transactions

What are stealth addresses, and how do they work?

Stealth addresses in cryptocurrencies act like secret codes for transactions, providing enhanced privacy by generating unique addresses for each payment.

The purpose of crypto stealth addresses is to enable privacy for each transaction, concealing the recipient’s identity and transaction history.

Crypto stealth addresses are a privacy-enhancing feature in blockchain technology that lets users receive money anonymously. Unlike conventional public addresses, stealth addresses provide distinct, one-time addresses for every transaction. The recipient’s actual address is kept secret when a sender transfers funds using a stealth address; the transaction is broadcast to the network. 

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CoinList agrees to $1.2M settlement over apparent US sanctions violations

The crypto exchange processed 989 transactions for users in Crimea from April 2020 to May 2022, according to the Office of Foreign Assets Control.

CoinList, a United States-based cryptocurrency exchange, has agreed to a $1.2-million settlement with the Treasury’s Office of Foreign Assets Control (OFAC) following allegations the firm facilitated transactions in apparent sanctions violations.

In a Dec. 13 notice, OFAC said CoinList had processed 989 transactions for users in Crimea — the peninsula formerly a part of Ukraine currently occupied by Russia — from April 2020 to May 2022. OFAC said the apparent sanctions violations were “non-egregious” but “not voluntarily self-disclosed.”

“[CoinList’s] screening procedures failed to capture users who represented themselves as resident of a non-embargoed country but who nevertheless provided an address within Crimea,” said OFAC. “In particular, [CoinList] opened 89 accounts for customers, nearly all of whom had specified ‘Russia’ as their country of residence but all of whom provided addresses in Crimea upon account opening.”

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Ocean mining pool refutes claims of censoring certain Bitcoin transactions

Dashjr rejected blame for accusations aimed against Ocean and asked Samourai Wallet to fix the bug “on your end.”

Bitcoin (BTC) wallet provider Samourai Wallet has accused BTC mining pool Ocean of censoring Whirlpool CoinJoin transactions and BIP47 notification transactions from Dec. 6. However, Ocean’s top executive has denied the claims while asking the Bitcoin wallet provider to fix a bug in their software.

On Dec. 7, Samourai Wallet claimed that a new policy enacted by Ocean mining pool censors certain Bitcoin transactions. In addition, the wallet provider accused X (formerly Twitter) and Block co-founder Jack Dorsey, who is an investor at Ocean, of a “hostile action.”

Samourai Wallet continues to accuse Dashjr of lying and deceiving community members by shifting the blame away from itself as it asks the community, “Don’t let them get away with this.”

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Xapo Bank to enable USDC deposits and withdrawals

According to the Bitcoin custodian, utilizing the USDC stablecoin will allow members to deposit and withdraw funds without fees.

Bitcoin custodian and licensed private bank Xapo Bank has partnered with financial technology company Circle to integrate USD Coin (USDC) payment rails as an alternative to SWIFT. Payment rails refer to the infrastructure and technology used to facilitate the movement of funds between parties in a financial transaction. Payment rails come in many forms, including traditional bank wires, credit card networks, and blockchain-based platforms.

Xapo Bank says that the new feature allows its members to bypass the cumbersome and expensive SWIFT payment system through “outrails” added to its existing USDC on-ramps. By utilizing the USDC stablecoin, members can deposit and withdraw funds from Xapo without fees and benefit from a one-to-one conversion rate from USDC to the U.S. dollar. In addition, all USDC deposits are automatically converted to the dollar, enabling members to earn an annual interest rate return of up to 4.1%.

According to the announcement, Xapo Bank is a fully licensed and regulated bank and a member of the Gibraltar Deposit Guarantee Scheme (GDGS), which protects depositors’ dollar deposits up to $100,000. Additionally, Xapo Bank shared that it does not engage in the staking of any cryptocurrency deposits, and all deposits are automatically converted to the dollar upon receipt by the bank. Xapo claims this reduces exposure to any risks associated with the fluctuating crypto markets.

Xapo claims its business model differs from traditional banks as it does not engage in lending activities and does not rely on fractional reserve banking to generate profits. Instead, the private bank maintains all customer funds in reserve and invests them in “short-term, highly liquid assets” to pass on the earned interest to its customers.

Related: Traditional banks rely on ‘tiny buffer’: Paris Blockchain Week 2023

As previously reported by Cointelegraph, Moody’s Investors Service haswarned that USDC’s depeg could negatively impact the adoption of stablecoins and lead to increased regulatory scrutiny. The credit rating agency argued that the traditional banking sector’s recent turmoil and the depegging of USDC could increase resistance to fiat-backed stablecoins.

USDC’S depeg occurred following the sudden collapse of Silicon Valley Bank on March 10. The collapse of SVB was a significant risk event for USDC issuer Circle Internet Financial, which had $3.3 billion in assets tied up in the bank. 

SVB contagion: Australia reportedly asks banks to report on crypto

Australia’s prudential regulator has reportedly told banks to improve reporting on crypto assets and provide daily updates.

Australia’s prudential regulator has reportedly asked local banks to report on cryptocurrency transactions amid the ongoing contagion of Silicon Valley Bank’s (SVB) collapse.

The Australian Prudential Regulation Authority (APRA) has started requesting banks to declare their exposures to startups and crypto-related companies, the Australian Financial Review reported on March 21.

The regulator has ordered banks to improve their reporting on crypto assets and provide daily updates to the APRA, the report notes, citing three people familiar with the matter. The agency is aiming to obtain more information and insight into banking exposures into crypto as well as associated risks, the sources said.

The new measures are reportedly part of the APRA’s increased supervision of the banking sector in the aftermath of recent massive collapses in the global banking system. On March 19, UBS Group agreed to buy its ailing competitor Credit Suisse for $3.2 billion after the latter collapsed over the weekend. The takeover became one of the latest failures in the banking industry following the collapses of SVB and Silvergate.

Barrenjoey analyst Jonathan Mott reportedly told clients in a note that the situation “remains stable” for Australian banks but warned confidence could be quickly disrupted, putting pressure on bank margins.

Related: Silvergate, SBV collapse ‘definitely good’ for Bitcoin, Trezor exec says

“Our channel checks indicate deposits are not being withdrawn from smaller institutions in any size, and capital and liquidity buffers are strong,” Mott said, adding:

“But this is a crisis of confidence and credit spreads and cost of capital will continue to rise. At a minimum, this will add to the margin pressure the banks are facing, while credit quality will continue to deteriorate.”

The news comes soon after the Australian Banking Association launched a cost of living inquiry to study the impact of the COVID-19 pandemic and geopolitical tensions on Australians. The inquiry followed an analysis of the rising inflation suggesting that more than 186 banks in the United States are at risk of a similar shutdown if depositors decide to withdraw all funds.

SVB contagion: Australia purportedly asks banks to report on crypto

Australia’s prudential regulator has purportedly told banks to improve reporting on crypto assets and provide daily updates.

Australia’s prudential regulator has purportedly asked local banks to report on cryptocurrency transactions amid the ongoing contagion of Silicon Valley Bank’s (SVB) collapse.

The Australian Prudential Regulation Authority (APRA) has started requesting banks to declare their exposures to startups and crypto-related companies, the Australian Financial Review reported on March 21.

The regulator has ordered banks to improve their reporting on crypto assets and provide daily updates to the APRA, the Financial Review notes, citing three people familiar with the matter. The agency is aiming to obtain more information and insight into banking exposures into crypto as well as associated risks, the sources said.

The new measures are apparently part of the APRA’s increased supervision of the banking sector in the aftermath of recent massive collapses in the global banking system. On March 19, UBS Group agreed to buy its ailing competitor Credit Suisse for $3.2 billion after the latter collapsed over the weekend. The takeover became one of the latest failures in the banking industry following the collapses of SVB and Silvergate.

Barrenjoey analyst Jonathan Mott reportedly told clients in a note that the situation “remains stable” for Australian banks but warned confidence could be quickly disrupted, putting pressure on bank margins.

Related: Silvergate, SBV collapse ‘definitely good’ for Bitcoin, Trezor exec says

“Our channel checks indicate deposits are not being withdrawn from smaller institutions in any size, and capital and liquidity buffers are strong,” Mott said, adding:

“But this is a crisis of confidence and credit spreads and cost of capital will continue to rise. At a minimum, this will add to the margin pressure the banks are facing, while credit quality will continue to deteriorate.”

The news comes soon after the Australian Banking Association launched a cost of living inquiry to study the impact of the COVID-19 pandemic and geopolitical tensions on Australians. The inquiry followed an analysis of the rising inflation suggesting that more than 186 banks in the United States are at risk of a similar shutdown if depositors decide to withdraw all funds.

Euler Finance hacker starts returning stolen Ether

Chances that the hacker will return the entire loot of $197 million remain slim, as no more outbound transactions — other than the 3,000 ETH — were recorded at the time of writing.

The recent attack that drained $197 million from Euler Finance was dubbed the biggest decentralized finance (DeFi) hack of 2023 so far. However, this may not hold for much longer as the hacker reportedly had a change of heart.

On March 18, roughly 3,000 Ether (ETH) ($5.4 million) were returned to Euler Finance’s deployer address from the Euler Finance hacker’s address. Blockchain investigator PeckShield identified three transactions that were used to send the funds.

Cointelegraph confirmed that the hacker transferred 1,000 ETH per transaction to Euler’s deployer account. However, chances that the hacker will return the entire loot of $197 million remain slim, as no more outbound transactions were recorded at the time of writing.

On March 16, Euler Finance announced a $1 million reward to track down the hacker and retrieve the funds.

The exploiter was able to drain $197 million through multiple transactions and later used a multichain bridge to transfer the funds from the BNB Chain to Ethereum.

Related: Euler Finance hacked despite 10 audits in 2 years, says CEO

Soon after a $1 million bounty was announced, the stolen funds were moved into the crypto mixer Tornado Cash.

Euler Finance demanded that the hacker return 90% of the funds within 24 hours to avoid possible jail time.

Hedera confirms exploit on mainnet led to theft of service tokens

Hedera said the March 9 smart contract exploit has not impacted the network or its consensus layer.

Hedera, the team behind distributed ledger Hedera Hashgraph, has confirmed a smart contract exploit on the Hedera Mainnet that has led to the theft of several liquidity pool tokens.

Hedera said the attacker targeted liquidity pool tokens on decentralized exchanges (DEXs) that derived its code from Uniswap v2 on Ethereum, which was ported over for use on the Hedera Token Service.

The Hedera team explained that the suspicious activity was detected when the attacker attempted to move the stolen tokens across the Hashport bridge, which consisted of liquidity pool tokens on SaucerSwap, Pangolin and HeliSwap. Operators acted promptly to temporarily pause the bridge.

Hedera didn’t confirm the amount of tokens that were stolen.

On Feb. 3, Hedera upgraded the network to convert Ethereum Virtual Machine (EVM)-compatible smart contract code onto the Hedera Token Service (HTS).

Part of this process involves the decompiling of Ethereum contract bytecode to the HTS, which is where Hedera-based DEX SaucerSwap believes the attack vector came from. However, Hedera didn’t confirm this in its most recent post.

Earlier, Hedera managed to shut down network access by turning off IP proxies on March 9. The team said it has identified the “root cause” of the exploit and is “working on a solution.”

“Once the solution is ready, Hedera Council members will sign transactions to approve the deployment of updated code on mainnet to remove this vulnerability, at which point the mainnet proxies will be turned back on, allowing normal activity to resume,” the team added.

A notice posted by Hedera on its status webpage cautioned users that its network would not be accessible. Source: Hedera

Since Hedera turned off proxies shortly after it found the potential exploit, the team suggested tokenholders check the balances on their account ID and Ethereum Virtual Machine (EVM) address on hashscan.io for their own “comfort.”

Related: Hedera Governing Council to buy hashgraph IP and open-source project’s code

The price of the network’s token Hedera (HBAR) has fallen 7% since the incident roughly 16 hours ago, in line with the broader market fall over the last 24 hours.

However, the total value locked (TVL) on SaucerSwap fell nearly 30% from $20.7 million to $14.58 million over the same timeframe:

The TVL on SaucerSwap fell sharply following the news of the exploit. Source: DefiLlama

The fall suggests a significant amount of tokenholders acted quickly and withdraw their funds following the initial discussion of a potential exploit.

The incident has potentially spoiled a major milestone for the network, with the Hedera Mainnet surpassing 5 billion transactions on March 9.

This appears to be the first reported network exploit on Hedera since it was launched in July 2017.

BIS wraps exploration project on retail CBDC payment system

The bank concluded that a “hub-and-spoke” model between CBDC domestic systems could “reduce settlement and counterparty risk” and complete cross-border transactions in seconds.

The Bank for International Settlements, or BIS, has reported it has concluded a project exploring international retail and remittance payments use cases for central bank digital currencies, or CBDCs, with the central banks of Israel, Norway and Sweden.

In a March 6 report, the BIS said it had finished Project Icebreaker, an initiative involving the bank’s Innovation Hub Nordic Centre that tested key functions and the technological feasibility of interlinking domestic CBDC systems through the Central Bank of Norway, the Bank of Israel, and Sveriges Riksbank. According to the report, the BIS concluded that a “hub-and-spoke” model between domestic systems could “reduce settlement and counterparty risk by using coordinated payments in central bank money and complete cross-border transactions within seconds.”

“Without a hub-and-spoke approach, each [retail CBDC, or rCBDC] system would need to make individual specific network and infrastructure configurations to communicate with other rCBDC systems,” said the report. “Communication between these rCBDC systems may not be standardised via a common interface and would instead be a bespoke integration between each pair of rCBDC systems. This would be not only complex to support and maintain but could also introduce cyber security risks.”

The report could provide the groundwork for a cross-border payment system should the central banks of Israel, Norway and Sweden move forward with issuing a digital shekel, digital krone, and digital krona, respectively. In October, the bank reported that a CBDC pilot involving the central banks of Hong Kong, Thailand, China and the United Arab Emirates was “successful” after a month-long test facilitating $22 million worth of cross-border transactions.

Related: Some central banks have dropped out of the digital currency race

In 2020, the Central Bank of the Bahamas became the first in the world to make a central bank-issued CBDC — the Sand Dollar — available to all residents of the island nation. Other countries have been moving forward on large-scale trials of digital currencies, including China, with the nation’s central bank reportedly distributing millions of digital yuan over the Lunar New Year holidays.

Xapo Bank enables faster Bitcoin payments with Lightning Network

Xapo Bank members will now be able to instantly pay for small purchases of up to $100 at any vendor accepting Lightning payments.

Xapo Bank, an international private bank headquartered in Gibraltar, has integrated the Lightning Network to improve its Bitcoin (BTC) capabilities.

On March 2, Xapo officially announced a partnership with the Lightning Network infrastructure platform Lightspark, which allowed the firm to implement Lightning on its platform.

The integration enables faster and cheaper transactions on Xapo, reducing blockchain confirmation waiting times and transaction fees on the original Bitcoin network.

According to the firm, Xapo Bank members will now be able to instantly pay for small purchases of up to $100 at any vendor accepting Lightning payments. High-volume transactions will not initially be supported with the integration.

The new integration was introduced on Feb. 27 as part of a new update for Xapo bank’s apps on the App Store and the Google Play Store.

Lightning Network transactions on Xapo via Lightspark

According to Xapo Bank CEO Seamus Rocca, Bitcoin’s transaction confirmation can take up to one hour during periods of high usage, which makes BTC unsuitable for small daily payments like groceries. By integrating the Lightning Network, Xapo allows its customers to pay with Bitcoin without having to convert it to the U.S. dollar, he said.

Related: Bitcoin node connection shuts down: BlueWallet users urged to withdraw funds

Bitcoin average confirmation time has seen a huge spike in mid-February amid a massive activity on the Bitcoin network, with the mempool size reaching November 2022 levels. According to data from YCharts, BTC confirmation time hit nearly 600 minutes on Feb. 19.

Source: Ycharts

Rocca also noted that Bitcoin payments are especially crucial during times of hyperinflation, economic uncertainty and political turmoil.

Founded in 2013, Xapo operates a private bank as well as a Bitcoin custodian and wallet regulated by the Gibraltar Financial Services Commission. The company is known for combining traditional banking with crypto by offering USD and BTC accounts in one place.

Xapo claims that, at the peak of its Bitcoin custodianship, the firm held more than 800,000 BTC ($18.7 billion) for family offices, funds and high net-worth individuals. Such an amount of Bitcoin is more than 4% of the entire number of all BTC in circulation.