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TUSD Stablecoin Fails To Maintain $1 Peg Due To Binance’s FDUSD Strategy

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The trueUSD (TUSD) stablecoin, which is supposed to be pegged to the US dollar, has dropped below $1 and is currently trading at $0.988, according to CoinDesk Indices data. This is the second time in two months that TUSD has de-pegged, as it also fell to $0.9957 in June 2023.

One of the reasons for the decline is the high demand for First Digital’s FDUSD stablecoin, which Binance, the largest crypto exchange by volume, supports. Binance introduced zero-fee FDUSD trading, incentivizing users to sell their TUSD and buy FDUSD instead. FDUSD is the preferred stablecoin for staking new tokens on Binance’s Launchpad.

Bradley Park, an analyst at CryptoQuant, said that TUSD holders sold their coins as the Launchpad pool did not open, causing the de-pegging. He also said that trueUSD is related to Justin Sun, the founder of Tron and Poloniex, and its market cap is constantly shrinking due to the potential impact of the HTX and Poloniex hacks.

It is likely due to the potential impact of the HTX and Poloniex hacks, said Park.

TUSD’s Attestations And Market Share Under Scrutiny

Another factor contributing to TUSD’s loss of confidence is the lack of transparency over its attestations. Attestations are reports from independent auditors that verify the amount of US dollars backing the stablecoin. trueUSD claims to have monthly attestations from Cohen & Company, but the latest report available on its website is from October 2023.

However, some users have expressed doubts about trueUSD’s credibility and solvency on social media platforms such as Twitter and Reddit. Some have also accused TUSD of manipulating its supply and price to maintain its peg.

trueUSD’s market share has also been declining, as FDUSD has overtaken it as the fourth-largest stablecoin by market capitalization. According to CoinGecko, FDUSD has a market cap of $2.02 billion, while TUSD has $1.97 billion as of January 16, 2024. The top three stablecoins are Tether (USDT), USD Coin (USDC), and Dai (DAI), with market caps of $95 billion, $25 billion, and $5.35 billion, respectively.

Related Reading | Crypto Investment Soars: $17.5B Record Trading In A Week

Tether’s Dominance Grows Amid Concerns of Expanding Use In Money Laundering

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Tether, the issuer of the USDT stablecoin, has witnessed a substantial increase in its share of the global stablecoin supply, surging from 50% to 71% throughout 2023, as reported by The Block. The company recently achieved a significant milestone by exceeding 95 billion stablecoins in circulation, surpassing the GDPs of nations like Guatemala and Bulgaria combined. In contrast, its primary competitor, Circle’s USD Coin (USDC), lags with a circulation of 27 billion tokens, down from 48 billion at the beginning of the year.

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UN Warns Of Tether’s Dark Side

However, amidst Tether’s success, recent reports indicate that the cryptocurrency platform has become a preferred tool for money launderers and fraudsters in Southeast Asia, according to a warning from the United Nations. The UN’s Office on Drugs and Crime released a report revealing that Tether’s crypto token is at the epicenter of a burgeoning industry of scams, including tactics such as the “pig butchering” strategy, where criminals engineer false romantic connections to exploit victims.

Jeremy Douglas of the UN’s Office on Drugs and Crime expressed concern about the rise of a parallel banking system facilitated by organized crime through new technologies, particularly within the loosely regulated online casino sector in Southeast Asia. The report emphasized the symbiotic relationship between online gambling platforms, illegal ones in particular, and Tether-based money laundering.

Despite the company being a stablecoin pegged to the US dollar, providing stability in cryptocurrency trading, the UN report reveals that authorities have uncovered various money laundering networks dealing in illicit Tether funds. Singaporean authorities dismantled an operation last August, recovering $737 million in cash and crypto.

Erin West, a criminal prosecutor and cybercrime expert, explained that Tether’s appeal to criminals lies in its promise of fast, irreversible transactions on the blockchain. West highlighted the challenges victims face, blinded by love and enticed by the prospect of quick wealth through unfamiliar cryptocurrency investments.

While there has been a broader crackdown on digital assets in the US and other regions, the company continues to be embraced by criminal groups for moving funds due to the perceived lack of effective cryptocurrency regulations. Tether’s token has become so ingrained in illicit activities that some casinos now specialize in handling it, further exacerbating concerns about the growing role of Tether in facilitating criminal transactions.

Related Reading | Solana And Avalanche Replace XRP And Tron In HKVAC’s Crypto Indexes

Solana Suffers $4 Million Scam Epidemic As Web3 Anti-Scam Platform Issues Warning

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In a concerning revelation, the Web3 anti-scam platform Scam Sniffer has reported a surge in sophisticated Solana wallet-draining scams, resulting in losses exceeding $4 million within the past month. In a recent X post, the platform shed light on the alarming trend that has seen over four thousand users falling victim to a widespread phishing attack, marking a significant threat to the security of Solana’s user base.

The genesis of the investigation traces back to the identification of a Rainbow Drainer after a user reported an airdrop phishing incident. Scam Sniffer issued a cautionary warning on December 16, 2023, following this revelation. The anti-scam platform underscored that scammers employ anti-simulation techniques to mask balance changes in wallets, leaving users unaware of the malicious transactions they sign, consequently leading to asset losses.

Solana Scam Surge

Data from Dune Analytics revealed that Rainbow Drainer successfully stole approximately $2.14 million from 2,189 victims. Another malevolent actor named Node Drainer emerged in a Christmas day phishing campaign, managing to siphon over $2 million in less than a fortnight.

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The platform revealed that an address associated with Node Drainer converted stolen USDC to ETH via AllBridge, raking in more than $1 million in profit. This starkly contrasts traditional Ethereum-based scams, as Solana phishing attacks often involve direct transfers, capitalizing on weaknesses in transaction simulations.

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In a grim analogy, Scam Sniffer characterized the blockchain ecosystem as a dark forest, teeming with lurking scammers. The platform sounded an urgent alarm, urging users to fortify their defenses against such threats by remaining vigilant and well-informed.

Despite its recent surge in popularity during the last quarter of 2023, Solana has now faced the brunt of this malicious activity. CoinMarketCap data revealed a remarkable 570% surge in the price of SOL between September 27 and December 25, 2023. 

However, at the time of reporting, SOL traded at $97.61, retracting from its peak of $125.97 on Christmas day. The incident is a stark reminder of the vulnerability within the burgeoning blockchain landscape and the imperative need for enhanced user awareness and security measures.

Circle’s Secret IPO: Analysts Bullish On $1.5B 2023 Revenue

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USDC issuer Circle has confidentially filed for an initial public offering [IPO] with the intention of transitioning into a publicly traded company in the United States by early 2024. The specifics of the IPO, such as the number of shares to be offered and the proposed price range, remain undisclosed at this stage. The successful completion of the IPO is contingent on the review by the Securities and Exchange Commission [SEC] and prevailing market conditions.

As the issuer of the second-largest stablecoin globally and the seventh-largest cryptocurrency overall, according to CoinGecko, Circle’s tokens are collateralized by cash and cash equivalents, including short-term Treasury bonds.

The firm’s decision to pursue a public listing comes amidst a lengthy period of reduced deal-making activities amid elevated interest rates and market volatility. Other companies, such as Apex Fintech and Aspen Insurance, have also confidentially filed for US IPOs, signaling a potential revival in the public offering space.

This marks Circle’s third attempt at going public, with the previous attempts in 2022 through a special-purpose acquisition company [SPAC] and in 2021 with a special-purpose acquisition company named Concord Acquisition Corp. facing obstacles and ultimately being terminated. Despite the uncertainties surrounding the valuation sought in this IPO, Circle’s move aligns with its longstanding objective of becoming a publicly traded entity in the United States.

Circle’s Pursuit: Embracing Transparency

CEO Jeremy Allaire has consistently emphasized the significance of the IPO in enhancing trust and transparency for the company, which boasts major financial players such as Goldman Sachs, Fidelity, and Blackrock among its investors. While there have been rumors about Circle’s wavering commitment to an IPO, a spokesperson for the company has refuted such claims, asserting the unwavering pursuit of this strategic move.

Circle
Source: Ryan Selkis

Market analysts, including Messari’s Ryan Selkis, have noted the confidentiality of Circle’s IPO filing but highlighted the company’s strong performance, citing estimated revenues of $800 million in 2022 and a projection of approximately $1.5 billion in revenues and $300 million in profits for 2023. Circle’s decision to go public aligns with a broader trend among crypto companies seeking public status as a means to rebuild trust in the aftermath of the market challenges experienced in 2022.

Coinbase & Yellow Card Partner To Bring Crypto Access To 20 African Countries

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Coinbase, one of the world’s largest cryptocurrency exchanges, has joined forces with Africa’s Yellow Card to expand its services across 20 new African countries. The partnership aims to provide millions of users with access to USD Coin (USDC) stablecoin, fostering faster, cheaper, and more accessible transactions.

The announcement, detailed in a blog post by Coinbase, highlights the company’s commitment to addressing the unique financial needs of emerging economies. By collaborating with Yellow Card, a leading African stablecoin exchange and a Coinbase Ventures portfolio company, Coinbase aims to empower users with the benefits of USDC on its decentralized Layer 2 (L2) Base.

Coinbase Wallet Integration for Seamless USDC Purchases

The partnership’s immediate impact will be felt by Coinbase Wallet users in the 20 targeted African countries, representing half of the continent’s population. Starting in February, these users will have the ability to purchase USDC directly within the Wallet app. What sets this apart is the convenience of sending USDC without fees on various platforms, including messaging apps like WhatsApp, iMessage, Telegram, and popular social media apps and email.

Yellow Card’s platform will also play a crucial role in expanding access to USDC, providing users with cheaper payment options and transfers through the L2 blockchain. This move is particularly significant for countries facing high inflation rates and heavy reliance on remittances.

The emphasis on USDC is expected to bring economic freedom to regions that have struggled with financial instability. The initiative aims to protect savings from the impact of volatile currencies, with inflation rates reaching 18.5% across Africa. Additionally, the partnership seeks to revolutionize remittances by reducing fees from 3-6% to a maximum of 2%, ensuring faster transactions.

The benefits extend to small and medium enterprises (SMEs) in emerging economies, offering them the opportunity to access global financial systems through USDC. Setting up a Wallet in less than 30 seconds will enable merchants to engage in cross-border commerce seamlessly.

In regions where younger populations predominate, the partnership anticipates a positive response, as crypto ownership is more prevalent among individuals under the age of 34. With a focus on mobile accessibility and the decentralized nature of cryptocurrencies, the Coinbase and Yellow Card collaboration aims to leapfrog outdated financial systems and provide a modern, global, and decentralized alternative for millions in need.

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CoinsPaid Hit by Second Breach, $7.5M in Assets Stolen

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Crypto payment gateway CoinsPaid has recently encountered its second security breach within the span of six months, resulting in a compromise of nearly $7.5 million. The breach was initially identified by web3 security firm Cyvers, whose artificial intelligence system flagged multiple unauthorized transactions totaling $6.1 million in digital assets, including Tether (USDT), Ether (ETH), USD Coin (USDC), and CoinsPaid’s native token CPD.

CoinsPaid Struck Again in a $7.5M Breach

According to Cyvers’ team on X (previously Twitter), the attackers executed a strategic move, exchanging approximately 97 million CPD tokens for Ether valued at around $368,000. The ill-gotten funds were then shifted to externally owned accounts (EOAs) and deposited into prominent cryptocurrency exchanges such as MEXC, WhiteBit, and ChangeNOW.

Upon conducting further analysis, Cyvers discovered additional unauthorized transactions involving Binance Coin (BNB) exceeding $1 million. This revelation brings the cumulative amount stolen in this latest breach close to $7.5 million.

Despite the significant financial impact, CoinsPaid, a leading player in the Estonian digital asset payment processing sector, has refrained from issuing an official statement concerning the recent attack. This incident comes on the heels of another security breach in July 2023, where malicious actors pilfered over $37 million from the platform.

CoinsPaid attributed the compromise to the North Korean state-backed Lazarus Group in the earlier breach. In a detailed post-mortem report, the company revealed that the group had attempted multiple infiltrations since March 2023, adopting “highly sophisticated and vigorous social engineering techniques” after initial failures. Notably, the attackers focused on targeting employees rather than directly compromising the company’s infrastructure.

The Lazarus Group has been implicated in several cryptocurrency hacks throughout 2023, raising concerns within the industry. TRM Labs, a blockchain intelligence firm, reported that the group successfully stole at least $600 million in cryptocurrency last year.

These repeated security breaches cast doubt on the efficacy of CoinsPaid’s security infrastructure and its ability to protect the substantial volume of cryptocurrency transactions it facilitates. As the cryptocurrency sector contends with escalating cyber threats, stakeholders eagerly await CoinsPaid’s response and its strategy for bolstering security measures moving forward.

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Crypto Custodian Radiant Capital Experiences $4.5 Million Hack

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In a setback for the crypto and decentralized finance (DeFi) sector, Radiant Capital, a prominent player, faced issues with its newly established native USDC market on the Arbitrum network. PeckShield, a blockchain security and analytics company, disclosed that approximately $4.5 million worth of the cross-chain lending protocol Radiant Capital was compromised, involving 1,900 ETH.

Responding promptly to the incident, the Radiant DAO committee, comprising members of the Web 3 security community and developers, temporarily halted the loan market on Arbitrum. 

The breach, identified as a flash loan attack, took advantage of a vulnerability that often arises when a new market is introduced in the lending industry. According to PeckShield, the attack occurred six seconds after the launch of the new crypto market.

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Crypto Custodian Radiant Capital Experiences $4.5 Million Hack 6

Crypto Flash Loan Vulnerabilities: A $1.5 Billion Security Wake-Up Call

Flash loan attacks exploit features allowing users to borrow assets without collateral, influencing markets or exploiting smart contract vulnerabilities. Notably, as of September 2023, the cryptocurrency industry had incurred losses totaling $1.5 billion due to hacks and frauds, underscoring the escalating security concerns.

Radiant Capital addressed the issue, assuring that the Radiant DAO Council has temporarily suspended lending and borrowing markets on Arbitrum while the matter is under investigation. 

The custodian emphasized that no funds are currently at risk. A comprehensive postmortem report will be released once the investigation concludes, with normal operations set to resume on Arbitrum.

This security breach is part of a broader trend of crypto attacks in the DeFi sector. Notably, Orbit Chain’s bridging service, Orbit Bridge, experienced a significant loss of $82 million in a breach on December 31, further highlighting the vulnerability of platforms in the decentralized finance space.

Charting Crypto’s Transformative Trajectory: 5 Key Highlights From 2023

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2023 emerged as a pivotal year in the dynamic landscape of the crypto industry, marking a shift from the turbulence of 2022. Five key charts shed light on the transformative journey of cryptocurrencies over the past year, according to the recent report from the Block.

Crypto Chart Chronicles Of 2023

Firstly, the Grayscale Bitcoin Trust (GBTC) witnessed a remarkable narrowing of its discount to Net Asset Value (NAV). Following Grayscale Investments’ triumph against the SEC in August, the GBTC discount dropped below 10% for the first time since July 2021. This trend, a significant departure from the historic premium, reflects growing optimism regarding the potential approval of a spot bitcoin ETF in the U.S.

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Contrastingly, Binance faced a challenging year as its legal and regulatory troubles unfolded. In November, the U.S. authorities settled a criminal investigation with Binance, resulting in a historic $4.3 billion penalty. Former CEO Changpeng Zhao’s guilty plea and subsequent resignation further compounded the exchange’s woes. Binance’s market share among non-USD exchanges dwindled from over 70% to around 46% by the year’s end, signaling a significant setback.

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Meanwhile, the stablecoin USDC, issued by Circle, experienced a squeeze in its market share. Starting the year with a 32% share, USDC faced a depegging from the U.S. dollar in March, leading to a 15% drop in its market cap within 24 hours. The subsequent months witnessed a continued erosion of USDC’s market share, falling to 19% by the end of the year, with USDT strengthening its dominance.

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Bitcoin, traditionally not associated with NFTs, played a crucial role in the resurgence of the NFT sector. The Bitcoin Ordinals protocol, introduced in January 2023, allowed users to engrave NFTs directly onto the blockchain, leading to a transaction surge. Bitcoin-based NFTs accounted for around 59% of the peak weekly NFT trading volume, revitalizing the NFT market.

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Closing the year on a positive note, the crypto market rebounded from the challenges of 2022. Bitcoin’s value surged by 160%, while Ether witnessed a 94% increase from its position a year ago. Solana emerged as the top performer among the top ten cryptocurrencies, experiencing a staggering 1,000% gain.

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However, the industry continues to evolve, promising more developments in the year ahead as the crypto community anticipates the potential approval of a spot Bitcoin ETF and the upcoming Bitcoin halving event in 2024.

Related Reading | XRP’s Trader Foresees Potential Dip Before Anticipated Surge

Circle Charts Regulatory Milestone In France, Taps Payment Industry Expert for Key Role

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Global financial technology firm Circle, renowned for issuing stablecoins such as USDC and EURC, revealed in a press release on December 21st that it has received conditional registration as a Digital Asset Service Provider (DASP) with the French Financial Markets Authority (AMF).

The announcement underscores the company’s commitment to France and the European Union, with the firm also disclosing the appointment of Coralie Billmann, a seasoned professional in the payments industry, to lead its licensed operations in the country. However, Billmann’s role is contingent upon regulatory approval.

To initiate operations in France, Circle must fulfill the conditions tied to its registration by obtaining approval as a payment services provider (PSP) or registration as an agent of a PSP. The company is currently in the process of obtaining an Electronic Money Institution license to satisfy this requirement.

Billmann brings a wealth of experience to her role at Circle, having played a pivotal role in launching the payments activity of 3S Money Club in Europe and serving in leadership positions at JP Morgan and PayPal. Her strong background in compliance and finance positions her to play a crucial role in ensuring MiCA readiness and passportability for Circle’s products and services.

Jeremy Allaire, Co-founder, CEO, and Chairman at Circle, emphasized the company’s commitment to a regulatory-first approach, citing the conditional DASP registration in France as a significant milestone. He praised Billmann’s expertise:

With Coralie Billmann joining Circle, her deep market expertise and leadership will be instrumental in furthering our regulatory efforts and deepening our connections in France.”

Circle’s Regulatory Vision

Circle aims to bring its European operations under comprehensive EU oversight by securing both a full DASP and Electronic Money Institution license. This aligns with the stringent standards the Autorité de Contrôle Prudentiel et de Résolution (ACPR) set and ensures compliance with the forthcoming Markets in Crypto-Assets (MiCA) regime.

Dante Disparte, Circle’s Chief Strategy Officer and Head of Global Policy highlighted the strategic selection of France as their European regulatory base, citing the country’s clear rules for responsible innovation in fintech and digital assets.

Meanwhile, Coinbase, a major player in the crypto space, has also secured authorization from the AMF as a Virtual Assets Service Provider (VASP). This move positions Coinbase to custody digital assets and offer and facilitate crypto trading in France, aligning with EU and international regulations. Additionally, Coinbase has expanded its services to institutional foreign investors outside the United States, enabling them to trade Bitcoin and Ether against USD Coin.

Related Reading | 69k Bitcoins Seized In Silk Road Face U.S. Judgment

Solana Game Hacked: AURY Token Plunges 80%

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Aurory, a gaming ecosystem that operates on the Solana blockchain, was allegedly hacked, specifically targeting Aurory’s SyncSpace bridge on Arbitrum’s native decentralized exchange [DEX] Camelot. This incident resulted in a substantial decline in liquidity within the AURY-USDC pool on the decentralized trading platform Carmelot, plummeting nearly 80% from 1.5 million USD to 312,000 USD.

Following the security breach, the token’s value plummeted to $0.35 but subsequently rebounded. Presently, it is trading at $1.2, reflecting a 15% decrease within 24 hours.

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Solana Game Hacked: AURY Token Plunges 80% 13

In response to the breach, the SyncSpace bridge, a crucial component of Aurory’s ecosystem facilitating the seamless transition of items between on-chain and off-chain with a single transaction, has been temporarily shut down for maintenance. The Aurory team is diligently conducting a thorough investigation to identify and rectify the vulnerability. The bridge is expected to reopen in the coming days once the necessary security measures are in place.

The Solana platform has released an official statement addressing the incident. The team detected unusual activity on their marketplace, revealing that a bad actor exploited the marketplace’s buy endpoint, increasing their $AURY balance in SyncSpace. Subsequently, around 600k tokens were withdrawn to the Arbitrum network, and the exploiter executed market sells into existing bids, liquidating the entire stolen amount. Despite this, the platform assured users that no user funds or NFTs were lost or at risk, as the stolen AURY came from a team wallet designed for withdrawals.

Solana Game Hack Update

The exploit, confirmed as not ongoing, prompted the immediate disabling of SyncSpace for maintenance. Measures were taken to absorb sell pressure through market-making strategies and pool rebalancing, ensuring the exploiter had no remaining AURY to sell. The Aurory team emphasized that SyncSpace underwent a thorough audit by a leading security firm months ago, and they are committed to investigating how the vulnerability went undetected despite this expert review.

A detailed post-mortem on the situation is promised once the fix is completed and the investigation concludes. The Solana-based ecosystem team expressed gratitude for the community’s patience and understanding, assuring users of their dedication to restoring services swiftly and enabling uninterrupted gameplay and transactions. Amidst the security challenges, the team is also gearing up to announce a new Amber patch and an end-of-year event for Seekers of Tokane in the coming week.