SEC's 'War On Crypto' Escalates...
Is crypto in danger???
GM, frens! Ambire here with our weekly newsletter, today crypto is once again facing tough times but don’t lose hope, what goes down must come up - let's discuss this in more detail. Today we'll talk about SEC's continuous war on crypto, Tether investing in Volcano mining in El Salvador, NFTs used to fuel a music chart race in UK, a crypto CEX gets licensed as an official payment provider in Brazil, Atomic Wallet getting hacked, SWIFT and Chainlink partnership and some other stuff. Let's get down to it:
SEC's ‘war on crypto’ escalates
The US SEC (Securities and Exchange Commission) has increased the pressure on crypto exchanges this week, with lawsuits against two of the biggest players in the industry - Coinbase and Binance.
Gary Gensler revealed his true motives on CNBC today.
He makes it clear that he's trying to take down the Crypto industry as a whole ... not just protect investors.
(Watch this clip 🎥)
— Kevin Svenson (@KevinSvenson_)
Jun 7, 2023
The SEC alleged that Coinbase was trading at least 13 crypto assets that were securities and should have been registered with the commission prior to being listed. Meanwhile, Binance was accused of offering 12 crypto coins without registering them as securities.
The lawsuits put the spotlight on other exchanges in the US that are yet to be investigated by the SEC. This could spell trouble for some of these companies, which may now have to take steps to ensure they comply with relevant regulations. (Although the regulations themselves aren't very clear, and will likely change and/or evolve over time.)
Netflow to Binance over the past 24 hours is $778.6M negative on Ethereum - $871.7M in and $1.65B out
Over the past hour, netflow on Ethereum continues to be negative at $35.7M on Ethereum - $14.8M in and $50.5M out
Track it here and filter for "Binance"
— Nansen 🧭 (@nansen_ai)
Jun 6, 2023
As a consequence, investors have been turning to DEXs (decentralized exchanges) as a way of avoiding the risks associated with centralized services. This has caused a surge in trading volume on DEXs, with the median daily volumes of the top three exchanges jumping more than 500% over the past few days.
The strict measures taken by the SEC against #Binance and #Coinbase have increased #DeFi trading volumes by 444%.
The total daily trading volume on decentralized exchanges (DEX) has surged by nearly $800 million over the past two days.
The average trading volume on the three… twitter.com/i/web/status/1…
— George Marshall (@MrGeorgeCrypto)
Jun 7, 2023
So is it going to completely destabilize the industry? That remains to be seen, but it's certainly a sign that SEC is out for blood.
Tether and Volcano Energy join forces to build a seismic-powered Bitcoin mining farm in El Salvador
In the meantime, Tether, along with other investors, will be helping Volcano Energy build a volcano-based Bitcoin mining farm in El Salvador. Volcano Energy has reportedly already started the construction of their state-of-the-art facility.
Tether is expanding its energy investments, providing capital, tech expertise and advisory to the new venture Volcano Energy🌋
The potential of El Salvador 🇸🇻 as the global energy and #bitcoin hub is immense and at @Tether_to we're grateful to be part of this opportunity ❤️… twitter.com/i/web/status/1…
— Paolo Ardoino 🍐 (@paoloardoino)
Jun 5, 2023
The mining farm will reportedly have a capacity of 6,000 terahashes per second (TH/s), making it one of the largest Bitcoin mining farms in the world. The farm will utilize renewable energy sourced from volcanic activity, thanks to El Salvador's unique geography.
The CEO of Volcano Energy is Josue Lopez, a 23-year-old bitcoin advocate from El Salvador. The company is also co-led by Max Keiser, who is the chairman and an advisor to El Salvador President Nayib Bukele. The size of the planned bitcoin mining farm is 241 megawatts (MW), divided between 169 MW of photovoltaic solar energy and 72 MW of wind energy. This output is expected to generate a computing power of over 1.3 EH/s (exahashes per second), making it one of the most powerful Bitcoin mining operations in the world.
The partnership between Tether and Volcano Energy is a major step forward for crypto, as it will allow for the efficient use of renewable energy for mining operations. This move is also expected to benefit El Salvador, as it will bring new economic opportunities to the country and help it further develop its cryptocurrency industry.
Noel Gallagher uses music NFTs to compete with Foo Fighters’ album
Noel Gallagher, a singer from the legendary rock band Oasis, is now relying on music NFTs as a strategy to edge ahead of his main competition, the Foo Fighters.
Noel Gallagher 200 Copies ahead of Foo Fighters currently for #1 Spot this week.
— Anything Oasis Official (@AnythingOasis)
Jun 5, 2023
Gallagher released “Council Skies” with his current band, the High Flying Birds, on June 2. The same day, the Foo Fighters released “But Here We Are”, their first album since the death of drummer Taylor Hawkins.
Unlock exclusive access to the 'Council Skies' Docuseries Parts 1 & 2!
Noel Gallagher’s High Flying Birds have partnered with @ser@serenade__corelease a Limited Edition Digital Pressing of 'Council Skies', packed with unique content. Each owner receives access to the first two… httptwitter.com/i/web/status/1…p
— Noel Gallagher (@NoelGallagher)
Jun 6, 2023
Gallagher has now created a limited-edition NFT that will allow him to gain recognition among new audiences. The single “We Are” from the new album will be available as an NFT, giving fans the chance to own a piece of the music and artwork. This marks Gallagher’s first foray into the world of cryptocurrency and a new way to promote his music.
Owners of the NFT will be able to unlock high-quality WAV files of the record, the first two parts of a four-part documentary about the making of the record, and a digitally signed lyric sheet. The pressing will also feature limited-edition signed and colored artwork.
We're not exactly sure if that's going to be enough to outdo his main competition, but Gallagher hopes that this innovative approach will help him get an edge over the Foo Fighters.
Crypto CEX licensed as an official payment provider in Brazil
Some bullish news from Brazil: it has become the first Latin American country to officially recognize a crypto exchange as an official payment provider. On June 2nd, Mercado Bitcoin, one of the largest and oldest cryptocurrency exchanges in Brazil, received approval from the Brazilian Central Bank to start working as a payment institution.
🇧🇷 Mercado #Bitcoin, Brazil's largest #crypto#exchange, was licensed as a payment institution by Brazil's central bank.
The company is now authorized to operate as a payment institution, under the status of an electronic money issuer.
— Cryptic (@Crypticsmma)
Jun 3, 2023
This step will allow Mercado Bitcoin to launch its new fintech solution MB Pay, which means users will be able to make fixed-income investments, stake coins and do other financial transactions with crypto assets held on the exchange. In addition, an off-ramp debit card is also expected to be available soon for users in the country.
The approval process had been delayed after a long wait due to the regulator's approval process, but it looks like Mercado Bitcoin is finally ready to roll out its services.
Atomic Wallet gets hacked, users lose $35M in crypto
Atomic Wallet got hacked last Saturday, and the company has since confirmed that some of its users were affected. According to blockchain intelligence firm Elliptic, this could have been perpetrated by Lazarus, a North Korean-based hacking group. The team behind Atomic has stated that the number of affected users does not exceed 1% of monthly active users.
The security breach has caused a great deal of distress for the victims, who have reported their wallets being drained of funds.
Some things to note about this hack.
Largest single victim I have observed is for 2.8M USDT. Multiple other losses for 6 figures across different chains.
Thanks to all of the victims who have messaged me their transaction hash. The root cause is still tbd.
— ZachXBT (@zachxbt)
Jun 3, 2023
ZachXBT, a blockchain investigator, estimated that around $35 million in various crypto coins had been stolen, including bitcoin (BTC), ether (ETH), tether (USDT), dogecoin (DOGE), litecoin (LTC), BNB coin (BNB), polygon (MATIC) and Tron-based USDT. The stolen crypto has been funneled to a mixer called Sindbad.io. This mixer has been often used to launder money from other hacks attributed to Lazarus, and the usage pattern is the same. Elliptic also found connections between the wallets containing the loot from Atomic and some of the Lazarus hacks.
An interesting bit: last year, security audit firm Least Authority published a blog post warning that Atomic Wallet may have been susceptible to security breaches. According to Least Authority, they found issues with how Atomic Wallet implemented cryptography, didn't adhere to best practices for wallet design, lacked robust project documentation, and incorrectly used Electron, a framework for building desktop applications. It is clear that Atomic Wallet needs to take more stringent measures in order to protect its users’ funds in the future.
SWIFT and Chainlink collaborate to connect the financial world via the blockchain
SWIFT (the Society for Worldwide Interbank Financial Telecommunication) announced a collaboration between major banks and Web3 infrastructure provider Chainlink. The two are testing the ability to connect private and public permissionless blockchains. The tests are part of Swift’s initiative to explore the interoperability of tokenized assets across private blockchains which it began in 2022. Now, with the help of Chainlink, Swift is extending its experiments to public blockchains.
Chainlink is working with @swiftcommunity and more than a dozen major financial institutions on experiments to enable connectivity to and interoperability across public and private blockchains:
These experiments are a significant step forward from the… twitter.com/i/web/status/1…
— Chainlink (@chainlink)
Jun 6, 2023
With this, it is hoped that the financial sector will be able to capitalize on the benefits of both private and public blockchains. For instance, it could lead to increased efficiency, performance, and scalability which could result in better customer experiences and lower costs.
The collaboration includes major financial institutions across the globe, including BNP Paribas, BNY Mellon, Citi, Euroclear, SIX Digital Exchange (SDX) and The Depository Trust & Clearing Corporation (DTCC). Chainlink is providing what Swift calls an “enterprise account abstraction layer.” Sergey Nazarov, one of the company’s co-founders, said that he thinks the asset tokenization trend is being embraced by banks and financial market infrastructure institutions alike, which has the potential to “10x the blockchain industry size.”
When SWIFT first started in 1977, it was revolutionary in replacing old communication technology with its own digital network called Telex, which was essentially a “private financial internet before the internet” according to Nazarov. Now, decades later, SWIFT and Chainlink are helping to move the financial sector towards a future where private and public blockchains can work together for the benefit of everyone involved.
Other worthy reads:
A summary from Kobeissi Letter:
Over the last year, crypto has seen:
1. Collapse of FTX, larger fraud than Enron
2. $2 trillion+ erased in bear market
3. Over 300 class action lawsuits since 2022
4. Collapse of regional bank system
5. Binance and Coinbase now sued by SEC
Yet, the total crypto market cap… twitter.com/i/web/status/1…
— The Kobeissi Letter (@KobeissiLetter)
Jun 6, 2023
Liquid staking explained by Patrick:
Imagine a new financial primitive that’s yield bearing, deflationary, and secures the 2nd largest blockchain.
That’s liquid staked ETH.
Master thread on liquid staking, LSDs (no, not that kind), 10 LSDFi protocols, and how to research new protocols in this category.
— Patrick | Dynamo DeFi (@Dynamo_Patrick)
Jun 6, 2023
A thread on crypto narratives from Zero Ika:
Being early to the right crypto narratives can be very lucrative.— ZERO IKA 🗡️ (@IamZeroIka) June 1, 2023
And since this world is in continuous evolution, it's not easy to spot them.
Here are 8 narratives that I'm paying attention to, some related protocols + personal considerations.
1/19 🧵👇 pic.twitter.com/MsSmnFO6Ez
The fun page: our weekly meme collection
That's all for now, frens.
We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us and we look forward to seeing you back next week. Cheers!
Yours, The 🔥 Team
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