"Companies that once serviced the boom in cryptocurrency mining are pivoting to take advantage of the latest data gold rush," reports the Guardian. Canadian company Hive Blockchain changed its name in July to Hive Digital Technologies and announced it was pivoting to AI. "Hive has been a pioneering force in the cryptocurrency mining sector since 2017. The adoption of a new name signals a significant strategic shift to harness the potential of GPU Cloud compute technology, a vital tool in the world of AI, machine learning and advanced data analysis, allowing us to expand our revenue channels with our Nvidia GPU fleet," the company said in its announcement at the time. The company's executive chairman, Frank Holmes, told Guardian Australia the transition required a lot of work. "Moving from mining Ethereum to hosting GPU cloud services involves buying powerful new servers for our GPUs, upgrading networking equipment and moving to higher tier data centres," he said.

"The only commonality is that GPUs are the workhorses in both cases. GPU cloud requires higher end supporting hardware and a more secure, faster data centre environment. There's a steep learning curve in the GPU cloud business, but our team is adapting well and learning fast."

For others, like Iris Energy, a datacentre company operating out of Canada and Texas, and co-founded by Australian Daniel Roberts, it has been the plan all along. Iris did not require any changes to the way the company operated when the AI boom came along, Roberts told Guardian Australia. "Our strategy really has been about bootstrapping the datacentre platform with bitcoin mining, and then just preserve optionality on the whole digital world. The distinction with us and crypto-miners is we're not really miners, we're datacentre people." The company still trumpets its bitcoin mining capability but in the most recent results Iris said it was well positioned for "power dense computing" with 100% renewable energy. Roberts said it wasn't an either-or situation between bitcoin mining and AI.

"I think when you look at bitcoin versus AI, the market will just reach equilibrium based on the market-based demands for each product," he said... Holmes said Hive also saw the two industries operating in parallel. "We love the bitcoin mining business, but its revenue is rather unpredictable. GPU cloud services should complement it well," he said.
Thanks to long-time Slashdot reader mspohr for sharing the article.

FT Alphaville: Making fun of corporate brands embarrassing themselves online is like shooting fish in a barrel. It's not hard, but washing off the resulting splatter of blood, scales, innards and half-digested crab is, so no one wins. Honestly though, what the hell Franklin? Really? OK maybe Alphaville should tread carefully here, given some readers see our ~cough~ somewhat different approach to news and commentary as at odds with mainFT's brand. But like Meb Faber we prefer our trillion-dollar asset management groups to be boring. Stick to solid, sober and purportedly smart investing. Don't tweet that 60/40 retirement portfolios should include "assets" where it gleefully says "speculation is a feature, not a bug."

Especially when said asset manager was famously named after Benjamin Franklin, because according to founder Rupert Johnson he "epitomised the ideas of frugality and prudence when it came to saving and investing." We get that Franklin needs to revamp itself. Despite a spate of aggressive M&A swelling its assets to $1.4tn, its share price has sagged over the past decade, giving it a current market cap of $13.6bn. That's less than AppLovin, Domino's Pizza and the world's biggest producer of frozen potato chips. It's only barely enough for inclusion into the S&P 500. Beyond the obvious and well-documented challenges of being a very traditional active asset manager in a world that mostly loves alternatives and passive funds, Franklin also has a rep for being a bit old-fashioned. Promoting crypto therefore probably seems like an obvious, fellow-kids way to seem more cool and edgy.

An anonymous reader quotes a report from Wired: Stablecoins, cryptocurrencies pegged to a stable value like the US dollar, were created with the promise of bringing the frictionless, border-crossing fluidity of Bitcoin to a form of digital money with far less volatility. That combination has proved to be wildly popular, rocketing the total value of stablecoin transactions since 2022 past even that of Bitcoin itself. It turns out, however, that as stablecoins have become popular among legitimate users over the past two years, they were even more popular among a different kind of user: those exploiting them for billions of dollars of international sanctions evasion and scams.

As part of itsannual crime report, cryptocurrency-tracing firm Chainalysis today released new numbers on the disproportionate use of stablecoins for both of those massive categories of illicit crypto transactions over the last year. By analyzing blockchains, Chainalysis determined that stablecoins were used in fully 70 percent of crypto scam transactions in 2023, 83 percent of crypto payments to sanctioned countries like Iran and Russia, and 84 percent of crypto payments to specifically sanctioned individuals and companies. Those numbers far outstrip stablecoins' growing overall use -- including for legitimate purposes -- which accounted for 59 percent of all cryptocurrency transaction volume in 2023.

In total, Chainalysis measured $40 billion in illicit stablecoin transactions in 2022 and 2023 combined. The largest single category of that stablecoin-enabled crime was sanctions evasion. In fact, across all cryptocurrencies, sanctions evasion accounted for more than half of the $24.2 billion in criminal transactions Chainalysis observed in 2023, with stablecoins representing the vast majority of those transactions. [...] Chainalysis concedes that the analysis in its report excludes some cryptocurrencies like Monero and Zcash that are designed to be harder or impossible to trace with blockchain analysis. It also says it based its numbers on the type of cryptocurrency sent directly to an illicit actor, which may leave out other currencies used in money laundering processes that repeatedly swap one type of cryptocurrency for another to make tracing more difficult. "Whether it's an individual located in Iran or a bad guy trying to launder money -- either way, there's a benefit to the stability of the US dollar that people are looking to obtain," says Andrew Fierman, Chainalysis' head of sanctions strategy. "If you're in a jurisdiction where you don't have access to the US dollar due to sanctions, stablecoins become an interesting play."

Fierman points to Nobitex, the largest cryptocurrency exchange operating in the sanctioned country of Iran, as well as Garantex, a notorious exchange based in Russia that has been specifically sanctioned for its widespread criminal use. According to Chainalysis, "Stablecoin usage on Nobitex outstrips bitcoin by a 9:1 ratio, and on Garantex by a 5:1 ratio," reports Wired. "That's a stark difference from the roughly 1:1 ratio between stablecoins and bitcoins on a few nonsanctioned mainstream exchanges that Chainalysis checked for comparison."

Coinbase said buying cryptocurrency on an exchange was more like collecting Beanie Babies than investing in a stock or bond. From a report: The biggest US crypto exchange made the comparison Wednesday in a New York federal court hearing. Coinbase was arguing for the dismissal of a Securities and Exchange Commission lawsuit accusing it of selling unregistered securities. William Savitt, a lawyer for Coinbase, told US District Judge Katherine Polk Failla that tokens trading on the exchange aren't securities subject to SEC jurisdiction because buyers don't gain any rights as a part of their purchases, as they do with stocks or bonds. "It's the difference between buying Beanie Babies Inc and buying Beanie Babies," Savitt said. The question of whether digital tokens are securities has divided courts.

An anonymous reader shares a column: Apple delisting a dozen global crypto apps -- relied by big traders in India, in part due to its tax evasive properties -- from its Indian App Store seems the final nail in the coffin, capping a brutal two years. The pending removal across Google Play, internet providers and beyond caps a journey mired with shutdowns, pivots and relocations abroad for Indian crypto startups. The web3 dreams of local entrepreneurs now appear dashed against the rocky shores of regulatory resistance.

Stephen Harrison, an Englishman living in Thailand who posed as chief executive Steven Reece Lewis for the launch of the HyperVerse crypto scheme, told the Guardian Australia that he was paid to play the role of chief executive but denies having 'pocketed' any of the money lost. He says he received 180,000 Thai baht (about $7,500) over nine months and a free suit, adding that he was "shocked" to learn the company had presented him as having fake credentials to promote the scheme. From the report: He said he felt sorry for those who had lost money in relation to the scheme -- which he said he had no role in -- an amount Chainalysis estimates at US$1.3 billion in 2022 alone. "I am sorry for these people," he said. "Because they believed some idea with me at the forefront and believed in what I said, and God knows what these people have lost. And I do feel bad about this. "I do feel deeply sorry for these people, I really do. You know, it's horrible for them. I just hope that there is some resolution. I know it's hard to get the money back off these people or whatever, but I just hope there can be some justice served in all of this where they can get to the bottom of this." He said he wanted to make clear he had "certainly not pocketed" any of the money lost by investors.

Harrison, who at the time was a freelance television presenter engaged in unpaid football commentary, said he had been approached and offered the HyperVerse work by a friend of a friend. He said he was new to the industry and had been open to picking up more work and experience as a corporate "presenter." "I was told I was acting out a role to represent the business and many people do this," Harrison said. He said he trusted his agent and accepted that. After reading through the scripts he said he was initially suspicious about the company he was hired to represent because he was unfamiliar with the crypto industry, but said he had been reassured by his agent that the company was legitimate. He said he had also done some of his own online research into the organization and found articles about the Australian blockchain entrepreneur and HyperTech chairman Sam Lee. "I went away and I actually looked at the company because I was concerned that it could be a scam," Harrison said. "So I looked online a bit and everything seemed OK, so I rolled with it." The HyperVerse crypto scheme was promoted by Lee and his business partner Ryan Xu, both of which were founders of the collapsed Australian bitcoin company Blockchain Global. "Blockchain Global owes creditors $58 million and its liquidator has referred Xu and Lee to the Australian Securities and Investments Commission for alleged possible breaches of the Corporations Act," reports The Guardian. "Asic has said it does not intend to take action at this time."

Rodney Burton, known as "Bitcoin Rodney," was arrested and charged in the U.S on Monday for his alleged role in promoting the HyperVerse crypto scheme. The IRS alleges Burton was "part of a network that made 'fraudulent' presentations claiming high returns for investors based on crypto-mining operations that did not exist," reports The Guardian.

On Thursday, six spot bitcoin exchange-traded funds are expected to start trading on stock exchanges from Cboe Global Markets, according to a notice posted on CBOE's website. However, the listings still need to be approved by the U.S. Securities and Exchange Commission. CoinDesk reports: The Ark 21 (ARKB), Fidelity (FBTC), Franklin Templeton (EZBC), Invesco (BTCO), VanEck (HODL) and WisdomTree (BTCW) bitcoin ETFs appeared on the exchange operator's "New Listings" page on Wednesday. The listing doesn't mean that the ETFs will be approved by SEC. The commission still needs to approve the applicants' 19b-4 and S1 filings.

"We are still awaiting SEC approval of our spot bitcoin ETFs," a Cboe spokesperson said. "The notices posted to our website are standard procedure in preparation of an ETF launch." The notice comes a day after the SEC's X account was "compromised," posting an unauthorized tweet regarding bitcoin ETFs.

UPDATE: The SEC has approved the listing and trading of 11 spot bitcoin exchange-trading product (ETP) shares, including those of Grayscale, Bitwise and Hashdex. SEC Chair Gary Gensler writes: Today, the Commission approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares. I have often said that the Commission acts within the law and how the courts interpret the law. Beginning under Chair Jay Clayton in 2018 and through March 2023, the Commission disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP.

We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed. The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale's proposed ETP (the Grayscale Order).[1] The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares. [...] "While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin," concludes Gensler. "Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto." The full statement can be read here.

Apple has pulled apps of at least nine crypto exchanges including Binance and Kraken from its App Store in India, less than two weeks after most of these global firms were flagged for operating "illegally" in the country. From a report: Financial Intelligence Unit, an Indian government agency that scrutinizes financial transactions, late last month issued show cause notices to nine crypto firms and alleged that they weren't compliant with India's anti-money laundering rules. FIU had asked India's IT Ministry to block websites of all the nine services in India. Other exchanges whose apps have been pulled are Huobi, Gate.io, Bittrex, and Bitfinex. Bitstamp, another offending exchange named by FIU, was still operational on App Store in India, though the eponymous app of OKX had also disappeared.

With the approval of new rule change applications, the SEC is now allowing bitcoin ETFs to be traded in the United States.



UPDATE: The SEC said that the announcement about bitcoin ETFs on social media was incorrect, and that its X account was compromised. "The SEC's @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff," an SEC spokesperson told CNBC.

"The SEC has not approved the listing and trading of spot bitcoin exchange-traded products," said SEC Chair Gary Gensler in a post on X. From the original CNBC article: The decision will likely lead to the conversion of the Grayscale Bitcoin Trust, which holds about $29 billion of the cryptocurrency, into an ETF, as well as the launch of competing funds from mainstream issuers like BlackRock's iShares. The approval could prove to be a landmark event in the adoption of cryptocurrency by mainstream finance, as the ETF structure gives institutions and financial advisors a familiar and regulated way to buy exposure to bitcoin.

The SEC has for years opposed a so-called spot bitcoin fund, with several firms filing and then withdrawing applications for ETFs in the past. SEC Chair Gary Gensler has been an outspoken critic of crypto during his tenure. However, the regulator appeared to change course on the ETF question in 2023, possibly due in part to an August loss to Grayscale in court which criticized the SEC for blocking bitcoin ETFs while allowing funds that track bitcoin futures.

Inc. reports that funding for Web3 startups in 2023 "declined 73% from 2022, according to new data from Crunchbase." In total, Web3 startups netted $7.8 billion in 2023, compared with the $21.5 billion raised in 2022. It's part of a broader and sobering comedown from the stratospheric highs of tech's pandemic boom time, in which investment flowed to startups at historic rates, valuations soared and unicorns emerged seemingly every week. Last year firmly belonged to AI, with $17.8 billion invested in the sector, according to Dealroom.

Even as some remain convinced of Web3's future, uncertainty lingers over certain stumbling blocks, including how the technology can be farmed out to a massive user base on par with today's biggest tech firms. "I haven't seen [a company] that screams to me, 'this is what's going to get people on board,'" says Jillian Grennan, a business and law professor at UC Berkeley who studies Web3. Web3 startups are failing to net the investment indicative of revolutionary tech as AI steals the show and the dough. The reasons vary: Many have pointed out that defining Web3 is tricky, and Grennan mentions that appetites for navigating digital worlds may have been dented by pandemic-born Zoom fatigue.

Beyond that, there's the question of how to regulate crypto — a marquee aspect of the Web3 universe--which may have given investors some pause. "In this next period, we're going to get some important regulatory clarity that we just haven't had," Richard Dulude, co-founder and partner at Underscore VC tells Inc. "A lot of people sit on the sidelines until they have that...."

Interest rate hikes and the bloated startup valuations of 2021 have meant VCs can't throw their weight behind exciting ideas alone, Dulude says. The sector is undergoing "this transition from chasing growth, and trying to grow at all costs to actually investing behind the growth," he says.... All the investment couldn't compensate for one vulnerability: The technology is hard to use... Macroeconomic factors are of course important, but an industry resurgence depends first on whether Web3 can become easier to navigate for average people and provide them with a reason to hang around. "It's still pretty cumbersome to interact with the technology," Dulude explains. "Until it's made usable, it's really hard to break out of the current market environment we're in."

An anonymous reader quotes a report from The Guardian: A chief executive officer whose claimed qualifications appear to have no basis in fact was used to promote the HyperVerse crypto fund, alongside celebrity messages of support, as part of a push to recruit new investors into the scheme. A Guardian Australia investigation last month revealed thousands of people have lost millions of dollars to the HyperVerse crypto scheme, which was promoted by the Australian entrepreneur Sam Lee and his business partner, Ryan Xu, two of the founders of the collapsed Australian bitcoin company Blockchain Global. Blockchain Global owes creditors $58 million and its liquidator has referred Xu and Lee to the Australian Securities and Investments Commission for alleged possible breaches of the Corporations Act. Asic has said it does not intend to take action at this time. The HyperVerse investment scheme is among those that appear to have escaped scrutiny in Australia despite being flagged by regulators overseas, by one as a possible "scam" and another as a "suspected pyramid scheme." Lee has denied HyperVerse was a scam and disputes being its founder.

A man named Steven Reece Lewis was introduced as the chief executive officer of HyperVerse at an online global launch event in December 2021, with video messages of support from a clutch of celebrities released on Twitter the following month, including from the Apple co-founder Steve Wozniak and actor Chuck Norris. Promotional material released for HyperVerse, which was linked to a previous scheme called HyperFund, said Reece Lewis was a graduate of the University of Leeds and held a master's degree from the University of Cambridge. A brief career summary of Reece Lewis, which was presented in a video launch for potential investors, said he had worked for Goldman Sachs, sold a web development company to Adobe and launched an IT start-up firm, before being recruited to head up HyperVerse by the HyperTech group. This was the umbrella organization for a range of Hyper-branded crypto schemes.

Lee spoke at the launch event as "chairman" of the HyperTech group, while Xu was introduced as the group's "founder." The company praised Reece Lewis's "strong performance and drive," citing his credentials as the reason for his recruitment. Guardian Australia has confirmed that neither the University of Leeds nor the University of Cambridge has any record of someone by the name Steven Reece Lewis on their databases. No records exist of Steven Reece Lewis on the UK companies register, Companies House, or on the US Securities and Exchange Commission. Adobe, a publicly listed company since 1986, has no record of any acquisition of a company owned by a Steven Reece Lewis in any of its public SEC filings. It is understood that Goldman Sachs could find no record of Reece Lewis having worked for the company. Guardian Australia was unable to find a LinkedIn profile for Reece Lewis or any internet presence other than HyperVerse promotional material. A Twitter account in Reece Lewis's name was set up a month before he appeared in the HyperVerse video launch and was used to promote the scheme on the platform for just six months before the account became inactive.

In a letter (PDF) citing "strong public interest in a prompt resolution," U.S. prosecutors said they do not plan to proceed with a second trial of FTX founder Sam Bankman-Fried (SBF). The Register reports: The prosecutors reasoned that much of the evidence that would be submitted had already been considered in his October trial -- an event which yielded a guilty verdict after just four hours of jury deliberation. Although forgoing an additional trial means not holding SBF accountable for conspiracy to make unlawful campaign contributions, additional court dates would most certainly delay a scheduled March 2024 sentencing, as it would require negotiating with The Bahamas regarding terms of extradition.

SBF was extradited to the US from The Bahamas, where his crypto exchange FTX was headquartered, in December 2022. While the island nation agreed to extradition on seven out of eight charges, local authorities did not consent to extradition on a charge of conspiracy to make unlawful campaign contributions. US courts were therefore unable to pursue the eighth charge.

SBF's first trial yielded seven guilty verdicts. Those included two counts of conspiracy to commit wire fraud, two counts of wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. Together they carry a combined maximum sentence of 110 years. However, even though the campaign finance charge was not pursued, it could be considered relevant in sentencing matters, wrote the attorneys in their filing. The prosecutors' letter detailed that the sentencing judgment will also "likely include orders of forfeiture and restitution for the victims of the defendant's crimes."

Financial Intelligence Unit, an Indian government agency which scrutinizes financial transactions, said Thursday nine global crypto exchanges -- including Binance, Kraken, Kucoin and Mexc -- are operating "illegally" in the country without complying with the local anti-money laundering act and asked the IT Ministry to block their websites. From a report: FIU said it has issued show cause notices to all nine firms. Global crypto exchanges are required to comply with India's anti-money laundering rules and cannot evade the guidelines just because they don't have physical presence in the country, the government agency said.

Nigeria's central bank has lifted a ban on transacting in cryptocurrencies, while saying global trends had shown a need to regulate such activities, the bank said in its latest circular. From a report: The Central Bank of Nigeria (CBN) in Feb. 2021 barred banks and financial institutions from dealing in or facilitating transactions in crypto assets, citing money laundering and terrorism financing risks. Subsequently Nigeria's Securities and Exchange Commission (SEC) in May last year published regulations for digital assets that signalled Africa's most populous country was trying to find a middle ground between an outright ban on crypto assets and their unregulated use.

In a circular dated Dec. 22, the CBN said current trends globally have shown there is a need to regulate the activities of virtual asset service providers (VASPs), which include cryptocurrencies and crypto assets. The latest guidelines spell out how banks and financial institutions (FI) should open accounts, provide designated settlement accounts and settlement services and act as channels for forex inflows and trade for firms transacting in crypto assets. VASPs would need to be licensed by the Nigerian SEC to engage in the crypto business.

Binance will pay $2.7 billion to the Commodity Futures Trading Commission (CFTC) for evading federal law and operating an illegal derivatives exchange. Meanwhile, the cryptocurrency exchange's founder, Changpeng "CZ" Zhao, will pay $150 million.

"The court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC," wrote the CFTC in a statement. CoinTelegraph reports: The approved settlement marks the conclusion of a long-running case against CZ and Binance by the CFTC. On Nov. 21, CZ agreed to step down from his role at the helm of Binance as part of a wider settlement with the U.S. Department of Justice, the Treasury Department and the CFTC. On the same day, Zhao pleaded guilty to several civil charges and one criminal charge relating to Anti-Money Laundering laws. On Dec. 7, CZ was ordered to remain in the U.S. until his Feb. 23, 2024 sentencing date. He faces up to 18 months in prison on money laundering charges and has agreed not to appeal any potential sentence up to that length.

As part of the settlement, both CZ and Binance have agreed to take further steps to ensure Know Your Customer measures are maintained on the exchange as well as requiring Binance to implement a formalized corporate governance structure, including a board of directors with independent members, a compliance committee and an audit committee. The court also made a separate order for Binance's former chief compliance officer, Samuel Lim, to pay a $1.5 million civil monetary penalty for "aiding and abetting Binance's violations and engaging in activities outside of the U. S. to willfully evade or attempt to evade U.S. law."

An anonymous reader quotes a report from BleepingComputer: Former Amazon security engineer Shakeeb Ahmed pleaded guilty this week to hacking and stealing over $12.3 million from two cryptocurrency exchanges in July 2022. The two affected companies are Nirvana Finance, a decentralized crypto exchange, and an unnamed exchange on the Solana blockchain platform that Ahmed hacked using his blockchain audit and smart contract reverse engineering skills. He first targeted the undisclosed crypto exchange by manipulating a smart contract to introduce false pricing data, generating roughly $9 million worth of inflated fees. Ahmed later withdrew the funds and offered to return all but $1.5 million on the condition that the exchange refrained from involving law enforcement.

Although not explicitly named by the Justice Department, the details of the attack match those of a July 2022 breach impacting the Crema Finance decentralized finance (DeFi) platform. Shortly after this first hack, Ahmed exploited a Nirvana Finance DeFi protocol smart contract loophole to take a flash loan of ANA cryptocurrency tokens at a low price and sell it back at a higher rate, yielding him approximately $3.6 million. Despite being offered a $300,000 bounty to return the stolen crypto assets, Ahmed kept everything he stole (representing all the funds owned by Nirvana Finance) after demanding $1.4 million and not reaching an agreement, forcing the exchange to shut down.

Seeking to conceal his actions and obscure the digital trail of the stolen funds, Ahmed used several cryptocurrency mixers (including Samourai Whirlpool), the Solana and Ethereum blockchains, and foreign exchanges to convert the millions he stole into Monero, a cryptocurrency known for its enhanced privacy and anonymity. Wary of being apprehended, Ahmed actively sought ways to elude detection and extradition. His online searches revealed his interest in strategies to flee the United States, thwart asset seizures, and secure citizenship in different nations, clearly showcasing Ahmed's intention to sidestep legal repercussions for his actions. [...] Ahmed entered a guilty plea for a single computer fraud charge, an offense with a maximum imprisonment term of five years. Additionally, he committed to compensating his victims with a sum totaling $5,071,074.23.

Solana Saga smartphones sales are surging after arbitrage traders realized every phone comes with an airdrop of BONK meme coins valued at more than the cost of the hardware. "Saga sales have >10x'd in the past 48 hours, and are now on track to sell out before the new year," said Solana co-founder Raj Gokal in a post on X. As a result, Gokal's counterpart, Anatoly Yakovenko, said they'll need to raise the price. CoinDesk reports: The euphoria around BONK -- Solana's dog-themed equivalent to Dogecoin -- has led to a turnaround story for Saga, which just one week ago faced dimming prospects amid forgettable sales figures. Saga is a blockchain-enabled smartphone with special features for storing one's crypto securely on the phone's own hardware. The Saga Discord server exploded on Thursday with newcomers declaring they just bought the phone and wanted to get the airdrop.

According to posts on the Discord server, the BONK airdrop is available to those who download the BONK app from Saga's crypto-forward custom app store. "When you physically have the phone you will be able to mint 'Genesis token' through the 'dApp store, [this] token is eligible to claim the bonk drop," said a user who identified themselves as an employee of Solana Mobile in the Discord server. "The bonk drop is NOT forever, at some point that promotion will end," the user, whose screen name was Jax, said in the Discord. "As of right now the claim is live and is up to the bonk team on when they'd want to close it. No end date yet."

The U.S. Securities and Exchange Commission on Friday denied a petition by the country's largest crypto exchange, Coinbase Global, seeking new rules from the agency for the digital asset sector. From a report: The five-member body, in a 3-2 vote, said it would not propose new rules because it fundamentally disagreed that current regulations are "unworkable" for the crypto sphere, as Coinbase has argued. The letter marked the latest in a broader tug-of-war between the crypto sector and the top U.S. markets regulator, which has repeatedly said most crypto tokens are securities and subject to its jurisdiction.

The agency has sued several crypto companies, including Coinbase, for listing and trading crypto tokens which it says should be registered as securities. "Existing laws and regulations apply to the crypto securities markets," SEC Chair Gary Gensler said in a separate statement supporting the decision. In 2022, the company pressed the SEC to create a bespoke set of rules for the crypto sector, arguing that existing U.S. securities laws are inadequate. In April, Coinbase appealed to a judge to force the SEC to respond to the petition.

An anonymous reader quotes a report from TechCrunch: Hackers compromised the code behind a crypto protocol used by multiple web3 applications and services, the software maker Ledger said on Thursday. Ledger, a company that makes a widely used and popular crypto hardware and software wallet, among other products, announced on X (previously Twitter) that someone had pushed out a "malicious version" of its Ledger Connect Kit, a library that decentralized apps (dApps) made by other companies and projects use to connect to the Ledger wallet service.

"A genuine version is being pushed to replace the malicious file now. Do not interact with any dApps for the moment. We will keep you informed as the situation evolves," Ledger wrote. Soon after, Ledger posted an update saying that the hackers had replaced the genuine version of its software some six hours earlier, and that the company was investigating the incident and would "provide a comprehensive report as soon as it's ready." After this story was published, Ledger spokesperson Phillip Costigan shared more details about the hack with TechCrunch and on X.

Costigan said that a former Ledger employee was victim of a phishing attack on Thursday, which gave the hackers access to their former employee's NPMJS account, which is a software registry that was acquired by GitHub. From there, the hackers published a malicious version of the Ledger Connect Kit. "The malicious code used a rogue WalletConnect project to reroute funds to a hacker wallet," Costigan said. Then, Ledger deployed a fix within 40 minutes of the company becoming aware of the hack. The malicious file, however, was live for round 5 hours, but "the window where funds were drained was limited to a period of less than two hours," according to Costigan. Ledger also "coordinated" with WalletConnect which "quickly disabled the the rogue project," essentially stopping the attack, according to Costigan. Costigan also said Ledger pushed out a genuine software update that is "safe to use." "We are actively talking with customers whose funds might have been affected, and working proactively to help those individuals at this time," the Ledger spokeperson said, adding that the company believes it has identified the hackers' wallet.

An anonymous reader quotes a report from TechCrunch: Jack Dorsey's Block (the company formerly known as Square) announced today that it is releasing its hardware Bitcoin wallet, Bitkey, in 95 countries. However, users can only preorder the device at the moment, with shipping starting in early 2024. The device will cost $150 USD. Block's pitch to Bitcoin holders is that using a self-custodial crypto wallet is more secure than keeping their crypto assets in custodial wallets or exchanges.

Self-custodial wallets put the onus on users to remember -- or store securely -- passwords or long seed phrases to unlock their accounts. The Proto team at Block, which worked on developing the Bitkey wallet, said that it solved this problem by using a two-of-three authentication mechanism. Two keys lie with the customer: the hardware wallet and a mobile app. Bitkey stores the third key on its server. The company argues that by having access to just one key, it can't access or move customers' Bitcoins.

Block said that it uses its server-side key only to authenticate transactions to move Bitcoin when they just have their phone and to recover their account when their device or phone is lost. The company said the server-side key will also be able to handle the scenario when a customer loses both the phone and the hardware wallet. Recovery was recently detailed in a blog post by the company. [...] Block has partnered with crypto exchange Coinbase and the company's own Cash App to help people easily buy or transfer (or both) Bitcoins to the hardware wallet. The company said that the ability to transfer Bitcoin from Coinbase and Cash App will be rolled out immediately with other features coming later.