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Top shelf
Hackers hit DeFi protocol bZx again, derivatives traders have placed bets bitcoin will hit $30,000 by year's end and the latest twist in the SushiSwap saga.
Hacked again Decentralized finance (DeFi) protocol bZx is the victim of yet another exploit – this time costing nearly $8 million. On Sunday, an unnamed hacker or hackers apparently tricked bZx into minting iTokens, an interest-earning token that allows users to redeem crypto in the protocol’s lending pools, cashing them out for nearly 220,000 LINK tokens, 4,507 ETH, 1.76 million USDT, 1.4 million USDC and 670,000 DAI, CoinDesk’s Paddy Baker reports. Early this year, hackers drained nearly $1 million from the protocol in two separate attacks – raising questions over a DeFi feature called “flash loans.” The latest bug apparently passed through two audits performed by security firms Certik and Peckshield. bZx co-founder Kyle Kistner said the drained funds will be covered by the protocol’s insurance fund, pending community ratification.
In a late breaking twist, a spokesperson said bZx was able to track down the attacker using his or her on-chain activity and that the funds were returned as soon as that person was exposed. More to follow on CoinDesk.com.
Red flags The Financial Action Task Force (FATF), an international standards-setting body followed by 200 nations, has recommended regulators profile cryptocurrency users so they can better identify criminal activity. In a Monday report, FATF said regulators should keep an eye out for suspicious behavior including swapping publicly tracked cryptos for privacy coins like monero or zcash, skirting KYC/AML checks and transactions that fall just below the Travel Rule threshold, CoinDesk’s Paddy Baker reports. The watchdog also said a discrepancy between a trader’s transaction history and known wealth is a red flag.
Auto crisis Iran may use crypto to fund car imports. Gholam Hossein Mozaffari, CEO of the Kish Free Zone Organization, has queried the nation’s central bank about using cryptocurrencies mined on Kish Island to beat hyperinflation and international sanctions. "If the central bank allows this, it [would be] possible to import cars with digital currency for these three free zones, and the car problem can be solved," Mozaffari said, according to ArzDigital. In recent months, Iran has loosened regulations to permit crypto mining under certain circumstances.
Diamond ring? Prosecutors have charged a Washington, D.C., man with running a crypto-backed diamond investment ponzi scheme. Jose Angel Aman was charged with wire fraud on Friday for his alleged role in soliciting $25 million from hundreds of investors to fund a scheme where he and his cadres promised to buy and flip diamonds. Court documents say Aman "rarely" used investments as promised, instead funding a lavish lifestyle and to pay interest to earlier investors. Prosecutors further allege Aman launched a purported diamond-back cryptocurrency called Argyle Coin to solicit more funds as the scheme neared collapse.
ICO targets Rapper T.I., and seven others, were charged with securities violations for their involvement in a pair of initial coin offerings (ICOs). The Securities and Exchange Commission (SEC) said on Friday film producer Ryan Felton misappropriated funds and wash traded cryptocurrencies using the proceeds from the $164,665 FLiK and $282,418 CoinSpark ICOs, while others are said to have recommended investors buy tokens without disclosing they were paid by the projects. The rapper has agreed to pay a $75,000 fine and not participate in any digital asset sales for at least five years; Sparks agreed to pay a $25,000 fine and likewise refrain from participating in any securities sales for five years.
CoinDesk Live: Internet 2030 CoinDesk’s “Internet 2030” series will examine the future of the medium and what role blockchain and crypto will play in it with content and conversations on the future of the decentralized web.
The series, which features CoinDesk Live conversations on Sept. 15-16, coincides with the planned launch of the long-anticipated Filecoin mainnet, the native token for the InterPlanetary File System (IPFS) protocol. We’ll hear from Juan Benet and the Filecoin team about why peer-to-peer web storage infrastructure is critical to a free and decentralized future, and explore the array of use cases available.
Watch Day 1: Interplanetary: Filecoin Goes Live on Sept. 15 at 4 p.m. ET on YouTube, LinkedIn or Twitter. Read more here.
If you're interested in submitting an op-ed detailing your thoughts about the future of the internet, reach out directly to daniel@coindesk.com.
CoinDesk U Have you taken a cryptocurrency course at university? Are interested in learning about blockchain for your career? What have you heard about the institutions with the best teachers, research centers, student clubs and networking opportunities?
CoinDesk is on a mission to find out which U.S. university is doing the best overall job of teaching, researching and otherwise engaging on the topic of cryptocurrency and decentralized tech. We’re gathering data on a host of blockchain-related criteria. And now we really want to know what you – the student, former student or prospective student – thinks.
Please take a moment to answer our survey. Your participation will help make this research project as a responsive and accurate as it can be.
Billing itself a community-driven DeFi experiment, SushiSwap aspired to drain liquidity and users from the dominant, VC-backed AMM Uniswap. It did this by forking Uniswap’s code, instituting a governance token and offering a generous subsidy for liquidity providers (LPs) that migrated over.
On Saturday, the vampire clone cut its block reward from 1,000 tokens to just 100. And it looks like a number of LPs cut town as well.
As of writing, $776 million worth of crypto is held in Sushi’s smart contracts, down 18% from yesterday, according to sushiswap.vision. Meanwhile, Uniswap’s total value locked (TVL) has spiked 70% day-over-day to $971 million, according to DeFi Pulse.
Last Friday, Messari’s Ryan Selkis drew the terms of the confrontation as being about entrepreneurship and full-decentralization.
“As an entrepreneur I am rooting so f**king hard for uniswap and against everything about sushi. But as a crypto degen, I am loving the ruthless competition and embrace of open source ‘rules,’” he tweeted.
How to Value Bitcoin: On-Chain Transactions In this 30-minute webinar, the first in our four-part How to Value Bitcoin series, we look at on-chain transactions, a concept that sounds familiar but involves novelties and complexities that are critical to understanding how Bitcoin works.
On Sept. 15 at 10:30 a.m. ET, Glassnode CTO Rafael Schultze-Kraft and CoinDesk Research will walk through the structure of a Bitcoin transaction and how transaction data determines velocity, transaction count and value transferred. Register to join How to Value Bitcoin: On-Chain Transactions.
Market intel
Big bitcoin bets Hundreds of derivatives investors are betting bitcoin will rally to $36,000 by the end of 2020. Over the weekend, crypto derivatives exchange Deribit saw a rise in call options (bullish bets) with $36,000 and $32,000 strike prices that expire Dec. 25. Calls give investors the option, but not the obligation, to buy an asset at a given time. CoinDesk’s Omkar Godbole reports that the probability of bitcoin reaching a new record high above $20,000 by the end of December is roughly 5%.
First Mover First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. They follow the money so you don’t have to. You can subscribe here.
CoinDesk 20 Update: OXT In, BAT Out The CoinDesk 20 has made its first change since launching in July: Orchid (OXT), issued by Orchid Labs Inc., developer of virtual private network (VPN) software designed to be decentralized and open source, has replaced the basic attention token (BAT) issued by Brave Software Inc., developer of the Brave browser.
Do or dai Demand for stablecoins has knocked MakerDAO’s dai (DAI) off its peg, reports CoinDesk’s Colin Harper. MakerDAO’s community is now debating some tweaks to its monetary policy to restore the peg, though Maker’s creator believes the only long-term solution is adding additional, varied collateral to the DAO.
Op-ed
Bitcoin correlations Bitcoin’s correlation with gold is now at an all-time high, though this may not help us understand what “digital gold” really is any better. In the latest Crypto Long & Short newsletter, CoinDesk Director of Research Noelle Acheson examines the role correlations play in how we think about and utilize an asset – especially in an age where price movements may not be rational. “This grasping for data to back a story reveals our very human need to put bitcoin in context of things we’re already familiar with… [W]e are searching for a handle on its prevailing narrative. We hope that correlations will give us a clue.
Podcast corner
Validating Ethereum With Ethereum 2.0's much anticipated move to Proof-of-Stake getting closer, CoinDesk Research Analyst Christine Kim spoke with Ben Edgington and Vijay Michalik on what would-be validators need to know.
Who won #CryptoTwitter?
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