KuCoin promises to compensate users for losses incurred due to the incident and strengthen security measures

Cryptocurrency exchange KuCoin warned about the hacking of its official Twitter account. The incident occurred on the night of April 23 to 24. The platform reported that a small number of users lost funds due to actions related to fake tweets.

KuCoin is a centralized crypto exchange that ranks 7th in terms of trading volume. In the last 24 hours, according to CoinMarketCap, that figure on the platform was $514 million.

Hackers gained access to the KuCoin account for 45 minutes. After the exchange recovered the account, it identified 22 transactions. And that included Bitcoin and Ethereum transactions that were linked to the incident. The platform estimated the total loss at approximately 22,600 USDT.

“Kucoin will fully reimburse all asset losses caused by the social network hack and fake activity. To prevent more users from being harmed, we are currently checking and blocking suspicious addresses,” the statement reads.

Our experts note that Kucoin claims that users’ assets on their exchange remain safe. An investigation into the incident is underway. In addition, in addition to the existing two-factor authentication. Additionally, the platform intends to introduce additional security measures on its accounts in social networks.

A wave of repression by U.S. exchange regulators is affecting the companies behind development of decentralized crypto exchanges. Review by Crypto Upvotes experts

The cryptocurrency exchange dYdX, one of the most popular DeFi trading platforms. It is on its way to becoming a fully decentralized project, not the least of which is the policy of the U.S. government. Right now it’s running on a hybrid decentralized model. But in September, developers plan to launch a new version of it. This should help reduce the influence of centralized structures, on which it still has to rely.

The exchange depends at least on the dYdX Trading behind its development and StarkWare’s solutions for scaling trading capabilities on the Ethereum network. In the new version, dYdX will run on the Cosmos blockchain and leverage its own protocols. This is to minimize reliance on centralized links, any of which could potentially be pressured by regulators.

Decentralized finance (DeFi) projects are characterized by the absence of intermediaries for trading or loan transactions in crypto-assets. An automated protocol, the smart contract, plays the role of an intermediary. However, as in the case of dYdX, the development of this protocol is the responsibility of a specific company and team of developers.

Most DeFi projects issue their own tokens, which are traded on cryptocurrency exchanges. After the head of the U.S. SEC Gary Gensler said. that almost all existing crypto-assets are considered securities by the agency, any token issuer potentially falls under the agency’s oversight.

Repressions from the SEC of epic proportions

Speaking to community members during a conference call on March 30. The head of another decentralized exchange, SushiSwap, Jared Gray. Said he “stopped getting inspired” by his work. Gray spoke candidly about his attitude towards American regulators. In particular, he mentioned Senator Elizabeth Warren’s campaign platform, which included a total ban on cryptocurrency transactions in the United States. Politico published an article about Warren, saying in the headline that she was “raising an army against cryptocurrencies.

The week before, Gray revealed that he had received a subpoena from the SEC regarding his involvement with SushiSwap. To fund the impending lawsuit, Gray brought a proposal to the exchange’s existing Decentralized Autonomous Organization (DAO). In it, he proposed setting aside $4 million from the Treasury of the Record to create a “Sushi DAO Legal Defense Fund.”

“This is about an onslaught and retaliation of epic proportions, and it’s only going to get worse,” warned former SEC official John Reed Stark in a commentary for Bloomberg. Stark served as a senior adviser to the agency. And headed the Internet enforcement offices. He observed that regulators initially left market leaders untouched, focusing on easy-to-access projects. But now they’re targeting the big players as well.

What’s already happened this year

Also earlier this year, the SEC sued the cryptocurrency exchange Gemini because its Earn. Which allows users of the site to earn interest from lending their tokens. The service then fined Kraken exchange $30 million, while equating its stacking service with making money from unregistered securities. Later, the agency banned Paxos from issuing the BUSD token. It was second only to Tether’s USDC and Circle’s USDC in terms of capitalization.

In late March, the SEC accused Tron blockchain founder and Huobi exchange co-owner Justin Sun of artificially inflating trading volumes on the exchange. Just the same day, Coinbase received a notice from the SEC. It threatened to sue over a number of tokens and financial products available on this platform.

Full decentralization is needed to save crypto exchanges

Decentralized exchanges are already passing Coinbase in terms of trading volumes. Uniswap reached $71.6 billion in March, according to The Block Research. This is 45% higher than Coinbase’s $49.4 billion in the same month. Among traditional crypto exchanges, Coinbase is second only to Binance in terms of volume.

Summing up the results of the first quarter of this year Coinbase representatives wrote. That the trends on the exchange reflect a larger market. The actions of the SEC and CFTC only underscore the uncertainty surrounding Ethereum and other altcoins.

Referring to the Coinbase situation, in an interview with Bloomberg, dYdX head Antonio Giuliano says. About more and more cryptocompanies refusing to actively engage with regulators in the U.S. against the backdrop of what is happening. His company, dYdX Trading, will continue to work on the protocol after the launch of the new version of the exchange.

According to Giuliano, the network on which the next version of dYdX will run will work with multiple transaction validators. This is to minimize the risks of being banned or censored, to which the centralized mechanism is subject. The exchange will not technically have the ability to reject or censor transactions.

Our experts believe that the final form for everything in DeFi should be complete decentralization !

Huobi Korea intends to sever ties with its parent exchange Huobi and continue to operate as a local company in South Korea

The South Korean division of cryptocurrency exchange Huobi will separate from the global platform, according to News1. The Huobi Korea platform intends to sever these ties and continue operating as a local company in South Korea.

Huobi, founded in 2013, is registered in the Seychelles and has offices in Hong Kong, the United States, Japan and South Korea. The platform recently announced plans to move its headquarters to the Caribbean. Huobi remains one of the largest crypto exchanges by trading volume. According to CoinMarketCap, the daily figure on the platform exceeds $373 million.

On Jan. 9, Huobi Korea began preparations for a stock buyback. More than half of Huobi Korea is owned by Leon Lin, founder of Huobi Global (which was renamed Huobi in November 2022). Major shareholders also include Huobi Korea chairman Cho Kuk Bong and Korea Land Trust. Cho will acquire a controlling stake from Lin, increasing his stake to 72 %.

Separation of companies takes place because of the conflict between Huobi Korea and Huobi. The Korean platform has suffered from the image of a foreign platform. And especially from associations with the “Chinese exchange.” The Huobi Global platform was founded and was based in China until 2017.

Huobi Exchange has been experiencing difficulties over the past few weeks. Amid news of the layoff of 20% of staff and a reduction in reward, its users began to withdraw assets from the platform in droves. They fear even the minimal risk of crypto exchange insolvency.

Our experts noticed that the CEO of CryptoQuant analytics platform Ki Jung Ju pointed out. That over the past year, Bitcoin reserves at Huobi have fallen by 90%. According to him, the platform has the dirtiest reserves compared to, for example, Binance.

Opening of National Exchange of Indonesia is scheduled for this year. And it should take place before the change of transfer of crypto-assets supervision to the new regulator. Review by Crypto-Upvotes experts

The Indonesian government plans to launch a national cryptocurrency exchange as part of financial sector reform. The project is to be completed in 2023, before the authority to oversee cryptocurrencies in the country is transferred to a new regulator.

The local Commodity Futures Trading Regulatory Agency (BAPPEBTI) now regulates crypto-assets in Indonesia. According to a spokesman for the agency, the Financial Services Authority (FSA) will take over oversight of cryptocurrencies over the next two years. A national cryptocurrency exchange should already be up and running by the time regulators switch powers.

In 2021, Indonesia’s Central Bank Governor Perry Warjiyo announced the regulator’s intention to issue its own national digital currency (CBDC). Currently, Indonesian law prohibits the use of cryptocurrency as a payment instrument. However, trading in digital assets in Indonesia is allowed.

In 2018, Tokocrypto crypto exchange was officially launched in the country. The platform became the first cryptocompany in Indonesia approved by BAPPEBTI. Since 2020, Binance has been one of the investors of the exchange. The size of Changpeng Zhao’s stake has not been disclosed, but last December the media twice reported on the leading Binance’s plans to gradually increase its stake in Tokocrypto to 100%. Each of the news was accompanied by a sharp rise in the platform’s native token (TKO).

Our experts note that Asian market is probably important to Binance as a whole. And the exchange is entering it by acquiring stakes in local trading venues. In late November last year, the exchange acquired a stake in Japan’s Sakura Exchange (SEBC), a platform officially regulated by the Japan Financial Services Agency (JFSA). On January 2, local media reported on Binance’s plans to buy one of Korea’s leading cryptocurrency exchanges, Gopax.

Visa is using a proposal from Ethereum developers. It will allow automatic pre-scheduled payments from non-custodial crypto wallets

Visa has developed a blockchain-based autopay solution. A document published by this company details a new concept based on Account Abstraction (AA) technology from Ethereum developers. It will allow the implementation of automatic pre-planned payments using smart contracts in non-custodial users’ wallets.

Account Abstraction technology was proposed back in 2016. Since the core Ethereum network does not yet support AA. Therefore, VISA implemented its solution in StarkNet, a second-tier blockchain built on top of Ethereum blockchain. The account model in StarkNet just uses AA technology.

Whereas normal accounts check if a transaction is correctly signed for a specific address. With StarkNet, they simply verify that the transaction is coming from a given address. In addition, the introduction of Visa’s concept into this blockchain has not only enabled the deployment of a new auto-payment feature. But also increased transaction throughput.

Visa notes that it sees autopay as a key functionality that the existing blockchain infrastructure lacks. And it invites interested companies working in this area to work together on projects in the field of programmable payments.

Our experts note that payment companies from traditional financial industry this year began to actively develop projects related to blockchain and cryptocurrency. Also at the end of September, SWIFT and Chainlink oracle network announced joint work on a blockchain project. This project will allow traditional financial companies to conduct transactions on a platform that supports almost all blockchains.

Crypto-Upvotes experts told about the threat of massive asset outflow from the largest cryptocurrency exchange Binance and its opaque financial statements.

Binance is trying to reassure investors of its financial strength after the collapse of rival exchange FTX. The effects are still being felt in crypto markets. Billions of dollars worth of cryptocurrency were withdrawn from the exchange in a matter of days.

Outflows from Binance could range from $6 billion to $8 billion, including Bitcoin and other cryptocurrencies such as Tron.
At the same time, analyst firm Nansen reported that users of the trading floor withdrew $3.6 billion in Ethereum. And ERC-20 standard tokens in seven days, while $2 billion was withdrawn in just one day.

After the collapse of FTX and subsequent series of bankruptcies of leading crypto players, major crypto exchanges are trying to convince their customers. That they have enough assets in their wallets and user funds are safe and remain available for withdrawal. Earlier this month, accounting firm Mazars produced “proof of reserves” reports for Binance and other exchanges, including Crypto.com and KuCoin.

At the end of an already difficult week for Binance. Mazars said the firm had suspended activities related to audits of companies in the cryptocurrency industry. This is due to concerns about how such reports are perceived by the public. According to Financial Times sources, media hype was one of the factors that influenced the decision of Mazars.

Published reports on crypto exchanges’ reserves are severely limited in data compared to the results of traditional corporate account auditing procedures. Mazars uses what are known as “consistent procedures” to report on reserve validation. But it does not use asset analysis in the usual sense. No assurances or conclusions are given on the figures in the report in this kind of verification.

Reasons for auditing companies to refuse to work with cryptocurrency exchanges

Mazars’ decision to stop working with Binance. And also for others exchanges was not prompted by specific financial problems at any of the exchanges. The firm’s work was severely limited, and the auditors did not delve too deeply into examining the financial situation of the cryptocurrency platforms.

From a risk perspective, what’s happening with Binance could cause secondary problems. A significant outflow of capital from any business can create local liquidity problems. Even if an exchange is able to cover 100% of deposits, it does not mean that it has sufficient funds or liquid investments.

“The ironic thing about what is happening is that the main trigger in a series of bankruptcies in the cryptocurrency market was the rumors that the head of Binance. Also spread in the public space and his verbal manipulation. And now the main problem for his exchange is the emergence of the same type of rumors around Binance.” – said our expert.

“Black Box” new name for Binance

December 19, Reuters released a story that calls Binance a “black box,” referring to the corporate documents and declarations of the exchange, copies of which journalists were able to access. Among the claims against Binance are the concealment of financial data and the share of its native token (BNB) in the balance sheet. The article also mentions security risks in margin trading. And another portion of doubts about the real volume of user funds reserves.

It has become customary for Binance and its head Changpeng Zhao to publicly refute loud statements by journalists as in official publications of this exchange. And in personal social networks in front of millions of followers. Zhao has repeatedly assured that the Mazars report is “further confirmation” that the exchange’s assets equal or exceed its liabilities to customers.

In the case of Binance, we can talk about an excellent marketing strategy. Which provided a stable inflow of new clients for several years ahead. Therefore, potential liquidity problems may be smoothed out or may not even have started.

Assets on wallets with public addresses of Binance amount to more than $60 billion. This information can be checked through any blockchain browser or on special pages of services that track reserves of cryptocurrencies. At the same time, the company does not disclose information about its liabilities. This makes it difficult to determine its actual financial position.

How stable is crypto exchange Binance?

If the outflow of client funds continues, Binance may have a serious need to plug the holes and credit. And who will give it after the collapse of FTX? That’s the biggest question.

If Binance collapses, it will postpone the recovery of the crypto market for many years. And any positive developments in the next two years could lose any positive impact on the Bitcoin exchange rate.

Theoretically, if we consider the collapse of Binance in FTX scenario. It would cause infrastructural problems for the entire cryptocurrency market. On the one hand, the market would survive and exist regardless of the ability of specific projects to sustain their work. On the other hand, the “huge in its scale project decline” associates the crypto market with Binance.

However, in reality, such an apocalyptic scenario has a rather small chance of realization, our expert believes. Therefore, one should not seriously talk about an urgent withdrawal of funds from Binance.

Rather, the more people do not give in to the trend of cryptocurrency withdrawal, the higher will be the safety of each of participants. For each individual isolated investor, it is more profitable to withdraw money outside of exchange. But at the same time, if the majority will continue to keep cryptocurrency inside the project, it will keep Binance stable and will be beneficial to all, says our expert.

Mazars and Armanino have suspended the practice of providing services to crypto-industry platform. Crypto-Upvotes expert review

Auditing firms have begun to refuse to work with companies in the cryptocurrency industry. For example, Mazars, which recently audited Binance reserves, has suspended its audits of cryptocurrency companies. The firm Armanino, which worked with FTX, is also discontinuing its crypto audit practice and turning away clients.

Mazars Group, the French accounting firm that Binance, KuCoin, Crypto.com and other major industry players turned to to verify their reserve assets, stopped all work with cryptocurrencies. That’s because markets don’t trust its “reserve proof”.

A Mazars official said the company would make a statement in due course and declined to comment further. The website where Mazars reports to cryptocurrencies is currently down.

Another auditing company, Armanino, which has been working in the crypto industry since 2014, is also discontinuing its crypto-audit practice. And is giving up on clients, Forbes writes, citing sources familiar with the matter. According to their information, the firm’s cryptocurrency division may be winding down under pressure from Armanino’s non-cryptocurrency clients. These clients are concerned that the reputational risk to the firm would cast doubt on their audits.

Armanino, which had previously inspected OKX and Gate exchanges, was named a defendant in a collective lawsuit in November 2022. For failing to find irregularities at FTX.US after auditing the exchange last year. Collective action was filed by Stephen Pierce, an FTX customer who he claims lost $20,000.

Many accounting firms are afraid to work with cryptocurrency companies. Changpeng Zhao, Binance’s CEO, said this in an interview with CNBC on Thursday. When asked why Binance has not engaged an auditor from the “big four” (PwC, Deloitte, EY and KPMG). He replied that such firms “don’t even know how to audit crypto exchanges.”

The Mazars audit report on Binance’s reserves, published on December 7, drew criticism and sowed some panic in the cryptocurrency community. Customers of the exchange started withdrawing funds and the value of the BNB token started falling. Changpeng Zhao warned employees that a difficult period was coming. And urged to ignore the rumors and assured that the exchange “will survive any crypto winter.”

Former FTX head Sam Bankman-Fried is sent to the only prison in the Bahamas. There, due to a shortage of space, some inmates just awaiting trial end up in high-security wings. Review of Crypto-Upvotes experts

Former FTX head Sam Bankman-Fried is headed to the notoriously poor conditions of the Bahamas’ Fox Hill prison. After a court ordered him into custody and denied him bail, Business Insider reports.

Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange, was detained in the Bahamas on Dec. 12 upon official request from the U.S., where criminal charges were filed against him. Bankman-Fried is charged with several counts. These include scam, money laundering and campaign finance violations.

While awaiting extradition to the U.S., Sam Bankman-Fried will spend time in the Bahamas’ only prison. Fox Hill Prison, notoriously overcrowded and unsanitary. A judge has ordered that he be sent to that prison. Where he will first be held in the medical ward.

The Bahamas has one of the highest incarceration rates in the world. Thus, according to the U.S. State Department’s 2020 Human Rights Report, there were 409 prisoners per 100,000 people. The University of Lausanne calculates that the average for the Council of Europe’s 48 prison administrations as of January 2020 was just over 103 inmates per 100,000.

Conditions of confinement at Fox Hill prison

Due to the large number of prisoners in the Bahamas, Fox Hill is overcrowded. As a result, conditions are declining. Lack of space and overcrowding have led to some inmates simply awaiting trial being placed in a maximum-security unit. Local attorney Romona Farquharson told The Wall Street Journal.

Inmates are supposed to go outside for an hour a day, the lawyer said, but because of staff shortages, there are periods when inmates see only 30 minutes of sunlight a week.

The U.S. State Department’s Human Rights Report on the Bahamas. Which was published in 2021, reports that, according to Fox Hill inmates. They had to scavenge with buckets and were forced to lie on the hard ground for long periods of time.

The report says there is an infestation of rats, maggots and insects in the small cells of the high-security unit. They have no mattresses, no toilets, and can hold up to six inmates at a time. Detainees complained of poor food and denial of prompt medical care.

Sam Bankman-Fried applied for bail Dec. 13. But a justice of the peace in the Bahamas denied the request. The trading platform founder was deemed a flight risk and detained until at least Feb. 8, 2023, when his case will resume.

Bybit announced about obligatory KYC procedure for customers to buy cryptocurrencies for fiat money and transactions with NFT. Crypto-Upvotes expert review

Crypto-exchange Bybit will limit the number of services that can be available to users who have not passed the verification procedure. Platform announced changes in KYC policy, as well as the introduction of new withdrawal limits.

KYC is currently required to access Bybit Launchpad and Earn products. Also for credit card payments, trading on P2P service of the exchange and transactions in certain currencies.

Starting December 15, verification will be required on the platform to purchase cryptocurrencies for fiat money and through One-Click Buy and P2P services. The KYC procedure will become mandatory for all NFT purchases and for NFT resales over $10,000. Mandatory user verification for input, withdrawal and purchase of NFT on primary market will be required from December 30.

Bybit may further expand KYC requirements in near future, the exchange said in a statement.

In addition to the new verification rules, from December 15 the platform will change the withdrawal limits. For example, without KYC-checking the daily limit for withdrawal of assets will be 20 thousand USDT, the monthly limit – 100 thousand USDT. Until December 15, only daily limit of 2 BTC is set.

Goldman Sachs, one of our largest investment banks, plans to spend tens of millions of dollars to buy crypto platforms. Or invest in them after the collapse of FTX exchange lowered prices in crypto industry. Crypto-Upvotes expert review

Goldman Sachs has launched a “hunt” for cryptocurrencies that have fallen in price since the collapse of FTX, Reuters reported. According to the publication, one of the world’s largest investment banks plans to spend tens of millions of dollars to buy or invest in cryptocurrencies.

The FTX collapse reinforced a need for more reliable, regulated cryptocurrency companies. And big banks see an opportunity to get into business, said Matthew McDermott, head of digital assets at Goldman Sachs. Without revealing details, he specified that the bank is now conducting due diligence on a number of different crypto firms.

The bank sees some really interesting opportunities at a much more reasonable price, McDermott said. FTX was a role model, he said. And its collapse backfired on the market “in terms of sentiment.” That said, McDermott stressed that the underlying blockchain technology continues to work.

Goldman Sachs has already invested in 11 digital asset companies. And it has partnered with MSCI and Coin Metrics to launch Datonomy, a digital asset classification service. According to McDermott, the investment bank is also developing its own private distributed ledger technology.

Goldman Sachs’ willingness to continue investing in the crypto sector in the face of shocks. Shows that bank sees promise in the industry. According to McDermott, Goldman is also looking at hiring opportunities as cryptocurrency companies cut staff.