| Here is a quick look at the hits from today's Inside Cryptocurrency newsletter: - A $25B growth in the former Binance CEO's fortune despite legal challenges he faced this year,
- Nigeria's decision to lift a crypto trading ban on banks and financial institutions serving digital asset firms,
- Kyber Network's staff reduction by 50%, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | The wealth of the crypto exchange Binance's co-founder and former CEO, Changpeng Zhao (CZ), has grown by almost $25B in 2023 despite the legal challenges the famous crypto entrepreneur faced this year. CZ's fortune is currently valued at more than $37B, most of which is derived from his controlling stake in Binance. More: - The $25B growth has made CZ the crypto entrepreneur with the highest increase in his wealth.
- Zhao's current fortune is significantly below its peak of nearly $97B at the beginning of 2022 and this year's high of $50.4B.
- CZ had to step down from the CEO position at Binance in November after pleading guilty to violating anti-money laundering requirements and U.S. sanctions by allowing terrorist groups to make crypto transactions on Binance.
- As part of the plea deal, the former CEO was ordered to pay a $50M penalty and prohibited from engaging in Binance's management for three years.
- At the time, Binance, the largest crypto exchange by trading volume, also agreed to pay a $4.3B fine to settle U.S. authorities' money laundering, unlicensed money-transmitting business operations, and sanction violations charges.
- Zhao currently faces up to 10 years in prison, though he is expected to get no more than 18 months under a settlement agreement.
- The former CEO's sentencing is scheduled for Feb. 23.
Zoom Out: - Rival crypto exchange Coinbase's CEO Brian Armstrong has also seen a $5.8B increase in his wealth to $7.2B this year, while the co-founder Fred Ehrsam's fortune has surged by $1.8B to nearly $2.5B in 2023.
- Similarly, Gemini's twin co-founders, Tyler and Cameron Winklevoss, have each experienced a $1.4B growth to $2.7B in their wealth.
- The U.S.-based crypto conglomerate Digital Currency Group's (DCG) founder, Barry Silbert, has managed to grow his fortune by $1.5B to $2B.
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| 2 | | 
What the numbers say: A recent report from the crypto-focused media outlet Decrypt has revealed the five biggest crypto hacks and exploits in 2023 by the amount of losses. The cyber attack targeting the Mixin network ranked first on the list, with $200M of funds stolen. On the ranking, the Mixin network hack was followed by attacks targeting the decentralized finance (DeFi) protocol Euler Finance, crypto exchange Poloniex, crypto wallet solution Atomic, and the DeFi platform Curve Finance, respectively. The top five exploits resulted in $683M of losses in total. Relevance: Data compiled by TRM Labs also recently pointed out that hackers stole around $1.85B in crypto this year. The figure represents a 53% decrease from the $4B of crypto lost in hacks and exploits in 2022. However, the number of attacks did not see a major change in 2023 compared to the last year, remaining steady at around 160. TRM Labs pointed out that infrastructure attacks, in which hackers steal funds by gaining access to the underlying infrastructure, became the most damaging type of hack in 2023. The losses in these attacks accounted for almost 60% of the total amount stolen. Brands that should care: Several other cyber attacks resulting in millions of dollars of losses in crypto this year include the hacks targeting KyberSwap, Stake, HTX, CoinEx, and Multichain. | | | |
| 3 | | The team behind the decentralized finance (DeFi) protocol KyberSwap and the Kyber Network has reduced its headcount by 50% to continue operating its business. The move came nearly a month after KyberSwap was hacked for $48.8M through a smart contract exploit. More: - The firm will create a voluntary database to help departing employees look for new job opportunities in the Web3 industry.
- Kyber Network CEO Victor Tran said the DeFi firm would also temporarily halt some of its initiatives, including the KyberAI project, to slow down its capital expenditure.
- However, Tran underlined that their core business would not be affected by the situation.
- Besides, Kyber Network launched a program to compensate for the losses of impacted users from the hack, with expectations to start distributing the funds on Feb. 1.
- Impacted users will need to register for the reimbursement program from Jan. 11 to 23.
- The program will see the impacted customers receiving only 60% of all the stolen funds.
Zoom Out: - KyberSwap is a DeFi protocol operating on the Kyber Network, a blockchain-based liquidity hub that allows the exchange of tokens across different blockchains without an intermediary or a third party.
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| 4 | | Bankrupt Japanese crypto exchange Mt. Gox has reportedly started repaying some of its creditors nearly 10 years after experiencing a cybersecurity incident that brought the platform to insolvency. Some users on Reddit pointed out that they received their Bitcoin (BTC) and Bitcoin Cash (BCH) balances back in Japanese yen (JPY) through PayPal. More: - Users who chose to receive their crypto balances back in cash to their bank accounts have yet to see any repayment.
- Some creditors reported their repayment is lacking, while some said they are paid twice due to a system issue.
- In September, the firm postponed the deadline for repayments to creditors by another 12 months, from Oct. 31, 2023, to Oct. 31, 2024.
- However, Mt. Gox's trustee, Nobuaki Kobayashi, sent an email to creditors in November, announcing their plans to start the first repayments in cash by the end of the year.
Zoom Out: - Mt. Gox was one of the first crypto exchanges and facilitated more than 70% of all trades within the blockchain ecosystem before going bankrupt.
- A cybersecurity incident caused the exchange to lose 850,000 Bitcoin (BTC) in 2014, impacting 24,000 creditors.
- Following the hack, the platform did not manage to avoid becoming insolvent, though it recovered around 20% of the stolen tokens.
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| 5 | | The Central Bank of Nigeria (CBN) has recently lifted a ban on crypto trading in the country. The ban was enacted in February 2021 due to the risks related to money laundering and terrorism financing, blocking banks and financial institutions from dealing with or facilitating crypto asset transactions for digital asset firms. More: - At the time, the bank clarified that the ban did not prohibit crypto trading totally in the country.
- In a circular, the central bank said current global trends show that they need to regulate the activities of virtual asset service providers and crypto activities.
- The new guidelines explain how banks and financial institutions should provide designated settlement accounts and services for crypto transactions and act as channels for firms engaging in crypto trade.
- The guidelines also require virtual asset service providers to receive a license from Nigeria's Securities and Exchange Commission (SEC) to operate a crypto-related business.
- However, banks are still prohibited from trading, holding, or transacting cryptocurrencies directly.
Zoom Out: - A central bank digital currency (CBDC) dubbed eNaira is also currently in use in Nigeria, though the country's government has been cracking down on digital assets since 2021.
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| 6 | | South Korea's Ministry of Personnel Management has announced that it will require high-ranking government officials to publicly disclose their crypto holdings as of 2024 to increase transparency. The information about officials' private digital asset holdings will be provided on the government's Public Official Ethics System. More: - The move will see South Korean citizens having access to at least 5,800 officials' declarations on their crypto holdings in 2024.
- The government portal will manage the registration of crypto holdings and review disclosures of public officials.
- The five major local crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, will also launch a separate information system by June 2024 to simplify the registration of information on crypto holdings.
- South Korea has increased its crackdown on public officials' crypto holdings since May, when Democratic Party member Kim Nam-kuk turned out to be holding at least $4.5M of Wemix tokens (WEMIX).
- At the time, Kim Nam-kuk came under fire over public concerns about potential conflicts of interest, insider information, and money laundering.
Zoom Out: - South Korea's Financial Services Commission (FSC), the country's financial market regulator, also previously announced that it would mandate domestic companies to report their virtual assets in their financial statements under the Virtual Asset User Protection Act.
- The Act was passed by the National Assembly in June this year to better protect crypto investors.
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- Business intelligence firm MicroStrategy, the largest corporate Bitcoin (BTC) holder, has purchased an additional 14,620 BTC for around $615.7M, pushing its Bitcoin reserve to 189,150.
- The U.S. Securities and Exchange Commission (SEC) has admitted that it made inaccurate statements in its lawsuit against Utah-based crypto company Digital Licensing Inc., which operates as DEBT Box.
- The vice president of the 279-year-old auction house Sotheby's, Michael Bouhanna, has disclosed that the company sold $35M of digital art in 2023, defining the year as one of the most exciting years for digital arts.
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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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