Weekly Crypto Roundup: New Rules, Serious Report Cards, and Yet More Hacks

Mainstream companies and regulators are feeling the ripples coming from the crypto industry

Mainstream companies and regulators are feeling the ripples coming from the crypto industry

As several crypto firms reported declining revenue in the second quarter of 2022, a growing number of traders are facing the effects of the recession spreading from the crypto industry to mainstream companies, prompting regulators around the world to act. being inspired to.

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rising rules

This week US Senators Debbie Stabeno and John Boozman proposed the Stabeno-Boozman bill, which aims to give the Commodity Futures Trading Commission (CFTC) the main responsibility of regulating bitcoin and ether. Currently, the crypto industry is struggling to navigate the regulatory overlap of the CFTC – which is supposed to be more tolerant of crypto innovation – and the Securities and Exchange Commission (SEC), which is known to take legal action against many cryptos. goes. companies.

The SEC has thousands of full-time employees and has a budget of close to $2 billion, while the CFTC has fewer than 1,000 full-time employees and has a budget of less than $500 million.

The offer comes as the value of bitcoin has halved this year to touch prices below $19,000, and a Number of crypto lending/trading platforms that fought to maintain operations – Or simply suspend user transfers and withdrawals.

On the other side of the Atlantic, the Indian government is closely monitoring the crypto sector.

Minister of State for Finance Pankaj Choudhary told the Rajya Sabha in a written reply on Tuesday that the Enforcement Directorate is investigating Indian crypto exchange WazirX. The platform was alleged to have laundered around Rs 2,790 crore.

“In one case, the investigation conducted so far revealed that Wazirx, an Indian crypto-exchange platform operated by Zanmai Labs Pvt Ltd in India, was using the boundary wall infrastructure of Cayman Islands based exchange Binance. It has been found that all crypto transactions between these two exchanges were not being recorded on the blockchain and thus were wrapped in mystery,” he said, according to PTI.

The Enforcement Directorate also deposited Rs 64.67 crore in the bank deposits of WazirX. WazirX issued a statement today saying that its deposits and withdrawals were taking place as usual, regardless of regulatory action. The exchange is also assessing its options.

Saylor is no longer CEO

American company MicroStrategy is best known for its business intelligence services, but people in the crypto world would call it a “whale”, referring to high-profile cryptocurrency buyers whose moves could greatly affect the market. At last count, MicroStrategy owned approximately 129,699 BTC.

This week, however, Microstrategy co-founder and billionaire Michael Sayer announced that he is stepping down from the CEO role and taking the position of an executive chairman instead, so that he can focus on getting more cryptocurrency. Mr. Sailor has been the CEO of the company for over 30 years.

MicroStrategy stock gained 14.56% over the past five days, its highest level since early May.

Still, that didn’t change the company’s Q2 results, which showed that even the loss of bitcoin hit the balance sheet hard. Total revenue for the quarter fell to $122.1 million and net losses exceeded $1 billion.

“Net loss for the second quarter of 2022 was $1.062 billion, or $94.01 per share on a diluted basis, compared to $299.3 million or $30.71 per share on a diluted basis,” the company’s official release said. on Tuesday.

In other news, Jack Dorsey’s Block, which led to mass adoption of crypto, is also taking steps to address the current state of the crypto economy. The company has been slow in hiring, and also plans to cut its investment target by $250 million.

The block’s shares have gained 22.49 per cent in the last five days.

two strikes in a week

This week was a painful one for many crypto traders investing in Solana, the ninth largest blockchain by market cap. About 8,000 wallets were hacked on Tuesday and Wednesday and their crypto funds ran out quickly. Several ecosystem members jumped into action to investigate the cause of the hack, and evidence points to a vulnerability arising from Solana’s digital wallet sloop.

“We feel the pain of the community, and we were not immune. Many of our own employees and founders had run out of wallets,” said Slope Wallet’s official statement published on Thursday.

It added that the team was working with developers, security experts and protocols in the ecosystem to “identify and improve”. The Slope Wallet team confirmed that although it had some hypotheses about the exploit, it did not yet have a “convincing” answer.

This latest incident shows how merchants and new users often pay the heaviest prices for decentralized blockchain projects whose founders are not accountable to investors during such crises.

Solana’s merchants were not out of luck alone. The crypto bridge Nomad, which helps move crypto assets between blockchains, was also exploited this week. The hackers took more than $190 million on Tuesday, but later returned nearly $9 million.

Crypto bridges are a common target for hackers, with the Ronin Bridge hack stealing nearly $600 million earlier this year. This is one of the biggest crypto hacks on record.

While ‘white hat hackers’ try to flag security breaches or draw attention to vulnerabilities in a project, the analytics platform has also revealed that North Korean state hackers resort to crypto exploits to evade sanctions. take.