In a collaborative effort involving law enforcement and cyber authorities, a victim who goes by the pseudonym L3yum on X (formerly known as Twitter) has achieved a significant breakthrough following a hack that resulted in the loss of 90 Ether.
The victim has managed to have the perpetrator’s Tether address placed on a blacklist, potentially enabling the recovery of a substantial portion of the stolen funds.
The breach occurred on March 16, when the hacker successfully acquired access to L3yum’s hot wallet seed phrase.
Subsequently, a collection of nonfungible tokens (NFTs) associated with Yuga Labs, as well as cryptocurrencies and NFTs from smaller projects, were pilfered.
These ill-gotten assets were swiftly liquidated or traded by the attacker.
In a recent post on Aug. 11 on X, L3yum conveyed the successful outcome: “Today after working with the police and cyber team in my country, I was able to get the stolen funds sitting in USDT frozen and black listed.”
The involved Ethereum-based USDT address, linked to the hacker, has now been rendered inactive, marking a significant step towards recovering the stolen assets.
At present, the 90 ETH translates to roughly $166,000, while the blacklisted wallet contains $107,306 worth of USDT, implying that the victim might not fully recoup their losses.
The question of whether the victim will receive restitution remains unanswered.
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However, history suggests that when a USDT address faces blacklisting under similar circumstances, Tether has previously destroyed the blacklisted USDT and reissued an equivalent amount of the asset to the original owner.
It’s important to note that the process of blacklisting a USDT address by Tether typically follows a court order, as has been observed in previous cases.
L3yum indicated that while this seemed to be the likely course of action, confirmation is still pending.
Responding to comments, L3yum clarified, “This is the part I’m unsure about but yeah from my understanding this is how it works and the funds that are blacklisted are essentially burnt.
Don’t quote me on that though, but that is my understanding!”
The circumstances that enabled the hacker to obtain the seed phrase back in March are yet to be fully determined.
However, initial speculation pointed towards possibilities such as SIM swapping, inadvertent seed phrase storage on iCloud, or the use of the wallet across multiple devices.
While details remain unclear, L3yum’s proactive efforts, coupled with the cooperation of law enforcement and cyber experts, have paved the way for potential recovery in this intricate crypto hack saga.
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Former FTX CEO Sam Bankman-Fried’s bail has been revoked by a federal judge in response to allegations that he attempted to intimidate witnesses by sharing information with New York Times reporters.
The decision was made during an August 11 hearing at the United States District Court for the Southern District of New York. Judge Lewis Kaplan ordered the revocation of Bankman-Fried’s $250 million bail, which had initially kept him out of custody since his arraignment in December 2022.
Bankman-Fried had given interviews to New York Times reporters, with the intention, as suggested by Judge Kaplan, of “hurting and frightening” his former colleague and girlfriend, former Alameda Research CEO Caroline Ellison.
His legal team confirmed his collaboration with the reporters, leading to the imposition of a gag order to prevent any further extrajudicial statements related to the ongoing criminal case.
Assistant U.S. Attorney Danielle Sassoon cited Bankman-Fried’s breach of previous bail conditions, which included sending a message via the Signal app to FTX US general counsel Ryne Miller, using a virtual private network for internet activities, and releasing information to reporters aimed at intimidating Ellison.
The prosecutor also mentioned that the Putnam County Correctional Facility could provide Bankman-Fried with a laptop if he were to be remanded into custody, though home detention with restrictions on Google Drive was also considered.
Judge Kaplan stated that there was probable cause to believe that Bankman-Fried had attempted to tamper with witnesses on at least two occasions, and he listed additional violations as well.
Consequently, he decided to revoke the bail. Sassoon argued that Bankman-Fried had allegedly asked witnesses to delete specific messages and documents.
Bankman-Fried’s attorney, Mark Cohen, pleaded with the judge to maintain his bail conditions, asserting that coordination with the legal team was necessary.
Cohen also contended that allegations of witness intimidation should be addressed during the October trial.
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Despite Bankman-Fried’s legal team’s intention to appeal the decision, Judge Kaplan denied the motion and ordered Bankman-Fried to be remanded into custody, likely at the Putnam County Correctional Facility.
He may be transferred to the Metropolitan Detention Center in Brooklyn once the trial begins in October.
It’s worth noting that Bankman-Fried’s parents may have been present at the hearing.
Bankman-Fried, who has primarily been staying at his California home except for court appearances in New York, is facing 12 criminal charges spanning two trials scheduled for October 2023 and March 2024.
While a campaign finance law violation charge is set to be dropped due to an extradition agreement with the Bahamas, prosecutors intend to include the alleged scheme in a wire fraud charge.
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Curve Finance, the decentralized finance (DeFi) platform, has formally declared its commitment to compensating users affected by the recent security breach, which led to losses amounting to $62 million.
In an official statement posted on X (previously Twitter), the platform reported significant progress in its ongoing investigation, successfully recovering about 79% of the lost funds.
The platform assured that it would evaluate each impacted user’s situation to facilitate fair reimbursement procedures.
This evaluation process aims to establish an equitable distribution of recovered assets among the affected users.
The breach occurred on July 30 and involved malicious actors capitalizing on vulnerabilities present in versions 0.2.15 to 0.3.0 of the Vyper compiler utilized by Curve Finance.
The sophistication and resource-intensive nature of identifying these vulnerabilities were highlighted by experts in the field.
An insider involved with Vyper compiler development noted that the attack likely required meticulous planning for several weeks before its execution.
The attack specifically targeted pools such as CRV/ETH, alETH/ETH, msETH/ETH, and pETH/ETH, raising concerns that the tri-crypto pool on Arbitrum might have also been compromised.
The repercussions of this breach reverberated throughout the broader DeFi landscape, underscoring a fundamental challenge in the emerging cryptocurrency sector: the lack of proper incentives to uncover vulnerabilities in prior software versions.
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To incentivize the responsible individual’s identification, a 10% bounty was offered, leading the attacker to initiate the return of the stolen funds.
As per Etherscan’s records, the current restitution amounts to 4,821 Ether.
In conclusion, Curve Finance, a prominent DeFi platform, has formally announced its commitment to recompense users affected by the recent $62 million hack.
The recovery of nearly 79% of the lost funds, ongoing investigations, and the initiation of fair reimbursement evaluations demonstrate the platform’s dedication to rectifying the situation.
This incident’s impact on the DeFi ecosystem highlights the necessity for improved security practices and incentives to identify vulnerabilities in cryptocurrency software.
The unfolding situation also reinforces the need for continued vigilance within the DeFi space to prevent and mitigate similar events in the future.
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Visa, a leading player in the payments industry, is taking a groundbreaking step that could significantly transform user experiences.
The company is currently in the testing phase of a revolutionary solution that enables users to pay on-chain gas fees using their Visa cards.
In a recent presentation by Mustafa Bedawala, a product manager at Visa, a critical challenge associated with cryptocurrency wallets was highlighted.
This challenge revolves around the constant need for users to manage their Ether balances to cover fluctuating gas fees.
In the traditional Ethereum process, users typically acquire ETH from exchanges or on-ramp services and then transfer these funds to their wallets to cover variable gas fees.
This dynamic adjustment of gas prices often results in users either overspending or having insufficient ETH, leading to complexities and obstacles.
Visa’s ingenious solution capitalizes on Ethereum’s ERC-4337 standard and leverages the “Paymaster” smart contract to facilitate off-chain gas fee settlement.
The procedure involves users initiating an Ethereum transaction through their wallets, which is then directed to the paymaster.
Through a web service, the gas fee is calculated, and Visa is charged via Cybersource.
Following this, a digital signature is generated, swiftly verified, and appended by the wallet before the transaction is sent to the Ethereum network.
The Paymaster confirms the signature and covers the gas fee.
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This novel series of actions empowers users to directly settle gas fees with their Visa cards off-chain, effectively eliminating the need for them to hold ETH solely for the purpose of fee payments.
Reports indicate that Visa has successfully piloted this concept on the Ethereum Goerli testnet, utilizing accessible open-source tools like Stackup’s userop.js library.
During the trial, transactions were able to cover fees through the Paymaster, rendering the necessity for ETH obsolete.
Significantly, this innovation has the potential to streamline experiences for blockchain users by enabling them to directly use their Visa cards to pay gas fees off-chain.
Furthermore, it opens doors to broader implications.
The report underlines the prospect of merchants and decentralized applications adopting the Paymaster framework to enhance customer interactions.
This entails facilitating gas fee payments through Visa cards.
Additionally, this advancement may prompt wallet and Paymaster providers to introduce options for gas fee payments via Visa cards.
In sum, Visa’s ongoing testing of its pioneering solution holds promise for simplifying the cryptocurrency landscape, providing users with more convenience and flexibility while ushering in new possibilities for merchants and service providers.
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The Hong Kong Securities and Futures Commission (SFC) has granted preliminary approval to the Hong Kong Virtual Asset Exchange (HKVAX) to operate a virtual asset trading platform within the framework of the region’s securities regulations.
HKVAX recently disclosed that it has secured an “approval-in-principle” from the SFC, authorizing the execution of Type 1 and Type 7 regulated activities.
The Type 1 license empowers the platform to administer a digital asset trading system dealing with securities, while the Type 7 classification formally permits the company to furnish automated trading services to both retail customers and institutional investors.
In pursuit of capitalizing on the investment prospects presented by Web3, HKVAX is striving to introduce a new category of offerings known as security token offerings.
Once the final endorsement is obtained, the platform intends to provide a range of services, including over-the-counter (OTC) brokerage facilities facilitating transactions between fiat and digital assets.
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Moreover, the platform plans to establish an institutional-grade exchange platform and a secure custody solution, backed by insurance provisions.
Anthony Ng, who serves as the co-founder and CEO of HKVAX, articulated that as the platform’s operations expand, the entity remains committed to broadening its array of products available in the Hong Kong market.
Simultaneously, HKVAX intends to collaborate with strategic investors during its forthcoming funding rounds.
The announcement from HKVAX emerges in the wake of HashKey and OSL, two exchanges, debuting retail cryptocurrency trading activities in Hong Kong.
These exchanges made history on August 3 as the first entities to be granted licenses to facilitate crypto trading services in the jurisdiction.
Hong Kong’s regulatory authorities have intensified their scrutiny of the cryptocurrency sector following the FTX collapse.
The CEO of the SFC, Julia Leung Fung-yee, stressed the importance of crypto trading within the virtual asset ecosystem in light of the FTX exchange’s downfall in 2022.
In a public address, Leung emphasized that the newly implemented licensing structure for virtual asset service providers aims to safeguard investors as they engage in trading activities.
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The California Fair Political Practices Commission (FPPC) has recently updated its campaign disclosure manuals, including an extensive set of rules related to the declaration of cryptocurrency contributions.
These updates align with recent changes in legislation and commission regulations, reflecting modern financial practices and covering a wide variety of topics.
Among the updates are rules about campaign contribution limits, limited liability company disclosure requirements, behested payment reporting, and cryptocurrency contributions.
Specific provisions regarding excessive contributions, advertising disclosure requirements, and other non-substantive technical changes are also part of the revisions.
Within these guidelines, political committees are allowed to solicit cryptocurrency as a non-monetary contribution, with specific requirements.
Notably, such contributions must comply with applicable limits and cannot be accepted from foreign principals, lobbyists, or anonymous sources.
Also, committees cannot receive cryptocurrency contributions directly through peer-to-peer transactions.
Instead, they must be processed through selected payment processors acting on behalf of the committee.
The commission requires that cryptocurrency donations be made and received through U.S.-based payment processors registered with the U.S. Department of Treasury and Financial Crimes Enforcement Network (FinCEN).
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These processors must use Know Your Customer (KYC) protocols, ensuring the verification of contributor identities.
Committees accepting cryptocurrencies must confirm that their payment processors use KYC procedures and collect relevant information such as name, address, occupation, and employer of contributors.
This information must be shared with the committee within 24 hours of a contribution being made.
Additionally, the payment processors must promptly convert cryptocurrency contributions to U.S. dollars at current exchange rates and deposit the funds into the committee’s campaign bank account within two business days of receipt.
These contributions are considered non-monetary, and any processing fee paid to the processor is not deducted from the reported amount.
The entire contribution must be reported by committees as a “miscellaneous increase to cash.”
In summary, the California FPPC’s updates demonstrate a thoughtful and detailed approach to regulating political contributions, particularly those made via cryptocurrencies.
It aligns political campaign financing with modern technological advancements, ensuring transparency, accountability, and adherence to existing regulations.
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SoFi Bank, headquartered in San Francisco, has reported an impressive surge in its cryptocurrency holdings, disclosing nearly $170 million in its Q2 earnings report.
This marks a substantial escalation compared to the previous quarter and underscores the bank’s growing involvement in the crypto market.
With an extensive customer base of over six million individuals, SoFi has established itself as a prominent player in the United States banking landscape.
Of the total crypto investments amounting to $166 million, SoFi Bank’s portfolio encompasses $82 million in Bitcoin (BTC) and $55 million in Ethereum (ETH).
Additionally, Dogecoin (DOGE) claims the third spot with an allocation nearing $5 million, while Cardano (ADA) holdings total $4.5 million.
Notably, the bank’s investor presentation highlighted its impressive feat of onboarding more than 500,000 new customers, expanding its support to facilitate trading for over 22 different cryptocurrencies.
Beyond mere crypto holdings, SoFi offers its clientele the ability to buy and sell a diverse array of cryptocurrencies, leveraging its strategic partnership with the Coinbase crypto exchange.
This move is aligned with the bank’s earlier initiative, commencing crypto services in September 2019.
Interestingly, SoFi evolved into a full-fledged bank in February 2022 when it obtained a banking license, distinguishing itself as one of the limited traditional banks delving into the crypto realm.
Despite its strides in the crypto domain, SoFi’s crypto venture has encountered resistance from regulatory quarters.
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In November 2022, a U.S. Senate committee raised concerns about the bank’s adherence to banking laws, spotlighting a looming deadline in January 2024.
SoFi Bank’s response to these concerns remains pending, as Cointelegraph’s outreach for clarity regarding its compliance deadline and potential implications for crypto holdings did not yield a response at the time of publication.
The integration of the cryptocurrency sector with conventional banking has long been deemed a pivotal milestone for mainstream adoption.
However, the crypto industry weathered a tumultuous 2022, which was further exacerbated by the collapse of several banks focused on crypto affairs in 2023.
In response, U.S. legislators hurriedly intervened to safeguard customers’ assets, albeit at the cost of disrupting the synergistic relationships between crypto and traditional finance.
As the regulatory landscape grapples with assigning accountability, the future trajectory of this evolving partnership remains uncertain.
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FTX’s CEO and chief restructuring officer, John J. Ray III, along with other debtors, are expressing dissatisfaction with certain members of the Official Committee of Unsecured Creditors (UCC), who are attempting to gain control over assets.
These debtors are raising concerns about the UCC’s proposal to invest around $2.6 billion from cash reserves into short-term Treasuries.
They believe this move contradicts the FTX 2.0 draft restructuring plan.
In an official response filed on August 9, FTX addressed the UCC’s opinions regarding the reorganization and term sheet proposal. FTX criticized the UCC’s pursuit of asset control, especially their recommendation to allocate the cash reserves to cover professional fees, which could total up to $330 million.
Tensions have arisen between the UCC and debtors due to allegations that creditors were not adequately consulted and that FTX substantially depleted funds during the bankruptcy filing process.
Furthermore, the United States Securities Exchange Commission (SEC) expressed dissatisfaction with what it perceived as limited engagement and unprofessional conduct among several UCC members.
FTX’s restructuring unit has managed to recover around $7 billion in liquid assets from the original $8.7 billion owed to customers at the onset of the exchange’s bankruptcy proceedings.
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However, some creditors and experts believe that the debtors’ actions are hindering the reorganization process and have contested claims made by the UCC.
The debtors have unveiled a strategy for the relaunch of FTX 2.0, with CEO John J. Ray III striving to finalize agreements and outstanding payments to facilitate the launch.
Yet, Jesse Powell, the CEO of Kraken, has expressed doubt about FTX 2.0, stating that the endeavor is more challenging than starting anew.
Powell pointed to factors like the absence of a complete team, technology, necessary licenses, and damage to the brand’s reputation.
In a separate development, FTX has submitted a request for the dismissal of Chapter 11 bankruptcy proceedings involving FTX Exchange FZE (FTX Dubai).
The exchange argues that it never actually provided cryptocurrency-related services to investors, and therefore, the bankruptcy proceedings are not warranted.
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The Bank for International Settlements (BIS) has unveiled a significant step towards advancing cross-border payment efficiency through its new initiative, the cross-border payments interoperability and extension (PIE) task force.
This pioneering endeavor has garnered the participation of leading industry players, including the blockchain-based digital payment network, Ripple.
In a communiqué released on August 9th, BIS outlined the key takeaways from the PIE task force’s meeting held on May 11th.
The task force, operating under the auspices of the BIS Committee on Payments and Market Infrastructure, has committed to fortifying cross-border payments and attaining the quantitative benchmarks established by the G20.
To fulfill this mission, the task force envisions bolstering access to payment systems, elongating payment system operational hours, and forging interconnections between diverse payment platforms.
These interconnected systems will encompass the convergence of application programming interfaces and messaging components.
Notably, Ripple, alongside eminent counterparts such as Mastercard and SWIFT, will be an integral contributor within the task force.
This collaborative approach unites industry leaders with a common purpose: augmenting the interoperability of cross-border payments to foster a seamless global financial landscape.
Recognizing the exigency of harmonized efforts, BIS emphasized that elevating payment systems mandates a unified approach involving global coordination and the synergistic involvement of both public and private sector stakeholders.
By bringing these diverse actors into alignment, the potential for transformative advancements in cross-border payments becomes even more attainable.
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Simultaneously, in a parallel development, a recent update regarding the ongoing legal tussle between the United States Securities and Exchange Commission (SEC) and Ripple Labs has emerged.
The SEC has submitted a letter to the presiding judge on August 9th, outlining its intent to seek an interlocutory appeal.
This decision stems from the belief that the verdict requires reevaluation by an appellate court.
Remarkably, the SEC is advocating for a review even as the case remains unresolved, underscoring the significance and complexity of the legal issues at hand.
In essence, these recent developments underscore the financial industry’s proactive strides towards enhanced cross-border payments, marked by collaborative innovation and legal deliberations.
As BIS spearheads the PIE task force with global industry leaders, and the SEC-Ripple legal saga continues, the trajectory of cross-border payments and their regulatory landscape stands poised for potential transformation.
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Stablecoins are positioned as the driving force behind a transformative shift tied to the U.S. dollar, potentially safeguarding its supremacy on the global stage, asserts an opinion piece dated August 9 in The Wall Street Journal.
Penned by Brian Brooks and Charles Calomiris, the article advocates for the establishment of a robust regulatory framework for stablecoins within the United States.
Brooks, previously at the helm of Binance.US and a former legal executive at Coinbase, brings substantial fintech expertise, while Calomiris, the dean of economics, politics, and history at the University of Austin, offers his background as a former chief economist at the Office of the Comptroller of the Currency.
The Clarity for Payment Stablecoins Act, championed by Patrick McHenry, Chair of the House Financial Services Committee, was tabled in July.
Unfortunately, the legislation has encountered resistance due to a lack of bipartisan consensus.
The Clarity for Payment Stablecoins Act, which has bipartisan support, seeks to implement necessary safeguards to enable this technology to realize its full potential.
In the face of mounting concerns regarding the erosion of the dollar’s status as a global reserve currency, Brooks and Calomiris suggest that stablecoins possess the capability to emulate the post-World War II paradigm in which the U.S. dollar emerged as the world’s primary trade currency.
Citing International Monetary Fund data, which reveals a decline in foreign central banks’ holdings of U.S. dollar reserves from nearly 73% in 2000 to 59% presently, the authors emphasize the importance of exploring tools that could fortify the dollar’s standing.
Brooks and Calomiris sound an alarm regarding the ongoing shift away from the dollar by major commodity trading nations like Brazil and Argentina.
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These nations have entered into bilateral agreements with China to facilitate trade settlements using the yuan and their respective local currencies.
The authors argue that stablecoins offer individuals trapped in hyperinflationary environments a more accessible pathway to the U.S. dollar.
In advocating for stablecoin oversight, the authors underscore the potential harm dedollarization could inflict on the U.S. economy.
The loss of reserve currency status could escalate the country’s borrowing costs, a pivotal concern during periods marked by extensive government borrowing and spending.
Furthermore, the authors contend that dedollarization could erode the purchasing power of American consumers, leading to an increase in the cost of imported goods.
The authors predict that, if stablecoins proliferate, global citizens might independently and even contrarily drive demand for the dollar, irrespective of their governments’ political stances.
The authors conclude by urging U.S. policymakers to acknowledge the significance of reaffirming the dollar’s role in the global economy.
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