WuBlockchain Weekly:Coinbase got a Wells Notice and Top10 News
Colin Wu . 2023-03-24 . Data
Top10 News

1. Coinbase’s weekly summary

a. Coinbase offered $3B backstop to Circle in bid to stabilize USDClink

According to Fortune, Coinbase provided an instant credit line of about $3 billion to Circle after the bankruptcy of SVB to ensure that the USDC can be converted into US dollars on Monday morning.

b. Coinbase requests SEC to clarify staking services as software serviceslink

On March 21, Coinbase submitted a comment letter to the SEC, explaining that its staking services are not a security issuance, but rather a software service, and that every branch of its core staking service fails the Howey Test. Coinbase requested that the SEC clarify the fact that staking services are not securities.

c. Coinbase said it got a Wells Notice from the US SEClink

On March 23, Coinbase said it got a Wells Notice from the US SEC, about an undefined portion of Coinbase listed digital assets and staking service Coinbase Earn, Coinbase Prime, Coinbase Wallet. Coinbase said it will not change current products or services. A Wells notice is the way that SEC staff tells a company that they are recommending that the SEC take enforcement action for possible violations of securities laws.

d. Coinbase has suspended staking rewards for Algorandlink

On March 23, Coinbase has suspended staking rewards for Algorand, which are still available for trading. The CEO of the Algorand Foundation stated that Coinbase is evaluating their services in light of recent regulatory scrutiny and will no longer support Algo rewards for Retail customers.

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2. Arbitrum’s weekly summary

a. Hacker invaded 2400 addresses, affecting 1.5 million ARB airdroplink

According to Arkham, the address (0x59d4087f3ff91da6a492b596cbde7140c34afb19) marked by Nansen as Arbitrum Airdrop Exploiter has transferred Gas to 2,400 wallets in the past two days to prepare to receive and transfer the upcoming ARB airdrop (at least 1.5 million ARB). The hacker somehow gained access/private keys to these wallets and had authorized the ARB in advance. The best option, Arkham said, is to revoke the authorization.

b. There are significant flaws in the anti-whale strategy of the Arbitrum airdrop link

On March 22, according to research by @x_explore_eth, there are significant flaws in the anti-whale strategy of the Arbitrum airdrop, resulting in over 150,000 witch addresses and over 4,000 witch communities participating in it. The total revenue of witch addresses exceeded 253 million tokens, accounting for 21.8% of the total airdropped tokens. The main reason is that Arbitrum’s anti-whale rules did not prevent the following four types: less than 20 addresses; access through exchanges, cross-chain bridges, smart contract deposits and withdrawals; obvious collection of NFTs or funds after the snapshot; obvious batch operations on other chains such as Optimism and Ethereum.

c. ARB collection page and Arbiscan crash due to high traffic link

At 21:00 on March 23, Arbitrum issued an airdrop. Due to too many visits, the ARB collection page, arbiscan, etc. were down and could not be opened. The ARB price was fluctuating wildly.

d. Arbitrum network fees reach all-time highs due to airdrop claims link

On March 23, due to the high gas fees caused by airdrop claims, the fees on the Arbitrum network reached $1.81 million, while the revenue, after subtracting the cost of sending on L1, amounted to $1.49 million, both reaching all-time highs. This made it the third-highest protocol in terms of fees on the same day, after only Uniswap and Ethereum.

3. Do Kwon’s weekly summary

a. Police in Montenegro have detained Do Kwonlink

According to the Montenegrin Interior Minister’s Twitter account, Police in Montenegro have detained Do Kwon, the founder of Terra. He was detained at Podgorica airport for falsifying documents, and South Korea, the US and Singapore have also lodged detention requests. According to YNA, the South Korean police stated that they confirmed the age, nationality, photo and name through their ID cards, and confirmed that he is the same person as Terra Founder Do Kwon; the police asked Montenegro to provide fingerprint information to confirm whether this person is really Do Kwon.

b. Details emerge on Do Kwon’s arrest in Montenegro link

Do Kwon and Hon Chang were arrested on March 23 for using fake travel documents on a flight to Dubai. The two also had forged documents from Belgium. During a luggage inspection, the police seized three laptops and five phones. Belgrade police have been tracking Do Kwon and have begun extradition proceedings. While there is no bilateral extradition agreement between Serbia and South Korea, both countries are signatories to the same international treaty. South Korean prosecutors had sought assistance from Serbia in February to apprehend Do Kwon. Now the focus is on whether Do Kwon will be extradited to South Korea to face fraud charges.

c. Federal prosecutors in New York charged Do Kwon with fraud after the arrest link

On March 24, Federal prosecutors in New York charged Terraform Labs founder Do Kwon with fraud hours after he was arrested by police in Montenegro. A spokesperson confirmed to CoinDesk that the Department of Justice would seek his extradition to the U.S. Kwon is being charged with conspiracy to defraud, commodities fraud, securities fraud, wire fraud and conspiracy to engage in market manipulation.

4. US SEC announced charges against Justin Sun and Tron Foundation link

On March 23, the US SEC announced charges against Justin Sun and three of his wholly-owned companies, for the unregistered offer and sale of crypto asset securities TRX and BTT. The SEC also charged Sun and his companies with fraudulently manipulating the secondary market. The SEC simultaneously charged the following eight celebrities for illegally touting TRX and/or BTT without disclosing. Justin Sun responded, emphasizing that the SEC’s prosecution earlier today was only a “civil complaint” and lacked merit.

5. The SEC recently served Sushi and “head chef” Jared Grey with a subpoena link

On March 22, Jared Grey, the current CEO of SushiSwap, proposed in the community to establish a Sushi DAO legal defense fund, which would be supported with 3 million USDT funding from Sushi DAO. The reason for this proposal is that both SushiSwap and Jared Grey have received subpoenas from the SEC. The defense fund will cover legal expenses related to inquiries, lawsuits, and other issues targeting core contributors.

6. Microsoft reportedly testing Edge browser Web3 wallet integration link

On March 18, Microsoft has added code that would integrate a non-custodial crypto wallet into the company’s default Edge browser, according to @thebookisclosed. Screenshots show that the wallet integrates Coinbase and Moonpay, and has NFT functionality.

7. Bitcoin ATM maker GENERAL BYTES issues highest severity security incident link

On March 19, Bitcoin ATM maker GENERAL BYTES issues highest severity security incident. The attacker identified a security vulnerability in the master service interface used by Bitcoin ATMs to upload videos to server. This resulted in ability to read and decrypt API.

8. DefiLlama’s weekly summary

a. DefiLlama team claims malicious takeover and forking link

On March 19, the founder of DeFiLlama stated that the DefiLlama team is forking Defillama, because DeFiLlama is undertaking a hostile takeover, and the person who controls both defillama’s twitter and domain has decided to launch a token despite everybody in the team not wanting it.

b. Several DeFi project founders spoke out in support of the founder of DefiLlama link

On March 20, several DeFi project founders, including Andre Cronje, spoke out in support of Charlie Watkins, the founder of DefiLlama, who had been attacked. They acknowledged that he had been paying for all of the company’s operating expenses out of his own pocket for years, which is not cheap. His attempt to stop the bleeding isn’t driven by greed, but by a desire for sustainability. They also warned that without his “free money”, the team will soon raise funds, add ads, or issue a token to sustain themselves.

c. DeFiLlama: There is no LLAMA token currently planned link

On March 21, DeFiLlama’s official Twitter account apologized for the events that occurred the previous day, citing miscommunication and internal misunderstandings within the team. The tweet also stated that there is no LLAMA token currently planned, and any airdrop will be discussed with the community, as every important decision is.

9. Coordinated central bank action to enhance the provision of U.S. dollar liquidity link

On March 20, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.

WSJ’s interpretation: The Fed supplied most of the money abroad via “U.S. dollar liquidity swap lines.” In essence, it lends dollars for fixed periods to foreign central banks and in return takes in their local currencies at market exchange rates. At the loans’ end, the Fed swaps back the currencies at the original exchange rate and collects interest.

10. USA’s weekly summary

a. White House economic report to Congress casts doubt on crypto assets link

On March 22, the White House’s annual economic report to Congress casts sweeping doubts on the merits of crypto assets, including that crypto assets are neither effective stores of value nor effective means of payment; their innovations are primarily about creating artificial scarcity to support the price. The report also slammed POW mining and DeFi.

b. US Fed approved another 25bps interest-rate increase link

On March 23, the US Fed approved another 25bps interest-rate increase but signaled that banking-system turmoil might end its rate-rise campaign sooner. Fed Chair Jerome Powell said officials had considered holding rates steady but opted to raise them given signs of still-high inflation and economic activity. The current probability of the Fed raising interest rates by 25 bps in May is 61.2%.

c. Republican-controlled U.S. House supports PoW mining link

On March 24, the Republican-controlled U.S. House of Representatives introduced a document calling for importance of POW mining to the US ability to achieve its energy goals and grow its economy. This is in sharp contrast to the White House just announced that it will increase the tax on POW mining by 30%.


Pixelcraft Studios, creators of Aavegotchi, has announced the completion of a token sale, raising a total of $30 million link

Crypto trading and market making firm Auros secured a $17 million fresh investment led by Vivienne Court Trading and Bit Digital (BTBT) link

OP3N, a web3 AI-powered platform, raised a $28 million Series A round that values the company at $100 million link

CCP Games has raised $40 million in funding to make a new triple-A blockchain game set in the Eve Online universe, a16z led the round link

Wallet venture Gryfyn has raised $7.5 million from investors including Liberty City Ventures, Leadblock Partners, Mind Fund and GameFi Ventures link

Wallet application Turnkey raised $7.5 million from investors including Variant, Sequoia and Coinbase link

Learn more, check out crypto-fundraising.info.

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