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This Week in Crypto #25

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There have been a few things happening in the ever-changing world of crypto this week. But we’re just going to go ahead and address the elephant in the room. We are talking about the Ethereum Goerli test net Merge that was successful. Now more than ever it all feels real as we approach this historical moment in crypto.

In other news we saw a few sanctions, bans, and hacks take place this week as well.

Without further ado let’s jump in!

Goerli Merge and ETH 2.0

On the long road to ETH 2.0 which will see the Ethereum Blockchain transition from a proof of work consensus mechanism to a proof of stake consensus mechanism, the Ethereum developers have crossed the final hurdle. The Goerli testnet has been successfully merged and become a Proof of Stake chain.

Now all that is left is to move Ethereum’s mainnet over.

The Ethereum mainnet Merge is tentatively scheduled for TTD 5875000000000000000000. This would out the Merge date on approximately the 15-16th of September.

The previously expected date was September 19. The road to ETH2.0 has been plagued with many delays. So moving the date forward instead of back for once is probably the biggest sign that we are closer now than ever.

Even though after the merge the older proof of work chain will still exist, many of Ethereum’s biggest projects are expected to move across sooner rather than later to the newer proof of stake one. Chainlink is one of the major projects that will be supporting the Merge, while Circle (USDC issuer) has announced they will only be supporting the new chain, moving completely away from the old one.

Polygon

And while still on the subject of Ethereum [… ] The leading Ethereum Layer-2 chain, Polygon, has announced it is teaming up with Neowiz in order to launch a new gaming platform called Intella.

Tornado Cash

Centralised authorities have great power over many. But they do not have power over what is indeed decentralised.

The centralised authority we are talking about here is the US Treasury Department which announced it is banning citizens from using Ethereum based crypto-mixer Tornado Cash. The decision comes after the North Korean hacker group Lazarus was reportedly using the service. The penalty for using the service will be up to 30 years in prison.

Anyone holding a wallet that interacted with Tornado Cash could be in for future complications.

Shortly after the announcement, one bad actor sent 0.1 ETH from Tornado Cash straight to the wallets of major companies, celebrities, and also crypto personalities.

Following on from the US announcement, decentralised crypto exchange dYdX announced it would flag and ban crypto wallets that had links to Tornado Cash.

However, even though the service can be utilised for malicious behaviour, it can also be used for legitimate reasons such as wanting to keep your entire net worth private when making a simple Crypto purchase, like for example buying a coffee. The way Blockchain works right now with its public transparency means that without using a crypto-mixer, the coffee shop would be able to see everything in your account.

Jeff Coleman, Head of Technology at Ledger Labs, took to Twitter to give some examples, saying

Wanting to donate to Ukraine is a great example of a valid need for financial privacy: even if the government where you live is in full support, you might not want Russian government to have full details of your actions.

Ethereum founder Vitalik Buterin replied to Jeff Coleman’s tweet saying that he himself was a user of Tornado Cash:

I’ll out myself as someone who has used TC to donate to this exact cause.

 

Lastly news just broke that authorities in the Netherlands have arrested a Tornado Cash developer.

The Dutch Fiscal Information and Investigation Service (FIOD) has released a statement revealing the arrest of a 29 year old man in Amsterdam. The FIOD says the developer was arrested on suspicion of “concealing criminal financial flows and facilitating money laundering through the mixing of cryptocurrencies through the decentralised Ethereum mixing service Tornado Cash.”

Curve exploit

This week saw Curve Finance being exploited, the latest in a series of recent crypto hacker activity.

Curve tweeted telling users to not use their site, as the name server had been compromised, saying they were investigating the matter. After the hack, Binance CEO gave some light to the situation by tweeting that

Curve. finance had their DNS hijacked in the past hour. Hacker put a malicious contract on the home page. When the victim approved the contract, it would drain the wallet. Damage is around $570k so far. We are monitoring.

Later on Curve Finance was able to resolve the exploit.

And finally, Binance froze and recovered $450k of the Curve stolen funds, representing 83%+ of the hack. CZ tweets

Mailchimp against crypto

News came out today that MailChimp – a provider of email, newsletter and marketing services – had suspended user accounts of many crypto media companies. Some of the affected user accounts include crypto heavyweight companies Messari, Decrypt, and Edge Wallet. Ryan Selkis, founder of Messari took to Twitter to freely express his opinion on Mailchimp’s decision.

OpenSea Policy

At a time when there seems to be a lot of malicious activity, many exploits taking place, and much theft in the world of crypto, including the NFT space, OpenSea has officially updated its stolen items policy.

They outlined the move on Twitter saying:

It is against US law to knowingly allow the sale and transfer of stolen items. We do not want to incentivize theft by allowing our platform to be used to help sell stolen items.

Any reports of stolen assets will need to be followed by the submission of a police report to OpenSea within seven days. This is to avoid false reports. Read more in their thread below.


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