Schlagwort: crypto market news

• Curve Finance is considering dropping TUSD from crvUSD backing amid SEC charges.
• The SEC alleges TUSD was mostly backed by a risky offshore fund, not U.S. dollars.
• Proposed changes include reducing TUSD backing to zero and lowering PYUSD minting.

In light of recent regulatory scrutiny, Curve Finance, a prominent decentralized exchange (DEX), is contemplating the removal of TrueUSD (TUSD) from its collateral options for the Curve Stablecoin (crvUSD).

This consideration follows charges filed by the United States Securities and Exchange Commission (SEC) against TrueCoin, the issuer of TUSD, for violations of securities laws.

Proposal to drop TrueUSD backing for crvUSD

On September 25, a proposal was posted on Curve’s governance forum by Wormhole, a cross-chain messaging protocol. The proposal suggests reducing the upper limit on TUSD backing for crvUSD to zero, aiming to eliminate exposure to TUSD amidst rising regulatory concerns and issues regarding its solvency.

Currently, the PegKeeper liquidity pool associated with crvUSD allows users to mint up to $10 million worth of crvUSD using TUSD as collateral.

Additionally, the proposal recommends decreasing the minting capacity of crvUSD with PayPal’s stablecoin, PYUSD, from $15 million to $5 million, ensuring a balanced reliance on the PegKeeper pools corresponding to the significance of each respective asset.

This strategic adjustment reflects Curve’s intention to enhance stability and mitigate risks associated with regulatory uncertainties.

Concerns over TUSD reliance

The SEC’s recent actions, particularly the charges settled against TrueCoin and TrustToken for fraudulent and unregistered sales of investment contracts involving TUSD, have heightened concerns within the crypto community.

The SEC’s complaint alleges that TrueCoin and TrustToken misled investors by claiming that TUSD was fully backed by US dollars when, in reality, a substantial portion of its reserves—specifically, 99%—was invested in a speculative offshore fund.

This risky investment strategy has raised alarms about the reliability of TUSD as a stable collateral option.

Following these revelations, TrueCoin and TrustToken neither admitted nor denied the allegations but agreed to final judgments that prohibit them from future violations of federal securities laws. They will also incur civil penalties of $163,766 each as part of the settlement.

Currently, crvUSD’s backing includes various cryptocurrencies, with Wrapped Bitcoin (WBTC) holding the largest share, amounting to over $68 million in total value locked (TVL).

Wrapped Staked Ether (wstETH), issued by Lido Finance, follows with approximately $60 million in TVL.

The community proposal underscores the need for greater diversification among PegKeepers, pointing to the risks associated with over-reliance on lesser-known stablecoins like TUSD, which has faced scrutiny in light of its recent regulatory challenges.

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• Banana Gun confirmed a $3 million loss from a hack targeting experienced traders.
• All affected users will receive full refunds without selling any tokens.
• The company has implemented enhanced security measures to prevent future attacks.

The Telegram-based cryptocurrency trading bot Banana Gun has confirmed a $3 million loss due to a hacking incident that targeted its experienced user base.

The attack, which exploited a vulnerability within its trading system, has prompted Banana Gun to take immediate action to protect its users and restore trust. The company announced that all affected users would receive full refunds, demonstrating its commitment to customer support and security.

Details of the Banana Gun hack

On September 19, users of Banana Gun reported unauthorized transactions draining funds from their crypto wallets. Initially, the investigation indicated that around 36 users were affected, leading to a loss of nearly $2 million in Ether (ETH).

However, further analysis revealed that the total loss was much higher, with only 11 users ultimately affected and a total of $3 million drained.

This discrepancy highlights the complexity of the incident and the challenges in assessing the full scope of the attack.

In response to these alarming reports, Banana Gun swiftly disabled its Ethereum Virtual Machine (EVM) and Solana trading bots to prevent further unauthorized transactions. The company emphasized that its trading bots are designed to facilitate automated trades, often utilized by crypto traders to enhance their profitability.

Unlike typical hackers who target inexperienced investors, the attackers specifically targeted seasoned traders, allowing them to manually transfer ETH while the trading bots were active.

The hack exploited a vulnerability in a Telegram message oracle, which has raised concerns about the security of such platforms. This incident serves as a reminder of the importance of robust security measures in the rapidly evolving world of cryptocurrency trading.

Following the identification of the vulnerability, Banana Gun implemented a series of measures to fortify its security protocols.

Banana Gun commits to refund users

In a public statement, Banana Gun has announced that all impacted users would receive full refunds from the company’s treasury.

The firm clarified that no tokens would be sold to finance these reimbursements, indicating a strong commitment to restoring user trust.

This move reflects the company’s understanding of the financial impact the incident has had on its users and its desire to maintain a loyal customer base in a highly competitive market.

The announcement of refunds is particularly significant given the increasing scrutiny and regulatory focus on the cryptocurrency sector. By proactively addressing the situation and compensating affected users, Banana Gun aims to distinguish itself as a responsible player in the market.

Enhanced security measures

In the wake of the hack, Banana Gun has instituted several enhanced security measures to prevent similar incidents in the future. These include a two-hour transfer delay for transactions, mandatory two-factor authentication (2FA) for transfers, and a comprehensive review of their systems.

By implementing these protocols, Banana Gun aims to bolster its defences and protect users from future threats.

The response to the hack also highlights a broader trend in the cryptocurrency space, where exchanges and trading platforms are increasingly prioritizing security as a means to protect users and enhance credibility.

As hackers continue to target vulnerabilities within the crypto ecosystem, firms like Banana Gun are recognizing the need for vigilance and proactive measures to safeguard their users’ investments.

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• Exodus donates $1.3 million to Stand With Crypto to help mobilise crypto holders to vote in November.
• The Stand With Crypto advocacy group recently joined forces with a16z and OpenSea to launch a new creator legal fund.

Crypto wallet provider Exodus has announced it donated $1.3 million to Stand With Crypto, a bipartisan crypto advocacy group.

This brings the total amount in donations to the advocacy group to over $2.79 million.

According to an announcement on Sept. 24, Stand With Crypto will use these funds to promote community initiatives aimed at pushing more people to vote in the upcoming US election. The program targets more crypto holders, encouraging them to register and coming out to vote.

While voter mobilization is a major aspect, the broader goal is to push for clarity in crypto regulation in the country.The election of crypto-friendly legislators to Congress is one such step.

Stand With Crypto is also tracking crypto-related comments and plans by Donald Trump and – recently – Kamala Harris.

We’ve tracked 21 statements on crypto from @realDonaldTrump & he’s rated Strongly Supportive.@VP Harris recently made a Somewhat Supportive statement & we’ve added it to our card.

Major candidates weighing in on crypto would’ve been unthinkable even recently. We’re winning. pic.twitter.com/OQoqqylaia

— Stand With Crypto🛡️ (@standwithcrypto) September 23, 2024

Earlier this month, Stand With Crypto teamed up with a16z and NFT marketplace OpenSea to launch a creator defense fund.

The legal fund followed the SEC’s Wells Notice against OpenSea, a regulatory approach highly criticized for its overreach and for alleging that digital collectibles are securities.

Crypto donations to PACs

The cryptocurrency sector has also been massively active in the US election campaign donations. Coinbase, Ripple and Gemini are some of the big donors, with funds going to political action committees.

One of the super PACs to receive a staggering amount of campaign donations is Fairshake.

Recent data shows the PAC has over $177 in crypto donations- money that Fairshake is utilizing as it looks to help bring crypto-friendly lawmakers to Congress.

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• Only 10% to 20% of financial advisors admitted to owning crypto in their portfolios
• Now, roughly, 70% indicated they did
• The approval of Bitcoin ETFs and the Fed’s rate cut are bullish signals that may have changed that

In a client memo, Bitwise’s CIO said that a “wave of the most powerful people in finance are finally allocating to crypto.”

Matt Hougan was reflecting on a keynote speech he’d given at the Barron’s Advisor 100 Summit, where the top financial advisors in the US meet, in Palm Beach, Florida.

Despite Hougan having spoken at the event twice before, he states this was the first time he’d taken to the main stage thanks to the approval of Bitcoin exchange-traded funds (ETFs) earlier this year.

To better understand his audience, Hougan asked them to raise their hands if they owned Bitcoin or another crypto asset in their portfolio. At the last two events, Hougan states that around 10% to 20% of the people in the room raised their hands.

“This year, nearly every hand in the room went up,” he wrote. “I don’t have an exact count, but I’d estimate at least 70% of the advisors in the room raised their hands.”

Following this, he asked if any of them had Bitcoin in client portfolios, with very few raising their hands. According to Hougan, this is expected as many advisors work for broker-dealers that don’t “allow them to buy Bitcoin ETFs yet.”

In Hougan’s opinion, financial advisors always allocate first in their portfolios and “client allocations typically follow six to 12 months later.”

Bullish trends

A change in how financial advisors view crypto can be pointed to several factors, according to Hougan.

These include the US Federal Reserve’s decision to cut interest rates by 50 basis points, spot Bitcoin ETFs being approved by Morgan Stanley, and the US Securities and Exchange Commission’s (SEC) options approval of Blackrock’s Bitcoin ETF.

However, despite bullish trends, Hougan argues that the “show of hands in Palm Beach was one of the most powerful signs of the times.”

“A wave of the most powerful people in finance are finally allocating to crypto,” he said. “When it spreads from them to their clients, things could get interesting quickly.”

Productive year

Hougan’s memo comes after a busy year for Bitwise. Following the approval of Bitcoin ETFs, Bitwise and VanEck promised to donate 10% of their profits to Bitcoin’s development.

In March, the asset management company, filed an S-1 form with the SEC, applying for an Ethereum ETF, which was approved in July.

In June, Hougan stated that Ethereum ETFs would attract $15 billion in net flows in their first 18 months. With so many moving pieces this year, aiming to help advance the crypto space, it’s no wonder an increasing number of financial advisors admitted to owning crypto.

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