How India's WazirX Got Hacked 🏴☠️
$230 million worth heist rocks one of India's largest crypto exchange. Did the private key compromise cause the hack? Vitalik warns of pro-crypto candidates. Ethereum to hit $5k after ETFs launch?
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India's leading cryptocurrency exchange, WazirX, suffered a major security breach on July 18, resulting in the theft of over $230 million worth of digital assets.
The amount stolen accounts for nearly 45% of WazirX's $500 million reserves as of June.
The stolen assets include
$102 million worth of Shiba Inu (SHIB) tokens
$52.5 million in Ethereum (ETH)
$11.24 million in Polygon (MATIC)
$7.6 million in Pepe coin
$135 million in Tether (USDT)
$3.5 million in Gala
Exchange response: WazirX temporarily paused INR and crypto withdrawals to ensure the safety of user assets. The exchange acknowledged the security incident and said that their team is actively investigating the matter.
The hack targeted one of WazirX's multi-signature wallets on the Ethereum network, potentially due to a private key compromise.
Crypto sleuth ZachXBT offers a lowdown on how the attack unfolded.
Read the thread 👇
Blockchain security researcher Mudit Gupta explains why the hack happened in this thread 👇
Suspected hackers: According to blockchain analytics firm Elliptic, the attack appears to have been perpetrated by hackers affiliated with North Korea.
The stolen funds were moved through the decentralised exchange Uniswap and the privacy tool Tornado Cash.
Other leading Indian crypto exchanges like CoinSwitch and CoinDCX have assured their users that their funds remain secure and unaffected by the WazirX incident.
The WazirX hack: A massive crypto theft
Hack has had a significant impact on the overall crypto market in India.
WazirX's native token WRX experienced a sharp 15% decline in price.
Other cryptocurrencies like SHIB lost over 6% in USD value and 16% against INR.
Discounts emerged across various crypto-INR trading pairs on WazirX, with BTC/INR trading 11% lower compared to other exchanges.
Broader implications: The hack could erode investor confidence in India's crypto market, which in caught in regulatory uncertainty. Increased security concerns may lead to reduced trading volumes, inflows and tighter regulations in India.
Block That Quote 🎙️
Ethereum founder, Vitalik Buterin
“Crypto-friendly now does not mean crypto-friendly five years from now”
So our man weighed down on all the political drama around crypto’s growing play in 2024 US Presidential elections.
What does he do? Writes a blog post.
Read: Against choosing your political allegiances based on who is "pro-crypto"
Vitalik’s warning: TLDR;
Avoid selecting political candidates based solely on their cryptocurrency stance.
Crypto movement's core values prioritise broader freedoms, not just financial freedom.
Focusing only on "pro-crypto" politicians can lead to supporting those whose broader values clash with the crypto community.
Consider a candidate's overall vision for technology, privacy, and internationalism, not just their crypto position.
Beware of aligning with authoritarian regimes that back crypto for self-interest while suppressing freedoms.
The crypto community should prioritise a politician's principles over their cryptocurrency support.
Peter Van Valkenburgh, the director of research at Coin Center, a non-profit focused on crypto policy issues.
And that don’t sit well with many. As expected.
Messari CEO Ryan Selkis
“Vitalik is an idealist, not a realist. He is one of the more politically naive people I have read and/or interacted with in crypto. Moreover he’s Canadian, and he’s given thinly veiled permission to vote for the most provably authoritarian and anti-tech president in American history because he’s intellectually overconfident but politically weak.”
Charles Hoskinson, co-founder of Input Output Global and the Cardano blockchain ecosystem.
Spot ETH ETFs Approved for NYSE Arca Listing
The United States Securities and Exchange Commission (SEC) has approved two spot Ethereum exchange-traded funds (ETFs) – Grayscale Ethereum Mini Trust and ProShares Ethereum ETF – for listing on the New York Stock Exchange's Arca platform.
The ETFs will list on the NYSE Arca after a Form 19b-4 filing.
Trading cannot start immediately as the ETFs await comments on their S-1 filings.
Grayscale Ethereum Mini Trust represents an evolution from the Grayscale Ethereum Trust.
ProShares Ethereum ETF is part of a broader wave of eight spot Ethereum ETFs pending final SEC approval.
Ethereum ETF issuers submit final S-1 filings
Asset managers including BlackRock, Fidelity, 21Shares, Grayscale, Bitwise, and Invesco Galaxy submitted amended S-1 filings on Wednesday.
The filings reveal the final details of the fund structures, including management fees.
Grayscale's main product charges a 2.5% fee, while its Mini Ethereum Trust is set at 0.25%.
BlackRock and Fidelity will charge 0.25%, while 21Shares set its fee at 0.21%.
Bitwise, VanEck, and Invesco Galaxy are at the lower end of the spectrum at 0.20%, while Franklin Templeton will charge 0.19%.
ProShares had not filed an amendment revealing its fee as of press time.
Institutions more bullish than retail
Institutional investor confidence in Ethereum's (ETH) price is stronger than retail investors, according to Bybit's report.
Institutional investors doubled their Ether exposure after the ETF announcement, while retail allocation rose more cautiously.
Potential for Ether price doubling: Ether's price could double to over $6,800 by 2025, thanks to the interest in Ether ETFs, according to Bybit's Eugene Cheung. He expects an excellent risk/reward ratio for potential investors.
Ether ETFs as a "sidekick" to Bitcoin: Expected to amass around 30% of Bitcoin ETF inflows in the short term, acting as a "sidekick," according to Bloomberg's Eric Balchunas and Bybit's Cheung.
Long-term outperformance potential: Launch could provide regulatory certainty, potentially making Ether outperform Bitcoin in the future due to its use cases and native yield, according to Cheung.
During the past year, Bitcoin's price rose over 111%, while Ether's increased over 77%.
In The Numbers 🔢
$5000
Ethereum price prediction by Matt Hougan, the chief investment officer at Bitwise.
His three key reasons why ETH will rise above $5,000 after the ETFs start trading.
Slowed Ethereum supply growth: Unlike Bitcoin, Ethereum's supply growth has slowed due to a technical feature that destroys a small portion of Ether with every transaction.
This has resulted in the net amount of Ether hitting the market being nearly zero since September 2022.
Read: Burning Ethereum 🔥
Fewer sellers among Ethereum stakers: Ethereum operates on a proof-of-stake consensus algorithm, which means users must lock up 32 Ether to become validators.
These validators are paid in newly created Ethereum, reducing the need to sell the cryptocurrency to cover operating costs, as is the case with Bitcoin miners.
Millions of Ether locked in staking: More than 33 million Ether, or 28% of the entire cryptocurrency's supply, are currently staked and effectively off the market, as they are locked up for a set period and cannot be withdrawn or sold.
Bullish outlook for Ethereum ETFs
Hougan has also estimated that investors will pour $15 billion into spot Ethereum ETFs in their first 18 months of trading.
He believes the combination of low inflation, fewer sellers among Ether stakers, and millions of Ether off the market make the proposition of an ETH ETF especially bullish.
"If the ETPs are as successful as I expect — and given the dynamics above — it's hard to imagine ETH not challenging its old record."
The launch of Ethereum ETFs is a step towards mainstream adoption of the cryptocurrency, providing investors with a more structured investment vehicle and ease of access through traditional brokerage accounts.
Worldcoin Faces Scam Allegations
The eyeball-scanning human identification project Worldcoin faces allegations of price manipulation.
Crypto investigator ZachXBT labelled Worldcoin as "the biggest scam token of the bull run," criticising the project's venture capitalists and team members.
Unlock delay sparks controversy: Worldcoin's developer, Tools for Humanity (TFH), announced an extension of the unlock schedule for 80% of its native WLD tokens, stretching the original three-year plan to over five years.
Price surge raises manipulation concerns: The token unlock delay led to a 68% price surge for WLD in just two days, raising allegations of market manipulation by the Worldcoin team.
Allegations of market manipulation: DeFi Squared, a prominent DeFi insights account, published a detailed post on X, claiming that the team had engaged in strategic changes to emissions, market maker contracts, and well-timed announcements to influence the token's price.
DefiSquared Worldcoin research - Part 1 and Part 2.
The Surfer 🏄
Robinhood has agreed to pay $9 million to settle lawsuit over unsolicited texts. The trading platform was accused of violating telemarketing laws by sending promotional text messages to customers without their consent.
Ethereum researcher Virgil Griffith to set to be released seven months early from prison due to good behaviour and lack of criminal history. He was sentenced to 63 months for helping North Korea evade sanctions, will be released.
The Ethereum Layer 2 scaling solution Polygon announced plans to migrate its native MATIC token to a new token called POL on September 4th, 2024, following community approval.
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