Blockchain Bites: Tether’s Dispute, Buterin’s Fix and 3 reasons for the Bitcoin sell-off

Tether disputes market manipulation allegations brought to court, Vitalik Buterin submits a proposal for Ethereum’s high gas tariffs, and Voatz assessed whether a long-standing federal law on access to computers is overly broad.

Ties disputes
Tether and affiliated trading group iFinex have demanded a market manipulation suit be filed because plaintiffs, they say, cannot prove that $ 3 billion worth stablecoins actually entered the market. Five cryptocurrency traders have sued companies for suffering monetary losses after purchasing cryptocurrencies at prices they claim were inflated by Tether’s market manipulation. Plaintiffs claim that Tether has issued billions of dollars worth of dollar-backed cryptocurrencies, which Bitfinex then used to buy cryptocurrencies on the open market to support prices during market downturns. Attorneys for the defendants argue that the claim that USDT is not adequately supported is based on “unsubstantiated allegations and that it has not been proven that the prices of cryptocurrencies were actually artificial at the time in question.

New couples
BitMEX has announced plans to introduce futures markets for two cryptocurrencies, chainlink (LINK) and tezos (XTZ), the first new coins to appear on the exchange in over two years. These two cryptocurrencies have recorded triple-digit returns since the beginning of the year. BitMEX last listed a new token in June 2018, when it announced a TRON / BTC futures market. Shortly before that announcement, the exchange removed six altcoin futures markets, including Ethereum Classic (ETC), Zcash (ZEC) and Monero (XMR). Notably, the new altcoin futures will be traded against tether (USDT) rather than bitcoin (BTC). In Friday’s announcement, BitMEX said the reason for this is because “USDT pairs account for over 60% of the overall altcoin volume.”

Commission fixes?
Ethereum co-founder Vitalik Buterin released an improvement proposal (EIP 2929) on Tuesday in an attempt to improve rising network rates. Average network fees hit $ 15.21 on Wednesday, up 660% from $ 2 a month ago. The increase in fees is likely due to the growing use and number of decentralized finance (DeFi) applications. Buterin’s proposal would make “heavy” contracts, which upgrade the status of Ethereum, more expensive by a factor of three. This repricing proposal could break some smart contracts already operating on Ethereum, Buterin wrote, adding that the developers “had years of notice” about potential changes. The consent needed to vote on the proposal could take weeks or months.

International regulation
Bank of England (BoE) Governor Andrew Bailey said regulators must unite for a “global response” to the stablecoin issuance. Speaking on Thursday, he said the international nature of stablecoins, which can be based in one country and operate in another, means that lack of coordination could lead to regulatory confusion and fragmentation. While admitting that stablecoins could reduce attrition costs by also becoming the primary means of purchasing goods and services, regulators need to ensure they maintain their 1: 1 backing with fiat currencies. Additionally, Bailey called bitcoin unsuitable for payments and cryptocurrencies backed by multiple assets such as premature balance. The BoE is actively seeking a “digital pound”.

Speed ​​up your search
Brazil’s chief central banker Roberto Campos Neto said on Wednesday that his country could be ready for a digital currency (CBDC) by 2022. At that point, the president of Banco Central said, Brazil will have an instant payment system. interoperable and a “credible” and “convertible international currency” – “all the ingredients to have a digital currency,” he said at a Bloomberg event covered by local outlet Correio Braziliense. Campos Neto also alleged that CBDCs are the consequence the rapid digitization of financial systems such as the Brazilian one.

Is the CFAA overly broad?
Blockchain voting startup Voatz has considered a long-standing ruling on improper access to a “protected computer”.

Appearing in a “court-friendly” brief before the US Supreme Court, the startup argued that cybersecurity bug bounty programs should be handled under close supervision.

The case, Van Buren v. United States, focuses on it being a federal crime for someone to access a computer “for an improper purpose” if they already have permission to access other files on that computer.

Nathan Van Buren, the petitioner of the case, is a former Georgia police officer charged under the Computer Fraud and Abuse Act (CFAA), which is often used to prosecute computer hackers. The CFAA, enacted prior to the creation of the Internet, prohibits unauthorized access to a “computer” as well as unauthorized deletion, alteration or blocking of privately stored data.

Some, like the well-known attorney Tor Eklend, believe the law is overly broad and outdated.

For his part, Van Buren argues that a lower court ruling in support of his conviction could be interpreted as meaning that “any” trivial violation “of a computer system could be a federal crime. He was given permission to look for a plaque for an acquaintance.

In his brief, Voatz says that the CFAA does not need to be restricted and some computer systems breaches are required.

However, the company argues that researchers looking into potential vulnerabilities should specifically check with the companies they are evaluating before doing so and should only proceed with the companies’ permission.

Late last year, one or more University of Michigan students taking a security course probably gained access to Voatz systems. In his brief, Voatz said “reckless student activity” was reported to West Virginia officials, prompting an FBI investigation because the company could not distinguish between their research and a true hostile attack.

“Regardless of the details, however, the West Virginia incident illustrates the damage caused by attacking or ‘searching’ for critical infrastructure without proper access or authorization, especially in the midst of an election,” Voatz wrote.

Non-malicious researchers trying to break into digital tools “impose significant additional costs” on organizations, Voatz said, and could damage public trust.

The reasons why
Bitcoin prices fell below $ 11,000 yesterday for the first time in a month.

First Mover editor Bradley Keoun spoke with market analysts to explain why the market went broke. Here are the three most common answers.

1. Bitcoin is monitoring traditional markets

2. DeFi sales have cascaded in bitcoin

3. The miners sold some of their bitcoins

Risk it out?
Bitcoin is unlikely to see a rapid rebound from the double-digit price drop in the past two days, reports CoinDesk’s Omkar Godbole. Bitcoin fell more than 10% Thursday to $ 10,006, according to CoinDesk’s Bitcoin Price Index, the largest single-day percentage drop since March 12, when prices plunged about 40% due to a strong clearing out on the stock markets. Although slightly up, Matthew Dibb, Stack COO, believes bitcoin will follow traditional assets during “this ‘risk-free’ period”. “Macro factors are currently at play,” Dibbs said.

Wallet forks
Wasabi Wallet forced the wallet on Thursday to address a vulnerability for a hypothetical attack that the team assumes was never executed. Discovered by a team member at Trezor, a major hardware wallet maker, the vulnerability would interfere with the implementation of CoinJoin’s wallet, a privacy protocol. Users need to upgrade to the latest wallet version if they wish to continue using the CoinJoin feature. “The discovery of the flaw is another example of the camaraderie and cooperation of the open source community,” reports Colin Harper of CoinDesk.

Stablecoin opportunity
Nic Carter, a CoinDesk columnist and partner at Castle Island Ventures, believes the billion-dollar stablecoin market represents an opportunity for the United States, not a threat. “If the US chooses to marginalize cryptocurrencies and punish their issuers, it will not only suppress a thriving American industry, but it will also push users towards even less responsible alternatives,” he writes.

DeFi degens
The latest edition of The Breakdown looks at the burgeoning DeFi market and its “degenerate” players.