As we head into a new month, this week’s edition of ‘The Cortex Connection’ brings you a recap of some of the events, trends, and developments from the previous month of May.
Security
Ledger Delays Plans for Private Key Recovery Service Following Controversy
Ledger has been embroiled in controversy over their private key recovery service, which has raised some concerns about the security of users’ seed phrase. They have sinced decided to delay the release of the opt-in ‘Ledger Recover’ program to assess the feedback from the crypto community.
DeFi protocol WDZD Swap exploited for $1.1M
Blockchain security firm CertiK identified that a known exploiter by the name ‘Fake_Phishing750’ created a contract that drained 609 Binanced-Pegged ETH tokens worth $1.1 million from the BSC based protocol.
Arbitrum-based Jimbos Protocol Hacked for $7.5M in Ether
Blockchain security firm PeckShield found that Jimbos Protocol had their lack of slippage control on liquidity conversions exploited for 4,090 ETH
Crypto Scams and Exploits in May Led to a total of $60M in losses
Security firm CertiK identified that May’s $60m in losses due to scams and exploits brings the total combined losses in the last 6 months to $500M
Regulatory News
Beijing’s municipal government unveils regulatory white paper showing signs that China is opening up to the crypto industry.
While the United States is currently in full crypto crackdown, the Beijing Municipal Science and Technology Commision has released the “Web3 Innovation and Development White Paper” which recognizes Web3 technology as an “..inevitable trend for future internet industry development.”
Texas could become the 1st U.S. State to Officially Regulate Crypto
Texas House Bill 1666, which has passed both the state House and Senate chambers, will require digital asset providers in the state to provide transparency and solvency reports on a yearly basis to the Texas Department of Banking. If signed by Texas governor Greg Abbot, the bill will become law in 2024.
European Union Formally Signs Crypto Licensing & Money Laundering Rules Into Law
The EU’s Markets in Crypto Assets (MiCA), which was initially proposed in 2020, was finally signed into law. The provisions allows for crypto exchanges and wallet providers to obtain a license to operate in all 27 nations in the European Union, require stablecoin issuers to hold appropriate reserves, and is enacted along-side additional “transfer of funds” rules requiring crypto providers verify their customers’ identity when they transfer funds.
New York Attorney General Seeks to Expand Crypto Oversight Authority
The office of New York AG Letitia James has proposed the Crypto Regulation, Protection, Transparency, and Oversight Act (CRPTO Act) to NY state lawmakers for consideration. Currently, crypto service providers in the state have been regulated by the New York State Department of Financial Services however the bill seeks to expand pre-existing traditional finance regulations to also cover digital assets and service providers and primarily seeks to prevent issues with conflicts of interest.
SEC to Grayscale Investments: Filecoin is a Security
The U.S. Securities and Exchange Commision has officially notified Grayscale Investments that their Grayscale Filecoin Trust application must be withdrawn as they have identified that $FIL, the coin associated with the Filecoin ecosystem, is an unregistered security. Protocol Labs, the company behind Filecoin, has identified that $ FIL does not meet the criteria for a security and Grayscale agrees stating that “…Filecoin is an international, decentralized peer-to-peer file storage network with thousands of contributors…” and that they will “…respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position.”
For Your Information
Tether to Mine Bitcoin in Uruguay
Tether, currently the largest stablecoin issuer and large holder of Bitcoin, is investing in energy production resources to establish sustainable Bitcoin mining operations in Uruguay. According to Tether’s site, 94% of Uruguay’s energy production is derived from renewable sources.
Bitcoin Transaction Fee Revenue at 2-Year Highs
According to The Block Crypto, Bitcoin transaction fee revenue is up to an 11% increase over April 2023 to 14.3%, which is the highest since April 2021. The key catalyst for this is the popularity of Ordinals, which is a method for creating artwork on chain tied to satoshis, the smallest unit of account on the Bitcoin network.
Robert F. Kennedy Jr. to Accept Bitcoin Campaign Donations
Praising it as a “…symbol of democracy and freedom..”, RFK Jr. announced at the Bitcoin 2023 conference that his campaign will accept donations in Bitcoin, making his campaign the first in U.S. history to accept BTC donations. Kennedy Jr. is running for U.S. president on the 2024 Democrat ticket against incumbent President Joe Biden.
Governance News
Uniswap V3 is Seeking to Deploy to the Fantom Network
After completion and acceptance of the proposal via on-chain vote, the smart contract deployments on the Fantom network and front-end integration are estimated to take 4-6 weeks to complete.
Ongoing Discussion to Introduce $LDO Token Staking and Buyback Program
Lido token holders don’t currently benefit from revenue generated by the protocol, leaving the $LDO token without any direct utility. There is a robust conversation discussing a token staking and buyback program, with many alternative focuses suggested in the thread highlighing a great example of the governance process in motion.
Alchemix Seeking to Deply on Arbitrum
Currently deployed on Ethereum, Optimism, and Fantom - the Alchemix community is discussing expanding onto the Arbitrum network. The project team has indicated that the technical development work should take about a week and that most of the additional time and work will be in evalutating risk metrics and coordinating operations to bribe for liquidity.
Synapse Seeking to Deploy on Pulsechain
Popular blockchain bridge Synapse is seeking to deploy on Richard Heart’s Pulsechain network, a long awaited and recently launched Ethereum fork. As the Pulsechain network has brought high trading volumes and robust liquidity, the Synapse community sees an opportunity to cater to the Pulse community’s demand for bridging assets between Pulsechain and other EVM compatible chains.
1inch Hardware Wallet
The 1inch community is seeking to allocate $2m in funding to finalize product development, set up the manufacturing process, and cover costs for auditing for a 1inch hardware wallet. The project was initially provided $175k under the 1inch grant program in 2022. Interested users can join the 1inch hardware waitlist with launch expectations by the 4th quarter of 2023.
Optimism Seeking to Pause $OP Token Inflation Rate
With nearly 90% of token holders voting in favor, the Optimism community has voted to reduce the token inflation rate from 2% to 0% from May 2023 to April 2024. The proposal was raised as a result of a significant supply unlock that was scheduled for the Partner, Seed, and Unallocated fund categories from the original token distribution and it appeared that additional token supply was not necessary in the near term.
That’s it for our news roundup for the month of May. We hope you found these updates useful. If we missed anything or you have any feedback or suggestions for future editions, feel free to visit our Discord to let us know.