Digital Discovery Newsletter - Unveiling the Latest in the World of Cryptocurrency

Introduction:

Welcome to the Digital Discovery Newsletter, your weekly source for a comprehensive summary of last week's events in the dynamic worlds of finance and cryptocurrency. We bring you the most significant updates, developments, and headlines that have unfolded from the world of cryptocurrency, DeFi, finance, security, and funding, ensuring you stay fully informed about the rapidly evolving landscape of digital currencies. Join us as we delve into the past week's major highlights and trends that are shaping the future of finance.

In This Issue:

Top Stories:

1. Grayscale's Big Move: Grayscale plans to convert its $5 billion Ethereum Trust ($ETHE) into an ETF.
2. SEC vs. Prager Metis: The SEC filed a lawsuit against Prager Metis, which audited FTX.
3. Sam Bankman-Fried's Bold Offer: Sam Bankman-Fried considered paying $5 billion to persuade former President Trump not to run for president.
4. Vitalik Buterin Speaks Out: Vitalik Buterin publishes insightful posts on Ethereum centralization and more.
5. StarkWare's Delay: StarkWare delays the Starknet ($STRK) token to April 15th, 2024, focusing on technology development.
6. Sam Bankman-Fried's Trial: The trial of Sam Bankman-Fried begins.
7. SEC's Ripple Battle: The SEC's motion for an interlocutory appeal is rejected in the Ripple case.
8. Ethereum Futures ETFs Debut: Ethereum Futures ETFs see low volume on their first day of trading.
9. Orbiter Finance Addressing Rumors: Orbiter Finance team dismisses rumours of a hack.
10. Alameda's Backdoor Revelation: Alameda's backdoor was discovered months before its collapse.
11. SEC Suing Elon Musk: The SEC is suing Elon Musk.
12. Polygon Co-Founder Steps Down: A co-founder of Polygon steps down.
13. Sui Foundation Allocates Funds: The Sui Foundation reallocates 117 million $SUI.
14. FTX Exploiter Strikes: FTX Exploiter swaps around $124 million.

Latest Innovations

• StarkWare's Delay: StarkWare postpones the Starknet $STRK token.
• Base's Daily Insights: Base introduces Onchain Daily, providing daily on-chain insights.
• Mint Fun's Creator Tools: Mint Fun launches creator tools and a special edition NFT.
• Farcaster Protocol's "Elephant": Farcaster Protocol releases the "Elephant" version and offers a commemorative NFT.
• Floor's Birthday Celebration: Floor, an NFT mobile app, celebrates its second birthday with a free commemorative NFT.
• Encode Club Bootcamps: Encode Club opens applications for Q4 Bootcamps.

Finance News

• Sam Bankman-Fried's offer to Trump: SBF considered paying former President Trump $5B to not run for president according to?author Michael Lewis in his new book.
• Paradigm's Amicus Brief: Paradigm files an Amicus Brief in the SEC's case against Binance. Paradigm argues that the SEC is attempting to change the law without following the established rulemaking process. Additionally, Paradigm points out flaws in the SEC's Howey test application.
• SEC vs. Prager Metis: The SEC sues Prager Metis for auditor independence violations.
• Grayscale's ETF Move: Grayscale aims to convert its Ethereum Trust into an ETF.
• VanEck's Charitable Gesture: VanEck donates 10% of profits to Protocol Guild for at least 10 years. Guild is?a collective of 152 Ethereum core protocol contributors.
• Coinbase's Singapore License: Coinbase receives a Major Payments Institution (MPI) license in Singapore. This license allows Coinbase to expand its Digital Payment Token services to individuals and institutions in Singapore.
• BlockFi Creditors Approve Restructuring: BlockFi creditors approve bankruptcy restructuring plan.
• Ethereum Futures ETFs' Lackluster Debut: Ethereum Futures ETFs experience low trading volumes on launch day.
• Sam Bankman-Fried's Trial: The trial of Sam Bankman-Fried commences.
• SEC's Ripple Battle Continues: SEC's motion for an interlocutory appeal in the Ripple case is rejected. District Judge Analisa Torres ruled that the SEC failed to prove that the appeal would significantly progress the case. The trial is scheduled for April 23, 2024.
• Ripple Singapore Subsidiary's License: Ripple Markets APAC Pte Ltd secures a full MPI license in Singapore.
• Celsius' Repayment Plan: Celsius seeks court approval to repay customers by the end of the year.
• Bank of Korea's CBDC Test: The Bank of Korea plans to test a wholesale CBDC. The test will investigate if a wholesale CBDC can serve as a settlement asset for tokenized deposits in commercial banks, as well as explore the programmability of tokenized deposits.
• FTX's Backdoor Discovery: FTX employees discovered Alameda's backdoor months before its collapse. Alameda had access to a backdoor that enabled them to have a negative balance of up to $65 billion by using customer funds. The Alameda employees reported this issue to their boss, who then brought it up with FTX executive, Nishad Singh. However, the matter was disregarded and one of the FTX employees who reported the issue was terminated.
• SEC Suing Elon Musk: The SEC is suing Elon Musk. Elon Musk is being sued by the SEC over allegations of securities fraud related to his acquisition of X. Despite being subpoenaed in May, Musk did not appear for a scheduled testimony on September 15th. His attorney, Alex Spiro, argues that the SEC has already questioned Musk multiple times in what he calls a misguided investigation, and believes enough is enough.”
• JP Morgan's Ethereum Staking Concerns: JP Morgan raises concerns about Ethereum staking centralization. According to JP Morgan, the top 5 liquid staking providers control over 50% of staking on the Ethereum network. Lido accounts for nearly a third of that.

DeFi News

• Vitalik Buterin's Insights: Vitalik Buterin's thoughts on Ethereum's protocol and more. The post discusses changes to Ethereum staking to reduce centralization and the tradeoffs between adding certain protocols to Ethereum's base layer and building them on top of Ethereum.
• UBS Tokenized VCC Fund: UBS launches the first blockchain-native tokenized VCC fund pilot on Ethereum.
• AltLayer Supports Connext Network: AltLayer supports Connext Network bridged tokens, xERC20.
• Chainlink Integration: Chainlink announces more projects integrating Chainlink CCIP.
• OP Stack's Fault Proof System: OP Stack's Fault Proof System goes live on the Goerli testnet.
• Taiko's Updates: Taiko releases v0.22.0 changelogs, including the Alpha-5 testnet.
• OpenSea's Studio: OpenSea launches OpenSea Studio, a one-stop shop for creators.
• Binance's Monitoring List: Binance adds tokens to its Monitoring Tag list. Binance has added Beta Finance ($BETA), BarnBridge ($BOND), Waltonchain ($WTC), and NEM ($XEM) to its Monitoring Tag list as these tokens do not meet Binance's listing criteria and may be subject to delisting.
• Utopia Labs' Deprecation: Utopia Labs to deprecate Utopia Core. Utopia Labs, which previously raised $23 million from Kindred Ventures and Paradigm, will discontinue Utopia Core on November 6th, 2023
• Yield Protocol Winding Down: Yield Protocol announces plans to wind down.
• Polygon's Co-Founder Steps Down: A co-founder of Polygon steps down.
• Polygon 2.0's POL contracts are now live on the Goerli testnet. The new proposed governance will be shared in the coming weeks.
• Immutable's Roadmap: Immutable publishes zkEVM roadmap. The roadmap for the future includes milestones such as Immutable zkEVM Testnet Re-Genesis (in November), Immutable zkEVM Mainnet (in December-January), Immutable zkEVM Dedicated App Chains (in 2024), and Prover Integration (in 2024).
• Sui Foundation Allocation: Sui Foundation reallocates 117 million $SUI from external market makers to invest in various growth initiatives. These include providing grants to developers who are building decentralized applications on Sui, as well as supporting Sui's DeepBook CLOB, automated market makers, and liquid staking and lending protocols within the network.
• dYdX's Transition: dYdX transitions from a rollup to an app chain.
• THORSwap in Maintenance Mode: THORSwap enters maintenance mode due to the potential movement of illicit funds through the protocol. This decision was made after carefully evaluating the situation and consulting with advisors, legal counsel, and law enforcement. THORSwap will remain in maintenance mode until a more permanent and robust solution can be implemented to ensure the continued security and integrity of the platform.

Security and Exploits

• FTX Hacker's Moves: The FTX hacker moves funds using RailGun and Thorchain.
• Fantom Foundation's Investigation: Fantom Foundation collaborates with TRM Labs for an independent investigation and accelerates the ability to trace and recover funds from the Multichain incident.
• Friend Tech Accounts Drained: Friend tech accounts were drained due to sim-swap attacks.
• Orbiter Finance Dismisses Hacking Allegations: Orbiter Finance dismisses hacking allegations.
• Aztec Labs pays a $450,000 bounty for a vulnerability in Aztec Connect. Rest assured, user funds remain secure. However, it is recommended that users withdraw their funds from ZK Money as Aztec Labs no longer provides active support for Aztec Connect.
• Xerberus Report on Ardana: Xerberus report reveals Ardana's losses due to risky Ethereum-based investments.
• JPEX Rug Pull: The Hong Kong Securities and Futures Commission takes action following the JPEX Rug pull.
• FTX Exploiter Strikes Again: FTX Exploiter swaps $ETH for $tBTC. FTX Exploiter swapped 75,636 Ethereum (~$124 million) for Bitcoin assets on Threshold Network after THORSwap went into maintenance mode.
• Friend Tech's Account Security Update: Friend Tech adds the ability to manage login methods.
• Stars Arena Vulnerability Fix: Stars Arena fixes a vulnerability that risks locked funds. Recently, Stars Arena, a platform developed by Friend Tech and based on Avalanche, was able to address a security issue that could have put funds locked in its smart contract at risk. Fortunately, the attackers were discouraged by the high transaction fees required to drain the funds, and the vulnerability was fixed before any significant damage was done. In the end, only $2000 was taken from the system.
• GALXE Security Breach: GALXE faces a security breach, with over ~$200K drained. Take action if you've connected to the site recently.

Funding

• Crypto Startups Raise $560M: Cryptocurrency startups raised $560 million in September.
• Blackbird's Series A: Blackbird raises $24 million in a Series A funding round.
• Para Finance's Seed Round: Para Finance raises $5 million in a Seed funding round.
• Accumulated Finance secures an undisclosed amount in private funding.
• Fountain's Closed Round: Fountain, a blockchain-based art brokerage platform raises undisclosed funding in a closed round.
• Burnt's (XION) Strategic Investment: Burnt receives a strategic investment from Circle Ventures.
• Cicada's Pre-Seed Funding: Cicada raises $9.7 million in a Pre-Seed funding round.
• Phaver secures $7 million in a Seed funding round.
• Fairblock's Seed Funding: Fairblock raises $2.5 million in a Seed funding round.
• Convergence RFQ raises $2.5 million in a Pre-Seed funding round.
• L1 Advisors secures $1.6 million in Pre-seed funding.
• Paima Studious' Grant: Paima Studious receives a $1.4 million grant from Cardano.

Token Unlocks

Token unlocks for various cryptocurrencies in October.

• Sui $SUI - 41.39M ~$20.27M on OCT 02
• Joe $JOE - 410.07K ~$106.83K on OCT 02
• dYdX $DYDX - 2.16M ~$4.49M on OCT 03
• Pendle $PENDLE - 340.33K ~$258.10K on OCT 03
• Tornado Cash $TORN - 175K ~$556.6K on OCT 03
• Liquity $LQTY - 733.65K ~$858.36K on OCT 04
• 1inch $1INCH - 287.14K ~$79.25K on OCT 04
• Galxe $GAL - 416.67K ~$537.50K on OCT 05
• Nym $NYM - 12.50M ~$1.43M on OCT 05
• Hashflow $HFT - 3.28M ~$1.12M on OCT 06
• ImmutableX $IMX - 22.71M ~$13.7M on OCT 07
• Moonbeam $GLMR - 4.47M ~$1.03M on OCT 07
• X2Y2 $X2Y2 - 17.4M ~$213.86K on OCT 08
• GMX $GMX - 2.81K ~$114.45k on OCT 08

Calendar

Upcoming Events: Stay updated with key cryptocurrency and blockchain events.

• Oct. 2-4: Cosmoverse 23, Istanbul.
• Oct. 5-6: ETHMilan conference.
• Oct. 12-13: Bitcoin Amsterdam conference.?
• Oct. 20-21: Plan B forum, Lugano, Switzerland.?
• Oct. 25-26: European Blockchain Convention, Barcelona.?
• Nov. 2-4 Cardano Summit, Dubai.?
• Nov. 13-19: Devconnect, Istanbul.
• Nov. 28: EOS native consensus upgrade with “instant finality.”?
• Dec. 1-3: Africa Bitcoin Conference, Ghana.?
• April 2024 (estimate): Next Bitcoin halving.
• May 29-31, 2024: Consensus, Austin Texas
• July 25-27: Bitcoin 2024, Nashville.

That's all for this week's Digital Discovery Newsletter! We've covered a wide range of topics, from major industry developments to the latest in DeFi, security, funding, and upcoming events. Join us next week for another edition.

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Stay informed, stay crypto-savvy!

The Digital Discovery Team