Daily Digest - 7th October 2022

Headlines

▌BNB Chain: The Network Operation Has Been Suspended and Potential Vulnerabilities Are Being Investigated

BNB Chain tweeted that due to abnormal activity, it is currently under maintenance, and all deposits and withdrawals through the BNB chain are temporarily suspended until further updates. “We suspended BNB Chain after identifying a potential vulnerability, all systems are now under control, we are investigating the potential vulnerability, and we know the community will assist and help freeze any transfers.” Binance CEO Changpeng Zhao tweeted that a bug in the BNB Chain cross-chain bridge “Token Hub” resulted in additional BNB.

▌EU Confirms Total Ban on Encryption Services to Russians

The European Union has confirmed a blanket ban on cryptographic services to Russians, the European Commission. Existing bans on cryptoassets have been strengthened by banning all cryptoasset wallets, accounts or custody services. Recommendations made by the European Commission last week were signed off by EU governments. The previous crypto sanctions were published in the Official Journal of the European Union and applied to Russian citizens, residents, and entities unless they resided in the EU. Earlier on September 29, it was reported that the European Union will tighten restrictions on Russians’ crypto investments within the bloc in response to a referendum held in Russian-occupied Ukraine. The previous cap on crypto holdings of 10,000€ ($9,600) will be removed, which could mean Russians will not be able to hold any assets in EU crypto wallets, according to people familiar with the matter.

Policies

▌MAS: Not All Cryptocurrency-Related Activities Are Regulated

Tharman Shanmugaratnam, Senior Minister and Competent Minister of the Monetary Authority of Singapore, said in response to a parliamentary question that not all activities related to digital payment tokens (DPT) are regulated, offering transactions involving the purchase, sale or promotion of DPT exchange. The companies that offer these services will be regulated under the Payment Services Act 2019 (PS Act) in Singapore. As previously reported, Sopnendu Mohanty, chief fintech officer of the Monetary Authority of Singapore, said that it will crack down on cryptocurrency speculation.

▌FBI Issues Warning on Cryptocurrency Investment in Killing Pigs

The FBI (Federal Bureau of Investigation) issued a cryptocurrency investment warning that the FBI Miami office has cooperated with the US Internet Crime Complaint Center (IC3) to deal with cryptocurrency-related issues. The "killing pig" investment plan issued a warning. Fraudsters will masquerade as highly successful cryptocurrency traders, reach out to victims through various social media or dating apps, or impersonate potential friends or partners and spend a lot of time gaining the victim’s trust, offering false reward inducements to entice victims to make so-called investments. The FBI issued five reminders: 1. Verify the validity of any investment; 2. Watch out for domains impersonating legitimate financial institutions, especially cryptocurrency exchanges; 3. Watch out for misspelled URLs; 4. Do not download or use suspicious apps as an investment tool; 5. Be careful with any high-yield investment products. As previously reported, Coinbase also issued a warning about the cryptocurrency investment scam in August.

Cryptocurrency

▌ Zcash Blockchain Hit by Spam Attack, Node Operators Have Been Severely Damaged

An unidentified spammer is filling the transaction blocks of the Zcash blockchain with massive shielded transaction outputs, and has now wreaked havoc on Zcash node operators. According to blockchain data, miners in the network verified a block with four “shielded transaction outputs” at 1832666 block height. While the motive for this attack has not been determined, the goal is to impact the Zcash network and prevent potential node operators from mining by causing node failures due to memory, performance, and synchronization issues. The analysis believes that the hacker's method of using the Zcash blockchain or the so-called "Eclipse attack" is to deceive network nodes by creating an artificial environment around network nodes so that they can receive false transaction confirmations.

▌Grayscale Sets Up Entity to Invest in Bitcoin Mining Hardware

Grayscale announced the launch of Grayscale Digital Infrastructure Opportunities LLC (GDIO), an investment entity centered on Bitcoin mining, which will be available to accredited investors such as hedge funds and family offices. Grayscale strategy is to buy mining rigs at a steep discount from distressed miners and expand operations at a low cost in the coming months. The GDIO will then deploy the device to mine bitcoins, sell bitcoins daily, and distribute the resulting cash to investors, thereby generating revenue.

Key Economic Events

▌Minutes of the ECB meeting: Most members expressed their preference for raising the ECB's key interest rate by 75 basis points

The minutes of the ECB meeting recorded that a very large number of members, in line with ECB chief economist Philip Lane’s proposal, expressed a preference for raising the key ECB interest rates by 75 basis points. They believed that even after the current decision, the key policy rates would remain significantly below the neutral rate.