Week in review: Solana wallet hack and Michael Saylor to step down as MicroStrategy CEO

Bitcoin closed the week around $23,000; hackers breached about 8,000 Solana-based wallets; Michael Saylor will step down as MicroStrategy’s CEO, along with other developments from the week.

Bitcoin ends the week around $23,000

The leading cryptocurrency finished the week at around $23,200, down 1.7% over the period. The asset’s market capitalisation stood at $444 billion.

Ethereum is trading above $1,700. Its market capitalisation stands at $206 billion.

Most top-10 market-capitalisation digital assets closed the week in the green. The best performer was BNB, up almost 13%. Solana and XRP fell 6.9% and 3.1% respectively.

Arcane Research analysts forecasted Bitcoin to rise to $27,000 if it can hold the $20,700 level. They say a series of higher local minima has formed since July.

ARK Invest strategists believe Bitcoin could rise by 240% from current levels if it can hold above the 200-week moving average.

Hackers drained around $8,000 Solana wallets and millions were withdrawn

Unknown actors gained access to the funds of owners of about 8,000 Solana-based wallets, stealing millions of dollars. The attack affected Trust Wallet, Phantom and Slope wallets. Analysts differed on the losses (from $5 million to $8 million).

Investigation by Solana developers and analytics firms showed that the attack was caused by lax security of the Slope wallet. The project stored users’ seed phrases on a centralized server in plaintext. Users were urged to transfer assets to external wallets.

A few days later, NEAR protocol developers urged NEAR Wallet users to update their seed phrases, citing a vulnerability resolved in June.

SEC charges Forsage founders over $300m crypto pyramid

The U.S. Securities and Exchange Commission has charged eleven people with creating and promoting Forsage, a crypto pyramid that raised more than $300 million from investors worldwide.

Among the defendants are four Forsage co-founders who lived in Russia, Georgia and Indonesia, as well as several U.S.-based residents who promoted the scheme online.

Hackers drained about $200m from the Nomad cross‑chain protocol

On 2 August the cross‑chain protocol Nomad was subjected to a hacker attack, resulting in the theft of crypto assets worth around $200 million. Its nature allowed anyone to copy the hacker’s transaction and change the destination address to their own. As a result, both ordinary users and “white‑hat” hackers withdrew funds from the protocol.

By 5 August, users had returned $22 million (11% of the stolen assets) to the Nomad storage address published after the attack. More than 50% of the funds remain idle in the hackers’ wallets — they were offered a reward for returning the stolen assets.

According to Chainalysis, losses from hacks of cross‑chain protocols this year total $2 billion.

Michael Saylor to step down as MicroStrategy CEO

MicroStrategy announced leadership changes — Michael Saylor will become executive chairman, and the CEO post will be taken by Phong Le.

Saylor will also remain chairman of the board. It is reported that as executive chairman he will focus on “innovation and long‑term corporate strategy”, which envisions further purchases and retention of bitcoin.

What to discuss with friends?

• Bloomberg: North Koreans plagiarise LinkedIn résumés to earn bitcoins.
• Kim Kardashian’s lawyers demanded the dismissal of the EthereumMax advertising lawsuit.
• Binance sued over Elon Musk’s decision not to acquire Twitter.
• Alexander Vinnik was extradited to the United States soon after his extradition to Greece.

Binance reveals losses from KYC, later denies

The cryptocurrency exchange Binance reportedly lost “around 90% of customers and billions of dollars in revenue” due to the introduction of KYC verification, said the exchange’s compliance team in an interview with CoinDesk stated.

After the interview, CEO Changpeng Zhao said the information was not accurate.

This week Binance also announced that co‑founder He Yi will head the venture arm of the exchange. Under her stewardship are assets worth $7.5 billion.

NFT News

• Tiffany will sell 250 CryptoPunks‑themed NFT jewelry pieces.
• Muse will release a new album as NFTs.
• Socios operator invested $100 million in the Barcelona metaverse.
• Meta expanded its NFT integration pilot in Instagram to 100 countries.

What about troubled companies?

Vauld secured temporary protection from creditors. The Singapore High Court granted a moratorium on proceedings for the crypto-lending platform until 7 November 2022, instead of six months.

The US bankruptcy court approved Voyager Digital’s plan to unfreeze a $270 million crypto broker deposit at Metropolitan Commercial Bank. The company said it had received 88 offers to buy the business. Negotiations are underway with 22 interested investors. The previously proposed FTX bid is described as the “worst”.

Robinhood’s crypto unit fined $30m; company cuts staff as Revolut expands

The New York State Department of Financial Services fined Robinhood’s crypto division $30 million for AML violations and cybersecurity policy breaches. The company also announced a 23% reduction in its staff.

Meanwhile fintech firm Revolut announced plans to expand its crypto‑unit workforce by 20%.

Poloniex will support Ethereum forks

Cryptocurrency exchange Poloniex will support a potential Ethereum fork on the Proof-of-Work (PoW) algorithm after the mainnet merge with the Beacon Chain, planned for September 2022.

At the same time, FRAX issuer Frax Finance proposed winding down PoW forks of Ethereum and moving assets to ETH under DAO governance in the PoS version of Ethereum.

What else to read?

We examined Ethereum Classic (ETC) price prospects after Ethereum’s shift to Proof-of-Stake during The Merge and the miners’ subsequent migration.

Educational cards discuss market makers, short squeeze, exchange Bitfinex, the Tornado Cash transaction-mixing service Tornado Cash, and reasons for OpenSea’s leadership OpenSea among NFT marketplaces.

This week they also released a regular report on the dynamics of key crypto‑industry indicators for July and a special feature on nodes. The latter explains how crypto hosting providers operate and how to run your own Ethereum 2.0 validator node.

In traditional digests, ForkLog highlights the week’s main events in cybersecurity and artificial intelligence . The crypto industry is attracting more institutional players as evidenced by new investments in infrastructure and growing attention to Bitcoin as an asset class. The most important developments of the past weeks are in ForkLog overview.

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