U.S. House lawmakers recently held the first-ever Congressional hearing on decentralized finance (DeFi). The House Financial Services Committee met with industry experts to discuss the future of digital assets and blockchain technology.

Crypto has also become a key point of discussion for the upcoming United States Presidential Elections, where both Donald Trump and Kamala Harris have expressed their views on the subject. While Harris remains skeptical about Bitcoin (BTC), Trump aims to fully embrace the digital asset, with his son recently announcing his very own cryptocurrency project.

Mixed Opinions

The House Subcommittee on Digital Assets, Financial Technology, and Inclusion organized a session titled Decoding DeFi: Breaking Down the Future of Decentralized Finance. Chair French Hill, R-Ark., stated that the hearing aimed to explore emerging financial topics like tokenization and blockchains.

Not all lawmakers shared the same enthusiasm as Hill however. Some Democrats, including Rep. Brad Sherman, D-Cali., questioned what utility DeFi could possibly have, suggesting it might primarily facilitate tax evasion for the wealthy.

Regulatory Concerns

What Sherman had to say did not sit well with everyone, as his remarks led to a rebuttal by Peter Van Valkenburgh, director of research at Coin Center, who attributed non-compliance in the crypto sector to unclear regulations. Van Valkenburgh emphasized that clearer guidelines could help users better meet tax obligations.

The hearing also highlighted various DeFi risks, such as fraud. Rep. Maxine Waters, D-Cali., noted a recent scam involving the World Liberty Financial project, where fraudsters used hacked social media accounts to promote a fake token, leading to losses of $1.8 million by about 2,000 people.

The hearing, featuring five industry experts, lasted about 90 minutes. Lawmakers will remain in session until September 27th before breaking for the election recess. With the September 30th funding bill deadline approaching, discussions on DeFi and blockchain regulation are expected to continue.

Cardano founder Charles Hoskinson has rejected the falsehoods and misinformation about the network and its staking procedures. In a post on X dated September 11th, 2024, Hoskinson voiced his frustration over the spread of false claims concerning ADA, clarifying that the network does not lock its staked tokens.

He commented that this kind of misinformation about Cardano has reached unprecedented levels. The founder would go on to say that staking on Cardano does not involve locking, yet for some reason the lies persist.

Community Reaction

The aforementioned remarks followed allegations suggesting that the substantial market capitalization of Cardano was due to investors being unable to sell their ADA holdings, as their assets were purportedly locked. These claims were made during a recent podcast featuring several crypto experts, including InvestAnswers, CTO Larsson, MartyParty, and Mando.

During the podcast, MartyParty argued that the large market cap did not accurately reflect its value. Instead, he contended that it stemmed via investors being unable to liquidate their ADA holdings, having been deceived into locking their assets in the staking pool.

Besides Hoskinson, several Cardano holders swiftly countered these claims, denouncing the false accusations. PRIDE, a prominent stake pool operator in the network, highlighted that Cardano stands out among the top 20 crypto projects by offering native liquid staking, meaning ADA tokens are never locked.

Staking Rewards And Overall Development

Various reports indicate that over 22 billion ADA tokens have been staked to enhance network security and facilitate block validation. The annual reward rate for staking ADA currently stands at 2.82%. The debate over ADA staking comes as Cardano has recently achieved notable milestones in its network development.

On September 1st, 2024, Cardano finally completed the initial phase of its eagerly awaited Chang Hard Fork, which introduced decentralized governance to the network. Leading up to the upgrade, the Cardano Foundation reported an increase in key metrics in August, with the number of smart contracts, transactions, and wallet interactions rising by approximately 1% each. A recent meme coin launchpad also helped the company reach record transaction volume.

Brazilian digital bank Nubank has declared an immediate halt to trading of its native cryptocurrency, Nucoin, effectively ending its operations. The token, which launched in March 2023, will no longer be available for purchase or sale within the next 15 days due to concerns over potential market volatility.

Recently, the Brazilian Securities and Exchange Commission granted the green light for the first spot Solana ETF, a milestone managed by QR and Vortx, with a launch anticipated within the next 90 days. QR, a firm experienced in managing Bitcoin and Ethereum ETFs, will play a key role in overseeing the ETF and all corresponding operations, in partnership with Vortx. The collaboration is crucial as it will enable both parties to mutually benefit while simultaneously ensuring that the ETF functions smoothly.

Exchanging For Other Crypto

Nubank has provided a conversion option for those holding at least 100 Brazilian reais in Nucoins. These customers can choose to exchange their holdings for either BTC or USDC, with the conversion period open until December 9th.

In an email to its customers, Nubank explained that the immediate suspension aims to safeguard users and all participants in terms of potential market fluctuations triggered by this update. For those who do not convert their tokens, Nucoins will be repurposed for the updated rewards program being provided by the bank.

A Difficult Decision

Despite the Nucoin blockchain explorer reaching half a billion transactions, Nubank has decided to discontinue its crypto trading activities. Moving forward, Nucoins will solely be used for redeeming benefits within the Nubank ecosystem, such as discounts on its shopping platform and exclusive brand experiences.

To ease the transition, Nubank is launching a prize campaign for its 16 million Nucoin holders. This includes 30 monthly prizes of 1,000 Brazilian reais, a monthly prize of 100,000 reais, and a grand prize of 1 million reais at the end of the campaign.

Nubank, a major digital banking platform supported by investors like Berkshire Hathaway, previously collaborated with Polygon in 2022 for the launch of Nucoin and its associated loyalty program. At that time, the general manager of Nucoin highlighted their commitment to blockchain technology.

Venmo and PayPal users will now have the ability to transfer cryptocurrency using Ethereum Name Service (ENS) names. On September 10th, ENS Labs revealed this integration, which is projected to reach over 270 million users across the United States.

An ENS name serves as a user-friendly alias for a blockchain address. Rather than sending tokens to a lengthy, complex address composed of letters and numbers, users can register a simple name like yourname.eth for cryptocurrency transfers.

The PayPal Effect

ENS Labs stated that this new integration makes it easier to transfer between wallet addresses, minimizing errors and the risk of losing funds. Khori Whittaker, the executive director of ENS Labs, mentioned that this integration will extend ENS naming features to millions of users via Venmo, PayPal Mobile, and PayPal Web.

PayPal is actively involved in the blockchain space. As reported by CoinMarketCap, PayPal USD (PYUSD) recently surpassed a total market capitalization of $1 billion. In May, PayPal launched PYUSD on the Solana network, collaborating with Crypto.com, Phantom, and Paxos to onboard users.

Marta Cura, the director of business development at ENS Labs, explained that partnering with PayPal and Venmo helps reach newcomers to the space and those who favor the familiarity of Web2 payment systems.

Focusing On Expansion

ENS is a blockchain-based, open-source protocol designed to replace intricate addresses on the Ethereum network. Its developer, ENS Labs, has been focused on expanding the protocol. In May, the company announced its transition to a layer-2 network to reduce gas fees and improve transaction speeds.

The company is also involved in a patent dispute. In May 2024, ENS Labs challenged the validity of a patent granted to Unstoppable Domains by the US Patent and Trademark Office. ENS argues that the patent lacks originality and infringes on the open-source technology developed by ENS. ENS Labs stated that the challenge is intended to keep the web as a collaborative environment.

Crypto scams are widespread, a fact well-known to many. However, some of these scams are notably more severe than others. Certain scammers repeatedly execute the same type of rug pull, and their misdeeds sometimes extend beyond mere financial theft.

Recently, someone reached out to share their story with the public. Below is an account detailing a notorious crypto scammer along with a distressing testimony by a victim of his schemes.

Alleged Crypto Scammer Jeremy Cahen, Aka Pauly0x

The online pseudonym Pauly0x belongs to an individual with a troubling history of alleged crypto fraud. Hackernoon reveals that Jeremy Cahen, among others, faced a lawsuit by Yuga Labs in June 2022. The lawsuit accused Cahen, along with the controversial artist Ryder Ripps, of selling NFTs that infringed upon trademarks belonging to Yuga Labs as well as those of the Bored Ape Yacht Club, defrauding buyers of millions.

In February 2024, Cointelegraph reported that a judge sided with Yuga Labs, mandating that the defendants pay over $9 million in damages collectively. Although the original post on Reddit about Pauly0x allegedly stealing $286k in under an hour has been deleted, users on X (formerly Twitter) have publicly denounced Pauly0x for his fraudulent activities.

Opinions On Pauly0x

It is pertinent to understand the thoughts of former collaborators of Pauly0x, such as OG_Kenobi_Hello, on the long-term impact of what Pauly0x has done. Kenobi believes that this is just the tip of the iceberg regarding the accusations against Pauly0x.

Jeremy Cahen, also known as Pauly0x, seems to be notorious for executing a classic pump-and-dump crypto scam repeatedly. This method is familiar to many within the crypto community and follows a predictable pattern:

1. Launch a token.
2. Promote the token extensively on social media.
3. Either sell the tokens immediately after people invest or steal funds directly via a DeFi platform.

While variations exist, the core strategy remains consistent. The token may be hyped through mainstream social media like Twitter or through private channels on Discord or Telegram. Once investors purchase the tokens, their funds often become irretrievable, either through loss in value or outright theft.

A Cautionary Tale

Evidence shows that Cahen used a Solidity contract to enable users to provide millions in liquidity to Uniswap in exchange for a negligible amount of a scam token called PNDX. This token allowed others to transfer funds via wallets without the consent of the users.

Shortly after, the liquidity provided by users was siphoned off. Three hours post-launch, when the liquidity was already drained, Pauly0x finally warned against using Uniswap for PNDX purchases, but by then, the funds had already disappeared.

The ETH wallet ending in 6faf initiated the mining contract, a multi-signature wallet, and added liquidity to Uniswap just 30 minutes before Pauly0x shared the contract address. The developer exploited this contract and then sold through Uniswap. This information, publicly accessible through breadcrumbs and ETH scan, mirrors the outcome of another Pauly0x scheme, yougetnothing.eth, detailed in this Reddit thread: https://www.reddit.com/r/CryptoCurrency/comments/14f4drl/twitter_user_pauly0x_had_told_people_to_send_him/, where contributors to Pauly0x received nothing in return.

Fractal Bitcoin, a highly awaited scaling solution for Bitcoin (BTC) supported by the wallet provider Unisat, has officially launched its mainnet today. This new scaling approach is integrated directly into the Bitcoin Core codebase.

Setting Itself Apart

The mainnet launch follows a trial phase on a testnet that started in July 2024. Fractal Bitcoin distinguishes itself as the sole scaling solution utilizing the core Bitcoin code, which helps distinguish it compared to various other Bitcoin sidechains and alleged Layer 2 solutions by concentrating on Bitcoin-native features rather than Ethereum Virtual Machine (EVM) compatibility. Additionally, it enhances overall capabilities by integrating the OP_CAT opcode.

The network boasts block confirmation times of under 30 seconds and a 20-fold increase in capacity per layer through recursive layering. Fractal Bitcoin supports Bitcoin protocols such as BRC-20, Runes, and Ordinals. It will also feature a decentralized exchange named PizzaSwap on the mainnet.

A New Mining Model

The project has introduced a new mining model called Cadence Mining, which merges permissionless mining with Bitcoin to bolster network security. Unisat and blockchain investment and development firm Block Space Force are leading the project as primary contributors.

With the mainnet launch, Fractal Bitcoin has also unveiled its native token, ticker FB, with a total supply of 210 million tokens. Half of these tokens are designated for PoW (Proof-of-Work) mining, while the other half has been pre-mined for various uses, including allocations for core contributors, investors, the ecosystem treasury, and community grants.

Charles Hoskinson, the founder of Cardano (ADA), has praised Snek.Fun, a meme coin launchpad, for boosting network activity. On September 6th, 2024, Snek reported that Cardano reached a record daily transaction volume, marking the highest 24-hour DEX trading activity in its history.

This surge followed the September 5th launch of Snek.Fun, created by SNEK and Splash, a decentralized exchange on Cardano. The platform lets users create tokens for a fee of 25 ADA, which is the native token of the platform. In December 2023 and January 2024, Cardano processed over 4 million transactions, demonstrating a noteworthy uptick in on-chain activity.

Effective Management

A bonding curve activates when 75% of the overall supply of any token is sold and the market capitalization hits 42,069 ADA, adding 25% of the supply to a liquidity pool on Splash DEX and burning LP tokens to prevent liquidity withdrawal.

This approach attracted 20,000 users within 10 seconds of launch, causing network congestion due to high demand and an unoptimized script. Snek acknowledged the issues and took responsibility, optimizing the platform quickly. Within 24 hours, over 2,000 tokens were created, and trading volume exceeded 5 million ADA.

Embracing Meme Coins

Analysts believe Snek.Fun could popularize meme coins on Cardano, similar to how other platforms have boosted engagement on Solana (SOL) which is one of its main rivals alongside Ethereum (ETH). TapTools noted that Snek.Fun lowers entry barriers and encourages experimentation, potentially serving as a model for future Cardano initiatives.

However, analyst Store Optimal raised concerns about long-term success, citing the need for features like creator royalties and potential issues with botting. Meme coins are also, generally speaking, not meant to last very long and their highest profits usually operate on a first come, first serve basis.

The token for the crypto social media platform known as friend.tech has significantly declined after its team transferred the administration and ownership of its smart contracts to a null Ethereum (ETH) address, effectively surrendering all control.

This transfer occurred on September 8th, with friend.tech stating on X that it was done to prevent any changes to their fees or functionality in the future. Following the transfer, the aforementioned token, $FRIEND, fell nearly 26% in the past 24 hours to $0.067, as reported by CoinGecko.

The main reason why this is so surprising is because many crypto-focused companies would usually go above and beyond to always maintain control of their smart contracts, as was the case with Cardano (ADA) in 2023.

An Unexpected Turn Of Events

The null address serves as a burn address designed to permanently destroy tokens, making any assets sent to it irretrievable. Serpin Taxt, associated with the blockchain reputation protocol Ethos, remarked on X that the transfer marked the end of an era and expressed surprise at how events unfolded.

This update comes three months after friend.tech announced plans to develop its own blockchain, Friendchain, a move that left many in the community uncertain about the future of the protocol. Confusion increased when their official X account deleted its announcement post.

Growing Pains

Tensions between the team and users grew when numerous issues arose with the much-anticipated $FRIEND airdrop in early May. Initially, the token reached a market cap of $233.6 million within the first four days of its launch, but it has now dropped to $6.3 million.

The total value locked (TVL) on friend.tech has also decreased dramatically. After experiencing an all-time high of $52 million in early October 2023. It recently fell to under $3.5 million, according to DefiLlama. Since August 2023, both daily fees earned by the protocol and FRIEND trading volume have also consistently been below $1,000.

Vanilla Finance raised an undisclosed amount in Strategic funding with support by HTX Ventures. Vanilla Finance is a decentralized trading platform focused on transforming the cryptocurrency trading experience.

Dropnest secured an undisclosed amount in Strategic funding with help by Manta Network (MANTA). Dropnest aims to become the biggest protocol for ethical airdrop hunting. The project aims to partner up with new and upcoming protocols going forward. Lastly, as all airdrop accounts will be out in public, protocols will have complete transparency.

onocoy generated $940K in a Private Token Sale with assistance by Smart Island / Smart Island Capital. onocoy is focused on building a GNSS reference station network by leveraging Web3 technology to provide reference stations at a scale and density only possible through a community-driven approach.

UXLINK secured an undisclosed amount with help by Animoca Brands. UXLINK is a Web3 social platform designed for broad adoption, offering social asset creation and cryptocurrency trading features.

Puffpaw raised $6M in Seed funding with assistance by Lemniscap. Puffpaw is a project on Berachain aiming to bring vaping activities on-chain to incentivize quitting smoking. It is developing a unique vape device that tracks smoking habits and transforms the experience into a gamified platform.

Hypernative obtained $16M in Series A funding with support by Quantstamp, Inc. Hypernative changes the way security and risks are prevented in Web3. With ML and real-time proactive monitoring, the project is able to security, economic, governance, and community risks before they occur.

IDA secured $6M in Seed funding with help by Hashed Fund. IDA is a digital asset technology company focused on spearheading the widespread adoption of blockchain finance while also empowering businesses to bridge the gap between Web2 and Web3.

Kredete raised $2.25M in Seed funding with assistance by Blockchain Founders Fund. Kredete is a financial platform focused on empowering African immigrants by enabling them to build credit and send money home with low fees.

DRiP secured $8M in Seed funding with support by Coinbase Ventures. DRiP is a creator platform on Solana that allows artists and creators to distribute digital works, such as art and music, to their followers.

Bitcoin (BTC) has really struggled over the past week, with the flagship cryptocurrency plunging to below $53,000 in a matter of hours. Unsurprisingly, the bearish trend extends to altcoins as well. Ethereum (ETH), for instance, has seen a more than 4% drop, now struggling around $2,250. Elsewhere, BNB has lost 3%, XRP is down by 3%, and SOL has decreased by 2.5%.

DOGE has been hit hardest among the larger-cap altcoins, with a significant 5% drop, pushing its price below $0.1. Other cryptocurrencies, including TON, BCH, SHIB, LTC, OKB, and XMR, are also experiencing significant losses.

Persistent Troubles

Last week, Bitcoin fell below the crucial $60,000 threshold, and the downward trend has continued. After a brief attempt to rebound on September 3rd, bearish forces have largely taken control, leading to the latest drop.

Before this recent decline, Bitcoin faced multiple rejections and saw lower daily highs. A temporary boost came on Friday when the US job report for August revealed a slight decrease in unemployment rates. This led to a surge for BTC as it rose to $57,000. However, this increase turned out to be short-lived as almost immediately afterward, the price plummeted to $54,000, and further bearish momentum drove it to a monthly low of $52,700 on Bitstamp.

Although Bitcoin has recovered slightly to just above $54,000, it remains down 4% for the day and over 8% for the past week. Its market cap has fallen to $1.070 trillion, and its dominance over altcoins has slipped to 53.5%.

Other Markets

In a dramatic move, Donald Trump has pledged to impose a hefty 100% tariff on any country that distances itself when it comes to the US dollar, making such a shift incredibly costly. Meanwhile, the European Central Bank is expected to cut interest rates again, setting the stage for similar actions by the Federal Reserve. The Singaporean oil sector is also grappling with falling prices while CLO equity holders are restructuring deals at a record pace.

On the global stage, President Biden is engaging with Iraqi Prime Minister Mohammed Shyaa Al-Sudani as Iraq begins ambitious projects to add 614MW of power. In Houston, residents face an extended blackout due to extreme heat. In Asia, as Hong Kong and Shenzhen debate the future of China, investors grow impatient with the sluggish stock market recovery. Lastly, numerous Chinese state-owned banks are facing substantial potential losses.

Hackers are increasingly targeting cryptocurrencies with more aggressive tactics. Since January, they have stolen over $1.2 billion in crypto, with many incidents linked to the DPRK. On September 3rd, the FBI issued a public service announcement warning the crypto industry about what kinds of malicious software is being used nowadays.

Warning For Android Users

McAfee, a software security firm, has detected an Android malware named SpyAgent. This malware utilizes Optical Character Recognition (OCR) to scan phone storage for images, including screenshots containing private keys. Remember, decentralized wallet providers advise against taking screenshots of your keys, instead, write them down on paper for security.

McAfee Labs notes that this malware is spread through malicious links sent via text messages. These links often lead to fake banking apps that request full access to your phone, including photos and media. If users receive a message claiming their banking app is outdated and prompting them to click a link to update, exercise caution. Clicking the link might open a website resembling an official bank website, but downloading and installing the application could expose your data to hackers.

The FBI has also warned the crypto community about highly specialized social engineering attacks. Such malware can be disguised not only as banking apps but also as government applications or games.

Malware Threats On MacOS

MacOS users might think they are immune to such threats, but that is not the case. In August, a malware called Cthulhu Stealer was discovered targeting MacOS. Like other malware, it masquerades as legitimate software. Once installed, it can steal private information, including all types of passwords and wallet credentials like MetaMask, as well as IP addresses.

In August, North Korean hackers exploited a vulnerability in Google Chrome. They created fake websites that mimicked legitimate crypto trading platforms to trick users into downloading a malicious crypto wallet or trading app.

As hackers become more focused on cryptocurrencies, these malware tactics are escalating. To protect yourself, always download applications directly via their official sources and verify website URLs. Crypto users should also avoid saving seed phrases as images or storing them on digital devices.

Telegram has updated its policy to allow users to report illegal and illicit content in private chats for moderation review, as indicated in a recent update to its frequently asked questions (FAQ) section. Toncoin ($TON) will still act as the native cryptocurrency of the TON blockchain, which was originally developed by Telegram. It is used within the ecosystem for transactions, smart contracts, and various decentralized applications (dApps).

Changing With The Times

The new policy introduces the ability for users to flag content in private chats, a shift compared to the previous stance of not moderating such conversations. This change might impact Telegram and its overall image, which has previously been linked to facilitating illegal activities such as money laundering and illicit crypto-related transactions.

The FAQ previously stated that all Telegram chats and group chats are private between their participants, and that the company does and will not process any requests related to them. The anonymity associated with Telegram made it one of the most popular messaging platforms worldwide.

A Necessary Change

The update followed Pavel Durov being arrested in France in late August. The arrest was part of a larger investigation into the messaging platform, with French authorities alleging that Telegram has been used for illegal activities.

Durov was released after four days in custody. He is under judicial supervision and faces preliminary charges that could have significant legal repercussions if he is convicted. In his first public statement on Thursday, the Telegram CEO acknowledged that the rapid expansion of the platform had made it vulnerable to misuse by criminals. He denied claims that Telegram is an anarchic paradise for illegal activities and emphasized that the platform actively works to remove harmful content.