The Crypto Compass Issue #83

Hello readers,

In the ever-evolving world of cryptocurrency, security remains a top concern for both investors and exchanges alike. The recent $235 million hack on WazirX, one of India’s largest crypto exchanges, serves as a stark reminder of the vulnerabilities that even the most established platforms can face. This attack, which exploited weaknesses in WazirX's multisignature wallet, resulted in the theft of millions in assets, highlighting the urgent need for better protection strategies.

As we delve into this week's developments, it's clear that safeguarding your digital assets has never been more critical. While exchanges can offer convenience, they are not impervious to attacks. That's why using a hardware wallet—storing your private keys offline—provides an essential layer of security that online platforms simply can't match. In light of the WazirX incident, we encourage you to take a proactive approach in securing your investments.

WazirX to Restore User Balances After $235M Hack

In response to a massive $235-million hack in July 2024, Indian cryptocurrency exchange WazirX has announced plans to restore the balances of all platform accounts. The hack, which occurred due to discrepancies in a multisignature wallet, led to the suspension of withdrawals and abnormal trading activities. WazirX will undo all trades carried out after the withdrawal suspension on July 18, ensuring that all users are treated equitably. The recovery process will reverse fees and referrals linked to the affected trades, and all impacted users will receive notifications regarding the adjustments.

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Celsius Files Lawsuit Against Tether for $3.5 Billion

Defunct cryptocurrency exchange Celsius has filed a lawsuit against Tether, seeking the return of approximately $3.5 billion in Bitcoin, damages, and legal fees. The lawsuit stems from a dispute during Celsius’ bankruptcy proceedings, where Celsius alleges that Tether liquidated 39,542.42 BTC in collateral without providing an opportunity for Celsius to offer additional collateral, as per their agreement. Tether has dismissed the claims as baseless, stating that Celsius itself directed the liquidation. The suit also demands the return of additional Bitcoin transfers, bringing the total to 57,428.64 BTC, valued at around $3.48 billion, alongside at least $100 million in damages.

White House and Crypto Leaders Discuss Future Policy

Top White House officials and crypto industry leaders met virtually to discuss future crypto policy. The meeting, organized by Rep. Ro Khanna, focused on use cases, policy outcomes, and economic impact. Notable attendees included Ripple, Uniswap, and Coinbase executives. The discussion signals progress in government-industry dialogue, with calls for the White House to support legislation regulating the crypto sector as the 2024 election approaches.

Happenings of the week

• MicroStrategy's BTC reserve strategy outperforms all top stocks

• Global Crypto Trading Volume Rises 19% in July

• Crypto startup funding grows to $2.7B in Q2 despite fall in total deals

• Doodles partners with Adidas for merchandise

VCs Favor Bitcoin, Ether Over Early-Stage Crypto Bets

Venture capitalists are slowing down investments in early-stage crypto startups, opting instead to hold Bitcoin and Ether due to their strong returns, according to Adam Cochran of Cinneamhain Ventures. Cochran explains that most VC firms prefer the safer, high-reward profiles of Bitcoin and Ether over riskier Web3 ventures, as these assets have consistently outperformed traditional index funds. Despite recent declines in VC funding compared to previous years, the focus remains on established cryptocurrencies rather than speculative early-stage investments.

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