Reading time 4m45s
GM.
It’s been confirmed that the Lazarus group was behind the massive Harmony hack from last year alongside APT38, another cybercrime group.
Pictured: Lazarus trying to steal your crypto when you use cold storage.
And $4.6B in Ethereum has been burned thanks to EIP-1559, a protocol that keeps ETH deflationary by burning some with each transaction. How will increasing NFT sales affect that moving forward?
Before we answer that — are you ready for some trivia?
Ethereum underwent “The Merge” last September, an update that switched the network over to Proof-of-Stake (PoS) consensus. What’s the next scheduled update for the protocol?
Tap your answer below to see if you’re right!
Today's Agenda:
- Insidious — Lazarus Struck Again 😰
- $4.6B ETH Up in Smoke — Why? 🧐
- NFT-Funded Film Wins an Award 🤩
- Best Time to Enter Crypto Space 🐂
- Brazil + Argentina BTC Adoption? 📈
The North Korean government’s hacker group has been busy over the past year.
The FBI has confirmed that Lazarus and APT38 are the cybercrime groups behind the massive Harmony hack from last June.
Many believe that Lazarus was behind the theft from the get go, but now we have the US government’s official confirmation. The Lazarus group is run by the North Korean government — they’re a “state-sponsored hacking organization,” according to the FBI.
The FBI also announced that just last week, Lazarus moved around $63M from that harmony hack through RAILGUN, a privacy protocol. Web detective ZachXBT (@zachxbt) broke down the entire process of how the funds were moved in an incredibly detailed visual:
In an attempt to launder the money in ETH, Lazarus moved the funds from crypto mixer Tornado Cash to RAILGUN, and finally offloaded them onto different exchanges, including Huobi.
Binance noticed that the funds were moving to Huobi and was able to help the exchange freeze those funds and recover them.
The Lazarus Group has been committing cybercrime since 2010, and so far they’ve raked in over $2B total from different exploits and hacks.
Over the past two years, we’ve seen billions of dollars of ETH get burned by the protocol itself. Why the heck is that happening?
Ethereum is a deflationary protocol, meaning that it has mechanisms built into itself that help keep the value of its token from inflating over time.
EIP-1559 is one of those mechanisms — it was introduced in 2021, and it causes the network to burn some ETH with every single transaction that goes through.
I’ll put the statistics another way — since EIP-1559 went live, 4 ETH have been burned every second! That’s insane. Ethereum’s doing a better job at curbing inflation than the Fed, that’s for sure 😂
And with NFT sales increasing, we could see the burn rate for ETH ramp up again, bringing us more and more deflation.
Pretty exciting to think about how this affects ETH’s future and crypto as a whole, making the second-largest market cap coin even more valuable as an asset over time.
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Other Top Stories Today 📢
Calladita, a film about the life of the Catalan middle class, just won a $300,000 award at the Film3 on the Mountain conference — and it was funded through NFT sales. Director Miguel Faus stated that the film “started as a crazy idea in my mind that maybe I could fund my first feature through an NFT collection, and a few months later, thanks to 500 degens on the internet who believed in us and minted our NFTs, we got to make the movie.” Film3 is a cinema conference held alongside the Sundance Film Festival.
They always say that bear markets are the best time to build, and Paul Veradittakit thinks the same. He’s a general partner of Pantera Capital, a crypto hedge fund, and he recently observed that he was “seeing a higher percentage of startups coming to market with strong teams — entrepreneurs coming out of established crypto startups like Coinbase, larger tech companies like Facebook, Uber, and Square, and legacy financial institutions like J.P. Morgan and Goldman Sachs.” He went on to cite growing stability in the market, easier-to-write smart contracts, and a general openness from institutions and enterprises toward blockchain as great reasons to jump into Web3.
Speaking of Signature Bank, this one’s interesting — as they continue to distance themselves from crypto where they can, they’re apparently no longer supporting transactions that are smaller than $100k each. The bank services a decent amount of Binance’s customers (0.01% total), and the crypto exchange is actively looking for an alternative option. As of September 2022, nearly a quarter of Signature’s deposits came from crypto, but they’re looking to reduce that number to 20% or even 15% in the coming days in light of the crypto contagion that’s taking out company after company.
Web3 Resource of the Day
MADOFF: The Monster of Wall Street - Docuseries from Netflix
"He stole from the rich. He stole from the poor. He stole from the in-between. He had no values. He cheated his victims out of their money so he and his wife ... could live a life of luxury beyond belief." - Former investor Tom Fitzmaurice at Bernie Madoff's sentencing
Netflix has a new docuseries out about Bernie Madoff, the man who ran the largest Ponzi scheme in history. He stole $65B and was sentenced to 150 years in prison on 11 felony charges. The series covers how he rose to power and the relaxed regulatory climate that allowed him to do it. Ring any bells a la FTX and Sam Bankman-Fried?
Have a Great Tuesday, Friend
I hope you found this helpful and that you feel up to date on what’s happening in crypto right now. We’ll see you again tomorrow — but first, a to-go meme. Don’t let the hackers get you down 🤣
That’s all for today, frens!
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.