OKX

OKX DEX suffers $2.7M exploit after proxy admin contract upgrade

The OKX DEX suffered an exploit resulting in a loss of around $2.7 million in cryptocurrencies after a proxy admin upgraded a contract that allowed a hacker to compromise the private key.

OKX decentralized exchange (DEX) suffered a $2.7 million hack on Dec. 13 after the private key of the proxy admin owner was reported to be leaked. 

On Dec. 13, the blockchain security firm SlowMist Zone posted on X (formerly Twitter) that OKX DEX “encountered an issue.” According to the report, the issue began on Dec. 12, 2023, at approximately 10:23 pm after the proxy admin owner upgraded the DEX proxy contract to a new implementation contract and the user began to steal tokens.

Until September 2023, research shows that the crypto industry has suffered $1.5 billion in losses due to hacks, exploits and scams this year.

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Coinbase CEO says Bitcoin Lightning is ‘something we’ll integrate’

“Lightning is great and something we’ll integrate,” Brian Armstrong said in response to an allegation that he was “ignoring” the network.

Bitcoin (BTC) layer 2 scaling solution Lightning may feature on the cryptocurrency exchange Coinbase in some capacity, according to its CEO, Brian Armstrong.

In a tweet on April 8, Armstrong said that “Lightning is great and something we’ll integrate” in response to a tweet criticizing him for “actively ignoring” the network.

Armstrong provided no further details on what a Lightning integration with Coinbase would involve or when it could be expected.

Coinbase, along with Binance and the now bankrupt FTX, has been called out in the past for not integrating the Lightning network which enables faster and cheaper BTC transactions than the Bitcoin base network.

According to a GitHub repository by Lightning enthusiast David Coen, Coinbase would join Bitfinex, Kraken and OKX as the largest trading platforms to have integrated Lightning, if Armstrong stays true to his word.

Coen had previously suggested that Lightning integration may go against the business plan for many of these trading platforms, “since the priority seems to be to integrate as many altcoins as possible and follow the trends of the market.”

Armstrong claims to have tested out a Lightning network application in recent days, and sent Cointelegraph reporter Joseph Hall $100 in BTC after Hall shared a video of himself using Bitcoin in Senegal.

The $100 was a prize by Armstrong for those who shared the “best” examples of how people are using crypto in Africa. Hall said he would give away the funds to onboard others to Bitcoin.

Hall reported, however, that he hasn’t received the payment, prompting Bitcoiner Derek Ross to suggest that Armstrong “needs a lesson on Lightning.”

Coinbase has lately been more active in the Ethereum ecosystem having launched “Base” on Feb 23 — an Ethereum layer 2 application-focused network powered by fellow layer 2 Optimism.

Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption

Interestingly, Armstrong wrote a “Scaling Bitcoin” article in January 2016, where he said that he would throw support behind Bitcoin scaling solutions:

“We also did it to show our support for scaling Bitcoin, and encourage things to move forward, since we’d like to see a solution sooner rather than later.”

Lightning was launched about two years later in March 2018, with last month marking the fifth anniversary of the network.

Cointelegraph contacted Coinbase for comment but did not receive an immediate response.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

OKX launches metaverse training session with football star Rúben Dias

The experience will allow fans to connect with Dias, and experience training techniques and coaching tips in virtual reality.

Cryptocurrency exchange and Web3 technology developer OKX has been active in the space over the last month, with the latest announcement on its first immersive metaverse fan experience part of its “OKX Collective.“

On April 3, the company revealed a collaboration called “Train Like Dias” with one of its brand ambassadors and Manchester City footballer, Rúben Dias.

According to the announcement, fans can virtually experience Dias’ favorite training techniques, and have exposure to coaching and tips. The experience is open to fans within the OKX Collective metaverse.

Haider Rafique, the global chief marketing officer at OKX, commented that the new immersive experience helps connect fans, and “is another great example of what this technology allows.“

“The possibilities that Web3 can offer are vast and only limited by our own imaginations.“

OKX and Manchester City officially became partners back in July 2022, with the platform hinting at future offerings of Web3-content from other players on the team, including Alex Greenwood, Ilkay Gündoğan and Jack Grealish.

Metaverse avatar for OKX Collection immersive metaverse experience. Source: OKX

Cointelegraph reached out to OKX and Dias for comments on the immersive experience. 

Related: To be or not to be: Ethics, democracy and morality in the nascent metaverse

The metaverse continues to be the next frontier to explore connections between physical reality and Web3 applications, as seen with “Train Like Dias.” However, recent events surrounding metaverse development have been mixed after Disney reportedly scrapped its metaverse division. 

That came only a week after rumors began circulating that Animoca Brands — a prominent metaverse developer in the space — made cuts of around $200 million to its metaverse fund. Animoca promptly denied those claims. 

On the other hand, South Korea launched a “Metaverse Fund” on March 12, intending to accelerate metaverse initiatives within the country. Automotive manufacturer Nissan also recently filed multiple Web3 trademarks and trialed sales in the metaverse.

Magazine: Is the Metaverse really turning out like ‘Snow Crash’?

Why did 12K Bitcoin margin longs close at Bitfinex, and why didn’t it impact BTC price?

An unprecedented number of BTC margin longs recently closed at Bitfinex, leaving analysts searching for explanations.

Since May 2022, the Bitcoin (BTC) margin markets on the Bitfinex exchange have been plagued by an unusually high open interest of over $2.7 billion. This information alone should raise a red flag, especially considering Bitcoin’s price decline from $39,000 to less than $25,000 during the same period.

Traders seeking to leverage their cryptocurrency position had borrowed over 105,000 Bitcoin. Currently, the cause of this anomaly and the number of entities involved in the trade are unknown.

Cheap borrowing favors high demand

Bitfinex’s sub-0.1% annual rate may contribute to the size of the Bitcoin lending market. To date, this has been the norm, creating enormous incentives for borrowing, even if there is no current need. Few traders would turn down such a ridiculously inexpensive leverage opportunity.

Margin borrowing can be used to take advantage of arbitrage opportunities, where a trader exploits price discrepancies between different markets. For example, borrowing Bitcoin on margin allows a trader to take a long position in one market and a short one in another, profiting from the price difference.

To understand how Bitcoin borrowing can be used to profit on derivatives markets, including those outside of Bitfinex, one must understand the distinction between futures contracts and margin markets. The margin is not a derivative contract, so the trade occurs on the same order book as spot trading. In addition, unlike futures, margin longs and shorts are not always in balance.

For example, after purchasing 10 Bitcoin using margin, the coins can be withdrawn from the exchange. Naturally, the trade, typically based on stablecoins, requires some form of collateral or a margin deposit.

If the borrower fails to return the position, the exchange will liquidate the margin to repay the lender.

Additionally, the borrower must pay interest on the BTC acquired with a margin. The operational procedures vary between centralized and decentralized exchanges, but the lender typically determines the interest rate and duration of offers.

There was a 12,000 BTC margin decline in a single trade

Historically, Bitfinex margin traders have been known to move large margin positions quickly, indicating the participation of whales and large arbitrage desks. In the most recent instance, on March 25, those investors reduced their long positions by 12,000 BTC in minutes.

Bitfinex BTC margin longs, in BTC contracts. Source: TradingView

Notice the significant decrease, although it did not affect the Bitcoin price. This supports the theory that such margin trades are market-neutral because the borrower is not leveraging their positions with the proceeds. Most likely, there is some arbitrage involving derivatives instruments.

Traders should cross-reference the data with other exchanges to confirm that the anomaly affects the entire market, given that each exchange has distinct risks, norms, liquidity and availability.

OKX, for example, provides an indicator for margin lending based on the stablecoin/BTC ratio. Traders can increase their exposure on OKX by borrowing stablecoins to purchase Bitcoin. Bitcoin borrowers, on the other hand, can only wager on the price decline.

OKX stablecoin/BTC margin lending ratio. Source: OKX

The above chart shows that OKX traders’ margin lending ratio has been stable for the past week near 30, indicating that professional traders’ long-to-short bets have not changed. This data supports the theory that Bitfinex’s decline is due to an arbitrage close unrelated to Bitcoin price movement.

Related: US government plans to sell 41K Bitcoin connected to Silk Road

Recent crypto bank closures could have triggered the movement

Another possibility for the sudden decrease in margin demand is the $4 billion deposits associated with the now-defunct Signature Bank. Crypto clients were told to close their accounts by April, according to a Bloomberg report.

While New York Community Bancorp (NYCB) purchased the majority of Signature Bank’s deposits and loans on March 19, the deal with the Federal Deposit Insurance Corporation did not include crypto-related accounts.

If those whales are forced to close their banking accounts, they will most likely reduce their arbitrage positions, including those in margin markets. For the time being, all assumptions are speculative, but one thing is sure: the 12,000 BTC long margin reduction at Bitfinex did not affect Bitcoin prices.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

OKX launches AI integration to monitor market volatility

Cryptocurrency exchange OKX announced a new integration aimed at helping users monitor market volatility in real time via advanced AI algorithms.

After the latest update of the infamous artificial intelligence (AI) chatbot ChatGPT-4, the technology has been a buzzword inside and outside the crypto industry. While opinions on the technology may be mixed, companies continue integrating AI to enhance their users’ experience.

On March 31, the cryptocurrency exchange and Web3 technology company OKX announced that it would launch a new integration from EndoTech, which utilizes AI algorithms to capture crypto market volatility.

The algorithms incorporate both machine learning and “other advanced techniques” in an effort to conduct real-time analyses of data and trading opportunities.

According to Dmitry Gooshchin, chief operating officer of EndoTech, understanding market volatility is “essential for successful trading in the crypto space.“

OKX also jumped on the AI bandwagon on March 30 when it posted an AI-generated poem from ChatGPT-4 about the company’s wallet.

This new platform update comes only a few days after the company announced its intention to expand its services to Australia while beginning to shut down its operations in Canada.

AI is finding various use cases in the crypto industry, not just for identifying real-time market volatility. It’s also used to track blockchain transactions, deploy autonomous economic agents for trading and more.

Related: OKX latest proof of reserves reveals $8.9B in assets

In everyday life, it’s now used for personal assistant-like tasks, social media and customer service needs, among other use cases.

While some have a more positive outlook on the impact of AI technology in scenarios like the metaverse, a recently emerged letter signed by 2,600 researchers and leaders in fintech calls for a pause in AI development.

The primary concern voiced by industry professionals was that “human-competitive intelligence can pose profound risks to society and humanity.” 

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Crypto Biz: Mastercard opens network to USDC, OKX departs Canada, Bitcoin climbs

Despite global bank turmoil and regulatory crackdowns, traditional and decentralized finance (DeFi) are continuing to blend.

Banks turmoil and regulatory crackdowns happening worldwide have not slowed down the ongoing blending of traditional and decentralized finance (DeFi). The on-ramps connecting the two sides seem even stronger despite the wild winds of change.

Take, for example, the recent issues that Circle-issued USD Coin (USDC) faced when it depegged from the U.S. dollar following Silicon Valley Bank’s collapse. Two weeks later, Mastercard boldly integrated the stablecoin into its infrastructure in the Asia-Pacific region, allowing users to spend USDC through its network. It’s happening, folks!

And let’s not forget about Bitcoin (BTC) — that digital gold is still on the rise and decoupling from Wall Street, once again proving its value proposition and prompting calls for a hedge against equity markets in the long run.

This week’s Crypto Biz documents the latest developments on worldwide crypto adoption, and how banking system fears impact the crypto space.

Mastercard to settle transactions for stablecoin wallet in APAC

Global payment provider Mastercard has made another move into the crypto space to allow retail customers in the Asia-Pacific region to spend stablecoins anywhere Mastercard is accepted. This move was made possible by a partnership with Stables, an Australian stablecoin platform. Users can spend and save USDC by converting it into fiat and settling on the Mastercard network. The wallet will accept deposits in several stablecoins, including Tether (USDT) and Binance USD (BUSD), with all deposits automatically converted into USDC.

MetaMask enables direct crypto purchases in Nigeria

On-ramps for digital assets are also increasing in Nigeria, as crypto wallet MetaMask expanded direct transactions with local banks. MetaMask’s parent firm ConsenSys has partnered with crypto fintech MoonPay, enabling users in the country to purchase crypto via instant bank transfers without requiring a credit or debit card. The integration is estimated to reduce the decline rate for direct crypto purchases in Nigeria from 90% to 30%. Nigeria is a major market for MetaMask, ranking third in mobile monthly active users. Chainalysis ranks Nigeria as one of the top 20 countries in cryptocurrency adoption.

OKX to cease operations in Canada by June 22, 2023

In a “temporary” bye-bye, crypto exchange OKX emailed Canadian users that the firm “will no longer provide services or allow users to open new accounts in Canada starting on March 24, 2023.” OKX cited “new regulations” behind the move, saying it is only temporary while it works with regulators. By June 22, OKX’s customers in the country must close open options, margins, perpetuals and futures positions. Fiat or tokens must also be withdrawn by that date. In February, The Canadian Securities Administrators published a notice requiring crypto exchanges to sign new, legally binding undertakings while they await registration with regulators. 

Off-boarding message sent to Canadian OKX users on March 20, 2023. Source: OKX

Bitcoin’s banking crisis surge will ‘attract more institutions’: ARK’s Cathie Wood

With fears of a global banking crisis on the rise, Bitcoin’s value proposition is on full display as its price continues to climb following the collapses of Silvergate, Silicon Valley Bank and Signature Bank. ARK Invest CEO Cathie Wood believes the current decoupling of BTC’s price to the equity markets may attract more institutional investors into Bitcoin over time. As for the impact on Bitcoin’s price from institutional interest, Wood expects that most firms would allocate between 2.5% to 6.5% of their investment portfolios to BTC by 2030, taking the leading cryptocurrency’s price to $1–1.5 million.

The impact of the Credit Suisse bank crisis on the crypto market

How to analyze banks and avoid inaccurate market capitalization indicators — such as the $15.8 billion value of Silicon Valley Bank? Crypto analyst Marcel Pechman delves into the enterprise value metric and how it provides a better picture of a bank’s balance sheet terms by subtracting net debt from market cap. Of course, Pechman first explains the relationship between banking valuation and cryptocurrencies, specifically Bitcoin’s ethos. 

Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.

OKX latest proof of reserves reveals $8.9B in assets

Lennix Lai, managing director of Global Institutional at OKX, spoke with Cointelegraph about what it means to be transparent in a post-FTX and SVB crypto industry.

The global cryptocurrency exchange OKX released its fifth proof-of-reserves (PoR) report, a practice it began in November 2022 to boost transparency in the industry. 

According to the latest edition, OKX holds $8.9 billion across Bitcoin (BTC), Ether (ETH) and Tether (USDT). This puts the reserve ratios of BTC, ETH and USDT at 103%, 103% and 102%, respectively.

This latest release also comes as the exchange upgraded its PoR system with more transparency by making full liabilities (the total balance of user deposits) publicly accessible.

Cointelegraph spoke with Lennix Lai, the managing director of Global Institutional at OKX, regarding these extra steps toward transparency.

Lai said that recent events in the industry highlight that “crypto-native challenges require crypto-native solutions.”

“The blockchain and crypto/Web3 industry is built on technology that enables trustless transactions on public blockchains, and this inherent transparency is incredibly valuable.”

Many exchanges in the industry — like Binance, Crypto.com and Bybit — have released Merkle-Tree-based verification proofs to preserve the industry’s integrity after the FTX scandal.

“The FTX crisis had a silver lining in that it made successful firms double down on security and transparency and motivated the industry to innovate in this area.”

Lai said the new mantra of the industry is “don’t trust — verify.” He said over 300,000 users have already viewed the reserves or verified their liabilities in the OKX ecosystem.

The new transparency mechanism that made the total balance of user deposits visible to the public maintains user privacy, nonetheless, through splitting and shuffling account liabilities in the tree through a solution known as “splitting leaf nodes.“

According to Lai, OKX will also add zero-knowledge proof to our PoR in the coming weeks.

Related: Tether’s assets exceed liabilities in new reserves report by BDO

After the crash of Silicon Valley Bank (SVB), transparency in the greater financial industry has become even more of a talking point. Lai said during times of uncertainty, such as the banking crisis: 

“Proof of reserves can provide users with real-time, on-chain verification of reserves and liabilities through transparent technology — in this way, traditional finance differs from crypto.”

However, back on March 8, the Public Company Accounting Oversight Board, a United States-based watchdog overseeing audits of public companies, issued a warning to investors about PoRs. The board said these reports “don’t provide any meaningful assurance to investors or the public.”

Nonetheless, companies in the crypto industry continue efforts in transparency. On Feb. 10, Binance also upgraded its PoR system to include zk-SNARKS.

OKX to cease operations in Canada by June 22 2023

“Withdrawals from OKX will continue to be available,” wrote the OKX team in an email to users. ͏ ͏ ͏ ͏

On Mar. 20, cryptocurrency exchange OKX informed Canadian users via email the firm “will no longer provide services or allow users to open new accounts in Canada starting on Mar. 24, 2023, 12:00 AM EST,” citing “new regulations.” According to OKX, existing Canadian customers must close open positions in options, margins, perpetual, and futures by June 22, 2023. Fiat or tokens must also be withdrawn by the said date.

“Your funds will remain safe in your account until you withdraw them. You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange. “

OKX says its withdrawal from Canada is “temporary,” and the exchange is working with regulators to solve this issue. “We hope to see you again in the future. Stay tuned,” wrote OKX staff. Previously, cryptocurrency exchange Bittrex Global off-boarded Canadian users on July 29, 2022, after giving advance notice, which, too, cited regulatory developments as reasons for leaving the country.

On Feb. 22, the Canadian Securities Administrators (CSA) published a notice requiring crypto exchanges to sign new, legally-binding undertakings while they await registration with the regulatory. Among many items, the new undertaking prohibits “buying or depositing Value Referenced Crypto Assets (commonly referred to as stablecoins) through crypto contracts without the prior written consent of the CSA.” Although it appears stablecoin USD Coin (USDC) has not been affected by the ruling. 

Currently, all cryptocurrency exchanges must register with Canadian regulators before onboarding users in the country. On June 22, 2022, cryptocurrency exchanges ByBit and KuCoin were issued millions of dollars in fines after the Ontario Securities Comission determined that determined both were operating as “non-compliant platforms” in the country.

The off-boarding message sent to Canadian OKX users on Mar. 20 2023 | Source: OKX

OKX to cease operations in Canada by June 22, 2023

“Withdrawals from OKX will continue to be available,” the OKX team wrote in an email to users. ͏ ͏ ͏ ͏

On March 20, cryptocurrency exchange OKX informed Canadian users via email the firm “will no longer provide services or allow users to open new accounts in Canada starting on Mar. 24, 2023, 12:00 AM EST,” citing “new regulations.” According to OKX, existing Canadian customers must close open options, margins, perpetual and futures positions by June 22. Fiat or tokens must also be withdrawn by that date.

“Your funds will remain safe in your account until you withdraw them. You will be able to withdraw dollars to your linked bank account and cryptocurrency to your self-custody wallet or your cryptocurrency account on another exchange. “

OKX said its withdrawal from Canada is “temporary” and that it’s working with regulators to solve the issue. “We hope to see you again in the future. Stay tuned,” wrote OKX staff. Previously, cryptocurrency exchange Bittrex Global off-boarded Canadian users on July 29, 2022 after giving advance notice, also citing regulatory developments as reasons for leaving the country.

On Feb. 22, the Canadian Securities Administrators (CSA) published a notice requiring crypto exchanges to sign new, legally binding undertakings while they await registration with the regulatory. Among many items, the new undertaking prohibits “buying or depositing Value Referenced Crypto Assets (commonly referred to as stablecoins) through crypto contracts without the prior written consent of the CSA,” although it appears the stablecoin USD Coin (USDC) has not been affected by the ruling.

Currently, all cryptocurrency exchanges must register with Canadian regulators before onboarding users in the country. On June 22, 2022, cryptocurrency exchanges ByBit and KuCoin were issued millions of dollars in fines after the Ontario Securities Commission determined that determined both were operating as “non-compliant platforms” in the country.

The off-boarding message sent to Canadian OKX users on March 20, 2023. Source: OKX

Okcoin suspends USD deposits in wake of Signature Bank closure

U.S. dollar withdrawals on Okcoin are not affected by the suspension.

According to a March 13 tweet by Okcoin CEO Hong Fang, the U.S. affiliate of cryptocurrency exchange OKX had no exposure to defunct U.S. tech bank Silicon Valley Bank (SVB). However, Fong stated that Okcoin’s U.S. dollar wire and ACH deposits have been “immediately paused” due to the regulatory intervention in Signature Bank, Okcoin’s primary partner for customer transactions in dollars. 

On March 12, New York state regulators closed Signature Bank, a major financial institution for fiat-crypto on-ramping, citing a “systemic risk exception” in the wake of SVB’s collapse. In addition to suspending dollar deposits, Fang wrote that “over-the-counter services will be temporarily paused too,” including its quick buy and recurring buy functions. Okcoin also stated that the suspension extends to “crypto transactions by credit card” and “trading USD-crypto trading pairs.”

In response to user inquiries, Fang clarified that “all corporate and all customer funds are safe” and “USD withdrawal not affected. The processing pace will be subject to bank operation.” All crypto deposit and withdrawal functions remain intact, including those of U.S. dollar-pegged stablecoins. Furthermore, the suspension appears limited to dollar deposits, as other fiat deposit methods, such as those made in euros, are unaffected.

“Our team are working very hard on alternative channels and solutions in real-time We’ve been through much worse times since our inception. If this weekend has told us anything, it’s the significance of the future that we are building. Our commitment to you hasn’t changed either.”

The crypto-friendly Signature Bank was a key partner for many crypto firms, including Coinbase, Celsius and Paxos, which have since disclosed that they held balances in the bank. U.S. federal regulators have stated that Signature Bank depositors will receive their balances in full post-shutdown.