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Decentral Bank says it has fixed a smart contract bug that briefly caused about 10 trillion USN tokens to be minted, the stablecoin developer announced on Thursday. The team has burned the tokens and plans to reward the affected user with a bug bounty.

Decentral Bank is a decentralized autonomous organization (DAO) that is developing the USN stablecoin on the Near blockchain.

According to a security incident report shared with The Block, the bug was discovered when a user called “pavladiv.near” tried to swap 5 USN ($5) for 5 USD Tether (USDT) at 01:35 a.m. EDT on July 6. The user attempted the trade via the on-chain swap mechanism on Decentral Bank.

Yet there was an issue that didn’t let swaps work if the wallet did not contain any USDT (despite it not being needed for the swap). As a result of this error, the swap failed.

The user tried the process twice and it failed on both occasions. Since the transaction did not go through, the USN smart contract attempted to refund them. This is where the actual bug happened.

The bug caused a misplacement of decimal points when refunding pavladiv.near’s USN. Instead of returning 4.9995 USN (about $5), the smart contract bug minted 4.9995 trillion USN for the user on both occasions, thus creating almost $10 trillion out of thin air.

Decentral Bank, upon noticing the minting bug, paused the contract and deployed a fix to prevent the incorrect decimal placement when refunding a failed swap. The team also burned the excess USN tokens minted by the bug, restoring the circulating supply of USN to its correct state.

If left unchecked, the bug could have been exploited to mint infinite USN. This could have led to a complete drain of the Ref Finance USDT liquidity pool. Ref Finance is a DeFi protocol on the Near network and is also one of Decentral Bank’s backers and core contributors.

The USN developer says it is testing a fix for the failure of swaps by users with wallets that have never held USDT. Decentral Bank says users should hold a small portion of USDT when doing such swaps while it prepares to rollout the solution.

Today’s announcement also stated that no one was affected by the bug and that the user who discovered the issue will be rewarded with a bug bounty. The USN smart contract has also been unpaused since 08:27 a.m. EDT on July 6, Decentral Bank stated in its security report.

Decentral Bank recently paused the use of NEAR, the native coin of the Near ecosystem, for minting USN. This move came about following the collapse of TerraUSD (UST), which led to concerns that USN — which was originally designed in a similar way — could suffer the same fate. USDT is now the collateral backing for USN.

© 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 American Bankers Association, a major trade association representing banks across the US, is cautioning against a central bank digital currency. 

“The purported benefits of a U.S. Central Bank Digital Currency (CBDC) are uncertain and unlikely to be realized, while the costs are real and acute,” the ABA wrote to the US Department of Commerce. 

The Commerce Department had put out a request for public commentary in May in response to President Biden’s March executive order calling on federal agencies to report on digital assets.  The Commerce Department’s comment window closed on July 5. 

“The issuance of a CBDC would fundamentally rewire our banking and financial system by changing the relationship between citizens and the Federal Reserve,” the association continued. “There are also significant trade-offs that must be made between different design choices. These trade-offs are likely to undermine many of the key goals of a CBDC and make it essentially impossible for a CBDC to fulfill all the various purposes for which it is currently being discussed.”

The ABA is a longstanding voice for the banking industry. It reported over $135 million in revenue in their most recent form 990, from 2019. Its comments come as a US CBDC has increasingly become the subject of political back-and-forth.

A frequent consideration is that a CBDC could disintermediate retail users from the Federal Reserve — which would threaten commercial banks and, critics say, financial privacy among individuals. 

Other respondents to the Commerce Department included crypto-focused trade associations like the Blockchain Association, the Chamber for Digital Commerce and the Association for Digital Asset Markets. 

Less overtly hostile to CBDC development, the Chamber for Digital Commerce wrote “U.S. CBDC should be designed to be complementary to other forms of digital money that have already been developed.”

© 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.

MakerDAO has approved Huntingdon Valley Bank, a US-based regulated bank founded in 1871, to open a stablecoin vault. This vault will work as a system allowing the bank to borrow DAI tokens after depositing off-chain loans on its balance sheet as collateral.

MakerDAO is the issuer of the Dai (DAI) stablecoin. The DAO vote on Maker Improvement Proposal (MIP) #6 concluded with more than 80% of the total delegated votes supporting the bank’s proposal to open a Maker vault.  

At the launch, the bank will be able borrow up to $100 million, with the debt ceiling to grow to $1 billion over the next 12 months. A Delaware-based trust company called MakerDAO Bank Participation Trust will co-manage the bank’s loan assets on behalf of MakerDAO. 

TJ Ragsdale, MakerDAO’s lead for real world assets, said a partnership with a US-based bank will help bridge DAI with traditional finance and therefore strengthen its use. 

“The HVB [Huntingdon Valley Bank] proposal enhances MakerDAO’s balance sheet and reputation. In the financial vein, Maker achieves an out-of-the-box, diversified, and wholesale solution for generating Real World Asset (crypto-uncorrelated) revenues,” a MakerDAO spokesperson told The Block.

The official proposal stated that the DAI borrowed from the vault will serve to support the bank’s operations. It claimed that it will also generate an estimated 3% yield for MakerDAO.

Governance discussions

As indicated by the vote, the large majority of the DAO’s delegates supported the deal. ACREinvest, a delegate who voted yes during the vote commented that “the innovation [following the deal] here will open the floodgates for others to imagine what’s possible outside of TradFi.”

However, not all delegates were happy with the idea of a decentralized stablecoin working with traditional finance entities. Chris Blec, the founder of DeFi Watch, was the largest Maker delegate voting against the proposal. He voted no with 4,218 MKR tokens (3.8% of voting power).

Blec voiced concerns regarding regulatory risks that come with this deal.”There is an existential risk that any of these third party deals pose to MakerDAO in the context of today’s regulatory climate. What if a regulator forces this bank to freeze everything, sever ties with the DAO and take all the money?” Blec told The Block.

What is DAI?

DAI was originally founded in 2017 as a decentralized stablecoin backed with ether (ETH), the native token of the Ethereum blockchain. Later in November 2019, MakerDAO migrated to new system, allowing multiple on-chain crypto collaterals to back DAI.

More recently, MakerDAO has pivoted to a strategy of diversifying its treasury into real-world assets (RWAs). Recently, MakerDAO passed a vote to invest $500 million into short-term treasury bonds and investment-grade corporate bonds.

© 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 miner Argo Blockchain became the latest big mining firm to reveal that it sold bitcoin last month.

The firm sold 637 bitcoin in June, at an average price of $24,500, according to a statement on Tuesday. Argo joins rivals including Bitfarms, Core Scientific and Riot, all of which uncharacteristically parted with bitcoin last month amid the bear market. These firms have historically held on to their mined bitcoins.

Besides using the proceeds to fund operating expenses and other areas of growth, Argo said it also used part of the money to pay down a bitcoin-backed loan from Galaxy Digital. Similarly, Bitfarms sold 3,000 BTC (about half of the Bitcoin holdings it had at the end of May) last month to pay part of a Galaxy loan.

The outstanding balance on Argo’s loan is now $22 million. The company said that it had the necessary liquidity to avoid any “potential liquidation” even as Bitcoin prices continue to fall.

“We have seen positive results from our risk management strategy through which we have reduced the company’s exposure to its BTC-backed loan, and we have hired a full-time derivatives trader,” said Argo CEO Peter Wall in the statement. “We believe the company is well-positioned to navigate the current market conditions and further increase our efficiencies.”

Argo had secured a loan of $20 million and another $25 million loan from Galaxy last year to help finance its Texas facility (Helios). It also has an additional $26.66 million loan from NYDIG.

Argo mined 179 BTC in June, up 44% from the previous month. That was mainly due to an increase in hash rate and greater uptime at the new Texas facility, the company said. As of  June 30, the company had 1,953 bitcoin, including 210 bitcoin equivalents.

The mining firm brought in $4.35 million in revenue last month, which is about 12% up from June. Mining margins were lower in June (50%) compared to last month (62%). This was “driven primarily by the reduced price of Bitcoin and higher electricity costs at Helios,” the company said.

Bitcoin lost about a third of its value in June, going from around $30,000 at the beginning of the month to $20,000. As of press time, bitcoin’s price was roughly $20,800, according to TradingView.

© 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.

Aave Companies, the entity behind DeFi protocol Aave, has proposed to Aave’s governance forum that a new stablecoin called GHO should be created.

Currently the proposal is up for discussion and it would need to pass a governance vote to be implemented.

The stablecoin would be overcollateralized and similar to dai, the most popular decentralized stablecoin in the Ethereum ecosystem.

Aave users would be able to mint the stablecoin by using assets that they have supplied to Aave as collateral. These assets would continue to generate yield while also being used as collateral.

“While GHO would be secured by the assets on the Ethereum market, the main vision for GHO is to pursue organic adoption via L2s [layer 2s] to solve real life payment opportunities across the internet and on-ground,” said Aave founder Stani Kulechov on Twitter.

Kulechov added that the Aave DAO would benefit by receiving the interest payments from anyone who borrows the stablecoin. He noted that the stablecoin’s development has been completed and has an audit scheduled for July 11.

© 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.

Ashley Alder, CEO of Hong Kong’s financial regulator, is the leading candidate to become the next chairman of the UK’s Financial Conduct Authority (FCA), Sky News reported on Thursday.

Charles Randell announced in October 2021 that he intended to leave his role as chairman of the FCA, after assuming the position — in conjunction with the Payment System Regulator position — in 2018. Richard Loyd has been interim chair since Randell’s departure in the Spring. 

Alder has served over ten years as head of Hong Kong’s financial watchdog, the Securities and Futures Commission (FSC), while also chairing the International Organisation of Securities Commissions.

The chair of the FCA plays a vital role in the economic regulation of Britain and the appointment of a new chair requires the approval of both the Chancellor and the Prime Minister. However, due to the latest developments in Westminister may block any confirmation in the near future. 

Earlier this week Rishi Sunak, former Chancellor of the exchequer, stepped down from his role in light of fresh scandals facing the beleaguered Prime Minister of Britain Boris Johnson. Since then Johnson has announced Sunak’s replacement, only for him to step down a day later, seen 60 members of parliament resign and announced his impending resignation.

The UK Treasury, which handles appointments to the FCA, didn’t immediately respond to a request for comment from The Block.

© 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.

Reddit is releasing a series of limited-edition blockchain-based avatars made by independent artists – but is stopping short of calling them non-fungible tokens (NFTs).

Announced on Thursday, Collectible Avatars will be released in the coming weeks on the Polygon blockchain, which the social network said was chosen for its low transaction costs and sustainability commitments.

In a blog post, Reddit emphasized multiple times that the collection would only be purchasable with government-issued fiat currencies, not cryptocurrencies. Additionally, they will not be put up for auction and will instead be sold for a fixed amount.

“In the future, we see blockchain as one way to bring more empowerment and independence to communities on Reddit. Reddit has always been a model for what decentralization could look like online; our communities are self-built and run, and as part of our mission to better empower our communities, we are exploring tools to help them be even more self-sustaining and self-governed. Blockchain-backed Collectible Avatars are one of the early steps we’re taking to test out the potential benefits of this concept on Reddit,” said the company.

Reddit’s reluctance to brand the new product as an NFT is perhaps surprising. While it’s common to see Chinese tech companies refer to blockchain-based collections as “digital collectibles,” Reddit had no such qualms when it brought out its CryptoSnoo NFT collection last year on OpenSea.

The move is the latest in a series of web3 rollouts and experiments for Reddit. It has also experimented with allowing users to have NFTs as avatars, and allowing tokenized Community Points for its communities.

© 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.

Pakistan-based Game Storm Studios will team up with Ready Games to launch two new web3 games, according to a statement today. 

The new project follows Ready Games’ entry into the web3 world in May, when it raised $3 million in token sales to fund its new mobile web3 gaming arm. Among the investors were Bitkraft Ventures, Hashed, Mapleblock Capital, Mulana Capital and Polygon.

Compared to browser-based games, app blockchain games have been slow to take off due to concerns about how they fit into Apple and Google’s terms of service. Part of Ready Games’ web3 push involves helping web2 companies convert already existing games to web3 while complying with the rules of app stores.

Games Storm’s new blockchain-based games will both be pet-themed. According to its website, Game Storm has published over 1,000 non-web3 games in its over 10 years of operation and has offices in Pakistan, the US, India and Dubai. It mainly focuses on helping game builders create mobile applications for Android and iPhone.

© 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.

Tenderize, a staking derivatives protocol, has raised $3 million in seed funding in a round led by blockchain venture capital firm Eden Block.

Other investors in the round included blockchain infrastructure firm Figment, web3 angel collective Daedalus and digital asset investment firm TRGC, according to a statement on Thursday.

Tenderize is a protocol that allows users to collateralize loans and trade tokens while maintaining a position of staked assets. Through this increased flexibility, the company believes that it can unlock the full utility potential of staked assets with the end goal of enabling permissionless liquid staking, an emerging form of staking that seeks to unlock the value of staked tokens.

© 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.US, the American affiliate of global crypto exchange Binance, has appointed a new chief financial officer (CFO) to help prepare the company for a potential future listing on the public markets.

Jasmine Lee, the former CFO and chief operating officer (COO) of fintech company Acorns, has joined Binance.US as CFO, the company announced on Thursday. Before Acorns, Lee was CFO and COO for the consumer product group at PayPal.

At Binance.US, Lee will oversee the company’s financial operations, accounting, investor relations, treasury and tax. She will report to Brian Shroder, president and CEO of Binance.US, who said in today’s statement that Lee will help the company prepare for an eventual initial public offering (IPO).

“Her experience at Paypal, a public Fortune 500 company, in particular, will be invaluable as we chart our path to an IPO in the coming years,” Shroder said.

Lee said she looks forward to building a finance department at Binance.US “that lays a strong foundation for continued growth and our path to a future IPO.”

When asked for more detail on when Binance.US plans to go public, a spokesperson said: “in the next 2-3 years.” The company — which first revealed IPO plans last year — has yet to decide which exchange it will list its shares on, according to the spokesperson. Binance.US’s rival Coinbase has been listed on Nasdaq since April 2021.

Lee is not the first CFO of Binance.US. That role was held by Joshua Sroge, who joined the company in January 2020 and left in October 2021, according to his LinkedIn profile. Eric Segal, who was acting as interim CFO, will leave the firm, the spokesperson said. 

While Binance.US has plans for an IPO, it’s still looking to raise more funds after its first-ever $200 million round at a $4.5 billion pre-money valuation in April of this year.

The company spokesperson said, “Binance.US is well-capitalized and in a strong position for continued growth. That said, the company expects to raise additional capital in the coming months and years from strategic partners and value-add investors both opportunistically and as needed by the business.”

© 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.