🔮 CZ You Later, Brazil ETF Push, AI in Digital Assets, Kyber Exploit

Token Specific News

Fast and Furious XII: Oracle Pursuit

In 2023, there has been a significant push to provide lower-latency pricing data to blockchains in decentralized finance (DeFi). Oracle providers like Chainlink and Pyth Network are at the forefront of this effort, aiming to make on-chain trading more appealing to speed-focused Wall Street speculators and high-frequency traders playing a crucial role in bringing off-chain data onto blockchains. Chainlink's recent introduction of Data Streams and Pyth Network's focus on low-latency pricing data on the Solana blockchain showcase the industry's commitment to reducing latency and operational costs. Other players in the oracle space include Band Protocol, Witnet, Tellor, XYO Network, Razor Network, and WINkLink. The sector faces the challenge of balancing tradeoffs between speed, reliability, and decentralization. This balance is crucial for the efficiency of crypto protocols, especially in the context of critical oracle infrastructure.

Ethereum Virtual Machine Blockchains Experience Surge in Transaction Activity

In recent weeks, there has been a surge in transaction activity on several Ethereum Virtual Machine (EVM) blockchains, including Polygon, BNB Chain, Avalanche, Celo, and Fantom. These EVM chains, capable of running the Ethereum Virtual Machine, saw a notable increase in their 7-day moving averages for daily transaction counts around two weeks ago. Polygon's average rose from 2.5 million to 6.43 million, surpassing BNB Chain. Avalanche surpassed Ethereum for the first time with its average jumping from 236,930 to 3.1 million. Fantom more than doubled its transactions from 219,870 to 3.41 million, surpassing both Ethereum and Avalanche. Celo experienced a significant surge, jumping from 288,000 to 3.82 million transactions. While the rise in transactions on these chains is partly attributed to higher fees on Ethereum, some chains, like Polygon, saw spikes due to specific events, such as a surge in minting PRC-20 tokens.

Kyber Exploit - Crypto Thieves Steal $363M in Nov

KyberSwap, a decentralized exchange protocol, experienced a suspected $47 million exploit involving its Elastic Pools liquidity solution. The funds were funneled into a single wallet, mainly consisting of ether and stablecoins, distributed across various blockchains. The affected platforms include Arbitrum, Optimism, Ethereum, Polygon, and Base. KyberSwap is currently investigating the incident and has urged users to withdraw their funds. The attacker left an on-chain message hinting at upcoming negotiations. Here's the ransom note and here is some data on the month.

Source: Certik

Wallet of Satoshi Withdraws Bitcoin Lightning App from U.S. Stores, Citing Voluntary Exit

The Wallet of Satoshi, a prominent Bitcoin Lightning app, has voluntarily pulled out of U.S. Apple and Google stores, discontinuing its services for U.S. customers. While the reasons for this exit weren't specified, the company ensured U.S. users that their funds are accessible for withdrawal and transfer to other wallets. The app remains available in other countries, and although some users speculated regulatory challenges, the company clarified the removal was its decision. Wallet of Satoshi, recognized for processing a significant number of Lightning Network payments, expressed hope for future developments that could facilitate a return to U.S. operations.

Decoding the Dance of GPUs, Storage Networks, and AI Networks in the Blockchain Ballet

Investors seeking exposure to the AI space through crypto are exploring three sectors: decentralized compute networks, storage networks, and AI infrastructure networks. GPU compute networks, responding to the GPU shortage for machine learning and AI, are emerging as crypto-coordinated networks pooling idle GPU resources. Platforms like io.net and Nosana, both on Solana, aim to establish decentralized clouds for machine learning. Storage networks, fueled by increased data generation from AI and machine learning, have seen price increases in the last 30 days, including Filecoin (23%), Storj (73%), and Arweave (67%). AI infrastructure networks like Bittensor, focusing on miners competing as AI models, have surged by 294% in the past 30 days. Other emerging AI infrastructure networks include Ritual, Upshot, Modulus Labs, Autonolas, and Delysium. The DePIN sector's market cap has grown by nearly $3 billion in the past two weeks, reaching $9.7 billion. Notable contributors include Render, Akash, The Graph, and Pocket Network. In November, DePIN applications collectively generated $562,000 in revenue, with Filecoin contributing $434,000.

Source: Messari

Cosmos Co-founder Initiates Fork, Creating AtomOne and ATOM1 Token in Response to Inflation Cap Governance Decision

Cosmos co-founder Jae Kwon is initiating a fork of the Cosmos Hub, creating AtomOne and its associated token ATOM1. This decision follows a contentious governance vote that imposed a 10% cap on ATOM token inflation. Kwon plans to airdrop ATOM1 to those who voted against the inflation cap, excluding supporters of the proposal. The newly formed AtomOne network will preserve essential Cosmos Hub features and original inflation rates, introducing changes in governance and a new fee token called Photon (phATOM1). The controversial proposal narrowly passed with 41.1% in favor and 38.5% against.

Regulation

New York's Crypto Blueprint?

The New York State Department of Financial Services (NYDFS) is updating crypto regulations, enhancing investor protections, and introducing new requirements for crypto exchanges and service providers. The NYDFS now mandates its approval for policies on delisting tokens, requiring risk assessments and orderly departure processes. Governance standards include the need for a board of directors or governing bodies, periodic policy reviews, record-keeping, and conflict of interest prevention. The green list of pre-approved tokens is reduced to eight, excluding tokens like FTX’s FTT or Binance’s BNB (and bridged tokens + tokens with less than 35 percent of their total supply in circulation). Entities must meet with the NYDFS by December 8 and submit final policies for approval by January 31, 2024. NYDFS Superintendent Adrienne Harris highlighted that other jurisdictions, including Illinois and California, are observing New York's approach.

Genesis of Resolution

Digital Currency Group (DCG) and Genesis Global have formulated a repayment plan to settle a lawsuit. In September, Genesis accused DCG of wrongful possession of over $620 million in loans, seeking repayment, interest, and fees amid Genesis' bankruptcy proceedings. DCG has paid about $227.3 million so far and is set to pay an additional $275 million in three installments, partially in U.S. dollars and bitcoin, by April. The agreement includes a $35 million upfront payment and a $10 million holdback from the recent CoinDesk sale. Approval from creditors is still pending for the proposed settlement.

"You Look Better in a (law) Suit" - SEC to Kraken

Kraken is facing a lawsuit from the U.S. Securities and Exchange Commission (SEC) alleging illegal operation as a securities exchange without proper registration. The SEC claims that Kraken, operating as Payward Inc and Payward Ventures Inc, ignored securities laws since 2018, making hundreds of millions of dollars while neglecting investor protection. Kraken denies the allegations, asserting that Congress should decide cryptocurrency exchange regulation and challenging the SEC's viewpoint on digital assets. The lawsuit seeks a civil fine, disgorgement of gains, and a halt to unregistered exchange activities. The SEC previously filed similar lawsuits against Binance and Coinbase.

South Korea's CB(ulgogi)DC

South Korea is set to launch a pilot for a central bank digital currency (CBDC) in Q1 2024, involving 100,000 citizens. The Bank of Korea will collaborate with financial regulators, the Financial Services Commission (FSC), and the Financial Supervisory Service (FSS) to conduct the pilot program. Approximately 0.2% of the country's population will participate, using tokens issued by commercial banks in CBDC form to purchase goods. The pilot's scope will be limited to buying goods, with restrictions on other uses such as remittances.

ETF In Brazil

Bitcoin exchange-traded funds (ETFs) in Brazil have demonstrated substantial demand, accumulating $96.8 million in assets under management (AUM) as of November 21. Hashdex's Nasdaq Bitcoin Reference Price FDI (BITH11) leads with $57.8 million AUM, capturing around 60% of the market share. These ETFs, available in Brazil for over two years, have seen success due to favorable digital asset regulations and increasing interest from significant institutions. In comparison, the largest U.S. ETF, SPDR S&P 500, has approximately $430 billion in AUM, highlighting the relative scale of the Brazilian market.

Other Domestic Regulation Updates

• DOJ's Binance deal could accelerate a BTC ETF
• Celsius Network to Emerge From Bankruptcy as a Bitcoin Mining Co
• Coinbase tells some customers it received subpoena related to Bybit
• JPMorgan says Binance settlement 'positive' as it eliminates potential systemic risk from hypothetical collapse
• Not Just Grayscale: BlackRock Also Met With SEC to Talk Bitcoin ETF

Other International Regulation Updates

• CZ is out on $175 million bond
• Swiss City of Lugano Embraces Crypto With Polygon Integration
• Turkey Seeks to Exit “Grey List” With New Regulations
• Terra co-founder Do Kwon's extradition was approved by a court in Montenegro, but it has yet to be determined whether he'll be sent to the U.S. or South Korea.
• BitMEX founder Arthur Hayes took aim at treatment of Binance and its ex-CEO CZ by the U.S. legal system, calling it "absurd" and "arbitrary."
• CEO Richard Teng Says He's Committed to 'the Binance Way' After CZ's Guilty Plea

Pain & Gain

Pain

• Binance sees about $1 billion in outflows
• $600M+ Is Being Unlocked This Week

Gain

• Solana-based Jito Announces JTO Governance Token and Airdrop for Past Users
• Sam Altman will return to OpenAI
• How Auction House Christie's Embraced NFTs After Beeple's $69 Million Sale
• 'Crypto Isn't Going Anywhere': Industry Leaders Weigh In on Binance Crackdown
• Mastercard Partners With Feedzai to Tackle Crypto Fraud
• Crypto Exchange Bullish Acquires CoinDesk
• Fnality Raises $95MM From Goldman, BNP to Tokenize Cash
• Tokenization Firm Superstate Raises $14MM to Bring Real-World Assets On-Chain
• Web3 Foundation to Provide $45MM to Develop Polkadot Ecosystem