This week saw a chain of events related to the now-infamous DeFi exchange, SushiSwap, unravel. What happened since its pseudonymous founder Chef Nomi purportedly cashed out his Sushi tokens along with other news in this week’s newsletter.
Decentralized exchanges such as UniSwap are increasingly becoming popular these days with their daily trading volumes exceeding that of the traditional ones. One of the reasons for the meteoric rise of the DeFi exchanges are the incentives that the investors get in the form of tokens for adding liquidity to these platforms. SushiSwap, the latest notorious kid on the block, is an off-shoot of UniSwap, that offers all the best features of Uniswap with an improved community-driven governance model. Any investor joining this community would be rewarded with governance tokens called Sushi, which they can stake along with Ether on UniSwap. This exchange was created by an anonymous entity, Chef Nomi, who promised the eventual migration of tokens to the SushiSwap network on its launch.
Chef Allegedly Pilfers Their Own Food
SushiSwap, which launched on Aug 28, amassed US $1.27 billion of investors’ money and locked it away in its smart contracts by Sep 6. The money was intended for funding the platform’s development. But, by late last week, rumors started circling in the cryptosphere about the founder, Chef Nomi, allegedly cashing out the Sushi tokens worth approximately US $14 million of this developer fund, for personal gain. The fear of an exit scam decimated the price of the Sushi token as it collapsed 88 percent within hours of this revelation. In their defense, the founder argued that they are always entitled to sell their developer’s share and hence have not committed any fraud.
How Did It All End?
The alleged scam followed by the founder’s defiant denial of any wrongdoing irked the investors of SushiSwap. Sam Bankman-Fried, Founder of FTX, a popular cryptocurrency derivatives exchange, and a Sushi investor, was very vocal about his discontent and advised Chef Nomi to give up the control of the project. Accordingly, Chef Nomi announced on Twitter that they have handed over the keys to access the developer funds to the FTX founder. Additionally, in what can be called as an anticlimax to what had transpired earlier this week, Chef Nomi gave back the US $14 million to the developer fund.
Countries Continue Their Blockchain and Crypto Forays
South Korean Blockchain-Based Employee ID System
KISA (Korean Internet and Security Agency) has become the first government agency in South Korean to implement a Blockchain-driven employee ID system. This novel ID system, accessed using a smartphone app, is currently being tested and will be available to KISA’s workers starting October. As per some reports, the agency will also issue digital tokens called the KISA Coin to its workforce. The employees can pay for their snacks and office supplies with these coins.
Bangladesh Gets Its First Blockchain-Powered Remittance Service
Standard Chartered Bank has launched the first Blockchain-based remittance service in Bangladesh. Now, the Bangladeshi workers in Malaysia can instantaneously transfer money to their families back in Bangladesh using this service. The bank has partnered with the Malaysian payments provider Valyou and mobile payments company bKash. The system runs on the Blockchain platform provided by the Ant Group.
Swiss Laws Provide the Legal Clarity for Digital Assets
Swiss Parliament on Thursday passed amends to the existing regulations so as to give the legal clarity on Blockchain and cryptocurrencies. The new laws define how digital securities have to be traded and exchanged. They also delineate the process for the users to reclaim their digital assets from companies that have filed for bankruptcy. They further elucidate the legal requirements to run cryptocurrency exchanges.
Russia Provides Open Access to Its Blockchain-Based Voting System
As Russia inches closer to piloting a Blockchain-based electronic voting system, the country’s elections authority has provided open access to the system’s source code. The smart contracts, develop libraries, and details of servers storing the votes were available on GitHub since Sep 7.
Us Legislators Approve Blockchain Proposals
The Energy and Commerce Committee this week approved two bills – Blockchain Innovation Act and part of the Digital Taxonomy Act. They are aimed at carrying out an in-depth analysis of using Blockchain technology in the government. The two proposals will now be debated and voted in the House of Representatives.
IRS Calls for Bounty Hunters
Meanwhile, the United States Internal Revenue Service has offered a bounty of up to US $625,000 to anyone who can break supposedly untraceable privacy coins such as Monero (XMR). As per the announcement, the IRS will accept submissions in the form of working prototypes until Sep 16. The accepted applicants will receive an initial grant of US $500,000 that will allow them to develop their prototype into a working concept over the next eight months. Once the pilot test is completed and approved by the government, the IRS will award a further US $125,000.
And Finally, Dorsey-Backed Square Launches Crypto Patent Alliance
With a goal to open access to patents in the Blockchain and the cryptocurrency space, Twitter’s Jack Dorsey owned Square Crypto has launched the Cryptocurrency Open Patient Alliance. As per Jack, the members of the community “will maintain a shared patent library to help the crypto community defend against patent aggressors and trolls.”