There’s always another nightmarish crypto hack just around the corner – TechCrunch


Welcome back to Chain reaction.

Last week, we looked to the near-term future for crypto gaming as VCs wonder where to place consumer bets. This week we look at hardware wallets and the endless journey to feeling safe in the crypto world.

To get this in your inbox every Thursday, sign up on TechCrunch’s newsletter page.


nowhere to hide

A weekly dispatch from TechCrunch crypto editor’s desk Lucas Matney:

The world of crypto can be a cruel and unforgiving place, and while VCs and crypto hedge funds have been happy to bail out institutions, consumers dabbling in space are sometimes left out in the cold. This week, some pretty high-profile hacks have cost crypto investors millions, but it was the smaller, more mysterious hack that likely got new buyers holding onto their private keys and praying for the best.

Putting money down everywhere is an exercise of trust, which sometimes makes it funny that the word “trustless” has been a leading expression in crypto-religious creeds that investors use to get converts. All a user has to do is keep their private key close and dear and they can rest assured that their money will always be there without having to put any trust in any traditional financial institution. But consumers are discovering some of the long-known fine print of that promise.

This week, thousands of Solana users logged into their crypto wallet apps to find that all their money was gone. Many of these users claimed that they had not used the wallet for weeks or months, thus ruling out some sort of mass signing of a malicious contract. While this was ultimately a simple seven-figure hack, the mystery was remarkable. At first, users weren’t sure if this was an attack on the underlying Solana network or an underlying service provider that multiple wallets relied on. Amid all the confusion, wallets continued to drain, eventually emptying the contents of more than 8,000 individual accounts.

Investors in the Solana ecosystem (the network founder dropped a pick on Twitter retweets) complained that the media focused more on the multimillion-dollar misuse when the Nomad Bridge was hacked a day earlier for $190 million. But it was the nature of the attack that was scarier than the dollar amount.

While users in various wallets reported the issue, the issue boiled down to a vulnerability in the Slope wallet that – unbeknownst to users – had their private keys captured in the backend, leaving them vulnerable to attackers if they ever got keys to the mobile. phone had imported app. This saga likely served as another breaking point of trust in the system for new users who may have thought their money was safer in a wallet than in the coffers of a centralized exchange. But longtime crypto users shrugged and indicated that this was yet another reason for users to… keep their money in so-called hardware wallets — physical devices that store a user’s private keys and dramatically reduce the number of attack vectors for hackers without human error.

Now it’s clear that pushing any new user into buying a ~$100 hardware wallet to really secure their assets is clearly not the ticket for widespread adoption in the short term, and yet it seems to be a rule. are what those deepest in space still cling to. While many of the richest cryptocurrencies stick to strategies that promote security above all else, it also seems that many of them are investing and promoting projects that emphasize speed and seamless onboarding at the expense of security. Users who are making their way onto the rails of flashy consumer apps may realize that crypto’s early onboarding hurdles have been steep for a reason, and that wealthy users who buy computers with air holes and keep their keys in one piece. hold paper, have a lot of history framing their paranoia.


the latest pod

Chain Reaction is back this week and better than ever! We announced two major changes to the pod this week. First and foremost we have a new co-host, Jacquie Melinek, who joins us weekly to talk about the biggest headlines in web3. Jacquie is a good friend of ours and as a reporter for TechCrunch+she is eager to get into the weeds to help us demystify all things crypto.

Second, we split our weekly show into two separate episodes: a weekly news segment performance. Jacquie, the first of which came out today, and an interview segment hosted by Anita and Lucas. Stay tuned for the latest interview episode coming out next week where we spoke to Uniswap COO MC Lader.

For this week’s news we unpacked two high profile hacks that happened in the first two days of the month (phew). We also discussed Robinhood’s latest round of layoffs and a $30 million fine the company paid to New York regulators.

Subscribe to Chain Reaction at Apple, Spotify or your alternative podcast platform of choice to join us each week.


Follow the money

Where seed money moves in the crypto world:

  1. AO Labs Raised $4.5 million from investors including Balaji Srinivasan and Sandeep Nailwal for its Spacebar web3 gaming platform.
  2. “Green” web3 platform One of the closed a strategic round of more than $8 million from investors, including Amex Ventures.
  3. Digital Asset Derivatives Company Track has raised $4.6 million from Matrixport, Brevan Howard and others.
  4. Crypto Credit Protocol Debt DAO got $3.5 million for its seed round led by Dragonfly Capital.
  5. Centrea crypto infrastructure startup, has raised $11 million in a seed round from investors including Thrive Capital, Founders Fund and Volt Capital.
  6. Gary Vaynerchuk’s NFT Project, VeeFriendsscored $50 million in a16z-led funding.
  7. quasara Cosmos-based DeFi protocol, has raised $6 million in seed funding from Polychain, Blockchain Capital and others.
  8. Stadium Livea metaverse fantasy sports startup, got $10 million for its Series A from KB Partners, Union Square Ventures, Dapper Labs, and others.
  9. Decentralized data warehouse provider Space and time has raised $10 million for its launch round of investors including Framework Ventures and Digital Currency Group.
  10. Fitness app to earn Sweatcoin completed a $13 million fundraiser, including a private token sale, from investors including Electric Capital and Jump Crypto.

the week in web3

A weekly look into the thoughts of web3 reporter Anita Ramaswamy:

It seems like a good time to talk about security in crypto in light of the recent hacks affecting both the Nomad crypto bridge and the Solana ecosystem. It is becoming increasingly clear that no matter how many guarantees a crypto company makes about how airtight its security standards are, investors should be wary at all times. The pain may be even more acute for NFT holders, who risk losing millions of dollars in value overnight if one of their expensive JPEGs is stolen — just think about what happened to actor Seth Green and his kidnapped Bored. monkey .

There are a few different options for how people can safely store their crypto today, and they all have their trade-offs. A “hot wallet” is connected to the Internet, making it vulnerable to outages or connectivity issues. In addition, numerous hot wallets are operated by centralized entities, such as exchanges that hold users’ keys on their behalf – a power transfer that many crypto users are reluctant to allow. A ‘cold wallet’, meanwhile, is considered much more secure, but involves clunky, difficult-to-use hardware that can be misplaced just as easily as a ‘seed phrase’, a password used to unlock a crypto wallet.

Upstream founder and CEO Alex Taub, who we had in last week’s pod, says his startup has an easy-to-use solution that allows people to keep control of their own keys digitally without sacrificing security. It is a unique solution that comes at a particularly opportune moment. To learn more about how it works and why it’s different from what’s already on the market, check out my article here.


TC+ analysis

Here’s some of this week’s crypto analysis available on our senior reporter’s subscription service TC+ Jacquelyn Melinek:

Solana’s Rapid Approach To Crypto Attracts Developers Despite Hiccups
While the crypto market is not always sunshine and flowers, some prominent players in the industry, including Solana co-founder Raj Gokal, still have optimistic prospects for growth – at least as far as their own projects are concerned. Despite Solana’s recent problems with 8,000 wallets hacked on Tuesday, the layer-1 blockchain has about 15 million to 20 million monthly active addresses, some of the highest in the crypto industry, Gokal said. “A question we get a lot is how the market affects the pace of development and the pace of construction?” His answer? It’s not, really.

Why education is key to stopping hacks like the $190 million Nomad exploit
After losing nearly $200 million to a security exploit on the crypto protocol Nomad, security experts stressed that more education and security protocols are needed to protect web3 communities from hackers. As the crypto ecosystem grows over time, interchain operability will also continue to grow, “at deep levels with a focus on security and decentralization,” Daniel Keller, co-founder at Flux, told TechCrunch. “However, attention should be paid to security and not just speed of development as we push DeFi products to the masses.”

Tiffany and Gucci’s Plunge Into Crypto Is A Balance Of Reputation And Earnings
Are crypto integrations by well-known brands and sports teams evidence of increasing use cases for digital assets and cryptocurrencies – or more of a marketing ploy? This week, Tiffany & Co., Gucci and FC Barcelona all dived deeper into the crypto sphere with partnerships in the world of digital assets. But do these partnerships really mean anything for the crypto ecosystem? A number of market players shared their views on the financial benefits, risks and business developments behind these new integrations.


Thank you for reading! And – again – to get this in your inbox every Thursday, subscribe to TechCrunch’s newsletter page.





Source link

Leave a Reply

Your email address will not be published.