The breach involved a teenager, Noah Urban, who was part of a cybercriminal group known as Scattered Spider. Urban, alongside his accomplice Jack, targeted employees of major tech and crypto companies, including Crypto.com, through phishing attacks. These attacks were meticulously designed to gain access to secure data by infiltrating employee accounts. The duo successfully breached a Crypto.com employee’s account, raising alarms about potential vulnerabilities within the exchange’s security protocols.

Crypto.com Breach: A Detailed Examination

The Crypto.com breach is not an isolated incident. Similar tactics have been used against other exchanges, with Coinbase also suffering substantial losses due to insider threats. Criminals often target exchange staff to obtain sensitive data, leading to severe security concerns across the industry.

A spokesperson for Crypto.com confirmed that the breach affected a “very small number of individuals” and assured that no customer funds were accessed. Despite this, the fact that personal information was compromised is a stark reminder of the persistent threats facing crypto exchanges.

The Impact of the Crypto.com Breach

The attack on Crypto.com occurred before March 2023, when the FBI raided Urban’s operations, seizing $4 million in cryptocurrency, cash, and valuables. Urban was eventually arrested in January 2024, charged with involvement in hacking 13 companies, and sentenced to 10 years in prison after pleading guilty.

This breach has sparked criticism from figures such as blockchain investigator ZachXBT, who criticized Crypto.com for not disclosing the breach earlier. He emphasized that Crypto.com has faced multiple security issues in the past, calling for greater transparency from the exchange.

Amidst these security challenges, Crypto.com has continued to grow. Recent data from The Block indicates a volume surge for the exchange, surpassing Coinbase in August. Furthermore, Crypto.com is collaborating with Trump Media to establish a digital asset treasury focused on acquiring its native token, CRO.

Lessons from the Crypto.com Breach

The Crypto.com breach serves as a crucial case study in the importance of robust security measures for cryptocurrency exchanges. It highlights the need for ongoing vigilance and transparency to protect user data and maintain trust in the crypto ecosystem.

Crypto Security must be a top priority for all exchanges to prevent similar incidents. Implementing advanced security protocols and employee training can help mitigate the risk of breaches and protect the integrity of user data.

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Claiming access to over 400 tokens, FalconX will function “both as a participant and a liquidity provider in the Lynq network,” as stated by Lynq CEO Jerald David. Lynq, created in collaboration with Arca Labs, Tassat Group, and tZERO Group, intends to offer a solution addressing the changing nature of regulatory structures and counterparty risk, based on a recent announcement. Such issues could be crucial for institutions adhering to stringent regulations and aiming to introduce crypto products.

In the crypto arena, settlement is the ultimate step where the funds are transferred between parties, and the transaction is documented on the blockchain. Examples include the transmission of tokens from one party to another, the release of collateral stored in a contract, and token generation events where tokens are distributed automatically to investors.

Web3 company Anchorage Digital, which serves institutions, owns an institutional settlement network named Atlas. London-based crypto firm BVNK actively participates in various crypto settlement procedures. Examples of blockchain-based settlement networks are Kinexys by J.P. Morgan and the “Project Ion” platform by a leading US equities clearinghouse.

Concerning the Lynq platform, David mentioned, “access to the Lynq Network is free for participants, and the transactions on the network are not subject to transaction fees. Lynq’s revenue is generated by taking a small amount of interest from the portfolio.”

The platform is scheduled to start its final user acceptance testing phase this Friday.

The upcoming launch of Lynq may indicate a surge in institutional interest in digital assets, particularly stablecoins, which are increasingly used in settlement processes. As per DefiLlama, the market cap of stablecoins reached $251.4 billion as of Tuesday, marking a sharp 55.5% rise within a year.

Stablecoins offer advantages over traditional fiat currency, including reduced transaction costs, quicker settlement times, and enhanced liquidity. These advantages become more pronounced in cross-border transactions or in countries where reserve fiat currencies, such as the US dollar, are scarce.

A recent survey by Fireblocks revealed that 90% of institutions are either using or planning to use stablecoins. The Wall Street Journal reported in May that several prominent US banks were discussing the possibility of issuing a joint stablecoin.

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The S-1 form, which was filed on June 16, suggests the introduction and trading of Truth Social Bitcoin and Ethereum ETF. The asset management firm, Yorkville America Digital, sponsors this initiative. The trust’s objective is to grant investors access to both Bitcoin (BTCUSD) and Ether (ETHUSD) through shares supported by these crypto assets, thereby eliminating the intricacies associated with direct investment.

According to the prospectus, the shares are backed by BTC and ETH held by the custodian on behalf of the trust, Foris DAX Trust Company, operating under the name Crypto.com.

It is proposed that the ETF shares be listed on the New York Stock Exchange Arca (NYSE Arca), as per the filing. Truth Social has officially appointed Crypto.com as its dedicated crypto custody provider, yet it has not finalized the specifics of the forthcoming ETF, such as the fund’s ticker and its cash custodian.

Truth Social has also stated its intention to submit an amendment outlining the terms of the prime execution agency agreement with Crypto.com in the near future.

The filing for the Truth Social Bitcoin and Ethereum ETF comes after the SEC approved Trump Media and Technology Group’s $2.3 billion Bitcoin treasury deal on June 13. The company mentioned in their statement that they have “no immediate plans” to issue any securities under the deal.

In late May, TMTG confirmed a $2.5 billion capital raise to buy Bitcoin, after initially denying reports about the raise. This news is still developing, and additional information will be provided as it becomes available.

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The exclusive bitcoin custodian, main execution agent, and liquidity provider for this ETF will be Crypto.com, as revealed in a document filed with the Securities and Exchange Commission.

Trump Media, which manages the Truth Social platform, last month disclosed its intention to raise approximately $2.5 billion from institutional investors for bitcoin purchase. The raised funds would be used to establish a cryptocurrency treasury.

“Bitcoin is the ultimate tool for financial freedom in our view, and hence, will be a vital part of our assets,” stated Devin Nunes, the Chief Executive of Trump Media.

In addition to this, the company has also delved into other crypto-related ventures. It launched a finance company named Truth.Fi earlier this year and announced an allocation of around $250 million for cryptocurrency and other investments.

The second Trump administration has shown a welcoming attitude towards the crypto industry, with Congress likely to pass crypto-favorable legislation. Other companies like MicroStrategy, Tesla, and Rumble have also recently included bitcoin in their balance sheets amid the booming interest in the industry.

Contact Connor Hart for more details at connor.hart@wsj.com

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A formal agreement was reached at the Dubai FinTech Summit, where the Memorandum of Understanding (MoU) was signed by the Dubai Department of Finance (DOF). High-ranking government officials, including Abdulla Mohammed Al Basti, Secretary General of the Executive Council, and Abdulrahman Saleh Al Saleh, Director General of DOF, witnessed the signing of the MoU with Crypto.com.

This collaboration is part of a broader initiative to implement the Dubai Cashless Strategy, which plans to enable government fee payments through cryptocurrency wallets. Crypto.com’s robust technical infrastructure will ensure secure conversions of digital assets into dirhams and subsequent transfers to the DOF.

The agreement aligns with Dubai’s long-term vision to be at the forefront of financial innovation and digital transformation. It is in line with the broader objectives of the Dubai Economic Agenda D33, a comprehensive plan aimed at solidifying the city’s status as a global economic and innovation powerhouse.

Government officials regard this project as a step towards offering more inclusive and efficient services. Amna Mohammed Lootah, the Director of Digital Payment Systems Regulation, emphasized a target of making over 90% of all public and private sector transactions cashless by 2026.

Upon the implementation of this system, residents and businesses in Dubai will be able to pay for public services directly from their crypto wallets. The conversion from cryptocurrency to dirhams will be managed by Crypto.com, providing users with a smooth experience. Stay tuned for further updates on this developing story.

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The legal representatives of Kalshi have countered these orders by asserting that these contracts are under the purview of the Commodities Futures Trading Commission (CFTC) and therefore, are beyond the regulatory reach of the state authorities. They further argue that the regulators’ orders do not acknowledge the fact that Kalshi’s event contracts operate as two-sided markets, which trade as swaps, differentiating them from the traditional sports-betting book model where the house governs the market.

Tarek Mansour, Kalshi co-founder, expressed his stance saying, “Prediction markets are a vital innovation of this century, and like all novelties, they are initially misunderstood. As a company that has spearheaded this technology, we are prepared to defend it yet again in the court of law.”

In addition to the sports-related contracts, the Nevada Gaming Control Board issued a cease and desist order against Kalshi’s election contracts. However, a U.S. judge in September 2024 determined these contracts legal, permitting them to be freely traded within the U.S.

On February 4, acting CFTC director, Caroline Pham, announced a major shift in the CFTC’s approach, intending to end regulation through enforcement actions, and instead, concentrate on combating fraud. Pham stated, “The CFTC is fortifying its enforcement program to focus on victims of fraud, while also remaining alert for other law violations.” This shift was warmly received by industry firms, who viewed it as a respite from the slew of regulatory lawsuits and enforcement actions under the Biden administration.

The CFTC also launched an investigation into the Super Bowl event contracts offered by Kalshi and Crypto.Com on the same day the notice was issued. The aim of the probe was to ensure these contracts conformed to current U.S. derivatives laws, with the CFTC ultimately deciding not to prohibit the contracts.

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These ETFs, facilitated through Crypto.com’s brokerage firm Foris Capital US LLC, are projected to consist of digital assets as well as Made in America securities spanning diverse sectors like energy. Crypto.com will manage the backend technology, custody, and supply the cryptocurrencies for these ETFs, which are expected to feature a unique basket of cryptocurrencies including Bitcoin, Cronos, among other crypto assets.

Subject to definitive agreements and regulatory approval, these funds are planned to be launched later this year and are expected to be widely available internationally, including in the US, Europe, and Asia across existing platforms and brokerages.

Devin Nunes, TMTG’s CEO and Chairman, expressed his excitement about the partnership with Crypto.com, and Yorkville America, to launch investment products supporting innovative crypto projects and American companies. He also highlighted their aim to create innovative funds incorporating companies focused on rapid growth, technological innovation, and strengthening the US economy, free from political posturing.

Kris Marszalek, Co-founder and CEO of Crypto.com, affirmed their pride in partnering with Truth Social (DJT) and Yorkville America, and supporting the launch of these new ETFs. He emphasized that these ETFs will provide consumers with more options from a brand with a loyal following. Once launched, these ETFs will be available on the Crypto.com App for their more than 140 million users globally.

The ETFs are scheduled to launch alongside a range of Truth.Fi Separately Managed Accounts (SMAs), both of which TMTG is planning to invest in using its cash reserves, as part of a financial services and FinTech strategy, with funds up to $250 million to be custodied by Charles Schwab.

About TMTG and Crypto.com: TMTG aims to counter Big Tech’s assault on free speech by promoting open Internet and giving people their voices back. Crypto.com, established in 2016, is trusted by more than 140 million customers worldwide and is committed to accelerating the adoption of cryptocurrency.

Notes: Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Actual results may differ materially from the expectations that we describe in our forward-looking statements. Risk factors include our ability to recognize the anticipated benefits of Truth.Fi, the possibility of adverse economic, business, and/or competitive factors; our ability to develop and launch new products and offerings; our ability to obtain regulatory approval, among others.

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In today’s digest, U.S. Bitcoin ETFs marked their biggest daily net inflows in six weeks, Solana pulled a contentious ad in the wake of community outrage, Cronos is prepared to reissue 70 billion previously burned CRO tokens, and more. Furthermore, the GLIF protocol unveiled its governance token by distributing 94 million GLF in an airdrop, aiming to extend beyond Filecoin.

U.S. Bitcoin ETFs reported net inflows of $274.6 million on Monday, marking the highest daily figure in six weeks. This followed five successive weeks of net outflows, which stripped over $5 billion from Bitcoin ETFs, reducing their cumulative all-time net inflows to $35.9 billion.

Rachael Lucas, a crypto analyst at BTC Markets, linked this shift to increased confidence resulting from Bitcoin’s price stability and renewed institutional interest. She also pointed out that quarter-end institutional portfolio rebalancing and rising demand for lower-fee ETFs played a part in the positive flows.

Solana has withdrawn a promotional video for its forthcoming Accelerate conference following a backlash from the crypto community. The video, which is still being circulated, was criticized for appearing to make light of gender issues and was seen by some as anti-queer.

A governance proposal by Cronos, a Layer 1 blockchain from crypto exchange Crypto.com, to reissue 70 billion previously burned CRO tokens was approved, returning the total supply to its original cap of 100 billion. However, several large Crypto.com-affiliated validators appeared to have tipped the vote in favor of approval, leading to accusations of centralization and manipulation.

Web3 workflow protocol developer Halliday has secured $20 million in a Series A round led by a16z crypto. With the new funding, Halliday plans to grow its team and continue developing its workflow protocol and Halliday Payments application.

Analysts at Bernstein contend that the current crypto market cycle is still in its early stages and has further to go, given a more crypto-friendly U.S. regulatory environment. They predict Bitcoin to reach a cycle peak of $200,000 by the end of 2025.

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Cronos, affiliated with the crypto exchange Crypto.com, had previously proposed to reinstate 70 billion CRO tokens that were burned in 2021, with the aim to revert to its initial 100 billion token supply as a “Strategic Reserve.” This alleged $5 billion scheme (based on the current $0.08 CRO prices) was designed to enhance U.S. crypto prevalence, foster ecosystem expansion, and initiate a CRO ETF. The community reacted strongly against this when the vote commenced, with 86% opposing it in the initial days.

However, crypto governance is infamous for being community-led in name only, with major token holders having the power to control any proposals and modifications as they please — even if the vote is, theoretically, carried out transparently by the “community.”

The proposal, active from March 2-16 and throughout its voting period, barely approached the 33.4% quorum required to pass. Then, on Monday at 14:00 UTC, a sudden casting of 3.35 billion CRO votes changed the game, achieving quorum and cementing the resolution. Final tally: 61.18% in favor, 17.61% against, 20.11% abstained, and 0.11% vetoed.

Two influencer network validators, Starship and Falcon Heavy, supported the initiative as of March 10, overshadowed by 77.97% opposing it and 8.47% abstaining at that time. On Monday, Electron, Antares, and Minotaur IV joined the fray — using a combined 3.2 billion CRO in voting power to endorse the proposal.

Immediately following the vote’s conclusion, the Cronos network underwent an upgrade which was completed on March 18 at 03:00 UTC, paving the way for a more than 200% surge in supply in the upcoming years. The market has reacted accordingly, with CRO falling 8.5% in the past 24 hours in an otherwise stable market.

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Tether expressed dissatisfaction with the hurried developments in the European market, driven by the enforcement of the MiCA framework. “The rushed actions prompted by statements that do little to clarify the basis for such moves are disappointing,” a Tether spokesperson told Cointelegraph.

According to Tether, these MiCA-induced changes pose significant risks to EU consumers and the local crypto market. The company fears that such actions will expose EU consumers to increased risk as many tokens, not just USDt, are affected by these changes.

Tether warns that these regulatory changes could lead to a “disorderly” market at a time when MiCA is still in the early stages of implementation. Notably, Crypto.com’s MiCA-enforced delisting process will affect a total of 10 tokens, including Wrapped Bitcoin (WBTC), Dai (DAI) stablecoin, and others.

Coinbase, another exchange that delisted USDT in December 2024, said it would delist six tokens to comply with MiCA. However, it delisted WBTC on the entire Coinbase platform for other reasons on December 19, 2024. A Coinbase spokesperson explained, “To meet regulatory requirements, we regularly review the assets we make available to customers on our platform and will consider re-enabling services for stablecoins that achieve MiCA compliance at a later date.”

In addition to potential consumer risks triggered by MiCA, Tether stressed that MiCA has negative implications for stablecoins licensed in the EU. The spokesperson indicated that the USD stablecoin market is almost negligible in Europe, unlike emerging markets where USDT is extremely popular.

Despite its concerns, Tether recognized the importance of established regulatory frameworks such as MiCA for sector growth and reaffirmed its commitment to compliance while introducing innovative technologies like Hadron and supporting transformative projects like Quantor, which are designed to be MiCA compliant.

This statement from Tether follows the European Securities and Markets Authority’s directive to European crypto asset service providers (CASPs) to start restricting non-MiCA-compliant stablecoins by the end of January 2025. The regulator also asked CASPs to completely restrict non-compliant stablecoins by the end of the first quarter of 2025.

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