Cryptospace Spotlight #55 (8 Jan 2023) - Bitcoin OG lost his signing key
Bitcoin OG and core developer lost all his Bitcoin, Nike’s NFT Unit COO was phished, and Banks concerned USDC stablecoin will become ‘backdoor CBDC’ with BlackRock’s help!
Security and Risk
2 Jan - Bitcoin OG and core developer lost all his Bitcoin
Luke Dashjr, a Bitcoin OG and core developer, claimed that his signing key was compromised on 31 Dec. He had lost almost all his Bitcoin i.e. 200+ BTC (est. $3.5 million). [more]
Luke did not share additional information despite questions from the community.
Meanwhile, a few others appear to suggest it may not have been a hack at all, suggesting that someone had stumbled across the seed phrase somehow, or it was part of an unfortunate “boating accident” ahead of tax season.
A Twitter user pointed out that if a top Bitcoin developer can’t keep his wallet secure, then mass adoption is a pipe dream. [more]
4 Jan - GMX whale hacked
GMX whale lost ~$3.5M worth of digital assets (82,519 GMX) after the attacker took control of the wallet. The attacker later exchanged 82,519 GMX tokens for 2,627 ETH, and cross-chained the assets to the Ethereum network using Hop Protocol and Across Protocol. [more]
4 Jan - Nike’s NFT Unit COO phished
Nike RTFKT COO Nikhil Gopalani said on Jan. 3 that he lost all his NFTs (worth $170K) to a phishing attack. The attacker used the phone number that was the same as his Apple ID in the attack. [more] [more-Nikhil]
Web3 Security Summary in 2022
Web3 bug bounty provider Immunefi released new research noting that $3,948,856,037 in crypto funds was lost across the Web3 ecosystem to hacks and scams in 2022. [more][more-report]
Among the $3,948,856,037 lost across the web3 ecosystem in
2022. It was noted that $3,773,906,837 was lost to hacks in 2022 across 134 specific incidents and $174,949,200 was lost to fraud in 2022 across 34 specific incidents. Most of that sum was lost by four specific projects: Ronin Network, BNB Chain, Wormhole, and FTXThe report also noted the two most targeted blockchains last year were BNB Chain and Ethereum, with 65 and 49 unique security incidents each.
While crypto fraud across the space remains common, the overall losses decreased 51.2% from the 2021 total of $8,088,338,239.
In total, $204,157,000 of stolen funds have been recovered across 12 specific
instances. This number represents just 5.2% of the total losses in 2022
Other Crypto and Tech Reads
Hong Kong - Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Special Administrative Region, proposed to turn Hong Kong digital dollar (e-HKD) into a stablecoin. He indicated that it would provide benefits for the adoption of new technologies like Web3. [more]
Singapore - An independent arbitrator in Singapore has ordered embattled crypto mining software firm Poolin to return 88 bitcoins (BTC), worth about $1.5 million at recent prices, to a customer. [more]
In Sep 2022, Poolin halted withdrawals and unilaterally coverted these BTC into I-owe-you (IOU) tokens for its customers. Poolin also ensured its customers that their tokens were safe despite the move.
Italy - Italian Parliament approved 26% crypto-gains tax in 2023 budget. [more]
Banks concerned USDC stablecoin will become ‘backdoor CBDC’ with BlackRock’s help. [more]
Since November, BlackRock has been managing a large portion of the reserve assets of the USDC stablecoin on behalf of the stablecoin issuer, Circle. BlackRock created a bespoke money market fund, the Circle Reserve Fund, which invests in U.S. short-dated Treasuries.
Lawsuits against cryptocurrency exchanges, digital wallet providers, and mobile service companies following cyberattacks reached a new high in 2022, as hacking victims increasingly test unproven legal claims to recoup their crypto losses. At least 50 individual lawsuits and proposed class actions have been brought since 2017 by victims against entities they blame for failing to protect their crypto assets from hackers. Fewer than 10 suits were being filed annually before the total jumped to 17 in 2021 and rose to 20 in 2022, the data show. [more]
More crypto companies downsized. Huobi preparing to layoff 20% of its staff [more], Silvergate cuts 40% of its staff [more] and NFT marketplace SuperRare announced a 30% staff cut [more].
FTX event
In minutes from its 2022 Federal Open Market Committee Meeting, released Wednesday, the central bank acknowledged that FTX’s failure has severely impacted the digital asset ecosystem. It also noted that the FTX’s collateral damage has not impacted the broader financial system. [more]
FTX’s former compliance chief, Daniel Friedberg, has reportedly cooperated with United States’ prosecutors investigating FTX collapse. [more]
SBF's lawyers filed court documents to protect the former FTX CEO's 56 million Robinhood shares. [more]