Krystal Newsflash (17th Feb 2023)
Welcome to our recap of the major stories in the crypto world! Here’s what has happened over the past week:
Paxos ordered to halt stablecoin minting 🛑
Just last week, Paxos, the issuer of BUSD, USDP and PAXG, was reported to be investigated by the New York State Department of Financial Services (NYDFS).
Paxos was then ordered to halt the minting of the BUSD stablecoin.
Although BUSD has Binance’s name on it, Paxos is actually the issuer of this stablecoin on the Ethereum network, and holds all of the reserves that back BUSD.
However, the BUSD is available on other networks, including EVM-compatible ones like BNB Smart Chain, Avalanche, Polygon, as well as non-EVM-compatible networks like Tron and the BNB Beacon Chain.
For these BUSD tokens that exist on other chains, Binance acts as the issuer for them as Binance-pegged BUSD.
This is done where Binance acts as the custodian of the BUSD minted on the Ethereum chain by Paxos, and they will wrap these BUSD on the other networks.
A previous report by Bloomberg suggested that there were not enough reserves to back the circulating supply of Binance-pegged BUSD, which was claimed to be due to a timing mismatch by Binance.
This could be the reason why the NYDFS is going after BUSD.
The entire saga has resulted in BUSD’s market decreasing by more than $2 billion.
Attack on crypto staking ⚔️
The concerns over the SEC coming after crypto staking were indeed true, as it was announced that Kraken will be settling a lawsuit for $30 million over providing staking services to US retail customers.
After previously claiming that ETH could be considered a security when it transitions to a proof-of-stake consensus mechanism, the SEC is going against companies like Kraken that offer these staking services.
The SEC claims that Kraken promoted its staking service without disclosing the appropriate risks that are tied to this.
As a centralised exchange, Kraken has full control over your funds and you would need to trust that they are keeping your assets safe.
However, trust in these entities is rather low after the crash of FTX, and the SEC is taking a harsher stance towards the remaining exchanges, such as claiming that staking-as-a-service providers should be regulated under securities laws.
Brian Armstrong, the CEO of Coinbase, has refuted this and seems willing to go to court if the SEC files a lawsuit against them.
With the concern over staking services provided by centralised entities, you may want to consider decentralised solutions instead.
At Krystal, we have partnered with 2 liquid staking providers, Lido and Ankr to provide multiple liquid staking options for ETH, MATIC, BNB, AVAX and FTM.
Liquid staking allows you to earn yield on your staked assets, and use it on other DeFi protocols as well!
Try it here NOW.
The zkEVM race continues 🏁
Various companies are rushing to be the first to release a working zero-knowledge Ethereum Virtual Machine (zkEVM).
zkSync has rebranded its zkSync 2.0 to zkSync Era∎.
This includes various milestones for the network, such as introducing a fair launch for projects to onboard, and open-sourcing its code.
Once developers have deployed their code to the zkSync mainnet, it’s only a matter of time before the network is made available to the public.
Meanwhile, Polygon has made significant strides with its own zkEVM, as the beta main network is set to go live on March 27.
One of the key takeaways from the announcement is that Polygon’s zkEVM has brought down the cost of generating a proof for a large batch of transactions to ~ $0.06.
This will make transacting on Polygon much cheaper, with its low gas fees already being one of the main drivers of the network’s growth.
Krystal’s wallet allows you to store both cryptocurrencies and NFTs on the Polygon network. If you’re looking for a simple, secure and trusted way of navigating the DeFi space, download our Krystal app below!
This law protects your private keys 🛡
The state of Wyoming has passed an interesting bill which prevents individuals from being forced to reveal their private keys to the court.
However, the only exception to this law is when either the public key is unavailable, or it is unable to disclose the details of the digital asset.
Wyoming has been known to be a rather crypto-friendly state, and this law helps to further progress its crypto policies.
Private keys act as the password to your crypto wallet, and anyone who has access to it can sign and approve any transaction, including draining the funds from your wallet!
We highly recommend that you do not share your private keys with anyone, as this gives that person full access to all of your funds.
Metamask phishing scam ⚠️
Namecheap, a web hosting company, had one of its third-party services compromised, and resulted in unauthorized emails being sent to its customers.
This resulted in a targeted attack on Metamask users, where the hackers sent a fake email to users requesting for Know-Your-Customer (KYC) verification.
Even though the site looked credible with the URL “verification.metamask.io”, it was actually a phishing site that tricked users into keying in their seed phrase.
Decentralised, non-custodial wallets like Metamask or Krystal never require you to perform any KYC verification. Your wallet exists on the blockchain, and it is not controlled by any central entity.
We urge you to be extremely cautious whenever a site requests for your seed phrase, especially if it is a URL that you clicked from an external site (e.g. email, Twitter or Telegram message).
Remember, your seed phrase is the master password for your wallet, so you will be giving up control of your funds to the hacker!
You can learn more about why a seed phrase is so important in our article here.
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