Snapshot Web3

November 21, 2023

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Regulatory and Legal News

SEC sues Kraken alleging it’s an unregistered exchange, mixes user funds

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, accusing the cryptocurrency exchange of operating as an unregistered exchange, broker, dealer, and clearing agency. The SEC alleges that Kraken commingled customer funds with its own, creating a "significant risk of loss" for clients, and that the exchange failed to register with the regulator. Kraken disputes the SEC's claims, stating that it does not list securities and plans to defend itself in court. This lawsuit follows the SEC's ongoing efforts to bring cryptocurrencies under its regulatory oversight, asserting that crypto assets are securities contracts under U.S. law.

US Justice Dept reportedly ready to settle with Binance for $4B

The U.S. Justice Department is reportedly in talks with Binance to settle its investigation, proposing a $4 billion fine. The agreement may allow Binance to keep operating under U.S. laws. Binance CEO Changpeng Zhao could face criminal charges related to alleged money laundering and other violations. Binance is said to seek a deferred prosecution agreement involving fines, a detailed admission of non-compliance, and monitoring processes for future compliance. The announcement of the agreement is expected by the end of the month.

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Innovation and Launches

Cambodian digital currency bakong amps up use case with Alipay agreement

The bakong, a digital currency operated by the National Bank of Cambodia (NBC), has signed a memorandum of understanding (MoU) with Alipay, expanding its use case. This agreement allows users to access the Alipay merchant network and facilitates cross-border transactions on Alipay+ using QR codes. Cambodians can use their bakong wallets to shop with 83 million merchants worldwide on the Alipay network, while Chinese tourists with Alipay accounts can use bakong's QR codes for shopping in Cambodia. The bakong, not classified as a central bank digital currency (CBDC), operates on a blockchain and has both U.S. dollar and Cambodian riel accounts.

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NFT, Gaming and Metaverse

Ubisoft Is Bringing Rayman, 'Captain Laserhawk' NFT Avatars to The Sandbox

Ubisoft, known for popular games like Assassin’s Creed, is launching a new set of NFT avatars for the metaverse game, The Sandbox. These avatars are based on Ubisoft’s new Netflix animated series, "Captain Laserhawk: A Blood Dragon Remix," which mashes up characters and franchises from Ubisoft’s history. The collection includes renditions of classic Ubisoft action hero Rayman, as well as characters from the cult classic game Beyond Good & Evil. A total of 1,866 unique player avatars will be released as NFTs on Polygon, and the collection has a futuristic, cyberpunk-esque vibe. The avatars will be minted on November 29, with pricing details yet to be disclosed. Ubisoft has been actively engaging in the Web3 space, making moves in the NFT and blockchain gaming industry.

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Scams and Hacks

Mastercard combats crypto fraud with latest AI integration

Mastercard is teaming up with AI firm Feedzai to improve its ability to detect and prevent fraud in cryptocurrency transactions. Feedzai's AI software will be integrated with Mastercard's CipherTrace Armada platform to monitor transactions from various crypto exchanges for suspicious activities. The collaboration aims to quickly identify and block potentially fraudulent transactions, especially those involving bank accounts and crypto exchanges. This move is part of Mastercard's ongoing efforts to enhance security in the cryptocurrency space and protect consumers from fraud and money laundering activities.

Kronos Research halts trading amid $25M API key hack investigation

Quantitative trading firm Kronos Research has temporarily halted its trading services after a hacker accessed its API keys and stole approximately $25 million. The hacker conducted six transactions totaling 12,800 ETH, moving the funds into various crypto wallet addresses. Kronos Research is conducting internal investigations to track down the culprit, and the firm expressed confidence in a positive outcome, stating that the potential losses are not a significant portion of its equity. The incident highlights the ongoing challenges and risks associated with cybersecurity in the cryptocurrency space.

Poloniex says hacker’s identity is confirmed, offers last bounty at $10M

Poloniex claims to have identified the hacker who stole over $100 million and publicly messages them, offering a $10 million white hat reward if the funds are returned by November 25. The exchange asserts cooperation with law enforcement agencies and marks the stolen funds as unusable. Community members express skepticism about the claim, questioning the need for police involvement and multi-language messages if the hacker's identity is already confirmed. The hack occurred in November, prompting Poloniex to disable the wallet for maintenance and offer a 5% bounty for fund return. Withdrawals resumed on November 15 after security enhancements.

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Interesting Reads

You Only Have 12% of Bitcoin (BTC) Supply Left to Buy

Recent data reveals that 88% of Bitcoin's total supply has remained untouched for at least three months, emphasizing the strong HODLing trend among long-term investors. The scarcity of actively circulating Bitcoin, accounting for only 12% of the supply, suggests a potential increase in its value. The scarcity principle, where rarer commodities experience higher demand and prices, may come into play. Bitcoin's price action chart supports this notion, showing an upward trajectory and bullish indicators. The market narrative suggests Bitcoin is evolving into a rare asset, potentially intensifying competition among buyers and driving prices higher.

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Funding and Acquisitions

Crypto exchange Bullish buys 100% stake in crypto media site CoinDesk

Crypto exchange Bullish has reportedly acquired a 100% stake in the crypto media platform CoinDesk in an all-cash deal. The terms of the acquisition were not disclosed. Bullish is headed by Tom Farley, former president of the New York Stock Exchange. The media platform's current editorial team will reportedly remain intact, and former Wall Street Journal editor-in-chief Matt Murray will chair an independent editorial committee. CoinDesk, previously owned by Digital Currency Group, was purchased for $500,000 in 2016. The acquisition talks reportedly took place amid financial challenges faced by Digital Currency Group following the crypto market downturn.

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Miscellaneous

Dfinity taps SingularityNET to bring AI services to DApps

The Dfinity Foundation has joined forces with SingularityNET to enhance decentralized AI infrastructure on the Internet Computer (ICP) blockchain. The collaboration aims to make large language models (LLMs) tamper-proof and transparent by decentralizing AI models, addressing the lack of transparency in training data. Blockchain developers can utilize the ICP network to connect with AI, with decentralized AI models on ICP running within smart contracts. The partnership includes joint grant programs to stimulate community developer engagement and accelerate advancements in decentralized AI.

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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.