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| Hey Insider! Welcome to the week's first Inside Cryptocurrency newsletter! The week has kicked off with another phishing attack targeting a high-profile figure, resulting in nearly $1M of losses in crypto. Today's issue covers the details of this incident as well as several of the other biggest stories in the crypto market, including FTX reopening its claims portal for creditors, the second-largest German stock exchange's plans to offer crypto staking service, the liquidity shortage in the crypto exchange JPEX, 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
p/dogayurduneri | |
| 1 | | Bankrupt crypto exchange FTX has announced that it reopened its claims portal, returning the platform to full operation. The move came less than a month after the company temporarily froze some impacted user accounts in the portal following a cybersecurity incident targeting Kroll, a third-party agent managing creditor claims on behalf of bankrupt companies. More: - Earlier in August, an unauthorized third party gained access to files in Kroll's cloud-based systems.
- The incident caused the customer data of the claimants of FTX, BlockFi, and Genesis Global to be compromised.
- The leaked files included some claimants' personal information, such as names, addresses, email addresses, and balances.
- At the time, FTX said its internal systems were not affected by the hack, and client funds and crypto account passwords were safe.
- However, some FTX customers received phishing emails following the incident, suggesting their personal data began being misused.
- In the latest announcement, the company reiterated that freezing customer accounts was a precautionary and proactive measure, and it has implemented additional security measures on the claims portal.
- FTX customers now have time until Sept. 29 to recover their funds from the collapsed platform, submitting their claims against FTX and its affiliated companies, including Alameda Research, through the portal.
Zoom Out: - 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 the former CEO Sam Bankman-Fried (SBF) used customer funds in FTX to compensate for losses at the sister company Alameda Research.
- Most recently, the U.S. bankruptcy court approved FTX to sell its $3.4B of crypto assets to repay creditors claiming their funds back.
Q: Do you think there will be further consequences of the cyberattack targeting the personal data of FTX's claimants? Join the conversation here. |     | |
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What the numbers say: Dubai-headquartered crypto trading platform JPEX's native token, JPEX Coin (JPC), briefly decreased by almost 40% in value within the past 48 hours. The token's price retreated from a 48-hour peak of $0.032 to as low as $0.020 after a few ups and downs. The figure represents an over 20% drop for the past 24-hour period. It also accounts for a nearly 80% decline from JPC's all-time high of $0.099 in June this year. Relevance: The plummet in JPC's price accelerated after JPEX halted trading in some of its services. The platform said users would not be able to place new orders on the Earn Trading interface, hosting its wealth management products, as of Sept. 18. The firm also added that existing orders on the interface would continue until their maturity. The company started talks with some third-party market makers to resolve its liquidity shortage. The platform's liquidity issues and the decision to halt trading followed an investigation launched by Hong Kong's Securities and Futures Commission (SFC) against the exchange. The agency alleged JPEX of operating in the region without a license. The move marked the first warning issued by the regulator against an unlicensed entity. Hong Kong police also arrested influencer Joseph Lam Chok in connection with the JPEX probe, saying that it has received 83 complaints related to the exchange so far. Brands that should care: On the other hand, Hong Kong officially approved its long-awaited licensing regime for crypto exchanges in May in line with its vision to turn the region into a crypto hub. The move allowed retail investors to trade major tokens such as Bitcoin (BTC) and Ether (ETH) on licensed platforms. In August, the region also granted its first crypto licenses under the new regime to HashKey and OSL. Earlier this year, several other leading crypto exchanges, including OKX, Huobi, and Bitget, similarly revealed their plans to apply for a license in Hong Kong under the new licensing regime. | | | |
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| 3 | | The U.S.-based investment banking company Citigroup has launched a new token service dubbed Citi Token Service for corporate customers to speed up money transfers across borders. The new service will allow institutional clients to transform their deposits into digital tokens. More: - The deposit tokens will be able to be sent instantly anywhere in the world.
- Through the service, customers will be able to tokenize their deposits to make a claim against the bank before transferring them on the blockchain.
- The new offering will use a private blockchain network owned and managed directly by Citigroup.
- Clients will not have to set up a digital wallet for the service, and they will be able to access the offering through the bank's existing systems.
- The product will aim to solve the problems related to cross-border money transfers that can take days due to government involvement, differing work hours, bank holidays, manual procedures, and paperwork.
Zoom Out: - Earlier in September, JPMorgan, the largest U.S. bank by assets, also started working on a blockchain-based digital deposit token that could be used to send money to clients of other banks easily and instantly.
- The bank has already developed most of the token's infrastructure, though it does not plan to launch the token before the project is approved by the U.S. regulators.
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| 4 | | Stuttgart Stock Exchange, Germany's second-largest stock exchange, has announced that it would start offering a fully insured cryptocurrency staking service in 2024 through its crypto-focused arm, Boerse Stuttgart Digital. Global reinsurance company Munich Re has created a dedicated insurance product for the new offering. More: - Boerse Stuttgart Digital's managing director, Dr. Oliver Vins, said they observed an increasing interest from institutional investors in the staking sector.
- The move came nearly six months after one of the company's subsidiaries, Blocknox GmbH, obtained a license from BaFin, Germany's financial market regulator, to offer digital asset custody services.
- The staking service will allow the German stock exchange's clients to pledge their crypto holdings to the platform in order to earn interest.
- The new offering will also expand the platform's custody service to allow Boerse Stuttgart Digital to earn rewards on the customer's digital assets stored with it.
Zoom Out: - Deutsche Bank, Germany's largest bank with its $1.4T of assets under management (AUM), also recently announced that it would start offering crypto custody services to institutional clients in partnership with Swiss crypto firm Taurus.
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| 5 | | Billionaire Mark Cuban, who is the owner of the professional basketball team Dallas Mavericks, has experienced a cybersecurity incident, losing $870,000 in crypto from his MetaMask wallet over the weekend. The lost funds include some stablecoins pegged to the U.S. dollar (USD), staked Ether (sETH), SuperRare tokens (RARE), and Ethereum Name Service (ENS) domains. More: - Cuban was predicted to lose his tokens by clicking on a phishing link after he had kept the wallet inactive for months.
- The billionaire was able to save over $2.5M of Polygon (MATIC) tokens by logging into his wallet after he became aware of the attack.
- The businessman moved his MATIC tokens to an address on the crypto exchange Coinbase.
- Cuban said the phishing attack stemmed from a fake MetaMask wallet application he had downloaded.
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| 6 | | The National Bank of Kazakhstan (NBK), the country's central bank, has established a separate unit dubbed the National Payment Corporation (NPC) that would oversee the national payment system and the digital financial infrastructure. The entity has been reorganized from the Kazakhstan Center for Interbank Settlements. More: - The NPC will be mainly responsible for the country's payment system, including interbank clearing services, money transfers, and digital identification.
- The unit will also supervise the development and implementation of Kazakhstan's central bank digital currency (CBDC), or the digital tenge.
- The move came seven months after the NBK started developing a CBDC.
- The digital tenge is currently piloted in a controlled environment with real consumers and merchants.
- The project's principal partners include Binance, the largest crypto exchange by trading volume, which supports the pilot with its blockchain infrastructure, BNB Chain.
- The central bank expects to launch the CBDC to the public in 2025.
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- Ukraine's Economic Security Bureau (ESB) has started investigating unregulated local crypto exchanges for alleged tax evasion.
- The Hong Kong Monetary Authority (HKMA) has warned crypto firms that they should not use the term "bank" to describe themselves and their services in order to avoid misleading customers.
- The U.S. Securities and Exchange Commission (SEC) has requested a U.S. court to unseal or remove the redaction from the documents that had been sealed at its own request in its lawsuit against crypto exchange Binance.
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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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