Posted on

Ledger Under Fire After Questions Arise Over Security Measures

Crypto’s flagship cold storage tool, Ledger, is taking heat from the crypto community this week following a Reddit post from a Ledger co-founder that suggested that external companies could have exposure to user seed phrases on an opt-in basis. The situation is far from ‘cut and dry’ and has led to substantial dialogue throughout crypto communities around the degree of security that Ledger owes it’s users.

Let’s take a look at both angles of the argument.

Ledger Lunacy: Where It All Started

The genesis of this started with a new firmware update over the past day, leading to quick question marks about the implications from the udpate. A Reddit post on subreddit r/ledgerwallet late on Monday / early on Tuesday this week is what set it all off, courtesy of a thread titled “Is there a backdoor? Yes or No.”

The Reddit poster asked in the body of the post:

An official answet from ledger would be very much appreciated. Also because the alternative (typing the three parts of the seed for the three custodians) goes against the number one rule of never typing your seed in a connected device. This silence on how this “recovery” works is the worst response. Customers appreciate transparency.

The post opened the floodgates to speculation, and responses from Ledger co-founder Nicolas Bacca (u/BTChip) didn’t field encouragement for Ledger users. Bacca provided several responses to user concerns throughout the thread, including this reply on the thread itself:

There’s no backdoor and I obviously can’t prove it (because it’s not possible to prove a negative) – let’s just say that you’re already using the device agreeing with the fact that Ledger cannot update the firmware without your consent – it’s the same mechanism for Recover, which is locked behind ownership of your device, knowledge of your pin, and finally your consent on device.

There’ll be more information published shortly describing how the service works – the tldr is that no single company knows your seed if you decide to use it. If you don’t want to use it there’s no consequence whatsoever in your previous experience of the device.

In all, users are seemingly left still trying to answer one dying question: Can a Ledger device expose a seed phrase?

The Big Picture: Back & Forth Dialogue

While the meltdown continued on Reddit, parlayed with new subreddit threads on the ‘hot’ page like “consider moving to a different cold wallet,” “How to kill your business,” and many more, Crypto Twitter also took hold of the situation. Resident Crypto Twitter dev Foobar amplified the situation further:

Not all were in agreement though, as another noteworthy dev, Udi Wertheimer, posted his disagreement. Wertheimer replied that the post was “irresponsible hyperbole” and that “Ledger remains as safe to use today as it was yesterday. For MOST people it is the easiest hardware solution to recommend.”

In all, it is right and to-be-expected in the crypto community that firms like Ledger face immense scrutiny: the integrity of the industry has a meaningful degree at stake over the security and integrity of the largest cold storage provide in the business. While it is likely that some community members are losing their head too quickly, Ledger will likely continue to face pressures to increase transparency around the degrees of access to wallet keys.

Posted on

Exploiter Of “Highly Profitable Trading Strategy” Arrested In Puerto Rico

A few months can feel like a lifetime in crypto. However, it probably hasn’t felt like long enough for Mango Markets exploiter Avraham Eisenberg, who was taken into custody in Puerto Rico this week. Eisenberg gained notoriety on crypto Twitter after describing his nine-figure exploit of the Solana-based protocol as “a highly profitable trading strategy.” On Twitter and across other outlets, Eisenberg was insistent that his exploit was simply taking advantage of the protocol’s code, and that his actions weren’t illegal or even immoral.

However, U.S. federal prosectors seem to disagree.

An Exploiter’s Endeavor

In October, Eisenberg exploited Solana-based Mango Markets and made headlines not just for the exploit – which was essentially a ‘looping’ exploit, manipulating the price of the MNGO token – but also for the outlandishly-sized ‘bug bounty’ that Eisenberg managed to walk away with. B

ug bounties are commonplace for exploiters – often ‘white hat’ exploiters who look to take advantage of code for the ‘better of society’ – but never have amounted to a payout this large. While Eisenberg attempted to include language in a Mango protocol proposal that could shield him from “criminal investigations,” that didn’t slow the U.S. DoJ and FBI from looking into his activity.

At the time of our October publishing on the matter, it was unclear if Mango would be able to make a recovery; little did we know how much damage the Solana ecosystem would face in the 60 days following that event. Since the exploiter’s endeavor, Solana’s defi landscape has crumbled, FTX fallout has impacted the chain drastically, and it’s once flagship NFT community is facing intense pressure with the departure of signature projects DeGods and y00ts.

Mango Madness, Continued

Court documents have been unveiled this week, shedding light on Eisenberg’s arrest in Puerto Rico. An initial filing, dated December 23, 2022 and released this week, federal prosecutors outline two separate charges surrounding Eisenberg’s “scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts” on Mango. The 14-page filing details how Eisenberg manipulated MNGO perps, detailing his movement between wallets.

The filing closes by mentioning that Eisenberg attempted to flee law enforcement by swiftly departing the U.S. to Israel, and highlights the belief that Eisenberg was well aware of the illegality of his actions, based on Twitter activity. The document is rounded out by a request from the FBI agent to issue a warrant for Eisenberg’s arrest.

A second filing, dated December 27, confirms his arrest in Puerto Rico. Crypto Twitter rejoiced with memes surrounding Eisenberg’s arrest.

Posted on

Coinbase Drops XRP & Other Tokens, Cites Low Activity

As the FTX saga continues, all eyes are on crypto exchanges: Coinbase, Crypto.com, Binance and the like all have hefty sets of eyes on their next moves.

There is plenty to be said for the state of crypto exchanges today, but Coinbase’s announcement of the delisting of several tokens: BCH, ETC, XLM, and XRP. Let’s dive into the state of crypto exchanges currently, and more on Coinbase’s latest announcement.

Exchange: Status Check

While Binance CEO Changpeng ‘CZ’ Zhao has seized the spotlight as crypto’s ‘main character’ lately, Crypto.com’s leadership team – spearheaded by CEO Kris Marszalek – has largely been on the defensive, while Coinbase has been treading their steady positioning. Plenty of other major headlining exchanges have followed suit with Coinbase. Many have sought to maintain posture and look to keep ‘business as usual’ to weather the storm.

Nonetheless, the spotlight is on. As more threads unravel around the FTX saga, consumer trust is impacted in immeasurable ways; one consistent thread is that all exchanges, the aforementioned 3 and beyond, have faced pressures to increase transparency around reserves.

That could lead to exchanges at large preparing for increased regulatory oversight, particularly with the U.S. Senate hearing regarding FTX less than 48 hours away.

XRP is frequently a top 10 token in biggest market cap in crypto; however, Coinbase has elected to no longer support trading of the token, citing “low activity.” | Source: XRP-USD on TradingView.com

Coinbase’s Delisting

We haven’t seen a delisting from Coinbase in recent memory. In a tweet announcement earlier on Tuesday, Coinbase announced the token delisting:

 

Coinbase, once notorious for being too lenient on their coin adoption policy, is tightening the belt and cutting the fat. The move may surprise those that pay attentive to tokens not named Bitcoin and Ethereum. XRP is generally seen as a low-cost token that is easy for cross-exchange swaps with it’s low fees. Similar sentiment is often shared with fellow delisted token Stellar (XLM), and both tokens typically sit in the top 25-50 in terms of biggest tokens by market cap – making them surprising cuts considering some of the more fringe, lesser-known tokens that Coinbase has listed previously.

The final two tokens, Bitcoin Cash (BCH) and Ethereum Classic (ETC) are both the result of forks and will be recognizable to more legacy crypto users who can recall when these tokens came into existence as early ‘forked coins’. Their stagnant performance and slow retraction of relevance has led to an unsurprising result with this announcement.

Users impacted should refer to Coinbase’s blog post on the matter for more details.

Featured image from Coinbase.com/press, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

DoJ Reportedly Eyes USDT Once Again; Tether Responds

It’s a tale as old as time: the Department of Justice investigating Tether and USDT. It’s been reported far and wide, and for years on end, with speculation throughout. We’re back again as 2022 comes to a close, this time courtesy of a new report from Bloomberg.

Let’s take a look at what’s being reported, and Tether’s response.

Bloomberg’s Latest Report On Tether

On a Bloomberg Crypto Report live broadcast on Monday afternoon, paired with a published piece released earlier in the day, the outlet reported that the U.S. Department of Justice (DoJ) was revamping investigations into potential bank fraud allegations against Tether.

According to Bloomberg, officials have pumped new life into the investigations, including handing the case over to Manhattan-based US Attorney Damian Williams, who Bloomberg describes as one of the most aggressive crypto prosecutors – to the degree that he even “recently secured a guilty plea from a person affiliated with one of Tether’s payment processors.”

Reports have swirled around the DoJ and Tether for nearly half a decade, and shouldn’t catch anyone by surprise at this point. However, the response from the stablecoin doesn’t simply deny the Bloomberg report – it frames it as flat out false.

USDT’s market cap dominance has floated between 5-10% for most of this year. | Source: CRYPTOCAP: USDT on TradingView.com

Tether’s Response

Tether CTO Paolo Ardoino issued a swift response via a Twitter thread:

Tether released a formal response on their website as well, describing Bloomberg’s report as “desperate for attention” and “recycling old news that isn’t even factual.” Critics cite issues such as Tether’s employee-to-circulating supply ratio (Tether has over $60B in USDT circulating, with a handful of employees), along with the stablecoins reserve discrepancy (the stablecoin platform paid over $60M in fines with no admittance of wrongdoing), as major concerns in Tether’s viability to serve as the de facto ‘reserve stablecoin.’

Tether has continued to insist that the firm has remained transparent and in communication with law enforcement officials, and that it is “business as usual at Tether.” The response goes on to directly contradict Bloomberg’s report, stating that “Tether executives have had no interactions with the DOJ in connection with any investigation for well over a year and the DOJ does not appear to be actively investigating Tether.”

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

Fidelity To Support Ethereum Trading For Institutions

Fidelity Digital Assets is adding support for Ethereum trading for institutional trading effective at the end of the month. The news comes through a widely amplified screenshot of a leaked email that was reportedly sent to the firm’s clients.

Lets take a look at what we know in the early days around this leak, with realized support for Ethereum expected to be just a week away.

Fidelity Digital Assets Makes A Big Stride

Fidelity Investments operates one of the biggest financial institution behemoths on the planet, and has shown continued investment in their digital asset division. While the perspective last year from Fidelity Digital Assets – throughout the midst of the bull market – was that institutional demand for Ethereum was not sufficient, that seems to have changed course. According to reports surrounding the leaked memo, Fidelity Digital is expected to offer Ether buying, selling and trading for institutional clients as early as October 28.

The move is surprising to some, considering the bear market conditions that have persisted this year.

Ether (ETH) trading is expected to be supported later this month for institutional clients of Fidelity Digital Assets, according to leaked memos that have been unveiled this week. | Source: ETH-USD on TradingView.com

The Building Blocks Of Institutional Investment

This announcement, however, might not be surprising to all. A survey conducted by Fidelity Digital last year that engaged financial advisors, high-net-worth investors, hedge funds, family offices, endowments and foundations, and similar businesses across the globe, found that price volatility and lack of fundamentals have been two main drivers behind skepticism around digital asset investments.

One year later, the market has found relatively stability (albeit, bear market stability) compared to years past, and there is more use cases behind Ethereum blockchain-based utility than ever before. Has that been enough for the tide to turn when it comes to institutional investment? This move from Fidelity Digital suggests so. Additional movement throughout this year has suggested Fidelity’s interest in continuing a push into digital assets, too, such as a bullish perspective in recent months from Fidelity’s Director of Macro Jurrien Timmer, and company-wide support for Bitcoin allocations in employee 401k’s. Just last week, the company continued it’s push, launching an Ethereum Index Fund.

We’ll see how institutional investment responds to Fidelity’s new offering, but regardless, it only bodes well for the big-picture future of the broader crypto landscape.

Featured image from FidelityDigitalAssets.com, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

JPMorgan Taps Former Celsius Exec As Crypto Regulatory Policy Director

Nothing supersedes personal experience. At least that seems to be the case with a new JPMorgan Chase hire this week, as the financial firm has brought in former Celsius executive Adam Iovine to serve as a director of digital assets regulatory policy, according to a variety of reports on Wednesday, which cite Iovine’s LinkedIn page.

The reports come after headlines around JPMorgan’s CEO Jamie Dimon slamming crypto as ponzi schemes. Nonetheless, the institution has flip-flopped it’s public perspective around crypto while still building digital asset infrastructure. Let’s look at this latest, seemingly bizarre hire, and what we know thus far.

JPMorgan Chase: An Unexpected Hire

Iovine was previously the head of policy and regulatory affairs at cefi platform Celsius, which came to a crumbling downfall earlier this year. His stint at Celsius was brief, serving at the company for roughly 8 months before departing the role in September. Now, less than 60 days later, Iovine joins JPMorgan Chase as an executive director in the firms digital assets regulatory policy division. A bit of an unorthodox hire, but Iovines resume certainly brings some… unique experience from his time at Celsius.

The cefi platform, led by CEO Alex Mashinsky, was widely considered one of the biggest of it’s kind, offering substantial yields on tokens that led to hefty criticism over the platform’s viability. From the critic’s vocals to reality’s being, Celsius started unwinding mid-year falling the crash of the Terra Luna ecosystem.

 

It’s been a rocky road for cefi platform Celsius, but one company executive has moved on to bigger and brighter ambitions, joining JPMorgans digital assets regulatory policy division. | Source: CEL-USD on TradingView.com

A Flurry Of Inconsistency

Iovine’s hiring aside, JPMorgans perspective on crypto can never seem to remain consistent; the firm certainly wants to take advantage of the burst of interest in digital assets, but doesn’t seem to be much of a proponent of them otherwise. Dimon in recent weeks described crypto as “decentralized ponzis,” while still playing both sides and touting the institution’s latest blockchain-based product, JPMorgan Onyx.

Regardless of JPMorgan’s shifts in publicly-voiced sentiment, the role that Iovine is filling here is reportedly a newly created one, which serves as just another example that despite a crypto bear market, traditional finance players are still showing continued investment.

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

Mango Madness: Exploiter Could Walk Away With Unparalleled ~$50M Bug Bounty

Forget March Madness, Mango Madness is in season this time of year. The Solana-based lending protocol has been a spectacle unlike any other throughout this week, and that’s certainly saying something considering the amount of antics crypto brings to the table on frequent occasion. Since our first covering of Mango’s exploit that led to a full-fledged drain of the protocol, things have only gotten more twisted and convoluted.

Let’s take a look at how things have developed this week and where things go for Mango Markets moving forward.

A Mango Monstrosity

Mango’s exploiter has generally been seen in the crypto community as less “hacker” and more “manipulator,” if we’re being frank. Regardless, things got interesting after Tuesday’s exploit when the attacker initiated a governance proposal; that proposal is said to have closed. However, a subsequently-created proposal by Mango Markets (which has now passed, as of Saturday morning) is phrased as a bug bounty to make users whole, but it settles Mango with just shy of $70M of their existing $114M balance. That leaves the exploiter with a nearly $50M ‘bug bounty,’ a strikingly large number compared to any previous bug bounty in crypto and one that has led to a large degree of criticism (look no further than the governance proposal’s comment section for evidence of this).

The exploiter quickly deployed the MNGO tokens that they seized (roughly 30M tokens) to vote in favor of their own initial proposal, but did not seem to vote on the subsequent and closing proposal – which nonetheless closed at a tally of 473M in favor and 16.6M against. The exploiter has seemingly gained protection through the proposal as well, as the protocol “will not pursue any criminal investigations or freezing of funds once the tokens are sent back as described,” according to the proposal’s language.

Mango Markets (MNGO) is looking for stable ground to see if recovery is possible following Tuesday’s exploit. | Source: MNGO-USD on TradingView.com

What’s Next

It’s hard to say where we go from here, and what degree of protection that attacker will actually see. The exploiter has reportedly funded attacking accounts with an FTX wallet, and their degree of protection is up for speculation.

Regardless, even when you deduct the initial $10M balance that the exploiter introduced into Mango, the protocol is generally giving up a heftier sum then usually seen in these scenarios – one of the largest in crypto’s history, in fact. We’ll see if the protocol can keep the heartbeat alive and shut down critics in the long run.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

Solana-Based Mango Protocol Suffers $100M+ Exploit

Mango Markets was victim to the latest exploit this week, as crypto cannot seem to escape an absolutely abhorrent Tuesday. Two exploits less than one day apart – and less than a week after the BNB Chain exploit that utilized a bridge to create millions of new BNB. Another nine-figure exploit has rocked the crypto sphere, this time with Solana-based Mango Markets. The protocol faced a massive drain of funds, over $100M worth, after a hacker drained the project through price manipulation and high-dollar leverage.

Let’s look at this latest exploit and what we know in the early hours.

The Price, Plus Pressure 

We’re fresh off the heels of a massive, six-figure exploit of Binance Bridge that resulted in newly minted tokens in the range of $500M in value. While not as high-dollar, news of another million dollar vulnerability in Ethereum-based Temple DAO is less than a day old. The combination with now this latest trio in October alone rings another stark reminder how much of a vital issue both smart contract security and risk management are in this space. The Mango Markets lending protocol was one of the top five largest in TVL on the Solana blockchain, according to data from DefiLlama.

Mango Markets (MNGO) protocol was practically drained on Tuesday following an exploit. | Source: MNGO-USD on TradingView.com

Mango Counters, Offers Bounty

Mango Markets has advised users not to deposit into the protocol following the exploit, and has asked the hacker to get in contact regarding a bug bounty. Critics have emerged with Discord screenshots from earlier this year that show channel moderators acknowledging concerns about exactly what seemed to have led to Mango’s downfall: massive futures bets against themselves and price manipulation, effectively taking advantage of a low-volume trading token.

Meanwhile, in their initial response, Mango has described the action as “oracle price manipulation.”

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

BNB Chain Halts Operations Following Massive Exploit

Binance’s signature Binance Smart Chain is the latest to suffer from an exploit, and the chain is “temporarily paused,” according to the official BNB Chain Twitter account and Binance’s CZ.

Early hours following the hack look to show 2M BNB, or over $500M at time of publishing, through the Binance Bridge. Furthermore, many have criticized the response around the matter. Let’s take a look at the details we know thus far.

Binance Bridge Can’t Avoid The ‘Bridge Problem’ 

One of the biggest issues around crypto vulnerabilities often seems to be bridges – where movement from one chain to another adds a layer of complexity that has proved to be a challenge. According to Paradigm researcher @samczsun (who provides a detailed thread on the the exploit), the BSC Token Hub bridge was tricked to send the attacker two transactions of 1M BNB each.

However, in early reports it seems that the tokens were not owned user tokens, but rather tokens not in existence before the exploit.

Binance’s BNB token faced impacts from today’s exploit. | Source: BNB-USD on TradingView.com

Criticism Around Halting The Chain

BSC reps went on to explain that they “coordinated with validators to temporarily suspend BSC,” which led to many critics emerging around the degree of centralization surrounding the chain. It seems that today’s hack is the second largest in history, and while Binance CEO Changpeng ‘CZ’ Zhao has assured holders that their funds are safe, there’s still a lot to discover here.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

FTX Wins Auction For Voyager Digital Assets, Valued Over $1B

Voyager Digital has officially completed it’s auction for acquisition, with powerhouse exchange FTX securing the winning bid, according to emerging reports (and confirmed via press release) in recent hours. Reports in recent weeks had stated that the flagship exchange was in the bidding mix with competitors Binance and CrossTower, with all three supposedly in the final running for Voyager’s assets – and each of which were supposedly offering unique packages in the bidding process.

With FTX coming out on top, let’s take a look at what sort of implications can lie from this acquisition moving forward.

FTX & Acquisitions 

FTX has long sought a ‘growth by acquisition’ model with mixed results. The firm is currently in the process of working through an acquisition of CeFi crypto lender BlockFi, which sought to avoid the same fate as competitor Celsius. FTX’s U.S. division is looking to acquire BlockFi, and can now add Voyager Digital to it’s list of new assets to build the FTX rolodex. While the aforementioned Binance and lesser-known exchange CrossTower were reportedly in the mix, it was FTX who came out with the most appetizing bid – despite rumors that Binance’s offer included a large cash sum payment.

Rumors had swirled in recent days around the deal’s closing, with commentators suggesting that FTX would shell out $50M in cash in it’s bid, and that the company desired that existing Voyager customers were moved over the FTX platform – where they could claim a pro rata share of the coins the debtors possess from the existing Voyager accounts. It remains to be seen if and how that will play out. According to the press release, FTX’s winning bid is valued at roughly $1.4B.

Voyager Digital (VOYG) is traded on OTC market, TSX, and has seen value dilution commensurate with the platform’s downfall. | Source: TSX: VOYG on TradingView.com

Where Things Go From Here

The closing of the deal will allow FTX to finalize acquisition of Voyager’s assets, but the timeline around these processes is still murky. Voyager can now still move forward with it’s Chapter 11 filing and look to reconcile debtors and former customers to some degree – but certainly not wholly. Nonetheless, FTX will see all of Voyager’s assets and customer accounts moved under their umbrella.

The move is likely seen as a win for FTX, who submitted a bid attempt for Voyager Digital back in July with no traction.

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

U.S. House Legislation Looks To Place Two-Year Ban On UST-Like Stablecoins

Are stablecoins in the sights of U.S. regulators?

The decline of Terra Luna and it’s UST (and correlating LUNA) token earlier this year brought along plenty of fanfare. It’s full damage and implications, however, have clearly yet to be established; a new draft of a U.S. House bill is proposing a two-year ban on stablecoins similar to Terra’s UST stablecoin.

UST depegged and caused major ripples throughout defi earlier this year. Let’s look at what the legislation could potentially bring to the market.

Stablecoins Under Scrutiny?

According to a report from Bloomberg, the House bill takes aim at stablecoins and would “mandate a study on Terra-like tokens from Treasury” along with a bevy of federal financial bodies, including the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., and the SEC.

The final version of the bill has not been proposed and the bill, led by House members Maxine Waters and Patrick McHenry, is still working through draft iterations before it’s presentation to the House. However, it’s reported that the bill will also allow banks (and others) to issue stablecoins – so an outright ban does not seem to be in the cards for this legislation. Stablecoin issuers would need to seek approval from standard federal regulators, and a formalized process for non-bank entities that want to issue a stablecoin would be established.

The bill could be presented to vote on as early as the end of this month.

Despite challenges for major stablecoin issues, like Circle and their USDC stablecoin, there is still substantial growth taking place – as exhibited by Circle’s USDC market cap dominance. | Source: USDC Market Cap Dominance on TradingView.com

State Of Stablecoins

While Terra’s downfall is often stated as the driver behind stablecoin scrutiny (and rightfully so), there is a long-standing history between crypto critics and stablecoins – including legacy stablecoin Tether (USDT). As we’ve covered in recent months, while critic’s eyes were already honing in on Tether’s reserve assets in recent years, Terra’s crumbling and the billions of dollars lost with it have given U.S. legislators extra ‘pep in their step’ in addressing crypto regulations around stablecoins.

Nonetheless, healthy regulation can spur growth – and that’s been the core of the argument for stablecoin issuers like Circle, who look to build relationships and lobby with current legislators, and even exchanges like Coinbase. Most U.S.-based firms would rather have a clear set of rules and guidelines to follow than worry about getting stuck in a loosely-defined ‘grey area.’ We’ll see how it shakes out.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

Robinhood Lists USDC, It’s First Stablecoin

Robinhood hasn’t been shy about it’s desire to be a player in crypto. The platform has had a few years of ups and downs as it’s navigated it’s crypto offerings. This week, however, the platform secured a win on the crypto front by listing it’s first stablecoin, USDC.

What We Know

The news first came straight from the horses mouth, as Robinhood’s Twitter posted a tweet this morning sharing the news. The token is Robinhood’s 17th supported crypto, and third largest in market cap behind blue chips Bitcoin and Ethereum. It’s the latest token addition since adding Cardano (ADA) at the beginning of the month. It is a growing list of crypto tokens for Robinhood, who also added Polygon in recent weeks.

Additionally, the move shows more bolstering growth for Circle’s USDC, which has sought out the number one spot over Tether’s USDT – the longtime dominant stablecoin. The narrative has been driven by an ideology that Tether’s account management is less transparent and straightforward than USDCs.

Robinhood (HOOD) has had a challenging year on the NASDAQ. | Source: NASDAQ: HOOD on TradingView.com

The Stablecoin Battle

In recent months, the good folks over at Arcane Research put together future growth projections based on USDC’s momentum this year, which shows USDC overtaking USDT’s number one spot as early as mid-October. The projected gap for today’s number is likely a bit closer than what we’ve seen in reality, however, signaling that a USDC takeover for the top spot could take another 4-6 months. That’s been exacerbated by USDC whale holdings percentage hitting a two-year low in recent weeks.

As our team cited, that movement has been driven by broader market movement, as well as U.S. sanctions on Tornado Cash. Exchange deposits have been substantially low for USDC as well, but mean transaction volumes are still flying high in recent months. Tornado Cash and other external factors, such as threats of U.S. legislation on stablecoins and other crypto, have led to more negative sentiment around stables than positive.

Robinhood’s adoption of USDC could help spur the growth in catching up with USDT’s lead. However, it remains to be seen how the more casual investor that typically frequents Robinhood will fare with a stablecoin asset, particularly one that doesn’t generate any interest.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.
This op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.

Posted on

Celsius CEO Mashinsky Proposes Resurrecting Platform As A Digital Asset Custody Firm

The saga that has been Celsius’ downfall this year has been well documented. CEO Alex Mashinsky has been a focal point of crypto critics after his engagement in ‘taking over‘ Celsius’ crypto strategy in the 11th hour before the platform’s pseudo-shutdown.

That isn’t slowing down a persistent Mashinsky, who, despite enduring a slew of bankruptcy procedures, continues to trudge along in forecasting some sort of future for Celsius. This week, Mashinsky is looking to reposition Celsius as a digital asset custody firm, according to a new report from The New York Times.

What Led To Today’s Celsius ‘Doom & Gloom’ 

About a year ago, state regulators across a handful of U.S. states started setting their sights on yield-generating platforms such as BlockFi and Celsius. Celsius, for some time, was offering aggressive rates for holding tokens on the platform. At it’s highest point last year, Celsius held tens of billions of funds and at times, promised double digit percentage yield that was compounding weekly.

As 2022 came into the fold, the market was middling but certainly not into ‘bear mode’ when Mashinsky and company rolled out their initial “custody solution.” Within a few months later, following the crumbling of Terra Luna, the platform was revealed to have exposure to DeFi protocols, including the likes of Terra’s Anchor Protocol, and was experiencing strong headwinds from more aggressive market conditions. It was around this time that Mashinsky starting deepening his position in company strategy. By July, the company had frozen user funds and filed for bankruptcy.

Celsius (CEL) token has seen a volatile short-term performance. | Source: CEL-USD on TradingView.com

The Pivot: Can It Work?

According to the Times report, in the past week, Mashinsky has proposed a project codenamed ‘Kelvin,’ where Celsius shifts to solely providing custody services and collecting fees from depositors. According to the report, Celsius employees were rightfully skeptical. Mashinsky countered to internal skeptics, according to the Times, by citing some of the biggest corporate turnarounds, telling employees: “Delta filed for bankruptcy. Do you not fly Delta because they filed for bankruptcy?”

The short stroke is that Celsius’ credibility is just as bankrupt as it’s balance sheet. Take one look at Celsius’ Twitter replies for a prime example. While Delta and Pepsi recovered from bankruptcy, they did so in different eras, and more importantly: neither was beholden to mass amounts of customer’s wealth. The brand image and identity behind the firm is likely a ship too far sailed.

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

How A Solana-Based DEX Bricked Itself, Locking $500K+ In Funds

It’s not easy being a dev. In recent days, a young Solana-based DEX, OptiFi, faced an unexpected downfall after a simple coding error. The platform released an announcement that their mainnet program is now unrecoverable yesterday. The move has resulted in an unexpected shutdown for the DEX.

Let’s review what we know from the announcement and how something like this could be avoided in the future.

OptiFi’s Unexpected Shutdown

OptiFi was an options and derivatives focused decentralized exchange (DEX) built on Solana that was less than a year in the making. The platform touted Solana’s low latency transactions, portfolio margining and partial liquidation mechanisms. The platform also brought the “first-ever delta-neutral options AMM vault” on Solana that provided yield to depositors. So how did we get here? According to OptiFi’s full debrief, a code update that was moving to Solana mainnet saw a user error that resulted in the use of a ‘solana program close’ command, locking roughly $660K worth of USDC in OptiFi-stored funds in their AMM vault.

OptiFi has assured that user funds will be compensated (while noting that a large majority of the funds are from an internal team member), and a proposal on the Solana github is currently active to address the matter. OptiFi notes in their debrief of a “lesson we learned harshly:”

EVERY DEPLOYMENT NEEDS A RIGOROUS PROCESS AND SINGLE POINT FAILURE CAN BE AVOIDED. PLEASE DON’T RUSH LIKE WHAT WE DID, ESPECIALLY FOR DEFI PROJECTS.

Solana (SOL) has been an emerging player in NFTs and DeFi, despite occasional setbacks like this recent OptiFi debacle. | Source: SOL-USD on TradingView.com

Is It Still Solana Season?

Despite small network setbacks, Solana has still seen strong strides this year in both DeFi and NFT marketplaces. Across NFTs, Solana-based projects like DeGods and Okay Bears, among others, have helped spurred the network to a strangehold of the #2 spot (behind only top dog Ethereum). In the more relevant DeFi, Solana has largely outperformed last year to date metrics, according to DeFiLlama. This has been spurred by growing products like Solend, Serum and more. DeFiLlama has Solana listed as the #6 chain in order of total value locked (TVL), at just over $1B worth of funds.

Building and shipping products is rarely a small task, and this is no exception. It hurts to see ecosystem products, regardless of chain, fall to seemingly small errors, but it unfortunately is a byproduct of this world. Our team extends best wishes to the OptiFi builders as they move forward.

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

Solana Hot Wallets Suffer Ongoing Attack, Roughly $5M Stolen Thus Far

We’re on the heels of cross-chain bridge Nomad suffering a demolishing hack earlier in the week, and now hackers are doubling down with an attack on Solana hot wallets mid-way through the week. On Tuesday afternoon, reports emerged of some sort of vulnerability that was taking advantage of Solana-based wallets. Approaching 24 hours later, there are still quite a bit of unknowns, and we’re approaching nearly $5M of hacked funds.

Let’s take a look at what we do know so far.

A Solana Scare

Nearly 10,000 wallets across mobile users utilizing both Slope and Phantom (two of the leading Solana wallets) fell victim to this week’s hack in what is seemingly a result of poor user privacy management. While reputable users in crypto Twitter are still working on a post-mortem, a Dune Analytics dashboard created by @tristan0x shows a visual of how quickly things developed; while activity on Wednesday has been at a standstill, there is still cloudy forecasts around whether or not this vulnerability is still active.

General crypto Twitter consensus thus far has pointed towards Slope as being the domino to fall here; the platform’s latest correspondence on Twitter, from Tuesday, states that they are “actively working to sort out the issue as rapidly as possible and rectify best we can.” On Wednesday, Slope released a message to users that was reposted by reputable crypto Twitter user foobar:

Statement from the Slope team pic.twitter.com/uOEdO25x8c

— foobar (@0xfoobar) August 3, 2022

 

Despite abundant question marks around Solana security, the price of the SOL token has remained surprisingly strong. | Source: SOL-USD on TradingView.com

Related Reading | Why The Crypto Fear & Greed Index Points To Sustainable Recovery

Crypto Vulnerabilities Run Rampant

So how did it all happen? Post-mortems from independent sleuths and other reputable sources in the space have yet to be released, but speculation has largely landed on some variation of a ‘software supply chain attack’ being the likely downfall here. This is where attackers search far and wide for security vulnerabilities across network protocols, server infrastructure, and platform coding practices to take advantage of potential holes.

In this case, the root issue seems to lie within Slope and some have even speculated that it could be a malicious insider at Slope taking advantage of the platform’s practices. As foobar notes in the Twitter thread above, “compromised Phantom wallets came from seed phrase imports used in Slope.”

If you or someone you know is concerned about the safety of their funds on a Solana-based wallet, move funds to a hardware wallet where the seed phrase key has not been typed or inputted digitally on any device. Until a post-mortem from Slope and other reputable resources in the community emerges, there will be a variety of assumptions around these circumstances – so stay tuned and stay secure.

Related Reading | TA: AVAX Struggles To Hold Above Resistance As It Eyes $40

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

Nomad Bridge Suffers ~$200M Exploit

Bridge exploits continue to prove to be a top concern across DeFi and crypto at large, as bridges time and time again have proven to be a major point of vulnerability. Enter once again another prime example with the latest 9-figure exploit, this time on the multi-chain Nomad Bridge.

In the early hours following the exploit, we’re looking at an exploit in the range of $160-190M – let’s take a look at this and more from what we know thus far.

Nomad’s Collapse

According to Defi Llama, the bridge closed off July with a TVL of right around $190M, and as August went underway, many users on crypto Twitter began to watch the bridge get exploited and essentially drained to 0. The bulk of that was in USDC, WETH, and WBTC. However, roughly a half dozen different tokens were drained, ranging anywhere from ten’s of thousands to nearly $100M worth.

It was first noted by Twitter user @spreekaway:

Nomad bridge getting rugged??? Looks very very sus pic.twitter.com/nvtMIjf0rD

— Spreek (@spreekaway) August 1, 2022

Seed investors in Nomad include the likes of Polygon, Coinbase Ventures, OpenSea and others, and the bridge took on a $22M round of fundraising just 4 months ago.

Ether (ETH) can be wrapped to be used to transfer across networks, through bridges, at a lower cost than ETH. | Source: ETH-USD on TradingView.com

Related Reading | TA: Near Protocol Struggles To Break Out Despite Relief Bounce

Another Bridge Bites The Dust

However the Nomad team looks to recover, it will be a long road to travel. Bridges continue to be a focal point of vulnerability in crypto, as 9-figure exploits continue to wreak havoc. Earlier this year, Wormhole suffered a loss over $300M in one of the biggest losses in DeFi history. Cross-chain activity should be a major point of emphasis for crypto security as many have touted it as “the future of crypto” – but also offers areas of vulnerabilities.

Unlike many of the vulnerabilities seen in crypto, however, this one was seemingly just a contract exploit utilized by a variety of addresses (some of which have said they plan to return the funds). In this case, a user manipulated code noted in the bridge’s audit, taking advantage of a vulnerable function to have every message on the bridge valid. Other users saw this taking place, and sought to see if they could do so themselves.

Perhaps enough funds will be returned for the bridge to continue forging ahead after the dust settles. At time of publishing, the bridge’s TVL sits just shy of $5,000 – a tiny amount of the near $200M locked pre-exploit, but still a small bounce back from the sub-$1,000 worth that was seen immediately following the exploit.

Related Reading | Ethereum Investors Clamor To Take Profits As Profitability Explodes

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

Crypto Hedge Fund 3 Arrows Capital (3AC) Files For Bankruptcy

Crypto hedge fund 3 Arrows Capital is slated to be another pillar piece of 2022’s bear market headlines, joining the likes of brutal bear market moments that include Terra Luna’s downfall and CeFi’s drama.

While rumors have swirled for several weeks now about 3AC’s status, limited details with concrete information have been released. That’s evolving to close out this week, as new reports have shown that 3 Arrows Capital is filing for Chapter 15 bankruptcy in New York.

A Dozen Headaches & 3 Arrows Makes For Chapter 15

In a bull market, it can all be rainbows and sunshine – and 3 Arrows was certainly seeing that with an AUM at around $10B earlier this year. As the tides have shifted this year, though, so too has the business operations.

The unraveling began in early June with speculation that 3AC was failing to make owed payments, headlined by ~$80M owed to derivatives exchange Deribit. Following roughly a week or so of silence from 3AC co-founders Zhu Su and Kyle Davies, Su posted this this tweet, essentially confirming that 3AC was facing serious liquidity issues:

It’s been dominos ever since. CeFi platform Voyager Digital stated that they could lose in excess of $650M due to the 3AC collapse, according to the Financial Times; the platform has since suspended withdrawals and trading. Fellow CeFi player BlockFi also sustained roughly $80M in losses, according to the Times.

This week, 3 Arrows filed for Chapter 15 bankruptcy in New York, following liquidation as well as regulatory inquiries from Singaporean officials, where the hedge fund is based. Chapter 15 is geared towards addressing “cross-border insolvency.”

Strong headwinds for Bitcoin (BTC) this year have exemplified the crypto market’s uphill challenges recently. | Source: BTC-USD on TradingView.com

Related Reading | Leading Crypto Exchanges See Negative Funding Rates, Have The Bears Taken Over?

State Of CeFi: Pulse Check

Centralized finance platforms, commonly referred to as CeFi, aim to take the utility of DeFi and integrate easy-to-use mechanisms and UI to attract more casual consumers with aggressive yields. However, speculation has surrounded a bevy of these firms as speculators suggest that their loans are high-risk and that their liquidity is volatile.

Then comes the subsequent problem – where even if liquidity isn’t an immediate issue for a CeFi platform in a downturn, users belief in potential liquidity concerns leads to a bankrun, and now liquidity becomes an issue because of mass withdrawals. Many believe that some CeFi platforms have engaged in riskier processes to generate yield, which adds another layer of complexity, and for platforms with ties to VC firms like 3 Arrows Capital, things only get even cloudier.

Related Reading | Can This Bitcoin Ratio Have Hints For A Bottom?

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

Reports: FTX Targeting BlockFi Purchase At $25M

BlockFi, Celsius, Nexo, and more: tough times can lead to difficult measures, and this year’s bear market is showing no exception to some of these players. Look no further than the current state of affairs for centralized finance (CeFi) platforms, who have been facing substantial headwinds with no end in sight.

Now, after days of rumors and reported exploratory deals, reports have emerged that powerhouse crypto exchange FTX is putting together the final ties around an acquisition deal of BlockFi at just a $25M valuation. The news comes after reports emerged that FTX passed on an acquisition deal for Celsius after seeing the CeFi firm’s balance sheet.

BlockFi On The Block

Should the purchase come to fruition at the reported valuation, it’ll be a major hit for BlockFi equity holders, following a nearly $5B valuation last year in the midst of bull market movement. However, that $25M number could move drastically between today’s reports and closing time – and a successful acquisition will of course take months to close. BlockFi CEO Zac Prince described the number as “market rumors” and outright denied the number, stating in a tweet that “we aren’t being sold for $25M.”

FTX is on the shortlist of exchanges that have sought out opportunity in the midst of crypto market downturn, exploring buyouts or equity share purchases for both Celsius and BlockFi in recent weeks, according to a variety of reports. However, based on the hard facts available to the public, the viability and likelihood of a buyout for BlockFi is still difficult to measure.

Celsius (CEL) has faced an uphill battle as the platform has still paused withdrawals for customers. | Source: CEL-USD on TradingView.com

Related Reading | Ethereum Loses Steam As Exchange Supply Spikes

State Of CeFi: Pulse Check

How did we get here? Bear market downturn over the past month or two has caused major pain for CeFi platforms, in a flurry of madness that started with Celsius freezing withdrawals earlier this month amid worries of a bank run and lack of immediate liquidity within the platform’s holdings. BlockFi has undoubtedly faced the heat, too, as FTX provided the firm with a $250M emergency line of credit just last week. While reports across the market suggest that BlockFi has several options on the table, it seems that few will lead down a path that spares equity shareholders of value at present time. Nexo has largely stayed quiet during the chaos, but there’s various internet sleuths who have targeted Nexo with content campaigns around the company’s practices as well.

Regardless of how you feel about CeFi, the decline of infrastructure in this bear market shouldn’t be celebrated – we’ll see how it all shakes out when the tides recover.

Related Reading | USDC Exchange Reserves Rise As Investors Escape From Bitcoin

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

The Nightly Mint: Daily NFT Recap

After a few days off, we’re back with a new Nightly Mint to give you a quick NFT recap. In the midst of market chaos, including the Celsius debacle, Coinbase layoffs, and swirling rumors of crypto VC firm’s downfall, NFTs have largely been left for the sidelines in the broader crypto conversation to start this week.

That doesn’t mean that things have come to a screeching halt.

The Nightly Mint

Latest Mint: NFT Marketplace OpenSea Shifts To Seaport Protocol

OpenSea has announced their shift from Wyvern to Seaport today, a protocol adjustment that will “significantly improve gas costs” and add other small features and UI upgrades. According to the platform’s blog post, gas fees are estimated to be cut by roughly 35%.

Other upgrades include support for ‘collection offers,’ as well as attribute-specific offers for NFTs on the platform, and new features (including a highly demanded ‘bulk listing’ feature) have been cited to be on the way now that Seaport is live.

Related Reading | Blue Chip NFTs 101 – Let’s Travel To Space With The Doodles Collection

Solana (SOL) has been an emerging NFT player this year. | Source: SOL-USD on TradingView.com
RadioShack Goes RatioShack

It was around 6 months ago that we covered the re-emergence of dinosaur technology storefront RadioShack’s return to the market as a… DeFi platform. It was a twist we didn’t exactly forecast. Now, RadioShack is now RatioShack on Twitter and is after NFT influencer’s heads. Definitely saw this coming.

Imagine hanging out on Twitter and tryna flex this pfp lmfao pic.twitter.com/JrtaA7cLPS

— Ratioshack (@RadioShack) June 14, 2022

The ‘Minty Fresh’ Take

No need to spam refresh. Let’s look at some underdogs instead, please.

NFTwitter: “99% of projects will go to 0. I believe these will be the ones to survive:” followed by a list of the top 10 projects at this very moment on OpenSea 😂😂😂

— bobbyhundreds.eth (@bobbyhundreds) June 14, 2022

Related Reading | Exchange Inflows Ramp Up As Crypto Investors Clamor To Exit Market

Featured image from Pexels, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.

Posted on

American Express To Offer Their First Crypto Rewards Credit Card

American Express is rolling out it’s first-ever crypto rewards credit card as part of a partnership with Abra, according to a joint announcement at this week’s crypto conference Consensus in Austin.

The announcement is a move in the footsteps of other major credit card providers, most notably Visa and Mastercard, but is still a major call-out in crypto integration into the current credit card landscape. There are over 60M AmEx holders according to figures from earlier this year – and now the network will bring access to direct cryptocurrency rewards for spending for the first time ever with a partner card with Abra.

American Express And Abra Team Up

The ‘Abra Crypto Card’ was unveiled at the annual Consensus event in Austin, Texas today, and will offer crypto rewards for any purchase category and amount, according to the formal press release. Abra offers a platform token, ‘Crypto Perx’ (CPRX) that is expected to be alongside a variety (but thus far undisclosed) of top tokens as options for earning rewards. It was a big day for the team at Abra, who paired the American Express announcement with news that their app would support custody and gallery views of NFTs.

American Express’ president of Global Network Services Mohammed Badi stated that Abra brings “deep expertise in both crypto and traditional financial services” that makes them a fitting partner for the endeavor.

‘Crypto Perx,’ (CPRX) is the native platform ERC-20 token for Abra; the token saw strong positive price reaction to the news around Abra’s new credit card on the AmEx network. | Source: CPRX-USD on TradingView.com

Related Reading | Solana To Support DeFi, NFT, And GameFi In South Korea With A $100M Fund

Join The Club

Visa and Mastercard are two of the most commonly-recognized names in the credit card business, but don’t sleep on American Express, who is only behind Citibank, Chase, and the two aforementioned top dogs when it comes to card issuance. AmEx has carved out a long-time niche of serving top dollar customers and offering commensurate rewards.

The Abra card is expected to bring those rewards along with it too, with rewards from the slate of the AmEx network, including “Amex Offers (for shopping, travel, dining, services, entertainment, etc.), presale ticket access, Global Dining benefits, and purchase protections,” according to the press release.

Abra joins a growing list of crypto-native card issuers with crypto rewards, including the likes of BlockFi, Gemini, Nexo and others. Even companies that aren’t crypto-first, such as Venmo and SoFi, are offering crypto reward cards.

Related Reading | Head To Head: Bitcoin, Ethereum Profitability For Investors

Featured image from Pixabay, Charts from TradingView.com
The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.