Lost money from mining $4.5 million crypto wallets? Here’s what you should do

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Good morning! Welcome to Distributed Ledger, our weekly crypto newsletter that hits your inbox every Thursday. I’m Frances Yue, a crypto reporter at MarketWatch, and I’m going to walk you through the latest in this bear market.

Find me on Twitter at @FrancesYue_ to send feedback, or tell us what you think we should cover. You can also reach me via email to share your personal stories with crypto.

Crypto at a Glance

BitcoinBTCUSD,
-3.40%
lost 1.7% over the past seven days and was trading at around $22,559 on Thursday, according to data from CoinDesk. Ether ETHUSD,
-2.63%
fell 3.3% over the seven-day period to around $1,599. Dogecoin DOGEUSD Meme Token,
-1.77%
fell 1.8% while another dog-themed token, Shiba Inu SHIBUSD,
-2.17,
remained stable seven days ago.

Cryptographic metrics
The biggest winners Price %return in 7 days

filecoin

$8.18

45.3%

To flow

$2.62

44.9%

Lido CAD

$2.49

29.1%

Chiliz

$0.15

28.8%

BitDAO

$0.74

19.4%

Source: CoinGecko as of August 4
The biggest declines Price

%return in 7 days

Tenset

$3.03

-21.1%

DeFiChain

$1.03

-10.9%

Chain

$0.09

-8.1%

Helium

$8.67

-5.1%

EOS

$1.19

-4.8%

Source: CoinGecko as of August 4
Crypto attacks

The crypto market suffered from two major exploits this week, further exposing the risks in the fledgling industry.

Digital asset protocol Nomad, which allows users to transfer crypto across different blockchains, said it lost nearly $200 million in a security hack on Monday.

As of Tuesday, clients of several crypto wallets, including Phantom and Slope, saw a total of $4.5 million worth of digital assets evaporate from their online accounts,

Developers of the Solana blockchain, used by both Slope and Phantom, said Wednesday that the incursion may have started in Slope.

“During an investigation by developers, analytics firms and security auditors, it appears that all of the affected addresses were at some point created, imported or used in the Slope mobile wallet apps on iOS. and Android (created and published by Slope Finance),” according to a statement from Austin Federa, communications manager at the Solana Foundation.

“No core code related to Solana Labs, the Solana Foundation, or anything related to the Solana protocol itself was implicated in this attack,” according to Federa.

Federa recommended users take action if they generated seed phrases or a group of words to access a cryptocurrency wallet, from Slope, or imported seed phrases or keys private in any Slope Wallet.

These users would need to transfer all digital assets to a hardware wallet, or generate a new seed phrase and transfer all assets to new non-Slope wallets, Federa said.

Raj Gokal, co-founder of Solana Labs, recently highlighted why it’s important for encryption protocols to go through code audits.

“I think every primitive of a parallel decentralized financial system has had enough time now to prove itself and have audited solutions that have also stood the test of time over many market cycles,” Gokal said in an interview with Distributed Ledger before the exploits happened. .

Still, Gokal said he believes in the potential of emerging crypto products. “What we keep seeing is that big companies that are trying to move into crypto and turn their product experience into a web three experience and move into web three, no matter how committed they are, it’s is very slow. And I think independent builders have openings to create new creative products on the web and compete with these incumbents every day,” Gokal said. Web three is what is called the next generation of the Internet.

BlackRock partners with Coinbase

Shares of Coinbase Global rallied on Thursday after BlackRock Inc., the world’s largest asset manager, said it was partnering with the crypto exchange to offer direct bitcoin access to select institutional clients. .

Common Coinbase COIN Customers,
+10.01%
and BLK from BlackRock,
+0.79%
investment management platform Aladdin, will have access to crypto trading, custody, prime brokerage and reporting capabilities, according to a statement Thursday.

In March, BlackRock Chairman Larry Fink wrote in a letter to shareholders that the company was investigating digital currencies, stablecoins and underlying technologies as the company saw growing interest from customers.

Listen to Mike Novogratz at the Best New Ideas in Money Festival September 21 and 22 in New York. Galaxy Digital CEO has ideas for navigating the crypto winter.

Michael Saylor steps down as CEO of MicroStrategy

A reshuffle in MicroStrategy Inc.’s executive suite has crypto traders weighing the consequences for bitcoin as Michael Saylor steps down as CEO.

MicroStrategy said on Tuesday that Michael Saylor will step down as CEO and assume a new role as executive chairman, while company chairman Phong Le will assume the CEO role beginning Aug. 8. The transition was announced as MicroStrategy announced a net loss of $1.06 billion in the second quarter, including $917.8 million in digital asset impairments, as the price of bitcoin crashed. .

Phong will manage overall company operations while Saylor will “focus more on” the company’s bitcoin acquisition strategy and related bitcoin advocacy initiatives, according to MicroStrategy.

As one of bitcoin’s loudest bulls, Saylor pushed forward MicroStrategy’s decision to buy the cryptocurrency wholesale first in the summer of 2020 and then doubled down. The company raised a total of $2.4 billion in debt to purchase the digital asset. As of June 30, he held approximately 129,699 bitcoins.

What does Saylor’s transition mean for bitcoin? I wrote more about it here.

$300 Million Crypto Ponzi Scheme?

The Securities and Exchange Commission announced Monday that it has indicted 11 people for their role in creating and promoting a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from retail investors.

The agency alleged that Forsage.io, a website that enabled millions of retail investors to complete transactions via smart contracts running on Ethereum, Tron and Binance blockchains, had been operating as a pyramid scheme for over two years, investors making money. by enrolling others in the program. According to the SEC complaint, the platform allegedly used assets from new investors to pay past investors.

According to Forsage’s website, it is a “decentralized network platform based on smart contracts”.

It is the latest move by the SEC in the fight against suspected crypto-related fraud, after the agency nearly doubled the size of its new name Crypto Assets and Cyber ​​Unit in May.

Crypto companies, funds

Shares of Coinbase Global Inc.. jumped 10.3% to $89.13 on Thursday, and they are up 43.2% over the past five trading sessions. by Michael Saylor MicroStrategy Inc.
MSTR,
-1.39%
fell 1.2% on Thursday to $309.85, while shares are up 12.4% over the past five days.

mining company Blockchain Riot Inc. RIOT,
+0.74%
shares edged up 0.1% to $8.13 on Thursday and have gained 9.8% over the past five days. Shares of Marathon Digital Holdings Inc.
MARA,
+1.05%
rose 1.1% to $13.43, with a gain of 1.7% over the past five days. Another miner Ebang International Holdings Inc.. EBON,
+3.23%
saw shares climb 4.5% to $0.50 on Thursday, for a 2.7% gain over the past five days.

Overstock.com Inc.
OSTK,
-4.12%it is
shares fell 3.7% to $28.51. Shares lost 5.9% over the five-session period.

Shares of Block Inc.
SQ,
+1.85%,
formerly known as Square, advanced 2.8% to $90.53, contributing to a 21.1% gain for the week. Tesla Inc.. TSLA,
+0.40%
shares rose 0.3% to $925.15, up 9.8% in the past five days.

PayPal Holdings Inc.
PYPL,
-0.96%
fell 1% to $96.94, although shares were up 13% in the five-session period. Nvidia Corp.
NVDA,
+1.70%
shares rose 1.8% to $192.32, a 7% gain last week.

Advanced Micro Devices Inc.
AMD,
+5.93%
shares rose 6.1% to $104.08 on Thursday, with a 13.6% gain from five trading days ago.

Among crypto funds, ProShares Bitcoin Strategy ETF
BITO,
-4.82%
fell 4% to $13.94 on Thursday, while its Bitcoin Short Strategy ETF
COCK,
+4.72%
added 4% to $34.97. Valkyrie Bitcoin Strategy ETF
BTF,
-4.65%
fell 3.9% to $8.69, while VanEck Bitcoin Strategy ETF
XBTF,
-4.51%
was trading down 4.2% at $21.89.

Grayscale Bitcoin Trust
GBTC,
-3.65%
lost 3% to $14.08.

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