Harmony has refused to issue billions of ONE tokens to cover losses

Harmony blockchain developers have changed their plan to give users their money back. Which were stolen in Horizon blockchain bridge hack.

The Harmony network team has abandoned its plan to issue billions of ONE tokens to reimburse customers. Who were affected by the Horizon blockchain bridge hack, according to the platform’s blog. This proposal was put to a vote. As a result, it became clear that this community did not support this plan.

In late June, a hacker hacked Horizon Bridge. Which allowed transferring tokens between the Harmony blockchain and other networks. He then stole about $100 million worth of cryptocurrency. That incident led to the loss of 14 different types of digital assets on about 65,000 wallets.

The Harmony proposal included a monthly refund to customers in ONE tokens for three years and a hardfork. Two upgrade options were put before their community for evaluation. The first option is 100% compensation with an issue of 4.97 billion ONE. And second option is 50% compensation with issue of 2.48 billion coins

Instead, developers propose to use project treasury for reconstruction. And also for development of this project. A detailed description of how Harmony will develop mechanisms for the effective use of funds. Which are allocated for recovery, will be published separately.

Our experts say that in late June, a few days after they stole assets Harmony developers announced a reward of $ 1 million for recovery money. Then later, rewards were increased to $10 million.

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White hacker made over $530k, Crypto-Upvotes review

White hacker known as Riptide discovered a bug in the Arbitrum protocol code. This error could have resulted in loss of millions of dollars

“White hacker” under nickname Riptide received 400 ETH (about $531 K) from Arbitrum protocol for finding vulnerability in the code, about which he wrote in his blog. Because of the critical bug he found, scammers could make millions of dollars. They could divert funds between Ethereum and the new version of the Arbitrum Nitro protocol, which launched a few weeks ago.

“White hacker” Riptide is in business of identifying bugs in codes whose developers offer rewards for doing so on the ImmuneFi platform. According to Riptide, there is a 100% certainty that developers will make a mistake when writing contracts. Or deploying or updating smart contracts.

Riptide knew that Arbitrum Nitro, Ethereum network scalability solution, was running an update and scrutinized the code. And as a result, he discovered a place in the program where the scammer could set up his own address to accept all incoming deposits in ETH.

Riptide reported vulnerability to Arbitrum developers and was rewarded with 400 ETH. However he wasn’t satisfied with his reward. Because the maximum reward for finding the bug, given by the protocol team, was $2 million. He commented on his reward negatively. Riptide stated that it is a bad idea to pay little for such mistakes. This way companies make “white hackers” think about joining ranks of “black hackers”.

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USA proposed to ban release of algorithmic stablecoins for two years

Creation of algorithmic stablecoins, working similarly to failed Terra USD coin, may become illegal

The U.S. Congress will consider a new bill to regulate cryptocurrencies. The bill could ban creation and issuance of algorithmic stablecoins for two years, Bloomberg reported. According to this document, the prohibition will apply to cryptocurrencies. Which are linked to prices of fiat currencies by another digital asset of the same issuer.

An example of such a cryptocurrency is stablecoin of failed project Terra UST. The collapse of this coin, supported by Luna token, began on May 8, 2022. On that day, UST lost its connection to USD after a one-time sale of tokens worth about $300 million. The collapse of this stablecoin led to billions of dollars in losses for ordinary investors.

The bill would also allow banks and nonbanks to issue their own stablecoins. And it would prohibit companies from pooling customer funds with company assets to protect consumers in case of company bankruptcy. The bill is currently in its drafting stage. Perhaps a vote on the bill will take place as early as next week, Bloomberg reports, citing unnamed sources.

Our experts note that the U.S. Congress continues to work actively to regulate cryptocurrency sector and increase control in this area.

 

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First hack on Ethereum PoW hardfork results in $1k loss, Crypto-Upvotes expert review

A hacker took advantage of a vulnerability in OmniBridge protocol. Hacked and withdrew funds from it in new Ethereum PoW network tokens

The first hack of a smart contract in the new Ethereum PoW network brought a scammer 200 ETHW (about $1,000). Theft of funds was possible because OmniBridge protocol (a bridge to transfer funds between different blockchains) in PoW network. He received a second message about transaction already made in Ethereum network. This was reported on Twitter by BlockSec, a cybersecurity company.

On morning of September 15, The Merge update took place on Ethereum’s main network. It switched altcoin from Proof-of-Work protocol to Proof-of-Stake (PoS). The token of the old version of this network received symbol ETHW.

On September 18, a scammer transferred 200 WETH via the OmniBridge protocol of Ethereum blockchain to Gnosis network. And then he repeated the same transaction message on the new PoW blockchain. To get 200 ETHW from a copy of the OmniBridge smart contract on this network.

Our experts explained that this attack was made possible by a vulnerability in the OmniBridge smart contract. It uses an incorrect unique blockchain identifier. The OmniBridge smart contract mixed up the networks and mistakenly paid a scammer.

The Ethereum PoW network itself was not hacked. The stolen funds belonged to the OmniBridge protocol. However, our experts warn a crypto community. That similar attacks using PoW blockchain and ETHW tokens can happen to other interconnect bridges.

ETHW rate has been falling on centralized exchanges since the start of hardfork. But its price in the old version of the network rose on Friday September 16 to 16,400 USDT on decentralized exchanges.

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SEC says all Ethereum transactions fall under U.S. jurisdiction, Crypto-Upvotes expert review

SEC filed a lawsuit against Ian Balina, a famous member of cryptocurrency community. The lawsuit states that all Ethereum blockchain transactions take place in USA territory

The Securities and Exchange Commission (SEC) claims that transactions on Ethereum are made in United States. Because blockchain validators (network nodes) are clustered more tightly in the United States than in any other country. This claim was made in a lawsuit against famous member of cryptocurrency community Ian Balina.

The lawsuit was filed Monday, Sept. 19. Balina is accused of breaking law while promoting Sparkster Cryptocurrency ICO (SPRK) in 2018. Which raised about $30 million from 4,000 investors.

This is not the first time the agency has initiated such litigation. However, paragraph 69 of this lawsuit states : ” At that point, their ETH contributions were validated by a network of nodes on the Ethereum blockchain,
which are clustered more densely in the United States than in any other country. As a result, those
transactions took place in the United States.”

According to Etherscan, more than 46% of all Ethereum nodes are now operating in the US.

What this means for Ethereum

Our experts think that mentions of transaction processing by US-based nodes in a lawsuit against blogger Ian Balina. It can also be interpreted as the SEC  attempt to extend its jurisdiction over any transactions in Ethereum network according to geographical principle. And in the future, this could become a precedent and reinforce the current fears of transaction censorship. Which have arisen since sanctions were imposed on Tornado Cash mixer.

Following the Ethereum move to Proof-of-Stake. And given its high level of centralization, Coinbase, Kraken and Binance are estimated by Nansen to account for 30.25% of ETH blocked in stacking. The U.S. government could seriously consider bringing this space under its control.

In future case law, similar lawsuits from the SEC may await other cryptocurrencies. Which work on the Proof-of-Stake algorithm.

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White House presented the concept of cryptocurrency regulation in the USA, Crypto-Upvotes expert review

New White House directives are aimed at developing financial services industry. As well as to simplify unlimited transactions and fight against scammers in cryptocurrency world

The White House presented first ever concept of regulation of cryptocurrency market in USA, writes CNBC. The new proposals had been under development for six months. This came after President Joe Biden called on authorities in March to study risks and benefits of cryptocurrencies and submit official reports.

One of points of concept is aimed at combating illegal activities in cryptocurrencies. In particular, it is proposed to consider amendments to Bank Secrecy Law. These are laws prohibiting disclosure of information and against money transfers without a license. It is necessary that they are directly related to providers of cryptocurrency services.

The White House proposals also specifically mention potential for Central Bank Digital Currencies (CBDC). The concept states that digital dollars can make the U.S. payment system more efficient. And creating a basis for further technological innovations that will allow for faster trans-border transactions.

Our experts also noted that the U.S. government believes that digital currencies, especially stablecoins, need to be strictly regulated. Otherwise, they can lead to “devastating effects. This concept points to a collapse of cryptocurrency TerraUSD, which resulted in a series of bankruptcies. And cumulative damage of which amounted to almost $600 billion.

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Why ETH will not become a security. Opinions of Crypto-Upvotes experts

Our experts talked about chances of ETH becoming such an asset after the network update. As well as to what implications this may lead to

The migration of Ethereum from PoW (Proof-of-Work) to PoS (Proof-of-Stake) is complete. Among the possible threats is not only the loss of part of the community represented by miners. But also the risk of recognition of ETH as a security with stricter regulation.

Thus, head of the U.S. Securities and Exchange Commission (SEC) Gary Gensler once again said. That vast majority of cryptocurrencies qualify as securities. And are subject to the relevant laws. Companies that conduct transactions in the cryptocurrency market. Are required to register with the SEC, just like other market brokers.

However, the position of the SEC has not been fully clarified. The agency has expressed its willingness to interact with the U.S. Commodity Futures Trading Commission (CFTC) on this issue. Because control over virtual asset service providers (VASP) could be passed on to the second of these regulators. That, in turn, would lead to the recognition of leading cryptocurrencies as commodities.

Recognition of ETH as a security would be a disaster for ordinary users. If that happens, the token would likely face large fines. Which ETH may not survive. As well as delisting from 90% of centralized exchanges. This will cause irreparable damage to both user base. And also price, which is likely to go down sharply.

Specific coins that are being considered as candidates for recognition as securities include. Such as Ripple, Stellar (XLM), Zcash (ZEC) and Horizen (ZEN) could include Ethereum in the near future.

Probability of recognition of ETH as a security

Recognition of Ethereum as a security seems unlikely. However, after moving to Proof-of-Stake algorithm, chances for recognition of such status can definitely become higher.

Our experts explain that Howey Test serves this purpose. According to this test, an investment contract is “an investment of money in a common enterprise with a reasonable expectation of profit solely from the efforts of others.” Regarding Ethereum, blockchain coins can be recognized as “money.” And a “common enterprise” is a system of validators in stacking. And the “expectation of profit” is rewards from stacking.

However, our experts pointed out that Ethereum still does not “risk” to move into the category of securities. SEC head Gary Gensler said he would support a bill that would give the CFTC a right to supervise BTC and ETH. In case such law is passed, ETH will actually receive a status of “exchange commodity” officially.

Also our experts say that on another hand, in this case all tokens on Proof-of-Stake can be considered as securities. And regulated in the same way as shares, which is unlikely.

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World War against anonymous cryptocurrencies. What awaits private tokens review by Crypto-Upvotes experts

Our experts told how anonymous cryptocurrencies are affected by stricter regulation. And their delisting from CEX exchanges, as well as prospects for such projects.

Main goal of anonymous cryptocurrencies is to ensure confidentiality of financial transactions. However, with such coins, scams and financial manipulation of cryptocurrencies have increased significantly. Cybercriminals often use these tokens to conceal movements of stolen funds.

In this regard, governments of different countries have a negative attitude to anonymous cryptocurrencies. And they take various measures to limit their use. Some cryptoplatforms are also refusing to work with confidential tokens. Thus, one of the recent negative events was the delisting of Monero (XMR) and another six tokens from this category on major cryptocurrency exchange Huobi.

Trend on delisting of anonymous cryptocurrencies increases

Currently, we are seeing a steady trend towards increased regulation of cryptocurrency. And also drive for large CEX exchanges to get as many licenses as possible in different jurisdictions.

And understanding of anonymous coins by financial regulatory authorities of leading economies is very negative. Anonymous coins are seen as a threat, a tool for scammers. And as a consequence, we see a “world war” against anonymous cryptocurrencies, our experts note.

Demand for anonymous cryptocurrencies is growing

After starting sanctions war between Russia and the West, interest in confidential cryptocurrency increased rapidly. This was due to their ability to circumvent restrictive regulations.

Our expert pointed out that in Q2, anonymous coins showed outperformance compared to the market as a whole.
Whether delisting from exchanges will affect prices of these coins, now it is difficult to say. Such actions by regulators could have collapsed prices in 2017. But now the market has become less susceptible to such news for many reasons.

Given the fact that these cryptocurrencies remain in high demand. Including due to sanctions that have reached cryptocurrency market as well. And wait for a fall in prices for XMR and other anonymous coins from these events should not be our experts’ opinion.

Anonymous cryptocurrencies may lose their capitalization, but not their real value.

 

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Developers of EthereumPoW fork have announced launch date, review by Crypto-Upvotes experts

EthereumPoW supporting mining concept will start working after main network upgrade

EthereumPoW (ETHW) team has announced plans to launch a blockchain. Which will support mining, within 24 hours after main Ethereum network moves to Proof-of-Stake protocol.

Ethereum update is expected to take place on September 15 and will mean the end of ETH mining. And part of participants support stacking concept proposed by developers. And the other part remains committed to a version of network based on mining.

EthereumPoW project was initiated by famous Chinese miner Chandler Guo. Who announced development of a hardfork back on July 27 of this year. This is not the first time he has supported the preservation of old Ethereum. In 2016, when hardfork resulted in Ethereum Classic (ETC). And here as well, Chinese miner was the main supporter of its creation.

At the time of launch, EtherumPow will make public final code, program files, system configuration, node data, and other information about the blockchain. EthereumPoW will first launch 2048 empty blocks. This will ensure a successful switch to new network. And prevent duplicate blocks on ETH and on ETHW.

Some crypto exchanges have already supported PoW trading of Ethereum tokens. Poloniex and MEXC have announced launching ETHS and ETHW trading. And BitMEX has launched a futures product based on ETHPoW tokens.

DAXA Alliance, which includes leading Korean crypto exchanges Upbit, Gopax, Bithumb, Coineone and Korbit. They also announced support for PoW version of Ethereum after blockchain update.

“The Merge” update – this update will mean the merger of Beacon Chain and the main Ethereum network. Which are currently operating separately from each other. This will end the use of Proof-of-work algorithms in Ethereum. And will start era of new Ethereum technology based on Proof-of-Stake technology.

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Huobi exchange will refuse to trade Monero and other anonymous cryptocurrency

Huobi stopped trading 7 tokens. And asked users to cancel all open orders for these cryptocurrencies, Crypto-Upvotes expert review

Cryptocurrency exchange Huobi Global will delist seven anonymous cryptocurrencies. The list includes Monero (XMR), Dash (DASH), Decred (DCR), Firo (FIRO), Verge (XVG), ZCash (ZEC) and Horizen (ZEN). Trading of these tokens was terminated on September 6 on this platform. Which was announced on this platform’s blog on September 12. Huobi team asks users to cancel all open orders for these cryptocurrencies in a timely manner.

Anonymous cryptocurrencies – these are cryptocurrencies that hide transactions in blockchain. In order to preserve anonymity of transaction participants and traces of their actions. Withdrawal function in these tokens continues to function for now.

According to Coingecko, centralized exchange Huobi Global, founded in 2013, ranks 8th by trading volume ($816 million). Cryptocurrency exchange features about 630 assets and more than 1,000 trading pairs.

Also in early August, a largest cryptocurrency Monero (XMR) mining pool named MineXMR announced its closure. Platform team asked miners to reconfigure their equipment to other pools by August 12.

Effects of rejection of anonymous cryptocurrencies

Unfortunately, more and more CEX exchanges are delisting anonymous cryptocurrencies. This is due to the fact that many CEX exchanges must follow the rules of international regulatory organizations. And the internal rules of the country in which they are located.

Most likely, we are facing the start of a global confrontation between cryptocurrency exchanges and anonymous cryptocurrencies. Because tensions have long been brewing between blockchain ideologues and traditional traders. Real cryptocurrency followers follow original ideals of technology and privacy. And traditional traders have come into cryptocurrency world only out of profits.

Perhaps we will soon see what you might call a “hardfork” of blockchain industry. When some currencies will simply become digital money, reminiscent of the usual fiat money of any country.
And part of the investors will use only real cryptocurrencies. Which maintain privacy and security.

Perhaps in the near future we will see new DEX platforms. Which will not follow general rules. And will stick to real cryptocurrency goals. Because cryptocurrencies were not created just to replace ordinary fiat money. Their purpose was security, anonymity, and decentralization. So that no country in world could control these funds. Who will win – regular traders or real cryptocurrency users. We will know in the next few years.

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