Crypto Hacking: FTX Chief Share A Solution To End It

Over the last few months, crypto hacking has turned rampant, especially in the decentralized finance (DeFi) market. This month itself, more than $750 million have been already lost in crypto hacks as per data from Chainalysis.

Rewarding Crypto Hackers?

Crypto billionaire and FTX chief Sam Bankman-Fried have recently outlined a framework to deal with this problem of crypto hacks. Interestingly, the solution proposed by SBF involves rewarding the hackers.

In his latest blog post, the FTX chief proposed a “5-5 standard” wherein the hackers get to keep 5% of the total funds stolen. Alternatively, they can also keep $5 million whichever is smaller. 

Other provisions include that the hacker acts in “good faith” and intends to cooperate on returning most of the crypto-assets.

In crypto hacking, some of the hackers are also white-hat hackers who seek to expose vulnerabilities. The hackers will do this in the protocol in return for a reward instead of making malicious gains. The SBF chief noted:

“Hacks are extremely destructive to the digital asset ecosystem. The 5-5 approach would have curbed the impact of hacks more than 98%.”

However, SBF is unsure of what would be the right standard for this process. The FTX chief also stated:

Keeping DeFi and peer to peer transfers free is crucial. There are policies I honestly think are key to achieving that. I could be wrong about those policies–I probably am wrong about some! But in the end the most important thing is to keep commerce and expression free.

As said, DeFi protocols have been the most vulnerable to hacks this year. So far in 2022, the DeFi protocols have lost a sum total of more than $4.4 billion.

FTX On Crypto Regulations

Sam Bankman-Fried also said that the U.S. arm of the crypto trading platform FTX will start conducting its own analysis. Their analysis will be on whether the crypto assets work as securities before listing them.

In the blog post, SBF said that FTX plans to use its internal framework for crypto securities. This they will do until there’s more clarity from the SEC. However, this internal framework doesn’t guarantee that FTX will be free from scrutiny by the U.S. SEC.

Meanwhile, Elon Musk Does Damage Control

The crypto market struggles due to a wide variety of macroeconomic factors. The altcoins market in particular faced a major crisis. Ethereum fell by 2% in the last 24 hours and is trading at $1281. 

Meanwhile, Cardano and Solana fell by 3% and 5% respectively. The Tesla earnings report was an important reason for the poor performance of the altcoins market.

Tesla missed its expected earnings for the third quarter and the company’s stock plummeted as a result. In the after-market, $TSLA is down by 6.25%. 

Tesla CEO Elon Musk informed investors that despite strong demand in the fourth quarter, the company will miss its vehicle delivery target in 2023.

Tesla was expected to earn over $22 billion in the third quarter. However, the company revealed that its third-quarter revenue was $21.45 billion. Tesla’s gross automotive margin also missed the estimates.

Why Tesla Earnings Impacts The Altcoin Market

The crypto market is strongly correlated to the broader general market. In particular, it shows a strong correlation between technology stocks and the tech-oriented NASDAQ. As major companies miss earnings estimates, the stock market plummets. As a result, the crypto market struggles too.

Moreover, Tesla’s earnings stoke fears of a slowdown in the economy and a potential recession. The World Bank believes that the economy will face a recession in 2023. Major figures such as Amazon founder Jeff Bezos believe that a recession is inevitable.

NFTs To Be Introduced Into The Metaverse By Snoop Dogg And Eminem

Snoop Dogg and Eminem will bring their Bored Ape Yacht Club (BAYC) NFTs to the VMAs this Sunday, performing from inside Yuga Labs’ upcoming metaverse game “Otherside.”

The rap superstars will perform their song, “From the D to the LBC,” according to MTV and Yuga Labs.

“Otherside” And mainstream Culture

“Otherside” is still in development and does not yet have a confirmed release date. According to the company, the Web3 metaverse game is currently in Phase 1. This means only owners of its Otherdeed land NFTs and select developers have been able to try out aspects of the MMORPG-inspired title.

This VMA performance is yet another example of NFTs bleeding into mainstream culture. NFTs have become digital status symbols for the rich and famous. And Bored Apes have been co-opted for everything from fast food restaurants to M&Ms. 

The promoters say Snoop and Eminem’s “Otherside” performance will be a never-before-seen experience. Their music video for “From the D to the LBC” came out two months ago and features 2D animations of their Bored Ape NFTs, but no metaverse footage.

Since its release, “From the D to the LBC” has been a notable success, both for the rappers and for the emerging trend of Bored Ape-themed music videos. The “D to the LBC” YouTube video has garnered over 46 million views and a VMA nomination for “Best Hip-Hop” song. On Spotify, the track has racked up nearly 25 million streams.

Eminem And Snoop Get Involved 

Eminem is clearly getting good use out of his BAYC NFT. One which he bought back in December for a hefty $450,000. The rapper has used it as his Twitter profile picture ever since. Snoop got his Ape from crypto payments company MoonPay. The company transferred Bored Ape #6723 to Snoop Dogg’s son, Champ de Medici, back in December. 

While “From the D to the LBC” is a lyrical hit for many fans, there has been no shortage of complaints about the NFTs featured prominently across the song’s cover art and music video.

“Fuck NFTs, but THIS is the Em I’ve been wanting for YEARS,” one Redditor wrote in a comment with over 400 upvotes.

“Good song tho [sic] but damn those BAYC things are annoying,” another complained.

While the BAYC has plenty of haters, this celebrity exposure is showing no signs of slowing down. 

And it appears to be affecting token prices as well. Back in June, Yuga Labs’ Apecoin (APE) token pumped 22% after the music video for “From the D to the LBC” was released. 

Despite that exposure, APE—the official cryptocurrency for “Otherside”—has still struggled to gain value. The crypto, since May hovers around $5.27, according to CoinMarketCap data.

Sunday’s performance will mark Em’s first return to the VMAs in 12 years. And Snoop’s first performance at the awards show in 17 years. 

Over the course of his illustrious rap career, Eminem currently has 13 VMAs and is a nominee for 60. That makes him the second-most nominated VMA artist behind Madonna, who has received 69 noms (and who also loves the Bored Apes). Snoop has received thirteen VMA nominations and secured three wins. 

Regardless of how Snoop and Em’s “Otherside” performance pans out, it’ll surely be one for both the rap and Web3 history books.

Meanwhile Cyber Criminals Are Stealing NFTs 

Over $100 million in NFTs have been stolen in the last year, according to a new report by Elliptic. The report released on Wednesday, “NFTs and Financial Crime,” covers nefarious crypto activity between July 2021 to July 2022.

Crypto Disaster: Thousands Of Solana Wallets Hacked

First it was the Bridge Protocol Nomad that was attacked at the start of the week. Now, the digital market has to deal with another major hit. 

In the early hours of Wednesday, August 3rd 2022, hackers attacked the Solana Ecosystem. This attack has rendered thousands of wallets empty and their owners in pain.

How Severe?

Currently, it is hard to give a very accurate report on the amount of damage inflicted. This is because of varying statistics from crypto analytic companies.

Blockchain forensic firm Elliptic gave its report on the incident and the extent of damage. Over $5.2 million in crypto-asset is missing so far, according to the company’s report. They also said that about 7,500 Solana wallets have been affected according to their findings.

Furthermore, security company PeckShield stated that about 4 Solana wallets drained $8 million from its victims.

The root cause is still not clear,” according to Elliptic’s co-founder, Tom Robinson. “It appears to be due to a flaw in certain wallet software, rather than in the Solana blockchain itself.” 

The attack sent Solana’s SOL token down as much as 7.3% to $38.40 in early trading on Wednesday, its lowest in a week. Bitcoin rose 1.3% to $23,327. 

The exploit affected users of a digital crypto wallet made by Slope Finance, according to a tweet sent Wednesday afternoon by Solana Status, a Twitter account managed by the Solana Foundation.

The tweet said that there is no evidence that Solana’s cryptography or protocol was compromised.

Slope confirmed in an official statement earlier today that a group of its wallet had been affected. The statement also indicated that the company’s founders and staff had also lost funds.

The crypto start-up has decided to conduct its own investigation on the issue.

Crypto Hacks This Year

The crypto projects seem to be providing a well of fortune for hackers. Consequently, the industry has suffered numerous attacks this year. 

Solana’s predicament comes a few days after Nomad lost close to $200 million in a security exploit on Monday. Nomad is a bridge protocol for transporting crypto tokens across different blockchains.

According to Elliptic, in 2022 alone, about $1 billion dollars was stolen from bridges.

Much remains unknown at this point — except that hardware wallets are not impacted,” Solana spokesman Austin Federa said.  

While there’s speculation the incident was a supply-chain attack, the nature of the exploit remains unclear. Supply-chain hacks occur when an outside party or provider with access to the victim’s systems and data is infiltrated.

Impact Of The Crypto Hack On Solana 

Solana, which has suffered network outages in the past, is a rival to the Ethereum blockchain. 

As transaction prices on Ethereum rose last year, chains like Solana, which tout their low transaction fees, emerged as alternatives for minting non-fungible tokens. The code underpinning Solana is also popular with clients looking to build their own decentralized-finance applications. 

Some NFTs were stolen in the hack – but the full impact of the exploit is still unclear, Elliptic’s Robinson said.

In other news, cryptocurrencies seem to be on the downside. Bitcoin currently trades at $22,897 and Ethereum $1,611. They are both down by 0.03% and 0.17% respectively. 

Solana is now at $38.72 which indicated a 0.05% drop from its original price. Cardano is up by 0.33%, bringing it to $0.5006.

Although the market looks steep, there are speculations that major coins will be on the rise. Is the crypto winter almost over? We’ll find out soon.