The most important industry news and a detailed analysis of digital assets in the weekly review of Getblock Magazine

​Biggest DeFi hack and the EU’s anonymous transaction ban. Key events of the week

01.04.2022 - 11:10

45

6 min

The bitcoin exchange rate gained 2,55% over the past seven days. The asset reached the highest values on March 28, when 1 BTC was trading at $48 189, the lowest values were recorded on March 25, at $43 850 per coin. As of April 1, the bitcoin exchange rate is $45 125 (according to the CoinMarketCap portal).

The second-largest cryptocurrency by capitalization, Ethereum, has risen 5,38% in the past seven days. The native token of the Binance cryptocurrency exchange (BNB) gained 4,40%.

The total capitalization of the crypto market rose from $1,99 trillion to $2,07 trillion during the week, with bitcoin dominating 41,3%. Ethereum’s share is 19%. As can be seen on the infographic of the Coin360 portal, most of the assets are in the green zone on April 1.

Source: Coin360

EU tightened regulation on cryptocurrencies

On Thursday, March 31, the EU lawmakers voted to ban anonymous cryptocurrency transactions. The users will be required to identify themselves when transferring digital assets worth more than 1000 EUR. The new rules will also affect the operation of exchanges, which will report such transactions to regulators.

Another initiative by the EU authorities aims to introduce compulsory legalization for crypto companies. To comply with the new regulations, cryptocurrency companies must register as a business, as well as get approval from the local regulators. Unlicensed crypto companies will have to cease their operations in Europe.

The UK has imposed similar requirements. On March 31, the UK’s Financial Conduct Authority (FCA) canceled temporary registration for cryptocurrency companies. Operating without a license is a criminal offense.

Ronin’s sidechain hack caused $625 million in damage

The most high-profile event of the past week was an attack on the Ronin sidechain, which is used by the popular game Axie Infinity. The hacker managed to gain control of 5 out of 9 validators and withdrew over $625 million in Ethereum and USDC cryptocurrencies. The hack was the largest in the history of DeFi.

The developers of Axie Infinity have promised players that they will reimburse all funds. They have two options for this: selling AXS tokens in bulk and at a discount to major players. Or use funds from the project’s “community treasury” to recoup the losses from the hack. The company currently has about $1,6 billion in treasury.

News broke this week regarding another major hack. It is about the Mt.Gox exchange, from which 744 000 bitcoins ($33,6 billion at the exchange rate as of April 1, 2022) were stolen in February 2014. Mark Karpeles, ex-director of the Mt.Gox exchange, said that the trading platform’s trustee will share up to $6 billion in compensation among affected customers. The exact timing of the compensation is not yet known.

Regulation of mining in Russia

Russia’s Ministry of Finance believes banning household mining is pointless and the country should focus on the development of mining as an industrial sector. This was stated by Deputy Director of the Financial Policy Department of the Ministry of Finance Alexey Yakovlev, on March 31.

A few days before this statement, Deputy Energy Minister Yevgeny Grabchak also spoke out on the topic of mining in Russia. The official called for mining to be made legal in the country as soon as possible. According to him, there is a legal vacuum in this field that needs to be addressed, and the provision of capacities and sites for miners should be carried out by the local authorities. In addition, these actions need to be synchronized with the relevant plans for the development of the regions.

The Ministry of Finance of the Russian Federation spoke out this week on the subject of the imposed anti-Russian sanctions. Director of the Finance Ministry’s Financial Policy Department Ivan Chebeskov noted that sanctions are an incentive for the development of the crypto market in Russia. Because of Western restrictions, Russians are unable to trade on many foreign crypto exchanges, which facilitates the creation of their own infrastructure.

Criticism of PoW mining

Chris Larsen, the co-founder of the Ripple payment system, has partnered with Greenpeace, Sierra Club, and other environmental organizations to launch the “Change the Code not the Climate” campaign, which has committed $5 million to its first initiatives’ implementation.

One of the key proposals is to change the bitcoin algorithm from Proof-of-Work to Proof-of-Stake to reduce the impact of mining on the environment. According to the initiators of the idea, a hard fork or a soft fork (changing the rules of the network) of the blockchain is needed to be conducted to abandon mining. If that does not happen, Larsen argues, bitcoin will lose the support of investors and become an “outlier.”

Other important news

The MetaMask cryptocurrency wallet added a number of new features, including Apple Pay support for buying cryptocurrencies on iOS, commission-free transactions for a number of sites, and a darker theme for the user interface. According to the developers, buying digital assets with fiat money will become even easier with the integration of Visa and MasterCard credit cards for iOS users.

UnionPay, China’s national payment system, will launch a self-service platform for merchants who want to use digital yuan (e-CNY). The network will allow customers to make purchases using the digital yuan through apps. For now, the platform will only support e-CNY wallets, with wallets from other financial institutions expected to be added in the future.

Fantom, a DeFi platform, announced the launch of its own algorithmic stablecoin called USDB. In the near future, stablecoin owners will have access to features such as profitable farming, liquidity pools, staking, as well as the provision of loans in cryptocurrency. The material remunerations are available for the developers and early adopters. USDB will be issued by burning the FantOHM (FHM) token.

Robert Kiyosaki, American writer and author of the bestseller “Rich Dad Poor Dad,” predicted the collapse of the dollar. In his view, this will happen because of the unstable geopolitical situation in the world. Kiyosaki calls for buying more gold, silver, and cryptocurrencies. He emphasized Bitcoin, Ethereum, and Solana.

The government of Vanuatu approved the Satoshi Island Community Project for crypto enthusiasts to live on. It will be created in the South Pacific, where traditional currencies will be replaced by digital assets. Self-regulation issues will be managed by decentralized autonomous organizations. The authorities have already received 50 000 applications for the crypto island’s citizenship in the form of NFT.

Author:

Michael Golikov Michael Golikov

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy