Snapshot Web3

October 24, 2023

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Regulatory and Legal News

BlackRock’s spot Bitcoin ETF now listed on Nasdaq trade clearing firm — Bloomberg analyst

BlackRock's proposed iShares spot Bitcoin exchange-traded fund (ETF) has been listed on the Depository Trust & Clearing Corporation (DTCC), a move seen as a positive sign for potential approval by the U.S. Securities and Exchange Commission (SEC). The ETF, with a ticker symbol of IBTC, is aiming for a listing on the Nasdaq stock exchange. Bloomberg ETF analyst Eric Balchunas noted that this is the first spot ETF listed on DTCC, and BlackRock's proactive steps suggest they might have received an indication of imminent approval from the SEC. The SEC has until January 10, 2024, to make a final decision on the ETF. If approved, it could pave the way for other spot crypto ETFs.

IRS proposes unprecedented data-collection on crypto users

The Infrastructure Investment and Jobs Act included new reporting requirements related to cryptocurrency. The IRS's proposal on this matter, although not as severe as it could have been, has raised concerns. It requires businesses to report customers to the government if they have the ability to collect sensitive information, even if there's no reason to do so. This approach aligns with the broader trend of increasing financial reporting requirements. However, many argue that this kind of surveillance goes against principles of privacy and the Fourth Amendment. They suggest a reevaluation of the entire framework and advocate for changes in U.S. law.

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Innovation and Launches

Chinese digital yuan CBDC used for first time to settle cross-border oil deal

The Shanghai Petroleum and Natural Gas Exchange (SHPGX) announced the successful use of the digital yuan (e-CNY) to settle an oil transaction. PetroChina International conducted the purchase of 1 million barrels of crude on October 19. This development aligns with the Shanghai Municipal Party Committee and Municipal Government's call to apply the digital yuan in international trade. The move is considered a significant step for the digital yuan and marks progress in the international use of the Chinese currency, contributing to the global trend of de-dollarization. In the first three quarters of 2023, the yuan's use in cross-border settlements rose by 35% year-on-year, totaling $1.39 trillion. This initiative follows earlier successes in trading liquified natural gas (LNG) using the yuan.

Bitget releases MPC wallet, includes 2/3 private key sharding

Bitget, a cryptocurrency exchange and derivatives platform, has introduced a multiparty computation (MPC) wallet to enhance security and key management for users. Unlike traditional methods that rely on mnemonic phrases and private keys, this MPC wallet uses password-based authentication, reducing the risk of a single-point private key exposure. It employs a threshold signature scheme and a 2/3 threshold setup for consumer-grade users, requiring only two-thirds of total key shares to authorize a transaction. Additionally, it features a reshare mechanism that invalidates key shares on old devices when newer devices are connected, improving security.

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NFT, Gaming and Metaverse

iSanctuary uses NFTs to crack down on hacked wallets

iSanctuary, a British investigative agency, has received approval from the High Court of Singapore to link NFTs (Non-Fungible Tokens) with legal documents to identified wallets involved in illicit activities. These NFTs serve as international freeze order notifications, allowing potential associates and exchanges to be aware of the compromised wallets. While they don't directly halt transactions, they facilitate tracking of misused funds. iSanctuary believes this innovation will help monitor the movement of compromised funds, potentially saving a business that suffered a $3 million loss in cryptocurrency. This move is hailed as a significant step in combating cryptocurrency-related crimes and demonstrates the court's embrace of technology.

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Scams and Hacks

Rug pull feared as Safereum devs reportedly unlock and dump native token

The developers of the Safereum cryptocurrency project reportedly sold over 700 ETH worth of its native token, causing the price of SAFEREUM to drop by more than 90%. This "rug pull" occurred shortly after the team raised $600,000 for a derivative token called "Safepad," with some of these funds suspected to have been part of the ill-gotten gains totaling around 720 ETH, equivalent to $1.27 million. CertiK, a blockchain security firm, noted that these funds had been distributed through multiple wallets, making tracking difficult. The price of SAFEREUM plummeted over 94%, leading to concerns within the crypto community, while influencers who promoted the project were also criticized for their roles.

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Funding

MetaMask security partner Blockaid secures $33M funding

Blockchain security startup Blockaid, a partner of MetaMask, has secured $33 million in funding, with backing from major venture capital firms like Ribbit Capital and Variant. Blockaid's security platform, now out of stealth mode, aims to protect Web3 applications from malicious transactions. It has notable clients including MetaMask and OpenSea. The funding will further enhance Blockaid's ability to resist hacks and scams. Founded in 2022, the startup is compatible with various blockchain networks and can detect malicious decentralized applications. CEO Ido Ben-Natan stated that they've scanned 450 million transactions, thwarted 1.2 million malicious ones, and safeguarded $500 million in user funds in the past three months.

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Interesting Reads

The evolution of decentralized exchanges: A comparative analysis

The article explores the evolution of decentralized exchanges (DEXes) from automated market makers (AMMs) to traditional order book models. While DEXes address centralized exchange challenges, they lack some functionalities of centralized platforms. The AMM model, pioneered by Ethereum's Vitalik Buterin, revolutionized DeFi but has limitations like impermanent loss and slippage. Order book models offer transparent price discovery and are compatible with UTXO-based blockchains. This shift indicates a move towards merging centralized and decentralized trading. Bridging these realms could revolutionize crypto trading and promote wider DeFi adoption.

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Resource of the Day

Tracking stolen crypto — How blockchain analysis helps recover funds 

In 2023, over $990 million was lost or stolen in crypto, underscoring the urgency for enhanced security measures. Blockchain analysis plays a crucial role in identifying illicit activities and recovering stolen assets. Analysts trace transactions, cluster related addresses, and analyze behavioral patterns to detect potential hacking incidents. Historical data and known attack patterns are used for early threat recognition. Regulatory efforts for stricter AML and KYC compliance in the crypto space are gaining momentum. Collaboration with law enforcement, exchanges, and stakeholders is essential for freezing or recovering stolen funds. Combining blockchain analysis with open-source intelligence (OSINT) provides a comprehensive view of hacks, aiding in identifying perpetrators and reclaiming stolen assets. On-chain data remains a valuable investigative tool, offering insights into asset movements and transaction tracking.

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Miscellaneous

Bitcoin price rockets to $35K as ETF excitement grows

The price of Bitcoin surged to over $35,000, a significant gain in 24 hours, attributed to rising excitement about developments in the Bitcoin ETF space. Bitcoin's price spiked more than 10% from $31,000 to over $34,000 and later reached as high as $35,300. This surge is linked to increased interest in upcoming spot ETF approvals and heightened trading volumes across spot markets. Notably, BlackRock's proposed spot Bitcoin ETF gained attention, with indications suggesting a potential approval. Bitcoin's spot trading volume also experienced a substantial increase, rising by 241% in 24 hours. This surge in Bitcoin's price had a positive effect on other cryptocurrencies, with Ether, Solana, Dogecoin, and Cardano also experiencing gains. This sudden price movement surprised many in the crypto community, highlighting a favorable setup for the growth in cryptocurrency prices.

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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.