Cryptospace Spotlight 2022 #3 (16 Jan 2022)
N.K hackers stole nearly USD400mil in 2021, Cryptographer pointed out NFTs flaw and IMF staff warned countries on systemic risk!
Asia Focus
Singapore seeks to ‘balance’ economic innovation while shielding public from the metaverse. [more-1] [more-2-pq]
Singapore is “closely studying” the risk non-fungible tokens, decentralized finance and the financial events inside the metaverse pose to its citizens, according to the country’s Minister for Communications
Similar to the physical world, the Government will seek to balance between promoting economic vitality, preserving social stability and protecting public security in the digital domain. International coordination of regulatory approaches to the Metaverse and associated technologies will also be crucial, given the borderless nature of these technologies.
North Korean hackers stole nearly USD400 million in crypto last year. The nine-figure sum represents a nearly USD100 million increase over the previous year's thefts by North Korean hacker groups, and it brings their total haul over the past five years to USD1.5 billion in cryptocurrency alone. [more]
Thailand’s revenue department weighs tax measures aimed at crypto trading. [more]
The Hong Kong Monetary Authority (HKMA) is seeking feedback from the public on how it should regulate cryptocurrencies and stablecoins. [more]
HKMA’s concerns mainly center on “payments-related stablecoins,” which it deems a risk that if left unchecked has the potential to severely undermine public confidence in its ability to monitor and regulate.
UAE regulators pave way for crypto and blockchain adoption, says legal expert. [more]
The country has been consistently enacting its vision of becoming a blockchain capital by providing frameworks to guide crypto businesses on how to operate in accordance with the laws.
Technology & Industry
Cryptographer pointed to a critical flaw in NFTs and other “distributed” tech in a devastating critique. He provided a few other examples in his post to illustrate the point that blockchain services were actually centralizing the flow of data. In other words, the very first applications of Web3 technology are already gravitating toward structures that underpinned the current web. [more]
Zero-knowledge scaling tech Plonky goes live on Polygon. Zero-knowledge algorithms ensure everything is correctly computed on layer two and return the succinct proof to Ethereum without sending the entire data. The network's developers allege that it is 100x faster than existing alternatives. [more]
Amid Turkey’s skyrocketing inflation rate (36%), Turkish citizens are pouring their capital into bitcoin and tether to offset risks. Cryptocurrency trading volumes carried out using the Turkish lira reached an average of $1.8 billion in the last quarter of 2021, a sizable increase over previous quarters.Turks went for crypto. [more]
Israeli Defense Minister Benny Gantz signed an order to seize more than $800,000 on cryptocurrency on its way to Hamas, but a spokesperson for the movement said that the Israeli announcement was exaggerated. Three years ago, Hamas resorted to digital currency in a bid to overcome the financial blockade imposed by Israel, with the cooperation of most countries in the world. [more]
Security
8 Jan - Liechtenstein regulated crypto exchange, LCX AG, suffered a security breach that has seen one of its hot wallets compromised. The hack saw $6.8M worth of Ethereum based token transferred to a hacker address. LCX AG suspended deposits and withdrawals. [more]
14 Jan - CityDAO, the experiment into decentralized land ownership, has fallen victim to a $95,000 hack by fraudsters on gaming instant messaging site Discord. [more]
Hackers are breaking into Amazon cloud accounts to mine cryptocurrency, leaving the owners stuck with huge bills for computing power [more]
Regulatory-at-large
During the session with lawmakers explaining the central bank's reaction to rising inflation, Fed Chair Powell indicated that CBDC and Stablecoins can coexist, and the highly anticipated Fed report on cryptocurrencies will come in the next few weeks. [more]
IMF staff call for global framework to guide national regulation of crypto. [more]
Economists at the International Monetary Fund (IMF) say that “crypto assets are no longer on the fringe of the financial system.” In addition, they “could soon pose risks to financial stability especially in countries with widespread crypto adoption.”
Chat-over-coffee
The world’s first ‘NFT restaurant’ is a members only club that has raised $14 million. The seafood-inspired Flyfish Club will be a member’s only dining club, and membership can only be verified by using a non-fungible token, or NFT. [more]
14 Jan - Russia’s main security agency said on Friday that at the request of the United States government it had dismantled REvil, one of the most aggressive ransomware crime groups attacking Western targets, and arrested some of its members. [more]