Poloniex $125M Hack & Weird Activities
Crypto Regulations Geomap | Decentralized Social Store
Marco Manoppo & Karon Pangestu
November 13, 2023
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Good Morning. The market is pulling back slightly but some funds might have been rotating to smaller market cap L1/L2 altcoins, with TIA, KLAY, FIL, OP, and MATIC leading the past 24-hour performance. Let’s have a good week.
In Today's Email:
What Matters: Poloniex $125M hack 🔒
Products: Farcaster DeSo store 🛒
Charts: Regulations geomap, COIN Q3’23 net loss 📈
Narratives: We might be seeing a minor pull back, but we’re definitely still in early innings of the rally — if spot market flow momentum can sustain.
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WHAT MATTERS
Poloniex $125M Exploit
State of play: Poloniex, the centralized exchange owned by Justin Sun, suffered a $125M+ security hack on one of its wallets, known as Poloniex 4 on Etherscan.
Poloniex’s wallet has been disabled for maintenance since last Friday and Poloniex will gradually resume deposits and withdrawals in forthcoming days.
According to PeckShield, the exploited funds were spread across three chains: $56M in ETH, $48M in TRX, and $18M in BTC.
Justin Sun claimed that a portion of the assets associated with the hacker’s addresses has been identified and frozen.
Sun also claimed that “the losses are within manageable limits, and Poloniex's operating revenue can cover these losses.”
Poloniex has operated since 2014; Sun acquired the CEX in 2019.
Sun and Poloniex are offering a 'white hat bounty' of 5% of the total hacked amount to the hacker. They will wait for 7 days (starting November 10) before involving law enforcement.
What’s next: The hacker has been criticized by crypto Twitter for doing multiple mishaps, such as sending funds to a burn address and others, indicating that the hacker might not be extremely experienced.
Alas, there’s a higher likelihood that the hacker will take the 5% bounty.
Our take: Justin Sun needs to enhance security practices on the CEXs that he’s involved in.
Two months ago, Huobi (now called HTX), another CEX that Sun is involved in, also suffered a security exploit of 5,000 ETH.
For builders and investors: Something weird is going on. Scopescan reported that the hacker bought 207M of TRX (~$22M) with USDC on Ethereum and with USDT on Tron. This led to a ~10% rise in TRX's price.
Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇
PRODUCTS OF THE WEEK
Farcaster Store
Farcaster is an Ethereum-based protocol for decentralized social apps and a social media graph. Now, there’s an app-store-like interface for users to access applications built on top of the Farcaster protocol.
Farcaster enables users to freely migrate social identities between applications, and developers to freely build applications with new features on the network.
Farcaster is a privacy-focused social media platform with no ads, data mining, tracking, server farms, or walled gardens.
Farcaster’s social network encompasses three levels: Identity Layer, Data Layer, and Application Layer.
Other cool products:
CHARTS OF THE WEEK
Crypto Regulations Geomap
State of play: According to Coinbase’s Q3 shareholder letter, 83% of the G20 and major financial hubs have either passed national crypto legislation or have crypto regulation in place.
In Europe, 27 countries are standing together to create one unified set of rules for crypto under MiCA.
From the Middle East, the UAE is the only country that introduced a new, compulsory regulatory market for the use of cryptocurrencies.
Almost all leading countries in APAC have a crypto regulation in place except for India. Singapore, HK, South Korea, and Japan have the most detailed regulations among others.
Our take: The US crypto regulatory progress remains behind. As a result, Coinbase has formed a lobby group to counter the unclear US regulatory framework, aiming to influence policy decisions and protect industry interests.
Coinbase Achieves Narrowest Loss Margin
State of play: Coinbase reduced its net loss to $2M in Q3’23, improving from Q3’22 $545M loss, despite trading volume declines, according to its shareholder letter.
Year-on-year, Coinbase's total revenue rose by 14.2% to $674.1M.
Out of the total revenue in Q3’23, $334.4M was generated from subscriptions and services, and the remaining $288.6M from transaction-based revenues.
Coinbase also reported positive adjusted EBITDA for the third straight quarter, signaling progress toward sustainable, long-term growth.
Our take: Coinbase is arguably one of the most misunderstood stocks out there as there’s no existing model to value a company that directly participates in the public blockchain ecosystem — e.g. what’s the value of Base, Coinbase’s L2?
QUICK BITES
Hodlnaut to be liquidated.
Poloniex exploited for over $100M.
FTX sues ByBit to claw back nearly $1B.
Michael Saylor’s bet crosses $1B in unrealized profit.
Bitcoin mining revenue hits 2023 peak amid market rally.
Ex-FTX executives plans to launch a new crypto exchange.
Binance-linked wallet address loses $27M in apparent hack.
Friend Tech sign-ups falter to 400 users every day this week.
NOTEWORTHY READS & MEME
etf is ... PRE approved
— CL (@CL207)
6:50 AM • Nov 12, 2023
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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.