Check out the biggest breaking crypto market updates for today:
Sensitive Data Leaked In Kroll Cybersecurity Breach: Report
According to a recent Twitter post, an allegedly ‘leaked’ Kroll Q&A summary published on Aug. 30 reveals that the recent data breach includes ‘sensitive’ data such as FTX users’ email addresses, mailing addresses, account numbers, unique bankruptcy identifiers, account balances, phone numbers and other claim details.
Notably, this is contrary to the statement published by the FTX team which claims that the breach only involved ‘non-sensitive’ data.
Immediately after the incident, FTX said accounnt passwords were not maintained by Kroll and that the firm’s own systems, along with its digital assets, were not affected.
A day later, the bankrupt exchange said it would temporarily freeze the accounts of affected customers within the claims portal.
According to the report, Kroll has since “contained and remediated” the incident. However, it warned that users should remain on “high alert” for “Fraud and scam” attempts that appear legitimate via the stolen data.
Shortly after the breach, multiple users began reporting phishing emails disguised as being from Kroll.
FTX had over 1 million users at the time of its bankruptcy filing last November. On Nov. 12, 2022, just one day after its bankruptcy announcement, FTX was hacked for nearly $400 million in an alleged inside job, sparking an investigation by the U.S. Department of Justice.
The bankruptcy proceeding has come under fire for its length and cost, with over $32.5 million spent on legal fees in February alone.
Robinhood’s Crypto Wallet Adds Bitcoin And Dogecoin
According to a recent announcement, Robinhood MMarkets Inc. has added wallet support for BTC and DOGE. This means that all users of the Robinhood wallet spread across 140 countries can now send and receive BTC and DOGE.
The company also stated that it has begun rolling out swap features for “select users” which will allow them to trade ether for over 200 different assets.
The company also on Wednesday began rolling out swap features for “select users” that allow them to trade ether for over 200 different assets. The wallet is capable of charging users gas fees – the price for transacting on Ethereum – from any tokens they hold, not just ETH. All users will have access to the swap feature in the coming weeks, Robinhood said.
Uniswap Lawsuit Dismissed: DeFi Crypto Exchange Not Liable For ‘Scam Tokens’
The United States District COurt SDNY has reportedly dismissed a class-action lawsuit against Uniswap Labs and its CEO, foundation and venture capital backers. The lawsuit, which was filed by trader Nessa Risley last April on behalf of other Uniswap users, accused the Uniswap developers and investors of violating securities laws and allowing token issuers to scam investors.
Notably, Judge Katherine Polk Failla, who handed down the dismissal, is also hearing the Securities and Exchange COmmission’s case against Coinbase. Judge Falia ruled that she found Uniswap’s ability to charge transaction fees, among other aspects, wasn’t convincing enough to find the exchange’s associates liable.
The ruling reads,
“The Court declines to stretch the federal securities laws to cover the conduct alleged and concludes that plaintiffs’ concerns are better addressed to Congress. These foundational contracts are distinctive from the token contracts unique to each pool and drafted by issuers. The contracts relevant to Plaintiffs’ claims are not these overarching codes provided by Defendants, but rather the pair or token contracts drafted by the issuers themselves.”
The tokens in question included Matrix Samurai (MXS), Rocket Bunny (BUNNY) and Alphawolf Finance (AWF). Judge Failla said the plaintiffs’ “dilemma” is the pseudo-anonymous nature of those token issuers, not Uniswap.
“In a perfect (or at least, a more transparent) world, plaintiffs would be able to seek redress from the ac tual issuers who defrauded them,” she wrote. “In the absence of such information, plaintiffs are left to argue that [Uniswap Labs] facilitated the trades at issue.”
Judge Failla found that Uniswap’s ability to charge transaction fees, among other aspects such as governance token, wasn’t convincing enough to find the exchange’s associates liable.
“The Court declines to stretch the federal securities laws to cover the conduct alleged, and concludes that plaintiffs’ concerns are better addressed to Congress,” she wrote.
Judge Failla’s decision said that smart contracts underlying the exchange’s core functions should be viewed separately from code underpinning liquidity pools, which are drafted by token issuers and enable newly created tokens to trade.
“These foundational contracts are distinctive from the token contracts unique to each pool and drafted by issuers,” Judge Failla wrote. “The contracts relevant to Plaintiffs’ clauses are not those overarching codes provided by Defendants, but rather the pair or token contracts drafted by the issuers themselves.”
The lack of case law surrounding DeFi protocols was acknowledged by Falia, who said, “No court has yet decided this issue in the context of a decentralized protocol’s smart contract.”
Still, she went on to say that Uniswap’s core smart contracts were not inherently illicit and, regarding other coins, “were themselves able to be carried out lawfully, as with the exchange of crypto commodities ETH and Bitcoin.”
Judge Failla put forth the payment apps Venmo and Zelle as part of an analogy. She said the plaintiff’s lawsuit would be equivalent to trying to hold those companies liable for a drug deal that tapped their platform to facilitate the transfer of funds, instead of the drug dealer.
The lack of clarity surrounding how securities laws apply to DeFi was noted by Judge Failia, referencing a warning from Securities and Exchange Commission Chair Gary Gensler in September 2021 that the class of projects “were under increased scrutiny.”
“Whatever concerns DeFi transactions engender, the law is currently developing around these exchanges,” she wrote.”Regulators may someday address this gray area.”
The class action lawsuit, in addition to bringing federal law claims, sought to pin down Unisewap on laws in North Carolina, Idaho, and New York. Those claims, unlike ones brought under federal laws, were dismissed without prejudice, meaning that the lawsuit could resurface in those jurisdictions.
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