Author: Jana Serfontein

Jana has keen interest in what cryptocurrencies have to offer in regards to NGO’s, governments and the financial system. And is also intrigued with the psychological effect that cryptocurrencies have on society.

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Crypto Exchange Crypto News

Robinhood Scoops Up Exchange ‘Ziglu’ at 60% Discount

Robinhood has successfully slashed its offer to acquire London-based cryptocurrency exchange Ziglu. The price of the deal went from US$170 million to US$72.5 million, a whopping 60 percent less than the original price tag, due to market conditions.

The initial deal was made in April 2022 and the purchase marked a step in Robinhood’s plan to scale its digital assets presence in international markets. Ziglu founder and CEO Mark Hipperson reportedly accepted the offer on August 18.

Commenting on the acquisition, a Robinhood spokesperson said in a blog post:

With Ziglu, UK-based customers can buy and sell 11 cryptocurrencies, earn yield via its ‘Boost’ products, pay using a debit card, and move and spend money, even abroad, without fees.

Robinhood blog post

Robinhood is now in a position to expand its operations at a much lower cost, but crowdfunding investors who purchased shares on UK-based equity platform Seedrs have lost out on this deal. Ziglu crowdfunded on Seedrs in 2020 and 2021, raising US$15 million at the time.

Hipperson justified the downgrade, citing market conditions triggered by troubled crypto lenders Celsius, BlockFi and Voyager. Ziglu is listed as one of the top 50 unsecured creditors of Celsius, which could be locked indefinitely as it is quickly running out of money and has been operating at a multibillion-dollar deficit as it undergoes bankruptcy proceedings.

Robinhood Continues Expansion

Along with acquiring Ziglu, Robinhood announced a Web3 non-custodial wallet in May to rival MetaMask. The wallet will give its customer access to NFTs, decentralised exchanges and swap tokens through a new interface. A month earlier, Robinhood also unveiled plans to support Lightning payments for its two million users.

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Bored Ape Yacht Club Crypto News CryptoPunks NFTs

CryptoPunks Surges Amid $55 Million in Bored Ape NFTs at Risk of Liquidation

The Ethereum floor price of the world’s largest NFT collection, Bored Ape Yacht Club (BAYC), dropped to its lowest level since the start of the year but has since managed to rally slightly. Yet for a brief moment, the second-largest NFT collection, CryptoPunks – also owned by Yuga Labs – saw its floor price top that of BAYC:

Debt Crisis Prompts Liquidation Fear

Many owners of BAYC and CryptoPunk NFTs, who used the collectibles as collateral to take out loans in Ether, have failed to repay their debts. The situation could trigger the NFT sector’s first massive liquidation. As BAYC struggles, CryptoPunks topped the floor price of the veteran NFT collection for the first time since March, according to NFT Price Floor.

Lending service BendDAO could liquidate up to US$55 million worth of NFTs to recover its loans, in fears that the so-called “health factor” of its debts could dip below one. (An NFT collection’s floor price is a key facet in determining a collection’s health factor.)

CryptoPunks Soldiers On

The past couple of weeks have been good for CryptoPunks, with exciting projects in its view. Early this month, famed jewellery brand Tiffany and Co announced the release of limited edition CryptoPunk pendants. In the midst of the crypto winter, a rare NFT from the collection sold for 2,500 ETH, or approximately US$2.6 million.

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Crypto Exchange Crypto News Jobs

‘Hodlnaut’ Faces Singapore Police Action and Job Losses

Troubled crypto lender Hodlnaut has announced massive layoffs and pending police proceedings in a blog post that underscores its dire financial and legal situation as it becomes the latest crypto firm to halt customer withdrawals.

The Singapore-based lender has laid off 40 employees in an effort to reduce its costs and has admitted it is subject to action being taken by the Singapore Attorney-General and the Singapore Police Force.

Hodlnaut Cuts 80% of Staff, Interest Rate to Zero

After pausing withdrawals earlier this month, Hodlnaut filed for creditor protection in Singapore seeking time to resolve its liquidity issues. In addition to cutting 80 percent of its staff, the company also slashed annual interest rates to 0 percent in an attempt to “stabilise liquidity”. The company’s founders remain in Singapore and are said to be “working hard on a recovery plan”. They added:

The current team we have retained are, in our assessment, [the] necessary headcount in order for us to carry out key functions.

Hodlnaut blog post

Hodlnaut joins fellow lender Vauld and Asia Pacific crypto exchange Zipmex in an unholy trinity of Singapore-based crypto firms facing liquidity crises. Hodlnaut also applied to be placed under judicial management earlier this month. If successful, the move will hand “ultimate decision-making power on all aspects of the company going forward” to the judicial manager – an independent third party that oversees the process.

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Bitcoin Canada Crypto News Ethereum Regulation

Ontario-Based Exchanges Impose $30,000 Annual Buy Limit on Altcoins, a Trend?

Canadian cryptocurrency platforms Newton and Bitbuy are imposing a CA$30,000 annual net buy limit on altcoins in some provinces, though the limit will not apply to unrestricted cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash:

Toronto-based exchange Newton says the limit will apply to what are being called restricted cryptocurrencies, or altcoins. A net buy limit tallies up all crypto purchases minus sells (at average cost) over a rolling 12-month period, according to Bitbuy.

Nine Provinces Affected

Provinces where the buy limits will be imposed are New Brunswick, Newfoundland, Nova Scotia, Nunavut, Northwest Territories, Ontario, Prince Edward Island, Saskatchewan, and Yukon. Users can still resell restricted cryptocurrencies to reduce their balance towards the limit, which resets after one year.

The limits, put in place by the Ontario Securities Commission (OSC) and the Canadian Securities Administrators, are calculated based on the amount in Canadian dollars altcoins are worth at the time of trade and are thereby unaffected by increases or decreases in the value of one or more digital assets.

The decision has rightly caused some confusion of frustration among Canadian residents who took to Twitter to express their concern:

On the other hand, Ethereum co-founder Vitalik Buterin is understandably happy about the decision to privilege major coins such as Ethereum:

Canada’s Shifting Crypto Landscape

Canada’s crypto scene has caused much confusion and frustration this year after Prime Minister Justin Trudeau took unprecedented steps in February by invoking the 1988 Emergencies Act, which enables the government to freeze bank accounts without going through the courts, in an attempt to deny funding to the Canadian “Freedom Convoy”, thus essentially banning cryptocurrencies.

The Freedom Convoy was established through a loose affiliation of truckers and citizens who launched protests over vaccine mandates for truckers crossing the US/Canada border. Many have slated the country’s decision as undemocratic and authoritarian.

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Ethereum Stablecoins Tether USD Coin

USDT and USDC Stablecoins Throw Weight Behind ETH’s Transition to Proof-of-Stake

As Ethereum prepares itself for ‘The Merge‘, set for September 19, Tether (USDT) and Circle, issuer of the USDC stablecoin, have pledged their full support for the long-awaited transition.

The Merge will see the platform move from an energy-intensive proof-of-work (PoW) consensus mechanism to a more sustainable proof-of-stake (PoS) mechanism that will improve the efficiency of the project and dramatically reduce its environmental impact.

In a statement released on August 9, Tether labelled the transition one of the “most significant moments in blockchain history”, saying:

Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to PoS is not weaponised to cause confusion and harm within the ecosystem.

Tether statement

Smooth Transition ‘Essential’ for Long-Term DeFi Health

The firm added: “Tether will closely follow the progress and preparations for this event and will support PoS Ethereum in line with the official schedule. We believe that a smooth transition is essential for the long-term health of the DeFi ecosystem and its platforms, including those using our tokens.”

The announcement from Tether came on the same day as its stablecoin competitor USDC, which announced it would only support Ethereum’s highly anticipated upgrade. The issuer of USDC, Circle, views the Merge as an important milestone in the scaling of Ethereum’s ecosystem, saying in its own statement:

USDC has become a core building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and helped broaden the set of use cases that today rely on Ethereum’s vast suite of capabilities. We understand the responsibility we have for the Ethereum ecosystem and businesses, developers, and end users that depend on USDC, and we intend to do the right thing.

Circle statement

As Support for Ethereum PoW Fork Increases, Buterin Not Too Bothered

The transition to a PoS blockchain means Ethereum will be effectively eliminating its mining for good, opting instead to rely on a trusted network of validators. While the majority of the community is excited about the upcoming event – none more so than Ethereum co-founder Vitalik Buterin – miners who stand to lose their income are suggesting another potential hard fork will continue the PoW mechanism. Buterin scoffs that proponents of a PoW “want to make a quick buck” and that it is “unlikely to succeed”.

Binance, the world’s largest cryptocurrency exchange by volume, has said it would not rule out support for the controversial fork, saying that while it shares the excitement for the Merge, it would also possibly support the “merge resistors” who plan to continue the use of the PoW mechanism.

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Celsius Crypto Exchange Crypto News

Celsius Drama Continues as CEO Cashes Out During Recent Short Squeeze

The CEO of bankrupt cryptocurrency lender Celsius has allegedly sold large amounts of the project’s native CEL token during the recent surge. The token’s value shot up almost twofold in the past week in what appears to be a community-driven short squeeze.

First Transaction in Late May

Blockchain data shows a cryptocurrency address identified by intelligence firms Arkham Intelligence and Nansen, as CEO Alex Mashinsky made an initial transaction in late May. According to data from Etherscan, the wallet sold CEL tokens in multiple transactions on August 6 and 9, swapping 17,575 CEL tokens for US$28,242 worth of Ether on the decentralised exchange UniSwap.

The transactions were initially spotted by Twitter user ‘alto’:

Arkham Intelligence managed to identify a few of Mashinsky’s wallets that have regularly sold a large amount of the CEL token on numerous decentralised exchanges. Before it declared bankruptcy, the firm listed its largest owners on its webpage, with the CEO reportedly the largest token holder just after the Celsius treasury.

CEL Token Under SEC Scrutiny

Celsius filed for bankruptcy protection on July 13, only a month after freezing all customer withdrawals. The CEL token issued by the firm as a utility token is also facing regulatory scrutiny from the US Securities and Exchange Commission (SEC) for not being registered as a security.

At its peak in October 2021, the crypto lender had US$25 billion in assets under management, according to Mashinsky, but now Celsius is down to US$167 million “in cash on hand” which it says will provide it with ample liquidity to support operations during its restructuring process.

This is little consolation to investors, as under the terms of its bankruptcy filing Celsius owes its users somewhere around US$4.7 billion. Amid its turmoil, Celsius has also had to withdraw its motion to bring back ex-chief financial officer Rod Bolger on a US$92,000 per month salary. Bolger was set to return to the firm as a consultant to help during the bankruptcy proceedings.

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Crypto News Ethereum Vitalik Buterin

Vitalik Buterin Claims Potential ETH Proof-of-Work Fork is ‘Unlikely to Succeed’

Ethereum co-founder Vitalik Buterin says he’s not worried about the potential of another hard fork following the Merge that’s set to take next month, claiming that proponents of a proof-of-work consensus mechanism “want to make a quick buck” and that it is “unlikely to succeed”.

The Merge upgrade will see the ecosystem move from a proof-of-work (PoW) consensus mechanism to a more sustainable proof-of-stake (PoS) mechanism that will improve the efficiency of the project and dramatically reduce its environmental impact.

Ethereum recently deployed its 10th shadow fork in preparation for the Merge. While the impending event has brought much excitement to the community – with Buterin more excited than most – it has also garnered a lot of criticism and speculation.

Least happy about the Merge are Ethereum miners who stand to lose income. To offset this potential loss, some are pushing against it and propose a potential continuous “ETH PoW” chain post-upgrade.

Miners Push for PoW to Sustain Their Investment

While interest in ETH PoW has been driven by Ethereum miners such as Chandler Guo, PoS will allow Ethereum to rely on a trusted network of validators, effectively eliminating its mining for good. In response, miners may try to continue the PoW chain to sustain their investment.

Tron founder Justin Sun has emerged as one of the prominent investors who support a hard fork to keep the money flowing. He has said there is nothing wrong with preserving ETH’s PoW system, despite the benefits a PoS consensus mechanism can provide:

As the founder of a proof-of-stake blockchain, I believe that proof-of-work has its own unique value. In fact, we may have underestimated the value of Ethereum as the only proof-of-work smart contract blockchain.

Justin Sun, Tron founder

Buterin has argued that those pushing for a fork are “just a couple of outsiders that basically have exchanges, and most just want to make a quick buck”. He added:

So I’m not expecting it to have substantial long-term adoption, just because I think Ethereum Classic already has a superior community and superior product for people pro-proof-of-work.

Vitalik Buterin, Ethereum co-founder

That does not mean we won’t see a few of them try as the project shifts. “If a proof-of-work fork becomes large, then there’s definitely a lot of applications that will have to choose one way or the other,” Buterin said, adding that if ETH PoW gained substantial traction, he expected a lot of market confusion and problems.

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Crypto News DeFi

How a Crypto Dev Faked a $7.5 Billion ‘Active’ DeFi Ecosystem

The Macalinao brothers, founders of Solana’s leading cross-chain stablecoin exchange, Saber Protocol, have reportedly been using numerous pseudonymous developer profiles to pump and fake the total value locked (TVL) on the Solana blockchain to the tune of US$7.5 billion.

An investigation by CoinDesk has revealed that by collectively misrepresenting themselves, Ian and Dylan Macalinao created the identities of 11 independent developers who appeared to be working on a variety of projects. In so doing they created the illusion of an active developers’ community on the Saber protocol, thereby artificially stimulating investment demand for it and the entire Solana ecosystem.

Ian Macalinao, coding as 11 independent developers, created a vast web of interlocking DeFi protocols that projected billions of double-counted value onto the Saber ecosystem. That, in turn, temporarily inflated the TVL on Solana, which became a problem as DeFi regards TVL as a barometer for on-chain activity.

‘Army of Anons’ Lent Credibility to the Project

By posing as collective developers, Ian Macalinao was able to artificially inflate Solana’s TVL by up to US$7.5 billion of Solana’s US$10.5 billion TVL. As the TVL of a DeFi platform rises, its liquidity, popularity and usability also increase, making it an important metric for investors.

Macalinao admitted to creating the false TVL in an unpublished blog, writing: “If an ecosystem is all built by a few people, it does not look as authentic. I wanted to make it look like a lot of people were building on our protocol, rather than ship 20+ disjoint[ed] programs as one person.”

Dylan Macalinao added in another blog post:

There’s only one way to build a strong moat in crypto: have so many other protocols/apps/layers depend on your protocol that its failure would lead to the entire system going down.

Dylan Macalinao, unpublished blog post

DefiLlama De-Emphasises Double-Counted Crypto Deposits

In response to the investigation by CoinDesk and the implications of inflated TVL, crypto data website DefiLlama has changed the way it presents TVL. By switching off its default display of protocols’ double-counted crypto-assets, it has lowered some blockchains’ TVL by billions of dollars. As a result, users must manually activate the double-counted value.

Solana has been in the news for all the wrong reasons of late. Last month, Solana-based liquidity protocol Crema Finance suffered a US$8.7 million hack involving Solend, a Solana-based lending platform. Just weeks earlier, Solend had voted to liquidate a whale’s account to mitigate risks posed to the Solana network.

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Crypto News Crypto Wallets Hackers Solana Trust Wallet

Solana Mobile Wallet Exploited, Millions Drained from Over 8,000 Users

Solana users this week reported that their funds had been drained from more than 8,000 internet-connected “hot” wallets, including Phantom, Slope, and TrustWallet, amassing losses exceeding US$5 million according to blockchain auditing firm OtterSec:

Hardware Wallets Not Compromised

No evidence was found that the Solana protocol or its cryptography were compromised, nor were its hardware wallets. According to a Solana Status Tweet, engineers from across several ecosystems, in conjunction with audit and security firms, were continuing to investigate the “root cause” of the attack:

Blockchain investigation firm PeckShield posted on August 2 that the hack was most likely due to a “supply chain issue”, which was exploited to steal user private keys behind the affected wallets. The exact cause of the attack remains unclear, although it appears that mobile wallet users were impacted most. The attackers were able to sign transactions on behalf of users, suggesting that a trusted third-party service might have been compromised.

The Solana Status Twitter account shared its preliminary findings via developers and security auditors, saying that “it appears affected addresses were at one point created, imported, or used in Slope mobile wallet applications”:

The thread continued: “This exploit was isolated to one wallet on Solana, and hardware wallets used by Slope remain secure … While the details of exactly how this occurred are still under investigation, private key information was inadvertently transmitted to an application monitoring service.”

Yet Another Setback for Solana

Over the past nine months, Solana has suffered some severe downtime on its network caused by “excessive duplicate transactions” and “high levels of congestion”. It also suffered a distributed denial-of-service attack in December last year that jammed the network and led to huge delays, leading many to question the security of the network.

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Blockchain Crypto News Hackers

Nomad Cross-Chain Bridge Drained by Over $150 Million

Nomad has suffered an exploit resulting in the loss of up to US$190 million worth of crypto assets. Nearly the entire fund has been drained from the bridge, leaving only US$651.54 left in the wallet:

Nomad Still Investigating

Nomad, a token bridge that allows transfers of tokens between the Avalanche, Ethereum, Evmos, Milkomeda C1 and Moonbeam blockchains, is still investigating the incident. Some of the funds lost in the attack were taken by so-called “white hat friends” who removed the funds with the intention of safeguarding them.

The first transaction came at 9:32 pm UTC when someone managed to remove 100 Wrapped Bitcoin tokens, worth about US$2.3 million, with holdings of Wrapped Ether and the USDC stablecoin also subsequently affected.

It was later confirmed by security firm PeckShield that as much as US$190 million worth of cryptocurrencies were taken. Blockchain data suggests that transactions may have been constructed to make it appear that multiple actors were involved:

Crypto Bridges Security Remains a Concern

In January this year, cross-chain protocol ‘Multichain’ reported an attack in which hackers managed to exploit various vulnerabilities in the protocol, stealing over US$1 million. When the Multichain team announced the hack, it prompted attackers to steal more funds, raising the total amount lost to roughly US$3 million.

In June, Axie Infinity’s Ronin bridge finally re-opened after losing US$625 million in a similar attack. Victims were said to have been fully compensated.