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Space Force Member Calls for Bitcoin’s Role in National Cybersecurity

Jason Lowery, a member of the United States Space Force, has called for a formal investigation into the use of proof-of-work (PoW) networks, such as Bitcoin (BTC), to enhance the country’s cybersecurity defenses.

In a letter addressed to the U.S. Defense Innovation Board on December 2nd, Lowery emphasized that Bitcoin, often perceived as a monetary system, possesses the capability to secure various forms of data and communication, thereby contributing significantly to national security.

The Defense Innovation Board, an independent advisory body, focuses on bringing Silicon Valley’s technological innovations and best practices to the U.S.

Military. Lowery’s letter urges the board to advise the Secretary of Defense to assess the “national strategic importance” of PoW systems like Bitcoin.

Lowery argues that PoW systems, like Bitcoin, can act as a deterrent against cyberattacks due to their resource-intensive nature, imposing steep costs on potential adversaries.

He draws parallels between PoW and physical security strategies employed in land, sea, air, and space domains, emphasizing the digital dimension in which PoW operates.

Highlighting the immense potential of Bitcoin in the realm of cybersecurity, Lowery contends that leveraging this technology is crucial for the United States to maintain its position as a global superpower, particularly in an era marked by digital interconnectedness and security vulnerabilities.

He suggests that this could mark the beginning of a “cybersecurity revolution,” utilizing the global electric power grid as a “macrochip” to safeguard data and messages traversing the internet.

Lowery concludes by underscoring the alignment of Bitcoin’s cybersecurity applications with a strategic offset, expressing concern that the U.S. Department of Defense may have lost valuable time by not incorporating it into its arsenal.

Additionally, Coinbase CEO Brian Armstrong has weighed in on the role of Bitcoin and cryptocurrencies in preserving the United States’ dominance with the U.S. dollar.

Armstrong suggests that Bitcoin can complement the dollar, serving as a natural check and balance.

He points out that as world leaders grapple with issues like inflation and increased deficit spending, cryptocurrencies could emerge as an alternative currency, particularly if the U.S. dollar were to lose its dominance.

Armstrong believes that cryptocurrencies like Bitcoin offer a viable alternative, and people may shift from fiat currencies to cryptocurrencies as a hedge against inflation.

Furthermore, Armstrong highlights the importance of U.S. dollar-backed stablecoins, such as USD Coin (USDC), and the emergence of flat coins in bridging the gap between traditional finance and the cryptocurrency world, ultimately contributing to a more unified financial landscape.

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KyberSwap’s Treasury Grants: A Decentralized Response to $48.8 Million Security Breach

Crypto News Today/DeFi

KyberSwap has taken a proactive stance in the aftermath of a significant exploit on November 22nd, which inflicted a substantial $48.8 million loss upon the decentralized finance protocol.

To mitigate the impact on affected users, KyberSwap is introducing a grant initiative funded by its treasury.

This initiative aims to provide compensation equivalent to the USD value of the assets lost during the security breach, demonstrating KyberSwap’s unwavering commitment to its user community and platform security.

Although specific details and eligibility criteria for the grant are still in the works, KyberSwap has pledged to share additional information within a two-week timeframe.

Upon conducting investigations into the security breach, it was discovered that the vulnerability stemmed from tick interval boundaries within KyberSwap’s concentrated liquidity pools.

This weakness allowed an attacker to artificially manipulate liquidity, resulting in a significant depletion of funds.

Initially estimated at $47 million, the confirmed loss was later determined to be $48.8 million.

In a bid to recover the stolen assets, KyberSwap proposed a 10% reward for the wrongdoer but encountered unconventional responses instead of acceptance.

Remarkably, KyberSwap managed to successfully retrieve $4.7 million of the pilfered funds, which had been siphoned off by third-party MEV (Miner Extractable Value) bots during the hack.

This partial recovery, alongside the introduction of treasury grants, underscores KyberSwap’s proactive approach to addressing security breaches.

Furthermore, the incident has spurred a comprehensive review of KyberSwap’s security protocols, with the team fully committed to enhancing safeguards to thwart future exploits.

The provision of treasury grants in response to this crisis is a noteworthy step within the decentralized finance community.

It signifies a collective effort to rebuild trust and provide support to users affected by security breaches.

KyberSwap’s dedication to its users and its commitment to rectifying the situation exemplify the resilience and adaptability of the DeFi ecosystem in the face of challenges, ultimately striving for a safer and more secure financial environment for all participants.

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US District Judge Warns SEC of Sanctions Over Deceptive Claims in DEBT Box Crypto Case

Crypto News Today

United States District Judge Robert Shelby has issued a stern warning to lawyers from the Securities and Exchange Commission (SEC), hinting at potential sanctions in response to alleged deceptive statements made in a legal action against Digital Licensing Inc., also known as DEBT Box, a prominent cryptocurrency company.

The SEC had filed a lawsuit against DEBT Box in the federal court of Utah, alleging that the company had deceived investors by approximately $50 million through the sale of unregistered securities known as “node licenses.”

However, Judge Shelby’s ruling revealed significant inconsistencies in the SEC’s case.

Initially, the SEC, led by attorney Michael Welsh, had successfully convinced the court to freeze DEBT Box’s assets, claiming that the company was relocating to Dubai to evade U.S. regulatory oversight.

Subsequently, it was discovered that these assertions were inaccurate, as there were no bank account closures, and an alleged overseas transfer of $720,000 turned out to be domestic.

Judge Shelby expressed concerns about the conduct of the SEC lawyers, suggesting that misrepresenting facts and the failure of other team members to rectify these inaccuracies may have violated federal court Rule 11(b), which mandates evidence-backed factual claims.

In response, Shelby issued a “show cause order,” requiring the SEC to provide reasons why they should not face penalties for their actions.

The complexity of the case is emphasized by a TRM Labs report that supported the SEC’s primary claim that DEBT Box had deceived investors regarding mining tokens.

However, the defense counsel has yet to provide a statement on the issue, and the SEC has acknowledged the order, with plans to respond within the specified two-week timeframe set by Judge Shelby.

This development marks a crucial moment in the legal process, shedding light on the intricacies of cryptocurrency regulation and emphasizing the importance of legal accountability in high-stakes financial litigation.

Ripple lawyer John E. Deaton expressed little surprise at the SEC’s alleged dishonesty, suggesting that the agency’s lawyers may have personal biases in crypto cases.

Deaton called for a subpoena against the financial regulator.

His colleague, Ripple chief technology officer Stuart Alderoty, has also outlined troubling patterns observed in the SEC’s actions, further raising questions about the agency’s conduct in cryptocurrency-related matters.

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Crypto Whistleblower Sparks Legal Showdown as SEC Accuses Terra and Do Kwon of Fraud

Crypto News Today

Lawyers representing the United States Securities and Exchange Commission (SEC) and Terraform Labs, along with co-founder Do Kwon, engaged in a heated courtroom battle centered around information provided by an anonymous whistleblower in a securities lawsuit.

This legal showdown, which unfolded in the U.S. District Court for the Southern District of New York, is of significant consequence to the crypto community.

On November 30, a transcript of the court proceedings, disclosed by Inner City Press, revealed that the SEC continued to assert its allegations of fraud against Terra and Kwon, specifically concerning the LUNA token.

The SEC supported its claims with sealed evidence furnished by the undisclosed whistleblower.

In response, Kwon’s and Terra’s legal team vehemently challenged the SEC’s position, accusing them of inconsistency regarding the depegging of TerraUSD (UST) from the U.S. dollar.

“The SEC has misrepresented Do Kwon’s statements,” asserted Kwon’s and Terra’s lawyer. “The whistleblower, whose identity we cannot reveal, has withheld some of their recordings.”

Judge Jed Rakoff, presiding over the case, weighed in during the proceedings, suggesting that any filings made under seal might lose their confidentiality status should the case proceed to trial.

This development followed the judge’s approval, on November 28, of confidential treatment for certain materials submitted by Jump Crypto, a firm implicated in the events leading up to the UST depegging controversy.

Do Kwon, who had previously been arrested in Montenegro in March for allegedly using counterfeit travel documents, now faces the possibility of extradition to either the United States or South Korea, subject to court approval.

In addition to the SEC’s civil lawsuit, Kwon also faces eight criminal charges related to fraud at Terraform Labs.

The trajectory of the case hinges on Judge Rakoff’s decision regarding motions for summary judgment. Should he deny these motions, the SEC’s case against Terra and Kwon is slated to commence in January 2024.

Furthermore, former FTX CEO Sam Bankman-Fried awaits sentencing in March 2024, while the trial of former Celsius CEO Alex Mashinsky is anticipated to take place in September 2024, both in the same judicial district.

These legal battles underscore the growing regulatory scrutiny and legal challenges facing the cryptocurrency industry.

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Swiss Asset Manager Pando Asset Joins U.S. Bitcoin ETF Race as BlackRock Refines Model with SEC

Bitcoin/Crypto News Today

Swiss asset manager Pando Asset has thrown its hat into the competitive ring of the spot Bitcoin exchange-traded fund (ETF) race in the United States, surprising many with its unexpected entry.

On the same day, investment giant BlackRock engaged in discussions with the country’s securities regulator, presenting an updated ETF model based on the regulator’s feedback.

On November 29, Pando Asset submitted a Form S-1 to the U.S. Securities and Exchange Commission (SEC), the document used to register securities with the agency, outlining its Pando Asset Spot Bitcoin Trust.

Similar to other ETF proposals, this trust intends to mirror Bitcoin’s price movements, with Coinbase’s custody arm responsible for safeguarding Bitcoin holdings on behalf of the trust.

Pando Asset joins a crowded field, becoming the 13th applicant seeking approval for a spot Bitcoin ETF in the U.S., competing with heavyweights like BlackRock, ARK Invest, and Grayscale.

In a November 29 post on X (formerly Twitter), Bloomberg ETF analyst Eric Balchunas expressed curiosity about Pando’s late filing, wondering why it emerged at this stage.

He also raised concerns about the potential implications if Pando’s ETF were to be approved alongside others on January 10, a date he and fellow Bloomberg ETF analyst James Seyffart have earmarked as a possible approval date.

This date coincides with the SEC’s deadline to either approve or deny ARK Invest’s application.

Seyffart, however, expressed doubts about Pando’s readiness to launch its ETF on the same day as others, acknowledging that unforeseen developments can occur in this space.

Meanwhile, the SEC held meetings with executives from BlackRock and Invesco on November 28 to discuss their respective ETF proposals, as revealed in agency documents.

BlackRock presented revisions to its redemption model, addressing concerns raised during a prior meeting regarding the impact on balance sheets and the risks faced by U.S. broker-dealers dealing with offshore crypto entities.

Balchunas clarified that BlackRock’s revised approach involves offshore entities acquiring Bitcoin from Coinbase and pre-paying U.S. registered broker-dealers in cash, as these broker-dealers cannot directly handle Bitcoin.

This strategy aligns with the SEC’s requirement for ETFs to have redemption models that place the responsibility on issuers to transact in Bitcoin, avoiding the need for broker-dealers to engage with unregistered subsidiaries or third-party firms for Bitcoin transactions.

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Cybersecurity Experts Rally for Enhanced Crypto Security Amid Rising Threats

Crypto News Today/DeFi

As the frequency of cyberattacks and breaches continues to plague companies, cybersecurity experts have shared their insights on enhancing crypto security for digital asset firms and the broader cryptocurrency industry.

Before September 2023, the crypto space had already suffered nearly $1 billion in losses due to hacks, exploits, and scams.

Unfortunately, the fourth quarter of 2023 witnessed more unsettling incidents, such as the Poloniex exploit, resulting in digital asset losses exceeding $100 million, and the HECO Chain bridge hack, which led to losses exceeding $80 million.

Given the rising number of security incidents and the substantial losses incurred with each breach, it is evident that digital asset security in the crypto industry needs significant improvement.

Consequently, Cointelegraph sought the opinions of cybersecurity professionals on measures to prevent further incidents and bolster crypto security.

Ronghui Gu, the co-founder of blockchain security firm CertiK, expressed strong disapproval of the ongoing incidents caused by SIM-swap attacks and multisig failures, especially after previous incidents had brought attention to these security vulnerabilities.

Gu emphasized the importance of embracing crypto-native multifactor authentication and conducting regular security audits.

He stated, “We’re building highly functional, highly complicated technology, and it’s important to prioritize security, even in the face of incentives to prioritize speed over security.”

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Christian Seifert, a researcher in residence at Forta Network and former security lead at Microsoft, concurred that security should be paramount.

He stressed the need for users to demand enhanced security measures and suggested that regulators should intervene if necessary to compel crypto projects to adopt more comprehensive security strategies.

Seifert argued that security audits alone are insufficient and called for a comprehensive security strategy encompassing secure design, monitoring, and threat prevention solutions.

Jerry Peng, a research analyst at Web3 analytics firm 0xScope, emphasized the necessity of gaining a deeper understanding of the origins and potential emergence of security threats.

This understanding would enable companies and individuals to detect patterns and connections exhibited by addresses involved in previous attacks.

Peng highlighted the role of crypto data analytics services in assisting investigators in preventing potential future hacks.

Ronghui Gu revealed that, according to CertiK’s data, hacks in 2023 alone had already inflicted losses of $1.5 billion as of November 28.

He pointed out that these ongoing security breaches significantly impact crypto adoption by eroding public trust in the security and stability of digital assets.

Christian Seifert echoed similar sentiments, noting that early crypto adopters were willing to accept certain risks, but such tolerance will not be acceptable to the broader user base that the crypto industry aims to attract.

Seifert drew a parallel, stating, “Imagine losing all your savings because the branch of your bank was broken into overnight. You wouldn’t bank there.”

Jerry Peng also believed that hacks hinder potential market growth by discouraging individuals who were previously open to exploring the Web3 space.

In essence, these security incidents hinder the progress and adoption of the crypto industry by eroding trust and confidence in its security measures.

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Philippines SEC Issues Warning Against Binance

Crypto News Today

The Philippines Securities and Exchange Commission (SEC) has issued a stern warning against cryptocurrency exchange giant Binance, asserting that the platform has been operating in the country without the requisite approvals or licenses.

The regulatory body’s announcement, dated November 28, disclosed that Binance lacks authorization to sell or offer securities within the Philippines.

According to the SEC’s statement, Binance, like any other exchange, is obligated to undergo registration and provide comprehensive details about the securities it offers to the public.

This information encompasses aspects such as issuance prices, the nature of the securities, and other pertinent data.

The Philippines’ Securities Regulation Code (SRC) mandates that securities issuers be registered within the country before being made available for investment.

Additionally, they are required to secure a secondary license for selling or offering securities to the public.

The SEC’s database revealed that Binance, the platform operator, is not registered as a corporation in the Philippines and operates without the essential license or authority to distribute any form of securities, as stipulated by Section 3.1 of the SRC.

In addition to operating without the necessary license, the SEC accused Binance of unlawfully promoting its services within the Philippines.

The regulator cautioned that entities involved in promoting or trading on Binance could face criminal liability under Section 28 of the SRC.

This criminal offense carries severe penalties, including fines of up to 5 million Philippine pesos (approximately $90,300) or imprisonment of up to 21 years, or both, as stipulated in Section 73 of the SRC.

Despite prior warnings, Binance has apparently continued to be a prominent cryptocurrency trading platform in the Philippines. Some users had previously praised its local services as “reliable and stable” on social media platforms.

Interestingly, a Reddit commentator speculated that the Philippines authorities might follow the regulatory decisions of the United States SEC concerning Binance’s legal status.

Binance was facing legal action by the U.S. SEC at the time, and if it lost the case, it could potentially impact its operations in various countries, including the Philippines.

Notably, this development comes shortly after Binance’s CEO, Changpeng Zhao, pled guilty in a U.S. court for violating U.S. Anti-Money Laundering laws and subsequently stepped down from his position.

Moreover, in September 2023, the Philippines SEC had entered into a partnership with the U.S. SEC to jointly combat cryptocurrency-related fraud.

At the time of reporting, neither Binance nor the Philippines SEC had responded to requests for comment from Cointelegraph.

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eToro and M2 Secure Regulatory Approval for Crypto Services in UAE’s Booming Market

Crypto News Today

Crypto investment platforms eToro and M2 have received approval to offer their services in the United Arab Emirates (UAE) from the ADGM Financial Services Regulatory Authority, which oversees the Abu Dhabi Global Market (ADGM), the UAE’s international financial center.

eToro has been granted a Financial Services Permission (FSP), enabling it to operate as a broker for securities, derivatives, and cryptocurrency assets in the UAE.

This approval marks a significant milestone in eToro’s global expansion journey, according to Yoni Assia, the company’s founder and CEO.

In September, eToro also received a Crypto Asset Service Provider (CASP) registration from the Cyprus Securities and Exchange Commission (CySEC), emphasizing the importance of securing European operating licenses for crypto companies aiming for worldwide growth.

On the other hand, cryptocurrency exchange M2 has obtained recognition as a fully regulated Multilateral Trading Facility (MTF) and custodian.

This allows M2 to onboard both UAE residents and institutional clients. M2’s services in the UAE encompass crypto custody, UAE dirham-based Bitcoin and Ether trading, and on/off-ramp services for the dirham.

M2 CEO Stefan Kimmel views the timing of the license issuance as opportune, coinciding with a resurgence of positive investor sentiment.

The UAE has become increasingly attractive to international crypto players, as it continues to grant operational licenses.

Simultaneously, the ADGM’s registration authority has introduced comprehensive regulations for Web3 organizations in November.

These regulations, known as the Distributed Ledger Technology (DLT) Foundations Regulations 2023, are designed to provide regulatory clarity for blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs), and traditional foundations venturing into DLT.

Under these regulations, entities can establish a “DLT Foundation” by submitting a signed charter detailing the foundation’s initial assets, governance structure, and potential token issuance. A

dditionally, organizations must provide their white paper, tokenomics paper, and a link to a technical document known as a DLT Framework.

These measures aim to foster a regulatory environment that promotes transparency and accountability within the blockchain and Web3 space in the UAE.

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Blockchain Security Firm Uncovers Alarming Rise in Fake Journalist Scams Targeting Cryptocurrency Enthusiasts

Crypto News Today/Metaverse

A Bored Ape Yacht Club (BAYC) enthusiast recently narrowly escaped a potential disaster when confronted by a scammer posing as a Forbes journalist.

On November 27, “Crumz,” a nonfungible token (NFT) collector, recounted his encounter with this fraudulent individual.

Crumz received a direct message from someone impersonating a real Forbes editor, Robert LaFanco. The imposter offered an interview opportunity for a new article about BAYC.

Despite noticing some red flags, such as the use of a non-premium Zoom account and a request to use a separate recording bot, Crumz proceeded with the interview.

During the conversation, the scammer asked Crumz to grant access for recording purposes. Initially, Crumz complied, not suspecting anything amiss.

However, towards the end of the interview, the imposter made an unusual request for Crumz to mention something related to his Bored Ape. Specifically, the scammer suggested mentioning a banana.

Crumz soon realized that this was an attempt to distract him from his computer while the scammer took control of his system to steal his valuable assets.

Instead of following the distraction, Crumz stayed vigilant by his computer. As expected, the scammers attempted to manipulate his screen.

Quick thinking saved the day as Crumz muted his screen, preventing any video feed and thwarting the scammers when they tried to access delegate.cash.

Crypto casino Rollbit partner borowik.eth raised the alarm to his 140,000 followers on X (formerly Twitter) on the same day.

He identified a fake account posing as Robert LaFranco, claiming to be a Forbes assistant managing editor.

Borowik.eth warned that the imposter’s intentions were to deceive and gain access to users’ PCs to steal their valuable NFTs.

Additionally, BAYC community member Laura Rod also reported being contacted by the same bogus Forbes editor.

This incident is not isolated, as blockchain security firm Slowmist recently exposed a series of scams in which victims lost their cryptocurrency assets to fake journalists.

The attackers typically scheduled interviews, guided victims to join Telegram interviews, provided interview outlines, conducted lengthy interviews, and then shared malicious links for publication consent.

In a similar case in October, a user on Friend.tech fell victim to a fake Bloomberg journalist who lured them into clicking a link for a supposed “consent form,” which ultimately resulted in their Friend.tech account being drained.

To stay safe in the cryptocurrency and NFT space, industry observers advise being cautious of scammers using BAYC profile pictures on platforms like X. Vigilance and skepticism are essential tools in guarding against such fraudulent attempts.

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California Governor Advocates GenAI Education to Secure the State’s Economic Future

Crypto News Today

California Governor Gavin Newsom is emphasizing the need for individuals to stay at the forefront of the rapidly advancing field of generative artificial intelligence (GenAI) by acquiring new skills and familiarizing themselves with this emerging technology.

A recent report has underscored the importance of providing Californians with access to educational and training opportunities related to GenAI.

The report recommends that residents of California should be offered educational and training resources in GenAI to support the state’s government workforce and prepare for the evolving skills required in the GenAI-driven economy.

It envisions state agencies providing training programs for government employees to harness state-approved GenAI tools to achieve equitable outcomes.

This move is seen as essential in response to the significant employment impact predicted by recent reports on GenAI.

The report cites Goldman Sachs’ forecast, which suggests that GenAI could affect up to 300 million jobs worldwide, even though it holds the potential for substantial productivity gains.

In light of this, the state of California aims to take the lead in training and supporting its workforce, enabling them to actively participate in the AI economy and fostering demand for businesses to establish themselves and hire within the state.

The report also emphasizes the importance of initiating GenAI education initiatives at higher education institutions and vocational schools.

By integrating GenAI education into these institutions, California aims to equip its workforce with the skills necessary to excel in this technology-driven landscape.

Recent reports have consistently highlighted the potential impact of AI on jobs in the global economy.

The Organisation for Economic Co-operation and Development (OECD) released a report on July 12, which identified the jobs most vulnerable to AI. According to the research, “high-skill, white-collar jobs” are particularly exposed to AI-driven automation.

Moreover, industries that demonstrate the most significant advancements in AI often involve “non-routine, cognitive tasks such as information organization, memorization, and perceptual speed.”

In conclusion, California, under Governor Gavin Newsom’s leadership, is taking proactive steps to prepare its workforce for the challenges and opportunities presented by GenAI.

By offering education and training programs and positioning itself as a hub for GenAI innovation, California aims to remain at the forefront of the AI revolution while ensuring equitable access to these emerging technologies.

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