Author: José Oramas

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

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Australia Crypto Exchange Crypto News DeFi Regulation

Crypto Exchange FTX Officially Launches in Australia

FTX, one of the world’s fastest-growing crypto exchanges, is rapidly expanding its presence globally, having now established a local service in Australia as announced by crypto-billionaire founder and CEO Sam Bankman-Fried:

As per a company press release, FTX Australia will offer a full range of services, including an exchange, over-the-counter (OTC) products, and even derivatives.

The announcement coincides with recent moves by the Australian government to establish a “world-leading” regulatory ecosystem for digital assets.

Senator Proposes New Crypto Legislation

During the Australian Blockchain Week conference, NSW Senator Andrew Bragg proposed legislation that seeks to lay the groundwork for a proper regulatory framework in the country. Bragg laid out four principles that the mooted Digital Service Act needs to follow:

  • technological neutrality;
  • broad, flexible principles, ie, not a prescribed code;
  • regulation by a minister, not bureaucratic agencies; and
  • the need for cooperation within government.

Bragg stated that the government should adopt these four principles if it wants to refine its approach to the crypto ecosystem, including certain components of the decentralised finance (DeFi) sector, such as DAOs (decentralised autonomous organisations). 

This will show Australia is open for business and things are clear and clean.

Senator Andrew Bragg

Bragg’s proposal came a day after a consultation paper was issued by the government, asking the industry to provide feedback by the end of the month. 

Bankman-Fried said he was largely incentivised by the efforts of the local blockchain community to help establish a clearer regulatory ecosystem for digital assets:

We are encouraged by the important work being undertaken to establish a new digital asset licensing regime.

Sam Bankman-Fried, FTX founder and CEO

Earlier this month, FTX partnered with the Ukrainian Ministry of Digital Transformation to develop a platform for crypto donations to the besieged country’s war defence.

Categories
DeFi Ethereum NFTs

Whoops: $1 Million Valued Clipart Rock NFT Sells for Less Than a Cent

Mistakes are made in the cryptocurrency world, some of which incur a high price. This time, we’re talking about the owner of an NFT who erroneously listed his EtherRock for 444 wei instead of 444 ETH.

The NFT in question is a rock JPEG previously owned by a trader with the Twitter handle of Dino Dealer. The rock was supposed to be listed at 444 ETH, or roughly US$1.2 million, but Dino made the mistake of listing it in wei, the smallest denomination of ETH (1 ETH = 1,000,000,000,000,000,000 wei):

Sniper Bot Snaps Up Rock

The NFT was quickly snapped up for less than a cent by a sniper bot. Bots are becoming increasingly popular in NFT listings, as buyers can use them for last-second bidding on auction items, such as on decentralised marketplace OpenSea. There’s a freelance website called Upwork that offers sniper bots for US$200, along with other sniping tools.

A desperate Dino even tried to reach out to “crypto customer service” asking if there was a way to retrieve the rock. As expected, this request was met with jokes from users handing out emails and WhatsApp numbers to Dino. Of course, no one should ever follow up on those dubious numbers or emails:

To Err is Human, You Could Say

Given the immutable nature of the blockchain, it’s highly unlikely Dino will get his rock back unless the new owner of the NFT sympathises with him – also extremely unlikely.

We have seen various examples of costly mistakes such as this, although one might wonder how it could be possible to confuse wei with ETH. One such rookie error led to the sale of a Bored Ape NFT for US$3,000 instead of its intended market price of $300,000.

Another painful example was a mutant ape that sold for 17 USDC instead of 17 ETH – somehow the owner confused both currencies. Keep in mind the owner paid a fee of 2.87 ETH, or US$9,100 at that time.

Categories
Australia Gaming NFTs Play to Earn

Survey Finds 32% Would Quit Their Job to Play NFT Games Full-Time

A new survey conducted by Balthazar, an Australian NFT gaming company, has found that one in three people would be willing to quit their job if NFT games could allow them to work full-time as gamers.

At least 32 percent of the survey’s 1,103 respondents – predominantly from the Philippines – said they would engage full-time in NFT games if they allowed them to earn the same as, or more than, their current jobs.

Balthazar CEO John Stefanidis says he isn’t surprised by the survey’s findings:

[Gamers] love play-to-earn games and many are ready to quit their other jobs to play NFT games instead, as they could potentially be earning the same, if not more, from playing NFT games.

John Stefanidis, CEO, Balthazar

However, the majority of respondents believe the P2E ecosystem is still in its infancy and is not mature enough to provide them with an adequate income. Over two-thirds said they would need to earn between US$1 to $20 per day (those who have jobs in the Philippines earn an average US$316 per month, or about US$16 per workday) to play NFT games full-time.

Other respondents said they could just play NFT games while keeping their jobs. Some, however, can’t afford NFT assets to even start playing, the reason why Balthazar offers scholarships for its users.

P2E Disrupting the Games Industry

The rise of non-fungible token video games has provided gamers with an opportunity to earn a passive income, thanks to the P2E (Play-to-Earn) model implemented by popular titles such as Axie Infinity.

With the rise of NFT games, a new inducement to engage newcomers to the space is via scholarships, basically a practice where owners of NFTs transfer their assets to new players who don’t own any of their own to play for them and receive a percentage of the earnings. This became a popular method within the Axie Infinity community:

We believe that play-to-earn games will be the biggest disruptor in the crypto space this year, as well as the video game industry, as more gaming companies, crypto holders and traditional investors are investing in the space.

John Stefanidis, CEO, Balthazar

However, it seems some are not happy with the rise of the NFT and P2E industries, tagging them as creators of “bullshit jobs” – a term coined by American anthropologist David Graeber whose 2018 book of the same name analyses the societal harm of meaningless jobs.

By way of perspective, a report published by the Blockchain Game Alliance in December showed that NFT games generated US$2.3 billion in revenue in the third quarter of 2021 alone, and generally saw remarkable growth throughout the year.

Categories
Canada CBDCs Crypto News ETFs

MIT Partners with Canada’s Central Bank to Study CBDCs

The US Massachusetts Institute of Technology (MIT) and the Bank of Canada have announced an agreement to collaborate on CBDC (Central Bank Digital Currency) research.

After exploring CBDCs for several years, the Bank of Canada has decided to step things up by partnering with MIT to embark on a 12-month research project focusing on the usefulness and technical aspects of CBDCs. As per the bank’s official press release:

The project forms part of the bank’s wider research and development agenda on digital currencies and fintech. It will focus on exploring and experimenting with potential technology approaches to determine how a CBDC could work.

Bank of Canada press release

The bank didn’t clarify if it intends to introduce a CBDC in the country. Updates on the findings will be provided at the end of the project period.

CBDC? Maybe; Crypto? Frozen and Seized

Canada embarked on CBDC studies in 2020 when it published a report titled Contingency Planning for a Central Bank Digital Currency. This was a year before the cryptocurrency market boomed and the world started exploring the possibilities. Now, a large swathe of countries are either researching or testing CBDCs, as per CBDC Tracker.

Canadian authorities, however, have proven to be anything but a Western liberal democracy, as they have described themselves. At first, the government demonstrated strong support for cryptocurrencies, allowing management firms and investment companies to launch crypto exchange-traded funds (ETFs) in the country.

However, a month ago, Canada decided to invoke the Emergency Act, cutting off crowdfunding for the Freedom Convoy, which had amassed millions of dollars in crypto donations.

If the Central Bank decides to issue a national CBDC, it can oversee all transactions being made with it. This is something the crypto community has protested about on numerous occasions, with famous whistleblower and former NSA agent Edward Snowden calling CBDCs a “perversion of crypto”.

Categories
Crypto News DeFi Hackers Tokens

Lending Protocols ‘Agave’ and ‘Hundred Finance’ Exploited for $11 Million

Two lending DeFi (decentralised finance) protocols, Agave and Hundred Finance, have been exploited for approximately US$11 million, both companies confirmed on Twitter this week:

Reentrancy Bug Responsible

Looking at the transaction data on Tenderly, it seems both protocols were hacked using reentrancy attacks, which is a vulnerability in Solidity, the programming language in which Ethereum is written.

Reentrancy is when an attacker manages to trick a function on the Solidity smart contract, called “callAfterTransfer” – the function then makes an external call to another untrusted contract.

Once the hacker has access to the untrusted contract, they can make recursive calls using the protocols’ funds without having to put up additional collateral.

Blockchain and security researcher Mudit Gupta shed some technical light on the hacks, stating that the attacker introduced code after the callAfterTransfer function to run a flash loan exploit, allowing them to borrow funds before the protocols were able to calculate the debt and prevent further borrowing.

Both protocols were hacked on the Gnosis chain, which is an EVM-compatible blockchain. Gupta added that what allowed reentrancy attacks was the fact that “the official bridged tokens on Gnosis are non-standard and have a hook that calls the token receiver on every transfer”:

Agave is a fork of DeFi lending protocol Aave, while Hundred Finance is a fork of Compound. Compound, on one hand, doesn’t follow the check-effects-interaction patterns, which is a recommended practice while making external calls in Solidity.

Aave does follow that practice, but according to Gupta there is a “path via liquidations using which the attacker broke the pattern”.

Tokens Wear the Fallout

Unsurprisingly, the native tokens of both protocols took a blow, both dropping by double digits, according to data from CoinMarketCap. But it seems they have recovered by at least 15 percent from their previous price.

After draining both protocols’ funds, the attacker went on to launder the money using Tornado Cash. Etherscan hasn’t labelled the attacker’s address with a DeFi exploit.

The event comes a week after Fantasm Finance was hacked for US$2.6 million through a flash loan attack, also using Tornado Cash to launder the funds.

Categories
Crypto News Institutions Russia Ukraine

Report Shows Institutions Are Selling Crypto Amid Ongoing Geopolitical Uncertainty

Crypto-related investment products have suffered outflows of over 100 million in the past seven weeks amid ongoing geopolitical uncertainty, as stated in a recent report from digital asset manager CoinShares.

Institutions Sell Crypto Amid Regulatory Uncertainty

It was only little more than a month ago that Crypto News Australia reported how institutional adoption had accelerated following BlackRock’s decision to offer crypto trading services to its clients, but now it seems it has taken a 180-degree turn amid investors’ fear regarding the current geopolitical scene in Europe and regulatory uncertainty.

Given there has been little price response and that outflows of US$30 million were also seen in Europe, it highlights [that] the reasons are unclear. Regulatory concerns and geopolitics remain at the forefront of investors’ concerns for digital assets.

CoinShares report

Bitcoin and Ethereum Among the Most Affected Assets

At least 80 percent of the outflows come from North America-based companies, with Grayscale, Purpose, and ProShares leading the board. The exact reasons remain unclear, but CoinShares said it’s likely a response to US President Joe Biden’s latest executive order, which calls on the government to examine the benefits and risks of cryptocurrencies.

Flows by asset. Source: CoinShares

Bitcoin (BTC) and Ether (ETH) were the most affected cryptocurrencies, with outflows of US$70 and US$51 million, respectively. The altcoin market also had its share of inflows – mainly Solana (SOL), Ripple (XRP), and Polkadot (DOT).

Solana, Ripple and Polkadot saw minor outflows totalling US$0.3 million, US$0.7m and US$0.9m respectively, while Cardano and Litecoin saw minor inflows of US$0.2 million.

CoinShares report

Blockchain equity and multi-asset investment products have also taken a hit. As per the report, inflows amounted to US$12 million and US$4.1 million respectively.

Categories
Airdrop Blockchain Cosmos Crypto Wallets DeFi

Users Left Fuming After Evmos’ Cosmos Cross Chain Fails to Launch

Evmos, a layer-1 blockchain compatible with EVM (Ethereum Virtual Machine) built on Cosmos, is facing a community backlash after the protocol failed to launch this week due to numerous bugs found on the network.

The launch of the Evmos mainnet, which came with a rather ambitious token airdrop, was highly anticipated by the Cosmos and Ethereum communities as it allowed cross-chain transfer between the two blockchains.

Critical Security Bug Halts Network

But it seems the launch was riddled with gremlins. Two days before the launch, a “critical security bug” was found on the network, which rushed validators to implement a fix improperly and subsequently caused a network halt:

Users were reporting problems related to hardware and software wallet integrations, which were apparently higher than the network was able to handle. On top of this, some users were claiming a “lack of organisation” and numerous delays surrounding the launch of the mainnet:

The team behind Evmos said developers and validators were reportedly still working on the matter and unable to reach a consensus on the next steps for the protocol.

Launch Suspended Till Further Notice

The backlash forced the Evmos team to suspend the launch for an undetermined number of days to address the community’s concerns, and that the network would be reviewed internally via a postmortem:

Evmos Responds to Backlash

While the community backlash was rather harsh for Evmos, some other users were supportive of the response from the Evmos team to handle the issues and give clarity to its community.

Some other DeFi projects are the opposite, however. Such was the case in January with the cross-chain bridge Multichain when it lost over US$3 million through a security hack. The protocol was sending “mixed messages”, stating the issue had been fixed, but it later reminded users to revoke approvals of the token.

Categories
Australia Blockchain

Australian BeefLedger Blockchain Goes Into Administration

BeefLedger, a popular Australian blockchain provider in the red meat market, has been placed into administration, according to a spokesperson for the company.

BeefLedger to ‘Realign’ Its Organisation

David Clout and Associates, a Brisbane-based boutique firm of insolvency accountants, was reportedly appointed liquidator on February 28 and has already commenced investigations into the company’s affairs.

The company didn’t provide detailed reasons as to why it decided to enter administration. “Formalising the process is the appropriate way for us to complete an internal consolidation and reorganisation to align with strategic priorities”, reads BeefLedger’s official statement.

What Did BeefLedger Aim to Do?

The people behind BeefLedger intended to bolster beef exports by using blockchain technology to track and verify the authenticity of Australian beef on overseas markets, especially in China.

Customers could access the data history and provenance of a meat product by simply scanning its QR code.

BeefLedger executives (L-R) Marcus Sweeney (CIO); director Charles Turner-Morris, CEO Tony Clark and chairman Warwick Powell.
Source: MHD Supply Chain

The platform launched its own utility token in 2018. The BEEF token powered its blockchain and provided users with access to provenance data, sales history, consumer feedback and more.

Throughout 2018, BeefLedger garnered numerous investors and received grants to help develop the organisation. It also partnered with Queensland University of Technology to initiate in-depth market research, focusing on China.

However, it appears the demand for a blockchain-based platform to track the provenance of Australian meat wasn’t necessarily warranted. Many exporters have suggested that BeefLedger’s claims actually hurt the Australian industry’s reputation.

Agtech [agricultural technology] companies had to undertake enormous supply chain research to ensure what they were developing met a genuine need. Simply inventing something and telling farmers and processors they needed it would always be unsuccessful.

Beef marketers lobby group
Categories
Crypto News NFTs Tokens

Early 2000s P2P File-Sharing Platform ‘Limewire’ Returns as NFT Marketplace

If you were a teen in the early 2000s then you might remember LimeWire, the popular peer-to-peer file sharing platform that became a hub for music piracy. Well, after more than a decade, Limewire is making a comeback – but as an NFT (non-fungible token) marketplace.

LimeWire was shut down by a US federal judge in 2010 after a legal conflict with major record companies over copyright infringement.

Hits and Memories

Now, two brothers from Austria, Julian and Paul Zehetmayr, have bought the rights to the defunct platform and aspire to bring the old memories back by relaunching the site as a marketplace for digital collectibles, starting with music.

In the Twittersphere at least, the news has been greeted with a mixture of nostalgia, humour and cynicism:

LimeWire Debuts in May with Its Own Token

According to the Zehetmayrs, LimeWire will debut in May and will do so with its own utility token. The service offered will be related to music NFTs, including merchandise, exclusive songs, artwork, and backstage content.

Even if you look on Twitter today, there’s hundreds of people still being nostalgic about the name. Everybody connects it with music and we’re launching initially a very music-focused marketplace, so the brand was really the perfect fit for that with its legacy.

Julian Zehetmayr

The duo has also made it clear that LimeWire will not be an alternative for subscription-based streaming platforms like Spotify, rather an “additional channel for artists to sell exclusive music and art directly to collectors”.

As more and more marketplaces come together to try to take on the current market leader of NFT platforms, OpenSea, LooksRare launched in January with the aim of being a community-focused marketplace that intends to develop new features based on what its users want. It, too, is built around its newly launched token, LOOKS, and it seems LimeWire has taken a leaf from LooksRare’s playbook.

Categories
Crypto News Scams Tokens

US Siblings Charged With $124 Million ‘Ormeus Coin’ Fraud

The US Securities and Exchange Commission (SEC) this week charged John and Tina Barksdale for running a cryptocurrency scam called “Ormeus Coin”, which allegedly defrauded at least 12,000 retail investors of US$124 million.

‘Modern-Day Snake-Oil Sellers’

As per a release by the Department of Justice (DOJ), the SEC alleged the sibling duo sold Ormeus Coin to investors as a legitimate project through in-person roadshows, social media, and even ran advertising on a jumbotron in Times Square.

We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit.

Melissa Hodgman, SEC’s Division of Enforcement
John and Tina Barksdale. Source: dailymail.co.uk

The Barksdales allegedly misled more than 12,000 investors with false statements, such as that Ormeus Coin had a US$250 million crypto mining operation that produced US$5-8 million in monthly revenues.

The project’s whitepaper, which claims the coin is an ERC-20 token, also included a picture of the mining facility that was supposedly owned by the Barksdales.

This picture of the mining facility, which is actually a data centre owned by a third party, was used throughout 2018 for their marketing campaigns.

Pair Faces up to 20 Years in Prison

The Omeus Coin’s website is still up and running and claims the coin is offered in several exchanges including HitBTC, PancakeSwap, and Uniswap. There’s also dubious claims about the project’s business model, such as being powered by “green energy” and being in possession of Bitcoin, Litecoin, and Dash mining rigs on its facility.

The complaint was filed in the US District Court for the Southern District of New York. The siblings now face up to 20 years’ prison for security and wire fraud.

Crypto Scams and Fraudulent ICOs

Ormeus Coin held an Initial Coin Offering (ICO) in 2017, at a time when the ICO bubble exploded as companies were raising incredible amounts of capital out of investors by just launching and marketing a cryptocurrency project.

Those were golden days for scammers who tried to take advantage of the hype and deceive investors with dubious crypto projects. Just two months ago, Aussie cryptocurrency entrepreneur Craig Sproule was charged by the SEC for defrauding investors in a fraudulent ICO.

He Qin, the Australian-born former crypto hedge fund manager who defrauded Aussie and US investors out of US$90 million, recently said he scammed them because he felt “inmense pressure” to succeed because of his Asian heritage.