SBF In Custody After Bail Is Revoked

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Sam Bankman-Fried In Custody After Bail Is Revoked Over Leaks

FTX founder Sam Bankman Fried (SBF) is reportedly back in jail after federal judge Lewis Kaplan revoked SBF’s bail on account of his recent attempts to tamper and intimidate witnesses by releasing information to New York Times reporters. 

After the bail was revoked, SBF was reportedly placed in handcuffs immediately as marshalls escorted him out of the courtroom. 

His mother cried in the public gallery and was comforted by his father.  

Kaplan said Bakman-Fried had likely intended to influence two witnesses – former Alameda Research Chief Executive Officer Caroline Ellison and the former FTX general counsel – and to have them “back off” and “hedge their cooperation” with the government. 

“A defendant’s speech is not protected to the extent that it is intended to bring about a crime,” Kaplan said. 

The former FTX chief executive officer’s lawyers immediately filed a notice of appeal over the bail decision, but lost an application to stay Kaplan’s order. 

That meant Bankman-Fried would remain in jail while his legal team fought to overturn the revocation in the second US Circuit Court of Appeals. He will be taken to the Metropolitan Detention Center in Brooklyn from the courthouse, according to a person familiar with the process. 

The MDC is the main federal prison in New York for defendants awaiting trial, previously including the likes of British socialite and child groomer Ghislaine Maxwell. 

It is unclear how long Bankan-Fried will stay at the MDC with prosecutors suggesting he could potentially be moved to the Putnam County Correctional Facility in upstate New York. 

Prosecutors had asked the judge to revoke Bankman-Fried’s $250 million bail package after accusing him of leaking documents in an attempt to discredit Ellison, who will likely be a key government witness. 

Prosecutors had previously raised issues with SBF’s behavior in January, after he messaged the former FTX general Counsel on an encrypted app, suggesting they “vet things with each other.” 

Bankman-Fried’s message to the former general counsel was an attempt to have both men “sing out of the same hymn book” and “an attempt at witness tampering,” Kaplan said. 

After signing off on an interim gag order last month, the judge found a permanent gag order wasn’t a “workable solution longer term particularly with someone who has shown a willingness and a desire to risk crossing the line in an effort to get right up to it no matter where the line is.”

Visa Trials Ethereum Gas Fee Payments Using Cards

In a recent blog post, global payments giant Visa introduced an experimental solution that would allow users to pay gas fees on the Ethereum blockchain in fiat currency using their credit card. A successful test of the experimental solution was reportedly conducted during an internal hackathon on the Ethereum Goerli testnet. 

The experimental solution leverages account abstraction and the ERC-4337 standard to create “paymaster”- a specialized smart contract that functions as a sponsor for gas fees on user contract accounts. 

Traditionally, users need to acquire ETH from exchanges or on-ramp services and then transfer the coins to their wallets to cover fluctuating gas fees for transactions on the Ethereum mainnet or when transacting in stablecoins such as USDT or USDC. 

This often leads to overspending or insufficient ETH balances, increasing the complexity of the user experience. 

In Visa’s implementation, the process begins when a user intends to execute a transaction on the blockchain. To initiate the operation, the wallet generates a User Operation Request, which includes details about the intended transaction (known as “calldata”) and the maximum cost allocated for the operation, encompassing parameters associated with gas fees. 

Specifically, the parameters within this request define the gas limit, determining the highest computational effort allocated for the operation, and the gas fee, specifying the cost for each unit of computation required. 

However, rather than immediately transmitting the User Operation request to the blockchain, teh wallet takes an intermediary step. 

It sends the User Operation along with the user’s Visa card credentials to a paymaster web service (as depicted in Step2 below.

This web service then utilizes the gas fee details to calculate the appropriate fiat currency cost that the user should be charged. 

Simultaneously, leveraging the provided card credentials, the card-issuing institution may opt to authorize the card payment. 

The chosen payment acceptance solution for the web service is Visa’s own payment management platform Cybersource, which equips developers with essential Software Development Kits (SDKs) and Application Programming Interfaces (APIs) and empowers merchants to seamlessly accept digital payments. 

Once the payment has been successfully processed via Cybersource, the web service generates a digital signature encompassing pertinent information within the User Operation. This includes the calldata specifics and gas fee particulars (as indicated in step 3 above). 

Additionally, the web service determines a specified timeframe during which this digital signature remains valid. 

Subsequently, the wallet receives the digital signature and the designated time wind ow from the web service. 

These details, along with the on-chain address of the paymaster contract, are then appended as the paymaster parameter to the User Operation. 

Once all facets of the User Operation are in place, the wallet is empowered to sign and trismit it to the blockchain (Step 4 above). 

Upon reaching the blockchain, in accordance with the processing framework outlined by the ERC-4337 standard, the paymaster contract receives the User Operation data. This data should encompass the digital signature obtained from the paymaster web service. 

If any discrepancies or inaccuracies are detected within the provided data (such as an incorrect signature or an invalid time window), the paymaster contract is designed to trigger an error, relieving it from covering the associated gas costs. 

However, when the signature is duly validated, signifyingg that the web service has received the card payment to cover the operational cost of the User Operation, the paymaster contract remains erro0r-free and proceeds to manage the cost. 

Consequently, the User Operation can be executed without hindrance (Step 5 above). 

Summarizing the experiment, Visa said that “the intricacies and complexities of  blockchain-based transactions have been a significant stumbling block for many users, creating a challenging learning curve and increasing user friction.” 

The experiment, the researchers added, offers a “promising approach to substantially addressing these challenges.” 

Curve Finance Has Recovered 70% Of Hacked Funds, With Distribution Planned

DeFi platform Curve Finance has reportedly recovered 70% of the funds ($50 million) lost in the recent exploit of the protocol. 

Curve has also officially stated its intention to reimburse users who were impacted by the recent breach and has stated that an “active investigation with regards to the rest is underway.” Each user will reportedly be reimbursed through an equitable distribution of resources. 

Recovered funds were either directly given back by multiple hackers involved or saved with the assistance of ethical operators of MEV bots, such as c0ffeebabe.eth. 

Earlier this week, Curve announced a $1.85 million bounty to anyone who can accurately identify the attackers with the remaining funds. 

The hack, occurring on July 30, led to a loss of 73.5 million across multiple projects within Curve’s factory pools, including well-known names like JPEG’d, Metronome and Alchemix. 

During the attack, factory pools on Curve Finance were confronted with a “reentrancy vulnerability,” a critical security flaw that allowed attackers to maliciously drain funds by exploiting its smart contract logic. 

Luke Baldwin

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