#41

English
Loading live market prices from LocalCryptos…
Lives prices from LocalCryptos.
DeFi

Compound users face moral dilemma after a mistaken airdrop

Over $80 million has been mistakenly distributed to users of DeFi lending protocol Compound due to a bug following a recent upgrade. One address received as much as $29 million worth of protocol’s native token COMP, which were originally allocated for long-term mining rewards.

The founder of Compound asked users to voluntarily return the received rewards, keeping 10% as a “white-hat” compensation. He also threatened to doxx those users who won’t comply, as well as report their rewards as income to the US federal tax agency. While some users have already returned the funds, the threats to doxx DeFi investors weren’t received well in the crypto community.

The Compound protocol manages $10 billion in total value locked and its governance token COMP has around $2 billion market capitalization, so the project can absorb the recent loss regardless of how much of it will be voluntarily returned.

Earlier this year, another DeFi protocol — Alchemix — prematurely forgave borrowers’ loans, essentially giving them nearly $5 million in free money. Alchemix developers were able to recover most of the losses by simply asking the community to return the tokens.

Governments

China intensifies crypto crackdown while El Salvador increases Bitcoin adoption

Following increasing regulatory pressure from Chinese financial watchdogs, major China-focused crypto exchanges started to curb operations in the country. Huobi and KuCoin announced plans to completely retire all of their users from Mainland China by the end of the year, while Binance and Coinex have halted account registrations.

Sparkpool, Ethereum’s second-largest mining pool with more than 20% of the total hash rate, followed suit with plans to suspend operations in China. Shortly after, another large China-based Ethereum mining pool, BeePool, halted its services.

Earlier this year, the country has already seen a massive exodus of Bitcoin miners to more friendly jurisdictions.

China’s biggest online commerce company Alibaba announced prohibition of sales of the cryptocurrency mining equipment, alongside with tutorials, strategies, and software for obtaining digital currencies on its platform.

Three major crypto market tracking websites — CoinGecko, TradingView, and CoinMarketCap — got blocked in the Asian country, while popular Ethereum gas forecasting website GasNow announced shutdown of all services on Oct 15.

Meanwhile on the other side of the globe, El Salvador began mining Bitcoin using the geothermal energy of a volcano. Earlier in September, the Central American nation adopted Bitcoin as legal tender in an attempt to diversify from the US dollar and leverage country’s 20 active volcanoes for cryptocurrency mining.

The Salvadorian government has also negotiated with the largest gas station companies in the country to introduce discounts on petrol purchases of $0.20 per gallon for local consumers who pay with KYC-enforced government wallet Chivo.

In other news

  • Coinbase disclosed that hackers gained access to accounts of at least 6,000 users between March and May by exploiting exchange’s multi-factor authentication process. The company promised to reimburse all victims, as well as provide free phone support and credit monitoring for affected users.

  • Avalanche-based DeFi lending platform Vee Finance has suffered from a flashloan attack, resulting in a loss of $35 million. Following the exploit, the dev team suspended platform’s smart contracts, halting the deposit and borrow function.

  • Crypto exchange Bitfinex mistakenly paid more than $23 million in gas fees to transfer $100,000 USDT from company’s account to its affiliated decentralized exchange DeversiFi, previously known as Ethfinex. After the incident, a miner that mined the block agreed to return almost all of misspent funds. The DeversiFi team contacted Ledger and maintainers of EthereumJS, who then implemented the fixes to prevent similar mistakes in the future.

  • Another provider of high-interest yield products became a target of American financial regulators. Circle, a key member of Center Consortium that issues collateral-backed stablecoin USDC, revealed that the company is under an investigation by the US SEC since July. The investigative subpoena came one month after Circle started onboarding corporate clients to its new yield generating product.

  • Amid increasing regulatory scrutiny over the DeFi space, decentralized exchange 1inch started blocking users from US IP addresses on its website, which is a front-end user interface for interacting with the DEX protocol.

  • American former Ethereum foundation developer Virgil Griffith, who gave a cryptocurrency presentation at the North Korean blockchain conference in 2019, pleaded guilty in an agreement with federal prosecutors, facing up to 6.5 years in prison. The developer has been accused of trying to help the North Korean government to violate US sanctions.

Stay up to date!

Get fresh crypto news delivered to your inbox every two weeks.

Awesome! Just one more step.

Click the link in your inbox to confirm your subscription.