Agents in Disguise
Crypto Market Week in Review (5 August 2022)
Markets
Increased tensions between the US and China over Taiwan saw Bitcoin’s upward momentum halted. Investors abandoned equities and the futures market due to the fear of escalation between the two giants. And Bitcoin recorded a 4% sell-off.
Bitcoin saw a promising start to the weekend reverted but then showed a strong resilience towards the end of the week with investors weighing up how much capital will Blackrock’s crypto venture attract to the markets.
Ether (ETH) drew similar patterns dropping 3.5% on the way. BTC and ETH appear to be in a recovery mode from the short-lived dips that likely can’t overshadow excitement surrounding Ethereum’s upcoming Merge.
Finally, Bitcoin’s active addresses don’t show the necessary break out yet.
Venture Capital Investments in Africa’s Blockchain Sector Continue
Venture capital (VC) flows into cryptocurrency ventures in the first half of 2022 exceeded the total for the entire year 2021 ($127 million).
A total of $91 million was raised in the first quarter of 2022 alone. This fundraising momentum continued into the second quarter when four further fundraising rounds brought in an additional $213 million.
KuCoin, a firm based in Seychelles, topped the list, raising a record-breaking $150 million in a pre-Series B fundraising round in May. This latest round brought its valuation to $10 billion.
Other African cryptocurrency platforms, Mara, Jambo, and Afriex raised $23 million, $30 million, and $10 million, respectively. The publicly known investments in Africa’s blockchain sector now stand at $304 million in 2022 alone.
North Korean Hackers Are Posing As Crypto Freelancers to Secure Remote Work Abroad
According to cybersecurity researchers, North Koreans are using stolen resumes from the internet and false identities to work remotely for Bitcoin companies to support illegal government fund-raising campaigns.
Researchers at Mandiant Inc. explained that fraudsters steal information from authentic LinkedIn and Indeed profiles for their resumes to land jobs at US bitcoin firms.
One applicant who Mandiant discovered on July 14 claimed to be both an "experienced software developer" and a "creative and strategic thinking expert" in the tech sector. In a cover letter, the job applicant further stated, "The world will see the tremendous result from my hands. Another user's profile contained language that was almost exactly the same.
The information uncovered by Mandiant supports claims made by the US government in May. To collect money for government weapons development programs, North Korean IT professionals are attempting to find freelance work abroad while pretending to be people from other countries, the United States said. According to the US guidance, the IT workers assert to have the kinds of abilities required for complicated work, including developing mobile apps, constructing virtual currency exchanges, and mobile gaming.
According to the US, the majority of North Korean IT workers were found in China and Russia, with a smaller number in Africa and Southeast Asia. According to the US alert, they also target freelancing contracts in wealthier countries, such as in North America and Europe, and frequently pose as South Korean, Japanese, or even US-based teleworkers.
The Mandiant researchers claim that North Koreans can learn about future Bitcoin trends by obtaining information from cryptocurrency companies, hereby giving the North Korean government an advantage on how to launder cryptocurrency in a way that helps Pyongyang avoid sanctions.
Sec Charges 11 Individuals Over $300m Crypto Pyramid Scheme
Eleven people have been prosecuted by the Securities and Exchange Commission (SEC) for allegedly helping to establish the "fraudulent crypto pyramid scheme" platform, Forsage.
The SEC filed accusations in an Illinois federal court on Monday, alleging that the platform's creators and promoters used a "fraudulent crypto pyramid and Ponzi scheme" to raise more than $300 million from "millions of retail investors throughout the world."
According to the SEC complaint, Forsage was designed in a way that allowed investors to profit financially from bringing in new investors in a "classic Ponzi structure" that included the US and Russia.
The SEC's complaint listed seven promoters in addition to the four founders, who are Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov. Three of the promoters were members of a promotional organisation based in the United States dubbed the "Crypto Crusaders."
Infractions of "Unregistered Offers and Sales of Securities" under Sections 5 A and C and "Fraud" under Sections 17(a) (1 & 3) of the US Securities Act have been brought against all 11 people. Additionally, the defendants are accused of "Fraud" in violation of US Exchange Act Sections 10B and 10C.
ECB Believes CBDCs Are Better than Bitcoin for Cross-border Remittances
According to the European Central Bank's (ECB) most recent study, central bank digital currencies (CBDCs) are preferable to Bitcoin, stablecoins, and other conventional banking methods like SWIFT.
The document, titled "Towards The Holy Grail of Cross-border Payments," aims to assist the 19 Euro-using European nations in choosing the greatest alternative cross-border payment system.
The study reveals that Bitcoin is the most "prominent unbacked crypto asset" in the world. It also notes that BTC's utility as a cross-border payment system is diminished by its subpar settlement mechanism and daily volatility. The authors' further comment:
“Bitcoin has scaling and speed issues that have been acknowledged for some time. The underlying technology (and in particular its “proof-of-work” layer) is inherently expensive and wasteful. If anything, it proves that a decentralised trust-creating mechanism relying on “proof-of-work” to render stable a permission-less blockchain is more expensive and less efficient than a centralised (e.g. based on central bank money) or semi-centralised one.”
Furthermore, the report notes that real-time value impacts can become rather obvious, given that settlements inside the Bitcoin network take place every ten minutes. However, the report acknowledges that recent improvements like Taproot and Layer-2 scaling options (like the Lightning Network) are attempting to address these problems.
The ECB considers CBDCs to be superior to Bitcoin since they offer seamless support for currency conversions. Not only that, but they also provide incredibly quick settlement times while assisting in the maintenance of monetary sovereignty.
We probably can’t expect the ECB to fall in love with its fierce competitor pointing out everything that’s wrong with its current set up, can we?
Crypto Bridge Nomad Drained of Nearly $200M in Exploit
On Monday, the Nomad cross-chain token bridge was attacked, and the attackers practically drained the protocol of all its cash. Nearly $200 million worth of cryptocurrency was lost due to the hack.
Similar to previous cross-chain bridges, Nomad enables users to transfer tokens back and forth between several blockchains. The attack on Monday is the most recent in a line of widely reported instances that have raised concerns about the safety of cross-chain bridges.
The Nomad team admitted to the exploit on Twitter. Leading organisations for blockchain intelligence and forensics have been retained, according to the team, and an investigation is still ongoing.
"We have alerted law enforcement, and we are working nonstop to resolve the issue and deliver timely information. Identification of the involved accounts, money recovery, and money tracing are our objectives."
What happened?
At around 9:23 pm UTC, a hacker used the bridge to extract 100 WBTCs worth $2.3 million, which was the first indication that trouble was brewing.
To take part in the money drain, a number of people duplicated the code of the first suspicious transaction and modified the address.
Between the blockchains of Ethereum (ETH), Avalanche (AVAX), Evmos (EVMOS), Moonbeam (GLMR), and Milkomeda C1, token transfers were possible thanks to the Nomad bridge.
The Nomad bridge nearly completely lost all of the $190.7 million that was locked in it.
Strangely, several of the transactions involving the exploit had the same value. As an illustration, more than 200 transactions totalling exactly 202,440.725413 USDC were made.
From the bridge, a number of tokens, including WBTC, WETH, USDC, FRAX, CQT, HBOT, IAG, DAI, GERO, CARDS, SDL, and C3, were stolen.
The attack occurred as a result of a subpar operating strategy, which Oxfoobar claims resulted in "failed Merkle root initialisation which led to every message being proven legitimate by default."
The Nomad team acknowledged the exploit and stated that it was looking into the circumstances.
Moonbeam entered maintenance mode in the interim "to examine a security incident with a deployed smart contract on the network."
*This communication is intended as strictly informational, and nothing herein constitutes an offer or a recommendation to buy, sell, or retain any specific product, security or investment, or to utilise or refrain from utilising any particular service. The use of the products and services referred to herein may be subject to certain limitations in specific jurisdictions. This communication does not constitute and shall under no circumstances be deemed to constitute investment advice. This communication is not intended to constitute a public offering of securities within the meaning of any applicable legislation.
