Today's News Highlights:
Juan Tacuri, the main promoter of the crypto Ponzi scheme Forcount, sentenced to 20 years in prison
TikTok faces allegations of operating a cryptocurrency exchange-like business in the UK
Vitalik proposes key goals for the Surge phase in Ethereum's development roadmap
deBridge governance token DBR now open for airdrop claims
African crypto startup Yellow Card raises $33 million in Series C funding, led by Blockchain Capital
a16z Crypto report: Cryptocurrency activity and usage reach all-time highs
Regulatory News
Juan Tacuri, the main promoter of the crypto Ponzi scheme Forcount, sentenced to 20 years in prison
Damian Williams, the U.S. Attorney for the Southern District of New York, announced that Juan Tacuri, a key promoter of the cryptocurrency Ponzi scheme Forcount (later renamed Weltsys), has been sentenced to 240 months (20 years) in prison. The scheme defrauded thousands of investors worldwide, primarily targeting the Spanish-speaking community in the United States. Tacuri, one of the most successful promoters of the scheme, earned millions of dollars and used the funds to purchase properties and luxury goods in Florida. Tacuri and others lured victims into investing in so-called cryptocurrency products by hosting lavish events and community promotions, promising daily returns and doubling investments within six months. However, Forcount did not engage in cryptocurrency trading or mining; funds were actually paid to old investors using new investors' money, while also being used for promotions and personal consumption. Ultimately, most investors were unable to withdraw profits and lost all their funds. Tacuri was also sentenced to one year of supervised release and ordered to forfeit $3.61 million in funds and properties acquired through the scheme, along with paying restitution.
EU warns: Fines for the "X" platform may consider revenues from Musk's other companies
The EU has warned that when calculating fines for the social media platform "X," revenues from Musk's other businesses, including SpaceX and Neuralink, may be included. This practice would significantly increase potential penalties for violations of content moderation rules. Under the EU's Digital Services Act, if illegal content and misinformation issues are not addressed, or if transparency requirements are not met, the EU can impose fines of up to 6% of a platform's global annual revenue. Regulators are considering whether to include sales from SpaceX, Neuralink, xAI, and the Boring Company in determining potential fines for "X," in addition to revenues generated by the social network. One insider noted that Tesla's sales would not be affected by this calculation, as it is a publicly traded company and not under Musk's complete control. The potential fine amounts are still under discussion. If "X" finds a way to address regulators' concerns, it may avoid penalties.
According to Newsis, Lee Bok-hyun, the head of South Korea's Financial Supervisory Service, stated during an audit at the National Assembly's Political Committee on the 17th, "We will investigate the issues surrounding the AVAIL token traded on Bithumb." After launching at 263 KRW on July 23, AVAIL skyrocketed to 3,500 KRW within 15 minutes, but fell back to 296 KRW in less than a day, raising suspicions of price manipulation. In response, Democratic Party lawmaker Min Byoung-dug remarked, "This AVAIL token incident indicates that Bithumb's own abnormal trading system is not functioning at all. When I asked Bithumb what they were doing, they said only trades accounting for more than 5% of the total issuance would be considered abnormal." Director Lee emphasized, "We are continuing to create and upgrade the abnormal trading detection system and are handling various investigation cases and related matters, so we will strive to establish market trust."
TikTok faces allegations of operating a cryptocurrency exchange-like business in the UK
According to Cryptonews, the short video app TikTok is under scrutiny for allegedly operating in the UK in a manner similar to a cryptocurrency exchange. A compliance expert reportedly warned the UK's Financial Conduct Authority (FCA) about the need for anti-money laundering and counter-terrorism financing checks on TikTok. The expert highlighted concerns that virtual tokens on TikTok could be indirectly exchanged for real money through its creator program. This review stems from TikTok's virtual currency system—TikTok tokens. Users can purchase tokens with real money and gift them on the platform or during live streams. They may also have the option to exchange these tokens back for cash. This process is similar to cryptocurrency trading. Given the strict regulations surrounding cryptocurrency businesses, this system has raised regulatory concerns. Critics argue that TikTok's handling of virtual currency may face the same scrutiny as cryptocurrency platforms. Additionally, such cryptocurrency-like transactions have raised concerns about the security of users' financial data, especially considering the geopolitical sensitivities. Reports indicate that the letter stated, "TikTok provides funding transfer services for money service businesses through its rewards program and facilitates the exchange of crypto assets with currency or currency with crypto assets, or makes arrangements for such exchanges." As of the time of publication, neither TikTok nor the FCA had responded to Cryptonews' request for comment.
Project Updates
Robinhood launches desktop platform and adds futures and index options trading features in the APP
According to Reuters, fintech company Robinhood (HOOD.O) launched a desktop platform on Wednesday and added futures and index options trading features to its mobile application (APP) in a bid to capture market share from traditional brokerage firms. The company stated that its desktop trading platform, named "Robinhood Legend," will focus on active traders. The platform will offer advanced trading tools, real-time data, and customizable and preset layouts without additional fees. Additionally, the app will allow users to trade futures products such as the benchmark S&P 500 index (.SPX), new tab pages, oil, and Bitcoin. Customers will also be able to trade index options.
Vitalik proposes key goals for the Surge phase in Ethereum's development roadmap
Ethereum co-founder Vitalik Buterin released a new article titled "The Future Development of the Ethereum Protocol (Part Two): The Surge," outlining key goals for the Surge phase: achieving over 100,000 TPS on L1+L2; maintaining decentralization and robustness of L1; ensuring that at least some L2s fully inherit Ethereum's core attributes (trustless, open, censorship-resistant); maximizing interoperability between L2s, so Ethereum should function as an ecosystem rather than 34 different blockchains. In December 2023, Vitalik announced an updated Ethereum development roadmap for 2023, which includes six parts: The Merge, The Surge, The Scourge, The Verge, The Purge, and The Splurge.
At the "10th Global Blockchain Summit" hosted by Wanxiang Blockchain Lab, Ethereum co-founder Vitalik Buterin stated, "Ethereum has made significant improvements in L2, smart accounts, account abstraction, zero-knowledge proof applications, and wallet user experience. However, the current Ethereum resembles 34 or more different chains; the future Ethereum should be a unified ecosystem, one with chain-specific addresses and one with ERC-7683 (a universal cross-L2 protocol). Regarding light clients, today Helios serves as a light client for L1 without L2; in the future, L2s will establish their own Merkle proof functions in cross-chain contracts, which can serve as universal light clients."
VanEck: Has made two long-term investments in Web3 gaming, one of which is in Parallel
Asset management giant VanEck announced on the X platform that it has made two long-term investments in Web3 gaming, one of which is in the AI blockchain game Parallel, while the other remains undisclosed. VanEck also added that it holds investments in Parallel's PRIME/PROMPT tokens.
SCB becomes the first bank in Thailand to use stablecoins for cross-border payments
According to Cryptoslate, SCB, Thailand's fourth largest and oldest bank, has become the first financial institution in the country to offer cross-border payment and remittance services based on stablecoins. The stablecoin remittance service will be provided in collaboration with fintech company Lightnet. This move aims to reduce transaction costs and provide customers with faster international transfers. The introduction of stablecoin-based services will enable SCB customers to send and receive payments globally 24/7. The service has been tested through the Bank of Thailand's digital asset sandbox to ensure compliance with regulatory standards and flexibility for future expansion. This initiative is expected to further promote the development of Thailand's digital economy, positioning SCB as a significant player in the future financial services sector.
According to Cointelegraph, Radiant Capital and two cybersecurity firms disclosed that after a cybersecurity vulnerability incident exceeding $50 million occurred on the BNB Chain and Arbitrum, Radiant Capital has suspended its lending market.
Web3 cybersecurity firm De.Fi Antivirus stated on the X platform: "Using the 'transferFrom' function on the BSC and ARB chains, attackers exploited the Radiant Capital contract, stealing user funds, including USDC, WBNB, ETH, etc. This attack resulted in approximately $58 million in stolen funds." This estimate is similar to that of another cybersecurity firm, Ancilia Inc., which estimated the loss to be around $50 million. Radiant is controlled by a multi-signature wallet, and the attackers gained control of the private keys of multiple signers, subsequently controlling several smart contracts.
Radiant stated in a post on the X platform: "We are aware of the issues with the Radiant lending market on the BNB Chain and Arbitrum. We are working with SEAL911, Hypernative, ZeroShadow, and Chainalysis and will provide updates as soon as possible. The markets on Base and the mainnet will be suspended until further notice."
According to Cointelegraph, a representative of blockchain analysis firm Chainalysis is scheduled to appear at a hearing in the New York State Supreme Court on October 16, related to a defamation lawsuit filed by Exceptional Media Ltd. (the company behind the YieldNodes blockchain investment project) in January 2024. According to documents published on the legal analysis site Trellis, the presiding judge will weigh Chainalysis's legal team's recent motion to dismiss. Chainalysis is being sued by Exceptional Media Ltd., which claims that Chainalysis incorrectly labeled its YieldNodes project as an "investment scam." Exceptional Media is seeking at least $650 million in damages, arguing that Chainalysis harmed its reputation and customer base and accused it of malice. Since the initial lawsuit was filed, Chainalysis's legal team has submitted multiple motions to dismiss. Chainalysis claims that Exceptional Media and YieldNodes failed to prove that the YieldNodes project is not a scam and did not provide any rebuttal to Chainalysis's allegations.
Game developer FractureLabs sues Jump Trading, accusing it of manipulating DIO token prices
According to Bloomberg, video game developer FractureLabs has filed a lawsuit against Jump Trading, accusing one of the largest market makers in the cryptocurrency industry of committing "fraud and deception" by manipulating the price of a token used in an online game.
The lawsuit states that FractureLabs planned to raise funds by launching the DIO token through the Huobi (now renamed HTX) exchange in 2021, hiring Jump as the market maker for DIO, which is the token used in its online game "Decimated" and also traded in the cryptocurrency market. As part of the agreement, it lent 10 million tokens to a subsidiary of Jump while sending an additional 6 million DIO tokens to Huobi for sale during the launch. Huobi (now HTX) invited online influencers to promote the DIO token, causing its price to soar to a high of $0.98, meaning the tokens borrowed by Jump were worth $9.8 million at that time. Following the sale of DIO tokens, the price dropped to about $0.005, and Jump subsequently systematically liquidated its holdings of DIO tokens, generating millions of dollars in revenue for itself. Jump then repurchased tokens at a significant discount, worth about $53,000 at the time, returned them to FractureLabs, and then canceled its agreement as the token market maker. The lawsuit alleges, "Jump concealed its true intent to 'pump and dump' the tokens in collaboration with HTX during the DIO launch." The complaint states that Jump also told FractureLabs it would keep the price of DIO within certain parameters required by Huobi (now HTX) for its listing agreement, but Jump's sale of DIO caused the token price to exceed those parameters, leading Huobi (now HTX) to refuse to return most of the $1.5 million in Tether USDT stablecoin deposits that FractureLabs had paid under the agreement.
A spokesperson for Jump stated in a statement: "These allegations are factually flawed and completely unfounded. Jump intends to vigorously defend itself." HTX is not listed as a defendant in this case, and when asked for comment, the exchange stated: "HTX is committed to full compliance with all applicable laws and regulations. As this matter is currently in litigation and HTX is not a defendant, we are unable to comment further at this time."
Stripe in advanced talks to acquire stablecoin-focused fintech platform Bridge
According to Bloomberg, insiders revealed that payment company Stripe Inc. is in advanced talks to acquire fintech platform Bridge, with no final decision made yet, and either party could still withdraw from the deal. The Bridge platform aims to allow businesses to create, store, send, and receive stablecoins, such as Tether's USDT and Circle's USDC. Reports in August indicated that Bridge had raised a total of $58 million in funding, with investors including Sequoia, Ribbit Capital, Index, and Haun Ventures, with Sequoia Capital leading Bridge's latest funding round of $40 million in Series A financing.
Meme coin Kabosu's prototype owner's Instagram account hacked, posting false content
According to AggrNews, the Instagram account of Kabosumama, the prototype owner of the DOG project "Doge" meme (Shiba Inu Kabosu), was hacked, and she previously posted on her blog that she could not log in. Additionally, BWEnews added that the hacker was quite cunning, posting a false message about a new family member. The hacker launched a memecoin in advance, luring victims to invest, and then quickly withdrew and fled.
CoinDesk acquires crypto data provider CCData and its retail business CryptoCompare
According to CoinDesk, CoinDesk has acquired crypto data provider CCData and its retail business CryptoCompare. CCData is a UK-regulated benchmark management agency that provides leading digital asset data and index solutions. CoinDesk plans to integrate CCData's high-quality data platform into its existing products to enhance data services, including the CoinDesk Index and CD20 Index.
Upbit to list Injective (INJ) on KRW and USDT markets
According to an official announcement, South Korean crypto exchange Upbit will list Injective (INJ) on KRW and USDT markets, with trading support starting at 18:15 local time on October 17.
deBridge governance token DBR now open for airdrop claims
The deBridge Foundation announced on the X platform that the DBR token has been launched and can now be claimed directly on-chain through official channels, with all claims to CEX having been distributed.
Related: deBridge officially issues governance token DBR, do you have it in nearly 500,000 airdrop wallets?
Google has restored Bitcoin and Ethereum price charts in search results
According to Decrypt, Google has restored the display of Bitcoin and Ethereum price charts in search results. Previously, these cryptocurrency price charts were temporarily removed due to inaccurate data, preventing users from viewing real-time price information directly in search. A Google spokesperson stated that the data comes from third parties, and the removal was due to receiving inaccurate data. After resolving the issue, the price chart feature has now returned to normal.
Animoca Brands to purchase more WATCoin from the open market
Animoca Brands disclosed on its official blog that it intends to acquire more WATCoin from the open market. WATCoin is the utility token of WatBird, a Telegram Mini App developed by Animoca Brands' subsidiary GAMEE. Animoca Brands stated that its purchase of tokens strengthens its commitment to WatBird's role in supporting a broader TON ecosystem.
The Bitcoin Ordinals browser Ord.io stated on the X platform: "There are rumors that insiders at Coinbase have revealed they are conducting an internal security audit and regulatory compliance assessment of the Runes protocol. We have not independently verified these claims."
Financing News
African crypto startup Yellow Card completes $33 million Series C funding, led by Blockchain Capital
According to Techcrunch, African crypto startup Yellow Card has completed a $33 million Series C funding round, led by Blockchain Capital, with participation from Coinbase, Kraken, OpenSea, Worldcoin, Polychain Capital, Block, Inc., Winklevoss Capital, Third Prime Ventures, Castle Island Ventures, Galaxy Ventures, Blockchain Coinvestors, and Hutt Capital. This brings Yellow Card's total funding to at least $88 million. The new funds will enable it to develop new products, strengthen its team and systems, and continue leading engagement with regulators across the African continent. Yellow Card was valued at $200 million during its $40 million Series B funding in 2022, and co-founder and CEO Chris Maurice stated that the current valuation of its crypto platform has significantly increased compared to the Series B round. Yellow Card, launched in Nigeria in 2019, has become the highest-funded cryptocurrency exchange on the African continent. In its initial years, Yellow Card served retail customers and has now shifted to B2C, collaborating with about 30,000 businesses in Africa and internationally, primarily helping them with payments and fund management through stablecoins. Yellow Card has two main products: a core on-off-ramp and an API suite.
Celo ecosystem EVM platform Mento's development team Mento Labs completes $10 million funding
According to CoinDesk, the development team of the decentralized EVM platform Mento on the Celo network, Mento Labs, announced the completion of a $10 million funding round. This round was supported by T-Capital, HashKey Capital, Richard Parsons, Flori Ventures, No Limit Holdings, Verda Ventures, and w3.fund. Mento Labs also announced a stablecoin roadmap, planning to add three local digital currencies to its expanding decentralized stablecoin lineup: Philippine Peso (PUSO), Colombian Peso (cCOP), and Ghanaian Cedi (cGHS).
Mento Labs is the development team behind Mento, an EVM platform for launching and operating new stable assets. Currently, Mento supports an increasing array of decentralized stable asset combinations, including cUSD, cEUR, cREAL, eXOF, cKES, and PUSO, with more assets set to launch. To achieve practical use cases for digital assets, Mento Labs develops customized solutions and provides partners with a suite of tools to launch and operate digital assets worldwide.
Binance Labs invests approximately $1 million in Bitcoin liquid staking platform Lombard
According to The Block, Binance Labs has invested approximately $1 million in Lombard, a Bitcoin liquid staking platform. Lombard is currently the largest Bitcoin liquid staking platform, with a total locked value (TVL) exceeding $640 million. Lombard has developed the LBTC token, which represents Bitcoin staked on the Babylon platform, allowing users to maintain the value of their original assets while earning yields through participation in DeFi. Lombard's LBTC has been used for collateral lending, yield farming, and trading across various DeFi protocols. This investment from Binance Labs will further promote the application and growth of Bitcoin in the DeFi space.
Important Data
According to SoSoValue data, the total net inflow of Bitcoin spot ETFs yesterday (Eastern Time, October 16) was $459 million. Yesterday, Grayscale's ETF GBTC had a net outflow of $0.00, with a historical net outflow of $20.142 billion. Grayscale's Bitcoin mini trust ETF BTC also had a net outflow of $0.00 yesterday, with a historical total net inflow of $419 million. The Bitcoin spot ETF with the highest net inflow yesterday was BlackRock's ETF IBIT, with a net inflow of $393 million, bringing IBIT's historical total net inflow to $22.461 billion. Following that was Fidelity's ETF FBTC, with a net inflow of $14.8103 million, bringing FBTC's historical total net inflow to $10.275 billion. As of the time of writing, the total net asset value of Bitcoin spot ETFs is $64.459 billion, with an ETF net asset ratio (market cap relative to total Bitcoin market cap) of 4.82%, and a historical cumulative net inflow of $20.193 billion.
PayPal stablecoin PYUSD market cap drops to $618 million, down 40% from August peak
According to The Block, PayPal's stablecoin PYUSD has been losing market share since it reached a market cap of over $1 billion at the end of August (when it was the fourth largest stablecoin). The current market cap of the token is $618 million, a 40% decline over the past month and a half. The market cap of the Solana-based PYUSD is currently about $267 million, down from a peak of over $600 million in August. Meanwhile, over $350 million of PYUSD tokens are circulating on Ethereum. The growth of this stablecoin has largely been attributed to PayPal's partnership with the Solana lending market Kamino Finance, which agreed to pay PYUSD holders high yields subsidized by the payment giant. In recent weeks, the yield on PYUSD deposits on the lending protocol Kamino has dropped from about 17% to below 7%. Solana-based protocols Drift and Marginfi, which also offered double-digit annual rewards to PYUSD holders, have also been impacted. However, this trend may reverse. On Tuesday, Kamino added PYUSD to its "meme coin market," allowing users to borrow against their meme coin positions like WIF, POPCAT, and BONK. This arrangement will provide an additional total of $10,000 in PYUSD rewards to depositors each week. In contrast, borrowers of PYUSD on the Ethereum-based decentralized exchange Aave are currently earning about 4.3% in yields. Over a similar six-week period, the market caps of the two major stablecoins USDT and USDC have remained relatively stable. Since August 31, Tether's stablecoin market cap has increased by $1 billion, while Circle's token market cap initially increased by $2 billion and then decreased by $2 billion.
According to The Block, Ethereum staker income is slowly declining, totaling $174 million in September, down from a peak of $247 million in March, reflecting a decrease in on-chain activity and overall market enthusiasm. The $174 million in staker income in September far exceeds the $35.5 million in transaction fee revenue, highlighting a severe reliance on block subsidies. Despite the decline in income, the number of validators continues to grow. Ethereum now has 1.09 million validators, indicating increased participation in network security. Even with individual rewards decreasing, the increase in the number of validators suggests ongoing confidence in Ethereum's long-term prospects. Since the merge, Ethereum's annual supply burn rate has remained at -0.06%, effectively removing 861,000 ETH from circulation each year. However, since April, an increase in Ethereum's supply has been observed due to a decrease in the number of users on the main chain, a finding that could lead to supply inflation. The highest annual burn rate recorded on April 5 was -0.38%, and it has been steadily rising since then. In fact, the number of active addresses on Ethereum has also decreased, further indicating a reduction in on-chain activity.
Tether: 330 million on-chain wallets have received USDT, with 36.25 million new users in Q3
Tether released the latest data stating that by the end of the third quarter of 2024, 330 million on-chain wallets and accounts (user agents) have received USDT, with the number of new users continuing to grow each quarter, averaging a 9% increase over the past four quarters. The third quarter of 2024 was its fastest-growing quarter, with 36.25 million new users. Tether noted that USDT is most used on Tron, Binance Smart Chain, and Ethereum, with the fastest-growing chains coming from Ethereum Layer 2 (such as Optimism, Arbitrum, and Polygon), as well as Avalanche and Solana. Additionally, USDT has experienced explosive growth on the TON chain, with 3.3 million new users in six months, accounting for 1% of all USDT on-chain users.
a16z Crypto report: Cryptocurrency activity and usage reach all-time highs
According to The Block, a study released by a16z Crypto on Wednesday found that cryptocurrency activity and usage have reached all-time highs this year. The report estimates that as of September, there are approximately 617 million cryptocurrency holders globally, with monthly active users reaching up to 60 million. By 2024, the number of monthly active crypto addresses is expected to exceed 220 million, with Base leading among Ethereum Virtual Machine (EVM) chains with 22 million addresses, while Solana dominates non-EVM chains with over 100 million addresses. This year, the number of mobile wallet users has also reached a peak, with the U.S. accounting for 12% of global users. Additionally, the report noted that Ethereum's Dencun upgrade and the EIP-4844 introduced in March this year have contributed to a 36% increase in ETH value on Layer 2, while Layer 2 payments accounted for 94% less of Layer 1 fees.
a16z crypto data scientist Daren Matsuoka stated, "We seem to be at a turning point for crypto infrastructure, which is rapidly driving blockchain expansion and unlocking new possibilities for applications and user activity. The sharp decline in user transaction fees is helping stablecoins find the right product market. We are also observing an emerging shift in behavior in the NFT space, which is quite interesting, with an increase in low-cost, social collecting activities, while high-priced, speculative secondary market activities are decreasing."
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