FreeCryptoCurrency.Me

A rare CryptoPunk sold for 8,000 ETH ($23.7 million USD) on February 12, making it the highest-selling CryptoPunk to date. 

The punk that sold was CryptoPunk #5822. It’s not only one of nine aliens in the collection of 10,000 NFTs but it’s also one of 333 to wear a bandana.

Deepal Thapliyal, CEO of the blockchain tech startup Chain, now owns this CryptoPunk. He collects other non-fungible tokens (NFTs) and even bought a rare Mutant Ape Yacht Club serum for $5.8 million in January of this year. 

CryptoPunk #5822

Prior to this sale, the highest ever selling CryptoPunk was another Alien Punk for $11.8 million at the auction house Sotheby’s in June of 2021, The Block previously reported, which was bought through USD and not ETH. 

However, the creators of CryptoPunks note on their platform that second-highest selling CryptoPunk by USD is #4156 for 2,500 ETH ($10.2 million USD) in December of 2021.

© 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.

Build Finance DAO suffered a “hostile governance takeover” over the last few days and has lost around $470,000 in funds, according to an announcement today.

Over the last few days, an unknown person managed to use a large supply of tokens to vote through a proposal that gave them full control over the DAO’s treasury and its ability to mint tokens. 

“As things stand, the attacker has full control of the governance contract, minting keys and treasury. The DAO no longer has control over any part of the key infrastructure,” said Urbane Grandier, a member of Build Finance’s core team, in its Discord server. 

“It is with deep regret that we have to inform the community of this total and irrecoverable loss of BUILD DAO treasury assets through the deeds of one malicious actor,” they added.

What was Build Finance?

Build Finance was a self-described “decentralized venture builder” with the goal of incentivizing new projects by rewarding them with tokens. The idea was to fund projects with its native BUILD tokens and the projects would, in return, adopt BUILD tokens to grow demand for them. The project started with 100,000 tokens and the community was able to mint more tokens to fund new projects.

The project was maintained by a DAO, a decentralized system where token holders vote on minting and allocating tokens. According to a tweet thread, they were able to also vote on the control of the token contract itself.

Over the last few months, the project had provided few updates. It appeared to be working on a website redesign and change to a new domain name. But its Discord members appeared unsatisfied.

“Hi team, an update would be appreciated. The lack of communication is concerning from a community perspective. I’m sure you are working hard behind the scenes but I think regular updates would be well received and appreciated by the community,” wrote one such member.

Yet despite this, the project was in control of a reasonably big amount of funds. As of August 2021, its treasury comprised six tokens including DAI, BUILD and METRIC. Its value at the time was $522,000.

The hostile takeover 

On February 9, Build Finance moderator 0xSHA2 penned a message in the Discord server that said someone had made a proposal that, if passed, would let them mint tokens unilaterally. The moderator encouraged token holders to vote against the proposal. 

According to the tweet thread, this proposal was made by a wallet named Suho.eth. This proposal failed.

Yet it seems the perpetrator sent their governance tokens to a separate wallet and tried again. This proposal, however, was not picked up by the Discord server’s bot (which would detect proposals and put them in a dedicated channel). This proposal appeared to go unnoticed and passed on February 10.

Per the thread, the perpetrator used their newfound control over the DAO and its token minting abilities to create 1.1 million BUILD tokens for themselves. They used them to drain the liquidity pools on two decentralized exchanges, Balancer and Uniswap. After this, they took a further 130,000 METRIC tokens from the project’s treasury, sold them, and minted a further 1 billion BUILD tokens. 

In short, they ransacked everything they could.

Since then, the perpetrator has sent a significant amount of funds to Tornado Cash, a mixing service on the Ethereum blockchain. The funds transferred add up to around 160 ETH, suggesting they made away with around $470,000.

The aftermath

Following the takeover and firesale, Build Finance’s core team is now looking to find a way to survive.

“We would welcome a discussion in the discord with community members about the way to move forward from this but it is difficult to see a future for BUILD with only its brand recognition and IP assets, and no liquid treasury,” said Grandier.

As for trying to get the funds back, Grandier said the team had been in contact with the perpetrator but that there was little desire for dialogue and even less for the idea of making reparations.

© 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.

Avi Felman’s eyes are glued to his trading screen, waiting for market-moving headlines that could be prime opportunities to put on a multi-million crypto trade. 

These past few weeks have been especially active for the portfolio manager, who joined crypto investment firm BlockTower in November 2019. Felman, who co-leads the firm’s flagship fund, navigated price gyrations stemming from macro and industry news, ranging from headlines that government officials recovered funds from Bitfinex’s 2016 hack to more recent news that Russia could invade neighbor Ukraine.

On this episode of The Scoop, Felman explained the decision-making process that goes into making a trade on headlines, using reports that Russia was on the verge of invading Ukraine as one case study example. 

“I know that the context is that the Biden administration has been warning about Russia for quite some time,” he said. “I know that bitcoin doesn’t like uncertainty. I read the headline as being extremely uncertain.”

Whether a certain news event adds uncertainty is just one factor Felman considers. Timing is equally important. 

“Okay, I want to make a trade and this all happens in the span of, you have to think, about 15 to 30 seconds,” he explained. “You need to make those connections. Then I need to start de-risking a little bit.”

In some instances, Felman takes a cue from the S&P 500, which has been moving very closely with bitcoin despite the crypto’s reputation as a hedge asset.

“The vast majority of time the bitcoin decouples from the S&P, it’s because of a delayed reaction,” he said. “It’s because bitcoin has some idiosyncratic crypto native bidder that isn’t paying attention to broader risk.”

On this episode, Felman and Chaparro also unpack:

• How the Russia news “threw a wrench” in Felman’s bullish thesis
• How momentum and value are the two main considerations for putting on a big bitcoin trade
• How large traders put on big positions without spooking the broader market
• The degree to which Federal Reserve hikes impact his decision-making

© 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.

Quick Take

• Radicle is a collection of open protocols – including peer-to-peer and blockchain-based protocols – that enable a decentralized social coding experience
• At its core is Radicle Link, a gossip protocol built on Git that enables social discovery within Radicle’s free and open-source software (FOSS) network, creating collaboration infrastructure for decentralized communities
• Recently, Radicle deployed its Ethereum integration enabling myriad new features, including decentralized governance, DAO-controlled repositories, and innovative smart-contract-based funding possibilities for FOSS developers

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

The Securities and Exchange Commission announced Monday that it fined crypto lending firm BlockFi $100 million, and now the firm plans to register with the agency to offer clients its popular high-yield crypto savings product. 

As a condition of a $100 million settlement with the SEC as well as state securities regulators, the firm has announced plans to file an S1 to offer BlockFi Yield to US investors as a security. 

“We intend for BlockFi Yield to be a new, SEC-registered crypto interest-bearing security, which will allow clients to earn interest on their crypto assets,” BlockFi CEO Zac Prince said in a press release. 

Bloomberg reported on Friday that the firm would have to discontinue its high-yield account for customers in the US, but this news suggests the company will offer the product under a new name and with the blessings of regulators. 

SEC Chair Gary Gensler, in the agency’s announcement of the settlement, said “This is the first case of its kind with respect to crypto lending platforms. Today’s settlement makes clear that crypto markets must comply with time-tested securities laws.”

In the meantime, BlockFi says that existing US clients will be able to earn interest in their existing accounts but won’t be able to add more assets. Non-US users are unaffected.

While US bank savings accounts are not subject to securities laws, they are required to offer FDIC insurance. Crypto lending platforms like BlockFi have generally compared themselves to bank accounts offering returns of up to 8%, as compared to sub-1% returns in traditional savings account. They have, however, not had FDIC insurance, which has rankled regulators like the SEC, who call these investment products akin to a mutual fund or other financial product. 

Starting last summer, a series of state securities regulators filed actions against BlockFi, which is one of the largest such yield platforms in the country. Around the same time, the federal SEC shut down Coinbase’s attempt to launch its own yield offering. Coinbase CEO Brian Armstrong lashed out at the SEC on Twitter over the commission’s decision and opacity in its decision making. 

© 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.

Monero mining pool MineXMR now controls 44% of the privacy coin’s hash rate, a position that some think carries potential risks for the network’s security.

MineXMR, the largest Monero mining pool, is relatively close to controlling more than half of the network’s hash rate. If it were to reach such a level, it would theoretically be able to carry out a 51% attack.

A 51% attack is when one entity holds over half of the hashing power of a blockchain network, a position that allows them to have some sway over the network’s consensus on what transactions have gone through. 

Some Monero proponents have raised alarm over the situation, citing fears that continued deployment of mining resources on MineXMR could lead to the pool controlling 51% of the network. They have called on miners to deploy their hash power on other pools to reduce MineXMR’s hash rate control.

As of the time of writing, MineXMR controls almost twice as much mining power as the second and third largest Monero pools combined.

Were the mining pool to grow to have more than 51% of the network’s hash rate, this doesn’t mean that the entity would necessarily attack the network or even try to harm it in any way. Plus, since it’s a mining pool, if the organizers of the mining pool were to try such an attack, it’s likely that miners would quickly migrate to other pools to prevent it.

Rogue actors who have gained 51% hash rate control of other blockchains in the past have often launched reorganization attacks, with the purpose of carrying out a double spend attack. In this case, they start by making a large transaction (often swapping them for other coins on an exchange). Then they broadcast an alternative recent history of blocks — using their larger hashrate to mine faster than all other network participants — which undoes the payment and lets them spend the money a second time.

If an entity has this stranglehold over a blockchain, they can also carry out smaller attacks, such as censoring new transactions from being made on the blockchain.

© 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.

DBS Bank, the largest bank in Southeast Asia by assets, will launch a digital assets trading desk for retail customers by the end of 2022, according to an earnings call on Monday.

The bank launched a trading desk for institutional investors in 2021, which The Block first learned of in 2020.

“We are starting the initial work to expand it beyond the current investor base,” said CEO Piyush Gupta on today’s earnings call. “And that includes the appropriate thinking about suitability and the potential for fraud… we are looking for an end of year [launch] to take something to market.”

Currently, DBS users are required to call a banker to place orders for cryptocurrencies. Gupta said that they are working on an online, self-service option akin to what users of a cryptocurrency exchange such as Binance are used to. However, it is as yet unclear whether users will be able to withdraw their purchases to a wallet. 

The news follows several other South-East Asian banking giants moving into crypto. Last month, the Philippines’ Union Bank unveiled plans to offer cryptocurrency trading and custodial services. Last year, Thailand’s oldest bank, Siam Commercial Bank, acquired a 51% stake in local cryptocurrency exchange BitKub. 

© 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 apps shot up App Store download charts in the US on Monday morning, after a Super Bowl studded with digital assets advertising. 

Super Bowl LVI’s face-off between the Cincinnati Bengals and Los Angeles Rams also saw two of the biggest crypto exchanges, FTX and Coinbase, compete for eye-balls. 

Data tracked by The Block Research shows that Coinbase’s app surged from 186th place to second on the App Store.

Coinbase’s ad prompted a rush of downloads.

FTX-owned Blockfolio and eToro, the investment app, also shot up the rankings after running ads during the big game. 

Coinbase’s minute-long ad featured a QR code bouncing across the screen, and invited viewers to participate in a large giveaway, with over $100 million in incentives for the crypto community expected this year. 

Coinbase’s website briefly experienced issues soon after the ad aired. 

FTX’s ad featured comedian Larry David. The two-minute video shows David rejecting some of history’s greatest inventions — from the wheel, to a fork, to a toilet. He is ultimately introduced to the FTX app and says: “I don’t think so. And I’m never wrong about this stuff.”  

© 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 UK’s tax body seized three non-fungible tokens (NFTs) and arrested three people on suspicion of attempting to defraud it of £1.4 million.

This is a first for British authorities in the policing of digital assets. The Telegraph was first to report the news. 

HM Revenue and Customs (HMRC) said the move was part of a probe into a suspected Value Added Tax (VAT) fraud involving 250 alleged fake companies. VAT is a broadly based consumption tax assessed on the value added to goods and services. 

The NFTs were seized alongside £5,000 of other crypto assets. Officials told The Telegraph that the seizure was a “warning to anyone who thinks they can use crypto assets to hide money.”

The tax body added that the suspects had used a raft of measures to cover their tracks, including pre-paid mobile phones, false addresses and invoices, and stolen identities. 

The Block contacted HMRC for comment but had not heard back at the time of publication. 

Authorities around the world are on high alert about the potential for dodgy dealings involving NFTs. Earlier this month, the Treasury Department in the US released a report describing how the NFT art market fits into money laundering schemes. 

While NFTs may be used in financial crimes, the blockchain analysis firm Chainalysis reported recently that the amount of illicit funds laundered through them remains relatively small compared to total crypto-based financial crime.

Illicit wallet addresses sent about $1.4 million to NFT marketplaces in Q4 2021 (the largest amount of all quarters last year) whereas an estimated $8.6 billion of cryptocurrency was used to launder funds in all of 2021. 

© 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.

Super Bowl LVI’s face-off between the Cincinnati Bengals and Los Angeles Rams was also a face-off between two of the biggest crypto exchanges: FTX and Coinbase. 

The two crypto firms—which typically vie for customer order flow—competed for eye-balls through their own Super Bowl ads, confirming earlier reports that the firms would have spots in this year’s event.

Coinbase’s minute-long ad with a QR code bouncing across the screen invited viewers to participate in a large giveaway, with over $100 million in incentives for the crypto community expected this year. 

Here’s how it works: New customers who join Coinbase by February 15 will receive $15 in BTC to get started on the platform. New and existing Coinbase customers can then enter for a chance to win 1 of 3 $1 million dollar prizes. 

The ad prompted a swift reaction on Twitter, where Coinbase started to trend minutes after the ad aired. 

The Coinbase commercial with just the QR code, and no dialogue or context, was kinda bold. They basically said “we only trynna sell to people who actually know what this is.”

— Carmen Rodgers (@CarmenRodgers) February 14, 2022

“Probably the most effective ad so far during the Super Bowl! Was it just me or did you also open up the camera on your phone and scan the QR code?” said Michael Estime on Twitter. 

“The Coinbase commercial with just the QR code, and no dialogue or context, was kinda bold. They basically said “we only tryna sell to people who actually know what this is.” said Carmen Rodgers in a Tweet.

In another video, which has now been viewed over 146,000 times on Twitter, a group watching the ad is cheering for the QR code to hit the corner of the screen, reminiscent of the bouncing DVD meme. 

“At Coinbase we have a goal of introducing a billion people to the cryptoeconomy. Crypto is about access for everyone, not old models of winner takes all, stoking fear or ‘FOMO’,” said Coinbase Chief Marketing Officer Kate Touch. “We believe the best way to learn about crypto is to actually try it. That’s why we’re launching our biggest giveaway ever, whereby all new customers will start their crypto journey with some Bitcoin in their account to get started. In other words: less talk, more Bitcoin.” 

Still, Coinbase’s website experienced issues soon after the ad aired. 

@coinbase just saw more traffic than we’ve ever encountered, but our teams pulled together and only had to throttle traffic for a few minutes. We are now back and ready for you at https://t.co/ZUJqRlnZPH. Humbled to have been witness to this. #WAGMI

— Surojit (@surojit) February 14, 2022

Sam Bankman-Fried’s FTX also bought a spot for an ad during the sporting event featuring comedian Larry David. In a two-minute ad that takes viewers through history’s greatest inventions—from the wheel, to a fork, to a toilet—David turns down the ideas as innovative. Then he’s introduced to FTX, and says: “I don’t think so. And I’m never wrong about this stuff.”  

As part of its own sweepstake, FTX is giving away 7.54 BTC for those who enter before midnight.

© 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.