Defrost Finance: Hacked Funds Have Been Returned

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Defrost Finance Says Hacked Funds Have Been Returned

Decentralized leverage-trading platform Defrost Finance has reportedly recovered some of the funds that were stolen in a recent exploit of the platform. 

The news of the exploit had initially drawn skepticism from the community, with some even expressing concerns about the exploit actually being a potential exit scam. 

In a post linked on its website, Defrost stated, 

“We will soon start scanning the data on-chain to find out who owned what prior to the hack in order to return them to the rightful owners. As different users had variable proportions of assets and debt, this process might take a little [time].”

In a tweet thread posted on Sunday, the team said a first attack used a flash loan to drain funds out of its V2 product. A second larger attack used the owner key to exploit V1. The protocol, which offers leveraged trading on the Avalanche blockchain, didn’t say how much had been taken. 

Blockchain security firm PeckShield, citing “community intel,” said at the time that the exploit may have been a rug pull that made off with $12 million. Earlier Monday Certik, also a security company, said it had been unable to contact members of the team and posted a graphic indicating it was treating Defrost as an exit scam. 

Defrost’s Twitter account isn’t configured to accept private messages.

Fidelity Wants To Give Investment Advice In The Metaverse, Say Trademark Filings

Trillion-dollar asset management firm Fidelity Investments has reportedly filed three U.S. trademark applications to provide services in the metaverse and other virtual worlds. 

The trademark applications cover a host of Web3 products and services, such as an NFT marketplace, referral services for investment advice and financial planning in the metaverse, virtual real estate investing, and a crypto trading platform in the metaverse. 

Interestingly, the patent applications also target investment services for mutual funds and retirement fund investment services in the metaverse. 

The firm’s decision to expand in the digital asset industry has received some pushback from regulators. Last month, three U.S. senators asked it to reconsider a decision to allow retirement plan participants to invest in bitcoin, saying the industry has become increasingly “volatile, tumultuous and chaotic.” 

Fidelity is eyeing educational services that include “conducting classes, workshops, seminars and conferences in the field of investments and in the field of marketing financial services in the metaverse and other virtual worlds.” 

Fidelity has filed these applications less than two months after the collapse of crypto exchange FTX and its sister company Alameda Research, which not only saw the prices of major cryptocurrencies plummet but also shattered faith in the future of the wider crypto industry. 

With Fidelity recently launching an early-access waitlist for Fidelity Crypto, a new product that will let retail investors trade Bitcoin and Ethereum from their phones with zero fees, the firm, however, is sending a positive signal to other players in the sector. 

In April this year, Fidelity, which is also America’s largest provider of 401(k) retirement accounts, announced plans for a new product offering companies and their participating employees access to Bitcoin. 

The move has been heavily criticized by some U.S. lawmakers, with a group of senators – including the long-time crypto nay sayer Elizabeth Warren – last month warning the firm against offering Bitcoin to its customers following the collapse of FTX.

Japan To Lift Ban On Foreign Stablecoins Like USDT In 2023

According to local media reports, Japanese regulators are considering reversing some of the major restrictions imposed on the digital asset industry. 

Specifically, the ban on the domestic distribution of foreign-issued stablecoins such as Tether and USD Coin might be lifted next year. 

Japan’s Financial Services Agency (FSA) stated that it will require more regulations related to Anti-Money Laundering controls to lift the ban on the domestic distribution of stablecoins. 

The new stablecoin regulations are expected to allow local exchanges to handle stablecoin trading under the condition of asset preservation by deposits and an upper limit of remittance. 

“If payment using stablecoins spreads, international remittances may become faster and cheaper,” the report notes. 

Allowing stablecoin distribution in Japan will also require more regulations related to Anti-Money Laundering controls, the FSA said. The authority on Monday started collecting feedback on proposals for lifting the stablecoin ban in Japan. Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions in June 2022. 

The latest measure will significantly impact crypto trading services offered in Japan as currently, no local exchanges provide trading in stablecoins like USDT or USDC. 

According to official data, none of the 31 Japanese exchanges registered with the FSA – including firms like BitFlyer or Coincheck – were handling trading in stablecoins as of Nov. 302022. 

BitFlyer, one of the largest crypto exchanges in Japan, trades a total of five cryptocurrencies at the time of writing, including Bitcoin, Ether, Bitcoin Cash, XRP, and Stellar. 

Japanese authorities have been actively working on crypto-related regulations recently. On Dec. 15, Japan’s ruling party, the Liberal Democratic Party’s tax committee, approved a proposal removing the requirement for crypto firms to pay taxes on paper gains issued tokens. 

Previously, local regulators also issued recommendations against the usage of algorithmic stablecoins like TerraUSD (UST).

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Luke Baldwin
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