August 9, 2022 / Unchained Daily / Laura Shin
Daily Bits✍️✍️✍️
- Cathie Wood said her fund sold Coinbase stock due to regulatory uncertainty from the SEC.
- Greg Dwyer, former head of business development at BitMex, pleaded guilty to violating the Bank Secrecy Act.
- Consumer watchdog group TINA demanded celebrities disclose NFT connections.
- Celsius token CEL surged amid a Twitter-driven short squeeze.
- Binance denied owning troubled Indian crypto exchange WazirX and it disabled off-chain transfers between them.
- Crypto lending platform Hodlnaut halted withdrawals, token swaps and deposits due to a liquidity crisis.
Today in Crypto Adoption…
- Crypto platform Crypto.com (disclosure: a sponsor of Unchained) expanded its operations to South Korea by acquiring two companies.
The $$$ Corner…
- Galaxy Digital reported a loss of $554 million in the second quarter.
- Marathon, a BTC miner, reported a $191 million quarterly loss.
- Cashmere raised $3 million which included Coinbase Ventures, FBG Capital and YCombinator.
What Do You Meme?
What’s Poppin’?
Tornado Cash Is Sanctioned by OFAC
The US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, a virtual currency mixer. The OFAC blamed Tornado Cash for being used to “launder more than $7 billion worth of virtual currency since its creation in 2019.”
In addition, the US Treasury linked Tornado Cash to the North Korean group Lazarus. This group of hackers has allegedly been behind many of the latest crypto exploits, including the $600 million Ronin hack.
Americans are now banned from interacting with Tornado Cash, since OFAC has blacklisted Tornado Cash’s addresses.
Secretary of State Anthony Blinken initially had this to say on the situation:
He later deleted his tweet, though the snapshots had already been taken. “Even though this tweet was deleted, it’s a pretty damning glimpse into how regulators view these things. When someone shows you who they are, believe them the first time,” said Tom Schmidt, partner at Dragonfly Capital and a host of The Chopping Block.
Jerry Brito of Coin Center tweeted, “Today’s action does not seem so much as a sanction against a person or entity with agency. It appears instead to be the sanctioning of a tool that is neutral in character and that can be put to good or bad uses like any other technology.”
Circle, the company behind stablecoin USDC, froze USDC funds in the wallets sanctioned by the US Treasury. The amounts frozen account for at least 75,000 USDC.
“Today was a sad day for privacy. That being said, Circle had no other choice on the topic but compliance. Blaming them is easy but what is needed is to work on our dependence on centralized assets,” wrote Marc Zeller, head of developer relationships at Aave.
Recommended Reads
- Bizyugo on Aave and Curve Finance entering the stablecoin game
- Jon Charbonneau on rollups
- Vicky Flores on the Starbucks Web3 initiative
On The Pod…
Layne Haber, cofounder of ConnextNetwork, discusses the Nomad bridge hack, how it happened, and what can be done to prevent these exploits. Show highlights:
- what Nomad is and how it works
- how the hack occurred and what the vulnerability was
- how much TVL the protocol had and how much of it was drained
- why the Nomad hack was unique
- how this exploit resembled the DAO hack on Ethereum
- the bounty program that Nomad offered and how hackers responded to it
- how Nomad is working with law enforcement, and the reasons why law enforcement has decided to get involved
- how Nomad has partnered with TRM Labs to help with tracking the hackers
- whether privacy developments in the crypto ecosystem will make it harder for law enforcement to track down hackers
- why cross-chain hacks happen so often
- what Layne thinks can be done to improve bridge security
- what mechanism can be implemented to prevent errors that enable these types of mass looting
- what Layne expects to see in the next few weeks around the Nomad exploit
Book Update
My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!
You can purchase it here: http://bit.ly/cryptopians
