FreeCryptoCurrency.Me

Nereus Finance, a DeFi staking platform on Avalanche, was impacted in a flash loan arbitrage attack on Tuesday, that saw the exploiter drain $370,000 in USDC stablecoin, according to a report by CertiK.   

On-chain data from Snowtrace shows the attacker launched the exploit with a $51 million flash loan. The funds were used to execute a flash loan attack that manipulated token pricing on Nereus. The attacker paid back the $51 million loan but still had $370,000 in USDC after the arbitrage trade was over.

The attacker then ‘bridged’ the funds from the Avalanche blockchain to the Ethereum network. Bridging in crypto means the transfer of tokens across different blockchains. The bridged funds were then swapped into 194 ETH ($310,000) and 15,800 DAI ($15,800) and kept in this address which also matches the attacker’s address on Avalanche. 

Only about 14 ETH and 15,800 DAI are left in this address as of the time of publishing. The attacker transferred 180 ETH to four different addresses (45 ETH each). These funds have all been moved to Free Float, a crypto exchange on the Lightning Network, which likely signals the arbitrageur’s attempt to cash out the profit.

Nereus Finance did not immediately respond to The Block’s request for comments.

Flash loan exploits continue to be a major pain point for DeFi protocols. The US Federal Bureau of Investigation stated in August that flash loan and price manipulation exploits are among some of the risk factors for DeFi users.

© 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 lender Voyager Digital will hold an auction of assets next week, more than two months after filing for bankruptcy.

The auction will take place on September 13, starting at 10 am ET, according to a court filing dated Tuesday. Qualified bidders in the auction, which will determine who will buy the platform’s assets, submitted their proposals yesterday. A hearing to approve the results is scheduled for September 29. 

Voyager entered Chapter 11 bankruptcy proceedings in July after halting activity on its platform. As of August 4, Voyager’s counsel said 22 parties were in meaningful discussions to place bids for its assets and that multiple offers had been received.

The original deadline for bids had been extended to September 6 from August 26, after interested parties requested more time.  

Bidders are kept confidential in this process, although crypto exchange FTX and its associated firm Alameda publicized their bid in July — provoking a sharp response from Voyager’s counsel.

Bids can vary in offering different solutions to the bankruptcy in terms of amount of funds or level of assistance in the reorganization. The Voyager counsel will decide on the proposal it deems most valuable to customers and creditors.

On July 5, Voyager began its restructuring process when it filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, which is being administered in the United States Bankruptcy Court for the Southern District of New York. This code allows Voyager’s assets to be sold free of “liens, claims, interests, and encumbrances.”

© 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.

Former Revolut chief revenue officer Alan Chang has raised a $78 million round for his web3 energy startup Tesseract founded with fellow ex-Revoluter Charles Orr. 

Chang confirmed over Twitter direct messaging on Wednesday that Tesseract has raised $30 million in traditional equity, with the remaining amount raised through a sale of its native token. Backers of the round include venture capital firms Balderton, Lakestar, Accel, Low Carbon, Ribit Capital, Box Group and former Formula One racing driver Nico Rosberg. 

According to LinkedIn, Chang left Revolut this month. Chang was the fifth employee at the neobank and, according to an Insider report, he was considered a key lieutenant to founder Nik Storonsky before leaving to set up Tesseract with Orr. 

News of the round confirms a previous Insider report in May that the London-based startup was raising seed funding from Balderton, Accel and Creandum at a $150 million post-money valuation. The report said that the startup is expected to operate as a vertically integrated renewable energy company that buys energy from generators at fixed prices that are then offered to consumers.

It’s this process — called a power purchase agreements (PPA) — that Tesseract is looking to tokenize. Each Tesseract token will act as a PPA and correspond to a right to access power targeted at 1 watt of capacity on the company’s network, according to Insider. Tesseract’s website promises “commission-free energy” that is up to 10 times cheaper. 

Revolut itself has made several key steps into web3. Along with adding the ability to invest in cryptocurrencies, the company is also readying its own native token along with a noncustodial wallet, according to a The Block interview with Storonsky in May. 

© 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.

Episode 83 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Hxro Co-Founder & CEO Dan Gunsberg.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.

Hxro Network (pronounced “hero”) raised $34 million in a token round in November to help advance the platform’s vision of building a decentralized derivative platform on Solana.

Now, Hxro is on the cusp of launching USDC collateralized markets, which will mark the first time users are able to trade derivatives products using collateral with real value.

In this episode of The Scoop, Hxro co-founder and CEO Dan Gunsberg joins host Frank Chaparro to unpack the idea behind the Hxro protocol and to explain how Hxro hopes to solve liquidity problems that currently exist in the decentralized derivative space.

According to Gunsberg, the technology underlying Hxro Network allows anyone to create a decentralized derivative product:

“Effectively anybody will be able to come and create any type of derivative product on Hxro Network’s protocol… the core protocol is something called ‘Dexterity,’ and the idea of it is that it’s really just the generalized architecture for the payoff function and the accounting mechanisms of a derivative.”

Not only does Hxro allow users to build any type of derivative product, “the beauty” of the platform is the way in which it will unify liquidity to create more efficient markets, Gunsberg believes.

Gunsberg explains,

“Once those markets are created, they all exist in the base layer protocol and then any application can tap those markets… so what you end up with is this unification of liquidity across many applications and many users, that all bottoms out into the same marketplace depending on the product.”

During this episode, Chaparro and Gunsberg also discuss:

• How decentralized derivatives will capture market share from traditional finance;
• What regulators have to say about Hxro Network;
• Why complex derivative strategies enhance market liquidity.

This episode is brought to you by our sponsors Tron, Chainalysis & IWC Schaffhausen

About Tron
On August 1st, 2022, Poloniex launched a faster and more stable trading system along with a brand new user interface. Poloniex was founded in January 2014 as a global cryptocurrency trading platform. With its world-class service and security, it received funding in 2019 from renowned investors, including H.E. Justin Sun, Founder of TRON. Poloniex supports spot and margin trading as well as leveraged tokens. Its services are available to users in nearly 100 countries and regions with various languages available. For more information visit Poloniex.com.

About Chainalysis
Chainalysis is the leading blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.

About IWC Schaffhausen
IWC Schaffhausen is a Swiss luxury watch manufacturer based in Schaffhausen, Switzerland. Known for its unique engineering approach to watchmaking, IWC combines the best of human craftsmanship and creativity with cutting-edge technology and processes. With collections like the Portugieser and the Pilot’s Watches, the brand covers the whole spectrum from elegant timepieces to sports watches. For more information, visit IWC.com.

© 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.

Bitcoin traded below $19,000 on Wednesday while the price of ether flirted with $1,500 as crypto tracked traditional financial markets lower.

At the time of publication, bitcoin is trading at $18,794 on Coinbase, down about 5.9% over the past 24 hours, per data from the exchange.

Wednesday’s losses bring bitcoin back within range of its 2022 low of $17,600, which it hit in June amid the crypto credit crisis as Three Arrows Capital collapsed and lending platforms faced liquidity issues.

Ether’s losses over the past 24 hours are even greater than bitcoin’s as it trades at $1,518, having dropped 8.6%, per Coinbase data.

Traders had bid up Ethereum’s native asset over the past few weeks, ahead of The Merge, but the token is now falling in line with broader financial markets despite the network’s imminent switch to proof of stake consensus. 

The global crypto market cap was trading below $1 trillion again on Wednesday, having flirted with this level at various points throughout August. It currently sits at $987 billion, per CoinGecko data.

© 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 crypto and blockchain sector continues to show signs of maturity, despite global and ecosystem challenges, audit, tax and professional services firm KPMG said in its September Pulse of Fintech H1’22 report.

Although falling from 2021, the pace of continuous crypto growth “highlights the growing maturity of the space and the breadth of technologies and solutions attracting investment,” KPMG said.

With global instability around the conflict in Ukraine, and echoes of the recent TerraUSD stablecoin collapse still resonating, the blockchain ecosystem has seen its fair share of obstacles this year. However, in spite of these events, KPMG said investor sentiment remains strong, with the average mid-year investment level well above that of years prior to 2021, despite a decline from $32.1 billion in 2021 to $14.2 billion in 2022.

Source: Pulse of Fintech H1’22, Global Analysis of Investment in Fintech, KPMG International (data provided by PitchBook), *as of 30 June 2022.

However, waters may still be uncertain for some blockchain startups, which KPMG France Director of Blockchain and Crypto Assets Alexandre Stachtchenko said may need to cut valuations to raise money because it’s the only option. “Of course, some cryptos will die out — particularly those that don’t have clear and strong value propositions. That could actually be quite healthy from an ecosystem point of view because it’ll clear away some of the mess that was created in the euphoria of a bull market. The best companies will be the ones that survive,” he said.

The companies that are surviving continue to drive interest into the blockchain space and rake in venture capital with big raises by Germany-based Trade Republic at $1.1 billion, Bahamas-based FTX at $500 million, and ConsenSys at $450 million.

Other key takeaways

The face of crypto investors is changing dynamically from retailer investors to institutional and corporate players who constitute a growing share of  the capital influx. As such, from an investment risk perspective crypto assets are beginning to exhibit similarities to traditional assets, KPMG said in its report.

Since both El Salvador and the Central African Republic have adopted bitcoin as legal tender, the report said there is an increasing interest in the sovereign applications of cryptocurrencies among developing nations as opposed to that of existing currencies such as the U.S. dollar.

Although a crypto trading ban stands in China, and there are indications that India may follow suit, regulators in other jurisdictions are more interested in fostering competition, evolution, and growth in crypto markets while protecting consumers, KPMG said. In addition the EU will adopt new regulations for the cryptocurrency industry at the end of 2022.

Expect increased interest in stablecoins. Corporations are looking at stablecoins to better leverage the operational advantages of crypto, including such as reductions in costs and delays, increased visibility, more rapid liquidity, and greater ease of use, KPMG said.

© 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.

Coinbase released a proposal today on MakerDAO’s governance forum that would transfer 33% of Maker’s $1.6 billion Peg Stability Module (PSM) into a Coinbase Prime custody account, increasing Maker’s revenue by roughly $24 million.

If passed, the proposal would pay Maker 1.5% annual percentage yield on $528 million USDC.

Maker’s PSM was designed to hard-peg the price of DAI to $1 and launched after the protocol saw the peg go above $1 during the Covid crash in 2020. This was due to increased demand to pay off loan liquidations caused by ETH dropping more than 40% during the crash.

Although PSM has been effective in maintaining DAI’s peg, one of the main issues adcv, a pseudonym used by a member of Maker’s strategic finance core unit, identified on the forum is Maker’s ability to invest its balance sheet correctly.

Maker’s current PSM asset allocation is “highly underinvested,” which “reduces the protocol’s ability to take risk and its attractiveness as a stablecoin,” adcv wrote.

If the proposal passes, Maker will pay zero custody fees on its PSM allocation to Coinbase and be able to freely mint, burn, withdraw and settle its allocated USDC almost instantaneously through Coinbase Prime.

This proposal is a strategic move that will generate revenue on idle assets within Maker DAO’s balance sheet.

© 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.

Binance’s move to automatically convert USDC and two other stablecoins may lead to more USDC flowing into the exchange, according to the CEO of Circle, which issues the coin. 

“Binance is trying to consolidate dollar liquidity w cash equivalent stables. That’s good for liquidity and market depth,” said Circle CEO Jeremy Allaire on Twitter.

Binance said yesterday it will convert balances and new deposits of USD Coin (USDC), Pax Dollar (USDP) and TrueUSD (TUSD) to its own stablecoin (BUSD) in a 1:1 ratio. Users will still be able to withdraw these coins at the same ratio from BUSD even after the auto-conversion (scheduled for Sept. 26) happens.

“Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance,” Allaire said.

Having consolidated dollar books will make it easier for trading core markets to move USDC to and from Binance, Allaire said. “Given how limited BUSD usage is outside of Binance, this will likely benefit USDC usage as the preferred cross CEX and DEX stablecoin rail. Unless Binance can convince all their competitors to get behind BUSD.”

Crypto exchange FTX effectively does the same thing, crediting USD, USDC, TUSD, USDP, BUSD and HUSD deposits with USD Stablecoins in a 1:1 ratio, Steven Zheng, from The Block Research’s team, pointed out.

“Binance’s move helps consolidate liquidity of stablecoin trading pairs on its exchange,” he said. “This is beneficial to both users as they won’t have to trade against fragmented stablecoin liquidity as well as Binance who can bring more activity and eyes to its BUSD stablecoin.”

TUSD said on Twitter it will cooperate with the Binance “ecosystem.”

“Binance will maintain multi-chain $TUSD deposit and withdrawal support on their exchange for all the following token standards,” TUSD said.

The move will ensure better safety for Binance customers, said Rich Teo, co-founder and CEO of Paxos Asia, the company that issued BUSD in partnership with Binance.

“Unlike competing stablecoins, BUSD is regulated by NYDFS (New York State Department of Financial Services) which sets rules and monitors compliance with those rules,” Teo said. “ONLY regulated stablecoins do this, setting us apart from stablecoins issued by companies operating with Money Transmitter Licenses (MTLs) that have no oversight of reserves or governance.”

BUSD is among 24 currencies in the NYDFS’s green list, meaning that it can be used in the state by licensed entities without needing additional regulatory approval. Stablecoins issued by DFS-regulated entities that have been approved for issuance include Z.com USD (ZUSD), Pax Dollar (USDP) and Gemini Dollar (GUSD).

Teo also stressed that BUSD reserves are held by a bankruptcy remote trust offering “greater consumer protections” and “setting it apart from MTL-issued stablecoins which are held by corporations and exposed to losses and bankruptcy.”

BUSD has the third largest market cap among stablecoins (which are pegged to a fiat currency like the dollar), after Tether (USDT) and USD Coin (USDC). 

© 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.

Law firms Kirby McInerney and Radice are requesting that they replace embattled firm Roche Freedman as lead counsel in the Tether class action after a scandal involving Roche Freedman’s founding partner engulfed the firm.

Kirby McInerney and Radice Law Firm represent plaintiffs Eric Young, Adam Kurtz and David Crystal, passive members of the class bringing the case. They claim Roche Freedman’s continued status on the case “will likely continue to be detrimental to Kirby-Radice Plaintiffs and the putative class.” To mitigate those concerns, the firms sent a letter to the judge asking to replace Roche Freedman.

“Unless Roche Freedman is removed as interim co-lead counsel, the inquiry into the adequacy of lead counsel’s representation in this and other litigations will prejudice the rights of the putative class,”  the letter said. “To avoid a sideshow about the adequacy of counsel or the motives and use of litigation and discovery, a new leadership structure is necessary.”

That new leadership structure would be Kirby and Radice, according to the letter, saying their appointment “would provide guardrails against additional fallout from the recent disclosures relating to Roche Freedman and ensure that the putative class has adequate representation going forward.”

Roche Freedman first brought the case to the U.S. District Court for the Southern District of New York in 2019, alleging Tether colluded with several other exchanges named in the complaint to manipulate crypto markets, harming traders. Scandal rocked the case in recent weeks when videos circulated of Kyle Roche, founding partner and lead on a number of the firm’s class action cases, discussing his relationship to Avalanche blockchain developer Ava Labs. A blog post publishing the videos alleged Roche lodged cases on behalf of the firm, a claim both parties have vehemently denied.

In recent days, Kyle Roche began withdrawing from a number of the firm’s class actions, and the firm says it has removed him from its class action group. Still, defendants in the Tether class action have argued that’s not enough and called for the removal of the firm from the case. 

Roche Freedman lodged a separate response today to the defendants’ calls for its removal.  

“To be clear, while Mr. Roche’s statements were improper, defendants have failed to show
any evidence that the firm’s attorneys remaining on the case have done anything questionable,” said the response. “On this record, the reasonable inference is that defendants’ continued pursuit of disqualification is because they stand to benefit from it.”

It has yet to formally respond to Kirby McInerney and Radice’s letter. 

© 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.

Most bitcoin mining stocks fell on Tuesday as the coin’s value dipped below $19,000.

Bitcoin was trading at around $18,800 at market close, according to data from Trading View.

Cipher Mining’s stock fell 13.87%, followed by Hive Blockchain’s (-11.06% on Nasdaq), which announced in its August mining update that it is testing other coins to mine besides Ethereum after The Merge.

Here’s how crypto mining companies performed on Tuesday, Sept. 6:

© 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.