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How Exchanges Are Dealing With New UK Crypto Rules

Plus HTX Hack Returned

Author

Nathaniel Whittemore
October 10, 2023

The Breakdown First Five - Tuesday October 10, 2023

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

5. Crypto Aid to Israel

Crypto Aid Israel has established a wallet to receive crypto donations for the benefit of displaced and harmed civilians. The fund will be managed by Fireblocks and has the backing of local regulators. Meanwhile, the attacks have refocused attention on allegations against Bianance. The CFTC lawsuit referred to flippant executive remarks on servicing Hamas accounts.

3. HTX Hack Returned

$8M in hacked funds have been returned to HTX (formerly Huobi). The exchange paid out a 250 ETH bounty to the hacker along with the message “you have made the right choice.” Hacks have ramped up over the last quarter, with Immunefi identifying 76 hacks in Q3 compared to just 30 in the same quarter of 2022. Year to date losses from hacks are now at $1.38B.

2. $65B Line of Credit

Friday’s testimony from FTX CTO Gary Wang disclosed that Alameda Research had a $65B line of credit, access to unlimited withdrawals of customer funds and a speed advantage on the exchange. Wang also explained that the FTX insurance fund was a work of fiction, with the $100M fund being made up by a random number generator and based on a multiple of FTX revenues, rather than reserved cash and crypto. Wang’s testimony continues today.

1. The UK Workaround

Coinbase, Binance and OKX have established partnerships with local firms to sign off on their marketing materials. New UK crypto advertising regulations require a registered firm to approve marketing, but this can be provided by a partner. Binance went to the lengths of establishing a new local website to avoid running afoul of regulations on internet based offers. HTX and Kucoin have failed to find a local partner and have been added to a warning list.

Thanks for reading -NLW