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Blockchain This Week – KuCoin Hack, Blockchain Regulation

Crypto Crimes

KuCoin Exchange Hacked

Late last week, KuCoin, purportedly one of the most secure crypto exchanges, was hacked, and the hackers made away with at least US $150 million in Bitcoin, ERC-20, and other tokens. According to KuCoin Global CEO Johnny Lyu, the hack happened because of the leak of the private key for the KuCoin hot-wallets containing these tokens. When the incident came to light, KuCoin, froze all its customers’ wallets. Lyu has assured that the deposits and withdrawals functions will resume within a week. He also stated that the exchange would compensate all the affected customers with their insurance funds. 

Meanwhile, the hackers are laundering the stolen tokens using DeFi exchanges such as Uniswap. They have also transferred some of these tokens to obscure wallets. Lyu says KuCoin is working with crypto exchanges such as Huobi and Binance, as well as with security agencies and law enforcement, to trace the stolen funds.

US Regulator Charges BitMEX 

On Oct 1, the United States trading commission, CFTC, charged the crypto exchange BitMEX with illegally operating the platform. According to the commission, BitMEX is not registered in the US and is violating the anti-money laundering laws. The CFTC has filed a civil enforcement action in New York against five entities and three individuals. Arthur Hayes, Ben Delo, and Samuel Reed are the three people charged. According to CFTC, these three are listed as owners who operated the platform with a labyrinth of companies.

MakerDAO Class-Action Suit

In April this year, a user of MakerDAO, the makers of stablecoin DAI, had filed a case against the company claiming that DAI’s terms of service had deliberately misrepresented the structure of the MakerDAO protocol to downplay the risks associated with using the protocol. The lawsuit seeks nearly $30 million in damages for the platform users. The Maker Foundation filed a motion to move this case to arbitration. Late last week, a court agreed with the foundation and stayed the lawsuit and sent the case to arbitration

People Suspected of Funding Extremists With Crypto Arrested

On Tuesday, the French police arrested 29 people suspected of financing an extremist network in Syria using cryptocurrencies. These people are believed to have used crypto coupons to cover their tracks. 

US and Blockchain

Law to Give Regulators More Power Over the Crypto Industry 

California Governor Gavin Newsom signed a bill into law that gives the state department responsible for regulating the financial services more powers to supervise the crypto industry. This law will go into effect on Jan 1, 2021. According to the press release, this new law is intended to provide the Californians protection from the pandemic-inspired scams.

Blockchain Bills Passed in the House, Now to Go to Senate for Approval

In early September, the Energy and Commerce Committee had approved two bills aimed towards analyzing using Blockchain technology in the government. Earlier this week, these bills were passed in the House of Representatives. Now, the bills will go for approval from the US Senate.

IRS Gives Away Bug Bounties

In September, the United States Internal Revenue Service had announced a bounty of up to US $625,000 to anyone who can propose a solution to track the supposedly untraceable privacy coins such as Monero. According to an IRS representative, 22 proposals were received. Of which, IRS has awarded these $625,000 contracts to two firms, Chainalysis and Integra FEC, this week.

Venezuela and Blockchain

Venezuela Government Allegedly Wants to Skirt the Us Sanctions With Crypto

Nicolas Maduro, the Venezuelan president, states that his government is exploring cryptocurrencies as a possible way to circumvent the sanctions imposed on the country. Earlier this week, he presented a new bill that aims to help Venezuela recover from the hardship caused by the US embargoes. As a part of this bill, the country will now study the possibility of using the cryptocurrencies in foreign and domestic trades. 

A Decentralized Exchange

Additionally, Venezuela has launched an Ethereum-based national stock exchange as a part of the President’s new measures to sidestep the US sanctions. The platform will allow the Venezuelan investors to trade stocks and bonds in digital form. These traditional assets are tokenized using the ERC-223 and ERC-721 standards.

Connect to Blockchain Without Internet

Cryptobuyer, a crypto startup, announced this week that it had launched the first Bitcoin node connected to the Blockstream’s satellite network. Venezuelan users now need not depend on local internet connection to connect to the Bitcoin network.

Blockchain Adoption in Other Countries

To begin with, the Shanghai Stock Exchange of China launched a blockchain pilot intending to streamline the time-consuming business processes and reduce costs. Second, according to a report, the European Central Bank (ECB) has applied for a trademark on the phrase – digital euro. Third, the Australian government this week unveiled its US $4.95 million grant supporting two Blockchain pilots aimed at reducing business compliance costs. Finally, in Singapore, a government-owned investment firm SGInnovate and a startup Accredify have jointly developed a new blockchain-powered digital health passport. This passport is intended to enable secure storage and sharing of sensitive health data.

Other Blockchain and Crypto News

Uniswap became the first DeFi protocol that crossed the US $2 billion milestone in total value locked in the platform. Next, late last week, OpenBazaar, a decentralized marketplace, had announced that it would have to shut down its platform due to financial troubles. Since then, it seems to have garnered the support of a mysterious donor. The donor has agreed to cover the cost of the operations until the end of the year. 

Ethereum 2.0 developers have launched yet another testnet called Spadina, to give on-boarding stakers a dry run before the launch of Eth 2.0. Developers will only be supporting Spadina for the next three days while Eth 2.0 stakers practice joining the network with the testnet.

And Finally, Crypto Goes Green

With the focus on decentralized approaches to reduce the carbon footprint, Energy Web, a non-profit, has partnered with Ripple and XRP Ledger to show how Blockchains can switch to zero carbon footprint. Accordingly, the Blockchain firms have purchased energy attribute certificates (EAC). They assure that the power that these Blockchains use for the next year will include renewable energy sources.

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