FreeCryptoCurrency.Me

Curve Finance will rerelease code for its crypto-backed stablecoin following “a mistake in the deployment script,” a day after the stablecoin’s smart contracts were deployed on the Ethereum mainnet. 

This comes after the team identified a problem with the initial deployment that would prevent vote-escrowed Curve (veCRV) token holders from earning rewards from liquidity pools containing its new crvUSD stablecoin. To resolve this issue, the team said it would need to redeploy the stablecoin.

This announcement follows the team’s confirmation yesterday that the smart contracts for crvUSD had been deployed. However, they also noted that the final launch was not yet complete as a user interface — a frontend for interacting with the crvUSD smart contracts — remained under development.

Curve uses a vote-escrowed model, allowing CRV holders to stake their tokens in exchange for another token, veCRV, which includes staking rewards and incentives. The initial version of crvUSD contained an issue to properly distribute rewards to veCRV holders due to an error in the deployment script, per the team. 

“After some peer review of deployments, it was found that the current version of crvUSD needs redeployment, which will follow shortly today. veCRV wouldn’t receive fees with this one due to a mistake in the deployment script,” Curve Finance tweeted.

Curve asked a user to return the stablecoin

The team requested that a DeFi user with a specific address (0x38) contact them since a fresh deployment could potentially render the existing version of the stablecoin useless in the future. The owner of that address had purchased 49,970 crvUSD stablecoins earlier from Curve’s liquidity pool.

The Curve developers also left an on-chain message for the user stating: “Please contact @CurveFinance on Twitter or @michwill on Telegram to swap back crvUSD to USDC OTC. crvUSD is getting redeployed.”

In response, the user sent back the tokens and received 49,965 USDC in exchange via an apparent over-the-counter swap, on-chain data show.

© 2023 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 exchange Coinbase will no longer offer its Borrow program from next week. The program allowed users to borrow cash against bitcoin as collateral.

“Beginning May 10, 2023, customers will no longer be able to take out new loans with Coinbase Borrow,” the company said in an email to customers on Wednesday that was shared by users on Twitter. “There is no impact on your outstanding loans and there is no action required at this time. You will continue to have access to your loan history and the full Borrow dashboard.”

Coinbase first unveiled the Borrow program in August 2020 and then publicly launched it in November 2021. The program allowed users in select U.S. states to borrow up to $1 million from Coinbase using their bitcoin as collateral at a variable annual percentage rate (APR) of 8.7%. It allowed users to avoid selling their bitcoin when they needed cash for something urgent, which could incur a taxable gain or loss.

Coinbase Borrow also offered a fixed-term loan only for Connecticut residents, allowing eligible customers to borrow up to $100,000 at 8% APR using bitcoin as collateral.

Coinbase Borrow termination comes amid U.S. regulatory battle

The termination of the Borrow program comes amid a regulatory dispute between Coinbase and the Securities and Exchange Commission. The SEC sent Coinbase a Wells notice in March that the company said was in relation to “possible violations of securities laws.” Last month, Coinbase sued the SEC in order to force the agency to respond to a petition that the company filed demanding the SEC publish specific rules for digital assets.

In September 2021, Coinbase had to shelve its Lend program after an SEC warning. The product was supposed to offer a crypto savings account that would earn customers a 4% APY, a return higher than most savings accounts at traditional banks.

Amid ongoing U.S. regulatory tensions, Coinbase expanded outside the U.S. earlier this week by launching an international derivatives exchange from Bermuda, allowing users to trade perpetual futures with currently 5x leverage. Later today, the company is set to announce its first-quarter financial results.

Coinbase did not immediately respond to The Block’s request for comment on the Borrow program.

© 2023 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 New York Times, The Financial Times, and Bloomberg have again asked a U.S. bankruptcy court to release the names of 9 million FTX customers despite the risk of exposing them to AI-driven “pig butchering” scams.

The bankruptcy court has so far kept the full list of creditors sealed, for fear of exposing them to hackers, phishing scams and other fraudsters who prey on people desperate to get their savings back. The 9 million are mostly customers with money stuck or lost on Samuel Bankman-Fried’s collapsed crypto exchange. A 90-day deadline on renewing that seal is pending, and the media companies now want the names released.

In U.S. federal law, there is a presumption of openness and transparency around bankruptcy proceedings. It is normal for lists of creditors to be filed publicly when a company fails, the media coalition argued in a May 3 filing. “But there is no legal basis for giving crypto users the ability to participate in bankruptcy proceedings anonymously.”

The debtors in control of the shell of FTX had previously argued that crypto customers are uniquely vulnerable when their personal data is exposed. A security expert for FTX stated in an affidavit that FTX customers would be likely targets for scams, including “pig butchering,” where targets are persuaded to invest money in a crypto account controlled by a scammer posing as a trusted intermediary who claims to be helping them restore their funds. Once the account is full, the scammer drains the funds.

Artificial intelligence platforms like ChatGPT now make this even easier for scammers, Jeremy Sheridan, FTX’s security expert, told the court in an April 20 filing.

Scammers can use FTX customer names to discover other personal info about them

Customers of Celsius, another bankrupt crypto company, have already been targeted this way, Sheridan stated, because once the names are known scammers are able to use that to discover other personal information about their targets.

“Subsequently, many Celsius customers became the target of phishing attacks by scammers posing as bankruptcy lawyers using emails and phone calls.”

“These examples of phishing attacks targeting the Celsius customers ranged from simple attempts to connect over messaging applications, to sophisticated emails using Celsius logos and impersonating legal counsel, and in one instance resulted in the bankruptcy court involving the U.S. Marshal.”

“Even though Celsius customer email addresses and phone numbers were redacted, malefactors were still able to reach customers based solely upon the disclosed names,” he said.

ChatGPT can make crypto scammers more convincing

ChatGPT will now make this easier for scammers because it can provide them with scripts written in near-perfect English. Often, scammers are non-English speakers whose poor grammar gives them away.

“Historically, these efforts have been hampered by linguistic, grammatical, or content errors committed by the malefactor, especially those in foreign locations. Simply put, the malefactor makes errors in the impersonation message that raise suspicion in their target and prevent the scheme from being successful,” Sheridan said.

“However, the arrival and refinement of artificial intelligence programs, such as ChatGPT, … has further propelled the success of these impersonation attacks by essentially eliminating previous telltale signs of poor grammar, typos, and recycled material/narratives,” he said.

Pig-butchering scams cost Americans more than $429 million in losses last year, he added.

No evidence of scams being successful so far

In response, the media companies argued that FTX and Celsius customers are actually less susceptible to scammers precisely because they are familiar with much of the skullduggery that goes on in crypto. The only reason Sheridan knows that Celsius customers were targeted by scams is because those people alerted the bankruptcy court who then alerted everyone else, they said.

“Despite these scam attempts, the record contains no evidence that any individuals named in the Celsius litigation have fallen victim to theft—either of their identities or their crypto assets,” the news organisations argued.

© 2023 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 decentralized exchange Curve Finance deployed smart contracts for the decentralized stablecoin crvUSD, marking its release on the Ethereum mainnet.

Curve confirmed the deployment and added that the launch is not yet finalized, as a user interface — a frontend to interact with the crvUSD smart contracts — is still under development.

“As many have figured out, deployment of crvUSD smart contracts has occurred. This is not finalized yet because the UI also needs to be deployed. Stay tuned,” Curve Finance tweeted.

Earlier, the team created a total of 20 million crvUSD on the mainnet, which can be viewed on the Etherscan blockchain explorer as an over-collateralized loan taken with Frax Ether, an Ethereum liquid staking token issued by Frax Finance. An address labeled as Curve on Arkham Intelligence took a loan of 1 million crvUSD ($1 million) with 957 Frax Ether ($1.8 million). 

How the Curve stablecoin works

The crvUSD stablecoin, a decentralized currency pegged to the U.S. dollar, employs a token design akin to MakerDAO’s DAI stablecoin, rather than relying on dollar reserves. It will be over-collateralized by supported crypto assets surpassing the value of issued crvUSD. Similar to DAI, crypto users on the Curve platform can mint crvUSD stablecoins through overcollateralized loans.

The stablecoin will rely on a new algorithm called Lending-Liquidating AMM (LLAMMA). This continuously liquidates and automatically deposits collateral to manage the risk associated with the stablecoin, while maintaining its peg to the U.S. dollar.

Designed by one of the largest decentralized finance platforms with a strong focus on stablecoin, crvUSD stands a chance at gaining adoption. Nevertheless, it faces stiff competition in a market currently dominated by centralized stablecoins such as USDT and USDC, which represent $82 billion and $30 billion respectively of the overall $130 billion stablecoin market.

Meanwhile, DAI has a market capitalization of $4.6 billion. Aave, the largest lending protocol, is also testing a stablecoin called GHO, which was deployed on Ethereum’s Goerli testnet in February and remains in development.

© 2023 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.