Day: April 19, 2023

Ethereum staking volume surpasses withdrawal volume post-Shapella upgrade

by Blockchain News

The Ethereum blockchain underwent a critical Shapella upgrade on April 12, marking a milestone in the history of the blockchain. The upgrade enabled validators to withdraw their staked Ether (ETH) from the Beacon Chain after three years, opening up the possibility of mass selling. However, the latest data suggests that most validators are choosing to restake their unlocked Ether, contributing to an increase in staked ETH volume.

According to the on-chain analytics firm Nansen, as of April 17, the ETH staking volume of 124,000 ETH exceeded the withdrawal volume of 64,800 ETH for the first time since the Shapella upgrade. In the last 24 hours, the amount of staked ETH was 94,968 against 27,076 in withdrawals. Notably, the first round of withdrawals primarily consisted of partial withdrawals from Lido and old validators, and it takes approximately three days to get into the withdrawal queue.

The Shapella upgrade was a make-or-break situation for the Ethereum blockchain, with millions in unlocked ETH posing a risk of mass selling. However, the data shows that the majority of validators are choosing to restake their unlocked Ether. Crypto exchange Binance is set to open withdrawals on April 19, which could lead to further changes in staked and withdrawal volumes.

Out of the 1 million withdrawn ETH, three addresses restaked a total of 19,844 ETH, suggesting that validators are actively choosing to remain invested in the blockchain. Three addresses transferred ETH to centralized exchanges (CEXs) after withdrawal, with 71,444 ETH sent to different exchanges. Other whales did the same, with some sending it to Huobi staking addresses and a few others to CEXs, according to data shared by Lookonchain.

While some validators, like Kraken, had to exit to comply with a United States Securities and Exchange Commission ruling, the majority of early withdrawals are staking rewards. Currently, 22,231 validators have signed up for a complete exit out of 574,624, while 910,930 ETH of the 18.6 million staked ETH is slated to be withdrawn.

One of the reasons for the decrease in withdrawals could be attributed to the current price of ETH. The average price of staked ETH is about $2,137, which suggests that validators are choosing to hold their assets rather than selling them at current prices.

In conclusion, the Shapella upgrade has been a success for the Ethereum blockchain, with the majority of validators choosing to remain invested in the platform. While some early withdrawals were staking rewards, the majority of validators are restaking their unlocked Ether, which has contributed to an increase in staked ETH volume. As the situation continues to evolve, it will be interesting to see how the balance between staked and withdrawn ETH evolves over time.

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Aleph Zero Launches $50 Million Ecosystem Funding Program

by Blockchain News

Aleph Zero, a nonprofit foundation overseeing the development of a layer-1 privacy-enhancing blockchain, has launched a $50 million Ecosystem Funding Program to support developer teams in building on its platform and advancing blockchain adoption globally. The program is designed to provide comprehensive support to attract developers, going beyond just grants, and including assistance with business feasibility, regulatory compliance, and community-building. The foundation aims to offer access to a reliable partner network, as well as sharing its own experience in building something from scratch.

“We’re hoping to introduce a somewhat redesigned approach to how layer-1s can support builders and to go beyond simply providing grants,” said Zolciak.

The Ecosystem Funding Program comprises grants, incubation, and acceleration at all stages of product development, with successful applicants receiving up to $500,000 per project in grant funding. Additionally, grant recipients will gain exclusive access to Aleph Zero’s venture capital pool, infrastructure credits from Amazon Web Services, and security design consultations from Kudelski Security. The Aleph Zero partner network will also provide marketing, branding, UX, product design, and operational support as needed.

During its pilot phase, the program has already produced a range of successful projects, including decentralized lending and borrowing protocol Abax, NFT marketplace ArtZero, domain name service AZERO Domains, unique dark metaverse experience DRKVRS, enterprise-grade decentralized identity platform Gatenox, and decentralized security platform Interlock.

The Aleph Zero Ecosystem Funding Program is backed by long-term contributors to the project, including NxGen, Diamond Atlas Capital, BlackDragon, Necker Ventures, Hodl.nl and Hodl Ventures, Pragma Ventures, RR2 Capital, Cardinal Cryptography and Cardinal Ventures, Bellwether Rocks, and Offbeat.

The launch of the Ecosystem Funding Program is timely, given the recent decline in venture capitalist investment into crypto firms during the first quarter of 2023. According to a report by Galaxy Research, the research arm of crypto investment firm Galaxy Digital, VC investment fell to $2.4 billion, the lowest sum invested since the last quarter of 2020. Companies building in the Web3, NFTs, DAOs, Metaverse, and Gaming subsector raised the most deals, while Trading, Exchange, Investing, and Lending companies raised the most capital ($538m).

VC investments have been falling since peaking at nearly $13 billion in Q1 2022, with the latest quarter’s results representing a decline of over 80% compared to the same period last year. Against this backdrop, Aleph Zero’s Ecosystem Funding Program represents a promising development, offering much-needed support and resources to help developer teams build innovative products and services on the blockchain.

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Binance to Disable Multiple Old Deposit Addresses

by Blockchain News

Binance, the world’s largest cryptocurrency exchange by trading volume, has announced that it will disable multiple old deposit addresses as part of its ongoing infrastructure upgrade. The retirement of selected deposit addresses and memos will take place in batches across multiple blockchains, including Ether (ETH), Tron (TRX), BNB (BNB), and Stellar (XLM).

According to Binance, the retirement of old addresses is a routine and essential part of enhancing security and efficiency for its users. The users of impacted deposit blockchain addresses will receive notification via email, urging them to obtain a new address and memo upon receiving the notification. The email will also include the expiration date for any outdated deposit addresses, and old deposit addresses will become invalid once users obtain a new one.

To obtain a new deposit address, impacted users must log in to their Binance account and follow the instructions mentioned in their email notification. The migration is scheduled for between April and June 2023, and Binance assures that the funds won’t be lost if someone mistakenly sends assets to expired addresses. However, payments made to addresses that have already expired will not be immediately reimbursed, and users must manually credit the deposits from the old address using the “transaction history” page.

Binance regularly upgrades and maintains its infrastructure to ensure the security and efficiency of its services. The exchange recently raised concerns against 191 high-risk and untrustworthy decentralized applications and fake tokens on its native blockchain network called BNB Chain.

The change in deposit addresses of multiple blockchains, including Ethereum, comes just a day before Binance is set to open ETH withdrawal for its users. Millions of Ether are now unlocked after the Shapella upgrades on April 12, with major exchanges and custodians having already made arrangements for users to unstake their ETH from the Beacon Chain nearly three years after staking it.

In conclusion, Binance’s move to disable multiple old deposit addresses is part of its continuous effort to enhance the security and efficiency of its services. Impacted users are encouraged to obtain new addresses and memos as soon as possible to avoid complications in their transactions. Binance assures users that their funds won’t be lost, and the migration process is scheduled to take place gradually between April and June 2023.

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Unidentified Exploit Steals Over $10.5 Million in NFTs and Coins

by Blockchain News

Since December 2022, an unidentified exploit has drained more than $10.5 million in non-fungible tokens (NFTs) and coins from experienced members of the crypto community who believed they were “reasonably secure.” The alarming incident was first brought to light by MetaMask developer Taylor Monahan, who revealed that over 5,000 Ether (ETH) had been stolen. However, the extent of the losses is yet to be determined. Monahan also cautioned that no one knows how the exploit works yet.

What is particularly worrying about this exploit is that it does not target crypto newbies but rather those who are experienced in safeguarding their digital assets. As Monahan noted, the exploit is not like the usual phishing attempts or random scammers. It targets those who are “crypto native,” with multiple addresses and work within the space. Some of the known commonalities about the exploit are that it targets keys that were created from 2014 to 2022.

To safeguard their digital assets, Monahan advised crypto veterans to use a hardware wallet or migrate their funds. Those who have their assets in a single private key are especially vulnerable and should consider splitting up their assets or getting a hardware wallet. Community member Jacky Goh echoed this sentiment, stating that the unknown hack is yet another reminder to use a hardware wallet. Goh recommended moving assets worth more than $1,000 for more than a week to a hardware wallet, which can save one in the long run.

The crypto community has been grappling with cybersecurity threats, with data published by cybersecurity and anti-virus provider Kaspersky indicating that it detected over 5 million crypto phishing attacks in 2022 alone. This marks a 40% year-on-year increase compared to 2021 when the company detected around 3.5 million attacks. The rise in cyberattacks targeting the crypto community highlights the need for robust cybersecurity measures.

Moreover, the exploit highlights the need for greater awareness and education around digital asset protection. While many crypto veterans are well-versed in securing their digital assets, it is essential to stay up to date with emerging threats and vulnerabilities. The fast-paced and rapidly evolving nature of the crypto space means that vigilance is essential. By keeping a close eye on one’s digital assets and using best practices for digital asset security, one can reduce the risk of falling victim to cyberattacks.

In conclusion, the recent exploit that has stolen over $10.5 million in NFTs and coins serves as a sobering reminder of the importance of robust cybersecurity measures for crypto assets. The crypto community must remain vigilant and educate themselves on emerging threats to safeguard their digital assets effectively. By adopting best practices and staying up to date with the latest cybersecurity trends, crypto veterans can protect their assets from theft and loss.

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Zipmex Requests Moratorium Extension in Singapore

by Blockchain News

Cryptocurrency exchange Zipmex has requested another extension to its moratorium on debt payments in Singapore due to liquidity issues. The firm has filed a request in Singapore’s courts to extend its existing moratorium period by two months. Zipmex plans to use the extra time to plan and reopen Z Wallet withdrawals.

Zipmex initially filed for a moratorium in July, which allowed the company to postpone payments due to its exposure to Celsius, a cryptocurrency lending platform. The exchange suspended withdrawals earlier that month, while CEO Marcus Lim did not deny reports that the firm was facing insolvency. Singapore’s courts granted Zipmex’s moratorium request, giving the company until December 2022 to come up with a restructuring plan.

However, the platform has continued to request extensions on the moratorium, with the most recent one likely pushing its deadlines to June. In an announcement on April 18, Zipmex said it was in negotiations with investors to “maximize returns for customers” following a delay in payments.

It’s unclear which investor Zipmex was referring to in its latest announcement. In March, venture capital firm V Ventures reportedly did not provide a payment of more than $1 million necessary for Zipmex to avoid liquidating certain operations and stop distributing payroll to employees.

Zipmex’s latest request for an extension highlights the challenges faced by cryptocurrency exchanges in a volatile market. The crypto industry has seen significant fluctuations in value over the past year, with Bitcoin alone experiencing a dramatic rise and fall in value. This has led to liquidity issues for some exchanges, as investors are unable to withdraw funds and pay debts.

The company’s struggles also reflect the broader regulatory challenges facing cryptocurrency exchanges. Many countries are grappling with how to regulate the industry, with some governments taking a more restrictive approach. In Singapore, authorities have implemented strict rules for cryptocurrency exchanges, including requiring them to obtain a license from the Monetary Authority of Singapore (MAS).

Despite these challenges, the cryptocurrency industry continues to attract investors and users around the world. While some exchanges may struggle, others are thriving, and the industry as a whole shows no signs of slowing down. However, as the Zipmex case demonstrates, investors and exchanges must navigate a complex landscape filled with uncertainty and risk.

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US House Committee to Discuss Stablecoin Regulation

by Blockchain News

The US House of Representatives Committee on Financial Services will hold a hearing on stablecoin regulation on April 19th, according to an announcement made by the committee. The hearing comes in response to a new draft bill introduced in the House to provide a regulatory framework for stablecoins. The bill aims to protect consumers and maintain the integrity of the US financial system while promoting innovation in the use of stablecoins.

The hearing will include testimonies from experts in the field of cryptocurrency and stablecoins, including Austin Campbell, a managing partner at Zero Knowledge Consulting and adjunct professor at Columbia Business School. In a transcript of his planned testimony, Campbell notes that stablecoins are “mundane” and “look a lot like pretty basic cash instruments”. He believes that stablecoins will increase the reach of the US dollar and enhance financial inclusion, as they provide access to the global financial system to those who are currently excluded from traditional banking.

Campbell’s testimony suggests that the regulatory framework for stablecoins should not be overly burdensome, as stablecoins are similar to traditional cash instruments. He notes that regulations should focus on ensuring that stablecoins are fully backed by reserves and are not used for illicit purposes, such as money laundering or terrorist financing.

The hearing will provide an opportunity for members of the committee to learn more about the benefits and risks associated with stablecoins, as well as to gather feedback on the draft bill. The regulatory framework proposed in the draft bill is expected to be a starting point for discussion and may be amended following the hearing.

Stablecoins are digital currencies that are designed to maintain a stable value relative to a fiat currency, such as the US dollar. They are used in a variety of applications, including remittances, peer-to-peer payments, and international trade. Stablecoins have gained popularity in recent years as a way to access the benefits of cryptocurrency, such as fast and low-cost transactions, without the volatility associated with other cryptocurrencies like Bitcoin.

However, stablecoins have also raised concerns among regulators and policymakers, particularly regarding their potential impact on financial stability and the risks associated with their use. The regulatory framework proposed in the draft bill aims to address these concerns by providing a clear and consistent framework for the regulation of stablecoins.

In conclusion, the upcoming hearing on stablecoin regulation in the US House of Representatives will provide an opportunity for experts to provide testimony on the benefits and risks associated with stablecoins. It will also allow members of the committee to gather feedback on the draft bill proposed to regulate stablecoins. As stablecoins continue to gain popularity, it is important for regulators to establish a clear and consistent framework for their use to ensure that they are used safely and effectively.

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UK Aims to Implement Crypto Regulation Soon

by Blockchain News

The United Kingdom is looking to establish regulations for digital assets within the next 12 months, according to Andrew Griffith, the economic secretary to the UK Treasury. In an interview with CNBC on April 17, Griffith stated that the country aims to take advantage of the benefits that blockchain technology can bring to the private sector and the overall economy. He added that the UK’s long-term vision is to enable companies to maximize the opportunities presented by crypto assets through effective regulation.

This move towards regulating digital assets reflects the UK government’s recognition of the growing importance of blockchain technology and cryptocurrencies. The implementation of sound crypto regulation will provide greater clarity for businesses and investors operating in the space, reducing the uncertainty and risk associated with digital assets.

The potential benefits of blockchain technology are significant, particularly for industries such as finance, where it can streamline processes, reduce costs, and increase transparency. However, the lack of clear regulation has been a barrier to wider adoption, with many companies reluctant to engage with crypto assets due to the associated risks.

Griffith’s announcement has been met with enthusiasm from the crypto community, with many viewing it as a positive step towards wider adoption of digital assets. It is hoped that this move will lead to increased investment and innovation in the space, further driving the growth of the UK’s digital economy.

The UK is not alone in recognizing the importance of regulating digital assets. Governments around the world are increasingly looking at ways to establish clear guidelines for the use of blockchain and cryptocurrencies. While some countries have taken a more cautious approach to regulation, others, such as Switzerland and Malta, have been more proactive in establishing themselves as cryptocurrency-friendly jurisdictions.

The establishment of digital asset regulation is not without its challenges, however. One of the key issues facing regulators is how to strike a balance between protecting consumers and promoting innovation. Finding the right balance between regulation and innovation will be critical to ensuring the success of the UK’s digital asset industry.

In conclusion, the UK’s move towards regulating digital assets is a positive development for the country’s digital economy. By providing greater clarity and reducing risk, effective regulation will encourage wider adoption of blockchain technology and cryptocurrencies. As the UK works towards establishing its regulatory framework, it will be important to strike a balance between promoting innovation and protecting consumers.

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US Prosecutors Seek Lengthy Sentence for Crypto Shadow Bank Executive

by Blockchain News

US prosecutors are seeking a lengthy sentence for Reginald Fowler, a former minority owner of the Minnesota Vikings NFL team, over his alleged involvement in shadow banking practices through Crypto Capital Corp, an alleged crypto shadow bank. Fowler’s sentencing is scheduled for April 20, following his arrest in 2019 and subsequent charge with bank fraud, illegal money transfers, and conspiracy connected to his operation of an unlicensed money transmitting business.

In a request filed on April 18, US District Attorney Damian Williams requested a sentence of at least seven years imprisonment for Fowler, with a suggested range of 15 to 20 years to reflect the seriousness of the offense. Williams argued that Fowler’s actions as an unlicensed money transmitter and his alleged deception of financial institutions warranted a significant penalty.

Fowler established a firm called Global Trading Solutions (GTS) in 2018 under the umbrella of the Panama-based Crypto Capital Corp, an alleged crypto shadow bank. Through GTS and Crypto Capital, Fowler is alleged to have provided shadow banking services to several crypto exchanges including Bitfinex, Binance, CEX.io, and QuadrigaCX. Between February and October 2018, GTS and Crypto Capital processed approximately $750 million in cryptocurrency transactions, providing unlicensed crypto firms with unlawful access to the U.S. banking system, according to the filing.

The use of shadow banking practices by Crypto Capital and GTS came to light during the court case regarding Bitfinex’s failure to disclose the loss of $850 million in customer funds. Fowler and Crypto Capital were identified as key players in the case, which was settled in February 2022 with the firms ordered to pay $18.5 million in civil penalties and shut down New York trading operations.

The alleged involvement of Fowler and Crypto Capital in shadow banking practices highlights the risks associated with unlicensed money transmitting businesses and the potential for illegal activities to occur within the crypto industry. The case also underscores the need for stronger regulation and oversight of crypto exchanges and shadow banking practices to prevent illicit activities and ensure the integrity of the financial system.

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Trump NFTs Generate Over $1.2M in Trading Volume

by Blockchain News

The latest round of digital non-fungible token (NFT) trading cards have dropped, featuring former US President Donald Trump. Polygon minted 38,001 cards, which were launched at a price of $99 each on April 18. According to data from NFT marketplace OpenSea, the Trump NFTs currently have a floor price of 0.0659 ETH ($145) and have generated over $1.2 million in trading volume. With a 10% creator fee, the sales have generated over $100,000. The initial subscription generated $3.76 million in revenue based on a sale price of $99.

Posting on Instagram, Trump revealed that he kept the price of the NFTs the same as the first series “because I want my fans & supporters to make money, & have fun doing it.” He added, “I could have raised the price MUCH HIGHER, I believe it still would have sold well, with a lot more money coming to me, but I didn’t choose to do so. I WILL BE GIVEN NO ‘NICE GUY’ CREDIT?”

The initial series, which was launched on December 15, has seen its floor price drop by 61% in the last 24 hours according to OpenSea, although the trading volume has increased by 1,011%.

In other news, Big Tech firm Meta has allowed teens from the US and Canada to use its virtual reality (VR) app, Horizon Worlds, after previously restricting access to people aged 18 and over. The decision follows a shortfall in monthly active users for the app in 2022, recording an average of just 280,000 over the year, compared to its target of 500,000, according to Statista. However, various advocacy organizations and safety groups have urged Meta CEO Mark Zuckerberg to halt plans to allow minors into its metaverse. An open letter published on April 14 argued that Meta should wait for more peer-reviewed research on the potential risks of allowing youths in the metaverse, claiming minors will face harassment and privacy violations on the VR app, which is still in its early stages. Meta has attempted to address these concerns by emphasizing its plans to mitigate risks through features such as parental supervision tools and limiting interactions between teens and adults they don’t know.

Global sportswear brand Nike also entered the NFT market, launching its first collection through its Web3 community platform, .SWOOSH. The collection features a digital version of its “iconic” Air Force 1 sneaker from 41 years ago. The Polygon-based NFTs are priced at just under $20 and are available to all .SWOOSH members. According to Nike, the NFTs will provide a range of perks such as “special access to physical products and experiences.” Nike added that it will “introduce other new utilities and benefits” to its virtual creations in the near future. 

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NFT Co-Founder Faces Lawsuit Over Crypto Wallet Dispute

by Blockchain News

The world of nonfungible tokens (NFTs) has been rocked by a lawsuit that has been filed against one of the co-founders of the Rebase project, Edmond Truong. The lawsuit has been brought by Krzysztof Gagacki, who claims to be a co-founder of the project and alleges that Truong has acted in bad faith by misappropriating $2 million into a separate wallet that is owned and controlled by him without Gagacki’s consent.

In the filing, which was made on April 17, 2023, in a United States District Court in California, Gagacki accuses Truong of eight separate complaints, including breach of contract, breach of fiduciary duty, defamation, and trademark infringement. He is demanding a jury trial, claiming that Truong has “gone rogue” by stealing money from a joint crypto wallet and ousting Gagacki from the firm.

According to Gagacki, the professional relationship between the two had deteriorated by October 27, 2022, when Truong breached their partnership contract. Gagacki claims that he owns a 50% share of the funds in the joint crypto wallet but that Truong refuses to provide him with the private keys to the digital wallet.

Gagacki further alleges that Truong has “ousted” him from the business by presenting himself as the “sole owner” and “decision maker” for Rebase. He claims that Truong has made several defamatory statements to the firm’s business contacts about him, causing damage to his reputation.

Furthermore, Gagacki claims that Truong has intentionally interfered with several prospective deals that he had been working on for the firm. One of these deals involved American celebrity Bella Hadid, who featured in the firm’s Cy-B3lla NFT project. The filing alleges that Hadid refused further collaboration with the project after it was made apparent to her that the two co-founders had clashed.

It is unclear when the professional relationship between Truong and Gagacki started to deteriorate, but Gagacki claims that Truong has been acting in bad faith by misappropriating funds and making defamatory statements about him. The lawsuit is expected to be closely watched by the NFT community, which has seen explosive growth in recent years. As the use of NFTs continues to expand into different industries, legal disputes like this one could become more common.

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