Welcome to Barmy’s Daily Crypto News – August 19th, 2022
1. Ripple CTO lashes back at Vitalik Buterin for his dig at XRP.
Ethereum co-founder Vitalik Buterin attacked XRP in a discussion that was sparked by the recent 30,000 Canadian dollar limit on altcoin purchases by two Ontario crypto exchanges, which excluded Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). Ripple chief technology officer David Schwartz didn’t take kindly to this.
In a tweet reply, Buterin lauded the Ethereum community’s opposition to laws that favor ETH over other cryptocurrencies. In response to Buterin, David Hoffman, the creator of the decentralized media and education platform Bankless, stated that he wouldn’t have objected if they had restricted XRP.
Buterin was referring to Ripple’s argument that XRP shouldn’t be classified as a security because Ether and Bitcoin (BTC) are similar in nature, which even went so far as to label the two most popular cryptocurrencies as being under Chinese control, in its ongoing legal dispute with the US Securities and Exchange Commission. A SEC case concerning the alleged unauthorized sale and issuance of XRP tokens is being fought by Ripple right now.
With Ripple asserting that the SEC is manifestly biased against them and in favor of Ethereum, the potential security classification of Ether has come up frequently during the ongoing legal procedures. In a 2021 interview, the CEO of Ripple, Brad Garlinghouse, claimed that the SEC was instrumental in ETH overtaking XRP as the second-largest cryptocurrency.
Due to a lack of regulatory rules, the question of whether cryptocurrencies constitute securities has been up for debate for a long time. The majority of regulators throughout the world view Bitcoin as an asset, however due to its pre-mine and initial coin offering, ETH’s legal status is still up for question.
2. Over 2/3 of Ethereum nodes are distributed across centralized service providers.
According to crypto analytics platform Messari, the majority of the 4,653 active Ethereum nodes are held by centralized web service providers like Amazon Web Services (AWS), which could “expose Ethereum to central points of failure.”
On the Ethereum Mainnet, three main cloud providers are responsible for 69% of the hosted nodes, with over 50% coming from Amazon Web Services (AWS), over 15% from Hetzner, and 4.1% from OVH, according to a report published on Monday. Additionally, according to data from Ethernodes, Oracle (4.1%), Alibaba (3.9%), and Google (3.5%) offer web hosting services on Ethereum.
The lowest third of cloud service providers’ distribution is becoming more decentralized, although Messari expressed concern in a December 2020 research that Ethereum may be exposed because to the costly node infrastructure.
Furthermore, according to Ethernode data, the majority of distributed Ethereum nodes worldwide—nearly 60%—are geographically centered in the United States (46.4%) and Germany (13.4%). Therefore, governmental interference from either of these two nations might have a significant negative effect on Ethereum’s node-level decentralization.
3. Celer Network closes the bridge due to possible DNS hijacking
After shutting down its cBridge due to a suspected Domain Name System (DNS) hijacking, interoperability protocol Celer Network has requested that its users remove the approval for a number of contracts.
The project’s initial analysis revealed that there was suspicious DNS activity on Wednesday around 7:00 pm UTC. However, the platform is still looking into the matter and trying to learn more about it as of this writing.
The team has temporarily shut down the cBridge to protect users and prevent more accidents while the platform continues to identify the issue. Revocating token approvals for smart contracts on Ethereum, Polygon, Avalanche, BNB Smart Chain, Arbitrum, Astar, and Aurora were also advised by the platform to its users.
According to a report from blockchain analytics company Chainalysis, bridge attacks have increased in frequency in the cryptocurrency market and will cost $2 billion in losses in 2022 alone. Around 69% of all bitcoin stolen this year was through cross-chain bridge attacks, with the first quarter leading as a result of the March Ronin Bridge hack.
There are still good samaritans in the crypto sector despite the hacks. The majority of the money lost due to the recent Curve Finance exploit was recovered by the cryptocurrency exchange Binance earlier in August. In addition to this, ethical hackers have given the Nomad bridge hack victims back almost $32 million in digital assets.
4. Russian Accused of Laundering Cryptocurrency From Ransomware Attacks Extradited to US
Russian national Denis Dubnikov, 29, was extradited from the Netherlands to the United States this week, according to the U.S. Attorney’s Office in Portland and the U.S. Department of Justice (DOJ). He will be charged with money laundering in the District of Oregon. Before being detained in Amsterdam in November of last year, the individual is said to have been involved in the illicit activities for three years.
The offenders explicitly used ransom money obtained from Ryuk ransomware attack victims to launder. Ryuk, a sort of malware that encrypts files and tries to erase system backups, was first discovered four years ago and has been connected to a Russian ransomware outfit.
According to a statement from the DOJ, Dubnikov is suspected of laundering more than $400,000 in Ryuk ransom money in July 2019. At least $70 million was laundered overall by those participating in the operation. The Russian faces a potential sentence of 20 years in jail if found guilty.
Similar developments in the prosecution of Alexander Vinnik, the suspected proprietor of the notorious cryptocurrency exchange BTC-e, led to Dubnikov’s extradition. Vinnik was detained in the summer of 2017 in Thessaloniki, Greece, where he had traveled there with his family for a summer vacation.
The French legal system initially received the Russian IT expert, who was then given a five-year prison term for money laundering. Vinnik was sent back to Greece and extradited to the United States after serving his sentence in France. His lawyers, who fear that he may be held “as a hostage” by the present geopolitical tensions surrounding the war in Ukraine, were incensed by the rapid relocation. Moscow, however, charged that Washington was conducting a “real hunt for Russian citizens.”
5. US lawmakers appeal directly to 4 mining firms, requesting info on energy consumption
US politicians individually contact 4 mining companies and ask for information on energy usage. Concerning the potential environmental impacts of the energy consumption of four large crypto mining companies, four members of the US House of Representatives from the Energy and Commerce Committee have asked responses.
U.S. lawmakers Frank Pallone, Bobby Rush, Diana DeGette, and Paul Tonko asked Core Scientific, Marathon Digital Holdings, Riot Blockchain, and Stronghold Digital Mining to provide information beginning in 2021 about the energy consumption of their mining facilities, the source of that energy, what percentage came from renewable energy sources, and how frequently the companies curtailed operations.
The proposal came after U.S. President Joe Biden on Tuesday signed the Inflation Reduction Act into law, which many experts believe to be the most significant piece of climate change legislation ever. The bill contained incentives to promote and expand green energy initiatives, such as “climate-smart” industry and sustainable mobility.
Whether the topic is being discussed for its economic or environmental effects, bitcoin continues to be a hot topic in politics, both domestically and internationally. 23 U.S. congressmen urged EPA administrator Michael Regan in a letter issued in April to investigate if crypto mining companies may be infringing environmental laws.
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