Cryptocurrency

Putin’s Crypto Move Illustrates Long Game, But What About Custody

Published

2 years ago

February 15, 2022

After the central bank proposed a crypto ban, Russian President Vladimir Putin hit the breaks, noting in a video conference that there are “competitive advantages” in crypto mining. He directed the CBR to consider the advantages of crypto mining, considering the country’s electricity surplus.

“Given his commentary, it is clear that the Russian president understands the long-term possibilities for digital assets and blockchain technologies. Interestingly enough, in the same speech, he also noted ‘certain risks’ that go along with cryptocurrencies, as well as the desire for the government and central bank to come together and act in a unanimous nature, something that many have long talked about,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“The central bank does not stand in our way of technical progress and is making the necessary efforts to introduce the latest technologies in this area of activity,” Putin said.

“That statement is profound. It is a clear indicator that Putin is keenly aware of how these technologies will play out in the future. He doesn’t want to get caught on the wrong side of technological history. Asking the government for unanimity on the matter may well be a result of looking around at other global powers that are having trouble grappling with a united message when multiple agencies are in play. Getting the government on the same page always helps an industry’s confidence,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Regulation is sufficient to protect our citizens,” Ivan Chebeskov, the head of the financial policy department at the Russian Ministry of Finance, has said, alluding to the Ministry’s work on just that.

“With the talk of regulation and Putin’s discussion on risks, I’ll be interested to see how the country decides to deal with crypto-custody. Right now, the major players just aren’t living up to the needs of the industry,” said Gardner.

Fireblocks, which is among the best-known providers, found itself embroiled in a lawsuit with StakeHound, which alleges the custody company lost roughly $70MM of Ethereum, after the key vanished. As a result, StakeHound could not access over 38,000 ETH.

“Putin discussed needing ‘well-trained’ individuals in the mining sector. It only stands to reason that they would emphasize the same competency in custody. I think that, across the globe, we are likely in the beginning of a digital assets custody shakeup,” offered Gardner.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Cryptocurrency

Mixin Network Halts Services After $200 Million Security Breach; Recovery Plan in Progress

Published

6 days ago

September 25, 2023

Investors King

Mixin Network, a prominent decentralized wallet service provider, has been rocked by a massive security breach resulting in a loss of $200 million.

The breach, attributed to vulnerabilities in its cloud service provider’s database, has raised questions about the platform’s dependence on centralized infrastructure.

Mixin Network, known for its support of 48 public blockchains and an impressive total network asset value exceeding $1 billion, halted deposit and withdrawal services following the breach.

This incident has prompted discussions within the crypto community regarding the risks associated with centralization in decentralized platforms.

In response to the breach, Mixin Network has taken swift action, enlisting the expertise of blockchain security specialists from SlowMist.

The company has pledged to resume services only after thoroughly addressing identified vulnerabilities, a decision reached through consensus among all network nodes.

The plan for asset recovery will be announced in due course, and Mixin founder Feng Xiaodong will provide a detailed explanation in a public livestream.

The Mixin incident follows closely on the heels of the JPEX cryptocurrency exchange scandal in Hong Kong, which has left countless individuals reeling from financial losses totaling $178 million.

Experts now speculate that these recent setbacks may lead the Hong Kong government to reconsider its enthusiastic promotion of Web3 technologies, as concerns over security and public sentiment cast a shadow on the region’s cryptocurrency ambitions.

Carlton Lai, head of blockchain and cryptocurrency research at Daiwa Capital Markets, said, “I think this scandal will have a pretty sizeable negative impact on retail sentiment, given its significant local presence and the various celebrities involved.”

As Hong Kong grapples with the fallout from these high-profile incidents, the future of cryptocurrency in the region remains uncertain, with questions of regulation and security taking center stage.

Cryptocurrency

Dallas Mavericks Owner and Billionaire Tech Investor, Mark Cuban, Falls Victim to Phishing Attack, Losing $870,000 in Crypto Assets

Published

2 weeks ago

September 18, 2023

Samed Olukoya

Mark Cuban, owner of the Dallas Mavericks and a prominent billionaire technology investor, recently fell prey to a phishing attack, resulting in a loss of approximately $870,000 worth of tokens.

The incident occurred over the weekend after months of inactivity on Cuban’s crypto wallet.

Phishing attacks, a prevalent threat in the crypto industry, deceive users into revealing sensitive information, downloading malicious software, and exposing their private data.

These attacks exploit users’ trust, often causing them to overlook the authenticity of incoming requests on their crypto wallets or unwittingly download counterfeit applications designed solely to pilfer their assets.

Cuban’s crypto wallet was emptied of various assets, including U.S.-pegged stablecoins, staked ETH (stETH), SuperRare (RARE) tokens, and some Ethereum Name Service (ENS) domains, according to blockchain data.

The initial discovery of these suspicious transactions was made by the vigilant on-chain investigator @wazzcrypto.

Fortunately, Cuban was alerted to these transactions, and he managed to safeguard over $2.5 million worth of Polygon’s MATIC tokens.

He accomplished this by promptly logging into his wallet and transferring the tokens to a secure Coinbase exchange address.

Cuban revealed that the phishing attack was apparently initiated through a fraudulent MetaMask wallet application that he had unwittingly downloaded.

This incident marks the second high-profile phishing attack in as many weeks, following Ethereum co-founder Vitalik Buterin’s experience in early September. Buterin’s X account was compromised in a phishing attack, although he did not appear to lose any of his own funds.

Nevertheless, unsuspecting users collectively suffered losses of up to $700,000 by sending tokens to a malicious link that falsely appeared to have Buterin’s endorsement.

As the crypto industry continues to thrive, it is crucial for users to exercise caution and remain vigilant to safeguard their digital assets from the ever-present threat of phishing attacks.

Ethereum

RxR Analysis Reveals: Ether’s True Worth 27% Higher than Market Price

Published

2 weeks ago

September 18, 2023

Samed Olukoya

RxR, a research-driven partnership between Republic Crypto and Re7 Capital, has revealed that Ether (ETH), the native token of the Ethereum blockchain, is currently trading at a 27% discount to its actual fair value.

This revelation comes as a result of RxR’s innovative approach to evaluating the worth of cryptocurrencies. Instead of relying solely on traditional metrics, RxR’s methodology incorporates a blended version of the Metcalfe law that takes into account both the active user base on the continuously expanding Ethereum scaling networks and the users on the Ethereum mainnet.

Ether, as a fundamental component of the Ethereum ecosystem, facilitates a wide range of activities, from simple transactions to participating in network security through staking, earning interest, and even storing non-fungible tokens. As such, the value of Ether has long been intertwined with Ethereum’s network usage.

Lewis Harland, an analyst at RxR, explained the significance of this approach, stating, “Ethereum’s network valuation exhibits a closer alignment with the updated Metcalfe law index when the active user base of Ethereum’s scaling networks is included in the model, in contrast to when it is omitted.”

Harland continued, “The updated model, which factors in these networks, places ETH’s valuation at $275 billion, indicating that the current market capitalization is trading at a substantial 27% discount.”

Ether’s market capitalization consistently tracks the blended Metcalfe law model more accurately than the traditional model, which fails to consider the growing activity on layer 2 networks or offchain solutions built atop the Ethereum mainnet.

In essence, this analysis challenges the perception that Ether might be overvalued, as suggested by the traditional Metcalfe law Model.

The emergence of Layer 2 technology has undoubtedly become one of the most dynamic and exciting developments in the crypto market. Key protocols, such as Coinbase’s BASE, Arbitrum, and Optimism, have found their unique niches within this landscape.

According to data from L2Beat, the total value locked in layer 2 protocols has surged more than threefold in just two years, reaching an impressive milestone of over $9 billion.