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How ‘Solana-Ethereum’ $320 Million Wormhole Tragedy May Have Just Questioned Crypto’s Overall Security



How 'Solana-Ethereum' $320 Million Wormhole Tragedy May Have Just Questioned Crypto's Overall Security

Barely six weeks into 2022 and the crypto market may have just witnessed its biggest DeFi attack of the year. A few hours ago, an unidentified hacker quickly crept under the Ethereum-Solana bridge (typically used to facilitate seamless transactions between ETH and SOL holders) stealing close to $320 million as at last valuation.

Wormhole Crypto, the official Twitter account behind the SOL-ETH interoperability protocol, has come out to confirm the attack, adding that it would replace all 120k wrapped Ethereum tied to several Ethereum users and bear the losses thereof. It has also offered the hacker a $10 million white hat bounty to return all the stolen digital assets. Here’s a scoop about what may have made the attack a successful one.

An unfixed glitch in the bridge protocol likely cause

Since the news of the hack, many top analysts have tried to reverse engineer the attacker’s process in stealing close to 120kwETH. wETH is an ERC-20 1:1 version of ETH that helps holders complete transactions with other tokens linked to or domiciled in the Ethereum blockchain. Like fiat currency backed by gold reserves, each wETH is backed by a corresponding ETH and is equal in value. To facilitate transactions on blockchain networks like Solana, a user would typically have to deposit ETH and proceed with the equivalent number of wETH. 

According to pro-Wormhole analysts on Twitter, the bug which was exploited by the hacker had been published on Solana’s GitHub open source repository since mid-January, and its remedy was given days after, but the team of developers had delayed its implementation until the attack.

Allegedly taking cognizance of this unresolved flaw, the attacker had successfully minted close to 120k fake ETHs, taking advantage of the unpatched bug to trick the Solana security verification system into acceptance. With the fake deposit now certified as real, all the hacker had left to do was to withdraw the equivalent amount of real ETH from the bridge protocol and transfer it to untracked recipients.

Speed vs. Security

All the news about Solana being better than Ethereum is hinged on its speed and not on its security. The latest attack has shown how much the network holds its ~55,000 transactions-per-second record in high esteem, neglecting the catastrophic losses that could come with poor user safety.

Back in September and more recently in December, it had suffered repeated DDOS attacks, causing close to 17 hours of network shutdown. Yesterday, the network was in the news for the launch of its Solana Pay protocol, spurring a brief gain past the $100 mark. Today, all such gains totaling close to 12% have been eroded as it sits sullenly at $96.76.

Crypto competence gets dragged

It is too early to tell if the attacker will choose to sacrifice $220 million of his bounty, but the entirety of the current circumstance casts a shadow on the cryptocurrency market. Especially for investors who find little attractiveness in such outrageous risk. Cases like these win points for the argument against open source reliability and decentralization especially considering the volume of transactions involved. The Geneva-based token will have to do more than just outrun Ethereum transaction speed to keep and attract new users.


Cardano’s Charles Hoskinson wants to work with Elon Musk to develop a decentralized social media platform



Cardano's Charles Hoskinson wants to work with Elon Musk to develop a Decentralized social media platform

The Founder of Cardano (ADA) has invited Tesla owner and billionaire, Elon Musk, to work with him in developing the first decentralized social media platform. Charles Hoskinson, who also doubles up as the CEO of Input-Output Global is offering to help Elon Musk achieve his goal of free speech on social media.

The news follows Elon Musk’s acquisition of a stake in Twitter last week. The Billionaire bought 9.2% of Twitter, estimated at $2.89 Billion, and was even offered a seat on the micro-blogging site’s board. However, after deliberations, Elon passed on the offer since it would bar him from owning beyond a certain threshold of Twitter’s shares.

Free speech advocate

Elon Musk is on record for being a passionate supporter of free speech and open internet policies. He has in the past openly accused Twitter of muzzling free speech and open internet use. He recently held a poll that indicated that most users would prefer an edit button on Twitter and said that if he is not allowed to acquire the platform, he would have to reconsider his position as a major shareholder of Twitter.

To actualize this cause, he has offered to acquire the platform for a reported fee of $43 Billion in cash. This intended acquisition has left his critics and supporters talking and would go a long way in helping him bring much-needed changes to Twitter. His intention has however come under fire with his critics, including Dogecoin co-founder, Jackson Palmer saying that Elon Musk is planning a hostile takeover of Twitter. 

Hoskinson’s offer to Elon Musk

Upon seeing the opposition against Elon Musk’s plan, Hoskinson wooed Elon to join him in creating a decentralized social media platform. He tweeted:

“@Elon if Twitter rejects your offer, then hit me up. Happy to build a decentralized one.”

This offer follows Elon Musk’s Twitter poll where he sought the opinion of his 80 million followers about a decentralized social media platform. He posited that were he to be barred from acquiring Twitter, he would establish his decentralized platform that would be founded on free speech and open internet.

Elon Musk’s campaign for free speech and open internet has not been welcomed by all. Some of his critics have argued that coating his move with good intentions, his true intention is to get revenge against the SEC for muzzling his Twitter activities.

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Thailand Outlaws The Use Of Crypto For Payments



Thailand Outlaws The Use Of Crypto For Payments
  • The SEC in Thailand has banned crypto payments in the country.
  • Its new decision is expected to become enforceable in April.
  • The SEC reiterated that the government still maintained support for the blockchain industry, clarifying that the decision does not affect crypto investments.

The Securities Exchange Commission today has placed restrictions on crypto as a means of payment. They believe that it poses risks to the nation’s financial stability.

Crypto Payments Outlawed

Thailand’s SEC today has outlawed the use of crypto as a medium of exchange in the country. The regulators came up with this decision after discussing the benefits and inherent risks from crypto and blockchain technology with the country’s central bank, the Bank of Thailand (BOT).

They concluded that the use of cryptocurrencies for payment was potentially harmful to the country’s financial stability and economy. Price volatility, risks of theft, and potential use cases in money laundering were amongst the reasons cited by the SEC that led them to this decision.

The SEC report read, “the use of digital assets as a medium for payment of goods and services Because it may affect the stability of the financial system and the overall economy. including risks to people and businesses such as the risk of loss of value caused by price volatility Risk of Cyber ​​Theft Risk of personal data leakage or being used as a tool of money laundering.”

As per the SEC’s new decision, crypto service providers and vendors or merchants in the country are encouraged to stop providing or facilitating such services. Suppose a crypto service provider discovers that a customer has used its services to make payments. In that case, the service providers are to inform the SEC and restrict activities on the said account.

The SEC’s new ruling is to take effect from the 1st of April. However, businesses that already offer such services would be given till the end of April to cease such operations. The crypto market in Thailand has grown massively over the last couple of years. As per a Bloomberg report, government data estimates that Thai citizens hold about $3.4 billion in crypto assets.

Crypto Investments Not Affected As The Thai Government Still Supports Blockchain Technology Innovation

The SEC in their release, clarified that the restriction was only on using cryptocurrency as a means of payment and in no way affected citizens investing in crypto. It was stated that “digital asset traders/investors can carry out normal investment/trading related transactions.”

The SEC also maintained that the government still supported blockchain technology and was working to provide a regulatory environment where innovation can be encouraged in the industry. Recall that earlier this month, the country had offered tax incentives to investors and businesses in the crypto industry.

“… the BOT and the SEC, as well as other government agencies, see the benefits of various technologies behind digital assets such as  blockchain and emphasize and support the use of technology to further innovation.”

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