Around the Blockchain with Huobi Learn (25 Feb 2022)

Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
The Ukrainian army has received over $1 million in crypto donations after Russia launched a large-scale offensive against Ukraine yesterday. According to blockchain analytics firm Elliptic, almost $400,000 in BTC was donated over a 12-hour period to Ukrainian NGO Come Back Alive, which provides country’s army with military equipment, medical supplies and drones. The Ukrainian Cyber Alliance, which engages in cyber attacks against Russian targets, has received nearly $100,000 in BTC, Litecoin, ETH and several stablecoins. On the other side, pro-Russian separatists have been raising funds in BTC since the start of the conflict.
According to a study by blockchain intelligence firm Chainalysis, 4,068 criminal crypto ‘whales’ hold over $25 billion in crypto. The study states that there was a 266% rise in crypto balances held by criminals between 2020 and 2021. Among stolen funds, ransomware, fraud shops and darknet funds, the former comprised the largest portion of criminally held crypto. The study further said most criminal crypto whales (who represented 3.7% of all crypto whales) could be placed in one of two categories — they “received either a relatively small or extremely large share of their total balance from illicit addresses”.
Retirement investment firm IRA Financial Trust was being “swatted” just as it was hacked for $36 million worth of crypto, according to an account by a Sioux Falls detective. On 8 Feb, police received reports of a “robbery” at the firm’s South Dakota offices. The call turned out to be bogus and the incident was termed “swatting”, i.e., tricking police into responding to a fake crisis. However, there was indeed a robbery in progress, albeit in cyberspace. When employees returned to their desks, they found that “customers’ accounts had been hacked and money was actively being taken”. The company managed to stop the money drain shortly but by then, “a lot of damage” had been done to “hundreds of victims”. IRA’s institutional partner, Gemini, has denied responsibility and blamed IRA for the loss, but it remains unclear how Gemini’s safety protocols were compromised.
BitMEX founders Arthur Hayes and Benjamin Delo have pled guilty to violating the Bank Secrecy Act after a lengthy litigation process with the US Department of Justice (DOJ). At one point, BitMEX served American customers without any know-your-customer (KYC) or anti-money laundering (AML) verification procedures, which led to BitMEX becoming a “money-laundering platform”, said the DOJ. Furthermore, it has been insinuated that Hayes had bribed the Seychelles local government when BitMEX moved there in 2020 and even boasted that it cost him “just a coconut”. Hayes and Delo have each agreed to pay $10 million in criminal fines ahead of their trial in March.
Following widespread criticism that it was “seeking to profit from suffering”, the Associated Press (AP) has withdrawn plans to sell a video of “migrants drifting in an overcrowded boat in the Mediterranean” as an NFT. It has since deleted the tweet announcing said plans and cancelled the sale. Global director of media relations and corporate communications, Lauren Easton, admitted it was “a poor choice of imagery for an NFT”, adding that AP’s NFT market place was “a very early pilot program” and saying it was “immediately reviewing” its efforts.
zkSync, a protocol responsible for implementing Ethereum scaling platforms, announced yesterday the test network release of a Zero-Knowledge roll-up (zkEVM) compatible with Ethereum Virtual Machine (EVM) — years ahead of schedule. This marks the first implementation of a ZK roll-up capable of running the full Ethereum environment, and will offer valuable insight into how good zero-knowledge tech is at scaling blockchains. If zkEVM can offer fees similar to other ZK roll-ups, Ethereum’s scaling problems may be solved earlier than expected and Ethereum-native apps will be able to port over Solidity-based contracts and offer a full product range in a low-fee, secure environment.
Show me the money
According to data from the Huobi Global, BTC has reversed its decline with a rapid increase to near 40,000, while ETH has also seen a significant increase. Daily charts for both show fluctuation at low levels. In terms of contracts, Huobi Futures data showed stable open interest (OI) in both BTC and ETH futures, with a slight decrease in volume amid a relatively inactive contract market.
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