The Crypto Compass Issue #76

Hello readers,

Recent developments in the cryptocurrency world have underscored the critical importance of self-custody for digital assets. The long-awaited repayments from the defunct Mt. Gox exchange and the $3 million exploit at Kraken highlight the risks associated with trusting third parties with one's cryptocurrency holdings. As Mt. Gox prepares to repay creditors years after its infamous hack, and Kraken addresses vulnerabilities that led to significant unauthorized withdrawals, the crypto community is reminded of the inherent risks in relying on centralized platforms. These events serve as a stark reminder of why self-custody remains a vital practice for safeguarding digital assets.

Mt. Gox to Begin Bitcoin and Bitcoin Cash Repayments in July

Defunct bitcoin exchange Mt. Gox is set to start distributing bitcoin and bitcoin cash repayments from July, as announced by Rehabilitation Trustee Nobuaki Kobayashi. Preparations for these repayments have been finalized, and they will commence with exchanges that have completed the required information exchange and confirmation. This news follows Mt. Gox's movement of $2.9 billion in bitcoin for the first time in five years. Bitcoin's price, which had already dropped below $63,000, fell further to $60,500 following the announcement. The repayments are part of a plan to reimburse creditors with 142,000 bitcoin, 143,000 bitcoin cash, and fiat currency totaling $432 million by October 2024.

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Tokenized Asset Market Could Reach $4 Trillion by 2030, Says McKinsey

McKinsey & Company reports that the market for tokenized assets might reach $4 trillion by 2030, although widespread adoption remains distant. The report highlights that tokenization's growth, driven by blockchain technology, is slower and narrower in scope than previously optimistic predictions. Financial institutions are cautiously moving from pilot projects to scaled solutions, with mutual funds, bonds, and loans leading the way. Despite the potential, many institutions remain hesitant, awaiting clearer regulatory signals and industry standards. McKinsey's base case estimates the market at nearly $2 trillion by 2030, with a bullish scenario depending on favorable regulations and industry collaboration.

MicroStrategy Buys $786 Million Worth of Bitcoin, Expands Holdings

MicroStrategy has purchased $786 million worth of Bitcoin, expanding its holdings to approximately 226,331 BTC. This acquisition follows the company's recent $800 million fundraising through convertible senior notes. The purchase price averaged $65,883 per Bitcoin, significantly increasing MicroStrategy's stockpile to a total worth of around $15 billion at current valuations. Despite the high current value, the firm's aggregate purchase price for its Bitcoin is $8.33 billion, or roughly $36,800 per coin. This move reinforces MicroStrategy's position as the largest institutional Bitcoin holder, closely linking its fortunes to the cryptocurrency's performance.

Happenings of the week

• Bitcoin Falls Below $64K Following $900M in ETF Outflows

• Bitcoin price slides below $63,000, triggering a spike in long liquidations

• SEC Ends Probe Into Consensys, Won't Sue Over Ethereum

• Trump scores bitcoin donations worth $2 million from Winklevoss twins

Kraken Recovers Funds After $3 Million Bug Exploit

Kraken disclosed that nearly $3 million was taken from its wallets following a bug-related exploit that has since been fixed. The bug, discovered through a bounty program alert, allowed attackers to inflate their balance and withdraw funds without fully completing deposits. Although no client assets were at risk, the flaw stemmed from a recent UX change. Three accounts exploited the bug before it was fixed, with one account linked to the individual who reported it. Kraken requested the return of the funds, but the researchers initially refused. The funds have since been returned, minus fees, with Kraken treating the incident as a criminal case.

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