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Cracking the Code: The FTX Hack Mystery Solved??

Plus ARK's Case for Bitcoin Diversification

Author

Nathaniel Whittemore
February 02, 2024

The Breakdown First Five - Friday, February 2, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

Cracking the Code: The FTX Hack Mystery Solved??

5. OPNX Shutters

OPNX will shut down in less than two weeks. The questionable derivatives and bankruptcy claims exchange launched by Su Zhu and Kyle Davies lasted less than 9 months in operation. In that time, OPNX managed to launch an exchange token which pumped and dumped and racked up $2.7M in fines from Dubai regulators. Anyone who put their money on the platform has until February 14 to ask for it back. Good luck. 

4. Polygon Layoffs

Polygon Labs have laid off 19% of their workforce, a headcount reduction of around 60. CEO Marc Boiron said the move was “for the sake of enhanced performance, rather than for financial reasons.” Retained employees will see a 15% pay bump as the firm seeks to reduce bureaucracy and focus on nimble execution with a “surgical team that can collaborate closely.” 

3. Are You Harboring Undeclared Miners?

In its latest power grab, the Biden Administration has authorized what Marty Bent is calling a “hyper-detailed registry of mining operations in the United States”. The EIA, the stats division of the Department of Energy will begin a survey next week. Commercial miners will report exact details of mining equipment, energy use and electricity suppliers. Compliance is mandatory with hefty civil and potentially criminal penalties attached. 

2. ARK: You Don’t Own Enough Bitcoin

ARK Invest have released their latest Big Ideas report and have made the case for Bitcoin as a diversifier in investment portfolios. According to their calculations, a 19.4% allocation to Bitcoin gave optimal risk-adjusted returns last year. They also found that Bitcoin had only a 0.27 correlation coefficient to traditional assets over a 5-year span, extremely low.

1. FTX Hack Mystery Solved?

The FTX hackers might have been identified in a recently unsealed indictment. A defendant called “El Swapo” allegedly directed a SIM swap attack on an employee of a large corporation in November 2022. The attack enabled over $400M in cryptocurrency to be stolen. Those facts could only really describe the FTX hack and would explain the frantic on-chain actions witnessed the day the exchange declared bankruptcy. 

Thanks for reading -NLW