Bitcoin In Retreat | $600 Million Crypto Hack

BITCOIN BRIEFLY GETS ITS HEAD ABOVE WATER

Starting with a surge last weekend, bitcoin past $48,000 mid-week to briefly recover all losses year to date. Currently trading at $46,530, it has retreated some over the last two days but remains free of the high-$30,000/low-$40,000 doldrums of the past two weeks. Part of the drop, which has affected most major assets, is due to the European Parliament voting to require crypto exchanges ⁠and other companies to verify the identities of the owners of unhosted wallets with which they transact in advance of a transaction.

$600 MILLION HEIST, ZERO PROFIT?

Hackers stole about $600 million from a blockchain network Ronin connected to the popular online game Axie Infinity last week in the second-biggest crypto hack of all time. According to a blog post published by Ronin’s team, attackers used hacked private keys to forge fake withdrawals, draining 173,600 ether tokens and 25.5 million USD Coins. The exploit was discovered after a user reported the inability to withdraw 5,000 ETH, worth $17 million, from the network. The heist underscores the security concerns that plague decentralized finance protocols. According to data from blockchain analytics firm Chainalysis, around $3.2 billion worth of cryptocurrencies was stolen from individuals and services in DeFi thefts in 2021—6x the amount stolen in 2020. It remains to be seen if the attackers will be able to cash out his earnings, as many of the funds were sent to centralized exchanges that are on high alert. Perhaps the attack was too successful?

THE UNCEASING COMMITMENT

MicroStrategy, a business intelligence helmed by billionaire cryptocurrency bull Michael Saylor, announced Tuesday that its subsidiary, MacroStrategy, has taken on a $205 million loan to buy more bitcoin and is using the cryptocurrency as collateral. According to regulatory filings, the three-year loan was provided by crypto-focused lender Silvergate Bank and was collateralized with $820 million in bitcoin, representing about 12% of MicroStrategy’s overall cryptocurrency holdings. In a statement, Saylor said the loan gives MicroStrategy an opportunity to “further [its] position” as the public company with the largest bitcoin investment and that using the cryptocurrency as collateral on the loan, a first for the company, would allow it to further execute against its bitcoin strategy. The company, which started buying cryptocurrency for its balance sheet in August 2020, currently holds approximately 125,051 BTC, purchased for nearly $5.8 billion.

Source: Forbes Digital Assets, powered by Nomics.  Prices as of 4:00 p.m. on April 1, 2022.

BIG BACKERS FOR CRYPTO’S ‘SUNKEN LAYER’

As opposed to the mantra of “one chain to rule them all,” many enthusiasts now believe that the blockchain industry will consist of many different blockchain networks communicating with each other in much the same way that Android users can now make FaceTime calls. Revealed exclusively by Forbes, Sequoia Capital, Andreessen Horowitz and FTX Ventures co-led a $135 million Series A+ investment in LayerZero Labs, which is developing a protocol that aims to connect decentralized applications across multiple blockchains. The team claims that its offering includes a messaging service akin to SWIFT and a novel token transport bridge that is more secure than the one used in the $600 million Ronin hack.

BLOCKCHAIN 50 SPOTLIGHT

Aon: Unintended policy cancellations are a big problem for insurers and often occur when a customer underpays or forgets to pay a premium. In 2021, insurance broker Aon ($12 billion, 12-month sales) partnered with insurance carrier Zurich to move invoicing to an immutable blockchain ledger—already leading to a double-digit decrease in cancellation notices. The technology, known as Adept, was developed by a subsidiary of Acord, the Pearl River, New York–based body that sets standards for the global insurance industry. Aon hopes to bring 10 more counterparties onto its blockchain this year.

ELSEWHERE

Grayscale’s Fight for a Bitcoin ETF Could End In Lawsuit Against SEC [Bloomberg]

EU Parliament Passes Privacy-Busting Crypto Rules Despite Industry Criticism [CoinDesk]

After Buying $500 Million Of Bitcoin, What Will Luna Do With It? [Bitcoin Magazine] 

Steven Ehrlich
Editor 
Forbes CryptoAsset & Blockchain Advisor

Nina Bambysheva
Reporter
Forbes Money & Markets

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