U.S. Senators Elizabeth Warren, Bernie Sanders, Bob Casey, and Richard Blumenthal have sent a letter to the Internal Revenue Service (IRS) and the Treasury, urging them to take swift action in closing tax loopholes that are being exploited by “crypto tax evaders.”
The lawmakers emphasized that failure to act promptly could result in a “crypto tax gap” of $50 billion, leading to a potential loss of $1.5 billion in tax revenue for the 2024 financial year if tax policy updates are delayed.
The senators’ concerns stem from the tax laws outlined in the Senate’s $1.2 trillion infrastructure bill, which was passed in August 2021.
The bill aimed to increase tax reporting requirements for businesses operating as crypto brokers. Despite the bill being signed into law, the Treasury and IRS have yet to release their new tax rules.
The deadline for their implementation is December 31, and the senators are calling for an expedited process.
Elizabeth Warren has been a vocal critic of the cryptocurrency industry in the United States and even made it a central focus of her Senate re-election campaign, forming an “anti-crypto army.”
Bernie Sanders, though less vocal about crypto, has co-signed letters with Warren seeking tighter restrictions on the space.
READ MORE: IRS Issues New Ruling: U.S. Crypto Investors Must Report Staking Rewards as Gross Income
A recent poll commissioned by Grayscale Investments revealed that 59% of Democrats and 51% of Republicans view cryptocurrencies as the future of finance, suggesting that Warren’s anti-crypto stance might not resonate with the majority of the population.
The senators’ letter serves as a reminder of the growing concern among lawmakers about potential tax evasion facilitated by cryptocurrencies.
They stress the importance of implementing robust regulations promptly to prevent tax evaders and intermediaries from exploiting the system and diverting billions of dollars annually from the U.S. government.
With the clock ticking and the deadline approaching, the lawmakers are pushing for the IRS and Treasury to take action immediately to address the crypto tax gap and ensure a fair and transparent tax system for all citizens.
Whether the agencies will act promptly in response to the senators’ letter remains to be seen, but the call for regulatory clarity in the crypto space continues to gain momentum.
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BlockFi, the cryptocurrency lender undergoing reorganization, has taken a significant step forward as the United States Bankruptcy Court for the District of New Jersey conditionally approved its disclosure statement.
The company released a joint statement with the Official Committee of Unsecured Creditors on August 2, 2023, urging all eligible parties to vote in favor of the plan before the September 11 voting deadline.
This approval is crucial as it will lead to the resolution of the Chapter 11 cases and the eventual return of client funds.
Once the bankruptcy plan obtains the necessary approval, BlockFi aims to focus on recovering funds from various defunct firms, including Alameda Research, FTX, Three Arrows Capital, Emergent, Marex, and Core Scientific.
The primary objective is to optimize the recovery of client funds while also countering potential claims by third parties that could dilute client assets.
The plan offers clients the option for releases if they don’t opt out of a voluntary third-party release.
This release would exempt them from any claims and causes of action that BlockFi might have against them.
However, this release does not apply to clients who withdrew $250,000 or more from BlockFi Interest Accounts (BIA) or BlockFi Private Client (BPC) Accounts on or after November 2, 2022.
Additionally, the plan stipulates that BlockFi will not reclaim amounts under $250,000 that clients properly transferred from BIAs or BPCs to BlockFi Wallet and subsequently withdrew from Wallet before the platform’s pause on November 10, 2022.
READ MORE: Decentralized Exchange on Coinbase’s Base Network Pauses Trading Amidst Concerns of Exploit
Furthermore, clients with claims under $3,000 or those who choose to reduce their claim to $3,000 will be part of the convenience claim class and receive a one-time cash distribution from the BlockFi estate equal to 50% of their claim.
In another development, the United States Securities and Exchange Commission (SEC) has agreed to postpone the collection of a $30 million fine from BlockFi until creditors are fully repaid.
This fine constitutes the remaining balance of a $50 million settlement reached with the regulator in February 2022.
With the conditional approval of the disclosure statement, BlockFi is inching closer to resolving its bankruptcy cases and ensuring the return of funds to its clients.
The company urges all eligible parties to vote in favor of the plan before the voting deadline to move forward with the reorganization process successfully.
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U.S. Judge Denies Motion to Dismiss SEC Lawsuit Against Terraform Labs
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Los Angeles, California, August 3rd, 2023, Chainwire
Entertainment and gaming franchise WAGMI Games has unveiled key appointments who will lead its quest to transform web3 entertainment. A number of flagship hires have been onboarded to the mobile-first gaming company with experience of leading global gaming studios.
WAGMI Games has sought to acquire top talent from established games companies whose skills can be brought to bear within a web3 environment. Chief among these is Esteban Gil, who led top-grossing mobile game Garena Free Fire and served as LPM (Lean Portfolio Management) at Respawn and Apex Legends. Esteban has assumed a similar role at WAGMI, where he will oversee business strategy development, with a focus on driving consumer-oriented products.
Esteban Gil said: “I’m excited to apply the skills and experience I’ve gained from the mobile space to the world of web3 and NFT technology. I believe that these technologies have the potential to revolutionize the gaming industry, and I’m thrilled to be a part of that journey. By leveraging these cutting-edge technologies, we can deliver even more engaging and immersive gaming experiences to our fans around the world.”
In addition, WAGMI Games has announced the appointment of Brent Pease, former Director of Operations at Electronic Arts. The highly experienced executive has assumed a combined COO/GM role at WAGMI, overseeing operations with a focus on implementing key growth strategies. Brent is a widely respected figure within the gaming industry, having founded Industrial Toys before assuming a senior role at Electronic Arts, which acquired his startup.
Brent Pease said: “’I am honored to have been asked to bring my 30 years of experience in building games and companies to this incredible team of passionate creators. This is the most exciting vision for players I have seen and I look forward to making amazing games at WAGMI that thrill our ever-growing community.”
WAGMI Games is on a mission to drive mass adoption of web3 games, which currently attract just 3% of the 3 billion players who regularly participate in gaming. The WAGMI team is confident that through driving down the barriers to participation, including onboarding friction and crypto wallet requirements, it can create highly engaging games that are mass market ready.
To solve these challenges, WAGMI Games has assembled a skilled team of professionals with a proven track record of developing and successfully launching blockbuster gaming titles. This talented lineup of founders, high-level executives, and producers are ideally qualified to refine every conceivable touchpoint, resulting in a gaming experience that delivers all of the upsides to web3.
“To have AAA talent like Brent and Estaban join our team is a real testament to what we are building,” states Ian Bentley, CEO. “They see clearly not only our vision as a franchise, but also this once in a lifetime opportunity to be a part of history in evolving the gaming space.”
From production and management to game balancing and marketing, WAGMI Games has meticulously recruited outstanding candidates for each role, making it optimally positioned to fulfil its promise of creating mainstream web3 games with viral appeal and longevity.
WAGMI’s ability to convince Esteban Gil and Brent Pease to join its team are a testament to the company’s vision and an endorsement of web3 gaming. At WAGMI, they will play a key role in helping the company bring mobile gaming to a new audience. Brent’s extensive experience and extensive network of contacts will be instrumental in driving WAGMI Games’ growth, while Esteban is leading a comprehensive redesign of the company’s game economy, meticulously organizing live operations and future expansions.
About WAGMI Games
WAGMI Games is a community-led entertainment franchise combining high-fidelity graphics, sustainable in-game economies and vibrant communities to create a first of its kind crypto gaming experience. By enabling players to purchase assets using fiat in-app, WAGMI bypasses the limitations of existing web3 applications while onboarding a new generation of users to digital collectible and the power of player-owned assets.
Learn more: https://wagmigame.io/
Contact
Dan Edelstein
[email protected]
Singapore, Singapore, August 2nd, 2023, Chainwire
OKX, a leading Web3 technology company, today announced the launch of a new account abstraction-powered Smart Account feature on its OKX Wallet, enabling users to pay for transactions on multiple blockchains using USDC or USDT.
OKX Wallet will soon launch additional account-abstraction powered features, including social recovery functionality. This will enable users to select trusted “guardians” from their social network to help them recover their Smart Account if they lose their keys.
OKX Wallet is one of the first wallets in Web3 with multi-chain account abstraction support. With Smart Account, users can now interact with multiple contracts in a single transaction. This enhances composability for advanced users and adds convenient features for beginners, creating a more user-friendly and intuitive wallet experience.
OKX Chief Innovation Officer Jason Lau said: “Our aim is to provide our users with the most accessible, secure, and powerful Web3 gateway. The Smart Account feature will play a significant role in achieving this goal. Account abstraction technology is a game-changer for the broader adoption of Web3 and enables new use cases and user experiences. We are excited to share more as we continue to build on top of this feature.”
Account abstraction simplifies crypto transactions by enabling the creation of Web3 wallet accounts that conceal the more technical details of their on-chain interactions behind a more accessible and user-centric interface. This is achieved by combining users’ smart contracts and Externally Owned Accounts (EOAs) into a single “smart” account, providing a more unified Web3 experience.
The account abstraction-powered Smart Account simplifies some of the complexities of blockchain transactions; for example, one of the biggest painpoints that users face is the need to navigate the complex transaction process and decipher technical terms such as ‘gas fees’ and ‘Gwei.’ Smart Account addresses this painpoint by reducing the number of steps required to complete a token swap or trade to just one click.
OKX Chief Marketing Officer Haider Rafique said: “We promised our customers and the larger DeFi community that we would prioritize security and interoperability as we build our Web3 wallet and apps. We support 60+ cross-chains, Multi-Party Computation (MPC), and now with Smart Account, we offer a stablecoin account that can interact with transactions on multiple blockchains without the need for a specific blockchain’s native token, with a social recovery feature coming soon. This is a game-changer, and we believe it has the ability to make transactions between chains a lot more seamless.”
Additional benefits of OKX Wallet’s Smart Account feature include:
Gas fee-related
- The option to pay for gas on any of the supported chains using stablecoins USDC and USDT.
- Users can also conduct gasless transactions if third-party dApps choose to sponsor their on-chain interactions.
- Elimination of the need for users to pay gas fees with each individual chain’s native token.
Simplified token swaps and staking
- Smart Account combines multiple stages of the swap and staking process into a single step. Users can exchange tokens and earn interest by staking crypto with just one click.
OKX Wallet currently supports account abstraction technology on seven blockchains: Ethereum, Polygon, Arbitrum, Optimism, BNB Chain, Avalanche and OKT Chain. It is also the first Web3 wallet to utilize multi-party computation (MPC) technology across 37 blockchains, eliminating the need for traditional written down keys and seed phrases by splitting a user’s private key into three parts, greatly improving security and eliminating a single point of failure.
About OKX
A leading global technology company driving the future of Web3, OKX provides a comprehensive suite of products to meet the needs of beginners and experts alike, including:
- OKX Wallet: The world’s most powerful, secure and versatile crypto wallet which gives users access to over 50 blockchains while allowing them to take custody of their own funds. The wallet Includes MPC technology which allows users to easily recover access to their wallet independently, removing the need for traditional, ‘written down’ seed phrases
- DEX: A cross-chain decentralized exchange which aggregates nearly 200 other DEXs, with 200,000+ coins on more than 10 blockchains available.
- NFT Marketplace: A multi-chain, zero-fee NFT marketplace that gives users access to NFT listings across seven top-tier marketplaces including OpenSea, MagicEden, LooksRare and Blur.
- Web3 DeFi: A powerful DeFi platform that supports earning and staking on 80 protocols across 15 chains.
OKX partners with a number of the world’s top brands and athletes, including: English Premier League champions Manchester City F.C., McLaren Formula 1, The Tribeca Festival, Olympian Scotty James, and F1 driver Daniel Ricciardo.
As a leader building innovative technology products, OKX believes in challenging the status quo. The company recently launched a global brand campaign entitled, The System Needs a Rewrite, which advocates for a new paradigm led by Web3 self-managed technology.
To learn more about OKX, download our app or visit: okx.com
Disclaimer
The information displayed is strictly for educational and informational purposes only. It does not constitute and shall not be considered as an offer, solicitation or recommendation, to deal in any products (including any NFT or otherwise), or as financial or investment advice. Both OKX Web3 Wallet and OKX NFT Marketplace are subject to separate terms of service at www.okx.com.
Contact
Seoul, South Korea, August 3rd, 2023, Chainwire
The inaugural edition of the Seoul Web3 Festival, hosted by Seoul City, Baobab Partners, and the Seoul Design Foundation with the support of Cronos Labs, reached a successful conclusion today after 3 days of hackathon, start-up demonstrations and NFT exhibition.
65 teams, representing 245 team members, were selected to participate in the hackathon. They received hands-on mentoring and technical support from Cronos Labs so that they could build Web3 projects on the Cronos blockchain. 10 winning projects were selected by the jury based the innovative nature of their solution, as well as their potential to drive mass adoption of Web3 and their positive impact on underprivileged communities.
Hackathon judges included representatives from Cronos Labs, Crypto.com, Microsoft, Alibaba Cloud and Ledger.
Finalist teams delivered innovative prototypes such as: a tool that leverages AI to remove sensitive biometric data from NFT images uploaded to decentralized storage; a voice identification app based on AI and zero-knowledge proofs to warn users in case of phishing scams; and various DAO protocols which take advantage of the wisdom of the crowd to report natural disasters or safety hazards.
Ken Timsit, Managing Director of Cronos Labs, said: “I am grateful for the opportunity to accompany the City of Seoul for the inaugural edition of the Seoul Web3 Festival. Cronos Labs mobilized some of our most experienced blockchain specialists in order to provide in-person support to hackathon participants. The connections forged with the local developer community are sure to create a strong pipeline of interest for the various Cronos ecosystem development programs such as the Cronos Builders Program, the Ecosystem Grant Program and the Cronos Accelerator Program.”
Cronos Labs views Korea as a top crypto market, and views Korea’s developer ecosystem as a major contributor to the global DeFi and GameFi markets. Cronos’ significant participation in the Seoul Web3 Festival highlights the growing global interest in the Korean crypto and blockchain industry.
About Cronos
Cronos (cronos.org) is the leading EVM-compatible layer 1 blockchain network built on the Cosmos SDK, supported by Crypto.com, Crypto.org and more than 500 app developers and partners. The mission of Cronos is to make it easy and safe for the next billion crypto users to adopt self-custody in Web3, with a focus on DeFi and GameFi.
Cronos has skyrocketed to a top 10 position among all chains and is adopted by >1 million users. The chain is powered by the Cronos ($CRO) cryptocurrency, which supports an ecosystem of more than 80 million users worldwide.
To build on Cronos, application developers can leverage: all the major Ethereum developer tools; Cronos Play, a suite of tools and integrations for Unity, C++ and Unreal games; IBC cross-chain connectivity to Cosmos chains; and a rich ecosystem of composable DeFi and GameFi Dapps.
Cronos Labs is the R&D, ecosystem development, and start-up accelerator arm of the Cronos chain.
Contact
Avishay Litani
[email protected]
Hong Kong, Hong Kong, August 2nd, 2023, Chainwire
Terminal 3, a Hong Kong-based Web3 startup, has successfully raised an oversubscribed pre-seed round to build user data infrastructure for a decentralized future. The company announced today a world-class investor group comprising 500 Global, CMCC Global, Consensys Mesh, Bixin Ventures, BlackPine, DWeb3, Hard Yaka, Bored Room Ventures, Mozaik Capital, and others.
The company aims to replace centralized data storage that deprives users of privacy and saddles enterprises with compliance and security issues and their associated costs. Terminal 3 leverages decentralized storage and zero-knowledge proofs to empower an equitable Web3, where user data is freely composable while remaining fully private and secure.
“The continued growth in blockchain allows us to reimagine digital data ownership and security,” said Gary Liu, CEO of Terminal 3. “We believe that data should flow freely between applications to drive innovation and improve user experience, but not at the expense of personal privacy and control.”
Terminal 3 was co-founded by Gary Liu alongside his partners Malcolm Ong (CPO) and Joey Liu (COO). All three were former entrepreneurs and business leaders who have built, scaled, and transformed some of the world’s leading technology companies. The co-founders previously worked together at the South China Morning Post, where they led the historic newspaper’s successful digital transformation. Gary was the Post’s CEO, while Malcolm and Joey were SVP of Product and Head of Strategy respectively.
Malcolm was also the Co-founder and CTO of Skillshare, the world’s largest online learning community for creativity, while Gary and Joey co-founded Artifact Labs, a Web3 startup backed by Blue Pool Capital and Animoca Brands that is preserving historical assets on the blockchain. Gary is also the Founding Chair of Web3 Harbour, an association in Hong Kong serving Web3 builders, investors, users, and leaders.
“I believe Gary, Malcolm, and Joey are perfectly suited to address data privacy problems that plague the internet,” said Vishal Harnal, Managing Partner at 500 Global. “Their mix of consumer startup success and expertise in enterprise technology could help bridge a critical gap between the old world of centralized data and the new world of decentralized identity.”
Growing Need for Alternative Data Infrastructure
Over the past five years, new regulations on data privacy have created a stringent environment for the storage and use of personal information worldwide. Led by Europe’s General Data Protection Regulation (GDPR) and China’s Personal Information Protection Law (PIPL), global regulators and lawmakers are increasingly holding enterprises accountable for the protection of individual privacy. This trend is set to continue with the approval of the Digital Market Act in Europe and upcoming GDPR-inspired laws in the United States and around the world.
US and UK corporations have spent over US$9 billion on GDPR compliance since 2018, with those investing incurring average costs of US$1 million annually. However, over 40% of companies still lack any budget for such compliance while GDPR fines continue to grow, with Meta alone sustaining over US$2.3 billion in penalties.
Data security is also a costly enterprise concern as data breaches accelerate in frequency. Global spending on data security and risk management products is projected to exceed US$188 billion in 2023. However, in a world where 90% of companies rely on multi-cloud environments, data privacy and security issues will grow regardless of investment.
Blockchain technology is increasingly viewed by corporate executives as a solution for user data privacy and security. In a recent survey of US Fortune 500 companies, Coinbase found that 51% of enterprises that use or plan to use blockchain employ the technology for ‘Data Collection and Management’.
“Terminal 3 is a compelling alternative to the non-compliant and unsecured data infrastructure that enterprises rely on today,” said Shawn Cheng, Partner at Consensys Mesh. “Data regulations and security laws are becoming more stringent around the world, and companies are finally realizing that self-sovereign data is a great solution for both users and enterprises. We are excited to be involved in this important project.”
“Scaling Web3 will require the re-invention of core enterprise technologies,” added Gary Liu. “Terminal 3 is building solutions that serve both corporations and individuals, to enable this critical shift in our digital world.”
About Terminal 3
Terminal 3 is a Hong Kong-based Web3 startup building user data infrastructure for a decentralized future. The company’s solutions are an alternative to centralized data storage that deprives users of privacy and saddles enterprises with compliance and security concerns. Terminal 3 leverages decentralized storage and zero-knowledge proofs to empower an equitable Web3 where user data is freely composable while remaining fully private and secure. The company’s founders are successful corporate executives and entrepreneurs, who have built, scaled, and transformed some of the world’s most important companies. Terminal 3 is also backed by world-class investors including 500 Global, CMCC Global, Consensys Mesh, Bixin Ventures, BlackPine, DWeb3, Hard Yaka, and Bored Room Ventures.
For more information about Terminal 3, please visit Terminal 3’s: Official Website | Twitter | LinkedIn
Contact
Joey Liu
Terminal 3
[email protected]
The United States Internal Revenue Service (IRS) has recently issued a significant ruling impacting crypto investors in the country.
According to Revenue Ruling 2023-14, crypto investors must report their earnings from staking digital assets as gross income in the year they receive them.
Gross income includes any form of income, be it in money, property, services, or even staking rewards.
This ruling applies to cash-method taxpayers who receive crypto as compensation for validating transactions on proof-of-stake blockchains, regardless of whether they stake cryptocurrency directly or through a centralized crypto exchange.
The ruling clarifies that the fair market value of the staking rewards should be added to the investors’ annual income and determined at the time they gain control over the rewards.
“Dominion” is defined as the moment when the investor gains control and can sell, exchange, or otherwise dispose of the cryptocurrency rewards.
Notably, the IRS previously subjected crypto-mining rewards to both income and capital gains tax, but staking rewards were not covered until now.
The crypto tax firm Koinly acknowledged the lack of provisions for staking rewards until this new ruling.
Messari founder Ryan Selkis praised the ruling for taxing staking rewards only when they become accessible for sale.
READ MORE: SEC Chairman Gary Gensler Raises Alarm Over Widespread Fraud in Crypto Market
This means that rewards that are accrued but locked will not be taxable until the investor gains “dominion and control” over them.
Selkis also highlighted that the IRS is treating crypto staking similarly to stock dividends.
However, some experts expressed their disappointment with the ruling. Jason Schwartz, tax partner and digital assets co-head at Fried Frank, stated that the ruling was unsurprising but disappointing.
He argued that tax law traditionally required the existence of a payer, such as an employer or counterparty, for income to be taxable, making this ruling a departure from that norm.
This ruling comes amidst increased regulatory scrutiny in the crypto space. U.S. federal regulators, including the Securities and Exchange Commission (SEC), have been targeting crypto-staking service providers and exchanges, alleging that they are engaging in illegal securities sales.
In conclusion, the IRS’s latest tax bulletin requires U.S. crypto investors to report staking rewards as gross income in the year they receive them.
This move aims to clarify the treatment of income earned from staking digital assets for taxation purposes and brings staking rewards into the fold of taxable crypto earnings.
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The Ukrainian government has made a recent request to obtain financial information from local cryptocurrency companies.
The National Bank of Ukraine (NBU) has reached out to four crypto firms, including Kuna, CoinPay, GEO Pay, and Qmall, demanding financial statements for the first two quarters of 2023.
These crypto businesses have been asked to provide the required financial data within seven days of the request.
The NBU’s demand for information goes beyond just financial statements; they have also requested data on the operating volumes of these crypto firms and information about the receipt and transfer of funds.
Additionally, the NBU has asked the companies to issue statements for all accounts starting from the beginning of 2023.
Michael Chobanyan, the founder and CEO of Kuna exchange, shared this news with the public. He referred to a document distributed by the Ukrainian Telegram news channel, Politics of the country, as the source of the information.
Chobanyan confirmed the authenticity of the NBU’s request on his own Telegram channel, but he expressed uncertainty about the reasons behind the latest action from the NBU.
Chobanyan criticized the NBU’s actions, claiming that there was no precedent for such actions in Ukraine.
He also mentioned that Kuna exchange had previously left the business-to-customer market in Ukraine due to what he described as “predatory actions” by the NBU.
These actions caused a significant drop in exchange volumes for the company.
Despite the Ukrainian government’s apparent hostility towards the crypto industry, Chobanyan sees a silver lining in the situation.
READ MORE: BNB Smart Chain (BSC) Hit by Copycat Attacks
He stated that Kuna would now focus on the European market, particularly the business-to-business (B2B) sector.
He pointed out that Kuna recently launched a crypto-acquiring service called KunaPay, which might have influenced the NBU’s actions.
However, the NBU has not yet provided any clarifications or comments regarding its recent request for financial information from the crypto firms.
As the situation develops, this article will be updated to include any new information or statements from the NBU.
In summary, the Ukrainian government’s National Bank has requested financial information from several local cryptocurrency companies, raising questions about its motives and impact on the crypto industry in the country.
While there are concerns about the NBU’s actions, some companies like Kuna see this as an opportunity to focus on the European B2B market.
The NBU’s response to these developments remains pending.
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Circle’s USD Coin (USDC) and other stablecoins are facing potential compliance challenges due to a new amendment in the 2024 National Defense Authorization Act (NDAA) recently passed by the United States Senate.
According to Berenberg analyst Mark Palmer’s July 31 investment note, the amendment could introduce new Know Your Customer (KYC) and Anti-Money Laundering (AML) measures that stablecoin issuers might struggle to comply with.
The proposed amendment requires the U.S. Treasury Secretary to establish examination standards for crypto assets to ensure compliance with money laundering and sanctions laws.
If it remains in the final version of the NDAA, it could present problems for stablecoin issuers.
Palmer pointed out that identifying stablecoin holders is only possible during issuance and redemption, and this requirement could lead to a deterioration in USDC’s market cap.
Over the past few months, USDC’s market cap has declined by approximately 39%, amounting to $17.5 billion since March 5.
This development not only impacts Circle but also poses challenges for Coinbase.
READ MORE: Bitcoin’s Reduced Volatility Sparks Anticipation for Exciting Long-Term Bull Signal
Palmer highlighted that in the first quarter of the year, 27% of Coinbase’s net revenue came from interest income on USDC. The potential setbacks for both Circle and Coinbase could be concerning for investors.
Coinbase’s shares have shown significant outperformance in the traditional equities market since the beginning of the year, surging 170% from $33 on January 1 to $98.61 at the time of the publication of the investment note.
Berenberg attributed this outperformance to favorable rulings for Ripple Labs and the interest generated by major institutions like BlackRock and Fidelity in filing for spot Bitcoin exchange-traded funds (ETFs).
However, the bullish factors for Coinbase might be on shaky ground. SEC Chair Gary Gensler’s recent comments have raised uncertainty among investors.
Gensler stated that cryptocurrencies could fall under the purview of the SEC, implying that regulations might be on the horizon.
Additionally, his response to Bitcoin ETF applications suggested potential opposition to their approvals.
Despite these uncertainties, Berenberg maintained a “hold” rating for Coinbase stock.
The company’s large balance of cash and equivalents offers financial cushion and flexibility for navigating the uncertain landscape of the cryptocurrency market.
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On July 30, several liquidity pools within Curve Finance, a significant decentralized finance (DeFi) protocol, were targeted in an attack stemming from a vulnerability discovered in the Vyper programming language.
Vyper is specifically designed for the Ethereum Virtual Machine (EVM) to facilitate smart contract development.
Curve Finance’s prominence in the DeFi space is largely attributed to its vital liquidity services.
However, the recent code vulnerability jeopardized approximately $100 million worth of digital assets, raising concerns within the community.
The flaw was identified in versions 0.2.15, 0.2.16, and 0.3.0 of the Vyper language, resulting in a malfunctioning reentrancy lock.
As a consequence, millions of dollars were drained from four Curve pools, namely aETH/ETH, msETH/ETH, pETH/ETH, and CRV/ETH.
Moreover, the impact of this vulnerability on three of its variations has the potential to affect other protocols in the DeFi ecosystem.
Following the attack, the native token of Curve Finance, CRV, experienced a sharp decline in value on decentralized exchanges.
However, the situation was salvaged when centralized exchange price feeds came into play.
READ MORE: SEC Suffers Setback as Court Overturns Ruling on SPIKES Index Securities Classification
The CRV price plummeted to $0.086 on decentralized exchanges, while maintaining a trading value of $0.60 on centralized exchanges (CEXs), thereby preventing the token’s total collapse.
The recovery was attributed to the integration of Chainlink’s oracle system within Curve pools, which incorporates price feeds from various sources, including centralized exchanges.
If it weren’t for the CEX price feed, Curve Finance would have faced a complete collapse.
This irony caught the attention of Binance CEO Changpeng Zhao, who found humor in the fact that a CEX price feed ultimately saved the DeFi protocol.
Zhao clarified that the Vyper vulnerability had no impact on Binance, as the exchange had promptly updated its code to the latest version. He also emphasized the significance of regularly upgrading code libraries to maintain robust security measures.
The bug within the earlier Vyper versions is estimated to be at least 1.5 years old, suggesting that the attacker invested substantial time and resources in exploiting this weakness within a high-value protocol.
A Vyper program contributor on Twitter even suggested that the level of effort put into the exploit indicated a potential state-sponsored attack.
As the DeFi space continues to evolve and gain traction, incidents like these underscore the importance of thorough code audits, prompt upgrades, and vigilance in the face of potential vulnerabilities to ensure the security and resilience of decentralized finance protocols.
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