🤯 Exchange hacks continue

All Things Flooz Newsletter Is For Innovators, Creators And Traders.

Flooz

4 min read Apr 18, 2023


Talking points

  • 🚨 Bitrue-much to handle

  • 🧑‍💻 $3B hacker punished

  • 🪙 Stablecoin for U.S?

 🚨 Bitrue-much to handle

Singapore-based crypto exchange Bitrue fell victim to a daring cyber attack, resulting in a staggering loss of $23 million! The hackers attacked the exchange's hot wallet on April 14, 2023, during the early hours of the morning, but due to Bitrue's swift action, they prevented any further damage to its funds.

The attackers made off with assets worth approximately $23 million in various cryptocurrencies, including Ethereum, QNT, GALA, SHIB, and wMATIC

However, the affected wallet represented less than 5% of Bitrue's total reserves, and the remaining wallets were untouched, ensuring the safety of the majority of user funds.

The details of this exploit are still under investigation, with some security checks having been made already, however, Bitrue wants to completely understand how this occurred and how to prevent an attack of similar nature in the future.

As a precautionary measure, Bitrue has also temporarily suspended all withdrawals, but rest assured, the team is working tirelessly to address the issue and expects to reopen withdrawals on April 18th.

Although if you have funds on the exchange or have been impacted in any way, rest assured as Bitrue has confirmed that any users affected will be fully compensated, which is a fantastic response and drives some added trust back into the exchange's favor as we have seen users struggle for any kind of compensation in previous events involving exchanges.

Bitrue is no joke in terms of exchange power as they have an average daily trading volume of over $1 billion and has become a major player in the crypto space, with bitcoin and ether being among the most-traded token pairs. But as we all know, even the best can fall prey to cyber attacks.

This incident again is a stern reminder that there is always vulnerability and you should have a plan in action to protect your assets.

🧑‍💻 $3B hacker punished 

It seems cyber crimes are the topic feature today as we have another one here, although we think perhaps just a little more was stolen as a result than the previous one you just read.

In a jaw-dropping case of cybercrime, James Zhong has been sentenced to one year in prison for his role in stealing over 51,000 Bitcoin from the notorious Silk Road drug-trafficking site back in 2012. Yes, all the way back from 2012, and yes again, you did read that correctly, over 51,000 Bitcoin were stolen, which at the time was worth around $600k. Although for comparison, the value of that today would be roughly $1.5B…

The U.S. Justice Department revealed that Zhong used a simple glitch on Silk Road's website to exploit the withdrawal process, but here's where the story takes a wild turn. Zhong didn't just stash the stolen Bitcoin and go into hiding.

Oh no, he went on a super spending spree! Zhong splurged around $16 million of the stolen BTC on a range of assets and luxuries including, real estate, luxury hotels, nightclubs, and even Lamborghinis! Talk about living the high life, right?

However, not all ended well as Zhong's extravagant lifestyle came crashing down faster than the Luna crash when U.S. police raided his home in Gainesville, Georgia, and uncovered the stolen Bitcoin, now worth over $3.36 billion due to the skyrocketing value of Bitcoin over the years and the price at the time.

This seizure also became the second-largest financial seizure in U.S. history, making headlines worldwide.

Zhong has since entered a guilty plea to one count of wire fraud, which carries a maximum sentence of 20 years in prison.

Prosecutors have asked the judge for a lenient sentence of less than two years, taking into consideration Zhong's youth, his autism, and his help in recovering the stolen crypto. Zhong's lawyers argued that while what he had done was against the law, Silkroad was certainly not a victim due to the nature of the marketplace.

So, folks, let this be a cautionary tale and a reminder to always play by the rules in the world of cryptocurrency and if you ever needed a reminder to stay on the right side of the law, here it is.

 🪙 Stablecoin for U.S?

Now we are off of the hacker topic, we have some potentially positive news for crypto in the U.S.

This comes after the U.S. House Financial Services Committee unveiled a draft version of a potential game-changing stablecoin bill. This bill, which is now available for public viewing on the committee's hearing page, marks the first major piece of crypto legislation to make its way in 2023.

Stablecoins have made some big headlines in the last year with the most recent incidents such as the blow-up of terraUSD (UST) and the temporary detachment of USD coin (USDCUSDC) from its $1 peg most being the biggest moments.

In response, the draft bill proposes a moratorium on stablecoins backed by other cryptocurrencies until a thorough study can be conducted. It also calls for an investigation into the potential impact of a central bank digital currency (CBDC) issued by the Federal Reserve.

It also seems that the government didn't want to announce it either, instead they simply uploaded it.

The bill introduces new definitions for payment stablecoin issuers and this development has sparked anticipation and speculation among crypto enthusiasts and experts alike. Could this signal a positive move for crypto in the US as a result?

This highly anticipated hearing comes right after the full Financial Services Committee meets to hear from Securities and Exchange Commission (SEC) Chair Gary Gensler, making it a pivotal week for the crypto community. Will the SEC finally let go of the grasp it has on crypto and allow it to prosper? Only time will tell…

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