Why the Starknet Airdrop Was So Controversial 🥶
Weekly News Recap: 🚀 Bitcoin's market surge, 🌐 Stacks' TVL milestone, 📜 NYAG vs DCG lawsuit expansion, 💱 Franklin Templeton's ETH ETF filing, 💸 FTX's subsidiary sale, and more!
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Is the Short Team Lockup for STRK ‘Misaligned’? No, Says Starkware CEO
In this episode of Unchained, Starkware CEO Eli Ben-Sasson tackled the intense scrutiny and feedback surrounding the Starknet airdrop.
Starknet's approach to distributing its tokens sparked heated discussions, with some community members feeling overlooked or unfairly treated. Eli explained the rationale behind their distribution criteria, emphasizing that Starkware was well aware of the potential backlash. He stated, "We knew from the start that by announcing the criteria, we will mostly be seeing the people who feel wronged and we are listening to that."
Also, why ETH solo stakers received such a large allocation?
Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
Stacks Hits All-Time High in Total Value Locked, Bolstered by DeFi Growth
It’s been an extremely positive week for Bitcoin’s price action and the general crypto markets, with the price of BTC and ETH surpassing $52,000 and $2,800, respectively, on Thursday. Notably, Bitcoin regained the level of $1 trillion market capitalization.
Also this week, Stacks, a layer 2 protocol enabling smart contracts on Bitcoin, has achieved a new milestone with an all-time high total value locked (TVL) of $85 million, signifying a more than 400% increase in the past four months. Data from DefiLlama reveals that the surge is primarily driven by ALEX, an open-source decentralized exchange protocol on Stacks, contributing over 80% to the TVL.
ALEX's growth is notable, with its TVL jumping nearly 558% since Oct. 1 to $68 million.
The native tokens for Stacks and ALEX have also witnessed significant appreciation, with STX increasing over 300% and ALEX by about 520% in the same period. The forthcoming Nakamoto hard fork upgrade for Stacks, coinciding with the Bitcoin halving event expected in April, aims to improve transaction throughput and enhance finality guarantees, further solidifying Stacks' position in the Bitcoin landscape.
The Blockchain Association Opposes Elizabeth Warren’s Bill
This week, the Blockchain Association, representing the cryptocurrency industry, voiced its opposition to Senator Elizabeth Warren's Digital Asset Anti-Money Laundering Act. Their open letter, endorsed by 80 former military and national-security professionals, warns that the act could inadvertently weaken U.S. national security and drive the crypto industry overseas. This public stance reflects a broader trend of strategic communication in policy debates, although Capitol Hill insiders suggest such efforts might have limited impact on actual policy changes.
In a contrasting scenario, blockchain technology was spotlighted for its potential to protect data privacy. At the State of the Net 2024 conference, Congressman Don Beyer, co-chair of the Congressional AI Caucus, proposed leveraging blockchain for data privacy. Amidst public concerns about data collection and misuse, Beyer's suggestion, supported by Rep. Bill Foster's advocacy for a national digital signature linked to blockchain, signifies a growing interest in blockchain's non-financial applications.
NYAG's Expanded $3 Billion Fraud Case Against DCG
New York Attorney General Letitia James expanded a lawsuit against Digital Currency Group (DCG), its subsidiary Genesis, and crypto exchange Gemini. The lawsuit, originally citing $1.1 billion in alleged fraud, now asserts a staggering $3 billion figure. This escalation follows additional investor claims of being misled and defrauded, particularly by Genesis.
One Genesis creditor, identified as BJ, expressed relief at the lawsuit's expansion, acknowledging the New York Attorney General's support for crypto creditors. They told Unchained: “We’re very happy about today’s complaint because it finally recognizes officially that we. . .were victims of fraud by Genesis and DCG directly.”
Attorney General James emphasized the need for stringent cryptocurrency regulations in light of these alleged fraudulent activities, while DCG denounced the charges as baseless and vowed to contest them vigorously.
In contrast to these legal woes, DCG showcased robust financial health in its recent shareholder letter. The company recorded $210 million in Q4 revenue and its valuation soared to $4.4 billion in 2023, a significant jump from the previous year.
FTX Sells Another Subsidiary Following Bankruptcy
Bankrupt cryptocurrency exchange FTX has agreed to sell its custody unit, Digital Custody Inc. (DCI), to CoinList for a mere $500,000. This sale price starkly contrasts with the $10 million FTX paid for DCI just months before its collapse in 2022, highlighting the dramatic downfall of Sam Bankman-Fried's empire.
DCI was initially intended to provide custodial services for FTX.US and LedgerX. However, following FTX's bankruptcy filing on Nov. 11, 2022, these plans never materialized, leaving DCI with limited operations.
This sale forms part of FTX's broader strategy to repay creditors, as the company offloads its subsidiaries during the bankruptcy process. The filing noted the sale's urgency, citing the need to avoid additional operational expenses.
Binance Founder's Sentencing Delayed
The sentencing of Changpeng “CZ” Zhao, the founder and former CEO of Binance, has been postponed to April 30. Originally scheduled for February 23, this delay was announced in a Seattle federal court, with no immediate explanation from U.S. prosecutors for the postponement.
Zhao, out on a $175 million bail bond, had his travel requests to the United Arab Emirates denied due to concerns over potential flight risk. He faces charges of money laundering and violations of the Bank Secrecy Act (BSA). Following his guilty plea in November, Zhao stepped down from his role at Binance. The exchange itself settled with the U.S. Department of Justice for $4.3 billion, resolving criminal investigations.
Zhao has already paid $50 million in individual fines and is facing a sentence of up to 18 months, although prosecutors have indicated they could seek to extend the sentence up to 10 years.
Franklin Templeton Files for Spot Ether ETF
Franklin Templeton has joined the competitive landscape of firms seeking to launch a spot ether ETF, as indicated in their recent SEC filing. This move follows their successful spot bitcoin ETF launch and demonstrates an interest in potentially staking ether for the fund, differentiating their approach from other contenders like ARK 21Shares and BlackRock iShares. A decision from the SEC regarding spot Ether ETFs is expected to happen in May.
Major Security Breach at PlayDapp
In a startling breach of security, the South Korean-based crypto gaming platform PlayDapp fell victim to a major exploit, resulting in a loss of $290 million worth of tokens. This incident unfolded in two separate attacks within a span of four days. Security experts at PeckShield identified the compromise of a private key as the likely cause.
The initial attack occurred on Feb. 9, with an unauthorized wallet creating 200 million PLA tokens valued at $36 million. Subsequently, despite PlayDapp's offer of a $1 million "white hat reward" for the return of the stolen assets, the attacker minted an additional 1.59 billion PLA tokens on Feb. 12, inflating the supply beyond its pre-attack level of 577 million.
PlayDapp swiftly responded, pausing the PLA smart contract and urging users to halt transactions. PlayDapp also announced plans for a contract migration.
Fun Bits: Biden's Meme Magic: A Laser-Eyed Surprise
In a humorous twist that caught the crypto community off guard, President Joe Biden's social media team posted an image of him with laser eyes, a well-known symbol of support in the Bitcoin world. This unexpected foray into meme culture left Bitcoin enthusiasts both thrilled and puzzled.
The laser-eyed Biden, which first appeared in a TikTok video joking about rigging the NFL season, resurfaced following the Kansas City Chiefs' Super Bowl victory. While some Bitcoiners interpreted it as an unlikely nod to cryptocurrencies, the image actually stemmed from the "Dark Brandon" meme, a tongue-in-cheek portrayal of the president as a superhero.