Coin360 Daily Dispatch | Crypto Market Updates & Highlights | May 24, 2023
Crypto Market Update
Written by Van
Table of Contents:
Cryptocurrency Payments and Darknet Trade
- Cryptocurrency Payments Fuel Darknet Fentanyl Trade, Reveals Research
- Market Performance and Financial News
- Bitcoin Falls as UK Inflation Figures Disappoint
- Multichain Token Price Plummets Amid Arrest Rumors
- Attacks on Token Protocols and Crypto Projects Decline in Q1 2023
Legal and Regulatory Updates
- Tornado Cash Developer to Challenge Money Laundering Charges
- IOSCO Recommends Treating Cryptocurrencies Like Traditional Financial Assets
- Japan Implements Stricter Anti-Money Laundering Measures for Cryptocurrency
- Coinbase Responds to SEC's Lawsuit with Strong Criticism
- DF Fintoch Allegedly Scams Investors Out of $32 Million
- Unciphered Discovers Vulnerability in Trezor T Hardware Wallet
Developments in Crypto Platforms and Exchanges
- Binance Denies Allegations of Customer Fund Commingling
- Aave Considers Implementing Version 3 on Coinbase-Supported Base
- Ava Labs Launches AvaCloud, a Web3 Launchpad for Blockchain Ecosystems
- Coinbase's Layer 2 Solution Base Nears Full Decentralization
- 0x's Matcha DEX Introduces "Matcha Auto" Transaction Mode
Cryptocurrency Projects and Innovations
- Synthetix Founder Proposes Governance Initiatives for Community Participation
- Ethereum Deposit Contract Surpasses $40 Billion
- Hunting Hill Launches Digital Asset Affiliate with Crypto 25 Fund
- ARPA Network's Token Price Soars Ahead of Randcast Launch
Insights and Commentary
- Vitalik Buterin's Comment Sparks Speculation on Solana
Cryptocurrency Payments Fuel Darknet Fentanyl Trade, Reveals Research
New research from Elliptic and Chainalysis reveals that $27 million to $37.8 million worth of cryptocurrency payments were made to wallets attached to darknet merchants selling fentanyl and its precursors. The majority of transactions used USDT or bitcoin and came from China, while India is also identified as a growing supplier. This data has helped enforcement track and interdict the flow of funds in the fentanyl trade. Fentanyl overdoses are now the leading cause of death for those aged 18-45 in the United States.
Bitcoin Falls as UK Inflation Figures Disappoint
Bitcoin and other cryptocurrencies fell due to poor UK inflation figures, with Bitcoin dropping below $27,000 during Asian trading hours. In the past 24 hours, Bitcoin lost 4%, reversing all gains from earlier this week. Cryptocurrency prices were also trading lower as global equities dropped due to fears of a possible default amid debt ceiling negotiations in the US. Nevertheless, Bitcoin has held up better than most assets as investors view it as the best high-beta hedge against a "no-deal" scenario.
Multichain Token Price Plummets Amid Arrest Rumors
Multichain's token price fell 26% to $5.21 after users reported that multi-chain funds had not arrived due to a backend node upgrade taking longer than expected. Rumors that the team had been arrested by Chinese police with $1.5 billion of contract funds under control also fueled the selloff. Multichain has surpassed $1.59 billion in total value locked and raised $60 million in a seed round led by Binance Labs.
Attacks on Token Protocols and Crypto Projects Decline in Q1 2023
Attacks on token protocols and crypto projects fell 70% YoY in Q1 2023 as hackers found it harder to exploit the digital currency sector. The stolen amount so far this year is less than in any quarter in 2022, according to a report by TRM Labs, which also highlighted that the average hack size fell to $10.5 million from $30 million in Q1 2022. Improved cybersecurity and regulation may have contributed to the decline, but TRM Labs warned that the trend could be temporary.
Tornado Cash Developer to Challenge Money Laundering Charges
Tornado Cash developer Alexey Pertsev will cross-examine Chainalysis as he seeks to clear his name of money laundering charges, according to a Dutch court ruling. The privacy protocol was sanctioned by the US Treasury’s Office of Foreign Assets Control (OFAC) last year after being used by North Korean hackers to obscure the source of funds. The case has sparked protests from online rights activists. Further hearings are scheduled for September, with the case expected to continue into 2024.
IOSCO Recommends Treating Cryptocurrencies Like Traditional Financial Assets
The International Organization of Securities Commissions (IOSCO) has that cryptocurrencies should be treated similarly to traditional financial assets and regulated as such, contrary to UK politicians who have called for cryptocurrency trading to be regulated like high-risk industries such as gambling. IOSCO's recommendations include the need for consistent global regulation, the tackling of cryptocurrencies within existing frameworks where possible, and the development of new frameworks if current systems are insufficient.
Japan Implements Stricter Anti-Money Laundering Measures for Cryptocurrency
Japan has announced stricter anti-money laundering measures to track cryptocurrency transactions from June 1. The revised legislation will include the “Travel Rule,” which requires financial institutions processing a crypto transfer greater than $3,000 to pass on customer information to the recipient exchange or institution, including the names and addresses of the sender and recipient, and account information. The move aims to bring Japan's legal framework in line with global cryptocurrency regulations.
Coinbase Responds to SEC's Lawsuit with Strong Criticism
Coinbase has responded to the SEC's criticism of its lawsuit, stating that the regulator was "talking out of both sides of its mouth". The lawsuit seeks a specific response from the SEC regarding new digital asset rules, which the regulator has yet to give. Coinbase argues that the SEC has no intention of engaging in such a rulemaking in the foreseeable future.
DF Fintoch Allegedly Scams Investors Out of $32 Million
DF Fintoch, a lesser-known cryptocurrency project, has allegedly scammed investors out of $32 million. The project, which promised a 1% daily return on investment, claimed affiliation with Morgan Stanley and had a CEO named Bob Lambert, who was actually a picture of actor Mike Provenzano. Multiple investors claim they cannot withdraw their funds from the project, and data shows user deposits were sent from Binance Smart Chain to Ethereum and Tron. The Monetary Authority of Singapore has put the project's website on its investor alert list.
Unciphered Discovers Vulnerability in Trezor T Hardware Wallet
Cybersecurity firm Unciphered claims to have found an "unpatchable hardware vulnerability" with hardware wallet Trezor T, which can allow it to hack into the device's seed phrase and pin. The company has previously hacked EthereumWallet and recovered locked-up crypto, and said it supports every wallet in the market. Trezor said its team didn't have enough details to respond fully, but added that the hack looked like an "RDP downgrade attack."
Binance Denies Allegations of Customer Fund Commingling
Binance denies allegations made by Reuters that it commingled customer funds with its own revenue in 2020 and 2021. The report claimed that Binance frequently commingled billions of dollars in accounts it held at the now-defunct Silvergate Bank. Binance's Chief Strategy Officer, Patrick Hillmann, has dismissed the report on Twitter and stated that "user and corporate funds are kept on entirely separate ledgers."
Aave Considers Implementing Version 3 on Coinbase-Supported Base
Aave is considering implementing its version 3 on Base, a Layer 2 blockchain supported by Coinbase. The proposal covers suggested risk parameters for assets on Base and is currently in the initial feedback stage. If approved, Aave could access a large user base and significant revenue streams. Base is in the testnet phase, with plans for a mainnet launch later in the year.
Ava Labs Launches AvaCloud, a Web3 Launchpad for Blockchain Ecosystems
Ava Labs is launching AvaCloud, a Web3 launchpad that helps businesses build no-code, fully managed blockchain ecosystems. The product has four main components: an automated blockchain builder, managed validators, comprehensive data tools and chain interoperability. With these new, users can quickly create a free testnet, launch onto mainnet and continue to add on functionality as they expand over time. According to Ava Labs, the new tool will create greater revenue opportunities and "sets the stage for mass adoption-ready cloud-based infrastructure in blockchain."
Coinbase's Layer 2 Solution Base Nears Full Decentralization
Coinbase's layer 2 solution, Base, is incubated internally, with plans to become fully decentralized. To launch, it must meet specific criteria, including a proven track record of stability on its testnet. The platform is built on Optimism's OP development stack, and one goal it has already met is instituting the Regolith hardfork. Coinbase has not shared a timeline for the mainnet launch.
0x's Matcha DEX Introduces "Matcha Auto" Transaction Mode
0x's Matcha DEX aggregator has released a new transaction mode, "Matcha Auto", which doubles the chances of transactions being included in the next block and reduces the risk of failed trades. The platform's liquidity sources have risen 47%, while the number of indexed tokens has soared from 11,000 to 3.7 million. In the past 30 days, Matcha had almost 17,000 users, 60,310 trades, and a total volume of nearly $529 million.
Synthetix Founder Proposes Governance Initiatives for Community Participation
Synthetix founder Kane Warwick has proposed 12 governance initiatives, including a 3:1 split of SNX tokens, quarterly bonuses for contributors, and allocation of SNX for trading incentives. The proposals aim to increase participation from the community and broaden Synthetix's capabilities. The Treasury Council will vote to determine which proposals will progress.
Ethereum Deposit Contract Surpasses $40 Billion
Ethereum's deposit contract balance has surpassed $40 billion following the Shanghai upgrade, with users depositing over 4.4 million ETH since April 12. However, an influx of new validators waiting for activation has balanced the withdrawal rush, with 64,000 validators queuing to participate in Ethereum staking. The surge of new validators has driven the active validator count to nearly 584,000, with an internal protocol parameter set to rise to allow for the daily activation of an extra 225 validators.
Hunting Hill Launches Digital Asset Affiliate with Crypto 25 Fund
Hunting Hill Global Capital launches digital asset affiliate Hunting Hill Digital, with the Crypto 25 Fund set to launch later this year with an initial $20 million to $25 million in assets under management. The fund will provide institutional investors with exposure to an actively managed strategy focused on the top 25 cryptocurrencies by market cap, liquidity and performance. Hunting Hill Digital plans to explore tokenisation and non-fungible token asset management, and will eventually manage all of Hunting Hill's digital asset products.
ARPA Network's Token Price Soars Ahead of Randcast Launch
ARPA Network's token price has risen by up to 56%, reaching $0.101867, as the blockchain protocol prepares to launch its own random number generation (RNG) product, Randcast. The protocol criticised existing RNG protocols for not being fully random and said Randcast would be "decentralised, verifiable, multi-chain supported RNG".
Vitalik Buterin's Comment Sparks Speculation on Solana
Ethereum co-founder Vitalik Buterin joked at EDCON 2023 in Montenegro that Solana was the world's "most scalable" blockchain, sparking rumours that he had endorsed the platform. Buterin's talk mostly focused on privacy and the challenges facing the Ethereum network, including the fragility of its consensus mechanism, which he said should be used "sparingly".
Top Altcoin Gainers and Losers
Toncoin TON (+2.39%)
Bitget Token BGB (+1.51%)
Unus Sed Leo LEO (+0.88%)
Pepe PEPE (-13.27%)
Fantom FTM (-9.94%)
GMX GMX (-9.63%)
NFT Market Map
Bitcoin Ordinals, the new non-fungible tokens on Bitcoin network, are providing strong to other networks such as Solana and Polygon and are changing trading behaviour. Bitcoin's ascendance in the NFT space is also likely to spur a decline in wash trading, which distorts markets. This could help restore legitimacy to NFT markets, which have been plagued by wash trading, according to industry experts.
This article has been refined and enhanced by ChatGPT.