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India Investigates Ten Crypto Exchanges For Laundering Over $125 Million

India’s Enforcement Directorate is conducting an investigation against ten cryptocurrency exchanges allegedly involved in laundering more than 1 billion rupees, equivalent to more than $125 million in digital currency.

According to The Economics Times, the exchanges (which have not yet been identified) were used by several companies accused of money laundering to make cryptocurrency purchases of more than 100 million rupees that were then sent to other international wallets, mostly linked to mainland China.

Exchanges Had a Poor Control of Their Users’ Activity

In addition, the sources noted that the exchanges collected KYC data of dubious provenance, as the tracked accounts belonged to people living in remote areas “with no connection to the transactions.”

However, the exchanges claimed they were in compliance with KYC regulations, despite not producing any suspicious transaction reports (STRs) that could have yielded any information about presumed money laundering.

Therefore, the failure to comply with the measures required by regulators made it more difficult to trace the account, which upon learning of the investigation, proceeded to withdraw their funds and log off, according to sources close to the investigation.

“Once these firms learned that they were under the scanner, they shut shop and used the crypto route to siphon the funds abroad. The opaque nature of the crypto ecosystem and the industry not being regulated provided the requisite cover for these firms to park their assets offshore,”

Binance And WazirX Crypto Exchange In India’s Crosshairs

As CryptoPotato recently reported, Binance and WazirX are in the ED’s crosshairs, following several Twitter spats between the CEOs of both companies over ownership and regulatory non-compliance by WazirX.

Following the two companies’ spat, the ED froze WazirX’s bank accounts holding more than $8 million, alleging that the exchange had “actively” aided in the money laundering of more than 15 fintech companies.

For its part, Binance said in response that they expect WazirX to “take full responsibility for its operations and users’ funds,” stressing that the global crypto exchanges has nothing to do with WazirX’s operations.

Although the ED is investigating several cryptocurrency exchanges for money laundering, according to an industry executive that talked to the Economic Times, the exchanges are the second point of failure in these crimes, as the money goes in and out primarily from traditional banks which also did little to nothing to trace the funds, which is why “it wasn’t caught at the banking level.”

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MakerDAO Co-Founder Proposes Dumping $3.5 Billion USDC Reserves for ETH

MakerDAO co-founder Rune Christensen recently proposed removing all USDC from the DAI stablecoin’s peg-stability module. He suggested that the USDC within, worth $3.5 billion, could be used to buy ETH instead. 

Yet despite what such a conversion could do to boost ETH’s price, Vitalik Buterin said it was a “terrible idea.”

Removing Exposure to USDC

In the governance channel of MakerDAO’s official Discord, Rune expressed concerns over the US Treasury Department’s latest sanctions against privacy protocol Tornado Cash. “It is a lot more serious than I first thought,” he said.

“I think we should seriously consider preparing to depeg from USD,” he continued, adding that such a transition is “almost inevitable” and should only be done with large preparation. 

One way to do this could involve a so-called “uprooting” or “yolo USDC into ETH approach,” in his words.

On Tuesday, Circle CEO Jeremy Allaire said that Circle (the issuer of USDC) were forced to comply with the Treasury Department’s sanctions against Tornado Cash due to Bank Secrecy Act requirements. As such, it used its authority to freeze USDC in all sanctioned addresses, and related entities. 

The crypto community has since begun discussing risks related to centrally-issued stablecoins, which are prone to state enforcement, censorship, and capture. By contrast, MakerDAO’s DAI is a “decentralized” stablecoin backed by a handful of digital assets. 

While about 50% of its reserves are comprised of USDC, the second half contains ETH and other less centralized cryptos. Theoretically, converting USDC reserves into ETH could remove the risk of MakerDAO’s assets being frozen by Circle – and bolster ETH’s price to boot. 

However, Ethereum co-founder Vitalik Buterin is not on board with the plan. 

This seems like a risky and terrible idea,” he tweeted. “If ETH drops a lot, value of collateral would go way down but CDPs would not get liquidated, so the whole system would risk becoming a fractional reserve.”

Decentralizing Stablecoins

The developer added that DAI could mitigate centralization risks by diversifying reserves such that no asset comprises 20% of the total. Alternatively, he suggested applying a “negative interest rate” to DAI to reign in its growth.

In MakerDAO’s Discord, Rune recognized that the conversion could increase the risk of DAI losing its dollar-peg, but still believes a “partial uprooting” could be worth the risk. 

“I think the market may finally start to reward decentralization to the point where these risks are acceptable because USDC is no longer the no-brainer it used to be,” he said.

Fears around decentralized and “algorithmic” stablecoins have abounded since TerraUSD (UST) – the former third-largest stablecoin – collapsed in May. The token was indirectly backed by the highly volatile LUNA, but crumbled after the prices of both assets were put under pressure. 

Months before TerraUSD’s meltdown, the LUNA Foundation Guard conducted a similar plan to Rune’s by buying billions of dollars in Bitcoin for its stablecoin reserves. However, it was later forced to sell those Bitcoin in a failed attempt to protect UST’s fledgling peg.

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MEXC Activated the Investor Protection Fund After DMA Hack, Launches Potion Airdrop

[PRESS RELEASE – Please Read Disclaimer]

MEXC Exchange

A few days ago, the Polygon Network ecosystem project Dragoma (DMA) experienced abnormal price fluctuations after its listing on MEXC, as it fell sharply from 0.85USDT. MEXC immediately suspended DMA/USDT trading on August 8th due to abnormal on-chain transactions.

It is understood that although MEXC announced an emergency plan immediately and closed related trading activities, some users still incurred certain losses due to the incident.

In order to minimise users’ loss, MEXC has withdrawn fund from the “MEXC Investor Protection Fund” to purchase USTD potion airdrops for affected users.

According to the relevant compensation benefits rules, users who traded DMA/USDT from 21:00 on August 7th to 09:20 on August 8th on MEXC will be eligible for this “USDT Airdrops Program”. At present, MEXC has completed the distribution of compensation benefits for all the above-mentioned affected users.

Founded in April 2018, MEXC currently provides one-stop services such as spot, contract, leveraged ETF, NFT index, etc. It is currently the top 10 cryptocurrency trading platform in the world. At the beginning of its establishment, MEXC set up the “MEXC Investor Protection Fund”. When platform investors suffer losses due to platform or market incidents, the “special fund” is used to compensate investors, such as the losses caused by the Dragoma incident this time.

The fund was initially obtained from the handling fee. However, in order to increase the protection of platform users, MEXC also injected 20% of other income besides handling fee into the “Investor Protection Fund.”

Information shows that Dragoma is a Polygon Network ecosystem-based project, which was listed on MEXC through MEXC community recommendation. Since then, MEXC adheres to the principles of “user-driven” and “service-oriented”, and the extensive collection of community suggestions in terms of voting for listing, community recommendation for listing, and product improvement are inseparable from the support of the platform community.

“Community recommendation listing” is one of the ways for MEXC to practice blockchain decentralization spirit. Previously, projects such as SHIB and PEOPLE were recommended due to their high popularity among the community users, and were launched accordingly on MEXC in accordance with the interest of most community users. Both projects obtained good performance after being listed on MEXC.

About MEXC

Established in April 2018, MEXC Global is a digital asset trading platform with over 7 million users, which offers users one-stop services including spot, margin, leveraged ETFs, derivatives trading and staking services. MEXC Global believes “User first, service foremost” and creates a community where users can access and trade the latest best-in-class digital asset across the world. For more information, please visit the website and blog.

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Gala Film Spearheads a New Era of Entertainment

[PRESS RELEASE – Please Read Disclaimer]

Gala, the successful blockchain gaming and music platform have announced the launch of Gala Film. The new platform continues the brand’s commitment to providing fans with unique opportunities to enrich their experiences with levels of involvement only possible through Web3.

The core benefit of Gala Film is its ability to offer a ‘Watch and Earn’ mechanic through the same blockchain technology that underpins Gala Music’s ‘Listen and Earn’ and Gala Games’ ‘Play and Earn’ ecosystem, offering fans ways to earn rewards through nodes and NFTs.

This new platform launches with the backing of several notable partners and benefits both fans and filmmakers. With Gala Film, fans now have the power to actively participate in the content they consume, take control of their entertainment through digital ownership and support new projects by voting on script choices or casting.

Filmmakers and artists can also reclaim their creative licence through a deeper connection with their audiences and the ability to distribute their content directly to the people that want to watch it.

By adding film alongside its successful music and games platforms, Gala is also able to offer an interoperable ecosystem where fans can benefit from crossover content. For example, by giving fans ownership of content in films, they may also benefit from involvement in the film’s soundtrack, or an accompanying game based on the film.

Sarah Buxton, COO of Gala, said: “The launch of Gala Film marks the beginning of a new era in Web3 entertainment, led by Gala. Our ecosystem offers exceptional involvement and access to new launches, with fans able to enjoy unique experiences, empower creatives and get rewarded for doing so. We are committed to delivering fan-first entertainment, where technology is used to improve fan experiences without ever becoming a barrier to entry or enjoyment.”

Gala Film has recently announced several upcoming projects and partnerships, including:

  • A partnership with Oscar-nominated and Emmy Award Winning Stick Figure Productions which has produced over 400+ hours of film and television for more than 40 networks and studios such as HBO, SHOWTIME, FOX, ESPN, IFC, E!, VH1, TWC, BBC, A&E, and National Geographic
  • A partnership with Ai&Aiko, one of the most popular GIF lines in history was awarded GIPHY’S Number 1 Artist of the Year with over 48 billion views and holds 4 Guinness World Records. This will see Peter Draw’s simplistic and charming visual storytelling brought to life through the Gala Film platform
  • A partnership with Filmmaker and Actor, David Bianchi (“True Story’’ Netflix, “Resident Alien” Universal / Peacock) and founder of Exertion3 (a blockchain film production company) to produce Live Action Sci-Fi Series “RAZOR” for Exclusive Blockchain Release
  • A partnership with Battle Island in the production of their animated series ‘Ghosts of Ruin’
  • ‘Making the Chronic’ – a series of 16 short films where Snoop Dogg narrates each of the tracks on his album released through Gala Music, with four of these shown at the event

About Gala

Gala is a world-leading Web3 entertainment company that uses blockchain technology to power digital ownership and rewards, creating a revolutionary new way of building and consuming entertainment. Launched in 2019 with Gala Games, Gala is the parent company to Gala Games, Gala Music and Gala Film. The vision brings all three brands together in the shared pursuit of offering fans unique and immersive experiences powered by Web3. Gala also gives creative licence back to content creators and emerging talent with a direct route to fans and the ability to offer genuine involvement in new projects. For more information, visit:https://links.gala.com/IuyBwu1i

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ETH Eyes $2K on Further Merge Developments (Ethereum Price Analysis)

The crypto market has seen a flurry of activity over the past few days, and Ethereum was no exception; most of the conversation centered around inflation and the Merge event. At long last, it seems that calmness has prevailed on the market, and everyone is waiting for ETH to reach the crucially important level of $2000.

Technical Analysis

By Grizzly

The Daily Chart

Ethereum has recorded an astonishing 16% gain in the past two days as it touched a high of $1930 at the time of this writing. The second largest cryptocurrency has ascended above the $1,700-$1,800 range (in blue). Reclaiming this resistance has increased the bullish sentiment in the market. It appears that the success of the Goerli merge has been a positive catalyst over the past 24 hours.

If the bulls can flip the resistance at $2000, then the way is paved to reach the resistance zone in the range of $2200-2300(in red), which overlaps with the 200-day moving average line (in white). It should be noted that the price may experience a brief pullback to retest $1,800 before reaching higher levels.

However, if the bears push the price below $1,700 by creating a bull trap, the above bullish scenario is invalidated. In this case, a downward trend will be triggered.

Currently, the advantage is in favor of the bulls, and the positive mark remains strong until a lower high and low is formed.

Key Support Levels: $1500 & $1350
Key Resistance Levels: $1800 & $2160

Daily Moving Averages:
MA20: $1668
MA50: $1406
MA100: $1618
MA200: $2263

1
Source: TradingView

The ETH/BTC Chart

Against Bitcoin, ETH has hit the resistance zone in the range of 0.077-0.078 BTC (in red). There is still no sign of a trend reversal in the chart. A bullish structure has been formed that has easily broken all resistances. Therefore, if the bulls take a break here, the pair will find support at 0.0726 BTC (in green). A break and a close below this level confirm the trend reversal.

On the other hand, if the red resistance is broken, the price will expand to the critical resistance at 0.0884 BTC (in yellow), which was the highest level that the ETH price against BTC saw in the 2021 bull run.

Key Support Levels: 0.072 & 0.065 BTC
Key Resistance Levels: 0.078 & 0.088 BTC

2
Source: TradingView

On-chain Analysis

Exchange Inflow/Outflow (Mean, MA7)

Definition: The seven days moving average of mean coins inflow/outflow to and from the exchange.

A high value indicates that investors who deposited or withdrew large amounts are increasing recently.

After Ethereum bottomed out at $880, the deposit of coins to the exchange decreased sharply. This could be due to positive news surrounding the Merge event. Meanwhile, the withdrawal of coins from the exchange did not reduce significantly. This indicates that buyers have dominated the exchanges. As long as this situation continues, the price is expected to touch higher levels.

img1_cryptoquant
Source: CryptoQuant
img2_cryptoquant
Source: CryptoQuant

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BlackRock Makes Crypto Splash With Private Bitcoin Investment Trust Product

BlackRock has followed up its Coinbase partnership with its first institutional crypto investment product: a private bitcoin trust that offers direct exposure to spot BTC price action.

  • BlackRock has debuted its first investment product offering direct exposure to bitcoin, according to a statement issued on Thursday (August 12, 2022).
  • The product is a private bitcoin trust for institutional clients based in the US that offers direct exposure to the spot price of the largest crypto by market capitalization.
  • According to the company, the introduction of the product offering is in response to an increased interest from its big money clients who want to access cryptocurrency. An excerpt from the announcement reads:

“Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets using our technology and product capabilities.”

  • Today’s announcement comes shortly on the heels of the $10 trillion asset manager inking a deal with US exchange giant Coinbase.
  • This deal is to enable BlackRock to begin offering crypto investment products to institutional investors via Coinbase Prime.

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Ankr Receives a Strategic Investment from Binance Labs

Ankr is a well-known Web3 infrastructure provider. In a nutshell, the protocol works in the background, but it makes using decentralized applications, wallets, as well as crypto-based games possible by connecting them to the blockchains that they need to communicate with.

Known for its continuous support for the BNB Chain by introducing BNB Liquid Staking, as well as building some of its core infrastructures, including their Erigon upgrade, Ankr has now received a strategic investment from Binance’s VC arm – Binance Labs.

Binance Labs Invests in Ankr

According to a press release shared with CryptoPotato, Ankr has been the recipient of a strategic investment from Binance Labs. The specifics around the total amount invested remain undisclosed.

However, the proceeds will be used to double down on its RPC service while also building out its Web3 developer suite. This includes Liquid Staking DK, Web3 Gaming SDK, as well as Application Chains as a Service.

Per the release, the protocol is receiving more than seven billion blockchain requests per day across the 18 different blockchains that it hosts RPCs.

Speaking on the matter was Ryan Fang, the Chief Operating Office at Ankr, who said:

We are very excited to count Binance Labs as a strategic investor. BNB Chain is by far the chain with the highest number of daily transactions and active users. We are commited to support BNB Chain further scale, enhance BNB token utility by enabling DeFi composability using BNB Liquid Staking, and expand Binance Application Sidechain (BAS) ecosystem to enable innovative use cases requiring a highly scalable infrastructure, and other innovative infrastrcture services opening the gates to permissioned sidechains.

ANKR Token Staking Already Live

Binance’s investment in Ankr comes a couple of days after the protocol revealed that it had enabled token staking on its infrastructure level.

This allowed ANKR holders to stake their tokens to support nodes and earn rewards. CryptoPotato reported on how the rewards are distributed here. Back then, Greg Gompan, Chief Marketing Office at Ankr, said:

Today marks a monumental achievement for Ankr. One where we have moved from a centralized infrastructure provider to a truly decentralized protocol solution, where token holders can contribute and earn across the network with us. This puts Ankr in a class of its own, as not only one of the best technology companies in the industry but one of the best pure plays for aligning with multichain growth across Web3.

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dYdX Confirms Blocking Accounts Linked to Tornado Cash

Just days after the US Office of Foreign Assets Control (OFAC) barred American citizens from transacting with Tornado Cash, dYdX has revealed blocking accounts that had previously engaged with the coin mixer.

To comply with the new sanctions set by the OFAC, dYdX observed a significant increase in accounts flagged by one of its compliance vendors that were subsequently blocked. It cited that a certain portion of the funds in these account wallets had, in some way, interacted with Tornado Cash.

dYdX’s Response

In its official blog post, dYdX maintained that the platform cannot seize customer funds. The ultimate custody of finds will remain at the hands of the users, who are free to withdraw at any given point. However, dYdX does have the ability to deploy their accounts in “close-only” mode on its hosted matching engine.

It also clarified that many account holders that were banned in the process may have never even directly engaged with the now sanctioned coin mixing solution. dYdX has tweaked its compliance policies and unblocked certain accounts. Moving forward, the platform said it will work towards limiting flagging while monitoring this issue.

Emotions Running High

The recent compliance requirements have forced several platforms to take drastic measures. Ethereum infrastructure provider Alchemy obstructs users of Tornado Cash from accessing its nodes. Infura also followed suit by blocking remote procedure call (RPC) requests to it.

GitHub, for one, has courted controversy suit deleting accounts of Tornado’s contributors immediately after the Treasury Department added the privacy tool to its sanctions list.

Stablecoin issuer Circle also froze USDC funds held within Tornado Cash’s smart contracts. However, its CEO, Jeremy Allaire, believes that the department’s approach appears to be flawed.

The main argument put forward by the US Treasury is that several individuals and groups have leveraged Tornado Cash to launder well over $7 billion worth of crypto since 2019. This included the $455 million theft by the notorious North Korean hacking syndicate, Lazarus Group.

The suppression of the privacy tool, however, prompted a general outcry from several market leaders. Director of research at Coin Center Peter Van Valkenburgh called the ban unconstitutional. Ethereum co-founder Vitalik Buterin recently revealed that he used the black-listed mixer to donate funds to Ukraine,

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SOL With Another Attempt at $44, Will The Bulls Finally Make It? (Solana Price Analysis)

After two failed attempts to break above the $44 level, Solana is back at it again.

Key Support levels: $40, $35 

Key Resistance levels: $44, $59

The bulls are seemingly very eager to push the price higher. The cryptocurrency rallied above the $4 key resistance level today but is now falling back down. If the buyers fail to sustain the momentum, then this might result in the third failed attempt at breaking this important level. The key support, meanwhile, is found at $40.

SOLUSDT_2022-08-11_14-35-32
Chart by TradingView

Technical Indicators

Trading Volume: A relatively good buy volume has taken SOL higher, but it seems that buyers struggle to maintain their momentum at the time of this post.

RSI: The daily RSI remains above 50 points. As long as it stays above this level, then the cryptocurrency has a good chance to break the resistance.

MACD: The daily MACD painted a bullish cross today. This is positive and may encourage buyers, but it is too early to make a call.

SOLUSDT_2022-08-11_14-35-56
Chart by TradingView

Bias

The short-term bias for SOL is bullish.

Short-Term Prediction for SOL Price

Even if SOL’s price manages to move above $44 today, the past shows us that this can just as easily turn into a fake breakout. If buyers fail to close today’s candle above this critical resistance, then the bears may regain control and push the cryptocurrency back to $40. A successful breakout would open the way for SOL to reach $60, but that seems far away at this time.

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Ethereum PoW Proponents Vow to Abolish EIP-1559

Proponents of the Ethereum fork are gearing up to eliminate the pivotal EIP-1559. An Ethereum miner, which gained allies from many prominent figures and firms in the industry, has now published an open letter to the community.

The Twitter account of the proposed chain-split fork – EthereumPoW –  said that the once “almighty” Ethereum Foundation has abandoned “decentralization” as part of its missions as the transition towards proof-of-stake (PoS) neared.

Goals

In a long thread, the Ethereum fork supporters said EIP-1559 was an attempt by the Ethereum Foundation to build a bullish narrative at the expense of the miners. They also accused the “elites” of suppressing the voice of miners, who instead are a “political force” that “should wield some political power and influence” to maintain and inclusive political system. They also accused the “TEF and its friends” of coercing miners into cooperating at ease.

Claiming to be a “truly decentralized community of volunteers,” EthereumPoW vouched that the new token will not be pre-mined and there will be no inflation. Maintaining PoW and the Nakamoto Consensus mechanism will remain the focus of the group.

“Abolition of EIP-1559. In a truly open and inclusive system/society, there is no justification for punishing one group of participants in favor of another. We will never idolize leaders, unlike our predecessors. We strive to be an enlightened society.”

It also said that it aspires to eventually become completely autonomous and self-sustained, devoid of any entity governing the blockchain. It plans to achieve this in the next three years.

The idea was first started by a prominent Chinese miner Chandler Guo who had recently mentioned in an interview with Bloomberg that many Ethereum mining manufacturing companies reached out to him to start forking efforts. It soon gained traction after controversial Tron Founder Justin Sun threw his weight behind the proposition of a hard fork.

While Guo may be leading the charge, the suggested fork also garnered support from derivatives platform, BitMEX, which rolled out a futures contract enabling speculators to leverage trade ETHPOW.

Advocating Ethereum PoS

Stablecoin provider Circle has joined the growing list of platforms that have announced full support for Ethereum’s shift to a POS chain.

Its rival Tether also extended its support to service Ethereum’s new chain upon launch. Chainlink, however, confirmed that it will not support Ethereum forks after the Merge that is slated for September 19th.

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