SafeMoon addresses recent exploits amid SEC charges

November 3, 2023 Coin Telegraph

SafeMoon says it is closely examining the recent developments and will work to resolve the situation promptly.

The decentralized finance project SafeMoon, which was charged by the United States Securities and Exchange Commission (SEC) for security rules violations and fraud, has said that it is closely examining the recent developments and will work to resolve the situation promptly.

According to a statement made by the project on X (formerly Twitter), its teams are actively developing and remain committed to serving users, advancing the project’s vision, and pursuing its mission.

SafeMoon was exploited in March, resulting in a net loss of $8.9 million in BNB. The capital linked to the security breach has been shifting through centralized exchanges (CEXs), and blockchain analysis company Match Systems suggests that these transactions may hold significant relevance for law enforcement authorities.

We are reviewing the recent news and we of course take these issues extremely seriously.

As we receive more information, we will do our best to address the situation as quickly as possible.

In the meantime our teams continue to build and we keep our focus on delivering for…
— SafeMoon (@safemoon) November 2, 2023

According to an analysis by Match Systems, SafeMoon smart contract, the attacker took advantage of a vulnerability in SafeMoon’s contract related to the “Bridge Burn” feature, enabling the execution of the “burn” function for SafeMoon (SFM) tokens at any address.

The exploiters’ action entailed transferring 32 billion SFM tokens from SafeMoon’s liquidity pool address to SafeMoon’s deployer address, causing a rapid increase in token value. Leveraging the price surge, the exploiter exchanged some SFM tokens for BNB at an inflated rate, resulting in a transfer of 27,380 BNB to the hacker’s address.

Match System’s analysis determined that the smart contract vulnerability was absent in the previous version and was introduced with the new update released on March 28, coinciding with the day of the exploit. This has raised suspicions of potential insider involvement.

The individual responsible for the attack initially stated that they accidentally exploited the protocol and expressed a desire to establish a means of communication to return 80% of the funds. Subsequently, the funds associated with the exploits have undergone multiple transfers through centralized exchanges such as Binance. Match Systems believes these transfers could be vital for law enforcement agencies to trace and apprehend the exploiters.

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Ripple to power Georgia’s central bank digital currency, the digital Lari

November 3, 2023 Coin Telegraph

CBDC

The National Bank of Georgia will use the CBDC platform to assess Digital Lari's benefits for the government, businesses, and retail users.

The National Bank of Georgia (NBG) has selected Ripple Labs Inc., a leading blockchain payments platform, as the official technology partner for developing Digital Lari, their central bank digital currency (CBDC) project.

Ripple said in a statement that the partnership will encompass the implementation and deployment of the Digital Lari pilot initiative through the Ripple CBDC Platform. The National Bank of Georgia will utilize this innovative CBDC platform to evaluate potential applications of the Digital Lari, determining its advantages to the government sector, enterprises, and individual retail users.

Before being designated as NBG’s technology partner, Ripple underwent a thorough and meticulous selection procedure. In September, the National Bank of Georgia disclosed its intentions to advance its CBDC project by introducing a Limited Access Live Pilot Environment. Consequently, it opted to select a sole technology collaborator for the initiative.

*Screenshot of the press release. Source: Ripple*

In the initial process stage, the National Bank of Georgia thoughtfully chose nine firms for their technological prowess, maturity, capability, relevant background, and eagerness to participate in the practical assessment. Among these, Ripple was included alongside notable entities such as AUGENTIC GmbH, Bitt Inc., Broxus Holdings Ltd., Currency Network Ltd., DCM Corp Limited, and others.

Ultimately, Ripple was the preferred protocol for the Digital Lari initiative. The selection committee considered various factors, including a profound comprehension of the project’s objectives, its potential applications, and a solid dedication to the project’s triumph, as stated in NBG’s announcement.

In July, Ripple received recognition from Currency Research for its contributions to Digital Currency Advancement and Best Sustainability Initiative, particularly for its role in fostering innovation in the realm of CBDCs.

Before the partnership with the NBG for the Digital Lari initiative, Ripple had proactively aligned itself with organizations seeking to delve into CBDC implementations. Ripple previously joined forces with Colombia’s Central Bank, Banco de la República, to investigate blockchain technology applications in its Digital Peso pilot, leveraging the Ripple CBDC Platform.

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Dubai VARA grants ‘initial approval’ to crypto firm WadzPay

November 2, 2023 Coin Telegraph

Coin Telegraph

The license allows WadzPay to begin preparing to provide virtual asset services and activities under the VASP License for Transfer and Settlement and Broker/Dealer activities.

The Dubai Virtual Assets Regulatory Authority (VARA) has issued an “Initial Approval” license to the crypto firm WadzPay, marking a pivotal step in the company’s journey toward obtaining a Virtual Asset Service Provider (VASP) license for virtual asset services and activities.

According to the announcement, Wadzpay’s VARA license allows it to commence preparations to provide virtual asset services and activities under the VASP License for Transfer and Settlement and Broker/Dealer activities. The VARA license does not allow the company to offer any other of its virtual asset products and services. The company’s platform offers services catering to businesses (B2B) and individual users (B2B2C).

Dubai’s regulator has issued operational licenses of various stages to crypto exchanges and firms over the past few months, strengthening its position as a crypto-friendly jurisdiction with its regulatory body and comprehensive rulebooks for Virtual Asset Service Providers (VASPs). Attaining a VARA license in Dubai is a three-step process requiring crypto exchanges to qualify for provisional approval, a minimal viable product (MVP) license and a total market product license.

WadzPay takes a giant leap with Initial Approval from Dubai Virtual Assets Regulatory Authority (VARA)!#WadzPay #blockchain #virtualassets #VARA #license #Dubai #UAE #regulatory #technology pic.twitter.com/0lDFCsUVHo
— WadzPay (@WadzPay) November 1, 2023

The cryptocurrency wallet Backpack was granted a Virtual Asset Service Provider (VASP) license at the end of October, leading to the debut of Backpack Exchange. Backpack’s VARA license restricts its operations to crypto exchange services within Dubai, excluding its other virtual asset offerings. The newly unveiled Backpack Exchange incorporates zero-knowledge (ZK) proof-of-reserves, multi-party computation (MPC) for custody, and high-speed order execution.

Komainu, a joint venture between Nomura and crypto firms CoinShares and Ledger, also received a full operating license from Dubai’s VARA. Komainu completed the final step in VARA’s licensing process nearly 10 months after securing its MVP license in November 2022.

Laser Digital, the cryptocurrency division of financial giant Nomura, secured an operating license from Dubai’s Virtual Asset Regulatory Authority (VARA) in August. This move is part of Nomura’s efforts to establish a presence in the digital asset sector. Through its subsidiary, Laser Digital Middle East FZE, based in Dubai, the company unveiled its Virtual Asset Service Provider (VASP) license, permitting it to provide brokerage, virtual asset management, and investment services in the emirate.

Laser Digital’s new license comes from Binance obtaining an operational minimum viable product (MVP) from VARA to operate cryptocurrency exchange and virtual asset broker-dealer services locally.

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Hong Kong issues rules for asset tokenization as interest mounts

November 2, 2023 Coin Telegraph

Coin Telegraph

Hong Kong’s securities regulator treats tokenized securities like traditional securities, subject to the same legal and regulatory norms.

The Securities and Futures Commission (SFC) of Hong Kong has issued two circulars to regulate digital asset tokenization.

The circulars offer instructions to intermediaries participating in tokenized securities activities and outline the criteria for tokenizing investment products authorized by the SFC.

The SFC considers tokenized securities as traditional securities with a tokenization layer. As a result, the exact legal and regulatory requirements that apply to conventional securities markets also apply to tokenized securities.

The regulator specified that tokenized securities offerings must adhere to the Companies Ordinance’s Prospectus Regime and the Securities and Futures Ordinance on offers of investment. Additionally, intermediaries providing advice on tokenized securities, managing tokenized funds, and facilitating secondary market trading on virtual asset trading platforms must comply with the existing conduct requirements for securities-related activities.

*Screenshot of the tokenized security circular. Source: SFC*

The recent guidance from the regulator coincides with Hong Kong’s exploration of tokenization. In February, the Hong Kong Monetary Authority issued the world’s inaugural tokenized green bond, raising approximately $100 million.

The circular also states that trading platforms with licenses must establish SFC-approved compensation arrangements to safeguard against potential security token losses. To illustrate, operators of cryptocurrency trading platforms can show their adoption of protective measures like transfer restrictions or whitelisting to ensure the security of tokenized securities.

Conversations about tokenization have recently surged, and the SFC noted a heightened interest from financial institutions in tokenizing traditional financial instruments within global financial markets.

The regulatory body clarified that it has been reviewing different suggestions regarding tokenizing investment products, including those related to the primary offering and secondary trading of tokenized products on SFC-licensed virtual asset trading platforms. It added:

“The SFC sees the potential benefits of tokenization to the financial markets, particularly in increasing efficiency, enhancing transparency, reducing settlement time and lowering costs for traditional finance, but it is also aware of the new risks arising from using this technology.”

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Ripple’s legal chief questions SEC case losses under Gensler

November 2, 2023 Coin Telegraph

Coin Telegraph

Stuart Alderoty expressed concern about the SEC’s repeated arbitrary and capricious actions in court cases, suggesting a troubling pattern under Gensler’s leadership.

Ripple chief legal officer Stuart Alderoty has expressed reservations about the recent string of legal defeats suffered by the United States Securities and Exchange Commission during Gary Gensler’s tenure. These remarks follow another setback for the SEC in the Fifth Circuit Court after Ripple’s victory in the XRP lawsuit in July 2023.

Alderoty characterized this sequence of events as a “deeply concerning trend” in which the SEC, under the leadership of Chair Gary Gensler, appears to be straying from its commitment to upholding the law. Alderoty expressed concern about the SEC’s repeated arbitrary and capricious actions in court cases, suggesting a troubling pattern under Gensler’s leadership.

Another day and another Court finds that the SEC again acted arbitrarily and capriciously. Is anyone else concerned about this very troubling pattern of the SEC flouting any faithful allegiance to law under Mr. Gensler? https://t.co/5bUgSBUOI8
— Stuart Alderoty (@s_alderoty) November 1, 2023

The Fifth Circuit Court of Appeals in the U.S. deemed the SEC’s stock buyback disclosure rule as arbitrary and lacking reasonable explanation on Oct. 31. The court has provided an opportunity for the SEC to demonstrate a thorough consideration of pertinent matters and provide a good basis for its decision. This development follows the SEC’s recent defeats in the XRP lawsuit and the Grayscale filing, which could hold significance for the crypto industry’s regulatory future.

The legal action, initiated by multiple U.S. business and trade associations, revolves around an SEC regulation mandating issuers to report daily information on share repurchases every quarter and to provide the rationale behind repurchasing their own stock.

Judge Analisa Torres, on Oct. 25, 2023, issued an order officially dismissing charges against Ripple’s CEO Brad Garlinghouse and executive chairman Chris Larsen in the Ripple v. U.S. SEC lawsuit. Furthermore, there have been developments regarding institutional sales of XRP (XRP). Judge Torres has requested a joint scheduling brief from both parties on this issue. The Summary Judgment on July 13, 2023, was a split verdict, favoring Ripple in the case of retail XRP token sales.

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HSBC and Ant Group test tokenized deposits under HKMA sandbox

November 1, 2023 Coin Telegraph

Banks

During the test, HSBC was connected to the blockchain platform developed by Ant Group and supported by Ant Group’s banking partners.

Banking giant Hong Kong and Shanghai Banking Corporation (HSBC) have tested the use of tokenized deposits – from issuance to transfer to redemption – with major Chinese banker Ant Group, founded by Jack Ma, in a sandbox arranged by the Hong Kong Monetary Authority.

The initiative led by the banking institutions aimed to explore the potential of deposit tokenization in enabling always-on, real-time treasury fund movement between accounts held by a corporation within the HSBC network.

During the test, HSBC was connected to the blockchain platform developed by Ant Group and supported by Ant Group’s banking partners. In an official communication shared with Cointelegraph, HSBC revealed that the test encompassed the issuance, transfer, and redemption of deposit tokens, adding:

“It will pave the way for future research on how blockchain and tokenization can drive efficiencies and foster innovations in corporate treasury management.”

The involvement of Ant Group’s banking partners enhances treasury fund transfer with improved turnaround time, cost efficiency and visibility. Vincent Lau, Global Head of Emerging Payments, Global Payments Solutions, HSBC, confirmed the bank’s interest in continuing to leverage tokenized deposits and other financial innovations to streamline and optimize treasury management for clients.

HSBC has also been an active participant in various central bank digital currency (CBDC) initiatives, including Swift cross-border CBDC initiative Project mBridge.

HSBC reportedly introduced its first local cryptocurrency services in June 2023.

SCOOP: HSBC, the largest bank in Hong Kong, today allows its customers to buy and sell Bitcoin and Ethereum ETFs listed on the Hong Kong exchange, and is also the first bank in Hong Kong to allow it. The move will expand local users’ exposure to cryptocurrencies in Hong Kong. pic.twitter.com/vH0LieSVGw
— Wu Blockchain (@WuBlockchain) June 26, 2023

According to the report, HSBC would offer cryptocurrency ETFs listed on the Stock Exchange of Hong Kong, which include CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF and Samsung Bitcoin Futures Active ETF.

HSBC did not immediately respond to Cointelegraph’s request for comment.

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Crypto speculations simmer after cryptic posts on X

October 25, 2023 Coin Telegraph

Coin Telegraph

The crypto community on X is on edge over cryptic posts by Ripple’s chief technology officer and X itself.

The crypto community on X (formerly Twitter) has been thrown into a series of guessing games by a couple of cryptic posts.

One of the posts was made by David Schwartz, Ripple’s chief technology officer. He published a picture of a frog sitting on the leaf of a lily pad, with a water lily flower on each side of the frog. This prompted a response from the cryptocurrency community, particularly XRP (XRP) and Pepecoin (PEPE) enthusiasts.

XRP enthusiasts expressed sentiments such as “Hoping this translates into a transformative XRP price” and “Anticipating a quantum leap or major shift.“ A PEPE-themed X account, xPEPE, suggested that Schwartz had come to a favorable realization and raised a “bullish flag for frog enthusiasts worldwide.“

pic.twitter.com/vFNrBmn7ft
— David "JoelKatz" Schwartz (@JoelKatz) October 24, 2023

X user Juan Martinez commented, “Welcome aboard Sir.“ The X user added an image of two frogs on the moon with a PondX logo on it.

Meanwhile, a second cryptic post was made by X itself, sharing a meme of a dog answering a telephone call, which has sparked speculations among the crypto Dogecoin (DOGE) community and others.

Although the post lacks specific details, it’s suspected by some Dogecoin enthusiasts that X, associated with Elon Musk, is likely exploring Dogecoin adoption on the platform. It’s worth noting that similar speculations have circulated in the past.

pic.twitter.com/2Gufkv3DXq
— X (@X) October 24, 2023

However, some believe the post hints at a new audio calling feature. X user Alx asked if an audio calling feature is imminent on X but received no clear response from X.

Nonetheless, Musk’s previous endorsement and positive remarks about Dogecoin have ignited excitement among Dogecoin enthusiasts for a while.

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Bitfinex Securities announces tokenized bond

October 25, 2023 Coin Telegraph

bitfinex

Paolo Ardoino, Bitfinex chief technology officer and incoming Tether CEO, said the “exciting” initiative marks the beginning of a new era in capital raising.

Bitfinex Securities, a platform focused on listing real-world tokenized securities, has announced its first tokenized bond that will be listed in November. The new tokenized bond called ALT2611 is a 36-month, 10% coupon bond denominated in Tether (USDT) and issued by Mikro Kapital, a global leader in microfinance.

Bitfinex Securities said the tokenized bond ALT2611 will acquire risks associated with the debt and equity of microfinance organizations, small financial institutions, leasing companies and banks, in Italy, Romania, Moldova, and other developing nations along the Silk Road.

Bitfinex Chief Technology Officer Paolo Ardoino called the first tokenized bond on the securities platform the beginning of a new era for capital raises “through deep liquid markets and stock/fond markets.”

Exciting!
This is the first bond listed on Bitfinex Securities. A new era for capital raises through deep liquid markets and stock/fond markets has begun.

Furthermore $USDt will become the underlying denomination asset of this new financial ecosystem.

And yes. It leverages… https://t.co/ekXj3gY7Xj
— Paolo Ardoino (@paoloardoino) October 25, 2023

The Bitfinex Securities platform is intended to help raise capital for issuers looking to list their tokenized securities on a public exchange. The platform offers access to a range of financial instruments, most notably blockchain-based bonds and stocks, as well as investment funds.

Businesses can use Bitfinex Securities to list their tokenized securities directly on the exchange or to facilitate the trading of the securities through the capital-raising platform. Businesses can allow their products to be transacted on exchanges and between wallets using the same or comparable technology as cryptocurrencies by tokenizing their goods, such as debt and equity securities.

Securities are financial instruments that can be traded and converted into other currencies in both public and private markets. There are basically three categories of securities namely debt, such as loans that must be repaid on a regular basis; hybrids, a mix of elements of debt and equity; and equity, which grants ownership rights to holders.

Bitfinex said the tokenized bond will start trading at the price of 100 USDT with a minimum investment amount of 125,000 USDT. The security distribution will begin within one week after the completion of the capital raise with a 3-year maturity period from the day of issuance. The securities bond will be governed by and construed in accordance with the law of the Grand Duchy of Luxembourg.

According to the official announcement Mikro Kapital will issue 100,000 securitized tokens of ALT2611 with the aim of raising 10,000,000.00000000 USDT. ALT2611 is not offered or made available to U.S. citizens or persons present in the U.S. or any other jurisdiction where the offer or sale would be unlawful.

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Telegram trading bot Maestro refunds users 610 ETH after router exploit

October 25, 2023 Coin Telegraph

Bot

Maestrobots, a group of crypto bots on Telegram, has refunded users 610 ETH in the aftermath of a 280 ETH smart contract exploit on Oct. 24.

Maestrobots, a group of cryptocurrency bots on the Telegram messenger, is refunding users in the aftermath of a 280 Ether (ETH) attack.

The Maestro team refunded the users affected by the Maestro Router 2 contract, the platform announced on X (formerly Twitter) on Oct. 25. According to the announcement, Maestrobots paid a total of 610 ETH in its own revenue to cover all the user losses, worth more than $1 million at the time of writing.

“Every wallet that lost tokens in the router exploit has now received the full amount they lost. Some of you ended up with even bigger bags,” Maestro wrote.

The Maestro team noted that some amounts were paid back in affected tokens and ETH. For nine out of the 11 exploited tokens, Maestro chose to buy and refund tokens instead of sending ETH because “it's the most equitable and complete refund” it could offer. “We spent 276 ETH to secure our users' tokens,” Maestro added.

Affected users of the other two exploited tokens — including JOE and LMI — were refunded in ETH, Maestro said, citing lack of liquidity to buy back the lost tokens. The announcement added:

“So we compensated affected users with the ETH equivalent of their tokens, and boosted that amount by 20% because you deserve it. These refunds cost 334 ETH.”

Blockchain security firm CertiK confirmed to Cointelegraph that it has been able to detect the transactions showing the 334 ETH compensation paid out to users from Maestro.

The refunds came shortly after Maestro reported that the MaestroRouter on ETH mainnet was compromised on Oct. 24, allowing hackers to siphon around 280 ETH in exploited tokens, worth around $485,000 at the time of the hack. The Maestro team said it identified the attack within 30 minutes after the start and fully removed the exploit. The platform also quickly resumed trading, temporarily halting tokens with pools on SushiSwap, ShibaSwap and ETH PancakeSwap.

“Wallets were not compromised at all during this attack. This was purely directed at the Router,” Maestro wrote.

According to the executive summary by CertiK, Maestro's smart contract breach affected a total of 106 user addresses. The affected tokens included MOG, LMI, JOE, BANANA, OGGY, JIM, ETF, LP, APU, Real Smurf Cat and PROPHET.

“Most of these tokens pumped back up due to the anticipation that we were gonna market buy the tokens. Most of these tokens are still alive and kicking,” a spokesperson for Maestrobots told Cointelegraph.

Maestro, also known as MaestroBots on X, is a Telegram bot facilitating trades across three networks, including Ethereum, BNB Chain and Arbitrum, with a default transaction fee of 1%. The Maestro bot system features three different bots, including the Maestro Whale Bot, the Maestro Sniper Bot and the Maestro Wallet Bot. The Maestro Bots Hub Telegram channel has more than 100,000 subscribers at the time of writing, while its X account counts more than 24,000 followers.

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85% of crypto rug pulls in Q3 didn’t report audits: Hacken

October 25, 2023 Coin Telegraph

Coin Telegraph

A cryptocurrency rug pull is one of the simplest scams to prevent, according to blockchain security auditor Hacken.

Cryptocurrency rug pulls are not too difficult to spot by investors, as the majority of such scams usually share distinct and visible features, according to a new report.

Blockchain security auditor Hacken released its latest security insights report on Oct. 25, aiming to spot the trends in Q3 crypto hacks and evaluate how affected projects approached security.

The report paid specific attention to rug pulls, which are a type of exit scam occurring when a team pumps their project’s token before the sudden withdrawal of liquidity. According to Hacken, crypto rug pulls made up the largest amount of exploits in crypto, accounting for more than 65% of all hacks in Q3 2023.

*Cryptocurrency hacks by type in Q3 2023. Source: Hacken*

The reason there are so many rug pulls on the market is that it’s easy to create such schemes. “Serial scammers use token factories that exhibit the same behavior to produce fraudulent tokens on a mass scale,” the report notes.

Despite their high prevalence, cryptocurrency rug pulls are “one of the simplest scams to prevent,” Hacken said, providing some tips about such scams based on its Q3 observations.

One of the most crucial ways to assess a project is to check for an independent third-party audit, according to Hacken. Of the 78 Q3 rug pulls examined by Hacken, only 12 reported having completed “any kind of audit.”

But even when a crypto project provides an audit, users should be vigilant to properly check them, as an audit alone doesn’t always guarantee protection from scams, Hacken noted, stating:

“The project can undergo an audit and have an audit report, but with a poor score. Yet, users overlook this and consider the mere fact that the project was audited as sufficient.”

According to Hacken co-founder and CEO Dyma Budorin, investors often ignore red flags like the absence of audits and other issues due to factors like the fear of missing out (FOMO). The industry has seen success stories with memecoins such as Pepe (PEPE) and Shiba Inu (SHIB), where $100 out of curiosity led to significant profits, so people tend to hope for this history to repeat, the executive noted.

“This desire for substantial returns in a short timeframe often causes individuals to overlook red flags and impulsively dive into investments,” Budorin said, adding:

“Scammers are well aware of this, and they are very good at mimicking successful projects. [...] Scammers frequently refer to thriving projects, intensifying the FOMO on the next big opportunity.”

Hacken’s CEO also stressed that the process of investing in cryptocurrency is a “no-brainer for many users,” requiring “only a few clicks.” According to the executive, this fact can also lead to impulsive decision-making.

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Tokens