More than 50,000 developers are actively involved in a local blockchain platform endorsed by the Chinese government. Yin Hejun, representing the Chinese Ministry of Science and Technology, communicated the significant commitment by the local government to advancing the Web3 industry in a written response to the National Committee of the Chinese People Political Consultative Conference (CPPCC) proposal.

China shifting to Web3

Yin emphasized that the suggestions related to enhancing resource support for Web3 technology research and development, fortifying technology supervision and management, promoting international cooperation, and intensifying publicity and promotion exhibit foresight and strategic alignment with the key priorities set forth by the Ministry.

The provided document recognizes the sturdy industrial base of China alongside its substantial potential for Web3, encompassing policy backing, technological exploration, and practical applications. The document highlights official directives on blockchain technology and ongoing innovation pilots exploring diverse applications, such as trade finance and intellectual property. Prominent Chinese technology enterprises like Ant Group, Baidu, and Huawei underscore the pivotal role of the consortium in this sector.

Advancement with a catch

To expedite blockchain adoption, the Ministry of Science and Technology, alongside other governmental entities, has introduced certain policies and standards. Local initiatives in Beijing and Shanghai specifically aim to nurture innovation within the Web3 sphere. Authorities are capitalizing on opportunities in this emerging field by creating a conducive environment through guidelines, committees, and targeted initiatives.

The embracing of Web3 technologies by China indicates a significant shift compared to its previous stance of prohibiting cryptocurrencies and cracking down on mining operations. Nonetheless, concerns linger around the Chinese CBDC, the digital Yuan, which, while positioned as an advanced payment mechanism, enables unprecedented surveillance and control by authorities.

The impending Bitcoin (BTC) Spot ETF applications hold considerable importance for all markets, according to Michael Saylor, the Executive Chairman of MicroStrategy (MSTR), who emphasized this point during a recent Bloomberg TV interview. Saylor has long since been a strong advocate for Bitcoin and its potential, to the point where he has bought a tremendous amount of the flagship crypto for MicroStrategy.

A historic development

Saylor suggested that the potential approval of the exchange traded funds could be the most significant development on Wall Street in three decades, drawing a parallel to the introduction of previous ETFs which helped provide investors with easy exposure to various markets.

Saylor highlighted the current lack of a high bandwidth compliant channel for mainstream investors, both individual and institutional, to invest in Bitcoin. He anticipates a transformative shift with the introduction of the ETF, predicting a surge in demand for BTC, followed by a supply shock during the upcoming halving event, reducing daily Bitcoin production to 450 as compared to its current levels which are at 900.

Saylor remains bullish

Saylor expressed optimism about a major bullish trend for Bitcoin as well as all of the other cryptocurrencies by association in the coming year but did not speculate on the potential price increase and did not provide any specific numbers or predictions.

Moreover, when it came to addressing concerns about whether a Spot ETF might divert investor interest regarding MicroStrategy, often considered a Bitcoin ETF proxy, Saylor clarified that MSTR is an operational company capable of using its cash flow or intelligent leverage to enhance its holdings. He also emphasized the absence of ownership fees for MSTR, which helps provide an important distinction when it comes to ETFs.

The European Union (EU) has introduced its 12th set of sanctions against Russia, concentrating on crypto assets to curtail financial capabilities for the Russians while advocating for peace in Ukraine. This latest package of measures encompasses a broad prohibition on Russian involvement in crypto services, encompassing ownership, control, or participation in the governing bodies of crypto service providers.

Curbing Russia

The sanctions also reportedly include measures to cease the provision of wallets, accounts, or custody services related to crypto by Russians. The EU is implementing these actions to restrict the financial capabilities of Russians while also simultaneously addressing vulnerabilities in digital financial transactions.

Since early 2022, the European Union has been escalating its sanctions against Russia, encompassing various economic and individual measures, with the primary objective of pressuring Russia to cease its military actions in Ukraine.

These sanctions are allegedly designed to promote peace in the region and involve substantial measures such as limiting Russian access to crypto services within the EU. Similar measures have been enacted against Belarus and Iran. The global crypto-asset sector is affected by these sanctions, as the EU focuses on a critical area of finance.

More than meets the eye

Despite its critics, the EU remains adamant in maintaining a steadfast position, utilizing economic sanctions for geopolitical influence, indicating a shift in global power dynamics. This particular development represents a significant initiative by the EU to curtail Russia, particularly in the crypto-assets sector, with the aim of contributing to the resolution of the conflict in Ukraine.

Still, some believe that, like most traditional institutions, the EU may be overreaching its influence in order to try and manipulate the global geopolitical situation. After all, a large portion of the Russian population never wanted a war with Ukraine in the first place, and many believe that punishing all Russian citizens for the actions of the government is a tad too far.

The board overseeing Zcash recently acknowledged Zooko Wilcox for introducing the initial real-world implementation of zero-knowledge proofs. Electric Coin Co. (ECC), the primary developer of Zcash, announced that Wilcox is stepping down as CEO, with Josh Swihart taking over. Wilcox has led the project since its inception in 2015 when the company was first established.

A needed change

Swihart, former Senior Vice President of Growth at ECC, will assume the CEO position as aforementioned. He will be responsible for all strategic and tactical decisions going forward. The Board has expressed confidence in Swihart, citing his vision for ECC, passion for Zcash, and a robust background in entrepreneurship, technology, and product development.

Wilcox will retain his position as a Director on the Board of the Bootstrap Project, the parent company of ECC. Wilcox discussed the intertwining of his life and identity with Zcash, expressing the need for separation for the well-being of both himself and the project. He mentioned taking time to contemplate how best to contribute in the future, emphasizing the importance of including Zcash in any future commitments due to its significance in promoting freedom.

History maker

Zcash, launched in 2016 as a fork of the Bitcoin (BTC) blockchain, is renowned for its z-addresses, enabling encryption on one or both sides of a blockchain transaction. The network utilizes zk-SNARK, a type of mathematical proof derived through zero-knowledge cryptography, a prominent trend in blockchain architecture in 2023.

The technical documentation explains that owners of z-addresses can share transaction details with trusted third parties using a view key, allowing auditable transactions while maintaining participant control. Electric Capital credited Wilcox for successfully delivering, through Zcash, the first real-world application of zero-knowledge proofs.

Aurory gaming, a Solana-based platform, has experienced a significant security breach resulting in an 80% liquidity loss in the AURY-USDC pool. Acting swiftly, the team disabled SyncSpace to safeguard funds and stabilize the market.

Damage control

The security incident involved the SyncSpace Aurory Bridge on the Camelot DEX known as Arbitrum. The hacker exploited this bridge, enabling the withdrawal of approximately 600,000 AURY tokens to Arbitrum, which were subsequently sold. In response, SyncSpace was promptly deactivated to prevent further complications and protect user funds and NFTs.

Notably, the pilfered tokens originated via the team rather than user funds. The team took immediate measures to stabilize the market, repurchasing tokens and planning security enhancements. Following the breach, AURY declined to $1.17, but it later recovered some of its value. The team continues to repurchase tokens as they conduct an ongoing investigation.

Fueled by hype and trends

The breach has sparked discussions about decentralized ecosystem security. The Aurory team assures a comprehensive analysis post-issue resolution, and SyncSpace is anticipated to resume operations soon, accompanied by plans for an upcoming user event.

Elsewhere, people all over the world are clamouring to get their hands on the new Solana Saga Web3 phone. Most are not actually interested in the phone itself, but rather the free 30 million BONK tokens which come with it. One person even reportedly paid a whopping $5,000 for the device.

BONK is a meme coin, which means it lacks a solid foundation or tangible assets, making it susceptible to sudden and drastic price fluctuations driven primarily by social media trends rather than fundamental value. The hype surrounding meme coins like BONK, DOGE, SHIB, and more can often lead to rapid and unpredictable market movements, exposing investors to the potential for significant financial losses. 

Solana Saga faced challenges meeting sales expectations initially but recently experienced a global sellout. Meme coin enthusiasts discovered that the flagship Web3 phone included a substantial amount of one of the most popular Shiba-Inu-themed tokens, BONK. As the meme coin gains momentum, traders are fervently pursuing the Web3 phone to capitalize on the surging demand. The Saga phone includes various complimentary items, such as free NFTs, merchandise, and more.

An insane price tag

Unexpectedly, Solana dropped a bombshell as the Saga phone sold out in the US, leaving only a few available in Europe. The spike in demand was surprising, given the revelation by Anatoly Yaovenko in early December that only 2,500 units were sold, significantly below the 50,000 target.

The sudden interest in the phone coincides with the explosive rise of BONK. Each Solana Saga phone includes 30 million BONK tokens, currently valued higher than the $599 price tag for the device itself. Recognizing this opportunity, traders are rushing to acquire the phone worldwide.

With escalating demand, the flagship Web3 phone is now reselling for up to ten times its original price on secondary marketplaces like eBay. Research indicates that the Solana Saga is attracting bids ranging up to a whopping $5,000, with reports of two phones selling at the higher end.

Unrealized success

The main reason for these high prices is the physical possession of the phone by sellers. Although online sales are depleted, traders must await the physical arrival of the phone to access and sell the free BONK tokens. Due to the infamous volatility associated with meme coins, prices can fluctuate significantly before the phone arrives.

Moreover, despite BONK experiencing an astonishing 800% surge in December, surpassing a market cap of $1.6 billion, it remains vulnerable to extreme volatility. It has already recorded a 20% decrease over a 24 hour period. Solana Saga initially distributed the 30 million BONK tokens through an airdrop in June.

In any case, BONK has been a significant success this year, attracting heightened demand due to its remarkable performance. Recognizing the long-term profit potential of the asset, traders are actively seeking the meme coin, leading to a global sellout of the phone as aforementioned.

Charles Hoskinson once again dominates the headlines due to his comments. Members of the community questioned his position on potential collaborations with Ripple and XRP. Unsurprisingly, the Cardano founder remained firm in his opposition to such partnerships, as the dynamic between Hoskinson and the XRP community is one of the most intriguing in the crypto space, characterized by an enduring feud with both sides constantly expressing dissenting opinions.

Hoskinson will not play ball

In the latest chapter of the ongoing saga, Charles Hoskinson finds himself once more in disagreement with the XRP community. On Sunday, an X user brought attention to a comment made by Hoskinson a year ago, where he heavily criticized the XRP community by calling them toxic and petty.

Despite Ripple CTO Ripple Schwartz urging him to reconsider his stance, the recent response remained a resounding no to potential partnerships. Hoskinson defended his position by pointing to two years of what he perceived as blatant harassment by the XRP community. Still, most spectators simply wish for the two parties to get along for the betterment of crypto in general.

A different purpose

Hoskinson elaborated that XRP served a different market purpose, emphasizing its role as an interbank settlement system and CBDC stack, distinct to decentralized smart contract systems like Ethereum, Polkadot, and Algorand. He expressed skepticism about collaborating with the XRP community, citing constant personal attacks, harassment, and an apparent inability to have a conversation.

The comments made by the Cardano founder reflected his overall frustration, prompting a response by the XRP community through memes and allegations of corruption. Hoskinson, in turn, dismissed them as conspiracy theorists, particularly in response to their ETHGate theory.

At any rate, the ongoing hostility between Charles Hoskinson and the XRP community leaves the duration of this feud uncertain. As long as the animosity persists, the situation becomes increasingly complex.

On behalf of the Web3 community, we would like to extend our warmest congratulations to the companies that announced their success in fundraising between 12th December and 18th December 2023. We are thrilled to see such tremendous support from all involved. Well done! 

Matr1x raised $20M - Matr1x hopes an esports scene springs up for its namesake game, which is still in development. The studio has meanwhile released two NFT collections and plans to release a third collection.

AIT Protocol raised $300K - The AIT Protocol stands as a trailblazer in the domain of Web3 data infrastructure, placing a significant emphasis on the annotation of data and the training of AI models.

Hackless.io raised $1.2M - Hackless, a company specializing in blockchain security solutions, has successfully concluded a private funding round, securing $1.2 million in investment.

Realtime raised $10M - This endorsement and financial support have been received for Reltime's three-year development initiative on &ldquoUsing 5G Mobile Handsets as node validators in Reltime's Layer 1 Blockchain for Microtransactions."

G.U. Technologies raised $2.9M - G.U. Group, the promoter of Japan Open Chain, has raised a 420 million yen ($2.9m) funding. Japan Open Chain is an Ethereum compatible public blockchain with enterprises running the validator nodes.

NFTScan raised $2.05M - NFTSCAN is a professional NFT asset browser and data analysis platform. Provide developers with a professional NFT API, and provide ordinary users with concise retrieval services.

Line Next raised $140M - LINE NEXT Raises USD140 Million to Expand Web3 Ecosystem. Investment is led by Crescendo Equity Partners. LINE NEXT aims to use funding to introduce a new platform and services.

Spielworks GmbH raised an undisclosed amount - Crypto startup Spielworks, which focuses on DeFi and gaming, has completed a strategic funding round with participation from the Swiss non-profit organization, The Hashgraph Association (THA).

Enphyr raised $1M - Enphyr, a Layer 2 solution that is built on the Ethereum network, has secured a $1 million in seed funding round at a $10 million valuation.

Dynamic raised $21M - Web3 authentication and authorization platform Dynamic Labs on Wednesday announced that it's raised $13.5 million in a round led by a16z crypto and joined by Founders Fund.

NodeKit raised $1.2M - NodeKit, the team working on Avalanche-based network SEQ, has raised $1.2M in a pre-seed round led by Borderless Capital, with participation.

Andalusia Labs raised $51.25M - Andalusia Labs, formerly known as RiskHarbor, the global leader in risk management infrastructure for digital assets, has successfully raised $48 million in Series.

To stay updated with news about future Web3 Funding Rounds, Follow CryptoWeekly
 

Tether CEO Paolo Ardoino is actively engaged in addressing the inappropriate use of the USDT stablecoin for unlawful purposes and reinforcing the credibility of the cryptocurrency sector. Following the introduction of a novel policy for freezing wallets, specifically targeting individuals on the SDN list which led to the freezing of more than 200 wallets, the stablecoin provider aims to escalate its efforts.

Cooperating with the law

In a recent communication with US lawmakers, the new CEO outlined his vision for preventing the exploitation of the USDT stablecoin, involving collaboration with law enforcement heavyweights such as the Secret Service and the FBI.

On December 15th, Tether expressed its unwavering commitment to combating the illicit utilization of its stablecoins in letters addressed to members of the US Senate Committee on Banking, Housing, and Urban Affairs, as well as the US House Financial Services Committee.

Underlining its dedication to establishing a sustainable and robust infrastructure, Tether committed to full cooperation with law enforcement in the fight against terrorist financing and other illicit activities. In the communication, Paolo elaborated on the recent endeavors to combat criminal activities. This included highlighting the success of its new wallet-freezing policy, which enabled law enforcement to restrict access to over 200 wallets, resulting in the freezing of over 3.5 million USDT.

Binance and Tether still in trouble

The stablecoin issuer emphasized its collaboration with the US Department of Justice, the US Secret Service, and the FBI as a concrete illustration of its partnership with law enforcement agencies, disclosing its involvement in freezing the aforementioned wallets. The move comes in response to US Senators urging the Department of Justice to scrutinize the stablecoin issuer.

In a letter dated October 26th, Senator Cynthia Lummis and Representative French Hill urged the DOJ to make a charging decision on Binance and promptly conclude investigations into the alleged involvement by Tether concerning various illicit activities.

The legislators alleged that Binance and Tether provided material support and resources for crypto-funded terrorism, violating applicable sanctions laws and the Bank Secrecy Act. They also claimed that the stablecoin issuers neglected proper screenings despite being aware of extremist groups utilizing stablecoins for terrorism and illicit activities.

The significance of Tether cooperating with law enforcement in combating the misuse of its stablecoins is crucial for the long term positive trajectory of the cryptocurrency industry. However, it also raises concerns about potential unwarranted centralization.

Coinbase has taken legal action against the U.S. Securities and Exchange Commission (SEC). This move follows the recent refusal by the SEC of the request put forth by Coinbase for more precise regulations regarding cryptocurrencies. The initiation of this lawsuit signals a notable escalation in the ongoing conflict between the crypto industry and regulatory bodies, emphasizing the intricate and often contentious landscape of cryptocurrency regulation in the United States.

Growing tensions

Coinbase Chief Legal Officer, Paul Grewal, revealed the commencement of the lawsuit via a post on X, expressing the resolve by the exchange to contest what it views as capricious decision-making by the SEC. The lawsuit also reflects a broader dissatisfaction within the crypto sector concerning the absence of specific regulations tailored to the distinctive features of digital assets.

The legal action also asserts that the rejection of the petition breaches the Administrative Procedure Act and constitutes an abuse of discretion. This legal maneuver underscores the increasing impatience among crypto companies when it comes to the SEC and its perceived hindrance to innovation alongside the creation of an uncertain business environment in the United States.

A convoluted regulatory environment

The SEC has thus far not provided a statement regarding the latest lawsuit, but the dispute may nevertheless establish a precedent for the regulation of digital assets, influencing the future trajectory of the crypto industry.

The legal action against the SEC mirrors the increasing assertiveness adopted by the burgeoning crypto sector in seeking transparent and equitable regulatory treatment. As the legal proceedings unfold, stakeholders, regulators, and investors will closely monitor the case, recognizing its potential implications for the future of cryptocurrency in the United States and beyond.

The resolution of this case may very well either facilitate further innovation and expansion in the sector or deepen the challenges and uncertainties that have persistently affected the crypto industry up till now.

In a notable security incident, unidentified malicious actors targeted Ledger, a widely-used hardware wallet provider, with the intention of exploiting their LedgerConnect kit. The attack was initially reported by Blockaid, a platform dedicated to safeguarding Web3 users. Over $480,000 worth of assets were reportedly pilfered before Ledger rectified the vulnerability.

Another hack

The assault, focused on Ledger Connector, took place on December 14th. The attackers successfully inserted a wallet-draining payload into the NPM package. Once the payload spread, assailants took control of the front end of various applications, such as Sushi, Hey, and Zapper, causing disruptions and allegedly absconding with assets valued in the hundreds of thousands of dollars.

The attack did not specifically target any particular decentralized application or blockchain, like Solana or Ethereum, rather, the hackers sought to exploit all protocols whose users utilized the LedgerConnect kit for asset management or transfers. To comprehend the execution of the hack, the hackers specifically directed their efforts toward the Ledger NPM. This connector plays a crucial role in facilitating secure online connection and management of assets for typically off-chain Ledger wallet clients.

Time for damage control

NPM, in addition to providing a gateway to wallets, also serves as an interface. Through this interface, developers can integrate Ledger hardware wallets into applications, enabling Ledger users to securely participate in NFTs, DeFi, and other activities. Given that this attack aimed at exploiting a vital Ledger infrastructure capable of affecting all protocols irrespective of blockchain, analysts now categorize it as a supply chain attack. In DeFi protocol supply chain attacks, hackers target trusted service providers, primarily wallet providers or exchanges, to pilfer funds.

Responding to the incident, Ledger acknowledged that a script infected with malware was uploaded to the NPM register at 9:44 AM UTC. However, Ledger promptly took action, stating that they deleted the malicious file and replaced it with a genuine version approximately four hours after the malicious upload, around 1:35 PM UTC.

This week, Cardano (ADA) experienced the most significant surge among larger-cap altcoins, gaining over 10% in value overnight. Also, after a brief period of moving south and trading in the vicinity of or below the $41,000 mark, Bitcoin (BTC) bulls reemerged, propelling the asset beyond $43,000. As of the time of this writing, BTC is trading at just over $42,600.

Altcoins, according to information provided by CoinGecko, are also displaying positive momentum, with ADA standing out prominently, followed by DOT, SHIB, AVAX, and SOL. The total crypto market cap surged by over $60 billion at one point, yet it currently remains below $1.6 trillion.

BTC regains momentum

Following its peak at $44,700, BTC faced a less favorable outlook. It retraced to $44,000 over the weekend and experienced a significant drop on Monday, falling below $41,000. The situation worsened on Tuesday, dipping to $40,200. However, bulls defended that level, pushing BTC to around $42,000. After a failed attempt to reclaim this level on Tuesday, the asset surged once more yesterday evening, surpassing $42,000 and even reaching $43,000.

Moreover, while most alternative coins were in decline, the market managed to take a positive turn. As previously mentioned, ADA leads the way among larger-cap altcoins, with a daily surge of over 12%, currently trading close to $0.65. Solana, Polkadot, and Shiba Inu are following suit. Avalanche, Ethereum, Ripple, Dogecoin, Chainlink, and Polygon also recorded gains of up to 4%. Further gains were also evident in BONK, Helium, WOO Network, and Injective.

Other markets

Asian stocks saw advancement, boosted by the Chinese Central Bank injecting $112 billion into the financial system. Treasuries experienced a slight decrease, while the MSCI AC Asia Pacific Index rose 1%, reaching its highest point since early August, with Hong Kong stocks rallying 3%. US equity futures inched higher, and the Nasdaq 100 declined after a more than 50% surge in 2023.

Elsewhere, contrary to consensus, some major money managers, including Fidelity International and HSBC Holdings, anticipate a stronger dollar next year. Some experts argue that a global economic slowdown will lead traders to favor USD going forward as it is still the global reserve currency.

However, some analysts are becoming increasingly skeptical about the sustainability of US consumer spending into the next year. Despite American shoppers displaying surprising resilience amid persistent inflation and elevated borrowing costs, sell-side analysts have reduced profit projections for the consumer discretionary sector over the past 12 weeks.