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| Hey Insider! Welcome to the Inside Cryptocurrency newsletter that brings the day's biggest stories in the digital asset market to your inbox from Monday to Friday every week. The week's first issue covers the most prominent stories hitting the headlines over the weekend and today, including Coinbase's decision to disable some accounts in India, the hack targeting Ethereum co-founder's X account, Fireblocks' new non-custodial wallet solution for enterprises, and more. Enjoy your reading, and if you find this newsletter useful, please do not forget to share it with your friends and colleagues! Doğa
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| 1 | | Ethereum co-founder Vitalik Buterin's official account on X, formerly known as Twitter, has been hacked by malevolent actors. The incident caused over $691,000 of funds to be stolen from users. More: - The hacker shared a malicious link from Buterin's X account, announcing the launch of a fake commemorative NFT series from blockchain software provider ConsenSys.
- The link urged visitors to connect their wallets to mint an NFT from the collection that would be allegedly free for the next 24 hours.
- The victims connecting their crypto wallets lost access to their assets and all their funds, which led to an over $691,000 theft combined.
- An Ethereum developer even lost one of his NFTs from the CryptoPunk NFT collection, whose floor price currently stands at around $75,000.
- The number of impacted users is still unknown.
Zoom Out: - Following the incident, Changpeng Zhao (CZ), the CEO of the largest crypto exchange, Binance, commented on the hack, saying that X's account security measures are not designed well compared to traditional financial accounts.
- CZ also recommended the Elon Musk-owned platform integrate additional security features, such as two-factor authentication and login IDs different from the username or email.
Q: Do you believe X should integrate better security measures to prevent hacks, especially for high-profile users like Vitalik Buterin and Changpeng Zhao? Join the conversation here. |     | |
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What the numbers say: Market intelligence firm Amberdata has recently published a new report surveying 60 industry professionals from asset managers, hedge funds, and investment firms in the U.S., the U.K., and Europe. The results have revealed the firms' adoption rate of a dedicated senior role for digital assets. The report has pointed out that 24% of the organizations assigned a senior executive dedicated to digital asset strategy, while another 13% have plans to do so over the next 12 months. However, a significant 63% said their organizations did not appoint a senior role for digital assets. The study also showed that nearly half of the study participants included digital assets in their firm's portfolio. Relevance: On the other hand, investment firms have increasingly started gravitating to AI and more traditional sectors due to a prolonged winter in the crypto industry over the past year. The decline in investor interest in the digital asset market also caused venture capital (VC) funding to Web3 startups to decrease by 76% in Q2 compared to the same period last year. Web3 startups managed to raise just over $1.8B in 322 deals during the second three-month period of 2023. The figure also means that crypto and blockchain startups experienced a decline in funding for five consecutive quarters. Brands that should care: Last year's high-profile collapses from the crypto-related firms, such as the previously third-largest crypto exchange FTX and the multi-billion dollar Terra ecosystem, also contributed to VC firms withdrawing their plans to invest in the crypto market. FTX's bankruptcy developing around the claims of misuse of customer funds especially caused reputational and financial damage to the firms with investment in the exchange. In May, Singaporean government-owned investment firm Temasek Holdings cut salaries for its executives who recommended investing in FTX after an internal review. U.S.-based VC firm Sequoia Capital also recently parted ways with two leading crypto-focused investors and downsized its cryptocurrency fund to $200M from the previously allocated $585M. | | | |
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| 3 | | Coinbase, the largest U.S. crypto exchange, has announced that it would disable some accounts in India that no longer meet its updated standards as of Sept. 25. The impacted users were informed through an email and advised to withdraw funds in their Coinbase accounts, sending them to other crypto service providers by the specified deadline. More: - The affected accounts will not be able to access Coinbase's retail services in India after Sept. 25, though access to the platform's cloud-based services will remain available for those users.
- Coinbase will allow the impacted users to update their information at a later date.
- A Coinbase spokesperson said they would remain committed to the Indian market, exploring ways of strengthening their presence in India and maintaining a strong tech hub in the country.
- The platform launched its services in India in April last year, outlining ambitious plans for hiring new employees in the country and investments in some local crypto exchanges, such as CoinDCX and CoinSwitch.
- However, local regulatory pressures forced Coinbase to restrict some payment services in India within a few days after launch, ultimately leaving users only the option to use existing crypto assets in their accounts through peer-to-peer (P2P) trading.
- The firm also halted accepting new sign-ups to its exchange in India back in June, urging potential users to download its live products like Coinbase Wallet.
Zoom Out: - On the other hand, crypto exchanges have experienced a decline in trading volumes by more than 90% in India since the government started imposing high taxes, including a 30% tax on crypto profits and a 1% tax on crypto transactions, in July 2022.
- The market downturn forced some local crypto exchanges, including CoinDCX and CoinSwitch, to reduce their headcount, causing a decrease in profits.
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| 4 | | The U.S.-based tech giant Apple has paid $5M to author Michael Lewis to secure the rights to his upcoming book on the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF). The book will focus on a year of SBF's life and cover the process involving his rise, downfall, arrest in the Bahamas, and extradition to the U.S. More: - The rights initially saw a massive interest, leading to a bidding war that resulted in Apple winning.
- Lewis' book, titled Going Infinite: The Rise and Fall of a New Tycoon, will be released on Oct. 3, coinciding with the same day SBF's criminal trial starts.
- The famous author first announced the publication date at the Bitcoin 2023 conference in Miami in May.
- SBF was once regarded as the golden boy of crypto and a rising star for the industry before the collapse of FTX, making him one of the most prominent figures of recent times, especially in finance.
- However, FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group.
- The downfall followed the claims that SBF used customer funds in FTX to compensate for losses at the sister company Alameda Research.
- On Oct. 3, the 31-year-old former executive will appear in court to defend himself against a bunch of charges, including money laundering and misappropriation of customer funds, to which he pleaded not guilty.
Zoom Out: - On the other hand, some media outlets defined the $5M buy-out as an unprecedented amount paid for an unpublished book.
- Other previous remarkable amounts include $6M for The Da Vinci Code and $2M for the first four movies of the Harry Potter series.
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| 5 | | Fireblocks, a U.S.-based blockchain security service provider for moving, storing, or issuing digital assets, has launched a new non-custodial wallet service for enterprises. The service will allow Fireblock's end users working with its partners to entirely control their own crypto assets without the need for a third-party service provider. More: - Financial technology (FinTech) firms, Web3 companies, and corporations will be able to create a non-custodial wallet through the new service for their customers.
- One of the key shares of the wallet will remain with the user in their web browser or mobile app.
- The other key share will be held by Fireblocks or the service provider and used only for security to recover the wallet in case of an incident, such as the loss of the device with access to the wallet or a cyber attack.
- Fireblocks currently secures more than 130 million wallets for the customers of its partners, including BNY Mellon, BNP Paribas, Flipkart, eToro, Revolut, NuBank, and Wisdom Tree.
Zoom Out: - Last year's high-profile collapses developing around the claims of misuse of customer funds caused a strong distrust in the centralized crypto exchanges (CEX) among investors, directing many users to non-custodial solutions.
- Non-custodial wallets, also known as self-custody solutions, allow users to manage their private keys, providing complete control of their assets and reducing personal financial risks from a potential collapse.
- Custodial wallets, however, require a third party, such as a CEX, to control users' private keys to keep their crypto assets under custody.
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| 6 | | A crypto user has recently paid around $500,000 in transaction fees to move just $200 of Bitcoin (BTC), accounting for 0.074 BTC, by mistake. The move marked the most expensive transaction fee paid in U.S. dollars (USD) for a single Bitcoin transaction. More: - The transfer was widely attributed to a crypto exchange or payment processor with buggy software.
- The on-chain data showed that the wallet making the payment was opened in June and has made more than 120,000 transactions so far.
- The fee was paid to F2Pool, a Bitcoin mining pool that mined the block containing the transaction.
- F2Pool co-founder Chun Wang said they would put 20 Bitcoin paid for the transaction on hold for three days, giving time for the user to contact them to claim the fund.
- If the fee remains unclaimed after three days, the fund will go to the firm's Bitcoin miner pool.
- There have been only 24 Bitcoin transactions with fees over $20,000 and 233 with fees over $10,000 to date.
Zoom Out: - The average Bitcoin transaction fee is currently lower than $3.
- Users can pay any amount they wish for transaction fees, though the lower fees could result in miners not accepting the transaction, or higher ones could pave the way for immediate processing.
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- Lawyers for the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), have requested a pre-trial release once more, citing that poor internet connection in the jail hinders his defense preparation.
- Animoca Brands, a Hong Kong-based venture capital (VC) firm focused on metaverse and gaming, has raised $20M for its new metaverse project, Mocaverse.
- Blockchain firm Ripple has acquired Nevada-based Fortress Trust, a licensed trust company focused on crypto and Web3.
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Term of the Day 51% attack: A 51% attack occurs when an entity takes control of more than 50% of a blockchain network's hash rate. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE CRYPTOCURRENCY LEADERBOARD (ALL-TIME) |
 | 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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