Flagship Crypto Exchanges Team Up With Legacy Giants |
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| Two partnerships among some of the biggest names in the crypto and legacy worlds were announced last week, as Visa teamed up with FTX and Google partnered with Coinbase.
Visa <> FTX Debit Cards
Payment giant Visa, who is no stranger to crypto with more than 70 partnerships, is expanding the range of its FTX debit card, which was launched nine months ago in the U.S.
The card, which links directly to a user’s FTX account, will now be available in over 40 countries, with a focus on Latin America, Asia, and Europe. Crypto has seen its most daily use in developing countries, so a crypto debit card is a natural fit for those areas mentioned above.
The move is also beneficial for Visa. The crypto wave is coming, regardless of whether traditional finance companies like it. Visa is wise to ride the wave instead of trying to swim against it.
Ultimately, this is an exciting step forward toward the mass adoption of crypto.
Google Cloud <> Coinbase
Coinbase has been on fire with partnerships lately, and they just added another one.
Starting next year, select customers can pay for Google Cloud services using crypto. To facilitate this, Google has partnered with Coinbase. Google is also exploring using Coinbase Prime, Coinbase’s institutional trading platform.
In return, Coinbase is moving some of its data from Amazon Web Services over to Google Cloud.
Although the exact details of the deal remain cloudy, investors responded extremely positively to the news. Coinbase shares jumped 8% after the announcement, a welcome sight for a stock down 70% for the year.
With partnerships like Blackrock and Google, Coinbase’s stock might not be down for much longer.
As for Google, it wasn't too long ago (2018) when we witnessed the company cracking down on crypto-related advertising. The company literally never used to allow crypto ads on its network. Now, its allowing people to use crypto to purchase its services. Ohhh, how the tides have turned. 😉 |
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Other Crypto Exchanges Falter |
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| Although it was an excellent week for Coinbase and FTX, three other crypto exchanges were not as lucky.
1.) Crypto•com’s $6M Blunder
Everyone knows Excel isn’t the most fun thing in the world. We’ve all made mistakes using it, some of which definitely made you want to pull your hair out.
None of those mistakes, however, compare to what happened with Crypto•com.
It turns out that a Crypto•com employee put the wrong numbers into a spreadsheet, which doesn’t sound all that devastating until you find out that those wrong numbers led to a user receiving $6.6 million instead of $64.
The unlikely millionaire believed she had won a contest and that the money was rightfully hers. She then did what any reasonable person would have done and spent it on luxury homes, art, and furniture.
Crypto•com didn’t even notice that they had made a mistake until seven months later, and by that point, the money was long gone. Fast forward through some legal fights, and the unlucky millionaire is now in jail, her assets have been frozen, and Crypto•com has recovered about half the money.
2.) U.S. Treasury Fines Bittrex
On Tuesday, the U.S. Treasury Department slapped a hefty bill on the crypto exchange Bittrex.
The fine is a record $29 million and is for the facilitation of $263 million in sanctioned transactions between 2014 and 2017. Basically, Bittrex was accepting transactions from individuals in sanctioned areas like Syria and Crimea. This is a transgression that has landed fellow exchanges BitGo and BitPay in trouble before but has never resulted in a fine of this magnitude.
For a crypto exchange that is already only doing a measly $15 million in daily trading volume, this fine is an absolute killer.
3.) Huobi Sells to Justin Sun
The man responsible for 10% of crypto’s total value locked (TVL) is adding to his portfolio.
Justin Sun, the founder of the blockchain Tron, is reportedly the core investor of Hong-Kong based investment firm About Firm, which just purchased Hong-Kong based crypto exchange Huobi.
Huobi has been bleeding money ever since it was forced out of China following Beijing’s crypto ban, ultimately leading to Huobi laying off 30% of its workforce in June.
If anybody can turn Huobi around, it’s Justin Sun. The mogul is infamous for shady behavior and being willing to do anything and everything to “succeed.” He also has seemingly deep ties with the Chinese government. Maybe he’ll be the one to get Huobi back into that crucial Chinese market. It seems unlikely with the current state of the Chinese government, but knowing Justin Sun, you can’t count it out.
Even if Sun can’t turn Huobi around, he has good reasons for wanting to get involved. Almost all of Tron’s TVL is from the Terra-like algorithmic stablecoin USDD. Sun has talked about pairing all of Huobi’s cryptocurrencies with USDD. In other words, you are about to see a lot more USDD liquidity, which will help USDD keep its peg and, thus, for Tron and Sun’s wallets to keep growing.
We have no idea if His Excellency Justin Sun can save Huobi. What we do know, however, is that when Justin Sun is involved, there’s always more to the story than meets the eye. |
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Features
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🔜 Advanced Analytics & Charts (Coming Soon) |
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BNB Chain & Mango Markets Hacked For 9 Figures? |
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| It’s been a tough week for crypto safety, as BNB Chain and Mango Markets were both hacked for 9 figures.
Let’s dive into what happened and what it means going forward.
BNB Chain
First up, we have BNB Chain – the layer-1 blockchain backed by crypto exchange kingpin, Binance. The blockchain was hacked last week for $586 million, with the attacker eventually escaping with $127 million.
Although this is definitely not good news, the reaction by Binance is what really has people concerned.
What Happened?
On October 6th, BNB Chain tweeted that they were temporarily pausing the chain because of “irregular activity.” As we now know, this irregular activity turned out to be the third-largest crypto hack of all time.
The hack is very well-explained by Paradigm security researcher @samczun, which you can check out here, but basically, the hacker was able to trick the BNB bridge into minting them 2 million BNB tokens.
Once they acquired the BNB tokens, the hacker tried to sneak out by using the loot as collateral to borrow stablecoins from the lending platform Venus Protocol. Unfortunately (for them), they could only make out with $127 million before the chain was paused, freezing the rest of the funds until a governance vote decides what to do with them.
A Decentralized Blockchain?
The pausing of the chain has not come without controversy.
As Binance puts it, “decentralized blockchains are not designed to be stopped.” If that is the case, then what does that make BNB Chain? It only has 26 validators, who are now proven willing to stop the chain on short notice. Is a blockchain with 26 validators truly decentralized?
Ultimately, this is a question that BNB Chain will need to definitively settle sooner rather than later. Decentralized finance deserves actual decentralized blockchains, not just decentralized in name only.
Another Bridge Hack
Besides the extremely important question of decentralization, the BNB hack also once again brings into question the safety of bridges.
The leaderboard of the largest crypto hacks is littered with bridges, which really makes one wonder if bridges will ultimately be a part of crypto. If crypto is ever to be widely adopted, it has to be at least as safe as the legacy financial system. Unfortunately, even the most ardent crypto supporters will not say bridges are safe right now.
Without safe bridges, the AppChain future that many envision would be impossible. Instead, it is likely that crypto would be held on one or two dominant blockchains. In other words, a bridge-less future is bullish for Ethereum and Solana and bearish for Cosmos and Polkadot.
Hopefully, for those of you who hold Cosmos (ATOM) or Polkadot (DOT), bridge designers will eventually figure out how to create truly safe bridges.
Mango Markets
This week’s second hack belongs to Solana's flagship trading protocol, Mango Markets. The protocol was hacked on Wednesday for $115 million, using a method that was forecasted to the team to a T seven months ago.
What Happened?
Mango is a trading protocol that allows users to post collateral to obtain leverage. The hacker was able to manipulate this to their advantage. Joshua Lim breaks it down in this Twitter thread, but basically, the hacker manipulated the price of MNGO to take out a $115 million loan, draining all of Mango’s liquidity and leaving the protocol with $115 million in bad debt.
As a result of the hack, 4,000 shorts on Mango were liquidated, Solana’s total value locked is down by 25%, and the price of MNGO is down 31%.
The Proposal
As if hacking Mango wasn’t bad enough, the hacker is now taking it upon himself to mock “decentralized” governance.
The hacker has proposed a governance vote in which the hacked funds are returned in exchange for the $70 million in the Mango treasury and a promise to not pursue criminal charges. The kicker? The hacker has by far the most MNGO tokens, which he used to vote “yes”.
It doesn’t look like a quorum will be reached, but still, not the best look for “decentralized” governance.
Unanswered Questions
The hack itself is done, but the story is not. There is still a range of questions to be answered in the coming days: - The hacker funded his account from FTX. Could FTX have had a hand in the attack? Even if there are no FTX ties, who is this mysterious and well-funded market manipulator?
- Back in March, the Mango team was warned of the possibility of an attack like this. Why didn’t they take it more seriously?
- If the governance vote passes, how binding would the promise not to pursue criminal charges be? Is a DAO vote as good as a contract? If they do honor it, then other hackers might be inspired to undertake similar attacks. However, if they don’t, the legitimacy of DAO governance would take a major hit. It’s a lose-lose situation for Mango, and we definitely don’t envy their position.
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