Blockchain Bites: DeFi Hacker Is Back, Oil Craters and Big Tech Won’t Sue You

The dForce hacker has returned nearly all of the stolen funds from this weekend’s $25 million exploit, China confirms its digital yuan wallet test while big tech vows not to sue you.

Scanning transactions on the Ethereum blockchain shows that a wallet address conspicuously called “Lendf.Me Hack” has sent a series of ether, bitcoin derivatives and an assortment of stablecoins payments to the admin address for the Lendf.Me project. As of Tuesday morning, the amounts total around $24 million, or about $1 million short of the initial attack. The hacker’s motives are unclear.

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Top Shelf

Unknown Motives

The hacker that drained $25 million in cryptocurrency from decentralized finance protocol dForce over the weekend has returned roughly $24 million of the stolen funds. Multiple transactions from an address labelled “Lendf.Me Hack” were sent to the admin address for the Lendf.Me project, as seen on the Ethereum blockchain. Curiously, the hacker did not return exactly the same balance of assets as were stolen, but returned some of the value in other types of tokens. 

China Confirms

China’s central bank confirmed it will be testing a mobile application for storing and exchanging the digital yuan, after screenshots circulated on social media. The People’s Bank of China will roll out internal tests for the national digital currency (DECP) in Shenzhen, Suzhou, Xiong’An and Chengdu, according to the bank’s Friday statement, but insists it’s just a test.

Amicus Association

The Blockchain Association has filed a “friend-of-the-court” brief in the ongoing legal case between the SEC and messaging startup Kik, arguing the firm’s kin token is not a security. “The Blockchain Association is troubled that the SEC’s recent arguments have conflated entering into a contract with accredited investors under a well-established exemption with other events involving the sale or distribution of tokens to the public,” the association’s executive director, Kristin Smith, told CoinDesk.

Heifer Jumps Over the Stablecoin Fence

Nonprofit Heifer International is joining the Libra Association as the 23rd official member of the organization. “At Heifer International, we work with some of the world’s poorest farmers, helping them to sustainably increase production and access new markets. As farmers grow their businesses, one of the major challenges they face is access to credit,” it said in the blog post, adding that the global Libra stablecoin could fill this gap.

Leery of Libra

The scaled back vision of the Libra stablecoin as a permissioned payment rail for tokenized national currencies is still a threat to national monetary sovereignty and more likely than ever to be adopted, writes Lex Sokolin, a CoinDesk columnist. “The Libra network is a strong candidate to subsume CBDC innovation, and see the launch of various regulated fiat coins on its protocol,” he said, adding, “This is the war for money. This is the war for finance. Who gets to build the fortress?”

Bitcoin Futures

The U.S. Commodity Futures Trading Commission approved Bitnomial Exchange to operate as a designated contracts market, meaning the exchange can now offer bitcoin futures and options contracts. The exchange joins CME, Cboe, Bakkt, ErisX and LedgerX as licensed providers of these crypto derivatives, and appears to be focusing strictly on physically-settled contracts, meaning customers receive the actual bitcoin when the contract expires.

Reversible ICOs

German regulators have approved the reversible ICOs, a funding mechanism that protects investors by allowing them to withdraw funds from a dubious token project. (Decrypt)

Blockchain for Banks

The Central Bank of Argentina is testing a new blockchain-powered clearing system that could be used by some of the country’s largest financial institutions to speed up fiat payments. Blockchain developer IOV Labs said the proof-of-concept is a permissioned blockchain network based on RSK Smart Contract Network, built in conjunction with the nation’s central and commercial banks including Santander and BBVA.

Dai For You

Interest rates have spiked for deposits of dai, the U.S. dollar-linked stablecoin, on the decentralized finance platform Compound, as people withdraw from the network resulting in a shortage of funds to lend. The annual percentage rate a user would earn by lending dai on the platform rose above 14 percent as of 19:00 UTC Monday – the highest level since March 16, according to Codefi Data, a unit of Ethereum startup ConsenSys.

Stablecoins Spike

The market capitalization of Ethereum-based stablecoins has nearly doubled year-to-date to $6.25 billion, amid market turmoil and inflation of foreign currencies against the dollar. (The Block)

Lightning Attack

New research warns cryptocurrency users that the Lightning Network can expose financial information of bitcoin payments thought to be anonymous. “The gap between the potential privacy properties of the Lightning Network and the actual ones is large. As it is designed right now, the Lightning Network opens the door for various attacks,” said Ania Piotrowska, a cryptography researcher at the University College London.

EOS Hack

A Chinese EOS-based wallet app reportedly shut down leaving $52 million in user funds inaccessible. (Chain News)

Fueling the Network

North American bitcoin miners that capture excess gas emissions from fossil-fuel extraction to power their mining farms are watching the oil markets with fear. If oil production shuts down, so do companies like Upstream Data in Canada, Crusoe Energy in Colorado and DJ Bitwreck in Texas.

Big Tech Goes Open Source 

Amazon, Facebook and IBM among other big tech firms and nonprofits have signed the Open COVID Pledge, a promise to free up their patents and intellectual property so developers can build solutions to the coronavirus pandemic without fear of running afoul of copyright law. “It’s not just universities but commercial companies that are hesitant to build tools, unless they have the rights they need,” said Mark Radcliffe, a partner at DLA Piper and co-author of the pledge.

European Exit

European researchers advocating for a decentralized contact tracing protocol have exited the European Privacy-Preserving Proximity Tracing (PEPP-PT) consortium, amid concerns France and Germany could choose a centralized system that puts personal privacy at risk. 

Brrrr vs. Debasement

While many caution the excessive printing of US dollars in response to the novel coronavirus due to fears of debasement and hyperinflation, CoinDesk columnist Jill Carlson has learned to love the money printer. “The fact is, we need the Federal Reserve’s money printer to BRRR right now. Those fears may not be baseless over the long run, but even having spent a material part of my career researching inflationary crises, working in emerging markets, and holding bitcoin, I’m not currently worried about excessive money printing.”

Permanently Digital

In response to the “EARN IT” Act, an attempt to outlaw end-to-end encryption in the United States, a Bitcoin Cash developer has built an unbreakable encrypted messaging system called bch-encrypt, which allows anyone with a BCH wallet to send intrusion-proof messages. (Decrypt)

The Isolation Journals encourages people to record their experiences as they navigate life during the pandemic. It’s an attempt to preserve a first draft of pandemic history as people’s lives shift more online, and limit the amount of broken links or re-coded websites. “Archiving has never been about saving everything. It’s about trying to save a representation,” said Mark Graham is the director of the Wayback Machine at the Internet Archive. (MIT Technology Review)

Akon City

Akon is building a city in Senegal that will run entirely on cryptocurrencies and blockchain. Slated to open in 2029, Akon City is trying to take advantage of the next wave of digital innovation in a continent that largely missed the developments of the internet. Hacker Noon breaks down the promises and obstacles that lie in the way of creating a smart city. (Hacker Noon)

CoinDesk Live

CoinDesk Live: Lockdown Edition continues its popular twice-weekly chats with Consensus speakers via Zoom and Twitter. Here you’ll get a preview of what’s to come in Consensus: Distributed, our first fully virtual – and fully free – big-tent conference May 11-15. 

On the show, we’ll chat with developers from the most exciting crypto projects, unpack the basics – and not so basics – of the industry and hear from entrepreneurs disrupting traditional industries. Then we’ll open the floor for you to ask questions directly to our guests.

Register to join our second session Tuesday, April 21, with Foundations speakers Priyanka Desai and Aaron Wright from The Lao to discuss for-profit DAOs.

Market Intel

Oil: Wells and Woes

Bitcoin is looking weak after Monday’s big crash in the oil markets, changing hands near $6,820 at time of writing having faced rejection above $7,200 yesterday. Bitcoin’s fall came as prices of oil, popularly known as “black gold,” tanked on oversupply fears, sparking an unprecedented sell-off that also dragged down global equities and crypto markets. 

So what are the takeaways from the unprecedented oil price sell-off? CoinDesk’s Brad Keoun and Omkar Godbole gathered the views of crypto-market traders, analysts and executives to bring you the 10 key lessons from oil going negative.

Halving Webinar

Join CoinDesk’s Noelle Acheson and Christine Kim for a chat about the upcoming bitcoin halving. They’ll talk about their recent report which explains what it is, why it matters and what its impact on the sector and the bitcoin price could be. We attempt to reconcile the various models and theses around the potential bitcoin price reaction as the adjustment approaches, and look at metrics that will shed light on the technological impact.

CoinDesk Surveys

Cannabis & Crypto

From CannabisCoin to supply chain tracking, blockchain is no stranger to cannabis culture. What’s the most pressing problem decentralized tech can solve for the cannabis industry? Take the survey. 

The Breakdown

Bearish or Bullish?

NLW breaks down what oil, cash hoarding and DeFi hacks tell about the crypto markets, in his latest podcast.

Who Won #CryptoTwitter?

Blockchain Bites is CoinDesk’s daily news roundup of the most important stories in blockchain tech from this site and around the web. You can subscribe here.