Crypto News Headlines (23-Aug-2022)

When the decentralized-finance platform Acala was attacked on Saturday, allowing the perpetrators to mint what was technically $3 billion worth of its aUSD stablecoins, a natural question to ask was: Didn’t Acala audit their code?

Yes, the Polkadot-based protocol certainly did. But the exploit involved a misconfiguration in one of Acala’s liquidity pools – the backbone of decentralized exchanges (DEXes), where cryptocurrencies are swapped according to a math equation instead of a conventional order book – which originate from another project entirely, the Honzon protocol. And that allowed 3.02 billion new aUSD stablecoins to be created, which drove their price down dramatically from their intended $1 each.

“We didn’t perform an exhaustive review of the Honzon protocol. We stated at the time that additional reviews were required to fully investigate issues we identified,” Nick Selby, vice president of the software assurance practice at Trail of Bits, said in an interview with CoinDesk. That company was one of several firms that audited Acala’s smart contracts last year.

It seems that Hodlnaut lost close to $200 million and the company is now looking for assistance and protection from the Singapore High Court. In a judicial management process update published on August 19, Hodlnaut says the company’s Hong Kong subsidiary suffered from the terrausd (UST) crash. At the time, Hodlnaut claims the terrausd (UST) crash sparked “unusually high volumes of withdrawals.”

After the update was published, the whistleblower Fatman explained that the court affidavit that shows the $193 million shortfall also indicates contradictory statements Hodlnaut published after the Terra crash. “In a new filing from Hodlnaut, they admit to [having] had most of their [assets under management] in UST through their HK defi spin-off entity, and they lost a whopping $190m in the Terra crash,” Fatman said. The whistleblower added:

Despite this, they continued to tell customers they had zero Anchor exposure.

Near Protocol’s Rainbow Bridge experienced another hack attempt over the weekend.

Like the first attempt back in May, the project successfully blocked this attack “automatically within 31 seconds,” the CEO of Aurora Labs Alex Shevchenko announced on Twitter yesterday.

The Rainbow Bridge connects Near Protocol, Ethereum, and Aurora—an EVM-compatible scalability solution on Near—allowing users to move funds between the networks via smart contracts.

Since smart contracts are automated and trustless, anyone can interact with them, including bad actors.

In the case of the recent Near attack, the attackers proposed a fabricated block on Near requiring a 5 Ethereum deposit early Saturday morning. The attacker may have been hoping that the early-morning attack would’ve been difficult to react to, said Schevchenko.

Ethereum Classic (ETC) is arguably one of the tokens that have benefitted the most in the recent rally. Given its close proximity to Ethereum, the bullish sentiment drummed off by the “Merge” had triggered a significant rally in the price of the digital asset. This has also drawn more attention to the cryptocurrency in terms of investment and mining activity, causing its hashrate to rise to the highest point it has ever been.

Ethereum Classic Hashrate At New ATH

The excitement around the Ethereum Merge has not ended on the network alone. Being a hard fork of Ethereum, it boasts of a strong community, some of which still believe that ETC is the original Ethereum. This is why Ethereum Classic has managed to remain relevant, despite dropping into the shadow of its larger counterpart, ETH.

However, the anticipation around the Merge has benefitted both cryptocurrencies tremendously, with ETC posting even larger gains. The growth has also translated to mining activity on the network as crypto miners move to share from the increase in price. This has seen the Ethereum Classic hashrate climb to its highest point yet.

In the aftermath of the first officially reported crypto payment in the sanctioned country’s foreign trade, Iran’s importers point to the necessity of stable regulations to continue trade via cryptocurrencies.

On Saturday local reports cited the head of Iran’s Importers Group and Representatives of Foreign Companies (Import Association), Alireza Managhebi, who emphasized that stable regulations and infrastructure should be prepared to be able to successfully use cryptocurrencies for imports:

“The question is, has the government developed consistent regulations for the cryptocurrency uses so that they will not change within two months and the businessmen active in this field will not be harmed?”

Managhebi also doubted the belief that the official use of cryptocurrencies for imports might end the dollar dominance in the Iranian market and reminded of a possible threat — the new payment method may lead to the emergence of rent-seeking business groups.

Developers behind non-fungible token (NFT) platform Sudorare rugged users for over $800,000 in various cryptocurrencies Tuesday before deleting the project’s online footprint.

Sudorare was a fork of decentralized NFT marketplace SudoSwap, known for its liquidity pools for NFTs and cheaper gas fees, and LooksRare (LOOKS), another NFT marketplace that rewards users for their participation on the platform. Both projects have gained popularity among crypto circles in the past year.

Sudorare offered a yield farm to users who staked LOOKs, XMON and wETH for its own tokens over one week.

However, blockchain data from Tuesday morning shows Sudorare developers illicitly emptied the LOOKS liquidity pool just six hours after it went live, swapping over 1 million LOOKS for 154 ether and 60,000 USDC in one such transaction, and thus pulling off a colloquial “rug pull.” The developers stole over 514 ether in all, valued at just over $815,000 at current rates.

During most of 2021 and the second half of 2022, many investors have been focused on assets like gold and bitcoin. Silver, on the other hand, has not performed as well and both silver spot prices and silver mining stocks have underperformed the S&P 500.

In February 2021, News reported on the so-called ‘silver squeeze’ sparked by anonymous cohorts on the Reddit forum r/wallstreetbets. That week, silver soared over $30 an ounce in USD value, and many precious metal dealers said they were out of stock.

In 2022, an ounce of fine silver managed to reach a high of $26.46 per ounce during the second week of March. On March 8, 2022, gold’s price per ounce hit a new lifetime high as it traded above the $2,070 range.

Silver has lost more than 28% in value since March 8, as it is currently coasting along at $19 per ounce on Saturday evening (EST) on August 20, 2022. Despite the significant losses, the founder of The Morgan Report, David Morgan, believes silver will see a crunch in supply in the next ten years.

Argentina’s eccentric Bitcoiner presidential candidate is being sued for allegedly promoting a crypto ponzi scheme.

Javier Milei, a top contender to be the next president of Argentina, last year uploaded an Instagram post to his 1.3 million followers promoting CoinX, a crypto investment platform that promised huge returns to users.

The platform, which closed in June, had a huge social media following and claimed to use AI, bots, and expert traders to automate trades for investors—and make them lots of money.

In December, Milei visited their Buenos Aires offices. “They are revolutionizing the way to invest to help Argentinians with inflation,” he wrote in the Instagram post. “You can now simulate your investment in pesos, dollars or cryptocurrencies and earn a profit.”

On Monday, August 22, SEC chairman Gary Gensler published an op-ed piece in Wall Street Journal sharing his views on how crypto markets should be treated. Drawing a comparison with the car industry, he said that just as the safety standards for the car industry have remained the same for the last six decades, the investor protection standards also remain the same.

Gensler said that there’s no reason to give any special status to digital assets. Instead, they should be treated like capital markets. He also noted how investors have been mercy of the crypto lending platforms going bankrupt this year. With their funds frozen, investors have no choice but to knock at the doors of the court. The SEC Chair wrote:

There’s no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology. Recent market events show why it is critical that crypto firms comply with securities laws.

Bitcoin (BTC), the world’s most-valued cryptocurrency, has the potential to be a significant energy consumer in the future, but only if it reaches several million dollars, according to new estimates by Arcane Research.

Crypto research and analytics firm Arcane Research on Monday released a report estimating the development in Bitcoin’s energy usage toward 2040.

Authored by Arcane Research analyst Jaran Mellerud, the report points out that Bitcoin’s future energy consumption differs massively depending on the future Bitcoin price alongside factors like transaction fees, electricity prices and others.

If the BTC price hits $2 million in 17 years, Bitcoin may consume 894 Terawatt-hours (TWh) per year, surging 10 times from today’s level, the report suggests. Despite huge growth, such energy consumption would only account for 0.36% of the estimated global energy consumption in 2040, increasing from Bitcoin’s 0.05% share today, the analyst estimated.