Author: Phil Stafford

Phil is a long-standing Australian journalist with specialised experience in business, finance, travel and popular culture.

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Binance Bitcoin China Crypto News Data Hackers

Hacker Wants 10 Bitcoin for Stolen Data of 1 Billion Chinese Citizens

In what could be one of the biggest data breaches in history, a hacker who claims to have stolen the personal details of 1 billion Chinese citizens from a Shanghai police database is offering to sell the information for a mere 10 bitcoin – worth about US$200,000.

The anonymous hacker, identified only as “ChinaDan”, posted the following message on hacker site Breach Forums last week:

“In 2022, the Shanghai National Police (SHGA) database was leaked. This database contains many TB [terabytes] of data and information on billions of Chinese citizens. [These include] several billion case records including names, addresses, birthplaces, national ID numbers, mobile numbers, [plus] all crime/case details.”

‘CZ’ Corroborates Intelligence Threat

In a July 4 tweet, Binance CEO Changpeng ‘CZ’ Zhao said the exchange had stepped up its user-verification processes after Binance’s threat intelligence detected the sale of records belonging to “one billion residents of an Asian country” on the dark web:

CZ blamed the leak on “a bug in an Elastic search deployment by a [government] agency”, without specifically mentioning the Shanghai police case.

Implications for Greater Crypto Industry

Kenny Li, co-founder of Web3 privacy project Manta Network – in which Binance Labs is an investor – warned the breach might have widespread implications for the crypto industry:

The stolen data could be used to exploit users and do things like [launch] phishing attacks to steal keys or [gain] unauthorised access to applications like centralised exchanges.

Kenny Li, co-founder, Manta Network

The Shanghai Police data hack claim comes as China has vowed to tighten protection of online user data privacy, instructing its tech giants to ensure safer storage after multiple public complaints about mismanagement and misuse.

China has recorded a number of data leak incidents in recent years. In 2016, sensitive information about powerful Chinese individuals, including Alibaba founder Jack Ma, was posted on Twitter.

Ransomware War Continues

In November last year, US$6 million in crypto was seized from the REvil ransomware group, and three months later the US Federal Bureau of Intelligence announced the formation of a specific crypto crime division to tackle ongoing ransomware attacks.

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Australia Bitcoin Bored Ape Yacht Club Crypto News Cryptocurrencies Investing NFTs

Brisbane Man’s Crypto Bet Enabled Him to Buy a Home Mortgage-Free

In less than a decade, Brisbane IT specialist Joe Bridge turned a small-time household crypto mining hobby into an A$1.2 million profit that enabled him to buy a house outright along with two motorcycles and a pair of boats.

Bridge, now 38, was a law student living at home in 2013 when he installed mining software on three computers and used 10 graphics cards to generate Litecoin and Dogecoin.

Traded $LTC and $DOGE for ‘More Than a Dozen’ BTC

Although the power bills at his parents’ house in Paddington, in Brisbane’s inner west, ramped up to over A$600 per month, Bridge mined enough $LTC and $DOGE to trade it for “more than a dozen” bitcoins. He held on to the BTC until 2017 when the price began to spike, then invested some of his stash on motorbikes and boats.

Joe Bridge at his Clontarf home with one of his motorcycles. Source: ABC News / Alex Papp

By the time bitcoin hit its all-time high in November 2021, Bridge was able to cash out A$880,000 for a house at seaside Clontarf in Brisbane’s northeast, and still had enough left over to pay a $290,000 capital gains tax bill.

Cautionary Advice for Would-Be Investors

No longer active as a crypto investor, Bridge has cautionary advice for anyone thinking of buying the current dip in bitcoin’s price. “I think it’s a dangerous time to be getting into it,” he told ABC News last week. “I would imagine it’s possible [to still make money], though. [But] would I recommend it? No. I’m not currently participating.”

I do think there will be a shake-out and the speculative bubble that surrounds [cryptocurrency] will disappear. Perhaps from the ashes of that, something with real utility to humanity may arise, but there’s a lot of debate about what product that is. I don’t think it’s bitcoin.

Joe Bridge, IT consultant in financial software, former crypto investor
Crypto market cap since November 2021. Source: CoinMarketCap

More than a million Australians now own some form of cryptocurrency, according to a Roy Morgan survey conducted in February this year. However, chances are that none of them will ever get as lucky as Australian NFT collector Steve Morlando, who in May was able to turn US$300 into a whopping US$5 million when he bought a rare Bored Ape for what amounted to 0.01 percent of its then-current value.

Like Joe Bridge, Morlando plans to hang on to his investment “for a minimum of 10 years”.

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Blockchain Crypto News Ethereum Gaming Metaverse NFTs Stablecoins Stratis

Stratis (STRAX) Token Soars 160% Amid NFT, Gaming and Stablecoin Announcement

Ethereum-based, decentralised blockchain platform Stratis has witnessed its native token STRAX rocket 103 percent in one 24-hour period this week, cooling off from a rally that at one point reached 160 percent.

STRAX took off minutes after the project announced a series of updates, including a new ticketing system via which NFTs will be used to validate entry to venues and distribute rewards at events.

Stratis has also foreshadowed several new blockchain-powered video games set to hit its mainnet later this year, along with issuing an update on its launch of a stablecoin pegged to the British pound called Great British Pound Token (GBPT).

PwC to Provide Audit Services for New Stablecoin

The platform is currently working with Price Waterhouse Coopers (PwC) to complete regulatory registration and expects the partnership to be ongoing with PwC providing auditing services for the GBPT stablecoin’s implementation.

According to the Stratis announcement, “With entities like Visa increasingly willing to accept stablecoin payments, there’s a huge opportunity to simplify cross-border and wholesale payments using blockchain technology.”

Prior to this week’s STRAX price rally, the team behind the protocol teased the upcoming launch of Sky Dream Mall, a new metaverse project powered by the Stratis blockchain:

STRAX Defies Market Conditions

All of which is in clear defiance of the current bear market and the onset of the so-called ‘crypto winter’. These are arguably the most positive developments in the sector since April, when blockchain-based music platform Opulous saw the price of its token, OPUL, rally 175 percent after it announced DeFi staking, CEX listings and S-NFT sales.

You’d have to go back even further to find another one-day performance to rival that of STRAX this week. In February this year, the utility and governance token for the DEX Injective Protocol rallied more than 100 percent in a single day following the listing of Cosmos (ATOM) perpetual futures on the platform.

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Australia Crypto News ETFs Investing Surveys

Millennials Prefer Crypto Over Investment Funds: Survey

A new survey conducted among young adults aged 25 to 40 in the US by French investment firm Alto reveals that more millennials are investing in crypto than in mutual funds.

According to Alto’s report, titled “How Millennials See Their Financial Future”, nearly 40 percent of the survey’s millennial respondents have invested in cryptocurrencies.

Coincidentally, the same percentage of Australian millennials indicated their preference for digital assets over real estate in a similar survey conducted by international crypto exchange Kraken almost exactly a year ago.

Another survey conducted by Australian online investment broker Pearler in May 2021 indicated that “a significant number” of Aussie millennials intended to retire at the age of 50 using their investments in exchange-traded funds (ETFs) and cryptocurrencies.

Current Market Conditions Dissuade Potential Investors

The 40 percent figure mentioned in the latest Alto survey also mirrors the proportion of American millennials who own stocks. The report notes that most millennials either already own crypto or are considering buying some, though Alto founder and CEO Eric Satz concedes that current conditions make it hard for them to consider investing:

In a world of conspicuous consumption, soaring living costs, and mounting student loan debt, millennials find it difficult to invest for the future because they are struggling to afford the present.

Eric Satz, founder and CEO, Alto Investing

Seven in 10 Millennials Intend to Add Crypto to Their Retirement Funds

Participants in the Alto survey who currently hold digital assets mentioned they were likely to add more crypto to their retirement portfolios. This cohort amounted to 70 percent of millennials surveyed.

Other key findings of the Alto survey included:

  • 74 percent of millennials thought that pouring money into the stock market should be considered gambling, whereas 70 percent were of the opinion that such actions were way too dangerous; and
  • 76 percent believed they could essentially be left without any savings if the bears continued to reign supreme on the crypto market.
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Australia Crypto Exchange Crypto News Payments

Aussie Exchange ‘Banxa’ Cuts 30% of Staff, Citing ‘Crypto Winter’

Australian crypto payments operator Banxa will lay off more than 30 percent of its global staff to reduce operating costs amid the ongoing bear market.

“Like many others in our industry [we] are anticipating another crypto winter, with trading volumes declining significantly,” said Banxa CEO Holger Arians in a grim letter to staff.

“We saw our market capitalisation nearly halve in a matter of days, and the forecast is that these conditions will most likely continue for another 12 months.”

Banxa must take decisive actions to reduce costs now, or else our company won’t be able to succeed over the long run.

Holger Arians, CEO, Banxa

With staff across seven different countries, including Australia, APAC, the US, UK and Canada, Banxa will reportedly cut employee numbers from 230 employees to 160.

European MD Also Out the Door

Banxa is an international Web3 on-and-off ramp solution that facilitates conversions between digital assets (including cryptocurrencies and NFTs) and fiat currencies. The company’s European managing director, Jan Lorenc, is also likely to step down, indicating Banxa’s diminishing interest in the Euro market.

The company has traded on the Toronto Stock Exchange’s early-stage TSX Venture Exchange since January 2021, but its shares have plunged 74 per cent in the past 12 months as the crypto and broader tech markets continue to cop a hammering.

Banxa will centralise its operations in the Australian and Philippines markets in order to better prioritise higher margins and profitability in the face of current industry headwinds, according to a spokesperson.

Jobless Crypto Queue Lengthens

Other major cryptocurrency platforms have also slashed their head counts. In mid-June, lending platform BlockFi and major exchange Crypto.com announced they would cut more than 400 jobs between them. Just a day later, Coinbase revealed it would be liquidating 1,100 jobs, or around 18 percent of its total workforce. With Gemini and Robinhood also recently rationalising their staff numbers, it would seem that the crypto winter is already upon us.

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Crypto Exchange Crypto News FTX Investing

FTX and Morgan Creek Want a Piece of Troubled Crypto Lender ‘BlockFi’

Less than a week after extending a US$250 million line of credit to BlockFi, Bahamian-based exchange FTX is now in talks to acquire a stake in the beleaguered crypto lending company.

FTX’s credit line offer stood to effectively wipe out all BlockFi shareholders, including investment firm Morgan Creek Digital, the firm told its investors. For this reason, Morgan Creek – a longtime backer of BlockFi – is attempting to raise an equivalent amount from investors to purchase a majority stake in the troubled lender, according to a leaked investor call.

VC Funds Line Up to Help Bail Out BlockFi

While Morgan Creek has declined to comment on the move, multiple venture capital funds are said to be exploring ways to provide equity financing to BlockFi as the lender struggles to stay afloat, according to an insider.

Morgan Creek managing partner Mark Yusko did reveal via the leaked call that BlockFi founders Zac Prince and Flori Marquez had good reason to accept FTX’s terms. Of the several emergency financing offers BlockFi had received, FTX’s was the only one that would not subordinate client assets to the rescuer:

Deal Just Days Away

Yusko also revealed on the leaked call that FTX and BlockFi were “probably three days away from signing a definitive agreement”. The outcome may prove to be the only bright light in what’s been a bleak month for BlockFi – and crypto in general – with Prince announcing in a June 14 tweet that “roughly 20 percent” of its workforce would be let go in the wake of the current market slump.

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Avalanche Binance Coin Crypto News DeFi Ethereum

DeFi Yield Protocol (DYP) Pumps 107% Amid Coinbase ‘Experimental’ Listing

One of six Ethereum-based altcoins just listed on US crypto exchange Coinbase’s roster of digital assets, DeFi Yield Protocol (DYP), is up a significantly bullish 107 percent in a week and as a result is currently trading at US$0.43:

Experiment Gets Real

Coinbase says DYP will be phased in along with five other Ethereum-based altcoins – HOPR, MATH, PARSIQ, Elastos (ELA) and ALEPH – in trading pairs with Tether (USDT) after appropriate liquidity conditions are met. All six altcoins are grouped under the exchange’s ‘Experimental’ label, introduced in March this year:

DYP aims to offer users the ability to stake Ethereum, Binance Coin and Avalanche to earn a fixed 25 percent APR (annual percentage rate). It is also said to be working on an array of products for the decentralised ecosystem and seeks to be “accessible for both beginner and advanced users” through a combination of DeFi, NFTs and metaverse gaming.

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Bitcoin Crypto News Ethereum Vitalik Buterin

Vitalik Buterin Claims BTC Stock-to-Flow Model is False

Ethereum co-founder Vitalik Buterin has renewed his attack on the stock-to-flow (S2F) price model for Bitcoin, dismissing it as “false”, “harmful” and “deserving of mockery”.

He went even further in echoing EthHub co-founder Anthony Sassano who, in a same-day tweet, damned S2F as an “epic failure”:

How the Stock-to-Flow Model Works

The S2F price model, authored by crypto analyst PlanB, predicts the future price of bitcoin based on its supply in circulation (stock) relative to the number of coins mined each year (flow), which decreases by half every four years. According to S2F predictions, 2022 would see bitcoin trading within the US$100,000-110,000 range, though the most recent market crash marked an 18-month low for BTC under US$20,000 last week, calling the model’s accuracy into question.

At that time, Buterin railed against “the ‘halvings cause BTC price rises’ theory”, implying that any price can be cited as evidence that the S2F model is correct.

S2F author PlanB countered Buterin in saying that the market’s slump made some people look for “scapegoats for their failed projects or wrong investment decisions”:

BTC vs S2F: Which Will Thrive to Survive?

In an earlier tweet, PlanB admitted that the model had enjoyed a “good run” for three years (until March 2022) but had since wobbled from its trajectory. As for the current market, PlanB considers that “either BTC is extremely undervalued and will bounce back soon, or S2F will be less useful in the future”.

Just last month, Buterin voiced his admiration for Bitcoin, saying he’d like to see Ethereum attain a similar level of stability. To do so, however, would require significant short-term change and instability – an apparent contradiction that has since come to pass.

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Bancor Crypto News DeFi

‘Bancor’ DEX Pauses Impermanent Loss Protection Amid ‘Hostile Market Conditions’

DeFi pioneer protocol Bancor has paused its impermanent loss protection (ILP) function, citing “hostile market conditions”:

In a June 20 blog post, the Swiss-based DEX was quick to point out that the ILP pause is strictly a temporary measure to protect the protocol and its users: “[This] should give the protocol some room to breathe and recover. While we wait for markets to stabilise, we are working to get IL protection reactivated as soon as possible.”

What Is ‘Impermanent Loss’ and How Does It Work?

In DeFi, impermanent loss happens when a user provides liquidity to a liquidity pool and the ratio of deposited assets later changes, potentially leaving investors with more of the lower value token. The bigger the change, the more users are exposed to impermanent loss.

The problem, says Bancor, is that many DeFi projects seem to ignore the issue, which ultimately results in inaccurate APR (annual rate of return expressed as a percentage) numbers reported by some protocols.

Insurance by Any Other Name

Bancor’s impermanent loss protection (ILP) feature imposes a cost on a protocol, similar to the insurance cost incurred by an insurance company.  This cost is offset in two ways:

  • ILP is funded by Bancor’s protocol-owned liquidity – the protocol stakes its native token BNT in its pools and uses the earned fees to compensate users for any impermanent loss; and
  • when earned trading fees are greater than the cost of impermanent loss on a given stake, the protocol is effectively burning excess BNT.

It seems not all investors approve of this modus operandi, however:

Elsewhere in the troubled world of DeFi this week, crypto lenders Babel Finance and Celsius have been forced to pause withdrawals and transfers due to what they respectively deemed “unusual liquidity pressures” and, echoing Bancor, “extreme market conditions”.

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Crypto News DeFi Investing

Crypto Hedge Fund ‘Three Arrows Capital’ Faces Insolvency Amid Forced Liquidations

The future of Singapore-based crypto venture capital firm Three Arrows Capital (3AC) has been blunted by rumours it faces insolvency after being liquidated on several fronts by its lenders to the tune of around US$400 million.

After a three-day social media silence, co-founder Su Zhu has addressed the rumours with the following, perhaps intentionally vague statement on Twitter:

3AC Sweats on a Repayment Plan

Sources say 3AC – which includes troubled financial services company BlockFi among its venture bets – is working on a way to repay lenders post-liquidation, the latest disaster for an investment firm that has backed the likes of Avalanche, Polkadot and Ether, down 57 percent, 38.8 percent and 47 percent respectively in the past 30 days.

3AC itself sustained significant losses during the collapse of the Terra ecosystem last month after investing heavily in its native token, LUNA. Insolvency rumours escalated when Zhu removed 3AC’s investment profile from his Twitter bio, retaining only a mention of Bitcoin.

Luke Davies (left) and Su Zhu, co-founders of Three Arrows Capital. Source: bloomberg.com

Then both he and Three Arrows Capital co-founder Kyle Davies went conspicuously quiet:

Celsius Stares Down its own Potential Insolvency

Meanwhile, DeFi banking platform Celsius has been shoring up positions to avoid liquidations and this week was positioned for a buyout by crypto services business Nexo after pausing withdrawals in an attempt to stave off insolvency.

Celsius funds account for a significant proportion of the total value locked in various platforms in the DeFi ecosystem, while 3AC is a major borrower. The collapse of either or both would have significant implications for the entire space.