Day: March 29, 2023

SafeMoon LP Compromised

by Blockchain News

SafeMoon, a cryptocurrency project that gained traction through endorsements by celebrities and social media influencers, recently announced that its liquidity pool (LP) had been compromised. While the company has not revealed any details about the attack, it confirmed that it is taking steps to address the issue as soon as possible.

The incident is the latest in a series of attacks targeting cryptocurrency projects in recent months. Like many other crypto projects in 2021, SafeMoon was backed by numerous celebrities, including Nick Carter, Soulja Boy, Lil Yachty, and YouTubers Jake Paul and Ben Phillips. However, a lawsuit filed in February 2022 alleged that these endorsements were part of a larger scheme to defraud investors by misleading them to purchase SafeMoon tokens under the pretext of unrealistic profits.

Experts suggest that a recent software upgrade may be to blame for the vulnerability that allowed the attacker to compromise SafeMoon’s LP. According to PeckShield, a blockchain investigation firm, a public burn function introduced in the latest upgrade allowed users to burn tokens from other addresses, potentially creating a security flaw that could be exploited by hackers.

A community member known as “DeFi Mark” provided further details about the attack, explaining that the vulnerability was used to remove SafeMoon tokens, causing an artificial spike in the token’s price. The attacker was then able to sell off the tokens at an inflated price, taking advantage of the situation for personal gain.

The incident has raised questions about the security and legitimacy of SafeMoon, as well as the role of celebrity endorsements in cryptocurrency projects. While the company has not provided any further details about the attack or its response, it is clear that security is a top priority for SafeMoon and other cryptocurrency projects.

Cryptocurrency remains a relatively new and largely unregulated industry, with many investors drawn in by the promise of high returns and the endorsement of celebrities and influencers. However, as the SafeMoon incident and others like it have shown, there are risks involved in investing in this space, and investors should be cautious and do their own research before committing their money to any project.

Despite the challenges and risks, many experts believe that cryptocurrency and blockchain technology have the potential to revolutionize the financial industry and create new opportunities for investors and businesses alike. As the industry continues to mature and evolve, it is likely that we will see more incidents like the SafeMoon attack, but also more innovations and advancements that could transform the way we think about money and finance.

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Bank of Russia Delays CBDC Pilot Rollout

by Blockchain News

The Bank of Russia’s central bank digital currency (CBDC) pilot, which was scheduled to begin on April 1, has been delayed indefinitely due to specific legislation only passing through the first reading in the Federal Assembly’s lower house. The legislation is expected to be enacted by early May, according to a report by the state-owned TASS.

The CBDC pilot was initially set to involve 15 private banks, but the number has since been reduced to 13. Some of the employees from these banks, along with one of the country’s largest insurance companies, Ingosstrakh, will become the test participants for CBDC retail payments.

Bank executives have expressed enthusiasm for the project, with the director of innovations at Sinara Bank, Vitaly Kopysov, stating that “the use of smart contracts should reduce the operational load of banks and make the deals transparent, which not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts.”

Although the pilot will involve real operations and limited consumers, the general public will be unable to participate in the first stage. The banks will enter the pilot with selected customers, and the Bank of Russia will determine how to scale the digital ruble further following the first stage.

The CBDC pilot was initially scheduled for 2024, but it was moved to an earlier date as the Russian central bank sought an alternative to the SWIFT payments system amid Western economic sanctions against Russia. The digital ruble aims to provide a secure and transparent payment system that reduces the dependence on foreign payment systems and minimizes the risk of financial crimes.

The Bank of Russia has been working on the development of the digital ruble since 2019, and it aims to provide an efficient payment system that can be used for various transactions. The CBDC will be a legal tender that will function similarly to traditional cash, but it will be digital and operate on a blockchain network.

The delay in the CBDC pilot rollout is expected to be a temporary setback, as the Bank of Russia remains committed to implementing the digital ruble. The CBDC will provide a secure and efficient payment system that will benefit the economy and the financial system as a whole.

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EU Proposes Cap on Anonymous Crypto Transfers

by Blockchain News

The European Union has taken a step towards greater financial transparency with a proposal to limit anonymous crypto transfers to 1,000 euros ($1,083) to combat money laundering and terrorist financing. According to a statement from the European Parliament published on March 28, the new limit would apply to transfers where a customer cannot be identified. Cash transactions would also be capped at 7,000 euros ($7,585).

The proposal is part of the Anti-Money Laundering and Countering the Financing of Terrorism package and is expected to be confirmed in a plenary session in April. Negotiations on the final shape of the bills will then begin. The new regulations will be enforced by the European Anti-Money Laundering Authority (AMLA), which was formed in June 2022.

The AMLA’s co-rapporteur, Emil Radev, stressed the importance of close cooperation between the new authority and national supervisors. He also called for the AMLA to directly supervise the riskiest crypto asset service providers and companies in the financial sector that operate in several member states.

Lawmakers overwhelmingly approved the text relating to anonymous instruments, including crypto assets, with 99 votes in favor, eight against, and six abstentions. The move is part of a wider push towards greater transparency in the financial sector, with the EU seeking to tackle the threat of money laundering and terrorist financing.

Crypto assets have long been seen as a potential haven for illicit activities due to the ease with which they can be transferred anonymously. The new regulations seek to address this issue by increasing transparency and accountability in the crypto sector.

The proposal is part of a wider push by the EU towards greater financial regulation. The European Central Bank has previously called for a global approach to regulating cryptocurrencies, warning that they could pose a threat to financial stability. The EU’s proposals also follow recent moves by other countries, such as China, to tighten regulations on crypto assets.

While the EU’s proposals have been welcomed by many in the financial sector, some have raised concerns about the potential impact on privacy and the practicalities of enforcing the new regulations. Nonetheless, the EU remains committed to tackling money laundering and terrorist financing, and the new regulations are just one step towards achieving this goal.

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Australian Senator Proposes Digital Asset Regulation Bill

by Blockchain News

Australia has been known for its progressive stance on cryptocurrency regulation. Recently, Senator Andrew Bragg submitted a private senators’ bill titled Digital Assets (Market Regulation) Bill 2023 to the Australian Parliament. The bill proposes regulatory recommendations for stablecoins, licensing of exchanges, and custody requirements to protect consumers and promote investment in the country’s cryptocurrency market.

The proposed regulatory changes aim to provide a regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers in Australia. The bill is intended to protect consumers and promote investment while providing guidelines for reporting information by authorized deposit-taking institutions for the issuance and control of a central bank digital currency.

Senator Bragg provided further information for the submission of the private bill, criticizing the current Labor government for not following through on 12 recommendations relating to cryptocurrency regulation introduced by the Senate Select Committee on Australia as a Technology and Financial Centre in October 2021. Bragg highlighted that the Australian consumers had been left exposed to industry-wide events like the collapse of FTX by the inaction of the Australian government to provide regulatory clarity to the sector.

The proposed act also sets out various obligations and requirements for exchanges, custody services, and stablecoin issuers. These range from capital or minimum reserve requirements, segregation of customer funds, reporting on customer holdings, auditing, assurance, and disclosure arrangements.

The bill would require a person or business to hold a license granted by the Australian Securities and Investments Commission or a foreign license to operate a cryptocurrency exchange. This would also apply to cryptocurrency custody services and stablecoin issuers in Australia.

In contrast to the typical introduction of regulatory changes by Australian ministers, members of parliament can introduce private members’ or private senators’ bills, which can take months or years to pass through parliament. As a result, it may take some time before the Digital Assets (Market Regulation) Bill 2023 is passed into law.

Public consultation is currently ongoing in Australia over the classification of cryptocurrencies and various digital asset tokens, services, and platforms. The “token mapping” consultation paper was released in February, outlining basic definitions for the cryptocurrency sector.

The proposed bill by Senator Bragg is a significant step towards regulating the cryptocurrency sector in Australia, ensuring the protection of consumers and promoting investment in the country’s growing digital assets market. If passed, the bill would provide a clear regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers to operate in Australia.

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BitKeep Compensates Users After $8M Hack

by Blockchain News

On December 26, 2022, BitKeep, a multichain wallet, suffered an attack that resulted in an estimated $8 million loss of funds from users who downloaded the 7.2.9. APK update for the wallet. The update had been maliciously swapped by hackers, resulting in the theft of users’ cryptocurrency holdings.

In response to the hack, BitKeep announced on March 29 that it had fully compensated all 11,090 users affected by the incident. The compensation was made possible through the company’s own funds and was an important step in restoring trust with its user base.

Additionally, BitKeep announced that it will rebrand to Bitget Wallet following a $30 million investment from the cryptocurrency derivatives exchange Bitget. The investment valued BitKeep at $300 million and will provide the wallet with access to Bitget’s $300 million User Protection Fund, which will help mitigate the risk of future security threats.

The compensation of affected users is a significant move by BitKeep to show its commitment to security and to demonstrate that it takes the safety of its users’ assets seriously. With the rebrand to Bitget Wallet and access to the User Protection Fund, the company is signaling that it is taking additional steps to enhance the security of its platform and to protect its users’ assets.

The decision to rebrand to Bitget Wallet also represents a strategic move by the company to align itself more closely with Bitget, a well-established player in the cryptocurrency derivatives exchange market. By partnering with Bitget, BitKeep will be able to tap into the expertise and resources of a company with a proven track record of success in the industry.

Overall, the compensation of affected users and the rebrand to Bitget Wallet represent important steps for BitKeep as it seeks to enhance its security and position itself for future growth. With access to the Bitget User Protection Fund, the company is well-positioned to protect its users’ assets from future security threats and to continue building a reputation as a trusted and reliable provider of cryptocurrency wallet services.

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SEC Chief to Testify Before House Committee on Crypto Oversight

by Blockchain News

Gary Gensler, the current chairman of the United States Securities and Exchange Commission (SEC), is set to testify before the House Financial Services Committee on April 18. This hearing will mark the first time that Gensler will face questions from the committee and provide an opportunity for the committee to exercise its jurisdiction over all aspects of the U.S. financial services sector, including banking, securities, and digital assets.

During an interview with Representative Patrick McHenry, chairman of the Financial Services Committee, it was confirmed that the hearing would focus on Gensler’s approach toward the crypto ecosystem. McHenry noted that the committee would take a serious approach in laying down a regulatory sphere for digital assets and expressed concerns about Gensler’s rulemaking and approach toward crypto assets.

Gensler’s approach toward crypto has been a topic of concern for many in the industry. Some Democratic party members have voiced their concerns about his approach, which they fear could be disastrous for the party’s 2024 election campaign. Many pro-crypto and pro-Bitcoin Democrats are lining up to voice their opposition to the party’s stance. Dennis Porter, the co-founder of the Satoshi Action Fund, believes that the party’s anti-crypto stance could have negative consequences for its electoral success.

U.S. regulators have taken a hard stance on crypto in the first months of 2023. The SEC has issued Wells notices to several crypto firms, including Coinbase, and the Commodity Futures Trading Commission has filed a new lawsuit against Binance. The crypto community has always highlighted that regulations would be decided by Congress, not individual agencies.

The hearing will provide an opportunity for Gensler to clarify his approach toward crypto and provide insight into the SEC’s regulatory plans. The crypto industry has long awaited clear regulatory guidance, and this hearing could provide much-needed clarity for the industry.

In recent years, the crypto ecosystem has experienced significant growth, and as a result, the need for regulatory oversight has become increasingly pressing. The lack of clear regulatory guidance has hindered the industry’s growth and led to uncertainty for investors and traders alike. The House Financial Services Committee’s oversight hearing with Gensler could provide an opportunity for the committee to establish clear guidelines for the industry and help foster its growth in a regulated environment.

In conclusion, the SEC chief’s upcoming testimony before the House Financial Services Committee on April 18 will be a crucial moment for the crypto ecosystem. The hearing will provide an opportunity for the committee to exercise its jurisdiction over the U.S. financial services sector and lay down a regulatory sphere for digital assets. It will also provide Gensler with an opportunity to clarify his approach toward crypto and provide insight into the SEC’s regulatory plans, which could provide much-needed clarity for the industry.

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Freeport Launches Crowd-Ownership Platform for Warhol Prints

by Blockchain News

Non-fungible token (NFT) startup Freeport has made history by becoming the first company to receive SEC approval to launch its crowd-ownership blockchain platform for a four-piece collection of Andy Warhol prints. This groundbreaking move will allow up to 1,000 individuals to own a piece of Warhol’s iconic blue-chip artwork through the purchase of shares on the Freeport platform. Each piece of artwork consists of 10,000 shares, with a minimum purchase of 10 shares per individual.

The collection of Warhol prints includes some of the artist’s most famous works, such as “Marilyn (1967),” “Double Mickey (1981),” “Mick Jagger (1975),” and “Rebel Without a Cause (James Dean) (1985).” These pieces are highly coveted by collectors, and current Andy Warhol paintings can fetch anywhere between $6 to $195,040,000 apiece, according to MutualArt.

Freeport’s innovative platform offers a unique opportunity for individuals to invest in high-value artwork, which was previously only accessible to wealthy collectors. By offering crowd-ownership of the Warhol prints, Freeport is democratizing the art market and enabling a wider range of people to participate in art ownership.

The SEC’s Regulation A review process is designed to protect investors while allowing innovative companies to raise capital from the public. Freeport’s successful completion of this review is a significant milestone for the NFT industry, which has been rapidly gaining popularity in recent years. NFTs are unique digital assets that are verified on a blockchain network and are commonly used to represent artwork, music, and other collectibles.

Freeport’s platform utilizes blockchain technology to provide a secure and transparent method for buying, selling, and trading shares of the Warhol prints. The platform also offers a range of benefits for investors, such as the ability to track the value of their investment in real-time and receive dividends based on the performance of the underlying asset.

In conclusion, Freeport’s launch of its crowd-ownership platform for the Warhol prints marks a significant moment for the NFT industry and the democratization of art ownership. This innovative platform has the potential to revolutionize the art market by making high-value artwork more accessible to a wider range of people. As the NFT industry continues to evolve, it will be exciting to see what other innovative solutions emerge to create new opportunities for investors and collectors alike.

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Nigerian Crypto Investors Face Account Freezing

by Blockchain News

Nigerian crypto investors using peer-to-peer (P2P) services are facing difficulties as the Central Bank of Nigeria (CBN) has flagged their bank accounts. The CBN’s decision is believed to be in relation to the recent Flutterwave hack, which saw almost $6.5 million (3 billion nairas) illegally transferred from the accounts of the Nigerian fintech company.

On February 27th, a motion ex-parte was filed and granted in support of Flutterwave’s claims, resulting in 107 accounts being put on lien/Post-No-Debit (PND), including their fifth beneficiaries. While the bank accounts have yet to be proven affiliations with the hack, some locals have confirmed that their accounts have been frozen in connection to the incident.

The situation has discouraged P2P users from using over-the-counter (OTC) markets, which allow trading of securities between two counterparties executed outside of formal exchanges and without the supervision of an exchange regulator. The hacked sum flowed into the Nigeria crypto market on different OTCs, and users now have problems with financial intermediaries when they want to use P2P services for crypto transfers.

Investors worldwide use P2P as a medium of direct exchange of crypto between parties without the involvement of a central authority. They may choose to swap cryptocurrencies for cryptocurrencies or crypto for cash. In 2021, the CBN announced a regulation that prevented financial institutions like banks from enabling crypto use. However, Nigerians were able to find a way forward and still maintain their leading position as the largest crypto hub of Africa through the use of P2P platforms.

Some community members believe that this situation could affect the general interest of Nigerians who are yet to join the crypto digital ecosystem in acquiring digital assets. The situation is causing some businesses to crumble as unsuspecting entrepreneurs have received payments for their services with funds that were allegedly linked to the hacked amount, resulting in confusion and possible legal repercussions.

Despite strict crypto regulations by the CBN, the P2P market has aided Nigerian trade. However, a financial analyst known as Sadeik calls it a black market hub for scammers laundering fraud funds. Sadeik went on to say that a friend of his lost more than 500,000 nairas because the person he transacted with had his account flagged in the Flutterwave hack.

In an official statement, Flutterwave denied the hack and stated that it identified an unusual trend of transactions on some users’ profiles and immediately launched a review in line with its standard operating procedure. The review revealed that some users who had not activated some of their recommended security settings might have been susceptible. Flutterwave was able to address the issue before any harm was done to its users.

The current situation highlights the need for increased security measures and awareness in the Nigerian crypto market. The CBN’s decision to flag accounts highlights the importance of financial institutions’ role in combating fraudulent activities. It also emphasizes the importance of financial intermediaries, such as banks, in ensuring that funds are not used for illegal purposes. The incident serves as a reminder for crypto investors to take necessary precautions and to only use reputable P2P platforms.

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Wakweli and Polygon Partner for NFT Authentication

by Blockchain News

In a bid to enhance the security of the digital ecosystem, Web3 infrastructure protocol Wakweli has partnered with layer-2 scaling platform Polygon to offer certification of authenticity for non-fungible tokens (NFTs). The partnership means that every NFT project holder on the Polygon chain can request authenticity certificates for each asset.

Negotiations for the partnership agreement began in August 2022, with the final details of the agreement concluded this March. Wakweli’s testnet will be available in April, which can be used with Polygon’s Mumbai testnet. Alpha testing with Polygon’s mainnet will begin in Q2 2023, with general mainnet compatibility expected to be ready by Q3 2023.

By providing a medium for detecting counterfeit NFTs, the partnership between the two companies has unlocked a definitive way to fight these scam attempts, thereby creating more trust in the thriving ecosystem. The Wakweli platform and application programming interface will offer developers access to advanced use case scenarios, including automatically generating certification requests when minting or accessing more detailed certification information.

Wakweli’s certification system provides an innovative solution to the ongoing problem of counterfeit NFTs, which has plagued the NFT market since its inception. The certification system will help to ensure that NFTs are authentic, thereby promoting transparency and trust in the digital asset market.

Polygon has gained significant traction through partnerships with major brands such as Starbucks and Adidas, leading to increased adoption of the network among cryptocurrency users. The collaboration with Wakweli is expected to further strengthen Polygon’s position in the market by offering an additional layer of security and authenticity to the digital assets on its platform.

In the past month, the Polygon Foundation has also collaborated with the South Korean multinational conglomerate Lotte Group to showcase the company’s NFT projects. This collaboration highlights the growing interest in NFTs and their potential applications across different industries.

Overall, the partnership between Wakweli and Polygon represents a significant step forward in enhancing the security and trustworthiness of the digital asset market. As the adoption of NFTs continues to grow, the need for robust certification and authentication systems will become increasingly important. The collaboration between Wakweli and Polygon is a promising development in this direction, and it is expected to have a positive impact on the overall growth and sustainability of the digital asset market.

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NFT Royalties Fall Short in Web3 Ecosystem

by Blockchain News

Nonfungible tokens, or NFTs, have become a popular gateway for users to enter the Web3 ecosystem, with artists and creators leveraging Web3 tools to enhance their work. However, recent data from eBit Labs and LiveArt marketplace suggests that the loss of creator royalties in the NFT space may be higher than previously estimated.

The emergence of the Blur marketplace in October 2022 has caused shortcomings in royalties for two of the leading NFT collections, Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC), with losses totaling around $20 million alone. This new data indicates that previous estimates of $35 million in royalty shortcomings may have been too conservative.

Creator royalties have been a hot topic of discussion in the NFT space. After briefly halting creator royalties and receiving severe backlash from the community, the OpenSea marketplace announced that it would enforce creator royalties on all listed collections.

In November 2022, the founders of BAYC proposed a new model for NFT creator royalties that would keep NFT transfers between wallets free. Meanwhile, MagicEden, another prominent NFT marketplace, has defended its own NFT royalty enforcement tool, which gives creators the ability to flag an NFT or blur the image if the listing or trade bypasses royalty rules.

Despite these efforts, Boris Pevzner, co-founder and CEO of LiveArt, says that the new data shows the Web3 ecosystem falling short of its promise to be a “creator-centric space.” Pevzner warns that if the current system continues to fail artists, it may cause them to lose interest in the industry, potentially causing the space to become more like the stock market.

Pevzner’s comments on “marketplace wars” primarily reference the entrance of the Blur marketplace onto the scene, which has targeted OpenSea’s market share. With NFTs continuing to gain popularity and more marketplaces vying for a piece of the pie, it remains to be seen how the issue of creator royalties will be resolved.

As the Web3 ecosystem evolves and matures, it is important to ensure that creators are fairly compensated for their work. The current system of enforcing creator royalties appears to be falling short, potentially hindering the growth and success of the NFT industry.

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