it shows that bankruptcy courts may be willing to approve deals involving the transfer of crypto assets. The decision highlights the importance of transparency and customer satisfaction in bankruptcy proceedings, as shown by the overwhelming support for Voyager Digital’s restructuring plan. Overall, this ruling is a positive step towards building a more stable and trustworthy crypto ecosystem.
Scammers are targeting non-fungible token (NFT) users by promoting fake airdrop links to claim BLUR tokens on malicious websites. According to TrustCheck, scammers have stolen over $300,000 in Ether from unsuspecting users who linked their wallets to these fake websites.
The BLUR platform is a newcomer to the NFT marketplace and has been gaining popularity with its three-phase airdrop incentive scheme. Users have been receiving tokens based on their trading activity on the platform. The second airdrop scheme distributed 10% of the total BLUR token supply to users who traded NFTs on Ethereum. The first airdrop was retroactive, awarding tokens to anyone who traded an NFT in the six months leading up to the platform’s launch, while the third airdrop rewarded users who placed bids on the platform.
The incentive program has created an opportunity for scammers to prey on users looking to claim BLUR tokens across the NFT ecosystem. These fake websites use smart contracts that automatically prompt transactions when users connect their Ether wallets. All the Ether from the wallet is then drained to a specific address. TrustCheck has been keeping tabs on the number of funds stolen by flagging suspicious websites and transactions, warning Web3 users of potential fake websites and smart contracts.
Despite reports of NFT wash trading, data analytics suggest that BLUR’s NFT trading volumes are legitimate. Scammers continue to drain funds through Web3 functionality, as phishing attacks and fake websites are commonplace across the internet. In February 2023, a phishing wallet address linked to a URL masquerading as the ETHDenver conference website has stolen over $300,000 to date. In late 2022, scammers targeted FTX investors through phishing websites after the failed cryptocurrency exchange’s implosion.
It is crucial for NFT users to be vigilant and cautious when dealing with token airdrops and to ensure that they only connect their wallets to legitimate websites. Tools like TrustCheck can help users identify suspicious websites and transactions, but ultimately, it is up to individuals to protect their funds and stay informed of potential scams.
Coinbase has warned its users that unstaking requests for ETH on its platform may take weeks or even months to process after the upcoming Ethereum network update in mid-April. The Shapella upgrade will enable stakers to withdraw their ETH holdings after they were locked up during the Ethereum Merge event in September 2022, which transitioned the network from proof-of-work (PoW) to proof-of-stake (PoS).
Coinbase anticipates a flood of unstaking requests once the functionality is enabled, but as a channel to pass unstaked ETH to customers once released by the protocol, it has no control over the on-chain processing of requests. Unstaking requests will open to all Coinbase customers at the same time and be queued based on when they are received.
While Coinbase cannot give an exact timeframe for unstaking, it expects considerable wait times due to the time it takes for the Ethereum network to process transactions. In the meantime, Coinbase provides a liquid staking option called “cbETH,” which lets stakers trade ETH while it is still locked up, with the promise of redeemability at a later date.
The Ethereum Merge was a significant milestone for the network’s scalability, transitioning from PoW to PoS to reduce energy consumption and improve transaction processing times. While the Ethereum network remains the leading platform for decentralized applications and smart contracts, ETH stakers have been unable to access their holdings since the Merge. The upcoming Shapella upgrade will finally provide a solution, allowing users to withdraw their staked ETH and stake more without being subject to an indefinite lockup period.
Overall, Coinbase’s warning of potential delays in unstaking ETH highlights the complexities and limitations of on-chain processing. While the Ethereum network continues to evolve and improve, users must be patient and consider alternative options like Coinbase’s cbETH to mitigate the inconvenience of locked-up assets.
A majority of members of the European Parliament voted in support of establishing a mandate for interinstitutional discussions to bring about a digital wallet that is applicable throughout the whole EU. The new European Digital Identification (eID) framework plans to develop what will be known as the European Digital Identity Wallet. This wallet will be a digital one that EU people and enterprises may use (EDIW). The digital wallet gives individuals and businesses in the EU the ability to store their identity information, such as names and addresses, as well as digitized documents, such as data from bank accounts, birth certificates, diplomas, and other documents that can be used across international borders.
The eID modifications that were proposed by the ITRE committee contain the norm of zero-knowledge proofs. This provides EU individuals with complete control over their identification data. This would make it possible for individuals to identify and verify themselves online without having to rely on commercial providers, which is the practice that is now being followed and which has given rise to problems over trust, security, and privacy.
The electronic identification legislation proposal is scheduled to be presented in June 2021. Its purpose is to provide EU residents an approach to accessing internet services that is both safe and simple to use. The development of a digital wallet would make it possible to store personal data in a way that is both safe and secure, and it would also give an alternative to using commercial providers. The modifications that were approved in February by the ITRE committee will serve as the foundation for the stance that the European Parliament takes throughout the negotiating process.
The transition toward a unified digital wallet throughout the EU has the potential to improve the efficiency of online services and make it simpler for individuals and companies to use services that are offered in other member states. The implementation of zero-knowledge proofs would result in an increased degree of security and privacy for people, who would retain complete control over the information pertaining to their identities. The formation of a European Digital Identity is one step closer to becoming a reality as a result of the negotiations that are due to begin immediately on the final form of the law.
The Chief Executive Officer of the American investment firm BlackRock, Larry Fink, sent an annual letter to the board of directors in which he emphasized the possibilities of digital assets and tokenization for the asset management business. Fink made notice of the continued interest in these kinds of assets, notwithstanding the disaster that occurred with FTX, and he brought attention to the “interesting changes” that have been taking place in this sector.
Particularly, Fink mentioned the “dramatic gains” that have been made in digital payment systems, which are contributing to the progression of financial inclusion in developing countries such as India, Brazil, and Africa. This is crucial since the residents of these communities may not have access to standard financial institutions due to a lack of availability.
Tokenization, which refers to the act of putting assets or securities on a blockchain as digital tokens, may also give advantages, like enhanced liquidity and transparency. It’s possible that BlackRock, which is the biggest asset manager in the world, will be in a good position to capitalize on these trends in the years to come.
It is important to remember that BlackRock has in the past indicated that it is interested in the bitcoin and blockchain industries. In 2018, the corporation established a working group to investigate possible applications for blockchain technology. Two years later, in 2020, the company raised its interests in two Bitcoin mining companies that are publicly listed.
In general, Fink’s letter sheds insight on the increasing interest that the asset management sector is showing in digital assets and tokenization, as well as the potential that these two trends have. It will be fascinating to see how BlackRock and other big financial organizations adapt to new technological developments and integrate these trends into their business plans as technology continues to evolve.
The Reserve Bank of India and the Central Bank of UAE have signed a memorandum of understanding (MOU) on collaboration and innovation in financial services, with a focus on central bank digital currency (CBDC) interoperability. The parties will develop a proof-of-concept and pilot program for a CBDC bridge to facilitate remittances and trade, which would reduce costs and increase efficiency of transactions, as well as strengthen economic ties between the two countries.
India and UAE banking officials had discussions in February regarding a rupee-dirham payment system using correspondent banks, which has been under development for a year. The countries currently use US dollars to settle payments. The UAE remains a major source of remittances to India, accounting for 17-18% of the total of around $87 billion, as of July 2022.
India has a domestic digital rupee pilot project with 50,000 users and 5,000 participating merchants, and has been testing its CBDC’s offline functionality. The RBI has also reported that it completed around 800,000 transactions worth $134 million with its wholesale CBDCs.
The UAE launched a nine-part financial transformation program and announced its intention to launch a CBDC for domestic and cross-border use in February. Emirati banks had already participated in the mBridge pilot project, along with banks in Hong Kong, China and Thailand, to use CBDC for cross-border transfers. Additionally, the UAE expects cryptocurrency to “play a major role for UAE trade going forward,” according to the UAE minister of state for foreign trade, Thani Al-Zeyoudi, who spoke at the World Economic Forum in January.
Overall, the MOU between the RBI and Central Bank of UAE will facilitate the development of a CBDC bridge that will enable easier and more cost-effective remittances and trade between India and the UAE. Both countries have been exploring the potential of CBDCs for some time, with India having already launched a domestic digital rupee pilot project and the UAE launching a financial transformation program and mBridge pilot project.
The recent failures of banks providing services to crypto firms in the United States have raised concerns in the crypto community about a perceived “de-banking” of the industry. In response, the Blockchain Association has called on financial regulators to provide information about their actions in relation to the banks’ failures. The association has submitted Freedom of Information Act requests to the Federal Deposit Insurance Corporation, the board of governors of the Federal Reserve System, and the Office of the Comptroller of the Currency, seeking documents and communications that could potentially show if regulators’ actions “improperly contributed” to the banks’ collapse.
The Blockchain Association believes that crypto firms should be treated like any other law-abiding business in the U.S. and given access to bank accounts. The association is investigating allegations of account closures and refusals to open new accounts by banks against crypto firms, which it believes are part of a wider trend of de-banking the industry.
The recent banking crisis in the crypto industry began with the announcement by Silvergate’s parent company on March 8 that it would “wind down operations” for the crypto bank. This was followed by Silicon Valley Bank’s own failure after a run on deposits on March 10, and the closure of Signature Bank on March 12 by regulators. Some in the crypto community believe that federal regulators’ perceived attack on banks servicing crypto firms could force companies to turn to “shadier” options.
Prior to its closure, Signature Bank was considered a major crypto-friendly bank in the U.S., providing services to Coinbase, Paxos Trust, BitGo, and Celsius. The FDIC’s resolution handbook states that an acquirer tells the FDIC what assets and liabilities from the failed bank it is willing to take, as well as what (if any) money will change hands.
Former U.S. Representative and Signature board member Barney Frank reportedly claimed the FDIC was sending a “strong anti-crypto message” in shutting down the bank, and some lawmakers are demanding answers. The recent actions by regulators have prompted concerns in the crypto community about the potential for a wider crackdown on the industry by regulators. The Blockchain Association’s calls for transparency from financial regulators are part of wider efforts to ensure that crypto firms are treated fairly and given access to banking services like any other business.