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Regulators

Tether refuses to ban Tornado Cash addresses without a specific law enforcement instruction

Amid ongoing crackdown on Ethereum’s privacy protocol Tornado Cash (TC), issuer of the USDT stablecoin Tether announced that the company will not preemptively freeze Tornado Cash addresses, but rather wait for specific law enforcement instructions. The move comes in contrast to Circle’s decision to freeze 38 addresses with 75,000 USDC associated with Tornado Cash.

It’s important to mention that despite Tether’s recent decision to resist US regulators, the stablecoin issuer usually complies with US authorities and has already banned 719 addresses, while its competitor Circle has banned 82 addresses, according to Dune Analytics dashboards.

After the US regulators sanctioned the Tornado Cash protocol, major crypto companies and even DeFi protocols such as Aave, Balancer, dYdX, and Uniswap have barred privacy protocol users from interacting with their services, exposing industry’s over-reliance on centralized services.

Many executives of crypto and DeFi companies including Cardano founder Charles Hoskinson, Kraken CEO Jesse Powell, execs from Coinbase and Circle have voiced their criticism over sanctioning an open source software instead of individuals and entities using it ill-intentioned.

On that note, the Dutch judge denied bail request for Tornado Cash developer Alexey Pertsev, ruling that the coder must remain in jail for at least 90 days more pending his trial. Reports emerged that Pertsev was a former employee of Russia’s intelligence agency.

Earlier in August, 29-year-old developer of the privacy protocol Alexey Pertsev was arrested in the Netherlands on suspicion of facilitating money laundering. According to the Dutch law, the developer can be held in custody for up to 110 days without a charge.

Upgrades

Ethereum and Cardano blockchains to undergo major upgrades soon

Ethereum’s long-awaited transition to the proof-of-stake (PoS) consensus mechanism finally got a date. The so-called “Merge”, when the blockchain will abandon proof-of-work (PoW) by significantly raising the mining difficulty, is expected to happen before September 20.

The Merge is a major step towards Ethereum 2.0, which includes not only a proof-of-stake consensus mechanism, but also the onchain scaling solution known as sharding.

Note that this event is not unanimously welcomed among its community. Some Ethereum miners unwilling to switch to other blockchains like Ethereum Classic (ETC), decided to hard fork Ethereum and keep mining the PoW version of the chain after the Merge is completed with a new token called ETHPOW. However, major centralized stablecoin issuers won’t support the hard fork chain, meaning that USDT and USDC will become worthless on the PoW chain. Thus, liquidity providers are advised to withdraw their funds from stablecoin-paired liquidity pools if they want to save their ETHPOW tokens from exploits following the merge.

On the other hand, development company behind the Cardano (ADA) cryptocurrency Input-Output Hong Kong (IOHK) announced the date of the upcoming Vasil upgrade that has been previously delayed due to technical issues. According to the team, the scalability upgrade will take place on September 22.

The highly-anticipated upgrade named after Cardano’s prominent community member Vasil Dabov was initially scheduled for the launch in July, but later got postponed with developers raising concerns over major bugs.

The upgrade requires 75% of SPO nodes to run the newest version to be activated. At the moment of writing, 82% of Cardano nodes have upgraded their clients to the latest version 1.35.3, according to data from PoolTool.

In other news

  • DeFi lending protocol Compound (COMP) has frozen withdrawals and liquidations for a week due to a serious bug in the latest upgrade, which had passed three different audits. The upgrade aimed to improve Compound’s oracle that provides pricing data for the assets available on the protocol.

  • According to Ukraine’s local news outlet Obozrevatel, the country’s two largest technology retailers Techno Їzhak and Stylus started accepting bitcoin as payment for goods and services.

  • According to Russia’s news agency Tass, country’s deputy finance minister Alexei Moiseev said that the Russian central bank and the finance ministry expect to soon legalize cryptos for cross-border payments due to the current geopolitical situation.

  • Pavel Durov - the co-founder of one of the world’s most popular messaging apps Telegram - has hinted at creating an NFT-like marketplace for trading Telegram usernames, allowing users to safely sell and buy usernames similar to how ENS and Unstoppable Domains protocols allow users to trade domain names on the Ethereum blockchain in a trustless way via smart contracts.

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