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Ethereum scaling platform zkSync is integrating with the digital identification protocol RNS.ID to enable on-chain government IDs and new use cases that require personal data. 

RNS.ID is a platform for building decentralized applications. More specifically, it enables developers to build secure applications that use personal data, such as a home address. It could increase the use cases of decentralized applications, a long-term goal of zkSync and the broader crypto space.  

RNS.ID was deployed on Ethereum and is moving to zkSync because of its cheaper transaction costs, decentralization and security. It’s the first working on-chain application for government IDs using zero-knowledge proofs, a new technology for scaling and privacy. For example, anyone can use RNS.ID to prove to an exchange they live in a legally compliant country, but without giving control of their personal data. 

Leading crypto exchanges — such as Binance, Coinbase, and Bybit — already support IDs issued by RNS.ID. It can be used for Know Your Customer (KYC) requirements, which traditionally rely on one entity to manage private data, representing a security threat. 

Anyone in the world can use RNS.ID to obtain an ID with its current partner – the Republic of Palau. This partnership is the first of its kind and allows anyone to obtain a legal government ID in the sovereign country. About 95,000 users from 81 different countries have used RNS.ID to become digital residents of Palau.  

“Collaborating with zkSync raises awareness of the most promising Digital ID platform,” said Cryptic Labs CEO Bril Wing. Cryptic Labs is the parent company of RNS.ID.  

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto custodian Casa will offer customers the ability to store ethereum, with its CEO referencing the FTX collapse as a reason for its appeal.

“A lot of people learned the hard lesson of why holding your own keys is important,” CEO Nick Neuman told The Block in an interview. “I hope we can use this as an industry turning point to continue educating people on the importance of self custody.” 

Casa is launching a refreshed app in January that will provide ethereum storage on its platform in addition to bitcoin as it says the shortcomings of keeping cryptocurrency on centralized exchanges like FTX and Binance become apparent. Centralized exchange spot trading volumes decreased by 26% to $544 billion in October from the previous month, according to The Block Research. 

Over the last few weeks there has been a “huge” number of new users joining the platform, Neuman said.

The addition of ethereum is only one part of the “next phase of the company’s journey,” which will include initiatives such as new membership plans. 

In May, the firm raised $21 million to build an API that connects Casa to other financial applications. Neuman said the effort is driven by the belief that “everything in our digital lives will be protected by private keys.”  

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

London-based Catapult raised $5 million in a seed round led by Blockchain Capital. 

Investors in the round also include Eden Block, Orange DAO and Reverie as well as several angel investors from leading crypto startups, including Aave’s Stani Kulechov and Teller’s Ryan Berken, according to an announcement. 

The startup, which was co-founded in 2021 by Rav Singh Sandhu and Greg Wilsenach as part of the Entrepreneur First program, aims to provide infrastructure that will enable better coordination in decentralized organizations by providing more context about their members in a pseudonymous manner. 

How does Catapult work?

Catapult started as an onboarding tool for Index Coop, a decentralized community that provides access to complex crypto investing strategies through tokens. Catapult made it easier to capture information about new joiners and guide them to the right starting point, according to the announcement. 

Now, Catapult uses data from the onboarding process to build rich pseudonymous friendly member profiles that are searchable and allow for better coordination and communication amongst members. 

Catapult Labs community screens

The platform just completed a closed alpha phase with Index Coop and Aragon DAO. It’s now extending its platform to Krause House, Lex DAO, Biconomy DAO, Spectral Finance, Algovera AI, Popcorn DAO, and groups within Bankless DAO. 

“Removing the friction and creating a web3 native, intuitive onboarding platform is a game changer for us, and what I believe will soon be a game changer for many other DAO’s and Web3 native organizations,” said Brad Morris, community co-lead at Index Coop, in the announcement. 

Encouraging productive contributors

The fundraise closed in July and was a combination of equity and token warrants, said a company spokesperson in an email statement to The Block. The funds will be put toward product development.

“DAOs have demonstrated the potential to supercharge community-led growth, but they often struggle to convert community members to productive contributors,” said Aleks Larsen, general partner at Blockchain Capital, in a statement. “Greg and Rav have brought an awesome team together at Catapult to arm DAO operators and community managers with powerful tools that provide context and drive meaningful collaboration and connection between members — helping unlock the potential of DAOs and Web3 communities.”

Catapult’s tech stack uses web2 technologies Node.js, for the back-end, and Next.js for its front-end. 

“We are excited about the future of decentralized databases, and monitor their progress closely,” said the company spokesperson. “However, for now we are using Firebase for privacy and security reasons.” 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Uniswap Labs, the main developer behind decentralized exchange protocol Uniswap, is starting a new NFT marketplace, which it hopes will break the barrier between cryptocurrency exchanges and such NFT markets.

“Historically, everyone views tokens and NFTs as two very separate experiences. But at the end of the day, they’re both digital assets and the goal is to unlock universal ownership in exchange for creators and for communities. NFTs and tokens are just two different ways to unlock value in our digital worlds,” said Scott Gray, head of NFT product at Uniswap Labs.

The marketplace aggregates NFTs up for sale from OpenSea, X2Y2, LooksRare, Sudoswap — including its pools, which sell NFTs along price curves — Larva Labs, X2Y2, Foundation and NFT20.

The developer has been working on the product since June when it purchased NFT aggregator Genie as part of expansion efforts to include NFTs and ERC-20 tokens among its products.

At the time, it announced plans for an integration with the Uniswap web app and said Genie would remain accessible until the new Uniswap NFT experience was available. For now, the Genie website will redirect to the NFTs on the Uniswap website. The launch comes with some $5 million worth of perks for eligible historical Genie users.

Uniswap’s effort is but the latest NFT aggregator that’s appeared on the scene over the last few months. It kicked off in April, with OpenSea’s purchase of Genie rival Gem. In October, Rarible’s revamped marketplace introduced aggregation from platforms such as OpenSea.

But newcomers to the market have also enjoyed some success. Blur captured some market share since its launch as a platform catering to NFT traders. Like Uniswap, it markets itself on speed, boasting a fast interface and the ability to buy multiple NFTs at once. It accounted for about 15% of NFT marketplace transactions on Ethereum in November.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

While bitcoin might appear stable for now, it’s on the brink of irrelevance — at least according to a report from two advisers to the European Central Bank (ECB).

Bitcoin is rarely used in transactions and poses a reputational risk for banks, according to an ECB blog post, which argues that regulation could be misunderstood as approval.

Bitcoin’s price peaked at $69,000 in November 2021 before falling to $17,000 this summer, note Ulrich Bindseil and Jürgen Schaaf, the report’s authors. And since the collapse of the Terra ecosystem in May, and this month’s bankruptcy of the FTX exchange, it’s mainly fluctuated between $17,000 and $20,000.

While some see this stability in the face of multiple crises as an optimistic sign, Bindseil and Schaaf see it as “an artificially induced last gasp before the road to irrelevance — and this was already foreseeable before FTX went bust.”

BTCUSD chart by TradingView

While the blog post is described as a “opinion piece” that doesn’t necessarily represent the views of the ECB, both authors have roles with the central bank. Bindseil is the ECB’s director general of market infrastructure and payments and Schaaf is an adviser. 

Utility and risk

The report points out that bitcoin is hardly ever used for transactions and purchases — at least not legal ones.

Despite being created to overcome the existing monetary and financial system, bitcoin has many shortcomings, Bindseil and Schaaf argue, adding that the conceptual design and technological failings make bitcoin questionable as a means of payment.

“Bitcoin transactions are cumbersome, slow and expensive. Bitcoin has never been used significantly for legal real-world transactions,” they write, arguing that bitcoin’s market value is based purely on speculation. 

As such, the post states, bitcoin is neither suitable as a payment system nor as a form of investment. Therefore, it shouldn’t be treated as either in regulatory terms and shouldn’t be legitimized.

Banks and the financial industry should be wary of the long-term damage of promoting bitcoin investments, according to the report. Bindseil and Schaaf argue that short-term profits don’t offset the negative impact on customer relations.

The authors go as far as to say the reputational damage to the entire industry could be enormous if bitcoin investors make further losses.

Regulation is not approval

In addition, the authors posit that regulatory oversight is often misunderstood as approval. 

They point to bitcoin proponents funding lobbyists to push the case for acceptance with lawmakers and regulators, biting that the number of crypto lobbyists in the U.S. alone tripled from 115 in 2018 to 320 in 2021. The report didn’t share numbers from 2022.

While lawmakers have sometimes facilitated the influx of funds by supporting the proposed merits of bitcoin, some even offered regulations that gave the impression that crypto is just another asset class.

However, this is not the case. According to the ECB authors, the risks of crypto assets are undisputed among regulators. 

“In July, the Financial Stability Board (FSB) called for crypto assets and markets to be subject to effective regulation and supervision commensurate with the risks they pose — along the doctrine of ‘same risk, same regulation.'”

Despite this, regulation has been slow to ratify, with implementation often lagging. Different jurisdictions aren’t proceeding at the same pace, Bindseil and Schaaf point out. 

The EU has agreed on a “comprehensive regulatory package” in the Markets in Crypto Assets Regulation (MiCA) proposal. However, the U.S. has not yet been able to agree on “coherent rules.”

Misconceptions also shape current regulations, especially “the belief that the space must be given to innovation at all costs stubbornly persists” even as blockchain technology has so far created little value for society.

“Since bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms and thus should not be legitimised,” they conclude. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Six exchanges — including Binance, Coinbase, Luno and Kraken — will have to share user data to help trace $10.7 million in funds stolen from an unnamed UK-based exchange in 2020.

London’s High Court issued a court judgment demanding the handover of the data, according to a Financial Times report. Two of the six exchanges involved were not named. 

The anonymous exchange — which has not shared its name to avoid “tipping off” the hackers — has already managed to trace $1.7 million of the funds from the hack.

The amount in question was deposited into 26 accounts on the exchanges in cryptocurrencies including bitcoin, XRP, ether and tether. It’s one of the first applications of a new law in the UK to help track assets in cyber-fraud cases, even if the companies holding the information are based overseas, according to FT.

Crypto fraud is on the rise in the country. Reported cases of crypto fraud increased by a third from Sept. 2021-Sept. 2022, according to police unit Action Fraud.

Despite the common misconception that cryptocurrencies on distributed public ledgers are anonymous, hackers risk identification due to KYC processes implemented by most major exchanges. This can include submitting ID documents as well as biometric verification.

Exchanges are complying with orders to turn over data not linked to hacks, too. In October, Coinbase informed UK-based users that it would share its data with then-His Majesty’s Revenue and Customs (HMRC) if they received more than £5,000 in cryptocurrency in the 2019/2020 tax year.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

BitDAO, a decentralized autonomous organization with a treasury worth over $1.7 billion, has launched an Ethereum Layer 2 network called Mantle, the DAO announced on Wednesday.

Mantle is a modular Ethereum Layer 2 chain. Modular networks are a new way of designing blockchains and are different from the older monolithic chains, where all network functions happen on the base layer. On modular blockchains, there are separate layers for network consensus, transaction execution and settlement, as well as data availability. This type of design is said to create networks that are more efficient and have greater scalability.

BitDAO’s Layer 2 network stack has three distinct layers, according to the announcement. One layer is for transaction execution while the other two handle transaction finality and data availability, respectively.

Mantle is BitDAO’s attempt to solve some of the challenges facing Layer 2 networks, a spokesperson for the DAO told The Block. “BitDAO aims to bring the spotlight back from Alt-L1s to Ethereum and give market participants the best web3, DeFi and GameFi have to offer,” said the spokesperson.

Mantle will reportedly offer superior features compared to other Layer 2 networks. BitDAO’s Layer 2 network will come with faster throughput and low fees, and be powered by a decentralized data availability layer, the announcement stated. Transaction fees on Mantle will be paid using BitDAO’s governance token, BIT.

EigenLayer, an Ethereum middleware platform, is one of the partners in the project. As such, early adopters can use EigenDA, a custom-built data availability layer designed by EigenLayer that supports Optimistic and ZK-Rollups — the two major types of roll-up technology.

Wednesday’s announcement marks the soft launch of the Layer 2 network. Mantle is expected to roll out an incentivized public testnet next year.

A BitDAO spokesperson confirmed that DAO partners can deploy protocols on Mantle when launched. Unlike most DAOs built around specific DeFi projects, BitDAO is more of an investment DAO. BitDAO’s mandate is to grow the web3 ecosystem by providing grants to projects and supporting web3-based research activities. BitDAO has the second-largest DAO treasury in the crypto space.

“Mantle will serve as the connective tissue for various BitDAO initiatives, such as projects from Game7, research from EduDAO, to the ecosystem of dApps being enabled by BitDAO,” said Jacob Cantele, product head at BitDAO’s Windranger Labs, adding: “Mantle is BitDAO’s demonstration to scale Ethereum and web3, enabling a whole new generation of use cases and innovations.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto payments company Ripple has led a $72 million Series B funding round into digital asset market maker Keyrock. Ripple has also been a key client for the firm for the last three years. 

Venture firms Six Fintech Ventures and Middlegame Ventures also participated in the round, which closed mid-September. Keyrock CEO Kevin de Patoul declined to share the valuation but said in an interview with The Block it was a significant lift in valuation — the firm last raised €4.3 million in Series A funding in October 2020.

Market makers like Keyock offer a buy-and-sell price for an asset to platforms such as exchanges. Typically, they earn revenue by charging higher selling prices than what they buy the asset for, pocketing the difference between the two, known as the spread. 

The firm also provides its market-making proposition as a service to clients for a set monthly fee. This means providing liquidity to markets that are yet to reach trading volumes sufficient to drive revenue for the market maker. 

“A big chunk of our vision is to provide liquidity on the markets that need it the most,” explained de Patoul. “On those markets, the ability to generate revenue on the spread is very limited so we work with a fee structure [to provide liquidity].”

Along with a focus on options and ramping up over-the-counter operations, the company is looking to use the funding to further build out its market making-as-a-service offer. 

Much like its competitors, Keyrock also invests in companies and funds. It recently backed LeadBlock Partners new $150 million fund. LeadBlock is a European crypto venture fund set up by former Goldman Sachs employees.

Making a market

Still, Keyrock’s raise comes at a time of pressure for its competitors. Both GSR and Wintermute recently came under the microscope for possible exposure to FTX, although ultimately said their exposure was manageable. Now, there’s talk of a so-called “Alameda Gap” with the fall of trading firm Alameda Research, which was closely aligned with FTX,  drying up liquidity in the crypto market. 

Keyrock itself isn’t immune from the FTX fallout. For instance, the FTX-acquired Liquid is a client of the company. On Nov. 20, the Japanese exchange suspended trading on its platform five days after halting withdrawals. 

“We have a very proactive counterparty risk management and we were able to get our funds out of Liquid before withdrawals were suspended… so none of our funds or clients’ funds were impacted,” said de Patoul.

Mostly, de Patoul is positive about the increased apprehension in the markets, saying that the company hasn’t had any downtime since FTX’s collapse. 

Meanwhile, it is also busy plowing ahead with expansion plans. With the funding, the Brussels-based company is planning to expand to Switzerland and Singapore next year with an office already in London.

In all these jurisdictions, it’s looking to procure regulatory licenses and is currently in the process of obtaining licensing in the UK. 

Midstage deals, such as the round raised by Keyrock, are an increasingly a rare occurrence in the current market. According to The Block Research, mid-stage deals fell approximately 63% from 30 deals in Q2 to just 11 last quarter. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

EU policymakers laid pressure on enforcing bloc-wide crypto regulations in the European Parliament’s economic committee today following the spectacular collapse of FTX. 

Regulators disagreed on whether the EU’s Markets in Crypto-Assets bill, which was postponed for a final vote in February, is a sufficient band aid for the implications of the debacle.

“The collapse calls for urgent need of the MiCA regulation,” said Alexandra Jour-Schroeder, the European Commission’s financial unit deputy. “No company active in EU market will be allowed to engage in the practices FTX allegedly engaged in.”

FTX saw a dramatic demise after the collapse of its native token, FTT, a crash that affected millions of users and numerous firms. The exchange, which was valued at $32 billion at the start of the year, filed for bankruptcy protection on Nov. 11. The fallout turned regulators’ heads around the world. 

“It wasn’t a failure of blockchain technology, the community nor of business models per se. What was responsible was the behavior and hubris of an individual,” said center-right lawmaker Stefan Berger, the Parliament’s lead negotiator on MiCA. “Sam Bankman-Fried, in other words.” 

Jour-Schroeder highlighted the “questionable” practices that led to the failure of FTX, including mismanagement of “governance, corporate controls, record-keeping, misuse of customer assets, unwarranted risk-taking and potentially even fraud.”

“The evidence is ample that there are weaknesses in the industry,” said Steffen Kern, head of risk analysis and economics in the EU’s financial markets regulator, the European Securities and Markets Authority (ESMA). The authority will continue to issue warnings for consumers investing in crypto, he said.

Meanwhile, some left-wing members of the hearing took a more hardline approach.

“I’d like the commission to wake up a bit,” MEP Aurore Lalucq said. “Can we really hold our heads up high and say that Binance, for example, which is registered in Europe in France, couldn’t possibly go bankrupt? The answer is no.”

MEP Ernest Urtasun expressed “serious doubts that MiCA would have prevented” the failure of FTX.

MiCA co-negotiator Eero Heinäluoma said that “the sector has been irritated when we talk about need for rules and supervision.”

MEP Chris MacManus asked for the acceleration of MiCA regulation, as the new laws will only come into action in 2024 at the earliest. 

The implementation of MiCA will be “an absolute matter of priority,” said Jour-Schroeder, adding that there are things “that cannot be done overnight.” The EU’s financial regulators are tasked with writing implementation rules for MiCA until 2024. “It is also not forbidden to finish before deadline expires,” the financial commissioner added.

The EU is still catching up to the U.S., where the troubled crypto giant is high on lawmakers’ agendas. Earlier in November, Congress probed the collapse of FTX and the role of rival exchange Binance, instigating a number of hearings.

The U.S. House financial committee is anticipating a first hearing investigating FTX on Dec. 13. In the Senate, the Agriculture Committee is holding a hearing on Thursday, and the Banking Committee is set to schedule one, too.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The developers of Layer 1 blockchain Secret Network said they resolved a security issue flagged by researchers who highlighted a vulnerability posed by Intel hardware the network used to enable privacy-preserving smart contracts. 

Secret’s promised privacy apps may have been compromised due to a vulnerability in certain Intel SGX chips called xAPIC or ÆPIC Leak.

Intel SGX chips are commonly used by software firms for privacy computing. Secret’s blockchain nodes also use them to encrypt data in a software setup called a “trusted execution environment(TEE).” However, the presence of xAPIC vulnerability also meant hackers could potentially snoop on systems depending on SGX. To prove the risk faced by Secret, the researchers extracted a “consensus seed” to decrypt all private transactions on the Secret blockchain. 

“We evaluated TEE-based blockchain Secret Network to see if it was susceptible to ÆPICLeak, and ended up finding the master decryption key for the whole network,” said Andrew Miller, a lead researcher of the report and Assistant Professor at the University of Illinois, Urbana-Champaign.

The researchers showed that it was possible that a malicious hacker could have also obtained all the transactional history on the network, contrary to Secret’s promise of full privacy. 

No funds at risk

In a blog post, SCRT Labs, the developer of Secret Network, claimed that no such incident related to a privacy leak had taken place, to the best of its knowledge — adding the hardware vulnerability only affected the privacy of data stored on Secret Network not used to determine the consensus of the blockchain. 

“Most importantly, funds were never at risk, because Secret intentionally does not rely on SGX for correctness – only privacy,” Guy Zyskind, CEO at SCRT Labs said.

The researchers first notified SCRT Labs of the vulnerability on Oct. 3. SCRT Labs acted to freeze new nodes to connect to the network to limit the exposure of the vulnerability. 

Later, the blockchain firm worked with Intel to develop a patch to prevent vulnerable machines from connecting to the network. This solution was deployed on Nov. 2 via a network upgrade and now the network is secure, it said. “With this upgrade, it is now infeasible to mount xAPIC attacks against the Secret Network mainnet,” SCRT Labs claimed.

SCRT Labs said that it delayed the disclosure of the vulnerability to prevent any malicious hacker from exploiting the vulnerability while it worked on the patch.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.