DeFi

Singapore court rules $125M Multichain hack was inside job – DL News

Published

6 months ago

17 July, 2024

Singapore court rules $125M Multichain hack was inside job – DL News

Fantom Foundation director Michael Long has long had doubts about Multichain’s story.
A Singapore judge has ordered Multichain to pay Fantom $2.2 million.
Reported arrests in China muddy the waters as to where the money went.

When Multichain close Last summer, after an apparent hack of $125 million in cryptocurrency, Michael Kong dismissed speculation that it was an inside job.

As CEO of the Fantom Foundation, Kong was dismayed to see his project burn when all that cryptocurrency was mysteriously transferred to “unknown addresses in an abnormal manner.”

But Kong couldn’t get his head around the fact that Multichain was a thriving business. Why ruin it?

Kong is not so sure anymore.

In an interview earlier this year, Kong said he couldn’t rule out that someone affiliated with Multichain had managed to get hold of the money. “My perspective has changed a little bit,” he said. DL News“I had a little too much faith in what Multichain was telling us.”

A court ruling now appears to lend credence to Kong’s suspicions.

On July 8, Judicial Commissioner Mohamed Faizal of the High Court of Singapore governed that Multichain owes the Fantom Foundation, the organization that manages the Fantom blockchain, $2.2 million.

A court decision

Fantom, once a top-five blockchain with nearly $8 billion locked in its DeFi ecosystem, now sits just outside the top 50. As of Tuesday, DeFi applications on Fantom managed to generate a total of $129 million, just over half of what they did before the hack.

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On the eve of last year’s exploit, much of the crypto in Fantom’s DeFi ecosystem came from Multichain, a “bridge” that allows users to move digital assets between otherwise incompatible blockchains.

The total value of cryptocurrencies in Fantom’s myriad DeFi applications plummeted after the Multichain incident.

“[Fantom’s] position is that the violation was possible because the CEO of [Multichain] “He had ultimate privileges and control over the cryptocurrency assets stored in the multi-chain bridge,” Faizal wrote in his decision.

This violated the company’s user agreement, the judge said.

The decision could pave the way for the appointment of a third-party liquidator and the eventual return of the stolen tokens, according to the Fantom Foundation.

Faizal also noted that Fantom believes the “siphoned assets” may have been “illegally diverted” from one Multichain entity to another.

The judge was quick to add, however, that this allegation fell outside the scope of the legal case before him.

$1.8 billion lost

The lawsuit sheds more light on an episode that took place during a series of exploits a few years ago.

In 2022, the bridges lost $1.8 billion in hacks, a figure that represents more than half the value of cryptocurrencies stolen from DeFi protocols that year.

A representative for Multichain could not be reached for comment. The company has not defended itself at any point in the Fantom case. trial in Singapore, which started in 2023.

A person familiar with the inner workings of Multichain said DL News The company team had not planned any internal work.

“The truth will be known when the police make the case public,” said the person, who spoke on condition of anonymity out of fear for his family in China.

“It’s conceivable that someone from the police force targeted the CEO of Multichain and said, ‘Hey, he’s got money.

— Michael Kong, Fantom Foundation

Kong claims that former Multichain employees have been “totally uncooperative.”

Multichain is a “bridge” that allows users to move digital assets between otherwise incompatible blockchains. Users on blockchain A can deposit cryptocurrencies into Multichain, which will issue IOU tokens on blockchain B, where they can be used as if they were real.

Arrests in China

In May 2023, founder and CEO Zhaojun He was arrested by police in the southern Chinese city of Kunming, according to a statement made by the company after the hack.

Despite the team’s efforts to keep the bridge up and running after Zhaojun’s disappearance, Multichain suffered an apparent hack on July 7, 2023, when $125 million in crypto was transferred to “unknown addresses in an abnormal manner,” the company said.

Two days later, Zhaojun’s sister tried to salvage what was left, the company said. She transferred much of the remaining cryptocurrency to wallets she controlled, only to also be detained on July 13.

Strapped for cash and unable to contact the CEO or his sister, Multichain said it would shut down and share information as it became available.

For some, the case has become a warning about operational security failure and running a business in a crypto-hostile police state.

Others, without evidence, suggested in a “Multichain Scam” Telegram chat group with over 500 members that Zhaojun and his sister had absconded with the missing cryptocurrency.

At the time, Kong said Multichain may have been the victim of a racketeering operation by local police. He added that employees had told him that some of their colleagues had been arrested.

Fantom investigates

A former employee, named Marcel, said DL News At least five people have been arrested, although this could not be independently verified.

“It’s conceivable that someone targeted the CEO of Multichain within a police force and said, ‘Hey, he’s got money, he’s pretty well-known in the industry. Let’s target him,’” Kong said. DL News last summer. “That’s what I think could happen.”

But evidence that has since emerged has changed that.

The Fantom Foundation, which hired a Hong Kong law firm called King & Wood Mallesons to investigate the situation, was able to confirm that Zhaojun had indeed been arrested, Kong said. DL News.

Jail

Although Zhaojun is likely still awaiting indictment, his colleagues at Multichain have had better luck.

“We understand that some of them have been arrested and released,” he said. “But we have had no contact with them for months because Multichain and its former team members have been completely uncooperative.”

A mysterious arbitration

In November, the Multichain Bridge was open for about two hours, allowing a user to take advantage of a $1 million arbitrage opportunity. The profits were then transferred to Binance, the world’s largest cryptocurrency exchange.

So who is behind this move? “We believe it is a person (or several people) from the old Multichain team,” Kong said. DL News this week.

Earlier this year, he said it was unlikely the police had moved any funds because they would likely have used a different method.

The possibility of Multichain’s involvement was raised in court.

In his ruling, Faizal noted that the Fantom Foundation had sued two entities: Multichain Foundation Ltd, which ran the crypto bridge, and Multichain Pte Ltd.

This is because of the “sudden incorporation” of Multichain Pte Ltd “just before the July 7 security breach” and the foundation’s “belief that the siphoned assets could have been illegally diverted” to the entity, Faizal wrote.

But the Commissioner made it clear that this allegation fell outside the scope of his decision.

“I do not comment on the merits of these claims regarding the involvement of [Multichain Foundation] And [Multichain Pte]”I am not convinced of the validity of these claims,” he wrote.

Regardless, the Fantom Foundation has yet to find a definitive answer as to what happened.

“We’re not quite sure yet,” Kong said. “Some [crypto] “The movements were confusing.”

Aleks Gilbert is DL News“New York-based DeFi correspondent. Got a tip? You can reach him at aleks@dlnews.com.

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DeFi

Pump.Fun is revolutionizing the Ethereum blockchain in terms of daily revenue

Published

6 months ago

31 July, 2024

Digital Finance News Staff

Pump.Fun is revolutionizing the Ethereum blockchain in terms of daily revenue

The memecoin launchpad saw the largest daily revenue in all of DeFi over the past 24 hours.

Memecoin launchpad Pump.Fun has recorded the highest gross revenue in all of decentralized finance (DeFi) in the last 24 hours, surpassing even Ethereum.

The platform has raised $867,429 in the past 24 hours, compared to $844,276 for Ethereum, according to DeFiLlama. Solana-based Telegram trading bot Trojan was the third-highest revenue generator of the day, as memecoin infrastructure continues to dominate in DeFi.

Pump.Fun generates $315 million in annualized revenue according to DeFiLlama, and has averaged $906,160 per day over the past week.

Income Ranking – Source: DeFiLlama

The memecoin frenzy of the past few months is behind Pump.fun’s dominance. Solana-based memecoins have been the main drug of choice for on-chain degenerates.

The app allows non-technical users to launch their own tokens in minutes. Users can spend as little as $2 to launch their token and are not required to provide liquidity up front. Pump.Fun allows new tokens to trade along a bonding curve until they reach a set market cap of around $75,000, after which the bonding curve will then be burned on Raydium to create a safe liquidity pool.

Pump.Fun generates revenue through accrued fees. The platform charges a 1% fee on transactions that take place on the platform. Once a token is bonded and burned on Raydium, Pump.fun is no longer able to charge the 1% fee.

Ethereum is the blockchain of the second-largest cryptocurrency, Ether, with a market cap of $395 billion. It powers hundreds of applications and thousands of digital assets, and backs over $60 billion in value in smart contracts.

Ethereum generates revenue when users pay fees, called gas and denominated in ETH, to execute transactions and smart contracts.

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DeFi

DeFi technologies will improve trading desk with zero-knowledge proofs

Published

6 months ago

31 July, 2024

Digital Finance News Staff

DeFi Technologies to enhance trading desk with zero-knowledge proofs

DeFi Technologies, a Canadian company financial technology companyis set to enhance its trading infrastructure through a new partnership with Zero Computing, according to a July 30 statement shared with CryptoSlate.

The collaboration aims to integrate zero-knowledge proof tools to boost operations on the Solana And Ethereum blockchains by optimizing its ability to identify and execute arbitrage opportunities.

Additionally, it will improve the performance of its DeFi Alpha trading desk by enhancing its use of ZK-enabled maximum extractable value (MEV Strategies).

Zero knowledge Proof of concept (ZKP) technology provides an additional layer of encryption to ensure transaction confidentiality and has recently been widely adopted in cryptographic applications.

Optimization of trading strategies

DeFi Technologies plans to use these tools to refine DeFi Alpha’s ability to spot low-risk arbitrage opportunities. The trading desk has already generated nearly $100 million in revenue this year, and this new partnership is expected to further enhance its algorithmic strategies and market analysis capabilities.

Zero Computing technology will integrate ZKP’s advanced features into DeFi Alpha’s infrastructure. This upgrade will streamline trading processes, improve transaction privacy, and increase operational efficiency.

According to DeFi Technologies, these improvements will increase the security and sophistication of DeFi Alpha’s trading strategies.

The collaboration will also advance commercial approaches for ZK-enabled MEVs, a new concept in Motor vehicles which focuses on maximizing value through transaction fees and arbitrage opportunities within block production.

Additionally, DeFi Technologies plans to leverage Zero Computing technology to develop new financial products, such as zero-knowledge index exchange-traded products (ETPs).

Olivier Roussy Newton, CEO of DeFi Technologies, said:

“By integrating their cutting-edge zero-knowledge technology, we not only improve the efficiency and privacy of our transactions, but we also pave the way for innovative trading strategies.”

Extending Verifiable Computing to Solana

According to the release, Zero Computing has created a versatile, chain-agnostic platform for generating zero-knowledge proofs. The platform currently supports Ethereum and Solana, and the company plans to expand compatibility with other blockchains in the future.

The company added that it is at the forefront of introducing verifiable computation to the Solana blockchain, enabling complex computations to be executed off-chain with on-chain verification. This development represents a significant step in the expansion of ZKPs across various blockchain ecosystems.

Mentioned in this article

Latest Alpha Market Report

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DeFi

Elastos’ BeL2 Secures Starknet Grant to Advance Native Bitcoin Lending and DeFi Solutions

Published

6 months ago

30 July, 2024

Digital Finance News Staff

© Reuters Elastos’ BeL2 Secures Starknet Grant to Advance Native Bitcoin Lending and DeFi Solutions

Singapore, Asia, July 29, 2024, Chainwire

Elastos BeL2 to Partner with StarkWare to Integrate Starknet’s ZKPs and Cairo Programming Language with BeL2 for Native DeFi Applications
Starknet integration allows BeL2 to provide smart contracts and dapps without moving Bitcoin assets off the mainnet
Starknet Exchange Validates the Strength of BeL2’s Innovation and Leadership in the Native Bitcoin Ecosystem

Elastos BeL2 (Bitcoin Elastos Layer2) has secured a $25,000 grant from Starknet, a technology leader in the field of zero-knowledge proofs (ZKPs). This significant approval highlights the Elastos BeL2 infrastructure and its critical role in advancing Bitcoin-native DeFi, particularly Bitcoin-native lending. By integrating Starknet’s ZKPs and the Cairo programming language, Elastos’ BeL2 will enhance its ability to deliver smart contracts and decentralized applications (dapps) without moving Bitcoin (BTC) assets off the mainnet. This strategic partnership with Starknet demonstrates the growing acceptance and maturity of the BeL2 infrastructure, reinforcing Elastos’ commitment to market leadership in the evolving Bitcoin DeFi market.

Starknet, developed by StarkWare, is known for its advancements in ZKP technology, which improves the privacy and security of blockchain transactions. ZKPs allow one party to prove to another that a statement is true without revealing any information beyond the validity of the statement itself. This technology is fundamental to the evolution of blockchain networks, which will improve BeL2’s ability to integrate complex smart contracts while preserving the integrity and security of Bitcoin.

“We are thrilled to receive this grant from Starknet and announce our partnership to build tighter integrations with its ZKP technology and the Cairo programming language,” said Sasha Mitchell, Head of Bitcoin Layer 2 at Elastos. “This is a major milestone for BeL2 and a true recognition of the maturity and capabilities of our core technology. This support will allow us to further develop our innovation in native Bitcoin lending as we look to capitalize on the growing acceptance of Bitcoin as a viable alternative financial system.”

A closer integration with Cairo will allow BeL2 to leverage this powerful programming language to enhance Bitcoin’s capabilities and deliver secure, efficient, and scalable decentralized finance (DeFi) applications. Specifically, the relationship with Cairo reinforces BeL2’s core technical innovations, including:

ZKPs ensure secure and private verification of transactions
Decentralized Arbitrage Using Collateralized Nodes to Supervise and Enforce Fairness in Native Bitcoin DeFi
BTC Oracle (NYSE:) facilitates cross-chain interactions where information, not assets, is exchanged while Bitcoin remains on the main infrastructure

BeL2’s vision goes beyond technical innovation and aims to innovate by creating a new financial system. The goal is to build a Bitcoin-backed Bretton Woods system, address global debt crises, and strengthen Bitcoin’s role as a global hard currency. This new system will be anchored in the integrity and security of Bitcoin, providing a stable foundation for decentralized financial applications.

As integration with Starknet and the Cairo programming language continues, BeL2 will deliver further advancements in smart contract capabilities, decentralized arbitration, and innovative financial products. At Token 2049, BeL2 will showcase further innovations in its core technologies, including arbitrators, that will underscore Elastos’ vision for a fairer decentralized financial system rooted in Bitcoin.

About Elastos

Elastos is a public blockchain project that integrates blockchain technology with a suite of redesigned platform components to produce a modern Internet infrastructure that provides intrinsic privacy and ownership protection for digital assets. The mission is to create open source services that are accessible to the world, so developers can create an Internet where individuals own and control their data.

The Elastos SmartWeb platform enables organizations to recalibrate how the Internet operates to better control their own data.

Home

https://www.linkedin.com/company/elastosinfo/

ContactPublic Relations ManagerRoger DarashahElastosroger.darashah@elastoselavation.org

This article was originally published on Chainwire

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DeFi

Compound Agrees to Distribute 30% of Reserves to COMP Shareholders to End Alleged Attack on Its Governance

Published

6 months ago

30 July, 2024

Digital Finance News Staff

Compound Agrees to Distribute 30% of Reserves to COMP Shareholders to End Alleged Attack on Its Governance

Compound will introduce the staking program in exchange for Humpy, a notorious whale accused of launching a governance attack on the protocol, negating a recently adopted governance proposal.

Compound is launching a new staking program for COMP holders as a compromise with Humpy, a notorious DeFi whale accused of launching a governance attack against the veteran DeFi protocol.

On July 29, Bryan Colligan, head of business development at Compound, published a governance proposal outlining plans for a new compound participation product that would pay 30% of the project’s current and future reserves to COMP participants.

Colligan noted that the program was requested by Humpy in exchange for his agreement Proposition 289 — which sought to invest 499,000 COMP worth approximately $24 million into a DeFi vault controlled by Humpy, and which appears to have been forced by Humpy and his associates over the weekend.

“We propose the following staking product that meets Humpy’s stated interests as a recent new delegate and holder of COMP in exchange for the repeal of Proposition 289 due to the governance risks it poses to the protocol,” Colligan said. “The Compound Growth Program…will execute the above commitments, given the immediate repeal of Proposition 289.”

Colligan added that the proposal would expire at 11:59 p.m. EST on July 29. Had Humpy not rescinded Proposition 289, Compound would move forward with it. Proposition 290 — block Humpy using the Compound team’s multi-sig to deploy a new governor contract removing the delegate’s governance power behind Proposition 289.

Hunchback tweeted that Proposition 289 had been repealed a few hours ago. “Glad to have brought Compound Finance back into the spotlight,” they said. added. “StakedComp… finally becomes a yield-generating asset!

Markets reacted favorably to the resolution, with the price of COMP increasing by 6.2% over the past 24 hours, according to CoinGecko.

Attack on governance

Proposition 289 proposed investing 499,000 COMP from the Compound treasury into goldCOMP, a yield-generating vault of the Humpy-linked Golden Boys team.

The proposal passed with nearly 52 percent of the vote on July 28, despite two previous iterations of the proposal being defeated by strong opposition. Can And JulyThe proposals notably asked for only 92,000 COMP, with security researchers warning that any deposit of tokens into the goldCOMP vault would cede their governance power.

In May, Michael Lewellen of Web3 security firm OpenZeppelin, note The first proposal was submitted by a new governance delegate who was suddenly awarded 228,000 COMP by five wallets that got their tokens from the Bybit exchange. Combined with his own tokens, the delegate got 325,333 COMP, which is over 81% of the 400,000 tokens required for a governance proposal to reach quorum.

“We have been alerting the community to the risk that these delegates could support a potential attack on governance,” Lewellen said. “The timing of the new proposal and these recent delegations are suspect.”

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