Poly Network, a cross-chain DeFi protocol, recently suffered a $600M hack — the largest DeFi exploit in crypto history. Mudit Gupta, security researcher and SushiSwap dev, breaks down the attack, explaining how it occurred, why the hacker is returning the funds, and what Poly Network should do next. Show highlights:
how Poly Network works
what specific mechanism the hacker attacked on Poly Network
why many people (including myself) had never heard of Poly Network before the hack
how “keepers” failed to protect Poly Network
why a failed transaction was the key to pulling off the hack
what SlowMist claims to have discovered about the hacker
what could be motivating the hacker to return the stolen funds
how the hacker is communicating with Poly Network
why Tether was able to freeze funds while USDC and BSC allowed the hacker to get away with their tokens
how Poly Network should handle negotiations with the hacker
Though Okcoin chief compliance officer Megan Monroe said that there are still certain grey areas over cryptocurrencies in the United States, further regulation may not be the best solution.
In a statement to Cointelegraph, Monroe said current U.S. regulations are sufficient to police cryptocurrency exchanges, token issuers and custody wallet providers, but “jurisdictional boundaries of these federal financial regulators are neither clear nor collaborative.” Rather, she advocated for a framework with greater clarity to determine which crypto firms should be subject to regulation and let investors know which protections are available.
“A clear regulatory framework with established jurisdictional boundaries, flexible compliance standards and open communication channels with registrants (as well as with state regulators) would be a good way to initiate an evolving framework for market participants to grow their businesses,” said the Okcoin chief compliance officer. “[This] would provide retail customers that seek to work with regulated entities a clearer understanding of the investor protections that would be available to them.”
She added:
“We do not believe that further regulation will necessarily prevent fraud and platform abuse […] Fraud should not be limited to focusing on retail customer regulatory compliance issues in the securities markets.”
Two of the major government agencies handling digital asset regulation in the United States, the Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC, have different jurisdictional claims regarding crypto.
The SEC often determines whether tokens are securities using the Howey Test, with Chairperson Gary Gensler arguing the crypto industry, including decentralized exchanges, falls within the regulatory purview of the federal agency. However, former CFTC Chair Christopher Giancarlo has claimed that cryptocurrencies are commodities and thus would be subject to regulation by the CFTC.
The apparent lack of clarity can be seemingly confusing to crypto firms that are considering relocating to the U.S., or local ones making the transition to the digital space. David Schwartz, chief technology officer of Ripple Labs, told Cointelegraph earlier this year that it was “difficult to figure out which laws apply and how they apply to something new,” like cryptocurrencies or blockchain technology.
“Over time, the regulators have educated themselves about the industry and expanded their scope to incorporate new blockchain technology, such as decentralized exchanges and DApps,” said Monroe. “But, the regulations still lag behind the industry innovation, which is why the regulators have yet to provide comprehensive regulatory guidance on decentralized finance technology.”
Related: Will regulation adapt to crypto, or crypto to regulation? Experts answer
The Okcoin chief compliance officer said that an “incubator” approach might be one possible solution to this “patchwork of financial regulations,” wherein crypto traders and businesses could operate without fear of legal action for a set period of time. She also encouraged projects to clearly identify the risks to both investors and users, and for greater communication and collaboration between agencies like the CFTC, SEC and Financial Crimes Enforcement Network.
Axelar, a decentralized interoperability network that connects blockchain ecosystems, applications, and users, announced it has entered into a new partnership with Keplr, the largest Cosmos interchain wallet.
The partnership will integrate the Keplr Wallet into the Axelar network to unlock liquidity within the Cosmos ecosystem and beyond. Keplr is the most considerable Cosmos wallet and offers users all-in-one tools to manage their assets, access decentralized applications (dApps), and stake tokens.
Integration Interests
Through this integration, users will be able to transact, stake, and participate in the Axelar network governance via the Keplr web and mobile wallets.
Furthermore, the partnership will also allow assets to be transferred from the Axelar network to other Cosmos chains and back via IBC; supported by both the Axelar network and Keplr.
“Keplr is the go-to wallet for Cosmos users, and we are excited for them to partner with the Axelar network and support the ecosystem. This integration is a big milestone for the multi-chain future and to connect Cosmos networks with other external ecosystems.” – Sergey Gorbunov, Co-Founder & CEO of Axelar
Integration means users will be able to move assets from all Cosmos chains to other ecosystems connected via the Axelar network, such as EVM chains like Ethereum, Avalanche, Moonbeam, and others. This will not only increase liquidity for users but will expand Keplr’s network of dApps and their utility.
“This latest integration with Axelar network is satisfying a growing demand for cross-chain asset movement support across the industry. Axelar network will lead the charge in bringing highly in-demand assets such as Bitcoin to the Interchain; and further catalyze IBC adoption.” – Josh Lee, Co-Founder of Keplr Wallet
DeFi (decentralized finance) has expanded its frontiers beyond the imagination of users. From a TVL of just over USD 1 billion in June 2020, to the current staggering USD 80 billion, its exponential growth is becoming a focal point to measure the massive activity in the world of finance, not just the token economy. The genesis of the various chains and DeFi platforms fuels positive growth the industry has been…
Blockchain Australia is displeased with the way its government is treating the crypto industry locally.
According to the association, the government is judging the industry through malicious scammers and actors who’re tarnishing its image through their activities. Blockchain Australia believes that the authorities should engage with the industry to develop regulations that’ll fit all purposes.
Blockchain Australia Engages The State
There has been a lot of discussions between the association and the State in recent times. The Australian government has been reviewing the importance of the blockchain & Fintech industry to its national goals and also looking into crypto regulations.
Related Reading | Vitalik Buterin Urges Ethereum To Grow Beyond DApps
Last week, the CEO of Blockchain Australia, Steve Vallas, appeared before the Senate Committee in charge of the “Australia as a Technology & Financial Centre.”
During the meeting, Vallas stated that the association doesn’t agree with the assertions that the crypto industry is “a wild west.” He also mentioned that they have been eager to sit down with regulators and create an all-purpose regulatory framework for the industry.
Vallas went ahead to trace the ICO boom from 2017 to 2018 and accused the government of not showing interest in the industry.
According to the CEO, there’s no appetite for Initial Coin Offerings in the country, and regulators are not even interested in ICOs happening again. In Vallas’s statement, the Australian government is still waiting to see if the industry will succeed, and that has kept them far from what other countries are achieving.
Steve Vallas Arguments On The Matter
Another top participant in the Australian crypto industry had also echoed Vallas’ argument. Michael Bacina is a partner of Piper Alderman, a law firm in Australia. His area of specialization is on digital law around Digital assets, fintech, blockchain, and regtech.
In his arguments, Bacina agrees that the Australian government is taking a passive approach to the crypto industry. But he made a little comparison between the United States and Australian crypto regulation issues. According to Bacina, people in the US are studying prosecutions to understand a little about crypto regulations.
Still on the issue, Chloe White, the MD of Genesis Block, also mentioned that the government is usually interested in crypto when there’s hype in the market.
Related Reading | American Banks Encouraged To Partner with Cryptocurrency Firms
According to her, this intermittent interest has prevented local policymakers from completely understanding the industry. As such, they only hold a reactive stance regarding analysis and policy advice.
Before now, another top shot in the government, Senator Andrew Bragg, had implored the government to do more. He had asked for clear crypto assets regulations to encourage tech & financial innovations to remain at the frontlines.
A cryptocurrency enthusiast who exploited a bug in the ICON network to mint a large amount of its native ICX token can pursue entitlement claims according to a California federal judge.
On Monday, Aug. 9, U.S. District Judge William H. Orrick said that the case raises novel questions about digital property. He added that plaintiff Mark Shin had adequately alleged that the ICON Foundation was wrong to freeze his crypto asset accounts after he took advantage of its flawed code.
According to Law360, the allegations were enough to allow the case to go forward, with Judge Orrick denying the bulk of ICON Foundation’s motion to dismiss the claims.
According to court filings, Shin discovered a bug in the ICON Network’s code after a software update in August 2020. When attempting to transfer staked tokens, Shin discovered that 25,000 new native ICX tokens had appeared in his wallet.
He thought that there was a “visual bug with the wallet software” and attempted the process again whereby another 25,000 ICX tokens were generated.
The code flaw allowed Shin to create a total of 14 million new ICX tokens worth around $7.8 million at the time. Many of those tokens he then transferred to the Kraken and Binance cryptocurrency exchanges.
According to the court order, Shin acknowledged that “the authors and developers of the [software update] may not have intended for the network proposal to behave as it did,” but argued that he was the new lawful owner of the tokens since the code changes had been adopted.
He claimed that ICON disagreed and asked Binance and Kraken to have his accounts frozen, saying that he had attacked the network. The judge agreed with the plaintiff’s claims of possible token ownership rights allowing the case to proceed, stating:
“The inquiry at this stage, however, is whether Shin has plausibly alleged possessory interest in the ICX tokens. I find that he has.”
Ted Normand of Roche Freedman who is representing Shin added that the case raises questions over decentralization claims some networks make:
“If you’re a DeFi company issuing assets… you can’t have a decentralized ecosystem only when it’s convenient.”
The South Korean blockchain project has fallen from its previous lofty positions in the market capitalization charts as ICX tokens have tumbled in price and largely missed out on this bull market. Today, ICX trades at $1.12, down 91.5% from its January 2018 all-time high of a little over $13.
Related:ICON (ICX) unaffected by South Korean tax investigation into ICONLOOP, says chairman
CoinDCX, an India-based crypto exchange, has announced the closing of a $90 million Series C round.
The funding was led by B Capital Group (founded by former Facebook co-founder Eduardo Saverin); plus returning investors Coinbase Ventures, Polychain Capital, Block.one, and Jump Capital among others.
Funding Development
With the funding, CoinDCX will pursue new business initiatives, enhance its product offering, improve technology infrastructure, and expand its workforce.
Other notable plans for CoinDCX include partnerships to expand its user-base, setting up a research and development (R&D) facility, strengthening policy conversations through public discourse, and collaboration with the government to introduce favorable regulations and education support programs.
“With the support of the largest institutional backers in both the traditional and digital asset spaces; we will double down on our efforts to build the next generation of products with cutting edge innovation, improve our existing product array, and strengthen our exchange infrastructure and product team.” – Sumit Gupta, Co-Founder & CEO CoinDCX
Bitcoin price just touched $46,000 for the first time in months following the worst second quarter selloff on record. The push has continued beyond yesterday’s weekly close – a pivotal close that left behind an extremely bullish battle call.
The pattern, called “Three White Soldiers,” is often the sign of a powerful uptrend brewing, but it often arrives with a feign of weakness. Here is more about the potentially important pattern and what it could mean for the current crypto market cycle.
Bitcoin Bulls Prepare For Battle With Three White Soldiers Pattern
Bitcoin price recently took a bullish turn after spending weeks grinding at support around $30,000. Repeated failure by bears to push prices lower gave bulls the confidence to make close to a 50% recovery from highs set earlier in the year.
Three full weeks of uptrend confirmed with last night’s weekly close has formed a bullish Japanese candlestick pattern called “Three White Soldiers.”
Related Reading | The Idea That The Bitcoin Bottom Is In Is Broadening
According to Investopedia, Three White Soldiers “suggests a strong change in market sentiment” and is characterized by three similarly sized candle bodies in a row. It is “important to note that the strong moves higher could create temporary overbought conditions,” the site continues.
If the pattern is valid, a short term retracement could result, followed by an explosive uptrend. A similar pattern appeared almost one year ago to the day, and the result was nine months of the most powerful uptrend Bitcoin has ever seen.
Bitcoin has potentially formed a powerful bullish pattern | Source: BTCUSD on TradingView.com
Three Black Crows Example In Crypto: With And Without A Trap
A similar sized drop as the August 2020 bear trap in crypto would take Bitcoin price back to around $35,000 before going on an absolute tear and potentially the last leg up of the bull run.
Bears might not get their short-lived trap this time around, either. As with most chart patterns, any bullish signal has an opposite bearish signal. The counter-signal to the Three White Soldiers is called Three Black Crows and is a signal that Bitcoin has felt the bite from before.
Three Black Crows with and without retracement | Source: BTCUSD on TradingView.com
Three Black Crows appeared before the plummet to the bear market bottom, and the same signal popped up once again at the June 2019 peak at around $14,000 per BTC.
Related Reading | A Generational Bitcoin Buy Signal Is Almost Back
In the first scenario, there was no retracement and Bitcoin simply fell like a ton of bricks through support. In the second scenario, there was a bull trap in October 2019 and an over 40% retest. The move broke records for one of the largest daily in history, but failed to break the resistance level and reclaim it as support.
After another failure, Bitcoin price fell back to its bear market bottom in Black Thursday 2020. If the two bullish signals (Three White Soldiers) also alternate in terms or retracement, there could be no bull trap, and instead the cryptocurrency slices through resistance as easily at support fell in December 2018.
Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
Ongoing regulatory scrutiny has forced many crypto businesses across the globe to close up shop.
Amid this crackdown, Sam Bankman-Fried, CEO of prominent crypto exchange FTX, has been vocal about his continued efforts to adapt to the changing regulations around running crypto businesses, announcing FTX’s efforts toward finding systems for streamlining its Know Your Customer (KYC) operations.
“As we mature as a company, we’ve been building out our checks, finding and incorporating more signals,” Bankman-Fried stated. He also highlighted the addition of a new feature on FTX that confirms a user’s jurisdiction based on their registered phone number. Bankman-Fried said:
“We check users’ phone numbers against their submitted names in KYC1, in order to further verify them. When this doesn’t work or there isn’t data, we’ll require KYC2 to access some features of the site, including futures.”
Sharing insights within FTX’s United States operations, the entrepreneur stressed the company’s continued efforts in “searching for more tools to confirm identity, hopefully while minimizing the hassle for users.” Bankman-Fried hopes this effort will help the company experience “smoother” operations within U.S. jurisdictions.
Currently, FTX aims to outperform rival crypto exchanges such as Binance and Coinbase. As reported by Cointelegraph, the CEO has previously said that acquiring Goldman Sachs and the Chicago Mercantile Exchange “is not out of the question at all” if it can surpass all crypto businesses to become the biggest exchange.
Complementing the announcement concerning the KYC-related update, Bankman-Fried cited investors’ funds and safety as a priority. He also assured investors there would be no restrictions on withdrawals unless the exchange can link the user’s activities to money laundering and theft-related activities. In doing so, the crypto exchange will continue to implement two-factor authentication and similar methods to help prevent theft.
Related: Regulatory clarity for crypto would take 3 to 5 years, FTX CEO says
Bankman-Fried recently discussed the immediate need for clarity in crypto regulation, supporting FTX’s drive to apply for licenses across numerous jurisdictions. In doing so, the FTX CEO claimed to spend “five hours a day” on regulation- and licensing-related activities.
The CEO said that he expects governments to have a clearer stance on crypto regulations in the next three to five years and intends to comply with KYC and Anti-Money Laundering requirements unique to each jurisdiction they serve.
Singapore, Aug 9th, 2021 — Mimo, home of the world’s first decentralized, algorithmically-pegged EUR token, is now officially live on Polygon.
Polygon lands a massive integration with Mimo. With easy access to blockchain services all on the strength of a euro stable token, the newly merged DeFi project brings a valuable utility to the network.
