Cryptospace Spotlight 2022 #28 (10 Jul 2022)
Crema Finance hacker kept $1.6M as bounty, Celsius sued by former employee for running 'ponzi' scheme, and a Bitcoin Core developer is scaling back his contributions!
Technology and Industry
Bitcoin Core developer Peter Wuille is scaling back his contributions to Bitcoin Core. Nevertheless, he said he will continue contributing code to the project and remains a key player in the Bitcoin ecosystem. [more]
Cardano (ADA) has successfully conducted a hard fork of its testnet in readiness for the upcoming Vasil upgrade. The new development promises greater scalability and performance improvements to the network. [more]
Tornado Cash community announced a fully open-sourced user interface (UI) for Tornado Cash Classic. The move is in line with the community’s efforts to prioritize decentralization, transparency and security. [more]
Why UI? The Tornado Cash community is intimately familiar with UI vulnerabilities. In February 2020, a developer discovered a bug that revealed private user details when someone clicked a “share” button from the interface. The bug was quickly resolved and no funds were lost.
A former employee of crypto platform Celsius has brought in a lawsuit against the digital asset lender. [more]
The company is accused of market manipulation, risk management failures, mismanagement, and accounting fraud.
Last summer, Three Arrows Capital partnered with pseudonymous non-fungible token collector Vincent Van Dough to launch Starry Night Capital, an NFT fund that aimed to raise $100 million, now worth less than $5 million. [more]
According to estimates prepared, Starry Night’s wallet has an estimated net worth of $4.2 million, after the fund spent $21 million amassing this portfolio.
Banking Circle, a European bank focused on cross-border payments, is adopting a major U.S. dollar-pegged stablecoin USDC for payment rails. [more]
Decentralized lending platform Aave (AAVE) has launched its permissioned lending and liquidity service Aave Arc to help institutions participate in regulation-compliant decentralized finance. [more]
World Blockchain Summit (WBS) returns to Singapore with an in-person event from 14 to 15 July. [more]
Crypto exchanges -
Binance subsidiary, Moon Tech Spain, has been registered and granted license as a Virtual Asset Services Provider (VASP) to operate in Spain. Binance has received approval in France and Italy so far this year. [more]
Singapore-based crypto lending and trading platform Vauld said on Monday (4 Jul) it would suspend withdrawals and trading and seek new investors. [more]
Spanish cryptocurrency platform 2gether is shutting down. The sudden closure affects about 100,000 users. [more]
US-based crypto platform Voyager Digital said it filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code as it seeks to implement its reorganization plan and "maximize value for all stakeholders." [more]
The CEO of the crypto trading and payments platform Crypto.com, Kris Marszalek, took to Twitter to calm down his platform's users amid of rumors. He added that the firm’s withdrawal policy is “the same as it always was,” and made it clear that no special deposit promotions have been introduced. [more]
United States - The Secretary of the Treasury, the Secretary of State, the Secretary of Commerce and the Agency for International Development (USAID) — as well as “other relevant agencies” chimed in on the report, the first of many expected frameworks governing cryptocurrency companies and trading more broadly. [more]
Highlights of the report include greater guidance around stablecoins and an emphasis on needing to “watch out for instability and crime from digital assets”
United Kingdom - The Bank of England’s Financial Policy Committee called for “enhanced regulation” of the crypto asset market to mitigate against potential risks. [more]
Noting recent market turmoil, the committee said crypto assets don't pose a threat to the wider financial system yet, but they might in the future as they become more integrated into mainstream finance
Europe - Denmark questions CBDC function as trust anchor for digital money - a core rationale promoted by the European Central Bank (ECB) for a retail CBDC - to act as a trust ‘anchor’ for digital money once cash disappears. [more]
Denmark’s central bank highlights that its domestic payments are already primarily digital – just over 10% of physical purchases in Denmark use cash – and it does just fine without a CBDC.
Instead of each mobile banking app in Cambodia having its own QR code at checkout, now there’s just one – the KHQR code supported by the National Bank of Cambodia’s groundbreaking Bakong payments app
When users scan a KHQR code, the payment backend now goes via the Bakong blockchain payment system. The 37 Bakong participant banks all support the new format. It can also be used for cross border payments.
The National Bank of Cambodia hosts Bakong atop the Hyperledger Iroha blockchain designed by Japanese technology company Soramitsu.
Security and Risk
The attacker started by creating a fake tick account. A tick account is "a dedicated account that stores price tick data in Concentrated Liquidity Market Maker (CLMM),” the developers said, referring to Crema's market making protocol.
After creating the fake tick account, the attacker then fabricated pricing data a much bigger reward than it should be. This allowed the attacker to take “a huge fee amount,” worth about $9.6 million from the pool when the attacker provided liquidity to flash loan.
Concentrated Liquidity Market Maker (CLMM) allows liquidity providers to set specific price ranges, add single-sided liquidity and do range order trading. It redefines the capital efficiency and trading depth on Solana.
Code is law? - Blockworks’ interview with three crypto-focused lawyers to get their perspective on crypto’s need for legal counsel. [more]
Post-Quantum Cryptography - NIST has completed the third round of the Post-Quantum Cryptography (PQC) standardization process, which selects public-key cryptographic algorithms to protect information through the advent of quantum computers. A total of four candidate algorithms have been selected for standardization, and four additional algorithms will continue into the fourth round. [more]