Weekly Blockchain Blog – November 18, 2024 - Fin Tech

In this issue:

Crypto Exchanges and Stablecoin Issuers Announce Multiple New Products
Digital Assets Trade Association Calls for U.S. Stablecoin Regulation
Research Papers Address DAOs, Crypto – AI Use Cases, Crypto Product Rollout
Multiple DOJ Press Releases Detail Ongoing Crypto Enforcement Actions
Crypto Threat Dashboard Posted; Paper Analyzes Blockchain Network Security

Crypto Exchanges and Stablecoin Issuers Announce Multiple New Products

Multiple crypto sector companies have recently announced new products. In a press release, LayerZero, "an omnichain interoperability protocol that unifies development across 90 blockchains," announced that the PYUSD stablecoin "now utilizes LayerZero's Omnichain Fungible Token (OFT) Standard to enable transfers between Ethereum and Solana." According to the press release, "[b]y utilizing LayerZero, PYUSD will now enable users who self-custody their tokens to seamlessly transfer assets between blockchains – without needing to rely on centralized platforms."

Another recent press release announced that "EDX Markets, a leading digital asset technology firm that combines an institution-only trading venue with a central clearinghouse ... reported record volumes, unveiled a new matching engine and announced the launch of SHIB and DOGE on its trading platform." Among other things, the press release notes that EDX Markets' average trading volume grew 59 percent in Q3.

In a third development, a major U.S. cryptocurrency exchange announced the launch of its new COIN50 index, "a benchmark representing the top 50 digital assets listed" on the exchange. According to a blog post, "[c]rypto traders can use the COIN50 as a benchmark to track broader market trends and gain insight into the overall performance of the cryptoeconomy." Additionally, "eligible traders can trade this index via a COIN50 perpetual future (COIN50-PERP) with up to 20x leverage" on certain of the exchange's trading platforms.

In a fourth development, Tether, the issuer of the USDT stablecoin, announced the launch of WDK Wallet Development Kit by Tether. According to a blog post, the "open-source, modular software development kit" is "designed to empower businesses and developers to seamlessly integrate non-custodial wallets and user experiences for USD₮ and Bitcoin in any app, website, and device."

Finally, according to recent reports, Japanese cryptocurrency exchange Coincheck has received approval from the U.S. Securities and Exchange Commission to list its shares on a major U.S. stock exchange. Coincheck is reportedly expected to have its shares listed on the U.S. stock exchange as early as December after completing a merger with a special purpose acquisition company.

For more information, please refer to the following links:

Digital Assets Trade Association Calls for U.S. Stablecoin Regulation

By Isabelle Sterling

A major U.S. digital assets trade association recently issued a call to action aimed at policymakers to support stablecoins in a report presenting various research findings indicating stablecoins can continue to strengthen the dominance of the U.S. dollar. The report, which is addressed to policymakers, emphasizes the dominance of USD-linked stablecoins and "highlights the increasing global adoption of USD-linked stablecoins and their critical role in sustaining the U.S. dollar's position as the world's primary reserve currency." The report also "evaluates current U.S. legislative proposals, identifying both the opportunities and challenges in developing a regulatory framework that supports a diverse and responsible stablecoin ecosystem." According to the report, the lack of a regulatory framework for stablecoins leaves open the door to other countries developing their own stablecoins, potentially diminishing the importance of the U.S. dollar globally. The report concludes by asking policymakers to "swiftly craft a regulatory framework that empowers the next phase of U.S. dollar diplomacy," saying, "Immediate action is essential to secure the dollar's influence and leadership in the digital age."

For more information, please refer to the following links:

Research Papers Address DAOs, Crypto – AI Use Cases, Crypto Product Rollout

By John Robertson

A major U.S. cryptocurrency exchange recently published a report with new research on the state of onchain governance. According to the report, onchain governance for decentralized autonomous organizations (DAOs) continues to struggle with highly concentrated governance tokens and low participation rates. The report states that less than 0.1 percent of total governance token holders own more than 50 percent of the total supply for several major governance tokens on the Ethereum network. The report also finds that only 1 percent of DAO token holders are active in governance voting discussions, and even fewer token holders participate in the final voting process.

Another major cryptocurrency exchange recently released research examining the growing intersection between artificial intelligence and cryptocurrencies. The report begins by comparing AI agents, which retain a level of autonomy, with bots, which are task-specific programs. The report then details several implementations of AI agents in the crypto space, including, among others, the use of an AI agent to market a "memecoin"; a platform where users may create and tokenize AI agents; and the creation of AI agent-led hedge funds using a DAO structure. The report concludes that while AI agent development is in its early days, there is a promising future for the technology to be paired with crypto.

Finally, blockchain analytics company Chainalysis recently published a report detailing the steps it believes traditional financial institutions should undertake when considering cryptocurrency product rollouts. The report describes the following phases, which it refers to as the "Crypto Maturity Journey": (1) education, strategy and planning; (2) supporting and interacting with cryptocurrency businesses; (3) offering cryptocurrency-based investment products, such as Bitcoin ETPs; (4) offering crypto deposits and custody; and (5) expanding into complex products such as crypto loans, DeFi and stablecoin payments.

For more information, please refer to the following links:

Multiple DOJ Press Releases Detail Ongoing Crypto Enforcement Actions

By Robert A. Musiala Jr.

The U.S. Department of Justice (DOJ) recently published four press releases related to crypto industry enforcement actions. In two instances, the press releases announced the sentencing of defendants. The first of these related to the sentencing of one defendant, Ilya Lichtenstein, to five years in prison "for his involvement in a money laundering conspiracy arising from the hack and theft of approximately 120,000 bitcoin" from a global cryptocurrency exchange in 2016. According to the press release, Lichtenstein's wife, Heather Morgan, is scheduled to be sentenced on November 18 for her role in the scheme.

The second press release announced that the operator of Bitcoin Fog, "the longest-running bitcoin money laundering service on the darknet," was sentenced to 12 years and six months in prison. According to the press release, over the course of 2011 to 2021, "Bitcoin Fog gained notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement and processed transactions involving over 1.2 million bitcoin, valued at approximately $400 million at the time the transactions occurred."

A third DOJ press release announced the conviction of a defendant on charges of "money laundering and operating an unlicensed, 'no questions asked' money transmitting business that converted more than $1 million in cash to the digital currency [b]itcoin, including on behalf of scammers and a drug dealer." According to the press release, the defendant concealed the true nature of his business from banks, cryptocurrency exchanges and state authorities by holding the business out to be a vending machine business.

A final DOJ press release announced that a defendant has pleaded guilty to charges involving "a scheme to launder millions of dollars in proceeds of cryptocurrency investment scams." According to the press release, as part of the scheme, the defendant would receive victim funds in financial accounts he controlled, convert the funds to USDT and then distribute the USDT to cryptocurrency wallets he controlled.

For more information, please refer to the following links:

Crypto Threat Dashboard Posted; Paper Analyzes Blockchain Network Security

By Robert A. Musiala Jr.

Web3 data analytics company Dune recently launched a cryptocurrency hacks, exploits and social engineering dashboard that tracks various metrics associated with the loss of crypto to threat incidents. The dashboard provides data on more than 5,500 incidents resulting in total losses of over $2.4 billion. Among other things, the dashboard provides data on crypto addresses and the flow of funds related to the incidents reported in the newly launched tool.

A recently published research paper analyzes the costs and benefits associated with perpetrating a 51 percent attack on the Bitcoin Network and a 34 percent attack on the Ethereum Network – known as the Byzantine fault tolerance thresholds of the respective blockchain networks. Among other things, the paper's findings "suggest that the current state of security in Bitcoin and Ethereum make attacks economically unfeasible." The paper's findings also "suggest that block producers engage in speculative behavior ahead of fee cycles, which ends up increasing network security even when fees are low and trending downwards." According to an abstract, the paper "contributes to the discourse around the long term viability of deflationary monetary policies used by Bitcoin and Ethereum and their impact on miner incentives and network security."

For more information, please refer to the following links:

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Weekly Blockchain Blog – November 18, 2024

Contributor

Crypto Exchanges and Stablecoin Issuers Announce Multiple New Products

Digital Assets Trade Association Calls for U.S. Stablecoin Regulation

Research Papers Address DAOs, Crypto – AI Use Cases, Crypto Product Rollout

Multiple DOJ Press Releases Detail Ongoing Crypto Enforcement Actions

Crypto Threat Dashboard Posted; Paper Analyzes Blockchain Network Security

Technology

Contributor

United States