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- Brazil To Launch Tokenization Sandbox 🇧🇷📥
Brazil To Launch Tokenization Sandbox 🇧🇷📥
PLUS: BitVM - Bringing Ethereum-like contracts to Bitcoin. Crypto exchange Upbit targeted by hackers 159K times in H1 2023.
Manan Vora
October 10, 2023
Snapshot Web3
October 10, 2023
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Regulatory and Legal News
Brazil's securities regulator, CVM, plans to launch a tokenization-focused regulatory sandbox in 2024. This follows successful tokenization of $36 million in assets. Areas like agribusiness and ESG are of interest. The CVM will await changes in Brazil's crypto market, including the central bank's digital currency. This move aims to enhance transparency, cut costs, and boost accessibility for investors. Tighter crypto regulations were recently introduced due to increased adoption. President Lula da Silva signed a framework in June, outlining the roles of the central bank and CVM in digital asset regulation. In November, Brazil will implement a program using private blockchain for ID issuance to enhance data security and prevent fraud.
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Innovation and Launches
Robin Linus, a Bitcoin developer, proposes BitVM in a white paper. This system enables advanced off-chain smart contracts on Bitcoin without a soft fork. Based on Ethereum's rollup concept, BitVM conducts contract logic off-chain, verifying on the Bitcoin blockchain. It expands Bitcoin's capabilities for applications like games and contract validation. However, it's limited to two-party settings and requires significant off-chain computation. Enabled by the Taproot soft fork, BitVM is cautiously received in the Bitcoin community.
The astrology-themed NFT project, Lucky Star Currency (LSC), conducted an exit scam, stealing over $1 million. The attacker swapped LSC tokens for Binance USD (BUSD) and moved them to another account. LSC targeted the Chinese crypto market and was extensively promoted before the scam. This incident underscores the persistent problem of rug-pulls in Chinese Web3 projects, where users risk fund confiscation due to regulatory restrictions. In a similar event in July, over $100 million were lost with the China-based Multichain protocol.
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NFT, Gaming and Metaverse
China Daily, a government-owned English-language newspaper, is launching its own NFT platform, offering a contract of 2.813 million Yuan ($390,000) to a third-party contractor. The platform aims to promote Chinese civilization through technologies like metaverse, VR, AR, Blockchain, NFTs, and more. It must support various digital collections, multimedia formats, and allow functions like pricing, bidding, and multi-currency settlement. The platform may also bridge to established NFT platforms like Opensea and LooksRare. Despite the ban on cryptocurrency transactions in China since 2021, blockchain projects continue to face scrutiny.
Yuga Labs and Beeple have collaborated to release physical prints of CryptoPunks NFTs, blending digital and traditional art. On October 26, a 48-hour window will allow printing in two events: Punk On Chain ($640 for a physical representation of a CryptoPunk) and 10,000 On-Chain ($500 for a sheet with all CryptoPunks). Avant Arte will authenticate each print with both physical and digital Certificates of Authentication, linking back to the digital origins. This venture exemplifies the trend of merging physical and digital aspects in the NFT space, enhancing the interaction with and appreciation of digital artistry.
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Scams and Hacks
South Korean crypto exchange Upbit faced over 159,000 hacking attempts in H1 2023, a 117% surge from H1 2022 and a staggering 1,800% increase from H1 2020, as reported by its parent company, Dunamu. Upbit, a major exchange with a daily trading volume of about $1.2 billion, strengthened security by allocating 70% of funds to cold wallets. While Upbit had a $50 million exploit in 2019, it hasn't faced any security breaches since. However, a recent incident involving a fake token led to a suspension of Aptos token services. This surge in hacking attempts underscores the need for heightened security measures in the crypto industry.
Crypto trading bot provider, 3Commas, is on high alert after a small number of user accounts were compromised, leading to unauthorized trades. The affected accounts mostly lacked two-factor authentication, and no sensitive data was accessed. As a precaution, 3Commas has implemented stricter password reset measures and disabled API connections after password changes. They advised users to enable 2FA and regularly update passwords. This incident follows a previous API key leak in December 2022. CEO Yuriy Sorokin acknowledged the incident and assured ongoing security enhancements.
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Funding
The local Web3 community, including 42Studio, MarketAcross, Collider Ventures, and others, have launched "Crypto Aid Israel" to provide humanitarian aid for displaced Israeli citizens affected by the recent conflict. The initiative aims to offer immediate assistance, including food, shelter, hygiene, and medical products for those who lost their homes. Crypto Aid Israel is managing a multisig wallet overseen by respected figures in the local Web3 community. Donors are advised to exercise caution and verify the official wallet address on the website to prevent potential phishing scams or cyberattacks.
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Quick Links
The FCA’s list of registered crypto asset providers includes 42 entities and hasn’t changed since August.
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Miscellaneous
Gitcoin, a crypto developer platform, has disclosed a loss of around $460,000 in Gitcoin (GTC) tokens after accidentally sending them to an unrecoverable contract address. The transfer was intended for a budget proposal but mistakenly went to a GTC token contract instead. This error resulted in the funds being permanently locked. Gitcoin is taking steps to prevent such incidents in the future and is emphasizing the responsibility of large token holders and multisig signers in handling funds. The incident has sparked discussion about the need for improved Crypto UX. Gitcoin is a platform for funding Web3 projects, allowing project owners to publish their projects and donors to choose which ones to fund.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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