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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Bitcoin Bitfinex Crypto Exchange Crypto News Cryptocurrencies Hackers Illegal Tokens

Bitfinex Token LEO Soars 60% Amid BTC Seizure from 2016 Hack

Bitfinex’s UNUS SED LEO token (LEO), an altcoin most had forgotten since it launched in 2019, has just surged 60 percent in value following the seizure of almost US$4 billion in Bitcoin lost in an infamous 2016 hack.

LEO Price Hits All-Time High

LEO went from trading at US$4.97 to US$8.04, according to data from CoinMarketCap, reaching an all-time high. The price has settled since to US$6.84, but the surge seems to be related to the seizure of stolen crypto assets that formerly belonged to Bitfinex users.

On February 8, the US Department of Justice announced it had recovered 94,000 BTC stolen in the infamous hack of the crypto exchange Bitfinex. The 2016 hack saw 119,754 BTC stolen, worth about US$72 million at the time. The value of the stolen crypto is now almost worth US$4 billion. On February 1, an estimated US$3.5 billion in BTC was moved from wallets associated with the hack into a single wallet, alerting authorities to the stolen Bitfinex BTC.

Bitfinex CTO Paolo Ardoino took to Twitter to express his gratitude:

Deputy Attorney General Lisa Monaco said in a statement: “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals.” The statement also named Ilya Lichtenstein and Heather Morgan as the two culprits charged with attempting to launder the stolen property.

According to the FBI, Morgan and her husband Lichtenstein spent part of the proceeds on gold, NFTs and other items. Each faces up to 25 years in federal prison should they be convicted.

LEO Buys Back

In 2019, Bitfinex sold its Leo token and raised US$1 billion in 10 days. The token is a basic exchange utility token, so using it on Bitfinex lowers trading fees. However, LEO has an additional unique property. According to its whitepaper, the firm pledged to use most of any recovered BTC from the hack to purchase LEO on the open market and burn it after.

The whitepaper indicates: “Bitfinex and its subsidiaries will use an amount equal to at least 80 percent of the recovered net funds from the Bitfinex hack …. to repurchase and burn outstanding LEO tokens.”

The whitepaper also gives the firm 18 months to dispose of the BTC, thereby allowing it to do so at a time-weighted average price rather than shock the market with one giant sale.

In a statement following the news of the seizure, Bitfinex said: “We want to express our appreciation for the dedication and hard work by the DoJ team that led to this great success. We will continue to support their efforts.”

LEO comes from the Latin phrase, “unus sed leo”, a line in the Aesop’s fable The Lioness, and the moral of the story is quality over quantity. If all goes according to plan, there will soon be considerably fewer LEO tokens in circulation.

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Avalanche Blockchain Crypto News

Smart Contract Platform AVAX Bounces Back, Up 80% from January Lows

Avalanche (AVAX) has managed to rally its price up by 80 percent after last month’s lows. AVAX’s recovery now extends into its third week, mainly due to similar upside movement across the top crypto assets.

AVAX, a layer-1 smart contract platform built by Ava Labs, is a proprietary proof-of-stake blockchain that is Ethereum-compatible and allows developers to build and deploy dApps on the platform. On February 3, it rallied almost 16 percent to reach US$96.50, its best performance since January 14.

The massive single-day growth has been attributed as part of a recovery that began in earnest on January 22 after Avalanche’s token AVAX hit a low of US$53. Extrapolating from this data, AVAX’s net rebound has totalled more than 80 percent.

Big Thaw for ‘Crypto Winter’

Since the beginning of 2022, crypto markets have plummeted as investors assessed the US Federal Reserve’s monetary tightening prospect. AVAX, like many other coins, had lost 65 percent in value in what is now being termed as a potential “crypto winter”, after reaching a record high price of above US$150 in November.

However, the market has recovered almost half its losses after bottoming out in late January, pushing projects such as AVAX to recover. Added to this, AVAX’s price also rose as Avalanche – as a standalone blockchain project – reported massive network growth at 2021’s close.

Late last year, AVAX soared after news of a partnership with the world’s biggest accounting firm, Deloitte, and also skyrocketed after completing a US$230 million investment round.

AVAX Climbs the Leaderboard

Avalanche saw a rise in the number of its daily active addresses to 70,000 per day in Q4 2021 versus 10,000 per day in Q3. AVAX has also ascended the blockchain leaderboard as billions of dollars of investor capital return to the project and it sees a 714 percent rise in the TVL (total value locked). AVAX now has US$10.48 billion in TVL, giving it the fastest growth among its competitors within the layer-1 and layer-2 categories – after the arrival of leading Ethereum protocols Aave and Curve into its ecosystem.

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Crypto Art Crypto News NFTs

Sotheby’s to Auction 104 CryptoPunks for Estimated $20-$30 Million

Centuries-old English art auction house Sotheby’s has announced it is set to sell off 104 CryptoPunks NFTs in a live New York City auction scheduled for February 23.

Sotheby’s describes Punk It! as its “most important and historic NFT project”. The auction, in which all 104 CryptoPunks will be sold as a single lot, will mark Sotheby’s first dedicated live evening auction for NFTs.

The live evening auction will also bring together the physical and digital in an unprecedented showcase for NFTs and digital art with a presentation on par with the most significant and high-profile sales for Contemporary and Modern art.

Sotheby’s press release

The Punks set to go on sale were all acquired together last July in a single transaction on the blockchain by an anonymous collector, “Ox650d”. This also means that all 104 Punks have the exact same provenance, which makes this collection unique.

What Are CryptoPunks?

CryptoPunks is a collection of 10,000 NFTs released in 2017 by Larva Labs, all of them pixelated portraits of punk rock-inspired faces. Each NFT in the collection is unique and sports various traits and accessories. The collection has become one of the most successful of its kind, with a current floor price of 67.5 ETH, or about US$217,000. Since its launch in 2017, the Punks collection has generated about 683,000 ETH in sales volumes (over US$2 billion).

Single CryptoPunks have sold for astronomical amounts of money. VISA, for instance, paid a whopping US$150,000 to buy a Punk of its own. But if you think that’s a lot of money, the current record price paid for a CryptoPunk at auction is a staggering US$11.8 million.

If you don’t quite have a cool US$12 million casually lying around, DegenData announced last month it would be auctioning off CryptoPunk #5761 along with the business IP and all supporting assets attached for a mere 420 ETH (US$1.36 million).

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Ethereum Gas NFTs

Crypto Project Uses Whole Ethereum Blocks and Turns Them into NFTs

A new crypto project called VanityBlocks is dedicating whole Ethereum blocks for the single purpose of turning them into NFTs. The project is using the blocks to mint NFTs that will be forever tied to that specific block.

The first Genesis NFT was created on January 16 in block 14017777. The transaction to create the NFT took up the entire block, costing around 5.31 ether, or US$16,600 at the time of writing.

A more recent mint took place on January 31 for block 14114114, costing over 3.42 ETH (about US$10,700) in transaction fees. To date, VanityBlocks only has minted these two blocks, available on OpenSea.

The NFT on block 14114114. Source: OpenSea

OpenSea has, however, also recently experienced problems when an update left some creators unable to mint new NFTs.

Second NFT Sold for Twice the Price

The second of the NFTs has already been sold to an eager buyer for 7 ETH (about US$21,000) on the same day it was minted. To put in perspective the magnitude of using up an entire Ethereum block, one block can hold between a few to several hundred transactions depending on the size of each transaction.

Transactions on the Ethereum network are designed to cost more if they contain more code, a method used to deter spam. In this particular case, the code was designed to keep performing more operations until it hit a certain amount of gas used. As a result, the transaction for each NFT maxed out the 20 million gas limit, meaning that no other transactions could fit in each block:

The only transaction in each block is the one minting the NFT, and the NFTs show the same image of a pair of eyes on a black background.

In the NFT metadata, it contains the block number it was mined in. The concept is that each NFT represents the block it was mined in, making it represent a part of the Ethereum blockchain.

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Crypto News NFTs

Dozens of Copycat Bored Ape Projects Are Making a Mockery of NFTs

A copycat troupe of Bored Ape Projects has been popping up left, right and centre to make a mockery of NFTs. While the OG Bored Ape Yacht Club (BAYC) apes are selling for astronomical amounts of money to celebrities such as Eminem and Justin Bieber, many ‘copycat’ projects are also trying to get in on the action.

The following are just some of the many making a mockery of the industry:

Starry Ape

Starry Ape Art Club is a collection of 10,000 apes inspired by famous artist Vincent van Gogh, the Bored Ape Yacht Club and “degens” all over the metaverse. The project is not affiliated either with BYAC or its creators, Yuga Labs.

Source: Starry Ape Art Club

Scribble Apes

Scribble Apes, also known as SCRAPEs, is a unique collection of 4,444 automatically generated colourful Ape art, yet again with no affiliation to BAYC.

Source: Scribble Apes

Martian Apes

Martian Apes, with a total supply of 3333 apes, is a collection of “immortal and ageless” NFTs, unique reverse-ageing apes that colonise the Red Planet.

Source: Martian Ape

Alien Apes Yacht Club (AAYC)

Alien Apes is an NFT collection of 10,000 AAYCs that lives on the Ethereum blockchain ERC-21, with more than 2000 accessories and expressions generated.

Source: AAYC

The NFT Boom Not Likely to End Anytime Soon

Although some might think the NFT market is overheated and many more share intense hatred for the entire concept, there is no denying NFTs are dominating at the moment. In January, despite the massive pullback in the overall crypto market, the NFT market reached a trading volume of US$6 billion, a new all-time high.

Categories
Crime Crypto News Scams

YouTuber ‘Ice Poseidon’ Admits Stealing $500,000 in Blatant Crypto Scam

Ice Poseidon, also known as Paul Denino, a YouTube streamer and internet personality, has admitted to scamming fans out of US$500,000 in a crypto pump-and-dump scheme. When confronted by YouTuber Coffeezilla, he showed little remorse:

Fellow YouTuber Takes Denino to Task

The scheme involved Denino raising the value of new crypto, CXcoin, by getting his many fans to invest. After promising sceptics and doubters that the scheme was a long-term project, he sold all his currency, causing the remainder held by his fans and investors to plummet – classic pump and dump. In July last year, YouTuber Logan Paul was slammed after after Dink Doink, a coin he had been promoting, crashed 95 percent in just two weeks.

In a recent video by Coffeezilla, the YouTuber shared his findings on Ice Poseidon’s CXcoin:

According to Coffeezilla, Denino personally made off with over US$300,000 while using the remaining US$200,000 to pay developers.

During the call between Coffeezilla and Denino, the latter seemed rather remorseless, stating that “part of the responsibility is on them [the fans] as well, for putting too much emotion into it”. Denino added: “Sometimes you have to look out for yourself.”

When asked if he could return the money if he wanted to, Denino replied: “If you want the answer, yeah, I could give the money back, it is within my power, but I am going to look out for myself and not do that.”

In a later Tweet, Coffeezilla said Denino claimed he would be returning US$155,000 after realising the story would be published. However, he has apparently returned only US$40,000 thus far.

Categories
Crypto News Gaming NFTs

‘Worms’ Ethereum Video Game NFTs Cancelled After Backlash

Following backlash from the community, collectible “Worms” have been buried as fans and other game developers complain about the company’s NFT plans. Echoing recent pushback to other video game NFT projects, the collectibles have been canned:

Team17 Closes its Can of Worms

The sentiment is not new, as video game firms announce plans for digital collectibles and backlash ensues. It happened again this week with publisher Team17 and its plans for NFTs based on the Worms video game franchise. The indie game publisher confirmed on Twitter that it was no longer pursuing its NFT plans, following significant criticism on social media after announcing them.

The British publisher had planned to release NFT collectibles inspired by the 26-year-old Worms franchise, which has to date sold 75 million games. Team17 had partnered with Reality Gaming Group to release the NFTs on the company’s Ethereum sidechain, called the Digital Assets Trading platform.

In addition to community pushback, Team17 also encountered resistance from its partners Aggro Crab, a studio that had its 2020 game Going Under released by Team17. Aggro Crab said it would not work with the long-running publisher if it continued with its NFT plans:

Gaming Community Pushing Back Against NFTs

Although 2021 was the ‘Year of the NFT’, and many have invested significant amounts of money in the industry,  the gaming community does not share the sentiment.

One Twitter user questioned why Team17 would even attempt launching collectibles given that “it’s common knowledge by now that NFTs are not wanted in this medium”:

Many other gaming companies have copped the same criticism as Team17, including Ubisoft. The company received massive backlash from its gaming community after it announced plans to add NFTs to its platform with the release of the last title in the Ghost Recon series. SEGA has also had to backtrack on its NFT plans after receiving considerable backlash from its fans across the globe.

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Blockchain Crypto News DeFi Ethereum Hackers

Blockchain Bridge ‘Wormhole’ Suffers Possible $326 Million Exploit

Wormhole, the popular blockchain bridge for connecting Ethereum, Solana and others, has suffered a possible hack worth over US$326 million and is now attempting to negotiate on-chain with the hacker.

120,000 ETH Currently in Hacker’s Address

The team at Wormhole has reached out to the exploiter’s address on the Ethereum network and offered a US$10 million bounty for returning the money:

In a tweet, Wormhole confirmed that the bridge was down while the team investigated a potential exploit. The bridge’s official website simply reads: “Portal is temporarily unavailable”.

The hack was identified when on-chain analysts called attention to an 80,000 ETH transaction from Wormhole to an address currently also in possession of over US$250 million worth of ETH. According to the developer, the hacker also kept 40,000 ETH on Solana, where they have been selling for other assets.

In a tweet, prominent pseudonymous Paradigm security researcher “samczsun” confirmed that the Wormhole team had offered the hacker(s) a bounty for returning the stolen funds:

Exploit Sounds Alarm in the DeFi World

The exploit has caused alarm in DeFi circles because it means Ethereum that has been bridged to Solana may be unbacked. Cross-blockchain bridges often take assets, such as Ethereum, and lock them in a contract to issue a parallel asset on the bridge’s chain.

Massive Exploits Continue to Plague the Industry

Earlier this month, decentralised lending platform Qubit Finance suffered a hack of its smart contract governing deposits on the Ethereum-Binance Smart Chain bridge, losing 206,809 BSC in the biggest hack of the year so far. Last October, CREAM Finance was exploited for a third time during 2021 for a whopping US$130 million.

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CBDCs Crypto News Cryptocurrency Tax India Regulation

India Set to Tax Crypto Income at 30% and Plans to Launch ‘Digital Rupee’ CBDC

Following the country’s annual budget speech, India’s finance minister Nirmala Sitharaman announced a 30 percent taxation rate on any income stemming from the transfer of virtual digital assets. She added that the country is likely to issue the digital rupee in the 2022-2023 financial year.

News Welcomed by Indian Crypto Investors

In a country where crypto investment has shot up by 19,000 percent in a year, and the younger cohort is opting to invest their assets in crypto rather than traditional options such as gold, the news has been welcomed.  

“There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime,” the minister said in the budget speech delivered on February 1.

Clarity regarding taxation suggests that crypto would not be banned as some had feared. Apart from the high tax rate, India will not provide any deductions on crypto income except the cost of acquisition. Further, losses incurred by transferring crypto cannot be offset against any other income, unlike losses from stocks.

According to the speech, tax deductions at source will also be imposed on payments for the transfer of crypto assets at a rate of 1 percent for transactions over a certain threshold. Any gifts of crypto assets will also be taxed in the hands of the recipient.

Although the words “crypto” and “cryptocurrency” were not used during the speech, the minister used the phrase “virtual digital asset”, which the industry takes as a term for cryptocurrencies and NFTs.

India to Launch ‘Digital Rupee’ CBDC in Fiscal Year 2023

The budget speech also gave a specific timeline for the launch of India’s central bank digital currency (CBDC). Minister Sitharaman has said that a “digital rupee using blockchain and other technologies” is set to be issued by the Reserve Bank of India starting in the fiscal year 2022-2023. According to the minister, “digital currency will lead to a more efficient and cheaper currency management system”.

Although the clarity given regarding taxation is a step in the right direction, the country still awaits regulatory clarity. The government was scheduled to introduce a crypto bill for discussion in parliament but has not done so yet. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, when presented, will provide specific details on whether India is going to embrace cryptos officially or not.

Will Taxation Deter Retail Investors?

The news from India is significant, seeing as it will affect over one billion people and is likely to set a trend. But the question remains whether imposing a 30 percent tax on virtual digital assets will deter retail investors. While some have argued that 30 percent is too much, others disagree, saying it is in line with taxation on personal income.

Categories
Crypto News DeFi Ethereum

$20 Billion Fund Suggests Ethereum Could 75x in Next 10 Years

In the newest edition of its Big Ideas Report, Cathie Wood’s Ark Invest has predicted that Ethereum (ETH), the world’s most in-demand blockchain, could have a market capitalisation of US$20 trillion in the next 10 years, suggesting the price could 75x to reach US$180,000 for a single ether.

2021 – The Year of Ethereum

ETH achieved major milestones in 2021 including capturing US$10 billion in transaction fees from the network. ETH also surpassed Stripe into second position in global transactions by dollar value in 2021. In 2021, the network underwent an upgrade called “London EIP-1559” which changed the way ETH fees worked and which has brought up issues of supply issuance. As it stands, crypto “whales” hold 43.7 percent of ETH, but it could become more attractive to them should a restricted supply issuance be ongoing.

Ark Invest is bullish on ETH and has high hopes for the platform, saying that it stands to benefit greatly from the rise in DeFi (decentralised finance) and NFTs (non-fungible tokens) given that it serves as the main ecosystem for both sectors. Since ETH is the “preferred collateral” in DeFi, Ark Invest believes that the platform could reach a market cap of US$20 trillion in the next 10 years, suggesting a price of roughly US$180,000.

The Big Ideas Report noted that:

According to our research, Ethereum could displace many traditional financial services, and its native token, ether, could compete as global money. As financial services move on-chain, decentralised networks are likely to take share from existing financial intermediaries.

Big Ideas Report, Ark Invest

It added:

“The beneficiaries of this shift include Ethereum, the base protocol, and DeFi, the decentralised applications built on top of Ethereum. As the preferred collateral in DeFi and the unit of account in NFT marketplaces, ether (ETH) has the potential to capture a portion of the US$123 trillion in global M2.”

Forecast of ETH market cap opportunities. Source: Ark Invest

To find out more about the exciting developments involving ETH, Crypto News Australia has published a helpful guide on the best Ethereum Layers 2 projects worth looking out for.