Top 10 Crypto News: Weekly Round-up of Headlines That Made Waves
In Brief
Dive into the overview of key crypto market developments that occurred during the week of September 25th to the 29th.
Last week, the crypto market buzzed with major revelations. From the arrest of Zhu Su, one of the co-founders of bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC), to the Web3 sector grappling with a staggering losses of $890 million due to hacks, this is your coverage of the latest happenings of the crypto market .
This article offers a concise overview of key crypto market developments that occurred during the week of September 25th to the 29th.
Three Arrows Capital Co-founder Su Zhu Arrested at Singapore Airport
Zhu Su, co-founder of the now-bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC), was arrested at Singapore’s Changi Airport. He attempted to depart the country.
Authorities have sentenced him to a four-month prison term. This is due to his non-compliance with a court order pertaining to the liquidation proceedings of 3AC. In the meantime, his co-founder, Kyle Davies, remains unaccounted for.
The fund, once overseen by prominent figures in the cryptocurrency sector, crumbled in 2022. This was following substantial losses incurred during the cryptocurrency market crash, specifically involving Luna and TerraUSD.
The recent development transpired subsequent to 3AC’s joint liquidator, Teneo, seeking and obtaining a committal order against Zhu. This action was taken due to his deliberate refusal to cooperate with the liquidators’ inquiries, a mandate emanating from a court order. Zhu was expected to provide an account of his actions in his capacity as a co-founder and former investment manager of 3AC.
Hong Kong and Macau Authorities Arrest Four More JPEX Crypto Scandal Suspects
Hong Kong and Macau authorities arrested four additional individuals on September 29th – Friday, described as being “relatively close to the core” of the JPEX cryptocurrency exchange scandal.
Two Hong Kong residents were apprehended in Macau, leading to the confiscation of HK$6.5 million (US $830,390) in cash and valuable assets, alongside the freezing of HK$8.2 million held within their casino accounts. Notably, one suspect was discovered attempting to destroy evidence through the use of paper shredders and bleach.
These recent arrests bring the total number of individuals in custody to 18, while the total amount seized stands at HK$24 million (approximately $3 million). The authorities are actively pursuing additional fugitives, as indicated in the report.
During a press briefing, Chung Wing-man, the assistant police commissioner, emphasized the significant scale of the syndicate, projecting an anticipated loss exceeding HK$1.5 billion.
On September 18, influencer Joseph Lam was arrested by Hong Kong authorities in response to a formal complaint against JPEX, which had been forwarded to the Hong Kong police by the China Securities Regulatory Commission. The complaint alleged fraudulent activities orchestrated by individuals associated with the exchange.
Gemini Clarifies $282M Withdrawal Before Genesis Bankruptcy, Dispelling Speculations
Cryptocurrency exchange Gemini addressed recent allegations on X (Twitter), disputing claims made in a New York Post article. The article had asserted that the exchange had clandestinely withdrawn $282 million prior to the collapse of Genesis, a crypto lender.
According to information from an undisclosed source, The New York Post had suggested that the Winklevoss Twins, who are the co-founders of Gemini, had removed their personal funds from the crypto lending platform.
In parallel, Bloomberg also covered the matter, reporting that Gemini had indeed withdrawn substantial sums from Genesis several months prior to the crypto lender’s declaration of bankruptcy. This information was attributed to two individuals with knowledge of the situation. Notably, Genesis had been serving as the lender for Gemini’s Earn program.
In response to these allegations, Gemini took to X to set the record straight. The exchange asserted that the $282 million withdrawn from Genesis in August 2022 represented funds belonging to Earn program users. Importantly, these funds did not originate from Gemini’s corporate accounts, nor were they associated with the personal assets of the exchange’s founders or their investment entity, Winklevoss Capital.
Gemini explained that the terms of the Earn Program afforded them the ability to establish a “liquidity reserve.” This reserve was designed to benefit Earn users by retaining a portion of the funds they had deposited into the program.
On August 9, 2022, amid market turbulence, Gemini executed a withdrawal of $282 million from Genesis, directing it toward the liquidity reserve.
Central Banks Successfully Test Cross-Border Trading Using CBDC and DeFi
The Bank for International Settlements (BIS) and the central banks of France, Singapore and Switzerland have conducted a successful cross-border trading test using wholesale central bank digital currencies (wCBDC).
In a collaborative effort known as Project Mariana, the practical application of wCBDCs for foreign exchange settlements was explored. This experiment delved into the mechanics of international wCBDC trading, utilizing hypothetical Euro, Singapore dollar, and Swiss franc wCBDCs among simulated financial institutions.
The project ambitiously employed a unified token standard on a public blockchain to enhance interoperability, ensuring the seamless exchange of wCBDCs across diverse local payment and settlement systems maintained by participating central banks.
This achievement marks a significant milestone as numerous countries, particularly in Europe and Asia, contemplate the issuance of wholesale CBDCs to streamline interbank transfers. In June, the Banque de France underscored the potential of wholesale CBDCs in enhancing cross-border payments.
Sui Mainnet Upgrade v1.10.1 Enhances zkLogin Verification
In its latest update, the Sui mainnet unveiled version V1.10.1, concurrently upgrading the Sui protocol to version 25. This advancement prioritizes the enhancement of the zkLogin verification function.
A pivotal aspect of this upgrade involves the application of a verification key, generated through a specialized ceremony. This key assumes a critical role in authenticating the proof within the zkLogin transaction, thereby ensuring heightened security and efficiency throughout the process.
The recent release introduces a new functionality that enables users to convert specific error responses, facilitating a more straightforward determination of the error’s nature. This improvement fosters greater clarity and expedites error resolution.
In an effort to bolster fault tolerance, issue #13699 introduces a new_leader_election_schedule flag. This move is designed to pave the way for the implementation of a reputation-based leader election algorithm, further solidifying the stability and reliability of the Sui Mainnet.
Additional noteworthy enhancements include a refined default output for a particular Sui client command (#13675). Furthermore, initial public support for Move 2024.alpha has been added. This update streamlines function definitions across entire packages, albeit with certain restrictions on external calls.
Buenos Aires to Launch Blockchain Protocol ‘QuarkID’, Built on zkSync Era
Argentine capital Buenos Aires is set to unveil QuarkID, a open-source digital identity protocol built on Ethereum’s zkSync Era, to transform citizen access to public services. The initiative is scheduled to commence in November, and marks a pioneering stride in Latin America’s digital identity landscape for secure, self-sovereign data control.
Under the innovative protocol, Buenos Aires residents will have the ability to download the QuarkID native wallet, facilitating easy access to essential personal documents, including birth and marriage certificates. This streamlined approach to documentation management aims to simplify citizens’ interactions with government services.
The collaborative effort behind QuarkID involves Extrimian, a on-chain digital identity solutions provider and Matter Labs, the visionary organization powering Ethereum’s layer-2 zkSync Era blockchain.
QuarkID aims to showcase the concept of self-sovereignty, to empower individuals with full control over their personal data. While the initial release will offer limited document types, Buenos Aires authorities have outlined plans for a phased introduction of additional official credentials.
The move builds upon collaborative efforts since 2022 by the Secretariat of Innovation and Digital Transformation in Buenos Aires, in partnership with tech entities such as Extrimian, IOV Labs, OScity, and Xcapit, alongside active engagement with the local community.
Binance Exits Russian Market, Sold to CommEX
Binance announced the sale of its entire Russian operations to CommEX, a move aimed at realigning the company’s operational strategies with its compliance policies.
Noah Perlman, Binance’s Chief Compliance Officer, conveyed the future challenges associated with operating in Russia in a blog post, highlighting the compliance-related hurdles faced by the company.
“As we look ahead, we recognize that maintaining operations in Russia is incongruent with Binance’s compliance strategy,” Perlman stated. “We maintain our confidence in the long-term growth of the global Web3 industry and will direct our efforts towards the 100+ other countries where we have a presence.”
The transition for existing Russian users is anticipated to occur gradually over the course of a year, with Binance and CommEX collaborating closely to facilitate the safe migration of user assets to CommEX.
Binance has reassured all Russian users that their assets will remain secure throughout this transitional period. Furthermore, the company will gradually phase out all of its exchange services and business operations in Russia in the upcoming months.
Mixin Offers $20 Million Bug Bounty for Return of Stolen Assets
In a bid to retrieve stolen assets, Hong Kong-based crypto business Mixin made a proposition to the unidentified hackers, offering a $20 million bug bounty if they return the pilfered assets.
After the breach, Mixin previously suspended deposit and withdrawal services and enlisted the assistance of Google and blockchain security company SlowMist for a thorough investigation.
The company remains hopeful, urging the attackers to return the stolen assets and claiming the majority of the lost assets belong to users of the platform.
In return, the company offered hackers $20 million as a reward. Mixin urged the hackers to get in touch at bug@mixin.one for more information about the bounty.
Blockchain research firm Chainalysis noted an increase in stolen assets from cryptocurrency firms, from $3.3 billion in 2021 to $3.8 billion in 2022. The Mixin theft adds to this growing tally
Web3 Security Incidents Led to $890 Million Losses in Q3 2023
In the third quarter of 2023, the Web3 sector grappled with a staggering total loss of $890 million. The revelation comes from a monitoring conducted by Beosin EagleEye, a subsidiary of the blockchain security audit firm Beosin.
According to the company’s new Q3 2023 Global Web3 Security report, the losses were a result of hacker attacks, phishing scams and project side Rug Pulls, underscoring the increasing vulnerability of Web3 ventures.
Among these incidents, 43 cyberattacks took place, causing a combined loss of around $540 million. Concurrently, phishing scams drained victims of approximately $66.15 million, while 81 Rug Pull incidents on various projects culminated in losses totaling roughly $280 million.
The comprehensive breakdown of losses in the Web3 sector during Q3 2023 is as follows:
- Hacker Attacks: A total of 43 hacker attacks led to staggering losses of approximately $540 million.
- Phishing Scams: The sector grappled with phishing scams that drained approximately $66.15 million.
- Rug Pull Incidents: A striking 81 project-related Rug Pull incidents resulted in cumulative losses of about $280 million.
Justin Sun’s HTX Hacked for 5,000 ETH, Assures Full Coverage of Losses
Cryptocurrency exchange HTX has revealed a security breach resulting in a loss of 5,000 ETH, valued at approximately $8 million. Justin Sun, associated with HTX, promptly addressed concerns by making the announcement.
Sun publicly disclosed the hacker’s addresses, highlighting the HTX team’s swift actions to prevent further potential losses following the incident. In an effort to recover the stolen funds, Sun announced a white hat reward of 5%, equating to approximately $400,000, to incentivize the hacker’s return of the assets.
Emphasizing HTX’s unwavering commitment to security and user trust, Sun underscored the relatively insignificant nature of the lost sum compared to the $3 billion in assets held by their users. He likened this loss to a mere two weeks’ revenue for the HTX platform.
Despite the security breach, all user assets remain secure, and the platform’s operations continue without interruption. HTX assured that they have fully covered the losses from the attack and resolved all related issues, thereby restoring normalcy to their platform’s operations.
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About The Author
Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
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Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
