Daily Digest - 12 June 2023

Headlines

▌SEC lawsuit led to nearly $996 million withdrawal of Ethereum and Bitcoin from centralised trading platforms

It has been six days since Binance faced a lawsuit from the US Securities and Exchange Commission (SEC), while Coinbase faced a similar legal challenge five days ago. In the wake of these events, large amounts of Bitcoin and Ethereum were withdrawn from exchanges, with data showing that nearly $996 million in Ethereum and Bitcoin have been withdrawn from centralised exchanges.

Policies

▌SEC lawsuit: 67 cryptocurrencies are now considered securities by the SEC

The total number of cryptocurrencies flagged as securities by US securities regulators has now reached 67, after a few more were added to the lawsuit against cryptocurrency exchanges Binance and Coinbase. In the case against Binance, the SEC classified 10 cryptocurrencies as securities, while naming 13 cryptocurrencies in its Coinbase lawsuit. Security tags now apply to a market worth more than $100 billion, roughly 10 percent of the $1.09 trillion cryptocurrency market cap.

Blockchain Application

▌V God: For long-term sustainable development, Ethereum needs to undergo three transformations: Layer 2 expansion, wallet security, and privacy

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Vitalik Buterin, the co-founder of Ethereum, pointed out in his latest blog post that Ethereum needs to undergo three major technological shifts for long-term sustainable development, namely Layer 2 expansion, wallet security, and privacy. It’s not just the protocol’s functionality that needs to be improved, he said. In some cases, the way we interact with Ethereum will need to change fundamentally, requiring profound changes to applications and wallets. Since there are many different expansion solutions on Ethereum, it is difficult for users to have only one address now, so it is necessary to build a cross-chain solution for Layer 2 blockchain. And this has to happen at the same time as smart contract wallets and privacy are further developed.

Cryptocurrency

▌North Korea has established a shadow labour force to be used for large-scale cryptocurrency hacking

North Korea has created a shadow labour force of thousands of IT workers, according to US officials. The shadow labour force has been linked to North Korean cybercrime operations and has been used to carry out massive cryptocurrency hacks. Shadow workers targeted a Sky Mavis engineer last year, posing as a recruiter on LinkedIn. After a phone conversation, shadow staff gave him a document to review as part of the hiring process. The file contained malicious code that allowed North Korean hackers to break into Sky Mavis and steal more than $600 million in the Ronin Bridge hack.

To infiltrate encryption companies, North Korean hackers hired Western front-office personnel, the report said. These front-office people are hired by crypto companies through interviews, and once hired, they make small changes to the product, making it vulnerable, and then hackers take over. With the help of these shadowy employees, North Korean hackers have stolen more than $3 billion over the past five years, according to Chainalysis.

▌Ripple General Counsel: The SEC is hypocritical

Stuart Alderoty, Ripple's general counsel, said the SEC is hypocritical and issues orders to block registration statements when they are not true. If the SEC considers the statement to be untrue, then I do not register as a broker-dealer, stock exchange, or automated trading system because the statement that I do not trade in securities should be blocked.