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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

Summary:

  • The Kyber Network team has admitted that Three Arrows Capital’s potential insolvency might impact its treasury.
  • A small portion of Kyber Network’s treasury is with Three Arrows Capital but is not significant enough to affect the KNC project’s operations.
  • The team at Kyber Network adds that it has enough funds to operate for many years.

The potential insolvency of the Three Arrows Capital hedge fund continues to expose a web of affected crypto projects.

Yesterday, the team at Kyber Network clarified via Twitter that Three Arrows Capital held a small portion of its treasury. Therefore, as explained in the tweet below, its potential insolvency could have a small impact on Kyber Network.

3/6 3AC’s potential insolvency may have some impact on Kyber treasury as a small portion of Kyber treasury is with 3AC.

— Kyber Network (@KyberNetwork) June 23, 2022

Three Arrows Capital Had Done an OTC Deal with Kyber Treasury to Buy Some KNC.

The Twitter thread by Kyber Network explaining its connection to the potentially insolvent Three Arrows Capital starts by stating that 3AC had done an OTC deal with cyber treasury to purchase KNC. However, the amount purchased was not significant and was transferred from Three Arrows Capital receiving wallet ‘a long time ago.’

The team at Kyber Network believes that 3AC still holds the KNC, but the amount should not be part of the assets belonging to Three Arrows Capital that was liquidated earlier this month.

Kyber Networks Can Sustain Development for Many Years.

The Kyber Network team also added that the events surrounding Three Arrows Capital would not significantly impact the project’s operations as it has enough to sustain development for many years. They said:

However, we are in no way stopped by this incident as Kyber treasury can still sustain Kyber’s development for many years. We were caught off guard since our relationship & our trust in 3AC had been built up for more than 3 years. At the end of the day we are still human.

3AC Incident is A Great Learning Lesson. KNC Will Not be Laying Off Any Employees.

Furthermore, they explained that the Three Arrows Capital incident ‘is a great lesson and wake-up call for [the project]’ and that it will firm up their ‘belief in a trustless Defi ecosystem.’ The Kyber Network team also clarified that they will not be laying off any employees, as explained below.

Nothing is changed in our long term plan, we are not laying off but rather expanding the Kyber team to build the true trustless decentralized exchange in line with our long term vision. New protocol announcement is coming in the next few days.

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Ethereum

US Government Prohibits American Citizens from Interacting with Tornado Cash

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US Government Prohibits American Citizens from Interacting with Tornado Cash

TLDR:

  • The U.S. sanctioned Tornado Cash, the mixing token that makes Ethereum transactions untraceable. 
  • The U.S. Treasury’s Office of Foreign Asset Control posted the updated sanctions list. 
  • The order makes it illegal for U.S. citizens to use Tornado Cash. 
  • Tornado Cash is open source, and many believe the sanctions deny Americans their “constitutional right to anonymity.”

Tornado cash has just today been sanctioned by the U.S. Government, a move which would presumably prohibit any address that interacted with it. This is not the first time the U.S. Treasury’s Office of Foreign Asset Control (OFAC) targeted crypto mixers after sanctioning Bitcoin Mixer Blender back in May. 

According to Senior Crypto Analyst Dylan LeClair, CirclePay’s USDC has officially blacklisted every Ethereum address sanctioned by the U.S. Treasury.

According to OFAC, the virtual currency mixer Tornado Cash has been used to launder around $7 billion of virtual currency since its creation in 2019. The U.S. claims that Tornado Cash is a haven for malicious cyber activities in Northern Korea and other criminal groups.

“Today, for the first time, Treasury is sanctioning a virtual currency mixer,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson in the press release.

“Virtual currency mixers that assist illicit transactions threaten U.S. national security interests. We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered.”

Blender and Tornado Cash have been linked to Lazarus Group, a cyber hacking group that has carried the largest virtual currency hacks to date. Its victims were Axie Infinity, from which almost $620 million were stolen, and around $20.5 million was used on Blender to launder the illicit proceeds.

According to data from blockchain firm Nansen, Ethereum transactions spiked after Axie Infinity’s hack last year.

US Government Prohibits American Citizens from Interacting with Tornado Cash 13

Crypto advocates are not happy with the move. Jerry Brito, executive director of Coin Center, told Fortune that the sanction denies Americans “their constitutional right to anonymity.” According to Brito, anyone who interacts with addresses could be in violation, even if they received funds from Tornado Cash without their consent. He believes that because the fund is open source, nothing stops a money launderer from tweaking the code and creating a fork of the chain. 

The U.S Treasury Department official said on a press call that they would continue monitoring mixers and would immediately take action when required.

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Binance Removes Off-Chain Fund Transfer Channel Between Itself And WazirX

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Binance Removes Off-Chain Fund Transfer Channel Between Itself And WazirX
  • Binance has ceased the off-chain fund transfer channel between itself and WazirX
  • On-chain transfers will still be available for the users to deposit and withdraw. 

Leading cryptocurrency exchange Binance has recently decided to remove the off-chain fund transfer channel between itself and the Indian exchange WazirX. 

Binance Suspends Off-Chain Transfer Channel Between Itself And WazirX

Per an officially released statement, Binance has reiterated its previous stance against the Indian crypto exchange WazirX, stating that the exchange does not own or manage WazirX in any way possible. 

Furthermore, the exchange has now officially removed the off-chain fund transfer channel between the two exchanges, which will come into effect from August 11. 

“To provide clarity and protection for users, we are removing the off-chain fund transfer channel between WazirX and Binance. Effective from 2022-08-11 03:00 (UTC), Binance will cease to support off-chain fund transfers between WazirX Exchange and Binance via the “Login with Binance” option.” The blog adds.

In simpler terms, off-chain transfers occur outside of a blockchain network and are actively managed by deploying a mechanism to aid such particular transfers.

Fact: we asked for transferring of WazirX system source code, deployment, operations, as recently as Feb this year. This was refused by WazirX. Binance do NOT have control on their systems.

WazirX has been uncooperative with us, and looks like uncooperative with ED as well.

— CZ 🔶 Binance (@cz_binance) August 6, 2022

The exchange further clarified that it will not be halting its on-chain transfers at the moment. 

The exchange later added how Binance will continue to support Indian regulators and provide all necessary assistance needed by the officials to investigate the said matter in depth. 

“Moving forward, Binance will support Indian regulators in the ongoing matters concerning WazirX. Binance believes in keeping an open dialogue with regulators, policymakers, and the law enforcement community as we collectively seek to establish a global regulatory framework for the industry.” The blog later adds. 

The controversy between Binance and WazirX stemmed two days ago when Binance’s CEO Changpeng Zhao tweeted that the exchange had never officially acquired WazirX. 

Quick thread on Binance and WazirX, and some incorrect reporting.

Binance does not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders.

1/4

— CZ 🔶 Binance (@cz_binance) August 5, 2022

In a comprehensive thread tweeted later, CZ further added how the WazirX-Binance transaction was never complete, and that the exchange had no control over WazirX’s control operations including “user-sign up, KYC trading and initiating withdrawals.”

The WazirX founding team maintained control of the operations of the platform. We (Binance) were never give data or control of users, KYC, etc. We would love to work with ED to fix these issues in WazirX.

— CZ 🔶 Binance (@cz_binance) August 5, 2022

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Macro Guru Raoul Pal: Most Participants Are Underinvested in Ethereum

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Macro Guru Raoul Pal: Most Participants Are Underinvested in Ethereum

TLDR:

  • Crypto Expert and Macro Guru Raoul Pal declared on Twitter today that he believes most participants are still underweight in Ethereum. 
  • The Founder of Real Vision Academy followed on to say that the pain will be at higher entry points, around $2,300.
  • Raoul Pal was famously previously bullish on Ethereum on October 29, 2021, where he confirmed he was “irresponsibly long” via a tweet that has been shared many times since on social media. 
  • Ethereum merge, which will mark the end of POW and transition to POS is scheduled in September.

Real Vision Academy founder and macro guru Raoul Pal posted his thoughts on Ethereum earlier today via his official Twitter account. 

According to Pal, Ethereum, the second highest digital asset by market cap, has higher to go in terms of price. The crypto expert believes that most participants in the market are underweight Ethereum and are expecting failure at resistance.

Raoul Pal’s view is that the more significant battle with resistance will be around $2,300. Ethereum’s price is currently $1,768.32%, and the coin has increased 3.3% in the last 24 hours.

ETH – I still think the path of pain is higher as most participants are still underweight and looking for lower entry points.

Most people expect a failure in this zone of resistance…

1/ #Ethereum pic.twitter.com/mdC3gBOvaN

— Raoul Pal (@RaoulGMI) August 8, 2022

Raul Pal shared his market thoughts previously and most famously on October 29, 2021 when he posted a tweet on being “irresponsibly long” on Ethereum. 

This tweet faced a lot of criticism on social media, as, at the time, the price of Ethereum was $4,288.10, and it was only a few weeks after the markets crashed, and crypto prices dropped severely when some reached pre-covid prices. 

Macro Guru Raoul Pal: Most Participants Are Underinvested in Ethereum 12
Source: Coingecko.com

Ethereum Merge scheduled in September

It is important to note that the Ethereum Merge is scheduled soon, with a tentative date of September 19. Ethereum price has increased 43.5% in the past 30 days anticipating the merge. The Ethereum merge will mark the end of proof of work on Ethereum and the full transition to proof of stake. The merge is set to reduce Ethereum’s energy consumption by approximately 99.95 % according to Ethereum’s official website.

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