China’s National Development & Reform Commission Adds Crypto Mining to Outdated Industry

About two dozen cryptocurrency firms have fled the country after PBOC explicitly warned foreign platforms about providing services to its citizens, calling them illegal financial activities.

In less than fifteen days since the People’s Bank of China issued new regulations to crack down even more strongly on the cryptocurrency industry in the country, more than 20 such companies have stopped providing services to users in China or have completely withdrawn from the Chinese market, according to a local report.

On Friday, the National Development and Reform Commission further added virtual currency mining back to its outdated industry category; an action expressed in the PBOC’s notice last month.

The NDRC first started publishing this industry reform catalog in 2005 and grouped industries into three categories to encourage, restrict or eliminate them.

According to the latest draft, crypto mining is an industry that uses outdated production processes and equipment.

Exchanges Shutting

This time the central bank has strengthened its regulations against crypto and explicitly warned foreign platforms about providing services to Chinese citizens, declaring them illegal financial activities.

The campaign has served as a “clearer signal to the cryptocurrency industry that the space for relevant institutions and professionals is being squeezed more and more,” said Su Xiaorui, a senior analyst at research firm Analysys.

Today, Justin Sun’s Poloniex exchange announced that it will cease its operations in mainland China as it cannot comply with the local laws only to inform later that their “last email was wrong.”

In its first email, Poloniex had said that the platform would restrict its operations from 7th October, 4:00 am (UTC), and that it had stopped its registration facilities on 4th October.

Executives Leaving

Leading crypto exchange Binance swiftly stopped registering new mainland Chinese users following PBOC guidelines. Another popular crypto exchange Huobi said it would phase out access to existing Chinese users by this year’s end, and earlier this month, it yet again issued an announcement confirming the details of the withdrawal of users in China.

This week, Huobi COO Zhu Jiawei further announced his exit from the company. Founder and chairman Li Lin clarified in a WeChat post that their COO had already quit in April, but they delayed publicizing the information to avoid negatively impacting the company. Binance’s chief financial officer Zhou Wei also left the company in May.

However, both the exchanges were already forced to move out of China in 2017 when Beijing stopped hosting fiat to crypto transfers. But until this year, Chinese users were still able to access those services through over-the-counter (OTC) services and crypto-to-crypto transactions.

No More Support

Other platforms like TokenPocket, BitMart, and BHEX have also stopped providing their services to Chinese users.

Miners like SparkPool, which is one of the largest Ethereum mining pools and data providers, have all fled China as well. Alibaba has banned the sale of crypto mining equipment, NBMiner, which develops management software for graphics cards, is no longer offering tech support to users in China, and the operator of the Feixiaohao app also ceased its operations in the country.

Even HyperDAO, which offers decentralized financial (DeFi) services, said it would no longer discuss cryptocurrency on Chinese social media and had quit all business on the mainland.

Major data aggregators CoinGecko, CoinMarketCap, and TradingView, are no longer accessible in mainland China either.

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Author: AnTy

Tis the Season for Bitcoin: BTC Reclaims Trillion Dollar Market Cap as Banks Capitulate & Stocks Tumble

September’s headwinds for bitcoin “have positioned the market to rally higher into and throughout Q4,” which is historically its best quarter, with an average return of 119%.

Bitcoin is back to leading the market.

After hitting an all-time high at about $65,000 in mid-April, Bitcoin had taken a back seat to let the altcoins experience a face-melting rally.

But now, after almost six months, Bitcoin has taken the reins back. On Wednesday, the price of BTC pumped as high as $55,700. This level was last seen on May 12, during the sell-off.

With this latest spike, Bitcoin has yet again become a trillion-dollar asset.

October is turning out to be a bullish month after the red month of September. Historically, not only Sept. has seen negative returns, but Q4 has also seen a substantial run-up.

Kraken Intelligence also noted in its research blog that September’s headwinds for bitcoin “appear to have positioned the market to rally higher into and throughout Q4.” It added that the Q4 is bitcoin’s historically best quarter, with an average and median return of 119% and 58%, respectively.

Futures Dominating Market

In the futures market, the funding rate on Bitcoin perpetual contracts is still normal, with the highest on FTX at 0.0320%. Delphi Digital stated,

“As BTC began to rally into October, basis didn’t rise as aggressively as one would’ve imagined. BTC has become a perpetuals and futures-dominated market.”

As for open interest for Bitcoin futures, it has climbed to $17.4 billion to early September levels.

OI for BTC options is on the rise as well, currently at $8.56 billion.

“The uptick coincided with BTC’s rally into the beginning of October. After a large expiry, OI tends to bounce back as freed-up capital from expirations moves back into the market.”

Banks are Capitulating

This week, we saw US Bancorp launching a crypto custody service for institutional investment managers and Bank of America Corp publishing its first crypto research coverage. Also, Soros Fund owns Bitcoin, revealed the CEO Dawn Fitzpatrick.

“The banks are capitulating one by one,” said Martha Reyes, head of research at digital asset prime brokerage BEQUANT.

“For those of us working in the space, the fact that it’s too big to ignore is hardly news, and the regulators certainly aren’t ignoring it.”

Bitcoin pumping is not only good for BTC itself but altcoins as well, as this means big players are entering the market, and it’s not just a few players trying to cash out and manipulate small market-cap coins.

During this bulls onslaught, altcoins are seeing gains, with Ether going to $3,625. Today’s other big gainer includes SHIB (24%), which has been enjoying a rally since the beginning of this week. ETH 1.91% Ethereum / USD ETHUSD $ 3,586.89
$68.511.91%
Volume 21.87 b Change $68.51 Open $3,586.89 Circulating 117.82 m Market Cap 422.61 b
6 h Tis the Season for Bitcoin: BTC Reclaims Trillion Dollar Market Cap as Banks Capitulate & Stocks Tumble 11 h Shiba Inu (SHIB) Leads the Crypto Market, Currently the Most Traded Asset on Binance, Coinbase, and Huobi 1 d Citadel Founder Says Regulating Crypto Will Make It “A Smaller Market” And “That’ll Be Good”
SHIB 62.48% SHIBA INU / USD SHIBUSD $ 0.00
$0.0062.48%
Volume 15.27 b Change $0.00 Open $0.00 Circulating 10 t Market Cap 11.13 b
6 h Tis the Season for Bitcoin: BTC Reclaims Trillion Dollar Market Cap as Banks Capitulate & Stocks Tumble 11 h Shiba Inu (SHIB) Leads the Crypto Market, Currently the Most Traded Asset on Binance, Coinbase, and Huobi 2 d Shift to Risk-on: Bitcoin Is Up 12% Already in Uptober Amidst Stock Market Weakness

The total market cap is now aiming for $2.4 trillion.

Stocks Are Taking A Beating

While Bitcoin and crypto are rejoicing with gains, global equity markets slid. The S&P 500 fell 0.77% and Nasdaq Composite lost 0.51%.

Meanwhile, the dollar rose 0.413% to 94.4 after a strong private payrolls report and surging energy prices fueling the inflation outlook and expectations that the Federal Reserve will soon start tapering.

However, while US private payrolls increased by 568,000 in September, according to the employment report from ADP, it has been an unreliable predictor of the non-farm payrolls data the Labor Department will release on Friday.

After warning about a 20% plunge in US stocks to be a real possibility about two weeks ago, Morgan Stanley’s Mike Wilson is now saying that this correction would be led by tech stocks because “earnings estimates are too high.”

“We’re in the final phase of this mid-cycle transition where growth is decelerating and markets correct.”

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Author: AnTy

Fidelity Urges the SEC to Approve A Bitcoin ETF As Another BTC Futures ETF Filed

Fidelity argues firms have to “fulfill financial backer need for direct openness to Bitcoin,” highlighting the need for a physically-backed Bitcoin ETF as the Bitcoin market has “developed and can uphold” the laws.

Fidelity Investments has urged the US Securities and Exchange Commission (SEC) to approve its Bitcoin exchange-traded fund (ETF) in a private meeting, reported Bloomberg.

Tom Jessop, the president of Fidelity Digital Assets (FDA) along with other executives, met with SEC officials over a video call on Sept. 8, according to a recent filing.

Laying down the reasons why the regulator should approve the proposed products, the executives pointed to increased investor appetite for crypto assets, the growth of Bitcoin holders, the existence of similar funds in other countries, and the regulator being slow to embrace, according to a presentation from the meeting.

“Bitcoin prospects-based items are not a vital interval venture before a Bitcoin ETP,” Fidelity said. “Firms ought to have the option to fulfill financial backer need for direct openness to Bitcoin” through ETFs enrolled under those 1930s laws, “on the grounds that the Bitcoin market has developed and can uphold them.”

In March, Fidelity filed the application for its Bitcoin ETF called the Wise Origin Bitcoin Trust.

According to Rebecca Sin, ETF Analyst at Bloomberg, the listing of crypto ETFs in the US “could boost ETF revenue to 20 billion over the next five years.”

As we have reported, several firms have filed their applications for a physically-backed Bitcoin ETF. In fact, the first such application was filed by Winklevoss twins eight years back, but not a single one has been approved yet.

“A progressively wide scope of financial backers looking for admittance to Bitcoin has highlighted the market need for a more differentiated arrangement of items offering openness to advanced resources for match interest,” Fidelity representative Nicole Abbott told Bloomberg.

However, recently, SEC Chair Gary Gensler did signal his openness to a futures-backed Bitcoin ETF as it offers increased investor protection.

Since Gensler’s comments, several firms have also filed for a Bitcoin Futures ETF, and the industry experts expect one to get approved by the end of this year.

On Tuesday, ETF Series Solution also filed for a Bitcoin futures ETF with Bitwise Index Services.

The Bitwise Bitcoin Strategy ETF was filed under the Investment Company Act of 1940 and seeks to invest in bitcoin futures and other financial products, including “Canadian-listed funds that provide exposure to bitcoin.”

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Author: AnTy

94% Financial Industry Pioneers say Digital Assets will Replace Fiat in 5-10 Years: Deloitte Report

“Participation in the age of digital assets is not an option—it is inevitable,” says the report, as digital assets have a fundamental impact on deposits and with organizations’ current business models at stake.

An impressive 97% of the financial services industry (FSI) Pioneers and more than three-quarters of all respondents see blockchain and digital assets as a way to gain competitive advantage reports Deloitte 2021 Global Blockchain Survey.

The survey was conducted between late March and early April 2021 as a way to gain insights into overall attitudes and investments in blockchain and digital assets. It polled 1,280 senior executives and practitioners in the US, the UK, Mainland China, Germany, Japan, Hong Kong, Singapore, South Africa, and the United Arab Emirates.

According to the survey, nearly 80% of respondents said that digital assets would be “very/somewhat important” to their respective industries in the next 24 months.

“The business imperative of adopting blockchain and digital assets is growing noticeably, as organizations increasingly accept that their current business models are at stake,” noted the report.

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There is also a consensus among the FSI people that digital assets will replace fiat currencies in the next five to 10 years, with 76% believing the changeover will occur. This number jumps to 94% for FSI Pioneers.

With the growing interest of major institutions and individuals in the cryptocurrency industry, funds also continue to flow into the digital assets market. According to Deloitte, “the fundamental impact on deposits creates an important opportunity for banks and all industries that hold assets.”

As such, nearly half (47%) of FSI survey respondents said that custody of digital assets represented a “very important” role for crypto assets in their respective organizations, ranking as the top role. Safe custody, too, ranks as the top concern around holding or transacting in central bank digital currencies (CBDC) at 57%.

Custody is followed by new payment channels, diversifying investments/portfolios, access to decentralized finance platforms, and tokenization of assets in terms of the role of digital assets in the respondent’s organization or project.

Approximately six in 10 respondents saw regulatory barriers among the biggest obstacles to the acceptance of digital assets.

Meanwhile, nearly 70% identified data security regulation as the greatest need of modification and 71% cybersecurity among the biggest obstacles to acceptance of digital assets — “suggesting that even the most dedicated believers in digital assets have legitimate security concerns.”

Still, there is “shared optimism” about future revenue opportunities from crypto solutions, with 80% strongly or somewhat agreeing.

Coming onto decentralized finance, 83% of FSI respondents said they believe digital assets will play a very or somewhat important role in it.

When it comes to which digital asset types will have a significant positive impact on their organizations, 42% said stablecoins or CBDCs, 38% algorithm-driven stablecoins, and 33% enterprise-controlled coins.

“Participation in the age of digital assets is not an option—it is inevitable,” concludes the report adding, “Leaders are left only to decide how and when their organizations should start—and how to use digital assets and the new global financial service infrastructure to their greatest advantage.”

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Author: AnTy

9 Out of 10 El Salvadorians Do Not Have A Clear Understanding of Bitcoin: Poll

9 Out of 10 El Salvadorians Do Not Have A Clear Understanding of Bitcoin: Poll

As a result, the majority disagree with bitcoin’s adoption as a legal tender in the country.

The majority of the Salvadorans, 67.9%, said they disagree or strongly disagree with the use of Bitcoin as a legal tender, according to a poll by Central American University (UCA), a Jesuit university based in El Salvador that surveyed 1,281 people.

Interestingly, the poll showed that 9 out of 10 people did not clearly understand bitcoin, and 8 out of 10 said they had little or no confidence in its use.

The fact that many are unaware of how to use the digital currency and are distrustful of the project makes sense that they do not agree to adopt Bitcoin as a legal tender beside the US dollar.

As we reported this week, a survey of 2,000 consumers across the US by Bakkt also found that while 48% have invested in crypto, 24% of respondents said they don’t know where to start, which means financial literacy and consumer understanding remain a big part of crypto adoption.

Many people in the country that you would ask if they would be open to being paid in cryptocurrency would not even know what Bitcoin is. They would want dollars, which is what they are used to, explained Chainalysis CEO Michael Gronager in an interview with Bloomberg about this reluctance among the people of El Salvador towards bitcoin adoption.

But when they download the Chivo wallet from the government and start to use it, they will realize that it is equally simple or even simpler than what they’re used to, he added.

“I think that’s just the normal resistance that you would see in a country. So I’m not super concerned about that,” said Gronager.

A Disagreement

This survey was conducted in August, ahead of the government’s move to formalize the use of cryptocurrency as legal tender in El Salvador on September 7.

However, more than 32% of people did agree with the government’s decision on some level.

Back in early July, Disruptiva also conducted a similar poll that found that out of 1,233 surveyed, about 54% of El Salvadorians view Bitcoin adoption as “not at all correct” while 24% described it as “only a little correct” while about 20% approved of the cryptocurrency plan.

This time, 7 out of 10 people believe lawmakers should repeal the law.

This broad rejection of the implementation of bitcoin as legal tender also shows that for “the first time,” there was a “significant disagreement between the population and decisions being made by the Legislative Assembly and the president,” said UCA dean Andreu Oliva.

The new survey further showed that most Salvadorans think the law will mainly benefit the government, business leaders, the wealthy, and foreign investors. “There is a lot of concern about the possible negative effects of using bitcoin,” said Oliva.

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Author: AnTy

48% of US Consumers Invested in Crypto But Nearly 40% Don’t Know They Can Buy A Fraction of a Coin

While 32% of those who have invested in crypto are interested in buying even more crypto in the next six months, 24% don’t even know where to start.

Nearly half of US consumers, 48% have invested in cryptocurrency, found ICE’s digital asset platform Bakkt Holdings in its latest “U.S. Consumer Crypto Survey,” involving more than 2,000 consumers across the US.

32% of those who have invested in crypto assets also said they are interested in buying crypto in the next six months. The survey was conducted in July of this year.

However, education remains an important part of crypto adoption, with 24% of respondents saying they don’t know where to start.

Interestingly, nearly 40% of respondents did not realize that they don’t need to buy a full coin and could buy part of a cryptocurrency, indicating financial literacy and consumer understanding are crucial to uniting the cryptocurrency and digital assets ecosystem, the survey noted.

According to the survey which was conducted via an online survey tool, younger generations remain interested as ever, with 37% of respondents aged 18-29 and 30-44, who haven’t purchased crypto in the past six months, “somewhat” or “very interested” in investing in crypto.

Those aged between 45-60 and are over 60 and haven’t invested in crypto show less interest, knowledge, and confidence than their younger counterparts, with only 25% interested in the 45-60 age range and 19% in the older group. Bakkt CEO Gavin Michael said,

“The results of the survey demonstrate that Gen Z and millennials are adopting crypto en masse and for alternative forms of payment, but the biggest roadblock standing in their way has been lack of understanding on how to get started and concerns with market volatility.”

The survey found that a good 58% of crypto investors view it as a long-term investment, while 43% plan to sell to make a short-term profit.

Long-term return on investment at 28% is the most appealing attribute of cryptocurrency, closely followed by lack of fees, ease of access, FOMO, and lack of centralized control.

Additionally, 24% said they plan to use it for online purchases and 12% for in-person purchases, while 11% are also interested in using it for peer-to-peer (P2P) transactions.

While crypto is increasingly gaining mainstream adoption, the key hurdles in its path involve “too much volatility,” according to 32% of respondents. Another main hurdle to buying cryptocurrency, at 24%, is not knowing where to start. A smaller percentage of respondents (11%) also said prices are high at the time.

While 45% of women surveyed said they don’t know anything about crypto, only 24% of men said they didn’t have any knowledge.

Among men, for 39%, volatility is the greatest hurdle, and 29% are most concerned with the cost and fees of buying cryptocurrency. In comparison, the main hurdle for women (30%) is finding where to start, and 28% wanted an easy-to-use platform.

Overall, almost 30% of respondents are either “very” or “somewhat confident,” and 34% are neutral when it comes to trusting cryptocurrency.

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Author: AnTy

Jack Dorsey is Building a KYC-Complaint DEX for Bitcoin with a Decentralized Identity Solution

Twitter CEO and co-founder Jack Dorsey have shared more details about his project that revolves around Bitcoin.

Last month, Dorsey had said that decentralized finance (DeFi) on Bitcoin is his new goal — “an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services” and that the name of the business is “TBD.”

He further revealed this week that the idea is to build a decentralized exchange (DEX) for the leading cryptocurrency.

“We’ve determined @TDB54566975’s direction: help us build an open platform to create a decentralized exchange for Bitcoin,” said Dorsey late on Friday.

DEXs have become immensely popular recently, and there is no shortage of them in the crypto space, with Ethereum-based Uniswap currently the leading the sector, accounting for 72.3% of DEX market share based on weekly volume, followed by SushiSwap, DODO, Balancer, Synthetic, Bancor, and 1inch.

Unlike centralized exchanges, decentralized exchanges don’t have a middleman.

Square’s General Manager of TBD, Mike Brock, gave us further insight into what the team is building and the questions they are facing during the process.

Centralized and custodial services like Square’s Cash App and Coinbase have a number of issues and aren’t distributed evenly around the world, is the problem TBD is looking to solve — making it easy to fund a non-custodial wallet anywhere in the world through a platform, said Brock.

“You can think about this as a decentralized exchange for fiat,” he added.

While entities exchanging fiat for crypto will still have to comply with KYC/AML laws, TBD will also focus “on a decentralized identity solution” in that regard.

As for regulation, “Navigating financial regulations to make things easy for people has literally been my forte for 7 years. We know what we’re up against,” assured Brock.

Brock reassured that the platform will be developed entirely in public and will be open-source with no foundation or governance model that TBD controls. “Permissionless or bust,” he added.

While the team is considering RSKSmart to make it Bitcoin-native, top to bottom, because gaps will be too large, they are also open to considering other chains as a bridge.

Some of the gaps are around scalability and cost, which is solved by Lightning with payments, but a similar infrastructure is required for exchanging assets like stablecoins.

“We believe Bitcoin will be the native currency of the internet. While there are many projects to help make the internet more decentralized, our focus is solely on a sound global monetary system for all.”

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Author: AnTy

In 1971 President Nixon Broke Money, Giving Central Banks Absolute Monetary Authority

The Nixon shock and subsequent dissolution of the Bretton Woods system have resulted in untenable inflation, mounting national debt, and extreme income and wealth inequality as the world’s largest economy stands on the brink of hyperinflation.

In June this year, Deutsche Bank issued a stark warning to the US after the Federal Reserve’s balance sheet doubled during the pandemic,

“US macro policy and, indeed, the very role of government in the economy, is undergoing its biggest shift in direction in 40 years. In turn, we are concerned that it will bring about uncomfortable levels of inflation.”

How did we get here? How did money become so fundamentally broken? Who broke it? Let’s dive into that story.

Bretton Woods Agreement (1944)

The whole premise of the Bretton Woods agreement was to pursue a fixed exchange rates system backed by gold as the universal standard to forestall competitive devaluation of sovereign currencies and promote free trade in the aftermath of WWII.

Britain wanted flexible rates. However, given that Britain emerged from the war as the debtor and the US now poised to assume the role of creditor, Britain had to settle for a compromise of fixed but adjustable rates.

As per the agreement, the US had a commitment to back dollars held in foreign reserves with gold at a rate of $35 per ounce. Other sovereign currencies were pegged against the dollar and were required to be kept within 1% of the fixed-rate by buying/selling dollars.

Breton_Woods_Agreement

Foreign currencies pegged to the dollar. Dollar pegged to gold

For as long as the US held the majority of the world’s gold reserves, this system would work, and it did work well in the early years as the US had a surplus of balance of payments.

What led to the collapse of this system?

The Marshall plan and US adoption of expansionary policies in the late fifties reversed the balance of payments in favor of other nations. By 1960, the US began running a deficit.

This, combined with the depletion of US gold reserves, would portend the beginning of the end for the Bretton Woods system. As dollar claims on gold outpaced the supply of gold, it created an arbitrage opportunity for other nations to further deplete US gold reserves.

What prevented this scenario was that everyone had a common interest in preserving the system, but only if the US would not resort to devaluing the dollar. In 1960, even before assuming office, JFK was forced to quickly move to allay such fears.

But without the US devaluing the dollar, other nations were required to revalue their own currency to redress the balance, which they were not keen on pursuing as it would adversely affect domestic policy.

A gold pool, known as The London Gold Pool, was formed with European nations to pool all the gold reserves to keep the ratio in check. However, demand for gold soon outpaced supply, and the gold pool was abandoned by 1968.

Among other abortive measures, an international currency (imagine that!) to replace the dollar was mooted in 1964 to salvage this system, but an agreement on that (what eventually became SDR) could not be reached in time.

By 1969, there was a run on the US gold reserves as other nations tried to cash their dollars to redeem gold. This led to emergency measures from President Nixon, known as the Nixon shock, which canceled the convertibility of the US dollar to gold and closed the gold window.

Thus collapsed the Bretton Woods system, and it resulted in the stagflation of the ’70s, a combination of high unemployment and high inflation, as the US dollar lost a third of its value.

In hindsight, the system was always untenable in the long run as it tried to promote free trade while allowing one country, the US, the “exorbitant privilege” of having its currency serve as the international reserve currency in a highly competitive macro-environment post-WWII.

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The New York Times pans the Nixon’s paper standard, 1971

The Triffin paradox

In 1959, just as the US began running a deficit, Yale professor Robert Triffin proclaimed that the Bretton Woods system was unworkable and would inevitably collapse as the dollar could not retain its exorbitant privilege of being the reserve currency without running up deficits.

Any sovereign currency serving as a global reserve currency is required to run up a deficit to meet the world’s demand for the currency. This creates a conflict of interest between domestic and international monetary policies.

The Nixon shock and subsequent collapse of the Bretton Woods system proved the Triffin paradox right, but ironically only further exacerbated the exorbitant privilege of the US by now allowing the Federal Reserve absolute authority on monetary policy as the dollar was no longer required to be backed by gold reserves.

The Fed’s newfound ability to continually manipulate supply, interest rates, and velocity of money led to other deleterious consequences such as the Cantillon effect and exploitation of moral hazards that inhere within the fractional reserve banking system.

Perpetual expansion to spur economic growth sent deficits spiraling out of control, resulting in a vicious cycle of inflation and ever-increasing, now extreme, economic inequality. Let’s look at the metrics,

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US national debt has risen from $398 billion in 1971 to 29 trillion as of this writing.

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Income of the top 0.01 parabolic divergence from per capita GDP since 1980

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Wealth owned by the top 0.1% crossed the bottom 90% in the aftermath of the global financial crisis of 2008

The Triffin paradox has remained an inscrutable puzzle for economists to this day.

What could solve the Triffin paradox?

Perhaps a decentralized, borderless, permissionless, durable, provably finite, infinitely divisible, instantly portable, objectively verifiable alternative to gold that doesn’t allow any one nation or its central bank an exorbitant privilege?

What if its monetary policy wasn’t arbitrary, couldn’t be controlled or manipulated by humans, but was predicated on a universal constant? Something like… mathematics?

Voila! Fix the money. Fix the world.

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Author: Lamps T

Poly Network Declares the Hacker a “White Hat” After He Returns Almost All the Stolen $610 Mln

What remains to be recovered is the $235 million of funds that have been sent to a “shared multisig” account which requires the keys from both the Poly Network and the hacker to access and the $33 million USDT frozen by Tether.

Poly Network, a little-known project which is not connected to Ethereum sidechain protocol Polygon (MATIC), declared its hacker as a “white hat,” referring to ethical hackers who aim to expose vulnerability upon the return of most of the stolen $610 million funds.

The last $235 million has been sent to a “shared multisig” account which requires the keys from both the Poly Network and the hacker to access the funds, said Tom Robinson, chief scientist and co-founder of Elliptic, a crypto tracking firm.

According to the hacker’s message, they will “provide the final key when everyone is ready.”

Additionally, $33 million USDT is also yet to be returned as Tether froze them on the day of the attack. Poly Network said on Twitter,

“The repayment process has not yet been completed. To ensure the safe recovery of user assets, we hope to maintain communication with Mr. White Hat and convey accurate information to the public.”

The hacker claims to have been offered a $500k bounty to return the stolen assets by Poly Network and the promise of not being accountable for the incident.

While the hacker turned down the offer of a bounty, they did ask for donations from the general public as a reward for doing the right thing. The hacker’s donation account has so far received 1.475 ETH worth nearly $4,800.

Earlier this week, on Tuesday, in the biggest ever DeFi hack, the hacker attacked the cross-chain network and stole $610 million worth of crypto assets, including stablecoins from three different blockchains Ethereum, Binance Smart Chain, and Polygon.

Founded last year in August by Chinese entrepreneur Da Hongfei, the chief executive of another blockchain platform, NEO, the hack of Poly Network mainly affected the Chinese individuals.

Less than 24 hours after the hack, crypto security firm SlowMist said that it had identified the attacker’s email id, IP addresses, and device fingerprints, adding the hack was “likely to be a long-planned, organized and prepared attack.”

In a series of Q&As, which the hacker did by sending transactions to themselves with text embedded within them, they said the attack was “for fun” and that they just wanted to “expose the vulnerability” before others could exploit it. They also said the plan was “always” to return the funds.

But not everyone believes that, as Gurvais Grigg, CTO at blockchain forensics company Chainalysis and former FBI veteran, said, it was likely that white hat hackers may have returned the money due to difficulties of laundering it.

While the hacker has returned the funds, they may still be pursued by the authorities as “their activities have left numerous digital breadcrumbs on the blockchain for law enforcement to follow, aided by blockchain analytics tools,” said Robinson.

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Author: AnTy