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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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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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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Crypto scammers fake Apple presentations on YouTube, Crypto-Upvotes review

Tens of thousands of viewers watched fake Apple streams with interviews of Tim Cook and Elon Musk promoting cryptocurrencies

Crypto Scammers took advantage of the fact that Apple was holding a presentation of a new phone on September 7. And launched parallel streams on YouTube promoting cryptocurrencies, allegedly on behalf of their company. Tens of thousands of viewers watched live spoofed old interviews with Tim Cook and Tesla CEO Elon Musk. Currently, these videos have been deleted.

Scammers on YouTube was live streaming an old interview with Tim Cook. That was seemingly being used to attract attention to a crypto scam. And when it was live, tens of thousands of viewers were tuning.

If you’ve seen crypto scams on YouTube before. You would have recognized a lot of hallmarks of what was going on. The fake live stream was getting attention by filling its description with an array of Apple keywords in both the title and description. But when you actually opened it up, it was filled with odd messages linking to a shady-looking crypto site.

One video titled “Apple Event Live. Ceo of Appl Tim Cook: Apple & Metaverse in 2022” aired an old interview from 2018. Bitcoin and Ethereum logos were added to this video. The number of viewers was up to 70,000.

Our experts have noticed that at the same time, more than 10 thousand people watched another stream on a channel called “Apple Inc”. Allegedly, it was supposed to contain an interview with Tim Cook and Elon Musk about Apple and the metaverse. But in fact it was a faked interview about bitcoins with CEO of Tesla and ex-Chief Twitter Jack Dorsey.

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Leading Korean crypto exchanges will support Ethereum 2.0 after update, Crypto-Upvotes expert review

Five of Korean largest crypto exchanges, united in DAXA alliance. Decided to support Merger of Ethereum and airdrop new tokens

DAXA alliance, which includes leading Korean cryptocurrency exchanges. Announced support for PoW version of Ethereum after blockchain update, decenter.kr reported. Platforms are considering listing and delisting the new asset, as well as its airdrop.

DAXA alliance, created in June this year, united 5 largest South Korean exchanges: Upbit, Gopax, Bithumb, Coineone and Korbit. So far, apart from a statement of support, no action has been taken. But our sources confirmed that the exchanges will try to avoid loss of assets by their customers.

Updating Ethereum blockchain will consist of two phases. The first will be an update called Bellatrix, which began on September 6. If it is successful, “Paris” update will be launched. As a result of this update, a split (hardfork) of network is possible. ETH could split into PoS-version (new) and PoW-version (old). If this happens, two Ethereum tokens will arise, for each version of their network.

Earlier, other crypto exchanges have already supported trading in such tokens. Poloniex and MEXC announced launching ETHS and ETHW trading. And BitMEX has launched a futures product based on ETHPoW tokens. Binance also announced that it will consider supporting new Ethereum tokens.

Currently, Ethereum network is facing a problem after a Bellatrix update. Blockchain has seen a noticeable spike in the “number of missed blocks” – the rate at which network does not process blocks of transactions assigned for verification. That rate has increased by about 1,700%. Before this update, this rate was about 0.5%. And after Bellatrix, it jumped to 9%.

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Binance and Coinbase will suspend ETH withdrawals during the Merger

Binance announces measures to protect customer funds in case of ETH network hardfork

Cryptocurrency exchange Binance will suspend withdrawals and deposits of ETH and ERC-20 tokens during the “Merger” (blockchain’s migration to Proof-of-Work protocol). In an official announcement, platform team announced measures. Which will be taken to minimize trading risks. And to protect customer funds in case of a split network and the emergence of a second Ethereum token.

Deposit and token withdrawal transactions will be suspended on the platform on September 6 during the Bellatrix update. And also on September 15 during the Paris update. The exchange will suspend Binance Crypto Loans. As well as ETH margin borrowings between September 14 and 16.

Spot trading of ETH and ERC-20 will not be affected during Ethereum update. However, Binance has drawn attention to the risk of increased volatility in the event of a hardfork. And reserved the right to suspend margin trading.

In the case of network splitting and new ETH token emergence. Binance will use ETH ticker for PoS Ethereum chain. Withdrawals for another version of token will be supported. But distribution details will be covered in a separate announcement.

Coinbase will suspend Ethereum operations during the “Merger” of network

Cryptocurrency exchange Coinbase announced in its blog. That new deposit and withdrawal transactions in ETH and ERC-20 tokens will be temporarily suspended on Coinbase during Ethereum Merge (blockchain update). Transactions launched before the suspension will also be temporarily delayed.

Coinbase team stated that this will be done as a precautionary measure. To ensure that customer funds are protected. Once the update is complete, processing of suspended transactions will be restarted.

“Merger” is tentatively scheduled for September 15. Customers of Coinbase Prime and Coinbase Exchange services may encounter delays in withdrawals. That’s why Exchange recommends customers to withdraw funds in advance, if necessary.

Users of Coinbase Wallet with ETH and ERC-20 tokens. As well as NFT or DeFi products of Ethereum network, this update should not affect them.

Our experts recommend withdrawing the necessary funds from CEX exchanges in advance. Or convert them to other cryptocurrencies at the time of ETH network update.

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Hotels in Maldives and Thailand began to accept payments in Bitcoin and Ethereum, review by our experts Crypto-Upvotes

Resorts in Soneva hotel chain can now be paid for in Bitcoin or Ethereum, review by our experts Crypto-Upvotes

Resort chain Soneva hotels in Thailand and the Maldives are now accepting payments in Bitcoin and Ethereum. Cryptocurrency payment provider TripleA and payment platform Pomelo Pay are helping to make payments.

The cryptocurrency payment option will be available at Soneva Fushi hotels. As well as Soneva Jani and Soneva in Aqua in Maldives. And in Soneva Kiri in Thailand. Also for Bitcoin and Ethereum it is now possible to buy real estate in the Maldives at Soneva Villa Ownership.

The resort network can directly book rooms. And pay with cryptocurrency through a secure link. In addition, you can use a QR code to pay in cryptocurrency. Soneva adds that while any payments made using Bitcoin or Ethereum are 100 per cent non-refundable, credits can apply in line with its flexible cancellation policy.

“At Soneva, we have always endeavoured to be a pioneer in the hospitality industry, hence accepting cryptocurrencies as a payment method is another example of enabling our international guests to easily make payments from anywhere in the world,” said Bruce Bromley, chief financial officer, and deputy CEO of Soneva.

 

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Ethereum 2.0. What will happen in case of update failure, opinions of our Crypto-Upvotes experts

Our experts told about its effect on cryptocurrency market “Merger” of Ethereum , and what will happen if it fails.

According to Ethereum developers’ plans, the blockchain update, also known as The Merge. Or Ethereum 2.0, is planned for second half of September. It is aimed at improving the efficiency and scalability of their network.

The speed of transactions in the network will increase to 100,000 TPS (transactions per second). It is now around 15 TPS, according to analytics platform Kaiko. The update will also improve Ethereum’s protection against coordinated attacks. Such as the 51% attack. In which, the person who controls most of the network. Can forcibly make fraudulent changes.

Phase 0 of the Ethereum 2.0 update, the Beacon Chain, was launched on December 1, 2020. Phase 0 began the blockchain’s transition to a proof-of-stake (PoS) algorithm. Its full implementation will mean the end of ETH mining.

Networks such as Ropsten and Sepolia have already switched to the new protocol. And on the morning of August 11 developers have successfully completed Goerli’s latest testnet upgrade. The tentative start date for the main network migration is September 19.

The cryptocommunity suggests that a bifurcation of the blockchain may occur during the “Merge” process. In this case, two parallel networks will emerge, each of which may have its own ETH token. Also, an update failure cannot be ruled out. These events could have an impact on the cryptocurrency market and token rates. Since the market was sensitive to Ethereum price changes after the completion of test updates.

Increased uncertainty in a crypto market

A failure of the transition to ETH 2.0 is unlikely. As all current updates in test networks are successful. In the worst case, the timing of the transition can be shifted, but not the refusal of the update and not its failure.

That said, the risks of a fork of ETH with a split into two coins, PoW and PoS, have increased in recent weeks. In the case of a fork, the PoW version of ETH will be more in demand at the expense of miners for the first time. Because of the continued ability to mine and accumulate tokens. However, in the long run, the PoS version will be more interesting for investment.

Splitting the network is not dangerous in terms of problems for the team and Ethereum project. But it could lead to uncertainty in cryptocurrency market. For example, it is unclear how long it will take to stabilize tokens, networks, exchanges and wallets. Which will have to account for not one, but two new protocols and two tokens.

Possible temporary collapse of Ethereum price

The market is already pricing in an option with a possible Ethereum upgrade. When the blockchain completely moves to the POS algorithm, there will not be any immediate reaction. If everything is “good and positive” with the market. Then ETH exchange rate will go up one way or another.

If the update will fail or will be postponed. Most likely there will be a local temporary dump of ETH price.

Ethereum has a lot of potential, especially after moving to PoS. There will be additional interest in it. Users will start investing in ETH to create nodes and get extra income from it. Our experts also said that it will open a road for institutional investors. And Ethereum itself will become more environmentally friendly due to the fact that less electricity will be used to mine it.

 

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