Getting scammed and hacked sounds like things that only happen to careless noobs, but that’s not actually the case.
Last week Vitalik Buterin had his Twitter account compromised…
This week a big name in business and media has been targeted by crypto thieves and lost a substantial sum–a story we’ll go ahead and dive into first.
Here’s what’s in today’s issue:
- Sam shares his thoughts on Mark Cuban losing $870k to a crypto hack, IOTA’s upgrade increasing supply by 60%, the return of the ICO, BitGo and Swan joining forces & an update on the SEC vs Binance US battle.
- This week on chain.
- This week’s trending coins by Rebecca.
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Mark Cuban Loses $870,000 to Crypto Thieves
Being a crypto-invested billionaire and entrepreneurial media presence, you might think that Mark Cuban inoculates against tech-related financial scams as a matter of habit, but you’d be mistaken, as last Friday the Shark Tank star had around $870,000 worth of various tokens stolen from MetaMask.
Or, perhaps, from what he thought was MetaMask, as we’ll see.
Suspicious movement of assets from one of Cuban’s addresses was spotted by a pseudonymous blockchain watcher, who tweeted (very unsympathetically) about the unusual activity.
The blockchain shows that Cuban also saved himself further losses by moving 2 million USDC that was on Polygon out of the compromised address and into Coinbase Custody.
Cuban stated, “I’m pretty sure I downloaded a version of MetaMask with some shit in it”, after he had searched on Google for Circle rather than for MetaMask, which suggests that he may not have downloaded the legit MetaMask product and might instead have been using a scam copy, putting his assets at risk.
Once again, this is a stark reminder to everyone using crypto to be extra alert at all times, and in this case it especially highlights the need to take great care that any products or apps that you use are the real thing.
One simple way to do this is to access crypto products through official links in their Twitter bios, since it’s easy to quickly identify whether or not a Twitter account is genuine.
As for who got Cuban’s cash, who knows?
Maybe the Lazarus Group just added to Pyongyang’s vaults.
IOTA Upgrade = Huge Supply Increase
Back in 2017 it was a major blockchain contender, but subsequently lost momentum and, while it had a resurgence in the bull run of 2021, failed to reclaim previous price levels.
However, the project is now scheduled to get an upgrade called Stardust which, among other things, aims to employ smart contracts and maximize network utility and activity, with L2 integration also part of the plan.
All of which sounds fine up to there, but what IOTA bagholders were not so glad to hear is that the hard fork, due in two weeks, will also come with a hefty 60% increase in token supply, or to put it another way, will come with the potential for a 60% token devaluation.
Sounds reasonable? A lot of holders, long-term IOTA supporters, casual passers-by, and random Twitter critics, don’t think so, and perhaps not surprisingly, price action since the IOTA official announcement on September 15th reflects that sentiment.
Return of the ICO? Japanese Startups Can Offer Crypto
If mention of IOTA got you all nostalgic for 2017, then here’s another nugget for you.
Cast your memory back to the ICO bubble of around the same time, when new blockchain projects would raise capital through Initial Coin Offerings, which came across as somewhere between a traditional IPO and internet-era crowdfunding.
Outside the anything-goes crypto world, this was generally seen as risky, and is equated with avoiding regulation, but over in Japan, the authorities are now taking a permissive approach and giving the official nod to ICO-esque business models.
It’s reported that Japanese regulators will allow startups to issue crypto tokens upon receiving funding from VCs and investment funds. This applies to limited partnerships, and removes restrictions that previously limited issuance to traditional assets.
Adding crypto into the mix in this way emphasizes Japan’s current open-mindedness around new tech, and it’s notable that the country also has a very liberal approach to AI development.
In other regions, there are ongoing discussions about copyright issues on materials used in machine learning, but in Japan, AI training is not subject to any copyright restrictions at all.
There’s plenty of recent speculation that the tech pendulum–particularly in relation to Web3 and AI–may be swinging towards Asia, and Japan looks like it’s positioning itself to be at the forefront of emerging trends.
BitGo and Swan to Form BTC Trust Company
Long-standing digital asset company BitGo and Bitcoin financial services provider Swan Bitcoin announced last Friday that they are working together to form a Bitcoin-only trust company, which will be the first of its kind in the US.
Core to this is the belief that custodial and exchange services should be separated, as is the norm in traditional finance, with BitGo CEO Mike Belshe stating,
“We believe the best model for the Bitcoin industry is the same battle-tested model that has been part of the US financial industry for over a century: the separation of exchange and custody.
Custody rules for traditional assets do not allow exchanges to also serve as custodians for good reason, as we’ve seen throughout Bitcoin history, from Mt. Gox to FTX.”
Plans are still subject to regulatory approval, but when that’s obtained, the trust is intended to serve (according to the official announcement), “company treasuries, asset managers, governments, pension plans, insurers, family offices, and on-ramps such as Swan.”
After the collapse of FTX, restoring confidence in crypto is key to furthering adoption, and so in this case, it makes sense to take a few pointers from the world of traditional finance.
SEC vs Binance: Documents to be Unsealed
In the latest development in the ongoing case between the SEC and Binance, which began in June with 13 charges against Binance US and the man we all know as CZ (that’s Changpeng Zhao, the Binance CEO) the District Court for the District of Columbia has approved a motion from the SEC to unseal and make public some previously confidential documents.
What the documents will contain, and to what end the SEC wants to make the contents public, remains to be seen, but the action comes after the SEC accused Binance US of a “lack of transparency” and “numerous discovery failures”, and so the SEC may be looking to publicly reinforce its case and make clear the charges against Binance.
What do you expect from this legal battle, does Binance stand a chance against the SEC? And what do recent scams–first taking in Vitalik Buterin, and now Mark Cuban–say about the state of crypto security? Can self-custody really go mainstream? Reply to this email and let us know your thoughts.
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Let’s begin with Bitcoin, where, as has been the case for a while, the HODL sentiment gets ever stronger.
In fact, when it comes to sitting on your stack, new all-time highs have been reached, with over 57% of BTC supply not moving in over two years.
Looking at bitcoin’s characteristics over its entire existence, it’s an asset that’s always been known for its enormous volatility. Critics often cited this as a problem, but for traders and longer-term holders, this feature is part of what makes BTC so attractive.
But with Bitcoin now approaching its fourth halving, is that volatility still present?
The answer is, by regular standards, partly, but–as things stand right now–not with the same tail-end extremes that were once present.
This makes sense, as we’d expect that as BTC matures, soaks up value, and is accepted as an alternative asset class, it should become more stable, although at the same time, there’s still a long way to go.
Moving on to look at annual volume on the Bitcoin network, in stablecoins, and in traditional payment methods, we can find some interesting long-term trends.
Although data is not completely up to date for 2023, both Bitcoin and stablecoins have surpassed PayPal, but it’s stablecoins that are now on a steeper upward trajectory, to the extent that they are approaching Visa.
Stablecoins are, arguably, the easiest part of the crypto world to get a quick grasp of, and they have obvious utility, so it will be interesting to see whether they can gain rapid adoption from here, and what effect, if any, that has on Bitcoin’s growth.
Moving on to look at Base, after an explosive summer, momentum is picking up again, with transactions again registering at very close to the August 21st high of 1.42 million.
The number of Base addresses with a balance also looks good, rising to hit 1.25 million.
This activity is partly thanks to the hype around Friend.tech, which makes use of Base, and which itself is continuing for the moment to maintain growth, as buyer and seller numbers, and protocol fees, show upward trends. We can’t know for how long this will continue, but it’s fair to say that it’s performing better, and for longer, than many expected.
It should also be noted though, that seller numbers are now increasing more quickly than buyer numbers, and there was some drama when DJ 3LAU stepped away from the platform, at around the same time as DJ and music producer Steve Aoki stepped in.
Over on Ethereum, there was a mysterious network anomaly last week, with a sudden, huge spike in daily active addresses from around 400K to over 1 million. This resulted in speculation that, for reasons uncertain, Binance was cleaning up dust from a large number of wallets, but for now, the exact cause behind the activity remains unclear.
And related to Ethereum, data shows that Polygon is now establishing a clear lead as the top Layer 2 scaling solution, with more weekly active users than its three nearest rivals combined.
This reflects the strides Polygon has made as a go-to option for established brands newly entering Web3.
And finally, it’s always good to get some broader economic and historical perspective, so here’s a horror chart to give you nightmares, showing the state (up to last year) of America’s finances and debt levels.
How does this large-scale scenario play out from here? That’s a matter for debate, but scarce assets are looking like a useful hold so you might want to grab a little more BTC.
Here are my key takeaways from the trends this week and it’s been a week of exciting partnerships and proposals.
- Veloce is a decentralized global sports and media group that’s launched its first proposal for the VEXT community to vote on.
- Polygon is an Ethereum sidechain that’s released 3 proposals that will kick off the transition to Polygon 2.0, including converting MATIC to POL.
- Bella Protocol is a DeFi platform that’s seen the team attend the Token2049 crypto conference in Singapore.
- Alpaca Finance is a lending protocol on BNB Chain and Fantom that’s launched a new BNB Savings Vault. Alpaca Finance has also concluded voting on its new Governance Vault Implementation proposal.
- Gala is a play-to-earn (P2E) gaming ecosystem that’s closed its TOWN to GALA burn. The Gala team has also announced a partnership with the filmmakers of the movie, Common Ground.
- ApeCoin is the utility token for the Bored Ape Yacht Club (BAYC) community that’s about to conclude voting on 4 improvement proposals. ApeCoin is also hosting a Merchant’s contest in September that’s giving away 25,000 APE tokens.
- Trust Wallet is a non-custodial wallet that’s integrated with BNB Chain’s Optimism-powered Layer-2 opBNB which has launched its mainnet.
- Bitcoin has rebounded to $27K and Deutsche Bank has announced it’s working on crypto custody services. Coinbase has confirmed it will support Bitcoin’s Lightning Network. A Nasdaq exec has also said BlackRock’s ETF rejection is not final.
- Solana is a Layer-1 blockchain that’s kicked off its Hacker House Hyperdrive Hackathon in India that’s seen an appearance from Balaji Srinivasan.
- Toncoin is the native token for the TON blockchain inherited from Telegram that’s unveiled its new crypto wallet in partnership with Telegram. TON Space is a self-custodial wallet now available to 800M active Telegram users.
- Sei is a brand-new Layer-1 built using the Cosmos SDK that’s launched its hackathon in partnership with One Piece Labs. Sei co-founder Jeff Feng has also been in Singapore to give a keynote speech at the Token2049 crypto conference.
- Filecoin is a decentralized storage network that’s seen the team complete its Developer Summit in Singapore. The Filecoin team will also be at ETHGlobal New York from September 22-24.
- Ethereum developers failed to get their new testnet Holesky launched due to a misconfiguration in one of the genesis files. The launch has now been delayed by two weeks. Billionaire Mark Cuban also lost $870K in a MetaMask phishing hack.
- Hifi Finance is a fixed rate borrowing platform on Ethereum that’s seen its HIFI token listed on exchanges such as Poloniex, HTX, Binance, and Bitmart.
- Optimism is an L2 Ethereum scaling solution that’s seen BNB Chain launch its Optimism-powered Layer-2 network called opBNB.
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.
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