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- China to implement blockchain-based identity verification system 🇨🇳🪪
China to implement blockchain-based identity verification system 🇨🇳🪪
PLUS: IOSCO international securities body releases DeFi recommendations. Shiba Inu announces plans to launch ‘.shib’ domain for SHIB holders.
Manan Vora
December 20, 2023
Snapshot Web3
December 20, 2023
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Regulatory and Legal News
The U.S. Securities and Exchange Commission (SEC) has reportedly conducted 24 meetings with applicants for a spot Bitcoin Exchange-Traded Fund (ETF), sparking speculation about potential approval. A spot Bitcoin ETF would offer investors exposure to Bitcoin's price movements without the complexities of owning the cryptocurrency, representing a significant advancement for Bitcoin in the investment world. While the SEC's engagement suggests a thorough review, approval is not guaranteed, and the decision-making process considers factors such as investor protection and market integrity. If approved, a Bitcoin ETF could mark a milestone for the cryptocurrency industry, attracting a broader range of investors.
The International Organization of Securities Commissions (IOSCO) has released nine policy recommendations for decentralized finance (DeFi) to promote consistent global regulatory oversight. These recommendations include enforcing applicable laws and assessing regulatory powers to address potential evasion by DeFi participants. IOSCO emphasizes the need for regulatory consistency between crypto-asset and securities markets, advocating for the principle of "same activity, same risk, same regulation/regulatory outcome." With over 130 member authorities overseeing 95% of the world's financial markets, IOSCO will now focus on monitoring, regulatory capacity building, and technical assistance.
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Innovation and Launches
China, despite its ban on digital currencies, is developing a blockchain-based digital identity verification system called RealDID. The Chinese Ministry of Public Security is partnering with China Mobile Communications Group, Beijing Zhongdun Anxin Technology, and the Blockchain Service Network for the project. RealDID aims to give citizens control over their identities, offering privacy features and limiting access to personal information for enterprises. The platform will support personal identification, business names, private logins, and information vouchers. China has been actively embracing blockchain for initiatives like its central bank digital currency and metaverse plans, emphasizing a national blockchain framework for innovation.
Shiba Inu (SHIB) is teaming up with internet domain firm D3 to apply for a ".shib" top-level domain (TLD) that works on the internet's Domain Name System (DNS). Unlike existing Web3 domains, the proposed ".shib" domain will be compatible with common internet tools, allowing SHIB holders to create email addresses using the new domain. D3 plans to seek approval from the Internet Corporation for Assigned Names and Numbers (ICANN). Additionally, D3 aims to introduce "name tokens" for SHIB users, simplifying the process of sending digital assets across blockchains. The price of SHIB showed minimal movement following the announcement. Shiba Inu's Shibarium network, a new layer 2 blockchain, reached 1 million users in September and is expected to go public in the coming months.
Web3 game publisher Immutable has launched "Immutable Passport," a wallet infrastructure that allows users to create and recover wallets using Google or Apple accounts or email addresses, eliminating the need for seed words. Five games and apps, including Gods Unchained and AtomicHub, have already implemented the new login method, serving a combined user base of over 500,000. Immutable Passport also features a dashboard for users to discover new games, manage in-game items, and handle funds. The platform emphasizes noncustodial security, utilizing the Magic software development kit to secure user funds without requiring trust in Immutable. The company has recently integrated Transak as a payment option and plans to offer a gas-free transaction option for its zkEVM platform in 2024.
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NFT, Gaming and Metaverse
The Epic Games Store has updated its content policies to allow blockchain games with an "Adults Only" (AO) rating, enabling the return of NFT card game Gods Unchained. Previously, such games were removed due to AO ratings received for their blockchain implementation. Epic Games now permits AO-rated blockchain games solely due to their use of blockchain or NFT technology. The policy change addresses the dilemma faced by developers, and while the ESRB may still assign AO ratings for games with real-world value elements, these ratings won't prevent them from being listed on the Epic Games Store.
HyperPlay, a PC game launcher, has integrated its wallet overlay with MetaMask Snaps, enabling players to use custom wallet apps within its games. The integration expands compatibility with various blockchains, allowing transactions on non-Ethereum Virtual Machine (EVM) compatible chains like Sui, StarkWare, and Solana. Players can now confirm transactions within games, enhancing convenience and interoperability across different gaming platforms. HyperPlay previously raised over $12 million in a Series A funding round in June and features a built-in version of the MetaMask Web3 wallet displayed as an overlay.
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Scams and Hacks
Atomic Wallet, the target of a $100 million hack in June, has launched a $1 million bug bounty program to identify security flaws. The initiative invites ethical hackers worldwide to find vulnerabilities in its open-source code, offering rewards ranging from $500 to $100,000 based on severity. The most critical vulnerabilities, allowing wallet attacks without physical access or social engineering, can earn white hat hackers the maximum reward. The bug bounty aims to bolster the wallet's security, following a class action lawsuit related to the June hack. Atomic Wallet has acknowledged that the attack affected 0.1% of users and may have resulted from various factors, including malware code injection.
CertiK, a blockchain security firm, has identified and reported a "critical" Remote Code Execution (RCE) vulnerability in the OKX iOS App, prompting the firm to urge all OKX users on iPhone to update their iOS applications immediately. The RCE vulnerability could potentially compromise sensitive data and crypto assets. OKX fixed the issue with a relevant upgrade on December 19, urging users to move to iOS version 6.45.0. CertiK confirmed the resolution of the security issue and emphasized that it did not impact any customer assets. The warning comes after OKX DEX experienced a $2.7 million hack on December 13.
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Funding and Acquisitions
Singapore-based venture capital firm Foresight Ventures is launching its third $10 million accelerator for blockchain and Web3 startups, focusing on artificial intelligence, Bitcoin Ordinals, and direct-to-consumer protocols. The application period extends until January 15, 2024, with selected companies receiving $200,000 to $500,000 in initial funding, mentor guidance, and access to Foresight's resources. Foresight notes increased liquidity in the Web3 venture capital ecosystem, advising startup co-founders to prioritize closing primary market fundraising quickly for timely go-to-market strategies. The firm recently acquired an 80% stake in crypto media company The Block for $60 million on November 13.
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Interesting Reads
A surge in "inscriptions," which involve writing data directly on-chain, has caused outages in several blockchain networks, including Arbitrum, Avalanche, Cronos, zkSync, and The Open Network. The inscriptions involve adding data on transaction call data, particularly BRC-20-type tokens themed after various collections. The trend has been attributed to users seeking low-cap crypto assets through this method, as it provides open access to retail investors. However, some analysts question the rationality behind this trend and warn about the potential for crypto influencers to promote risky assets through inscriptions. The surge in inscriptions has led to increased gas spending on EVM-compatible chains.
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Miscellaneous
Unstoppable Domains has integrated traditional ".com" domains into its platform, marking the first instance of merging conventional Web2 domains with the Web3 domain space. This integration aims to provide a bridge for users transitioning from the traditional web to the decentralized Web3, enhancing user adoption and experience. The familiarity of .com domains makes blockchain technology more accessible to a broader audience. The integration allows users to consolidate their traditional and crypto assets on a single platform, reducing friction and improving efficiency in managing financial resources. The move could also redefine digital identity management, privacy, and security standards in the online space.
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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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