Crypto Weekly: A hackers paradise

Hack costs Liquid Global more than $90mn

The Japanese exchange Liquid Global suffered a major hack last week, where hackers stole more than $90mn worth of crypto-assets. The incident comes the week after the blockchain interoperability protocol called Poly Network was hacked, letting the hacker run away with $610mn before choosing to return the assets to the protocol. In contrast to the Poly hack, the funds stolen from the Liquid exchange have not been returned yet. According to on-chain analysis company Elliptic, the hacker used decentralized exchanges shortly after the hack to convert Ethereum tokens into Ether to avoid having the tokens frozen, which happened for the Poly hackers. Following that move, the hacker used an Ethereum mixer called Tornado Cash to obscure the blockchain pathway of the funds. This makes it fundamentally more challenging for prosecutors, brokers, and exchanges to follow the Ether on the blockchain. These moves by the hacker essentially indicate that the person in question has no intention of returning the assets to the exchange. These hacking events are boosting the sentiment for those who have distrust of cryptocurrencies, making notably institutions and regulators cautious.

US State Department offers rewards in cryptocurrencies

Staying within hacking but jumping to the other side of the table, the US State Department is now offering rewards paid in cryptocurrencies for information about hackers targeting US infrastructure and other criminal activities. For many decades, the US government has been paying out rewards in return for information on the grounds of their Rewards for Justice program. After quietly introducing the option to be paid in cryptocurrencies last month, the option was widely announced some weeks ago at the cyber conference Black Hat in Las Vegas, which gathers a substantial number of white hat hackers (hackers with good intentions). The option to be paid in cryptocurrencies comes after several notable hacks explicitly targeted US infrastructure like the colonial gas pipeline earlier this year. The new option indicates that the US State Department assumes they can gather new information from informants who earlier were not willing to hand out information to the US government. This is potentially one of the more concealed ways the US government can benefit from crypto-assets.

41% of Robinhood’s Q2 revenue came from crypto