A participant of the initial coin offering (ICO) for Ethereum has emerged from an 8.2-year hiatus, transferring their entire stash of 2,000 ETH, valued at $3.2 million, to four distinct addresses. This event occurred on October 21, 2023, as reported by Lookonchain via Twitter. The transaction showcases not only the price appreciation of Ethereum but also the potential market dynamics induced by long-term dormant cryptocurrency holdings transitioning to active status.
The participant acquired these 2,000 ETH during Ethereum’s genesis phase at an approximate total cost of $620, given the ICO price of approximately $0.31 per ETH. The tweet included a link to the Etherscan page showing the transactions from the address 0x6403d062549690c8e8b63eae41d6c109476e2588. The remarkable price appreciation highlights the enormous potential for early adopters in the cryptocurrency space, with the value of the assets skyrocketing from about $620 to $3.2 million over a span of 8.2 years.
Market Implications
The reactivation and transfer of assets from long-dormant cryptocurrency wallets to exchanges can evoke various reactions within the market and the cryptocurrency community. These transactions are often closely monitored and speculated upon, generating discussions and narratives that may impact market sentiment and price dynamics in the short term. Cryptocurrency exchanges may see an influx of ETH, which could potentially affect the asset’s price depending on the subsequent actions taken by the ICO participant
Large transfers from dormant addresses are sometimes perceived by the market as a prelude to selling, which could potentially put downward pressure on the price of the cryptocurrency involved. This concern may escalate especially in cases where a substantial amount of cryptocurrency is moved, potentially affecting market liquidity, more so if the cryptocurrency has a relatively smaller market cap.
Beyond the immediate market reactions, the reactivation of long-dormant wallets carries sentimental or symbolic significance. It highlights the patience and long-term vision of early adopters, reflecting the historical narrative of the cryptocurrency in question. Such events showcase real-world examples of significant asset appreciation over time, underscoring the potential rewards for long-term holders in the cryptocurrency ecosystem.
Worldcoin, a blockchain-based protocol that integrates both off-chain and on-chain components, a proof of humanity protocol co-founded by Sam Altman of OpenAI, recently underwent two separate security audits. The audits were conducted by Nethermind and Least Authority, two reputable audit firms, beginning in April 2023. The protocol’s implementation, which includes its use of cryptographic constructs and smart contracts, is detailed in the Worldcoin whitepaper.
Worldcoin publicly launched on July 25, 2023, with the token WLD listed on mainstream crypto exchanges including Binance and Okex. However, the launch was met with immediate criticism. The French data protection agency, CNIL, questioned the legality of Worldcoin. The United Kingdom’s Information Commissioner’s Office (ICO) considered investigating the project for potential violations of the country’s data protection laws.
The audits covered a wide range of areas, including the correctness of the implementation, potential implementation errors, adversarial actions, secure key storage, resistance to DDoS attacks, vulnerabilities in the code, protection against malicious attacks, performance issues, data privacy, and inappropriate permissions.
Nethermind focused on the protocol’s smart contracts, which include the World ID contracts, the World ID state bridge, the World ID example airdrop contracts, the Worldcoin tokens (WLD) grants contracts, and the WLD ERC-20 token contract and its associated vesting wallet. Out of the 26 items identified during this security assessment, 24 (92.6%) were fixed after the verification stage, one was mitigated, and the remaining one was acknowledged.
Least Authority, on the other hand, concentrated on the protocol’s use of cryptography, including its use of the Semaphore protocol and the enhancements made to scale the protocol in a more gas-efficient manner. These include the protocol’s cryptographic design and implementation, the Rust implementation of the semaphore protocol, and the Go implementation of the Semaphore Merkle Tree Batcher (SMTB). The team identified three issues and offered six suggestions, all of which have either been resolved or have planned resolutions.
In their report, Least Authority stated, “We found that the cryptographic component of the Worldcoin Protocol is generally well-designed and implemented.”
Some of the items identified during the audits were due to the protocol’s dependencies on Semaphore and Ethereum, such as elliptic curve precompile support or Poseidon hash function configuration.
Worldcoin aims to establish a proof of personhood that is decentralized, privacy-preserving, open-source, and accessible to everyone. For more information about the project, the Worldcoin whitepaper and related documents are available for review.
An Ethereum (ETH) addressassociated with the initial coin offering (ICO) in 2015 has transferred a staggering 61,216.6 ETH, equivalent to $116 million, to the Kraken exchange a few hours ago. This transaction marks the first movement of these funds since their acquisition eight years ago.
The address in question received 61,216.6 ETH from the Ethereum genesis block on July 30, 2015. At the time of the ICO, the value of these tokens was a mere $19,038, with each ETH priced at $0.311. Fast forward to today, and the same amount of ETH is worth an astounding $116 million, showcasing the tremendous growth and adoption of Ethereum over the years.
The transfer of such a substantial amount of ETH to Kraken could indicate a potential huge sale pressure or a strategic move by the original ICO participant. However, the exact intent behind this transaction remains unknown.
It’s worth noting that the transactions could influence Ethereum price given the substantial amount involved.
In a cryptocurrency fraud scheme that took place in late 2017 and early 2018, investors purchased BARs, a crypto token, to participate in an initial coin offering (ICO) for Titanium Blockchain Infrastructure Services (TBIS), a company founded by Michael Stollery. The ICO raised approximately $21 million from investors in the United States and overseas. However, in 2018, the United States Securities and Exchange Commission (SEC) accused Stollery of not registering the ICO with the regulator and other allegations.
In July 2022, Stollery pleaded guilty to one count of securities fraud for his role in the fraud scheme. He admitted to falsifying aspects of TBIS’ whitepapers, planting fake client testimonials on the TBIS website, and falsely claiming business relationships with the United States Federal Reserve, which misled investors about TBIS’ legitimacy and prospects for profit. He also admitted to commingling ICO investors’ funds with his own and using a portion to pay for unrelated expenses.
Although Stollery was facing up to 20 years in prison, he will instead serve a total of four years and three months for his involvement in the cryptocurrency fraud scheme. The SEC has been increasing its actions against the cryptocurrency space in recent years, with 30 enforcement actions against digital-asset market participants in 2022, up 50% from the 20 actions in 2021. Of the 30 enforcement actions in 2022, 14 involved initial coin offerings (ICOs), with more than half of these including a fraud allegation.
According to Abe Chernin, vice president of Cornerstone Research and co-head of its FinTech practice, the SEC continues to pursue actions alleging that tokens issued in ICO-related unregistered securities offerings were investment contracts subject to SEC regulation and enforcement. Chernin also noted an increase in assistance to the SEC from outside agencies and organizations during crypto-related investigations under the Gensler administration.
Overall, the sentencing of Michael Stollery is a reminder of the SEC’s increased scrutiny of the cryptocurrency industry and its commitment to prosecuting fraudulent activities.
His Majesty’s Treasury has finally released a long-awaited consultation document in preparation for the imminent regulation of cryptocurrencies in the United Kingdom. The comprehensive paper, which is 80 pages long, covers a wide variety of subjects, ranging from the challenges posed by algorithmic stablecoins to the concept of nonfungible tokens (NFTs) and initial coin offers (ICOs).
The Treasury has claimed that the recommendations aim to position the financial services sector of the United Kingdom in the forefront of crypto and to prevent harsh control measures that have gathered traction worldwide throughout the crypto winter. This is the intention behind the proposals.
It was declared by the Treasury that there would not be a distinct regulatory system for cryptocurrency since it will be governed under the framework of the Financial Services and Markets Act 2000 in the United Kingdom (FSMA). The objective is to create an environment in which crypto and conventional financial systems compete on an equal footing. However, the Financial Conduct Authority (FCA), which is Britain’s primary financial regulator, will modify the laws established by the FSMA in order to apply to the market for digital assets.
At the very least, one of the annoying effects of that ruling is that it requires participants in the cryptocurrency market to go through the registration process again. They were previously required to go through the procedure in order to get a licence under the FCA’s licencing framework, but now they will have to be evaluated “against a broader variety of indicators.”
The good news is that, unlike in the conventional banking industry, organisations dealing in cryptocurrencies won’t be required to frequently publish their market data. On the other hand, the exchanges would be obligated to store the data and ensure that it may be accessed at any time.
In contrast to several of its overseas peers, the Treasury Department has opted not to prohibit the use of algorithmic stablecoins. They will instead be classified as “unbacked crypto assets,” and not as “stablecoins,” as a result of this change. Despite this, the word “stable” cannot be used in any of the marketing for the algorithmic coins that are being done for cryptocurrencies.
According to the consultation document, a distinct regulatory framework for crypto lending platforms would be examined, and it should require lenders to take into consideration an acceptable collateral value and contingency preparations in case the participants’ main market counterparties collapse.
“Beginning immediately, the government need to promote deeper engagement with the business sector in order to design a comprehensive, risk-based framework that is in line with worldwide best practise.”
Nick Taylor, who is in charge of public policy for the EMEA region at the global cryptocurrency exchange Luno, believes that the sector is now through a watershed moment. He made the following observation: “Whilst there is still a distance to go until new laws come into place, we’re heartened by the size of the Government’s ambition.”
On April 30th, 2023, the consultation will come to an end. Up until that point, the British government is interested in hearing feedback from any and all relevant parties, including crypto companies, financial institutions, trade associations, representative bodies, academic institutions, law firms, and consumer advocacy organisations.
In a new chapter of the EOS community versus creators saga, the EOS Network Foundation’s (ENF) founder and “community-elected CEO” Yves La Rose revealed that they are preparing for a legal “war” against EOS creators Block.one.
According to La Rose, they are reviewing any potential legal action “to seek $4.1B in damages.” Currently, the EOS leader mentioned that a Canadian law firm is working with them to explore what legal action they can take against the original developers of EOS.
As Founder of @EosNFoundation I share your frustrations! We are taking further steps to hold @B1 accountable for its past actions and broken promises against #EOS. Review of ALL possible legal recourse to seek $4.1B in damages underway. Let’s do this together! #4BillionDAO coming
— Yves La Rose (@BigBeardSamurai) February 10, 2022
In a blog post, the foundation announced that many members of the EOS community are very dissatisfied with Block.one.
“Block.one has not kept its word regarding past promises and that both the community and individual EOS users have been harmed as a result.”
Last year, the foundation announced that they have gone through negotiations with Block.one to find common ground. Both parties engaged in discussions in an attempt to settle the issues in a fair manner. However, ENF notes that Block.one walked away from the negotiations. As a result, the block producers of EOS deemed it necessary to freeze the vesting for future EOS token earnings for Block.one.
Related:New research claims 21 accounts pumped the $4.4B EOS ICO with wash trades
Back in 2018, Block.one conducted an initial coin offering of EOS tokens (EOS), selling 900 million tokens for more than $4 billion, the biggest ICO held during that time. However, since then, many have been disappointed by the direction that the company took.
A few months back, La Rose described EOS as a failure. Citing the market capitalization and the decrease in value, he said that it’s a terrible financial and time investment. He also said that the community lost key developers and turned away from blockchain development and shifted towards asset management.
DeFi banking protocol MELD recently made headlines for attracting more than $1 billion worth of staked Cardano (ADA) to its protocol through a novel funding mechanism called an initial stake pool offering, or ISPO, marking an important innovation in how early adopters support blockchain startups. Cointelegraph had the opportunity to connect with MELD CEO Ken Olling to discuss the significance of the ISPO as well as Cardano’s role in facilitating widescale participation in the stake pools.
ISPO: An overview
The ISPO is a novel way for investors and other early adopters to support a project by delegating cryptocurrency to public stake pools in exchange for the project’s tokens. MELD is currently the only known project to employ an ISPO even though the concept had been previously proposed elsewhere.
The MELD ISPO, which was initiated on July 1, allowed Cardano holders to stake their ADA for any duration and quantity in exchange for MELD tokens. The first stake pool was filled within 24 hours after roughly $100 million worth of ADA was contributed. Within five days, four stake pools equivalent to nearly $200 million were filled.
MELD stopped accepting new delegations on Oct. 27. By that time, nearly 620 million ADA had been staked for a cumulative value of over $1 billion. All said, the ISPO had over 40,000 participants. MELD also raked in $10 million in revenue.
The ISPO was a significant departure from previous crypto funding initiatives, most notably the initial coin offering (ICO) and security token offering (STO), and was a nod to Cardano’s growing ecosystem. It also highlighted pent-up demand in the market for DeFi projects, which continue to pique investors’ interest.
Blockchain projects raised billions of dollars in funding in 2017 and 2018 before regulatory crackdowns and a brutal crypto bear market put an end to the mania. Source: 3TS Capital
Why Cardano?
Of all the proof-of-stake (PoS) chains in existence, MELD selected Cardano for its ISPO for its lower transaction costs, attractive staking mechanism and overall architecture, according to CEO Ken Olling. During MELD’s initial development phase in mid-2020, Cardano was perceived to be the best option considering the circumstances surrounding Ethereum (ETH) at the time.
“There aren’t any more established blockchains,” Olling told Cointelegraph, adding:
“One of our requirements was a modern PoS blockchain. The only real option at the time was Cardano. You have Solana, which has a two-tiered, much more complex staking mechanic in regards to the blockchain. It also operates legally in a different way. And then you have other PoS blockchains, but none of them really provided the full picture or the full package.”
Related:How Solana and Cardano are paving new avenues for NFT growth
Olling said his firm is still “very bullish” about Cardano’s future despite its recent struggles. ADA’s performance has lagged considerably in recent months after being one of the crypto market’s hottest performers through September.
Achieving financial efficiency
At its core, MELD offers non-custodial banking services, enabling users to lend and borrow with both crypto and fiat currencies as well as stake their MELD tokens for interest. Lenders can deposit both cryptocurrency and fiat currency on the platform. Borrowers have the ability to borrow in both types of assets after posting their crypto as collateral.
The crypto collateral option is attractive for investors because it means they can borrow fiat to meet their expenses without having to sell their digital assets and thus incur a capital gains penalty. (Capital gains taxes are a source of consternation for cryptocurrency investors, with large bag holders always looking for ways to use their newfound wealth in the most efficient way possible.)
When asked about what differentiates MELD from other crypto lending and borrowing platforms, Olling identified two factors: first, “on the highest level, we offer transparency,” he said. “It’s on the blockchain, so what happens with funds on the protocol is completely open-sourced, unlike centralized crypto lending and borrowing services.”
Secondly, and on a more practical level, MELD offers “users fiat currencies for their crypto-backed loans, whereas other […] DeFi competitors can only offer other cryptocurrencies.”
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Related: DeFi can be 100 times larger than today in 5 years
Cryptocurrency lending has emerged as one of the biggest use cases within DeFi, with the likes of Aave and Compound achieving over $14 billion and $11 billion in total value locked (TVL), respectively. More than two-dozen other protocols have achieved a TVL of at least $100 million, according to industry data.
Although the emergence of DeFi has presented a sort of threat to the traditional financial system, the industry’s growth has been largely driven by users who already have access to legacy banking systems. That appears to be slowly changing as crypto entrepreneurs target the globe’s vast unbanked and underbanked populations in pursuit of financial inclusion. According to Olling, financial inclusion is a by-product of a more efficient financial system that is made possible through DeFi.
A new debate in the EOS community has emerged over B1’s share of the EOS token supply.
Community-backed EOS Network Foundation (ENF) has raised concerns over the 45 million tokens that B1 controls.
The CEO of ENF, Yves La Rose, said the community could attempt to remove B1’s vesting code.
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A group representing the EOS community wants to delete vested tokens held by Block.one, claiming the team failed to deliver on promises.
EOS Network Foundation Goes to War Against B1
The ongoing battle between EOS Network Foundation, and the project’s founding team Block.one (B1) has taken a new turn. There is now a raging debate in the EOS community over B1’s vested share of the EOS token supply.
It has been reported that B1’s CEO Brendan Blumer and co-founder Brock Pierce met with the EOS Network Foundation (ENF) to discuss a contention over B1’s vested EOS tokens.
At the network genesis, B1 allocated itself 10% of EOS’s total supply of 1 billion vested over a period of 10 years. Currently, out of a share of 100 million tokens, B1 has access to about 45 million tokens.
B1, the development team behind EOS, raised $4 billion in a 2017-18 initial coin offering (ICO) on the promise of creating a better and faster alternative to Ethereum. Later, EOS failed to find any kind of reasonable adoption. When B1’s technology lead Dan Larimer left, it caused a major blow to the network’s prospects of becoming an “Ethereum killer.” The token has been dwindling ever since in terms of value and overall market capitalization. After years of poor network growth and token performance, the EOS community and block producers (EOS network validators) decided to reboot the project.
Under the leadership of Yves La Rose, a community-backed group EOS Network Foundation (ENF) was created in August 2021 and declared a new roadmap for the EOS ecosystem. In an address to the EOS community, La Rose accused the B1 executives of “negligence and fraud” and said the community planned to distance the blockchain from B1’s centralized control.
In November, B1 said it was entering into an agreement to transfer ownership of the 45 million EOS tokens (worth $196 million) to Helios, a firm owned by B1’s co-founder Brock Pierce. In response, ENF expressed its disapproval and claimed the tokens did not belong to B1 in the first place, as it had failed to deliver on its “social contract” of supporting the network.
Commenting on ongoing negotiations with B1, La Rose said the network consensus is that the tokens held by EOS do not belong to them. In a tweet, he said:
“The gist of the disagreement and why negotiations are happening is that B1 believes the tokens they sold (still vesting) belong to them, while the network through consensus as it exists believes the opposite, those tokens do not belong to B1.”
Update from Yves about the negotiations with B1 #EOS pic.twitter.com/RGyu4sp3Y4
— EOS Bull (@EOSBull) November 15, 2021
La Rose wrote further that “the network could remove the vesting code, and the network believes it is within their rights to do so.”
It is not surprising that B1 disagrees with ENF’s claims. B1 co-founder Brock Pierce said the $45 million tokens will be used to grow the EOS ecosystem. On Twitter, Pierce said B1 has many “plans in the pipeline” including a potential launch of an exchange-traded fund (ETF) tied to EOS. In this Twitter thread, Pierce added:
“I don’t thinkEOSwill benefit from authoritarian control over account balances that will undermine property rights, and I think the ecosystem should focus on collaborating together to succeed.”
The community does not appear to be convinced of B1’s stated financial motives. The idea has not resonated with many community members who appear to simply want B1 out of the way. Such members have supported the idea of a takeover at the protocol level. “Just delete them. There’s no good compromise for eos”, one anonymous member wrote. Another member called B1 a scam and that it is “going against their publicly stated commitments.”
As a consequence, ENF, with support from the community, may attempt to fork the EOS software code to change the original token allocation. It is still unclear how ENF can achieve that fork unless it controls the smart contract for genesis token deployment. It is more likely that the two sides will come to a mutually beneficial compromise before a drastic move is made.
Disclosure: At the time of writing this feature, the author owned, ETH, SOL, and other cryptocurrencies.
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