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Bitcoin Core Developer Claims Loss Of $3.3 Million After PGP Exploit
Luke Dashjr, a Bitcoin OG and core developer, claims his wallet was hacked due to a Pretty Good Privacy (PGP) key compromise right before the new year. PGP is a cryptographic method to encrypt and decrypt data – and is supposed to help protect against unauthorized access or tampering.
Dashjr claims to have lost “basically” all his BTC, which is about 200 BTC or $3.3 million at current market prices.
“My PGP key is compromised, and at least many of my bitcoins stolen. I have no idea how. Help please.”
While what exactly caused the exploit is not yet confirmed, many believe a server Dashjr utilized may have been accessed to steal data, including the private keys to his bitcoin wallet.
Some people have even speculated the incident might be a “boating accident,” which is a running joke about people trying to avoid paying taxes by claiming they lost all their BTC when their hardware wallet went overboard in a “tragic boating accident.”
“The hack is still pretty fresh, so there is still not much clarity on what might have happened, besides PGP keys compromised and speculation that private keys might have been stolen from a previous server hack,” noted Gustavo Gonzalez, solutions developer at Open Zeppelin.
The pseudonymous developer of Yearn Finance, Bateg, commented on twitter that the incident may be a potential “supply chain attack.” Supply chain attacks happen when a hacker enters and modifies software by injecting malicious code into a system.
In this case, it’s possible that the hacker gained access to Dashjr’s server with the help of a compromised PGP key and later extracted the private key to his hot wallet connected to the server. However, a formal investigation has yet to confirm this.
The incident has garnered a lot of attention. Binance CEO Changpeng Zhao said his team monitored the assets and would freeze them if sent to the centralized exchange.
Hong Kong Brokers Line Up For SFC Approval Ahead Of New Virtual Asset Trading Legislation
According to local media reports, financial service companies in Hong Kong have begun seeking advice on licensing requirements and have already begun providing services to retail investors after Lawmakers passed an amendment to the Anti-Money Laundering and Counter Terrorist Financing Ordinance (AMLO) in December 2022.
The new law, which introduces a new licensing scheme for virtual asset service providers, will allow retail investors the ability to trade in virtual assets. Trading in digital assets is currently only permitted for qualified investors or traders who can show they have at least $1 million in bankable assets.
Victory Securities and Interactive Brokers were the first two brokers in Hong Kong with SFC to trade digital assets for their professional clients.
According to Robert Lui, the digital asset leader at Deloitte Hong Kong, retail investors will most likely be able to trade digital assets with a lage market capitalization and liquidity.
Currently, Hong Kong-based brokers do not need a specific license to service clients trading Hong Kong-listed exchange-traded fund futures based on Bitcoin and Ether. Though, those which will provide virtual asset trading will need additional SFC approval.
The new licensing was initially scheduled for March 1 of this year. However, the date was then pushed until June 1 in order to give virtual asset service providers more time to accurately prepare.
This comes after the SFC recently appointed Julia Leung as its new chief executive. Leung started her term on Jan. 1 and is set to be in office for the next three years. She has previously spoken out about tightening local crypto regulations.
An executive from the Central Bank of Hong Kong also recently said it was looking into investor protection regulations.
Dogecoin Foundation Announces New Fund For Core Developers
In order to further develop the Dogecoin ecosystem in the coming year, the Dogecoin Foundation has recently announced a new fund for Dogecoin Core developers.
According to the announcement, 5 million Dogecoin ($36,000) will be allocated to the new fund to support the development of the Dogecoin platform.
The fund will be kept in a new multisignature wallet that is maintained by the Dogecoin foundation’s members and requires three of the five signatures from the core developers of Dogecoin, including chromatic, Marshall Hayner, Michi Lumin, Patrick Lodder, and Ross Nicoll.
Besides controlling the release, these custodians won’t have any other access to the funds.
The team wrote:
“The DOGE held in this wallet will disburse rewards to developers of Dogecoin Core for work on all contributions, no matter how big or small.”
For every release of Dogecoin Core, 500,000 DOGE will be distributed among developers who contributed to the release.
To ensure transparency, the team released the wallet address where the fund is held. The Dogecoin core team will also be publishing blog posts for all expenditures and will be announced through social media channels by the custodians.
Meanwhile, Dogecoin developers recently denied rumors that the network is immediately moving over to a proof-of-stake (PoS) consensus mechanism. The developers clarified that they only plan to release a proposal on the issue.
Lumin, one of the engineers, reprimanded influencers who circulated the rumor and said that they do not have the “inside scoop” on Dogecoin.
On Sept. 16, Dogecoin became the second-largest proof-of-work (PoW) cryptocurrency. The update came after the Ethereum network switched over to PoS consensus. Because of the recent shift, some believe that Bitcoin should justify its PoW consensus. Labrys CEO Lachlan Feeney told Cointelegraph that “the pressure is on” Bitcoin to justify the PoW system in the long run.