The Week in Crypto – BSV, Clever Hackers, MiCA and more!

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This week in crypto we’ve seen hackers getting one up on the DAO they hacked, regulations banning stablecoins and BSV’s recovery tool slated. But which was the tastiest cut on the slab? Grab a cleaver and start slicing!

No. 3 – BSV Recovery Tool is “Horrific Backdoor”

BSV’s new backdoor tool to freeze and reissue coins on its blockchain was this week described as a “horrific backdoor” by one blockchain expert. Bob Summerwill, Executive Director at Ethereum Classic Cooperative, warned that the creation of the tool, which is intended to be used to recover coins that holders no longer have in their possession, for example through theft, “puts all blockchain projects and their developers at legal risk”, not just those running BSV.

He also cautioned that such backdoors “can and will be abused and are ultimately not in the public interest.”

No. 2 – Mango Markets Hackers Used Stolen Funds in DAO Vote

Of course, we should never be on the side of crypto hackers, but sometimes you have to admire them. The hackers of the Solana-based Mango Markets, who stole $100 million in various coins through manipulation of the network, this week offered to return a portion in return for confirmation from the community that no legal action would be taken against them.

The suggestion to let the hackers walk with tens of millions was put to the vote within the DAO…at which point the hackers used 32 million of their stolen MNGO tokens to gatecrash the vote in their favour and make it almost impossible for it to be overturned. Of course, a DAO agreement is not exactly legally binding, so they still could be hunted down, but you can’t fault them for effort and ingenuity.

No.1 – MiCA Regulations Pushed Through

This week saw the most sweeping regulations package crypto has yet witnessed as the Markets in Crypto Assets (MiCA) framework was approved by EU lawmakers. The package, which bans algorithmic stablecoins and makes exchanges more responsible for informing the public on potential risks, is being pushed through at the same time as the Transfer of Funds Regulation (TFR), which will mean that exchanges must collect and verify information of anyone involved in a transaction that goes through their platform, even if the sender or recipient is not a customer.

MiCA will be formally presented early next year and will come into effect in 2024.

Honourable Mentions

This week we also learnt that:

We’ll be back next week for another review of the week’s top crypto news.