🤷 who would've guessed
Feds seize $3.6 billion in Bitfinex hack, Russia moves to regulate crypto, Polygon raises $450 million and more.
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First up,
Market Recap 📈
Indian benchmark indices extended gains for the third straight day as RBI decides to keep key interest rates on hold. Meanwhile, US stocks also edged higher amid an influx of strong corporate earnings in an upbeat earlier session.
Sensex: 58,926.03 (+0.79%) ↑
Nifty 50: 17,605.85 (+0.81%) ↑
Dow Jones: 35,768.06 (+0.86%) ↑
Nasdaq 100: 15,056.96 (+2.10%) ↑
Bitcoin: $44,653.62
Top Stories 📰
1. Bitfinex hack mystery finally revealed!
If anyone had any doubts about crypto being safer than fiat, this should clear it.
The US Justice Department announced that it seized around $3.6 billion worth of Bitcoin from over 2000 crypto wallets stolen during the 2016 Bitfinex hack, marking its largest financial seizure ever. Officials arrested a couple, Ilya Lichtenstein and his wife Heather Morgan, and charged them for allegedly laundering 119,754 Bitcoin stolen after a hacker breached Bitfinex’s systems.
So far, authorities were able to seize over 94,000 Bitcoin, valued at around $3.6 billion. The total stolen bitcoin is currently valued at around $4.5 billion.
The Bitfinex hack: In 2016, crypto exchange Bitfinex revealed that it suffered a security breach where hackers stole Bitcoin worth $72 million. While the breach didn't expose any security weaknesses in the blockchain, it led Bitcoin's price to plunge 23%. Later, Bitfinex repaid the victims $76 million over time via a recovery token, LEO.
A blessing in disguise: While the DOJ announced setting up a court process for victims to reclaim their Bitcoins, they didn't specify the duration of the process. But victims may have to wait a while considering that historically, crypto refunds tied to exchange-related hacks have taken quite some time. Regardless, the news was enough to send LEO surging to an all-time high of $8.14. It's now in 24th place in terms of market cap.
Why it matters? The seizure, along with other such hacks in the past, shows that crypto markets can be heavily monitored by law enforcement authorities. Experts investigating crypto crimes said that while crypto provides digital trails for their examinations, there's an urgent need for bolstering reporting rules on the identities of users.
2. Russia recognizes crypto as currency
Crypto has had an unusual journey in Russia, from being almost banned to now reaching regulation.
According to an official statement, the Russian government and the nation's central bank have reached an agreement to draft regulations recognizing crypto as a form of currency.
But, there's a catch! Crypto's use as a currency will be permitted only after proper identity checks via licensed intermediaries. Transactions exceeding 600,000 rubles (roughly $8,000) should be declared, else they'll be treated as a criminal offence and will be fined accordingly.
Also, one key thing to note here is that the draft, which will be prepared by Feb 18, will classify crypto as an “analogue of currencies” and not as financial digital assets.
The revelation comes just two weeks after the Bank of Russia proposed a blanket ban on miners and other crypto-related operations over concerns that it could endanger the nation's financial system. While acknowledging the central bank's stance, President Vladimir Putin said that the nation has "certain competitive advantages" in mining digital currencies, and had urged the agency to reach consensus with Russian politicians.
Russia is the third-largest Bitcoin mining country, supplying more than 11% of the computing power to the network. Its citizens own more than 16.5 trillion rubles ($214 billion) worth of crypto.
Why it matters? Russia is the second nation attempting to regulate crypto recently. Last week, India took a step towards legalization by announcing a 30% tax on any income from the transfer of virtual digital assets. It’s only a matter of time until the US embraces crypto.
Deal Street 🤑
Polygon raises $450 million
Polygon, a secondary scaling and infrastructure solution for the Ethereum blockchain, has raised $450 million in new funding round, with a market cap of $13 billion. Led by Sequoia Capital India, the round was participated by Tiger Global, Accel Partners, Elevation Capital, SoftBank Vision Fund II, among others. Due to its applications in DeFi and NFTs, Ethereum has become widely popular in the developer community. But the congestion has landed the blockchain in several issues, including slow speeds and high transaction costs. Polygon and other Layer-2 firms plan to solve this problem by employing techniques to move a broad range of transaction data from the blockchain. So far, the platform has around 130 million unique addresses, processing more than 23 million blocks and 1.3 billion transactions. Polygon will use the fresh funding to continue its investment in zero knowledge technology "that will be key to onboarding the next billion users to Web3."
'AWS for crypto' valued at $10.2 billion
San Francisco-based crypto startup Alchemy Insights has raised a $200 million Series C1 equity round at a $10.2 billion valuation. The round, led by Lightspeed Ventures and Silver Lake, saw participation from existing investors, including Andreessen Horowitz, DFJ, Coatue Management, and Pantera. The funding comes as VCs continue to make big bets on Web3 startups as it offers massive potential for tech innovation. Founded in 2017, Alchemy builds developer tools employed to create decentralized apps on Ethereum and other networks. Since its previous raise in October, which valued the firm at $3.5 billion, Alchemy has powered $105 billion in annualized on-chain transactions and has seen over 3X growth in the number of teams building on its platform. The platform wants to do for blockchain and Web3 what AWS (Amazon Web Services) did for the internet.
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