| Take a look at the hits from today's Inside Cryptocurrency newsletter: - Defunct crypto lender BlockFi's official exit from bankruptcy,
- Mastercard's plans to partner with self-custody wallet providers,
- The deployment of the contracts of the Polygon network's new POL token on Ethereum, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | In a recent presentation, payment processing giant Mastercard revealed that it plans to partner with self-custody wallet manufacturers like MetaMask and Ledger in the near future to jointly issue a payment card dedicated to their products. The firm pointed out that such collaborations would help wallet providers increase their user number while creating loyalty and additional revenue streams. More: - The presentation also showed that the firm expects a joint card would allow holders to spend their crypto assets in a frictionless way.
- Also, the company stated that Mastercard would step in to help digital wallet firms address region-specific resource demands while introducing a card in a new jurisdiction.
- Mastercard is the second-largest payment processing company behind Visa.
- The firm has accelerated its plans toward the crypto industry over the last few years, partnering with many crypto-related firms, including Bitso, Gemini, Binance, Ripple, Consensys, Fireblocks, and Fluency, to make crypto mainstream.
Zoom Out: - Self-custody wallets, also known as non-custodial 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 centralized crypto exchange (CEX), to control users' private keys to keep their crypto assets under custody.
Q: Do you prefer to use a Mastercard-backed payment card linked to your self-custody crypto wallet? Join the conversation here. |     | |
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What the numbers say: A recent study from blockchain security auditor Hacken has shed light on cryptocurrency hacks in Q3 of the year, classifying them by type. The results show that rug pulls made up the majority of all crypto exploits during the last quarter, with a 65.1% rate. Hacken's report attributed the prevalence of rug pulls on the crypto market to the fact that it is easy to create such schemes. The firm also underlined that rug pulls are among the simplest crypto scam types to prevent. Relevance: Another recent report from Web3 security company Beosin EagleEye similarly revealed that rug pulls caused $282.9M of losses in crypto in Q3. The figure represented an over 400% increase from the previous quarter's loss amount of $55.5M. The study also pointed out that there was an overall dramatic surge in cybersecurity incidents targeting the crypto community during the last quarter. What it means: Rug pulls are a type of crypto scam where a project's team or founder abandons the project, suddenly disappearing and taking all the invested funds. Brands that should care: Some of the rug pulls causing the most losses in the crypto market include OneCoin, Thodex, Squid Game Token, and Mutant Ape Planet NFT projects. | | | |
| 3 | | The collapsed crypto lender BlockFi has formally exited bankruptcy, announcing that it would wind down its operations. Following the announcement, the firm started repaying its customers. More: - The company also pointed out that it would continue its efforts to recover assets it claimed from the collapsed crypto firms FTX and Three Arrows Capital (3AC).
- The bankrupt lender said success in the ongoing litigation related to its claims from other defunct firms could increase client recoveries.
- The court filings showed that customers with interest-bearing accounts would receive between 39.4% and 100% of the funds held in BlockFi.
- Clients with BlockFi Interest Accounts and Retail Loans will be refunded over the coming months, though their recovery amounts could change based on the outcome of the ongoing litigations.
- BlockFi has already made withdrawals available for almost all of its Wallet customers.
Zoom Out: - BlockFi filed for Chapter 11 bankruptcy protection in November last year due to the volatility in the crypto market and its exposure to the collapse of the crypto exchange FTX.
- Earlier in October, BlockFi CEO Zac Prince blamed FTX and its sister company, Alameda Research, for his company's collapse while testifying in court as part of the ongoing trial against FTX's former CEO, Sam Bankman-Fried (SBF).
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| 4 | | The team behind the popular Polygon blockchain has recently deployed the token contracts for its new token, POL, on the Ethereum network. The token will replace Polygon's existing native token, MATIC, permanently. More: - MATIC holders will have four years to migrate their holdings to POL.
- The token contract deployment came more than three months after the POL token was first announced as part of the network's transition to Polygon 2.0.
- At the time, the Polygon team said POL would serve as a single token for all Polygon-based networks.
- The token's users will be able to stake their POL holdings across compatible chains to help secure all the Polygon-related networks.
- The process will allow token holders to start earning rewards and transaction fees on each staked network as soon as they deposit their funds.
Zoom Out: - The token contracts are a type of smart contract involving the records and utilities powering a token, including the supply and the balances of the holders.
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| 5 | | Reports from local media have disclosed that Binance, the largest crypto exchange by trading volume, established a crypto exchange in Hong Kong dubbed HKVAEX in December 2022 to apply for a license in the region. The platform was set up as a separate entity, though the two companies share resources. More: - HKVAEX revealed that it is operated by its own team as an independent platform.
- The entity also pointed out that it is currently preparing to apply for a license to legally operate as a digital asset trading platform in Hong Kong.
- Hong Kong officially approved its long-awaited licensing regime for crypto exchanges in May to turn the region into a crypto hub, allowing retail investors to trade major tokens such as Bitcoin (BTC) and Ether (ETH) on licensed platforms.
- As part of the new regime, the region's Securities and Futures Commission (SFC) started accepting applications for digital asset trading platform licenses on June 1.
- Binance has not publicly shown any interest in obtaining a license in Hong Kong so far.
- However, in March, another report pointed out that the company was hiring officials for its upcoming operations in the region.
Zoom Out: - On the other hand, Binance had to intensify its legal compliance efforts over the last months since it faced increased scrutiny by regulators in various countries, including the U.S., Australia, France, Belgium, and Brazil.
- The company also recently had to withdraw from several markets in the West, such as Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 6 | | Privacy-focused crypto startup Nocturne Labs has recently announced that it raised $6M in seed funding in its latest investment round from several high-profile investors, including Ethereum co-founder Vitalik Buterin. The firm mainly aims to bring private accounts to the Ethereum blockchain network. More: - The fundraising round, co-led by Bain Capital Crypto and Polychain Capital, also saw participation from Bankless Ventures, Hack VC, and Robot Ventures in addition to Buterin.
- The round was closed in August, though it started raising funds in January this year.
- The U.S.-based startup builds a protocol that allows users to conduct transactions on Ethereum anonymously.
- The protocol is expected to also support Ethereum Layer-2 networks in the future.
- Nocturne Labs plans to launch the protocol on Ethereum in November.
- Currently, fewer than 10 people work at Nocturne Labs, but the startup aims to add more people to its headcount for the engineering, growth, and compliance functions after the protocol's launch.
Zoom Out: - On the other hand, privacy-focused crypto solutions, such as crypto mixers, have become a target of U.S. regulatory authorities over the past months since they make tracking financial transactions on blockchains harder.
- Most recently, the U.S. Department of the Treasury proposed a new rulemaking to label international crypto mixers as money-laundering hubs, citing Palestinian militant group Hamas' use of the crypto mixers along with other terrorist groups.
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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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