Author: José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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Blockchain Crypto News Institutions Payments

Mastercard Acquires Blockchain Forensics Company to ‘Help Keep Users Safe’ 

American multinational Mastercard has acquired blockchain forensic firm CipherTrace in an attempt to enhance its operations in the cryptocurrency industry. 

According to a September 9 press release, the deal would enable both companies to combine their technologies, from AI to cyber capabilities, to differentiate card and real-time payments architecture. Mastercard hopes to close the acquisition by the end of the year, giving the company insight into more than 900 cryptocurrencies.

[The acquisition] follows a number of investments the company has made, including partnerships with Uphold, Gemini and BitPay to create crypto cards, the creation of new platforms to test and support Central Bank Digital Currencies, programs to support the broader use of blockchain technology and NFTs, and the potential to support select stablecoins directly on its network.

Mastercard press release

Mastercard’s Multiple Plans for the Crypto Industry

Six months ago, Mastercard announced support for cryptocurrencies, prioritising stablecoins and popular tokens like Ethereum and Bitcoin. With this acquisition, Mastercard dives deeper into the digital assets space and brings a solution to protect its customers and merchants, also allowing global businesses and stakeholders to build upon and comply with regulations for their digital assets services.

We help companies – whether they are banks or cryptocurrency exchanges, government regulators or law enforcement – to keep the crypto economy safe. Our two companies share this vision to provide security and trust throughout the ecosystem. We are thrilled to join the Mastercard family to scale CipherTrace’s reach across the globe.

Dave Jevans, CEO, CipherTrace

Mastercard added it’s joining forces with a broad set of partners, including fintech companies, crypto-wallet providers, and governments, to further drive innovation in the digital assets space. A year ago, the credit card giant teamed up with Blockchain Australia and VeChain to track Aussie food and wine exports with blockchain technology.

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Crypto News DeFi NFTs

OpenSea Bug Destroys $130,000 Worth of NFTs

On September 8, a bug was found on the NFT marketplace OpenSea that destroyed at least 42 NFTs worth around US$100,000, as reported by Nick Johnson, lead developer of Ethereum Name Server (ENS).

42 Users Affected – 28.44 ETH Lost

Johnson discovered the bug when he tried to transfer an ENS name (which comes in the form of NFTs), titled rilxxlir.eth, to one of his personal accounts but instead it was randomly sent to an unused burn address.

The NFT ended up in an address no one uses and thus was lost forever. Despite the fact that the bug was reported and patched up by OpenSea, Johnson started receiving reports regarding at least 32 other transactions from 21 users who were similarly affected, with losses totalling 28.44 ETH, or US$100,000 at the time. OpenSea stated that Johnson was the only affected user of the bug.

The bug has since been patched, and while Johnson said that the rilxxlir.eth NFT didn’t have monetary value, it did have historical value as the first ENS name ever registered.

NFTs Skyrocketing in OpenSea

NFTs are exploding in popularity more than ever, especially at OpenSea, which has become the leading platform for content creators to expose and auction their artworks and digital collectibles. On March 19, the protocol raised US$23 million in a Series A funding round as an attempt to expand its operation.

However, there are some risks as the popularity of DeFi and NFTs increases. As Crypto News Australia reported last month, several OpenSea users were victims of phishing attacks from scammers posing as support staff on the Discord server.

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DeFi Markets

New WallStreetBets Defi App Aims to ‘Take Over’ Traditional Financial Markets

Popular subreddit WallStreetBets (WSB) aims to take over traditional finance with a new application called WSB DApp, a protocol that allows traders to swap synthetic stocks backed by blockchain technology. 

‘DeFi’ing Wall Street’

The r/WallStreetBet group claims it has created a decentralised platform that solves the “fees and market manipulation problem” coming from traditional financial institutions. The protocol is a direct market that allows borderless trading, open 24/7.

Landing page of WSB DApp.

Synthetic Stocks and $WSB

Users can trade synthetic stocks backed by blockchain technology. Synthetic tokens are an options strategy designed to emulate a long stock position in the stock market.

The protocol also has its own native token, $WSB, of which there are 1 billion in circulation. WSB is priced at 0.03 with over US$1 million worth of WSB exchanged in the past 24 hours.

The token has been performing pretty well in the market. One-month metrics show WSB is up 58 percent to date, and its aggregate WSB market valuation hit over US$30 million last weekend.

Jaime Rogozinski and WallStreetBet

According to a recent video on Twitter posted by @wallstreetbets, the project is led by Jaime Rogozinski , a Mexican writer and founder of WallStreetBets, and author of WallStreetBets: How Boomers Made the World’s Biggest Casino for Millennials.

Video posted by WallStreetBets. Source: Twitter.com

The subreddit group has become one of the largest communities in the retail trading world, featured in several important outlets including CNN, Forbes and Fortune, especially after the community joined forces to purchase massive amounts of GME stocks and hold them in an attempt to drive the stock price higher and defy hedge funds, causing worldwide controversy.

The GME hype might be over but now WSB wants to bring a more democratic space, rooted in the core concepts of decentralised finance, concepts that seemed flipped over when last week the SEC quietly signed a deal to spy on crypto/DeFi transactions with Californian analytics firm AnChain.AI.

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Blockchain Crypto News Gas NFTs Solana

Solana Booms as NFT Projects Consider Switching From Ethereum

As the NFT space grows, more artists and content creators could move their works from Ethereum to Solana, the high-performance blockchain, due to the excessively high fees of the ETH network.

Ethereum is the largest NFT minting hub for now, though network congestion, slow transactions, high fees and other hurdles are prompting content creators to migrate to other NFT-supporting blockchains, and Solana seems to be the DeFi protocol picking up the most momentum for NFTs.

Take the example of a group called “Burnt Banksy”, which is building a blockchain platform on Solana called Burnt Finance. It all started when the group bought an original artwork from the otherwise anonymous English street artist known as Banksy for US$95,000 and resold it for US$400,000 on OpenSea, the leading decentralised NFT marketplace.

Innovative Features Make a Bull Case

While there are other platforms such as Polkadot, Binance Smart Chain and Cardano that offer scaling solutions with low gas fees, NFTs are growing faster on Solana than in other protocols.

One of the reasons is that Solana uses innovative features such as the cryptographic clock system called PoH (Proof of History), which manages to support 65,000 TPS (transactions per second) with a $0.0015 average fee per transaction.

Another reason that Solana is gaining momentum on the NFT market is that the level of competition is soaring on ETH-based platforms. It’s difficult to sustain businesses models on these platforms while also keeping pace with gas fees. Content creators with cheaper collections – around US$100 to US$500 raribles or collectibles – may expect Solana to stand out from ETH competition by offering cheaper NFTs thanks to Solana’s lower gas fees.

Other types of NFTs could thrive in Solana. Fractionalisation is a recent trend that’s blowing up now in the DeFi community. The idea is that you can buy a fraction of an NFT and receive exposure to it instead of paying for the complete piece, something that could work with Solana but wouldn’t with ETH’s current gas fees. For instance, if you want to buy a piece of a CryptoPunk for US$20, you would probably pay a similar amount for it in gas fees.

Solana’s NFT Marketplace Also Booming

Solanart is the protocol’s NFT marketplace, which recently registered an expanding transaction volume with over US$5 million in transactions in a single day.

As the NFT industry grows, the crypto community is shifting its eyes to other potential protocols to build on, and Solana seems one of the preferred candidates. The ETH community, on the other hand, is looking to the rollout of ETH 2.0, which is expected to fix the network’s scaling challenges and gas fees.

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DeFi Regulation

SEC Begins ‘Actively Investigating’ World’s Largest DEX

The Securities and Exchange Commission (SEC) is reportedly investigating Uniswap Labs, the parent company of the leading decentralised exchange (DEX), Uniswap. 

The SEC Wants to Regulate DeFi

The Wall Street Journal reported the news on September 3, citing “people familiar with the matter” that SEC enforcement attorneys are actively investigating how users interact with the protocol and how the DEX is marketed.

This comes after the regulatory body highlighted its interest in tapping into the crypto and the decentralised finance (DeFi) space by overseeing crypto operations and lending. 

Naturally, the crypto community has rejected the SEC’s intentions to enter what the regulatory body has called “the wild west of finance”. 

Last month, SEC chairman Gary Gensler called on US Congress to give the agency more authority to police the crypto market and oversee DeFi platforms, which, unlike centralised exchanges, are not regulated in the US.

A Uniswap Lab spokesperson told WSJ that the company is “committed to complying with the laws and regulations governing our industry and to provide information to regulators that will assist them with any inquiry”.

Uniswap Removes 100 Tokens – Afraid of Regulatory Pressure

It should be noted that the SEC’s probe into Uniswap comes shortly after the DEX removed 100 tokens – including synthetic tokens, options and indexes – from the main user interface at the end of July, citing “regulatory pressure” as a major influence on the decision, something that had the crypto community questioning Uniswap’s decentralised system.

Uniswap currently accounts for the entire Ethereum-based DEX trade volume, with over US$10 billion in tokens swapped in the past week as per Dune Analytics data.

Requests for information have a high cost, and the SEC is tapping into the DeFi space by gathering information from one of the biggest DEXs. As pointed out by ShapeShift founder and CEO Erik Voorhees:

It should be highlighted that when a regulator ‘gathers information’ it means millions of dollars in legal costs and millions more in lost productivity is incurred by the target. When no wrongdoing is found, the regulator doesn’t reimburse for its transgression, nor even [does it] offer apology.

Erik Voorhees, CEO/founder, ShapeShift [Twitter]

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Australia CBDCs Crypto News

Australia Officially Launches CBDC Digital Currency Pilot

The Reserve Bank of Australia (RBA) has joined Singapore, Malaysia and South Africa to launch a Central Bank Digital Currencies (CBDCs) pilot for international settlements.

Project Dunbar, designed to support the G20 roadmap for enhancing cross-border payments, aims to test the efficiency of CBDCs and develop technical prototypes on different blockchains. This joint initiative will test shared blockchain platforms and explore different designs to enable central banks to share CBDC infrastructure.

The initiative is led by the Bank for International Settlements Innovation Hub, the RBA, Bank Negara Malaysia, Monetary Authority of Singapore, and South African Reserve Bank.

We are confident that our work on multi-CBDCs for international settlements will break new ground in this next stage of CBDC experimentation and lay the foundation for global payments connectivity.

Andrew McCormack, head, BIS Innovation Hub Singapore Centre

The RBA said it expected to publish Project Dunbar’s results in early 2022. Technical prototypes of shared DLT platforms will be demonstrated at the Singapore FinTech Festival in November this year.

RBA Moving Forward With CBDCs

The RBA is now moving forward with CBDC development after previously downplaying the need for a national digital currency, stating “it does not consider that a policy case has yet emerged for issuing an Australian CBDC”.

Other central banks, such as the Bank of Jamaica (BOJ), have been moving fast with plans to launch their respective national digital currencies. Compared to them, the RBA has been dragging its feet and is falling behind its global competitors – something for which the institution was heavily criticised by the Australian crypto community.

As Crypto News Australia reported in July, the People’s Bank of China has issued a whitepaper outlining the progress of the digital Yuan, revealing the CBDC uses smart contracts programmability as one of its several features.

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Crypto News DeFi Hackers

Cream Finance to Pay Back Users $19 Million via Protocol Fees Following DeFi Hack

Cream Finance (aka C.R.E.A.M.), a popular decentralised lending protocol, has allocated 20 percent of all the fees it charges to repay affected customers from a recent exploit in which it lost US$19 million.

Cream has announced repaying affected users after a flash loan hack at the end of last month. The team said it will post Cream collateral with Flexa, creator of AMP, to ensure the debt is entirely paid.

Additionally, the Cream team is offering a 10 percent bug bounty to the attacker and up to 50 percent for third parties who can assist the protocol to recover the funds.

We learned from this exploit and will use it as an opportunity to strengthen our protocol. Exploits are setbacks but this won’t stop us from fulfilling our mission to drive capital efficiency and meet the decentralised lending needs of individuals, institutions and protocols.

C.R.E.A.M. Communications announcement

At first, it was thought the hacker had stolen just over US$19 million, but after updating prices the total loss surpassed US$37.5 million.

Not the Best Year for Cream Finance

As Crypto News Australia reported this week, Cream Finance was exploited for the second time in six months. On August 31, an unknown attacker managed to drain 462 million AMP and 2,800 tokens – worth US$29 million – from its vault. According to blockchain security firm PeckShield, the attacker took advantage of an error in the integration process of AMP, forcing the protocol to halt supply and borrow on AMP to stop the exploit.

Five months ago, Cream and PancakeSwap suffered a DNS attack following several notices shared on social media, leaving users exposed to the protocols’ websites.

It’s always advisable to DYOR (Do Your Own Research) before investing in a DeFi protocol, as hackers, scammers and other malicious actors are thriving in this ecosystem.

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Crypto News Tether

Tether Asks Court to Block Release of its Reserves, Cites ‘Harm to Its Competitive Position’

Stablecoin operator Tether and its parent company Bitfinex recently filed a petition to the Supreme Court of New York to block an information request submitted by cryptocurrency media outlet CoinDesk.

Tether Under Pressure from the Crypto Industry

At the end of June, CoinDesk filed a Freedom of Information Law (FOIL) request – which under New York law allows members of the public to submit requests for access to government records – to the office of the Attorney General, demanding to see documents and other important materials attesting to Tether’s reserve composition and the settlement agreement between the New York Attorney General (NYAG) and Tether/Bitfinex. 

Tether and Bitfinex’s petition was filed on the last day of August by the companies’ attorney, Charles Michael, citing “harm to its competitive position”:

Competition is fierce, with upstart exchanges constantly entering the market and challenging the incumbent. Bitfinex and Tether differentiate themselves from their competitors using at least three secret and competitively sensitive types of data that are at issue in this proceeding: 1) financial strategies; 2) compliance measures and documentation; and 3) customer data.

It would tilt the competing playing field against Tether. CoinDesk, the online publication seeking the records in this case, has itself summarised what competing stablecoins have disclosed, and none [is] at the level of detail in the requested documents.

Tether and Bitfinex’s petition

Market Demands Transparency from Stablecoins

More stablecoin issuers are racing towards providing better disclosure of their reserves and transparent financial information for their users, yet it has been a complicated challenge for the industry.

Tether previously reaffirmed its assets are “fully backed by reserves”, yet failed to disclose what type of reserves it’s referring to, raising concerns in the crypto community about the company’s legitimacy.

At first, Tether released several public assurance opinions made by an audit provider service called Moore Cayman in an attempt to shut down the market manipulation rumours, but this wasn’t enough to convince the crypto community. These rumours only accelerated the decline in Tether’s supply growth, which has been surpassed by USD Coin (USDC), according to data from CoinMetrics.

It was only after Circle – the second-largest stablecoin issuer (USD Coin) – disclosed its financial information and the composition of USDC’s investments that Tether finally revealed its reserves.

Tether’s reserves are a combination of assets, the majority of them being commercial paper and fiduciary deposits, with only 3.87 percent of the USDT reserve is held in cash.

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Crypto News DeFi Surveys

New Report: 58 Percent of Multinational Firms Are Using Crypto

A new report from PYMNTS (Payment News & Mobile Payments Trends) has revealed that almost six out of 10 multinationals are using at least one form of cryptocurrency and, to some extent, blockchain technology for transactional purposes. 

Why Are Firms Using Crypto?

PYMNTS, in collaboration with global financial technology firm Circle, surveyed executives at 250 multinational businesses and 250 financial institutions. It seems utility is what matters most for global companies, which are six times more likely to use cryptocurrencies for transactional purposes rather than hold them as investment assets.

More than half (58 percent) of multinational firms already use or plan to use crypto to facilitate cross-border payments, and 93 percent of financial institutions believe business customers would use cryptocurrencies for both investing and transacting – and that some of them are far more interested in using cryptos than holding them. 

Bitcoin and Ethereum Lead Crypto Adoption

Naturally, bitcoin is the preferred cryptocurrency for most businesses with 34 percent of firms using it. But stablecoins and altcoins are also seeing a surge in interest as 29 percent of firms report using stablecoins like USDT (Tether) and USDC. Ethereum is the most coveted and compelling currency for some multinationals – 24 percent of them are using ETH and 21 percent say they are interested in exploring its potential use cases.

It seems cryptocurrencies are heaven-sent solutions for global firms as they eliminate some of the challenges of cross-border transactions, such as banking hours and regulations. Instead, blockchain payments are fast, secure and low-cost, all key factors for crypto adoption.

What Are the Challenges of Crypto Adoption?

While cryptocurrencies and blockchain compensate for what traditional banking and financial institutions lack, they do have their challenges:

  • Low Throughput – Compared to payment giants like VISA or Mastercard, BTC and Ethereum mainnet TPS (transactions per second) are low. Bitcoin currently handles up to 4-6 TPS while Ethereum handles around 15 TPS. There are faster and higher TPS blockchains out there, yet BTC and ETH are the most popular among institutional investors.
  • Lack of Organisational Awareness and Financial Resources – A barrier to widespread adoption is the lack of financial resources to implement blockchain tech. Another obstacle is the lack of understanding among institutional leaders and organisations about the crypto space.
  • Reputational Problems – The crypto and DeFi (Decentralised Finance) world is full of malicious actors (fraudsters, hackers, and scammers) that stain the image of crypto. While the DeFi industry has benefited from widespread institutional adoption and other assets like NFTs, scammers have taken advantage of newcomers. There are dozens of scams out there, including influencers asking followers to send them BTC, fake trading websites, Ponzi schemes, exit scams and more.
  • Regulation – While the crypto and DeFi worlds were originally meant to be decentralised, crypto-friendly regulations are required if institutional adoption and crypto businesses want to grow. In Australia, the lack of clear regulation has become a major problem for the crypto community and local crypto companies. Blockchain Australia and industry-related partners have called for a better, updated framework for the crypto scene.

These hurdles are certainly challenges for financial institutions and global firms, but industry leaders are working on enhanced and powerful ecosystems to boost crypto adoption and institutional capital.

These challenges haven’t stopped institutions from diving into cryptocurrencies. As Crypto News Australia reported a week ago, global crypto adoption is up 880 percent over the past year.

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Banking Bitcoin Payments

Anti-Bitcoin Protests Fill the Streets of El Salvador Amid BTC Legal Tender Launch

The political situation in El Salvador is heating up as hundreds of Salvadoreans protest the passing of the Bitcoin Law, which will make BTC a mandatory legal tender. The law takes effect on September 7 and prescribes that all citizens and economic agents accept BTC and the US Dollar as joint means of payment.

Demonstrations against the proposed law are taking place in the streets of El Salvador. Among the organising groups are workers, veterans and pensioners in their hundreds, all raising their voices in protest.

Last month, a group of university students, activists and unions gathered in front of Congress in capital San Salvador to demand the derogation of the Bitcoin Law, saying it only facilitates money laundering and corruption. Representatives of the group introduced a written statement arguing that bitcoin’s decentralisation could do more harm than good:

Bitcoin would facilitate public corruption and the operations of drug, arms and human traffickers, extortionists and tax evaders. It would also cause monetary chaos, hit people’s salaries, pensions and savings, ruin many MSMEs, affect peasant families and hit the middle strata.

Protest group statement

El Salvador is known for being an authoritarian country with non-transparent policies, and according to Salvadoreans the mandatory use of bitcoin will only encourage the government’s corrupt operations.

Cargo Carriers Threaten to Impose 20% Freight Levy

The Salvadorean Association of International Cargo Carriers (ASTIC) has demanded the modification of article 7 of the Bitcoin Law that stipulates the mandatory acceptance of bitcoin. It has threatened to introduce a 20 percent levy on customers paying for freight with BTC to protect itself from the currency’s volatility.

In an official statement, ASTIC argued:

No Central American carrier contracted by an economic entity in El Salvador will accept bitcoin as a form of payment, creating divisionism in the sector for paying the foreigner in [US] dollars and the national for being obliged with the cryptocurrency.

ASTIC statement

Neighbouring Countries Are Watching and Waiting

While Salvadoreans fill the streets to make their voices heard, neighbouring Central American countries are waiting to see how the situation develops once the Bitcoin Law is passed. If it succeeds, El Salvador could save substantial costs of remittances, besides facilitating financial inclusion for the unbanked – something that could also benefit neighbouring countries such as Guatemala and Honduras.

Stanley Quinteros, a member of El Salvador’s Supreme Court of Justice workers’ union, predicted that the mandatory adoption of bitcoin would damage Salvadorean finances as there is no way to control or stabilise prices.

We know this coin fluctuates drastically. Its value changes from one second to another and we will have no control over it. Everyone is watching if it goes well for El Salvador and if, for example, the cost of remittances drops substantially … other countries will probably seek that advantage and adopt it.

Stanley Quinteros, El Salvador’s Supreme Court of Justice workers’ union

In anticipation of the Bitcoin Law’s passing, in June El Salvador launched 1,000 Bitcoin ATMs installed by Athena Bitcoin for the purchase and sale of BTC.