All Been Crypto — Week 31 Dec 2021

Thank you for being a loyal reader this year, 2021 will probably be remembered as the year when crypto went truly mainstream, when we passed the point of no return…and YOU were part of it. Yes there will be cycles and volatility and even major corrections but the industry has reached a level of sophistication that none of that poses an existential threat anymore. Very much looking forward to 2022 and riding the journey together with you!

Bat Tai Chi — btc21@mail.com

HEADLINES:

Hacks, Scams and the Good?

I know they say its the season of giving but pls don’t be like some crypto users who decided to give to Scammers. There was a 3.2ml rug pull at MetaDao, classic Tornado Cashed the 800 ETH and left the ‘project’ even with their website down. Another cheap one was using fake MetaMask Tokens. A hacker managed to get the Approved Tick at an exchange called DEXTools (name a bit misleading as its not really a DEX) and made away with ~1.8ml ETH. The tricky part here is that the hack was not on a protocol level but just the API and so users always verify the contract on etherscan pls. Even a Verified Tick is not good enough. Finally we had a ‘real’ hack too on the Polygon Network. This had happened already on 3rd Dec but they came out this week with the final details. A group of White Hats found a vulnerability in the network’s proof-of-stake genesis contract and notified Immunefi — which hosts Polygon’s bug bounty program. They paid a total of about $3.46 million as bounty to the White Hats who helped discover the bug. But, a malicious hacker was able to use the exploit to steal 801,601 MATIC before the network upgrade took effect. Kudos to the bounty program and them being open and revealing this with all the information though.

Binance Canada Flip/Flop and HQ updates

Wednesday Binance said they got approvals and then yesterday Ontario Securities Commission released a statement saying they are not registered. Lost in translation or are regulators becoming more aggressive at pushing back on Binances more creative interpretation of regulatory framework? Who knows, we know though is that they are still out shopping for a HQ and have recently made some commitments in Dubai and this week also announced they got approvals from Bahrain. France is also in the cards and they tried sweeten a deal with a 100ml Euro initiative to support ecosystem there. Jurisdiction shopping at its finest.

Open Sea plays KYC (again)

Excuse the pun — Just as a reminder that we are dealing with a centralized entity that is anything but permissionless this weeks headline about the stolen assets from Todd Kramer’s NFT collection. He used a hot walled (NO NO) and tweeted that he lost his collection through a phishing scam that gained access to his hot wallet after he clicked on a malicious link (C’MON). Then he just went on Twitter to ask OpenSea for help and of course they heeded to the call and the assets were frozen meaning you cant trade them on OpenSea now. Curious to see if the pop up on other exchanges. Two important lessons here 1st ALWAYS use cold storage for your assets (!!!) second what’s the value of an NFT if you are the ultimate owner but cant transact in it, then we are back to a Web2.0. These are NON-Fungible Tokens, some are even calling it ART (tongue in cheek here). They are unique and so why not let the market decide if they want to buy a ‘stolen’ NFT? Maybe there is a different floor price, maybe there are no buyers? Maybe the community can decide that this APE is BAD because he’s been stolen…but for gods sake we don’t need another institution regulating transfer of ownership because we have enough of that already. I would love to see volumes shift to a true permissionless DEX NFT platform, lets hope for 2022

QUOTES:

Public-key cryptography can be used either to authenticate or encrypt. The “crypto” in cryptocurrency” refers to authentication. Blockchains ensure every transaction is legitimate and unique. Hiding blockchain transactions is quite difficult — a mostly unsolved problem today

Chris Dixon — A16z Partner

I like crypto

Joe Tsai — Alibaba Co-founder

The crypto industry claims that crypto is the path to financial inclusion, But bitcoin ownership is even more concentrated within the top 1% than dollars. We need real solutions to make the financial system work for everyone, not just the wealthy

Elizabeth Warren — US Senator

At Visa, the scale and scope of our work in crypto has grown dramatically. The number of people cross-functionally at Visa working on crypto in some capacity is now in the hundreds — up from just a handful of employees. And we’ve more than doubled our number of partnerships with crypto platforms in the last 18 months — up to 60 partnerships today.

Cuy Sheffield, Head of Crypto at Visa