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| Hey Insider! Happy Friday, and welcome to the week's last Inside Cryptocurrency newsletter! The week is closing with a data leak targeting the claimants of FTX and BlockFi. Today's issue covers the details of this cybersecurity incident as well as several of the other most prominent stories from the crypto market, including payment processing giants' decision to end their card partnerships with Binance, Worldcoin whistleblower's warnings, crypto exchange BitOasis' new funding, and more. Enjoy your reading, and if you find this newsletter useful, please share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Payment processing giants Mastercard and Visa have decided to withdraw from their card partnerships with Binance, the largest crypto exchange by trading volume, amid an increased crackdown by the regulators worldwide on the platform. The announcement came a day after Binance said it would stop offering its crypto debit card services in Latin America and the Middle East as of Sept. 21. More: - As part of the decision, Visa stopped issuing new co-branded cards with Binance in Europe last month.
- The move will also see Mastercard terminating its existing card partnership with Binance permanently in September.
- Binance's existing crypto debit cards issued by Mastercard will be terminated by Sept. 21, but the customers will be able to convert the holdings in their Binance wallets during a wind-down period, and Binance will continue to process claimed refunds and disputes in the regions until Dec. 20.
- Mastercard said its crypto card programs with other companies would not be affected by the decision.
- The exchange's crypto-supported debit cards allowed customers to make payments for goods and services in shops and online stores using their crypto assets.
- Binance first announced its plans for the Binance Card project in 2020.
- The exchange also recently shut down its fiat-to-crypto payment platform, Binance Connect, which allowed merchants to accept payments in crypto through Visa and Mastercard infrastructure.
Zoom Out: - The latest decision followed increased scrutiny by the regulators Binance faced in various countries, including the U.S., Australia, France, and Belgium.
- Over the past few months, the platform also had to withdraw from several markets in the West, including Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
- The increased scrutiny paved the way for Binance to lose support from its local banking partners worldwide, such as Checkout.com, Paysafe, Westpac, and Zepto.
Q: Do you expect more partners to cut ties with Binance after Mastercard and Visa due to the heightened scrutiny by regulators on the company? Join the conversation here. |     | |
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What the numbers say: The data compiled by AltIndex has shown that the market cap of the top five crypto mining companies declined by $2.8B following the recent price drops in leading cryptocurrencies like Bitcoin (BTC) and Ether (ETH). The combined market cap of the five firms dropped from $9.53B in July to $6.73B within less than a month, with a 30% decrease. Hut 8 Mining saw the highest decline by percentage, losing 36% of its market cap. However, the highest loss in terms of monetary value was experienced by Riot Blockchain, with a $1.08B decline. The $2.8B loss in the combined market cap was attributed to the recent sell-off trend that saw more than $1B of positions liquidated in the centralized crypto exchanges (CEX) within 24 hours, causing a plummet in prices of BTC and ETH. Relevance: Meanwhile, Bitcoin mining difficulty recently reached a new all-time high, hitting 55.62 trillion hashes. The new record means that it has never been more difficult and time-consuming to mine the leading cryptocurrency for crypto miners. The figure mainly refers to how difficult it is to mine a Bitcoin block. When the difficulty hits higher levels, miners require more hash rates, or computing power, to validate transactions and create new coins. This increase forces many miners to leave the network, raising the revenue for each miner since they receive a wider share of the cake. Since the beginning of the year, crypto miners experienced a 43% increase in revenue. Brands that should care: On the other hand, the increase in Bitcoin mining difficulty is expected to impact Bitcoin's decentralization negatively, eliminating medium- and small-scale miners from the market. It is also anticipated to allow large-scale miners and mining pools, such as Foundry USA, AntPool, F2Pool, and Binance Pool, to get a chance to increase their market share since they are capable of offering higher computing power as the smaller ones are forced to leave the network. | | | |
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| 3 | | Customer data of the claimants of the bankrupt crypto exchange FTX and the bankrupt crypto lender BlockFi has been compromised after a cybersecurity incident targeting Kroll, a third-party agent managing creditor claims on behalf of bankrupt companies. Both FTX and BlockFi confirmed that their internal systems were not affected by the incident, and client funds and crypto account passwords are safe. More: - According to an email, an unauthorized third party gained control of a mobile phone number belonging to a Kroll employee, accessing files in the company's cloud-based systems.
- The firm said these files include some claimants' personal information, such as names, addresses, email addresses, and balances.
- Kroll secured the impacted employee account and launched an investigation after becoming aware of the incident.
- The company warned claimants that the scammers could send phishing emails by using the compromised information and impersonating bankrupt companies.
- FTX stated that it was closely monitoring the situation, and Kroll continues to inform impacted individuals about measures they can take to protect themselves.
- Kroll also caters to the bankrupt crypto lender Genesis Global as well as various other companies outside the crypto industry.
Zoom Out: - FTX and BlockFi filed for Chapter 11 bankruptcy in November 2022.
- Both companies are currently undergoing their legal bankruptcy proceedings and trying to outline plans to repay their creditors.
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| 4 | | Middle East-focused crypto exchange BitOasis has announced that it secured new funding in a recent fundraising round led by India-based crypto exchange CoinDCX. The amount of funding and the firm's valuation have yet to be disclosed. More: - The company said the investors include Wamda Capital and Jump Capital.
- BitOasis also raised $30M in funding in 2021.
- The new funding came amid turmoil for BitOasis as the company faced a review and enforcement action by the Virtual Assets Regulatory Authority (VARA) in Dubai, where it is based, for failing to meet mandated conditions last month.
- The agency temporarily suspended BitOasis' license in the region several months after granting Dubai's first minimum viable product (MVP) operational license to the exchange.
- The company also had to reduce its headcount by 7% in June due to a broader crypto market downturn, declining its employee number to around 70.
Zoom Out: - BitOasis, launched in 2016, is regarded as the largest online digital asset platform in the Middle East and North Africa (MENA) region.
- On the other hand, CoinDCX became India's first crypto-focused unicorn in 2021 after raising around $90M from investors led by B Capital Group at a valuation of $1.1B.
- Indian crypto exchange most recently hit the headlines with its decision to cut 12% of its headcount due to a revenue drop and a broader market downturn.
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| 5 | | Nadir Hajarabi, a whistleblower who said he had worked at OpenAI CEO Sam Altman's crypto project Worldcoin, has announced that he cut all ties with the firm in a recent YouTube video. Hajarabi advised the potential users to evaluate Worldcoin's terms and conditions with greater scrutiny. More: - The whistleblower said he decided to leave the company after witnessing several concerning factors related to the release of the project's native token, WLD, and its whitepaper.
- Hajarabi also defined Worldcoin's efforts as a horrendous execution that deserves whatever will come next.
- In the video, Hajarabi stated that he had been doubtful about Worldcoin's questionable practices since the beginning of his duty period at the company.
- He further underlined that the release of the WLD token's whitepaper strengthened his concerns, supporting his decision to leave the firm.
- The Worldcoin whistleblower added that he could not share specific details related to the red flags since his legal counsel advised otherwise.
- Worldcoin has neither confirmed nor denied that Hajarabi is a former employee.
- The project scans the WLD token holders' irises through biometric imaging devices dubbed the Orb and verifies them in person to prove their identity, humanness, and uniqueness securely and privately.
- The project previously reiterated several times that it does not store the data once the Orbs generate a unique iris code, underlining that it complies with all laws and regulations governing personal data processing in the markets where it is available.
Zoom Out: - Worldcoin officially launched its long-awaited WLD token in July, accelerating its popularity worldwide massively.
- Since its launch, the project has come under scrutiny by data watchdogs in many countries, including the U.K., France, Germany, Kenya, and Argentina.
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| 6 | | Crypto lender Ledn has started offering a new solution for crypto investors to become permanent residents in the Cayman Islands by purchasing real estate through their digital assets. The company has partnered with crypto real estate broker Parallel for the new program. More: - The initiative will allow crypto investors to use their Bitcoin (BTC) assets as collateral to take out loans to acquire real estate in the islands without selling their crypto funds or converting them to fiat currency.
- Once customers take out loans from Ledn through their Bitcoin funds, they will be able to use those loans to purchase properties via Parallel.
- The loans' annual interest rate will start from 12.9%.
- The practice will also pave the way for securing a Golden Visa that offers a chance to receive citizenship in the British Overseas Territory.
- The Cayman Islands gives permanent residency through Golden Visa to people who invested a minimum of $2.4M in real estate.
- Those meeting further requirements also have a chance to receive citizenship in the islands.
Zoom Out: - Both Ledn and Parallel are registered with the Cayman Islands Monetary Authority (CIMA), the region's financial market regulator, as a virtual asset service provider.
- The 22 countries globally, including Portugal, Spain, Italy, and the U.S., use citizenship-by-investment programs.
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- Crypto exchange HashKey has announced that it would start offering its crypto trading services to retail customers in Hong Kong for Bitcoin (BTC) and Ether (ETH) after receiving the region's first crypto license under the new regime.
- Stablecoin issuer Num Finance has launched a new stablecoin pegged to the Colombian peso on the Polygon network.
- Venture capital (VC) firm Vessel Capital has dedicated a $55M fund to invest in Web3 infrastructure and applications.
- Bankrupt crypto custodian Prime Trust has revealed that it lost $6M of client funds after investing in the now-collapsed Terraform Labs' stablecoin, TerraUSD.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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