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- SEC did not have 2FA enabled: X safety team on fake Bitcoin ETF post ✖️🔐
SEC did not have 2FA enabled: X safety team on fake Bitcoin ETF post ✖️🔐
PLUS: Fox Corp launches Polygon-based blockchain platform. AI tokens had 3rd highest returns of any category in 3 months.
Manan Vora
January 10, 2024
Snapshot Web3
January 10, 2024
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Regulatory and Legal News
Two U.S. senators, J.D. Vance and Thom Tillis, have urged the United States Securities and Exchange Commission (SEC) to provide a report to Congress about the recent breach of its X (formerly Twitter) account. The senators expressed serious concerns about the incident and its impact on market stability, investor protection, and capital formation. They requested the SEC to provide a report by January 23, citing a recently finalized rulemaking on cybersecurity disclosures. The breach occurred on January 9 when the SEC's X account shared a false tweet about the approval of spot Bitcoin exchange-traded funds (ETFs), causing confusion and market volatility.
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Innovation and Launches
Fox Corporation, the media conglomerate behind brands like Fox News, has launched the Verify platform on the Polygon blockchain. Developed with Polygon Labs, Verify aims to establish the history and origin of registered media used by artificial intelligence (AI) firms. The platform will help consumers identify the true source of content and give media publishers more control over their relationships with AI platforms. Verify will confirm whether media outlets have verified Fox-created content on other platforms, addressing concerns related to the rise of AI-generated content and copyright issues. The move comes amid increased attention on the origin and authenticity of content in the age of AI.
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NFT, Gaming and Metaverse
Vlge, formerly Digital Village, is launching a groundbreaking feature—a patent-pending system of personalized AI data agents for the metaverse. These agents evolve based on users' activities, matching moods and providing real-time tailored content. Users retain control over data inputs, connecting digital and physical footprints. Vlge enables easy creation of virtual spaces, attracting brands like Lancome. The impending release of Apple's Vision Pro headset is expected to boost mainstream adoption of metaverse ecommerce experiences.
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Scams and Hacks
The X safety team revealed that the U.S. Securities and Exchange Commission (SEC) did not have two-factor authentication (2FA) enabled on its main X account, leading to the recent security breach. The SEC's X account was compromised in a SIM swap attack, where an unidentified individual gained control of the phone number associated with the account through a third party. The lack of 2FA made it easier for the hacker to access the account. The incident involved a false announcement of a spot Bitcoin exchange-traded fund (ETF), causing market confusion. U.S. Senators and other officials have called for an investigation and transparency regarding the incident.
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Funding, Acquisitions and Partnerships
DeFi lending service Altitude has raised $6.1 million in a seed round to enhance capital efficiency in decentralized finance (DeFi). Altitude automates the management of collateralized debt by adjusting loan-to-value (LTV) ratios in real time, optimizing capital efficiency while maintaining a safe liquidation risk profile. The protocol can allocate excess collateral to various platforms for income generation and rebalance automatically if collateral is needed to secure a loan. Altitude recently completed a $6.1 million seed round, attracting investors such as Tioga Capital, New Form Capital, Flow Ventures, GSR, and AAVE's Marc Zeller, among others. The funds will be used to further develop and launch the platform, with a closed beta coming soon.
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Price Action
Bitcoin's price experienced significant volatility after a fake announcement from the SEC's social account suggested the approval of all spot BTC ETFs. The price briefly surged to over $48,000 before retracing to nearly $45,000. This incident led to the wiping out of leveraged longs and shorts in the Bitcoin futures market, resulting in up to $1 billion in open interest losses. The SEC's X account hack raised concerns about market manipulation laws, with Senator Bill Hagerty calling for answers. The expectation of a spot BTC ETF approval had led to positive market sentiment, but some traders anticipated a "buy the rumor, sell the news" event. Institutional investors have been actively deploying funds into Bitcoin, with $2.25 billion invested in crypto funds in 2023, and retail interest in Bitcoin is also on the rise. The increased volatility underscores the market's sensitivity to regulatory and institutional developments.
The native token of Arbitrum, ARB, has gained 49.49% in the past month, outperforming tokens like Optimism, Binance Coin (BNB), and Solana. This surge is attributed to Arbitrum dominating Ethereum layer 2 TVL, accounting for 49.86% of the total. ARB's trading volume exceeded $3.3 billion, rising about 3,000% in a month. The upcoming Ethereum Dencun upgrade, with changes from EIP-4844, is expected to reduce transaction costs for rollups like Arbitrum. Despite a recent pullback, a bull flag on the daily chart suggests a potential uptrend continuation, with resistance at $1.826 and a target of $3.60. Technical indicators favor further upside potential.
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Interesting Reads
AI tokens, including SingularityNET, Cortex, Fetch, Ocean Protocol, Oraichain, and Render, demonstrated the second-highest returns, excluding memecoins, in the three months leading to January 2, according to Binance Research. With a 185% increase, AI tokens outperformed categories like DeFi 2.0, GameFi, and Real World Asset tokens. Only Ethereum layer 2s surpassed AI tokens with a 221% gain. Over the year, AI tokens, led by Fetch with a 659% increase, outperformed major cryptocurrencies like Bitcoin and Ethereum. The report suggests that blockchain-based decentralized physical infrastructure networks (DePIN) and AI could form a powerful combination in 2024.
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Resource of the Day
A nonce, or "number used once," is a unique number assigned to a block during blockchain mining, crucial for the proof-of-work (PoW) consensus. Miners adjust the nonce to generate a hash meeting specific criteria, ensuring blockchain security by preventing tampering. It plays a key role in block validation, preventing double-spending, defending against attacks, and maintaining block immutability. In Bitcoin, miners use the nonce to find a hash meeting difficulty criteria and add a block to the blockchain. Various nonce types, such as cryptographic and hash function-related, serve different purposes in ensuring data integrity. Attacks like nonce reuse underscore the importance of maintaining nonce uniqueness in cryptographic protocols. Regular evaluation of cryptographic implementations and adherence to standardized algorithms are crucial for security.
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Miscellaneous
The Bitcoin Core v27 update is aiming to eject Ordinals from the Bitcoin blockchain. Proponents of the phenomenon should fork to their own chain.
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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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