SEC - Page 281

In a recent incident, a hacker exploited a code vulnerability in the noncustodial decentralized finance (DeFi) protocol Arcadia Finance, draining approximately $455,000 from the platform.

PeckShield, a blockchain investigator, identified the cause of the hack as the absence of untrusted input validation in the code.

The hacker took advantage of this vulnerability, which allowed them to siphon funds from the Ethereum (darcWETH) and Optimism (darcUSDC) vaults.

READ MORE: Digital Currency Group Dismisses Gemini Lawsuit as “Publicity Stunt” by Winklevoss Twins

Arcadia Finance has not yet provided a comment on the hack in response to inquiries made by Cointelegraph.

However, the team did mention that PeckShield’s assessment of the root cause was incorrect.

Nevertheless, Arcadia Finance acknowledged the hack and took immediate action by pausing the contracts to prevent further loss of funds.

While investigations are ongoing, it has been discovered that Arcadia’s code contains another vulnerability that could potentially have catastrophic consequences if exploited.

PeckShield revealed that there is a lack of reentrancy protection, which enables instant liquidation to bypass the internal vault health check.

The majority of the stolen funds, approximately 180 Ether (ETH) equivalent to $1,864 at the time, were from Optimism and have been laundered through Tornado Cash.

However, the stolen tokens on the Ethereum network, valued at over $103,000, are still held in the suspected wallet address.

In the second quarter of 2023, the crypto space experienced a series of hacks and exploits, resulting in a cumulative loss of more than $300 million.

CertiK, a blockchain security company, reported a total of 212 security incidents during this period, which led to a loss of $313,566,528 from various Web3 protocols.

Comparing the data with the same period in the previous year, CertiK observed a decline of 58% in crypto hacks. Among the incidents, the BNB Smart Chain had the highest number, with 119 recorded cases amounting to losses of $70,711,385.

To commemorate this significant moment in history and show support for independent journalism in the crypto space, readers have the opportunity to collect this article as an NFT (Non-Fungible Token).

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According to recruitment executives, despite the excitement surrounding crypto firms entering Hong Kong, there has been a lack of in-country hires in the industry.

On June 1, approximately 150 companies applied for a local crypto license to operate a trading platform, with some reportedly spending up to $25 million to obtain one.

Sue Wei, managing director of recruitment firm Hays, mentioned that while exchanges aim to establish a presence in Hong Kong, the industry’s recruitment needs are currently low.

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She expects an increase in job openings as Web3 companies continue to develop and expand.

However, there has been a decline in demand for technical talent since the crypto market dip, especially after numerous layoffs, which has made candidates hesitant to work for crypto companies due to the business’s instability tied to crypto prices.

Neil Dundon, founder of crypto recruiter Cryptorecruit, also noted a lack of significant activity in Hong Kong despite regulatory changes.

He believes that the venture activity is currently low but anticipates an upward trend in the future. Olga Yung, managing director of Michael Page Hong Kong, shared similar sentiments, stating that there hasn’t been a significant increase in job seekers interested in Web3 despite the government’s recent support.

However, Yung observed a slight increase in Web3 companies seeking legal and compliance hires in the second quarter of 2023.

Looking ahead, Kevin Gibson, founder of Web3 recruitment firm Proof of Search, expects a surge in crypto talent to take around six months as companies wait for license approvals.

He also mentioned that the local talent pool in Hong Kong is limited, and companies establishing themselves there may face intense competition for talent.

Gibson believes that the talent squeeze will persist until 2024, with Web3 companies potentially relocating their headquarters to pro-crypto jurisdictions if their plans align.

Hong Kong’s demographics data indicate a negative population growth rate since 2020.

Employment statistics for the first quarter of 2023 show a nearly 38% increase in job vacancies compared to the previous year.

One of the main challenges is attracting candidates interested in the crypto and Web3 sectors. Many candidates remain risk-averse due to the current market sentiment.

However, Neil Tan, chair of the FinTech Association of Hong Kong, noted that he has encountered several individuals who have recently transitioned from traditional finance to crypto.

Some are approached directly by crypto firms, while others search for roles through platforms like LinkedIn.

The instability and shedding of headcount in traditional finance have made the stability of crypto more appealing to some candidates.

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Since the launch of Meta’s microblogging app, Threads, scammers have wasted no time in their attempts to deceive users.

Despite the app’s growing popularity, with over 98 million sign-ups since its release on July 5, it still falls significantly short of Twitter’s estimated 450 million users.

Crypto Twitter users, including prominent figures in the industry, have already raised concerns about the presence of imposter accounts on Threads.

READ MORE: South Korean Regulator Takes Action After ‘Coin Gate’ Scandal

On July 8, Wombex Finance, a decentralized finance platform, tweeted an image of a Threads account impersonating their platform.

They warned their followers about the potential scam, as their project was not associated with Threads.

A day earlier, popular nonfungible token (NFT) influencer Leonidas issued a similar warning to their 93,000 followers.

They revealed that both they and other notable NFT accounts were being impersonated on Threads by scammers.

Leonidas took the initiative to create their own account on Threads to combat these impersonators.

Jeffrey Huang, known as Machi Big Brother on Twitter, also fell victim to impersonation.

On July 6, he shared his Threads profile, only to have another user point out the existence of an imposter account posing as his Twitter persona.

Fortunately, the mentioned Threads accounts have refrained from sharing any scam or phishing links. Instead, they have predominantly posted crypto-related content.

This serves as a reminder that scammers have long targeted Twitter as a platform for crypto phishing schemes.

One common tactic involves hacking into the accounts of well-known individuals and businesses, then posting malicious links.

These links typically aim to trick unsuspecting users into revealing their crypto exchange login credentials, crypto wallet seed phrases, or connecting their wallets to crypto-draining smart contracts.

In the first half of this year alone, Web3 security firm Beosin reported that phishing scams resulted in the theft of $108 million worth of cryptocurrencies.

As Threads gains more traction and attracts a larger user base, it is crucial for Meta to implement robust security measures to protect users from scammers.

Additionally, educating users about the risks associated with phishing scams and providing guidance on how to identify and avoid them is essential.

By taking proactive steps, both the platform and its users can work together to mitigate the threat posed by scammers in the crypto space.

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Today, the most significant cryptocurrency gaining traction on Uniswap is Elon Musk (MUSK).

However, caution is advised as DEXTools reveals that this new meme token incorporates a blacklist function within its smart contracts.

As of the time of writing, $MUSK has experienced an astronomical surge of approximately 30,000%.

It is crucial to note that such substantial percentage gains over a short period are often attributed to low liquidity rather than genuine buying volume and demand.

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What is the Elon Musk (MUSK) Token?

The Elon Musk cryptocurrency asset made its debut on Uniswap on July 1st and currently boasts a liquidity pool of approximately $130k, with a 24-hour trading volume of $70k.

The market capitalization stands at $1.2 million, with 180 holders. Furthermore, it possesses a DEXTscore of 86/99.

Blacklist Function and Past Concerns

It is essential to acknowledge that previous rugpull incidents, such as the case of PepeHub earlier this week, involved the utilization of a blacklist function.

This particular function prevents specific wallet addresses from engaging in normal trading activities.

Therefore, it is plausible that some holders may be unable to sell, which could potentially account for the continuous price surge of $MUSK.

These circumstances contribute to the token’s status as one of the leading gainers in the cryptocurrency market.

At present, $MUSK coin has yet to secure a listing on CoinMarketCap.

However, it is worth mentioning that other unrelated assets associated with Elon Musk (MUSK) have appeared, and unfortunately, many of these have turned out to be scams.

The DEXTools description of $MUSK coin states, “$MUSK – Risk-taking and imagination are keys to success. Take a chance or regret it!”

Although Elon Musk, a long-time advocate of Bitcoin, Dogecoin, and cryptocurrencies in general, has not directly addressed the $MUSK token, he has recently engaged with another meme coin known as Wall Street Memes (WSM).

Musk has responded to tweets featuring memes from the @wallstmemes account on Twitter on three separate occasions.

While it remains unclear whether Elon Musk is aware of the upcoming launch of the $WSM token on Uniswap, his interactions with the @wallstmemes account indicate his involvement in the meme coin sphere.

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Ethereum co-founder Vitalik Buterin recently engaged in a Twitter Spaces session on July 7, where he shared his insights on new developments within the Bitcoin blockchain.

During the conversation with Bitcoin proponents Eric Wall and Udi Wertheimer, Buterin highlighted a few areas where Bitcoin could potentially learn from Ethereum developers.

Buterin commended the introduction of Bitcoin Ordinals, a layer for non-fungible tokens (NFTs), for reviving a “builder culture” on the network.

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He viewed this development as a positive shift away from the stagnant politics in the Bitcoin ecosystem.

According to Buterin, the advent of ordinals has rekindled a sense of action and productivity among Bitcoin enthusiasts.

The Ethereum co-founder suggested that Bitcoin could expand its functionality without compromising scalability.

He specifically praised the Ordinals and the BRC-20 token standard for their potential impact. Buterin believes that these advancements serve as a pushback against the “laser-eye” Bitcoin Maxi movement, which he considers to be a positive development.

The conversation mainly focused on scalability concerns.

Eric Wall voiced his concerns about the inadequacy of the Bitcoin Lightning Network in terms of future scalability, particularly when processing medium-sized payments.

In response, Buterin recommended that developers concentrate on implementing various layer-2 solutions and seek ways to enhance the efficiency of the Bitcoin base layer.

He specifically highlighted the value of rollups and ZK-snark-based scaling solutions.

Udi Wertheimer agreed with Buterin’s suggestions and emphasized the potential benefits of introducing zero-knowledge rollups to the Bitcoin network.

He argued that adopting rollups would not only improve scalability but also enable the execution of smart contracts.

Notably, Eric Wall and Udi Wertheimer are leading figures behind the Ordinals project called Taproot Wizards.

Their advocacy for increased functionality in the Bitcoin network has garnered criticism from Bitcoin fundamentalists who argue that smart contracts and NFTs dilute Bitcoin’s primary peer-to-peer cash functionality.

Among the critics is Samson Mow, CEO of Jan3, who considers Ordinals to be a waste of block space that could otherwise be used for Bitcoin payments.

Responding to the criticism, Wall explained that Bitcoin could serve as a proof system for zero-knowledge proofs, alleviating concerns about network congestion.

He expressed the perspective that Bitcoiners have always desired to explore DeFi adjacent ventures while relying on the Bitcoin base layer as a judge or arbiter of computation, rather than performing the computation on-chain.

Wall further highlighted that second layers could serve purposes beyond payments.

Unsurprisingly, this discussion has stirred controversy within the Bitcoin community. Udi Wertheimer criticized Samson Mow and Adam Back, CEO of Blockstream, for opposing the conversation with Buterin.

In a tweet, Wertheimer referred to them as “laser-eyed clowns” who have allegedly failed to produce a successful product despite leading Blockstream for a decade.

He questioned their reluctance to learn from Ethereum’s experiences.

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Galaxy Digital CEO, Mike Novogratz, is considering relocating businesses outside the United States as the country continues its regulatory crackdown on the cryptocurrency industry.

Novogratz, an American billionaire, cautioned that many other crypto firms are also adopting similar strategies and moving away from the US.

Speaking at the Piler Sandler Global Exchange & FinTech Conference last month, he revealed their intention to relocate both personnel and companies from the US.

READ MORE: Elon Musk Fights Back Against $258 Billion Dogecoin Lawsuit

Several US-based crypto companies have already taken steps to establish their businesses in other countries.

While Novogratz believes that the US will remain an important player in the long run, he emphasized the need for the country to engage with the crypto industry and not disregard it.

He stated that for cryptocurrencies to fulfill their true potential, the US must be involved.

Given their significant role in the global economy, it is crucial to find common ground through engagement with politicians and regulators.

Presently, the regulatory landscape for crypto businesses in the United States appears bleak.

The US Securities and Exchange Commission (SEC) has intensified its scrutiny of crypto companies, filing successive lawsuits against major exchanges such as Binance and Coinbase.

The regulator alleges that these exchanges have violated numerous investor protection laws.

Specifically, the SEC claims that over 30 cryptocurrencies listed on these platforms are unregistered securities, including popular tokens like Solana, Cardano, Polygon, Cosmos, The Sandbox, Decentraland, and Axie Infinity.

Considering the uncertain regulatory environment in the US, several crypto companies have already announced their intentions to relocate overseas.

One such example is Coinbase, the largest US-based crypto exchange, which recently established a business presence in Bermuda.

Additionally, Coinbase expanded its services for customers in Singapore. Earlier this year, Coinbase CEO Brian Armstrong emphasized the need for clear regulations governing crypto, warning that without them, companies would seek refuge in offshore jurisdictions.

Gemini, another prominent US-based exchange, is seeking a license in the United Arab Emirates and has revealed plans to expand its workforce in Singapore to over 100 employees within the next year, targeting the Asian market.

Ripple, currently entangled in a legal dispute with the SEC since 2020, has also expressed its intention to relocate its business outside the US.

In light of the increasing exodus of crypto businesses from the US and the growing regulatory uncertainty, it is crucial for US regulators to establish clear and comprehensive guidelines for the industry.

Failure to do so may lead to the further proliferation of offshore havens for crypto companies, which could ultimately hinder the country’s ability to fully participate in and benefit from the cryptocurrency revolution.

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Digital Currency Group (DCG) has dismissed the lawsuit filed by Gemini as a “publicity stunt” orchestrated by Cameron Winklevoss.

Gemini recently announced that it has taken legal action against DCG and its CEO, Barry Silbert, accusing them of defrauding creditors.

According to Gemini, Silbert pressured the continuation of the Earn program despite knowing about Genesis’ insolvency.

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Cameron Winklevoss alleges that Silbert and DCG executives repeatedly lied to conceal the truth from Gemini and other creditors.

Genesis, a subsidiary of DCG, reportedly owes nearly $1 billion to Gemini’s Earn program users and other creditors.

DCG responded to the lawsuit by issuing a statement last night, dismissing it as baseless and defamatory.

The company labeled the legal action as another attempt by Cameron Winklevoss to deflect blame from himself and Gemini.

DCG emphasized that any suggestions of wrongdoing by the company or its employees are completely false.

The statement revealed that DCG has been actively engaged in negotiations with the representatives of the Official Unsecured Creditors Committee and Ad Hoc committee to reach a resolution.

DCG criticized Gemini’s leadership, accusing them of being “missing in action” and making press statements while DCG has been working tirelessly to find a solution.

DCG’s statement clarified that neither of the Winklevoss twins was involved in any of the in-person meetings related to the mediation process.

The statement concluded optimistically, expressing an expectation to bring the Genesis Chapter 11 case to a close soon.

In response to DCG’s statement, Tyler Winklevoss, co-founder of Gemini, tweeted that DCG and Barry Silbert failed to address or deny any of the allegations made in the 33-page complaint.

Tyler questioned which parts of the complaint DCG considers “baseless, defamatory, and completely false.”

Gemini asserts that DCG and Silbert were directly involved in misleading creditors about Genesis’ financial condition.

The lawsuit claims that when Three Arrows Capital (3AC) collapsed in June 2022, it created a $1.2 billion deficit in Genesis’ balance sheet.

Gemini alleges that DCG intentionally lied to reassure them that they would absorb the losses.

The Winklevoss twins have repeatedly warned DCG of potential legal action if the issue remained unresolved.

The lawsuit between Gemini and DCG continues to unfold as both parties present their arguments and evidence in court.

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