Crypto News Roundup: Bitcoin Fees, FTX Reorganization, NFT Hack, and Tether Response
Bitcoin Fees Hit 20-Month High As Miner Revenues Match $69K BTC Price
One of the most notable events of the week was the spike in Bitcoin transaction fees, which reached the highest level since April 2021. According to BitInfoCharts, the average fee on the Bitcoin network was over $37, which is more than 10 times higher than the average fee in November 2021.
The main reason for this increase was the surge in Bitcoin Ordinals inscriptions on the network. Bitcoin Ordinals are a new feature that allows users to create unique identifiers for their transactions, such as names, dates, or messages. These inscriptions require more data and space on the blockchain, which drives up the demand and the price for block space.
Many analysts believe that this trend will continue for the foreseeable future, as more users adopt Bitcoin Ordinals for various purposes. This also highlights the need for layer-2 solutions that can offer faster, cheaper, and more scalable transactions on top of Bitcoin. Some of the most popular layer-2 solutions include Lightning Network, Liquid Network, and RSK.
FTX’s Revised Reorganization Plan Values Crypto Claims At Time Of Bankruptcy
Another major news of the week was the filing of the amended Chapter 11 plan of reorganization by the FTX Debtors estate. FTX was one of the largest crypto exchanges in the world, until it collapsed in November 2022 due to a series of hacks, lawsuits, and regulatory actions. The exchange filed for bankruptcy protection in the US, and since then, its creditors have been waiting for their claims to be resolved.
The amended plan proposes that the value of customer asset claims will be retroactively set to the time when the exchange collapsed, rather than the time when the plan is confirmed. This means that the creditors will receive the value of their crypto assets in US dollars, based on the market prices on November 15, 2022. However, this also means that they will miss out on the potential gains that their crypto assets have made since then, as the market has recovered significantly.
The plan also proposes that the creditors will receive 70% of their claims in cash, and 30% in FTX tokens, which are the native tokens of the exchange. The FTX tokens will be subject to a lock-up period of six months, and will be distributed proportionally to the creditors based on their claims. The plan also states that the FTX tokens will have no voting rights, and will not entitle the holders to any dividends, profits, or distributions from the exchange.
The plan is subject to approval by the bankruptcy court and the creditors, and it is expected to face some opposition and challenges from both sides. Some creditors may argue that the plan is unfair and unjust, and that they should receive the current value of their crypto assets, or at least have the option to choose between cash and crypto. On the other hand, some regulators and authorities may question the legality and validity of the FTX tokens, and whether they comply with the securities laws and regulations.
NFT Trader Hacked, Millions Of Dollars In NFT Stolen
The third news of the week was the security breach that affected NFT Trader, a peer-to-peer trading platform for non-fungible tokens (NFTs). NFTs are unique digital assets that represent various forms of art, collectibles, gaming, and more. They have become very popular and valuable in the past year, attracting millions of users and billions of dollars in transactions.
On December 16, 2023, NFT Trader suffered a hack that allowed the attackers to steal millions of dollars worth of high-value NFTs from its users. Some of the stolen NFTs included rare Bored Ape and Mutant Ape Yacht Club tokens, World of Women NFTs, VeeFriends, Art Blocks, and more. The total value of the stolen NFTs is estimated to be over $100 million.
The hack was possible due to a reentrancy vulnerability present in some of the old smart contracts used by the platform. A reentrancy vulnerability is a type of flaw that allows an attacker to call a function multiple times before the previous call is completed, resulting in unexpected and undesired outcomes. In this case, the attacker was able to withdraw the NFTs from the platform without paying the required fees or fulfilling the trade conditions.
The platform has since fixed the issue and updated its smart contracts, but it is not yet clear how many attackers took advantage of the vulnerability, and how many users were affected. The apparent main attacker posted a public message to the blockchain, claiming that they invented the NFT exploit and that they did it to “pick up residual garbage.” They also offered to return the NFTs to the victims if they were paid a “bounty” of 10% of the NFT’s value. The attacker also made some confusing moves, such as refunding one Bored Ape along with 31 ETH to one user, and returning some staked Bored Apes to their owners, while keeping the ApeCoin rewards.
The hack has sparked a lot of outrage and frustration among the NFT community, as well as a lot of questions and investigations. Some users have accused the platform of being negligent and irresponsible, and have demanded full compensation and accountability. Some others have blamed the attacker for being greedy and malicious, and have urged them to return the NFTs or face legal consequences. Some others have also speculated that the hack could be an inside job, or a publicity stunt, or a coordinated attack by multiple parties.
The hack has also highlighted the risks and challenges associated with NFT trading, especially on decentralized platforms that rely on smart contracts. While NFTs offer many benefits and opportunities, they also require a high level of security and trust, as well as a clear and fair resolution mechanism in case of disputes or errors. Users are advised to be careful and vigilant when trading NFTs, and to do their own research and due diligence before using any platform or service.
Tether Responds To US Lawmakers’ Calls For DOJ Action
The fourth and final news of the week was the response from Tether, the issuer of the largest and most controversial stablecoin in the crypto space. Tether is a digital token that claims to be backed by and pegged to the US dollar, and it is widely used as a medium of exchange and a store of value in the crypto market. However, Tether has also faced a lot of scrutiny and criticism from regulators, authorities, and critics, who have questioned its transparency, legitimacy, and compliance.
On December 17, 2023, Tether published letters that the company sent to the US Senate Committee on Banking, Housing, and Urban Affairs, and the US House Financial Services Committee, addressing requests for intervention by the Department of Justice (DOJ) about the illicit use of its stablecoin. The letters were in response to calls from Senator Cynthia Lummis and Representative French Hill from October, who urged the DOJ to “carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism.”
In the letters, Tether stated that it is committed to complying with all applicable laws and regulations, and that it has taken several steps to prevent and combat the abuse of its stablecoin for illegal purposes. Some of these steps include:
- Implementing a robust anti-money laundering (AML) and counter-terrorism financing (CTF) program, which includes customer identification, verification, screening, monitoring, reporting, and auditing.
- Cooperating with law enforcement agencies and regulators around the world, and providing information and assistance when requested or required.
- Participating in industry initiatives and associations, such as the Blockchain Association, the Global Digital Finance, and the Digital Dollar Project, to promote best practices and standards for the crypto sector.
- Publishing regular attestations and reports on its reserves and operations, which are verified by independent and reputable third-party auditors and service providers.
Tether also stated that it is not aware of any evidence or allegation that its stablecoin has been used to support terrorism, and that it is willing to work with the DOJ and other relevant authorities to address any concerns or issues that may arise. Tether also expressed its confidence in the value and utility of its stablecoin, and its contribution to the innovation and growth of the crypto industry.
The letters from Tether are the latest development in the ongoing saga between the stablecoin issuer and the US regulators and lawmakers, who have been clashing over the role and regulation of stablecoins in the financial system. While Tether has tried to defend and justify its business model and practices, the US authorities have been increasing their pressure and oversight on the stablecoin sector, citing potential risks and threats to the stability and security of the economy and the society.
The outcome and impact of this conflict are yet to be seen, but it is clear that stablecoins are a key and contentious issue in the crypto space, and that they will continue to attract a lot of attention and debate in the future.
Conclusion
These were some of the most important and interesting news that happened in the crypto world in the past week. I hope that you found this article informative, engaging, and useful. If you want to learn more about the crypto industry, stay tuned for more updates and insights from Bing. I are always here to help you with your crypto queries and needs.
Disclaimer: The information and content provided in this article are for informational and educational purposes only and do not constitute any financial, investment, or legal advice. Trading, buying, or investing in cryptocurrencies involves significant risks and may result in the loss of your capital. You should do your own research and consult a professional before making any decisions. This article is not a suggestion or an endorsement of any cryptocurrency or platform.
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