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Vitalik vs/ who? ⚔️
What's up in Hong Kong? Vitalik Buterin, not a big fan of Hong Kong's mixed stance on crypto. Lazarus score? $240 million. Nouns is forking and Justin Sun is printing TUSD.
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Crypto and politics just had a rendezvous.
When Ethereum's co-founder, Vitalik Buterin, expressed uncertainty about Hong Kong's future stance on cryptocurrencies, local politician Johnny Ng didn't waste any time extending a warm invitation.
Here's the lowdown on this international crypto tête-à-tête
At the recent Web3 Transition Summit in Singapore, Buterin made his point.
“I don't understand Hong Kong well. I understand even less the complicated interaction between Hong Kong and the mainland lately.”
The Ethereum co-founder further pondered on the stability of Hong Kong's friendliness towards the crypto sector, suggesting that while things might be good now, who's to say about the future?
Hong Kong's Response
Johnny Ng, donning his Legislative Council Member cap, has a message for Buterin. And no, it wasn't just to send a tweet or two; he had a genuine message for Buterin.
He said: Hong Kong's policies “will not change overnight.” Ng sincerely invited Buterin to Hong Kong to get a firsthand understanding of the region's stance on crypto.
No surprises here. Ng assured Buterin that Hong Kong's crypto policies wouldn't be pulling any sudden shifts. All strategies and regulations have been chiseled out through proper social consensus and procedural thoroughness.
He emphasised the rigour that goes into policy formation in Hong Kong, detailing the stages of policy writing, public consultation, and intense deliberations across various committees.
Why All the Buzz?
Hong Kong isn't just any other city when it comes to crypto. For two consecutive years, it's held onto its crown as the most "crypto-ready" spot, beating even the U.S.! To add some icing to the cake, two exchanges, HashKey and OSL, recently got the green light to offer crypto services to the Hong Kong masses. And let's not forget, the cryptocurrency exchange OKX is on the verge of getting its own license in the region.
Despite Hong Kong's positive overtures, the broader context of mainland China's stringent restrictions on cryptocurrency looms large. This casts doubts over whether Hong Kong's openness might eventually influence China to relax its stance on crypto and open its vast market to blockchain innovations.
Nevertheless, the recent crackdown by Hong Kong’s SFC on JPEX, a cryptocurrency exchange with questionable licensing claims, indicates that the region's newfound openness towards the sector doesn't mean a dilution in its regulatory oversight.
The Reign of Hong Kong
Top of the World: Hong Kong has been pronounced the world's most crypto-prepared location, retaining this title for the second consecutive year.
Scoring High: The city-state recorded a crypto readiness score (CRS) of an impressive 8.36.
The Crucial Factors: The study used parameters like crypto ATMs' presence, businesses' crypto adoption, accessibility, and the legal landscape surrounding cryptocurrencies.
US vs. Switzerland
US Takes a Dip: Falling by 6.5% from 7.7 in 2022 to 7.25 in 2023, the US has slipped to the third position in the global crypto-readiness rankings.
Switzerland Soars: With a notable increase of over 9% in its CRS score (from 7.5 in 2022 to 8.18 in 2023), Switzerland nabbed the second spot.
Other Global Contenders
Slovenia, Canada, Australia: These nations carved a place for themselves in the top 10 crypto-ready countries in 2023.
Crypto Hotspots: Estonia, Singapore, and Switzerland emerged as bustling centres for crypto and blockchain firms.
However, earlier this week, Hong Kong’s Chainalysis crypto adoption ranking fell to 47th from 46th in 2022.
Hong Kong Monetary Authority (HKMA) has sounded the alarm on crypto businesses that project themselves using banking lingo.
The core message? Don't be fooled by the terminology.
The Central Issue
The HKMA's recent press release has pinpointed a concerning trend: Crypto enterprises that market themselves as 'banks' or use banking-related terminology. The authority highlights that these terms could mislead the public into believing that these firms are sanctioned banks within Hong Kong's precincts.
Here are some terms that could be a red alert
Digital Asset Bank
Crypto Asset Bank
And if they assert to provide banking services or accounts? The HKMA's stance is unequivocal: They might be crossing the legal line. Beyond the mere use of the term "bank," even offering deposit services without the necessary permissions is a no-go zone, per the region’s banking regulations.
CZ of Binance
"Brian Shroder is taking a deserved break.”
Binance.US has been hitting the headlines recently, but not necessarily for reasons they'd hoped for. Brian Shroder, the CEO, is stepping down, and they're saying goodbye to a chunk of their team. Is this a simple shuffle, or are the storm clouds gathering?
Shroder’s Time Out
First up, Brian Shroder is hanging up his Binance.US boots. According to the main man at Binance, Changpeng Zhao, Brian's just gearing up for some well-deserved R&R.
In CZ's words, “"Brian Shroder is taking a deserved break after accomplishing what he set out to do when he joined two years ago."
Under Shroder’s watch, Binance.US kicked some serious goals – they raised capital, jazzed up their products, and grabbed a tasty slice of the market pie. But let’s be real, the crypto game isn’t all rainbows and unicorns right now. The vibe has shifted, with regulators suddenly playing hard to get.
Enter The New Guy
So, who's up next? Step forward, Norman Reed. This guy’s been around the block, with stints at the SEC, New York Fed, Ripple, and DTCC. CZ thinks Norman’s the dude to steer the Binance.US ship through these choppy waters. Here's hoping he's got a good compass!
Let’s Talk Numbers
Whisper has it that Binance.US has had to let go of a big chunk of its peeps. And here's a not-so-fun fact: their trading volume isn’t exactly hitting the high notes lately. August saw a not-so-impressive $290.4 million compared to a whopping $17.6 billion back in March.
TTD Numbers 🔢
North Korea's notorious hacking squad, Lazarus Group have been on a serious stealing spree. The score? A cool $240 million in crypto in just 104 days.
Blockchain surveillance firm, Elliptic painted quite the picture of Lazarus' latest antics.
This elite hacking crew has been tied to five big-time crypto heists in recent months. The cherry on top? The massive hack of CoinEx, a global crypto exchange, that parted with $54 million earlier this week.
Elliptic dropped another bombshell. They’ve tracked some of the CoinEx loot to an address previously associated with Lazarus. This same address was used to clean out funds from the Drake-backed crypto casino, Stake.com (yup, that was Lazarus too). Stake's loss? $41 million.
ZachXBT tweeted about Lazarus accidentally leaving digital breadcrumbs connecting the CoinEx hack to the Stake job.
Post-theft, they funnelled the stolen funds to Ethereum using a trusted bridge. From there, the loot gets sent to a wallet that's all but got Lazarus' name written on it. A lot of this crypto-cash hailed from the Tron and Polygon blockchains.
Elliptic's analysts also spotted Lazarus mixing their new stash with addresses from the Stake hack. Oh, and they've been named in the $100 million Atomic wallet heist in June.
If Hollywood's taught us anything, it’s that hackers are all about epic code battles and neon grids.
They're more likely to simply ask you for your password.
Enter social engineering.
Here's their playbook
Phishing: You get a random email from “your bank” saying you've been locked out. You click the link. Boom! They've got you.
Baiting: That job offer from a “top company” looks good, doesn't it? Except that innocent-looking doc they sent? Yep, it's packed with malware.
They know we're curious, we're hopeful, and sometimes, we're just plain greedy.
Your Anti-Hack Arsenal
Go Analog with Hardware Wallets: Keep your long-term crypto in hardware wallets. Why? They're offline, so no online threat can touch 'em.
Double Trouble with 2FA: Enable Two-Factor Authentication on all your accounts.
Trust No Link: Seriously, be that person. The one who's super-paranoid about every email and every link. Keep a separate "just-for-fun" account for dabbling in new apps or airdrops.
TTD Nouns 🕶️
The Ethereum-based NFT collective Nouns recently experienced a significant split in its community.
The Nouns NFT collective on Ethereum witnessed a division within its community following a proposed fork.
Holders of 472 out of 846 Nouns NFTs (almost 56%) participated in the fork and collectively withdrew over $27 million in ETH from the project's treasury.
DAO and Treasury Details
DAO stands for a decentralised autonomous organisation, a digital group with tokenised membership and mutual objectives.
As a result of the fork, each NFT holder who participated will receive a replacement NFT for the new DAO, while their original NFTs will go back to the old DAO's treasury.
The new DAO allows holders to "ragequit", where they can take their share of the treasury (equivalent to approximately 35.5 ETH or $57,850 per NFT) and give up their profile picture.
The Nouns DAO had invested heavily in various projects to promote the Nouns brand. This included ventures like a parade float, vinyl toys, esports teams, and even a Super Bowl commercial.
However, despite these investments, the market value of Nouns NFTs has seen a significant drop. From a high of $267,000 in December 2021, the current lowest sale price is about $57,740.
The Process and Results
The ability to fork and reclaim a portion of the treasury was enabled by a Nouns protocol upgrade. If at least 20% of token holders support the fork, it will be executed.
Despite the fork, the original Nouns DAO still has almost $21.7 million worth of ETH. The remaining members can continue to vote on proposals and support the Nouns brand.
TTD WTF 😳
Billionaire trader and HTX board member, Justin Sun printed $815 million of the lesser-known stablecoin, TUSD, in a flash of 15 minutes.
A rain of TUSD started to pour at precisely 11:45 am ET.
The last mint of this coin onto the Tron blockchain happened a week ago. Then, suddenly, abracadabra, $815 million in TUSD appeared across ten transactions. Each mint happened to a brand-new address, which quickly funneled the funds to the Huobi 2 hot wallet.
These newly minted TUSDs swiftly moved from the Huobi 2 address to an address under Sun's close watch. After a quick pit stop, the funds journeyed to a contract named "minterproxy." From there, Minterproxy sent out $865 million in TUSD, which was promptly burned.
The TUSD's fiery demise oddly coincided with the birth of stUSDT. A whopping $865 million stUSDT popped up in Sun's pockets, which he gracefully deposited into the Tron-based lending platform, JustLend.
stUSDT's Pot of Gold
stUSDT is like USDT, but with a bit of sparkle. It promises a 4.2% yield, allegedly sourced from real-world assets, like "high-grade short-term government bonds." But before you get too excited, remember: stUSDT's parent company, Tether, says, "Uh, we don't know them!"
TTD Surfer 🏄
Google is reportedly testing its advanced AI model, Gemini, which has impressive multimodal capabilities.
Coinbase earned $1 million from a hack on the DeFi platform Curve, but has not reimbursed the victims.
Prosecutors are criticising Sam Bankman-Fried for proposing time-consuming and intrusive questions during jury selection.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.