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Axie Infinity fell victim of one of the largest exploits in DeFi history

Axie Infinity’s bridge chain Ronin Network (RON) has suffered from a massive breach, resulting in a loss of over $600 million worth of ETH and USDC.

The attacker was able to get control over four Ronin validator nodes of Sky Mavis — the publishers of popular game Axie Infinity (AXS) — and the node run by Axie DAO. Before the exploit the Ronin sidechain had only nine validators and required just five signatures for withdrawals and deposits, so the adversary was able to forge fake withdrawals from the bridge using compromised private keys.

According to the COO of Axie Infinity, the breach was a result of a “social engineering attack combined with a human error”.

Following the attack, the Ronin Bridge and the Katana DEX have been temporary paused, compromised validator nodes have been replaced, the validator threshold has been increased from five to eight, and the development team announced plans to add new validators to increase its blockchain security. Binance has also temporary paused withdrawals and deposits on the Ronin network.

The team behind Axie Infinity has promised that all players who suffered from the exploit will be reimbursed.

The Ronin Network is an Ethereum sidechain that was specifically created to provide a scaling solution for the popular blockchain game Axie Infinity due to Ethereum’s high transaction fees.


European lawmakers vote to enforce strict KYC rules on all crypto transactions

The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has voted in favour of controversial measures to outlaw anonymous crypto transactions. 93 members of parliament voted in favor of stricter regulations, while only 14 voted against and 14 abstained.

As a result, crypto firms operating in the EU may soon be required to enforce strict KYC procedures for so-called self-hosted wallets that they interact with. In other words, companies will have to verify identities of owners of non-custodial wallets before approving transactions to or from such wallet addresses.

Additionally, all transactions above 1,000 EUR will have to be reported to relevant anti-money laundering authorities.

As pointed out by many crypto industry leaders, collecting KYC information on all transactional counterparties is often impossible, so the new proposed regulatory measures have been seen as a major obstacle to crypto adoption and innovation in the region.

Before passing into law, the new regulations have to be agreed on by the parliament and national ministers. If the legislation passes, crypto firms will have 18 months to ensure full compliance with the new rules.

The CEO of Coinbase has pointed out that the new legislation will treat holders of cryptocurrencies differently from holders of fiat money since banks aren’t required to report all transactions over 1,000 Euros to the authorities, unless there are indications of suspicious activity.

In other news

  • Despite public outcry, India’s new crypto regulation came into force on April 1, imposing 30% crypto tax and 1% tax deduction at source (TDS) on each trade, which is likely to reduce liquidity on local exchanges. Additionally, traders cannot offset their losses against profits, as the new crypto tax policy is based on gambling and horse betting tax rules.

  • The Indonesian government has followed suit by announcing that starting from May 1 it will begin charging value-added tax (VAT) on crypto transactions, as well as 0.1% income tax on capital gains from cryptocurrency investments.

  • Semiconductor manufacturing giant Intel has released a second-generation Bitcoin mining chip called “Intel Blockscale ASIC”. The company explains that the new chip was designed with a focus on energy sustainability. Jack Dorsey’s company Block — previously known as Square — will be among the first customers to buy Inter’s new chip.

  • Popular cryptocurrency wallet Metamask has announced its integration with the Apple ecosystem, allowing its users to buy cryptos with debit and credit cards. MetaMask is owner by US-based crypto-focused company ConsenSys.

  • OpenSea — the largest NFT marketplace by trading volume — has added a long-awaited integration with the Solana blockchain. Besides Solana, the marketplace supports Ethereum, Ethereum’s scaling solution Polygon, and the Klaytn blockchain.

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