Gala Games, a project in Web3 gaming, encountered a significant security breach on May 20th. An individual exploited the smart contract of the platform, creating 5 billion GALA tokens, valued at around $214 million. This event has caused considerable concern within the community and led to widespread speculation.

Gala Games Security Breach

Following the exploitation of the smart contract, the individual promptly sold 592 million GALA for 5,952 ETH, approximately $21.8 million. The Gala Games team swiftly took action to minimize the impact, by blacklisting the address of the individual in question, thereby preventing further token offloading.

In an official statement, the team underscored their dedication to security and openness. They reassured users of their ongoing cooperation with law enforcement to locate the culprits. This incident was isolated, and its root cause has been resolved, according to the team, who will update the community as the investigation progresses and implement all necessary measures to avert future occurrences.

Taking Responsibility

Eric Schiermeyer, CEO of Gala Games, expressed regret over the incident. He acknowledged that the breach was detected and contained within 45 minutes. He also highlighted the security of their ETH contract for GALA, safeguarded by a multi-signature wallet.

Eric claims that there were certainly gaps in internal controls, and that while this should not have happened, the team is currently implementing measures to prevent its recurrence. He went on to say that the team has successfully identified the responsible party and are cooperating with the FBI, DOJ, and international authorities. It is worth mentioning that the matter of daily distribution remains unresolved, and that there will still be a node vote on its resolution as the community will decide the next course of action, Schiermeyer stated.

Following the admission of internal control deficiencies by Eric, a Solidity developer known as Quit corroborated the findings. According to Quit, the address behind the exploit possessed admin-level permissions, enabling it to execute arbitrary actions involving the smart contract. Quit advocates for banning contracts with admin privileges allowing arbitrary token minting.

Bloomberg ETF analysts have made a surprising move, suddenly raising their odds for spot ETH ETF approval to a whopping 75% compared to the previous 25%. The rumours that the United States Securities and Exchange Commission may approve an Ethereum ETF has caused the crypto market to surge, with ETH recently crossing the $3,700 mark.

Most recently, the SEC has approved various forms for listing and trading spot Ethereum ETFs. It is worth mentioning that the agency still needs to approve the forms by the issuers before these products may be released.

Renewed Communication

Eric Balchunas, a senior Bloomberg ETF analyst, revealed that the SEC has unexpectedly changed its mind about rejecting spot ETH ETFs. This has led issuers to quickly finalize their applications before the first decision deadline on May 23rd.

It is worth mentioning that even though the Biden Administration has recently taken a strong anti-crypto stance, Balchunas believes the increasing political debates around crypto are behind this sudden shift. Earlier today, the market was pessimistic about Ethereum getting spot ETF approval, with Polymarket showing only an 11% chance. Now, the odds have shot up to over 50% for the first time since January, as the ETH/BTC ratio strengthens.

An Inevitability

Balchunas suggests political pressure made the SEC change its stance, but the approval of an Ethereum ETF has seemed inevitable for a while now. Various experts had noted that the lack of meaningful communication between the SEC and issuers was a bad sign, suggesting denial. However, when the SEC approved commodity futures-based ETH ETF products last October, it likely decided then that Ether was not a security.

With renewed confidence by the experts, the crypto community is now widely expecting ETH ETF approval to happen this Thursday. Still, as is so often the case with the crypto industry, anything could happen in the blink of an eye, and traders are being urged to think carefully before making any big decisions regarding their investments.

Ethereum (ETH) co-founder Vitalik Buterin recently lauded the ecosystem and its commitment to free speech. Nonetheless, his claim encountered criticism on social media, particularly regarding how Ethereum may not in fact be open to criticism. Some have gone as far as to say that Ethereum silences dissenting opinions about its protocol or ecosystem.

More Than Meets The Eye

Vitalik Buterin stated that he is immensely proud of the fact that Ethereum does not have any culture of trying to prevent people when it comes to speaking their minds, even when they have very negative feelings toward major things in the protocol or ecosystem. However, as alluded to earlier,  his comment, hinting at censorship on other blockchain platforms, was met with pushback. Some social media users reported experiencing censorship by Ethereum influencers and even called Vitalik ignorant and tone deaf.

An X user, using the pseudonym dubzy, reportedly said that after telling someone that ETH fees were expensive and needed to be addressed, he was met with abuse for 13 minutes before being completely shut down. Meanwhile, Matthew Gould, founder and CEO of blockchain firm Unstoppable Domains, stated he also experienced censorship and criticism for divergent opinions on the network.

Why It Matters

Constructive criticism is essential for technological advancement and industry progress, as experts frequently emphasize. In a surprising twist of events, Anatoly Yakovenko, co-founder of Solana, supported Buterin and his perspective, noting it as a widespread industry characteristic. Solana and Ethereum are fierce competitors, so many were shocked to see Yakovenko support Vitalik so openly.

Anatoly stated that he thinks this industry is amazing and that it is exceedingly unlikely that we will see the likes of Apple, Microsoft, and Google engineers all in one chat room constantly challenging each other and their design decisions.

Regardless, like any other initiative, Ethereum has both positive and negative aspects. It is praised for its robust blockchain technology, smart contract capabilities, and active developer community, making it a leader in decentralized applications (dApps). However, it faces criticism for high transaction fees and scalability issues.

After several rumours last week of Kraken potentially delisting the USDT stablecoin, the cryptocurrency exchange has now reassured users that it does not intend to remove USDT in Europe and will continue adhering to all legal obligations. The rumours began when the Markets in Crypto Assets (MiCA) bill, which will be implemented later this year, introduced new rules focusing on stablecoins, which are designed to maintain a stable value against traditional currencies.

Kraken Global Head of Asset Growth and Management, Mark Greenberg, addressed recent speculation regarding the potential delisting of USDT in the European market in a social media announcement. He stated that European users highly value access to USDT and the company is exploring all options to provide USDT under the forthcoming regulatory framework.

The Lawsuit Against Kraken

In November 2023, the United States Securities and Exchange Commission (SEC) filed a lawsuit against Kraken, alleging that it had been operating an unregistered securities trading platform. This action followed a settlement of charges related to previous staking services provided by Kraken months earlier.

In February 2024, Kraken sought to dismiss the lawsuit, arguing that the case was based solely on a registration issue, asserting that cryptocurrencies complying with SEC regulations should be classified as commodities rather than securities. Recently, Kraken intensified its defense, urging the court to dismiss the SEC and its claims to avoid a major restructuring of the U.S. financial regulatory system, according to court documents filed in the Northern District of California on Thursday.

The SEC opposed Kraken and their motion to dismiss, asserting its enforcement action falls within its authorized mandate and highlighting its role in enforcing registration requirements for securities intermediaries. Kraken has pushed for the dismissal of these claims by the SEC in order to prevent a significant restructuring of the U.S. financial regulatory system.

Stablecoin Comparison

There has been ongoing debate about the safety of stablecoins, specifically USDT and USD Coin (USDC). As of April, the market capitalization of USDT stood at $104 billion, more than three times that of USDC which is at $32 billion. This disparity is partly due to the network effect, with USDT having launched in 2014, four years before USDC. Still, the dominance of USDT is also reflected in its daily trading volume, which is 7.5 times higher than that of USDC.

Stablecoins come in several different types, each employing unique mechanisms to maintain their value. Fiat-collateralized stablecoins are backed by reserves of fiat currency, such as the US dollar, held in a bank account, with USDT and USDC being prominent examples. Crypto-collateralized stablecoins, like DAI, use other cryptocurrencies as collateral, leveraging mechanisms like over-collateralization and smart contracts to ensure stability. Algorithmic stablecoins maintain their value through algorithms and smart contracts that adjust the supply based on market demand, without relying on collateral, TerraUSD (UST) was a notable example before its collapse. Additionally, commodity-backed stablecoins, such as PAX Gold (PAXG), are supported by reserves of commodities like gold or oil. Each type of stablecoin aims to provide price stability but uses different strategies to achieve this goal.

Bitcoin (BTC) has continued its impressive climb, reaching over $67,400 yesterday, the highest it has been in over a month. This comes after a turbulent start to May when BTC plummeted to a multi-month low below $57,000. However, the flagship cryptocurrency began its recovery, hitting $65,000 on May 6th, only to dip again below $61,000 on May 10th. TON and NEAR are among the few altcoins currently seeing declines, while the broader crypto market experiences significant movement.

Surging To New Heights

The bulls took control at that point, halting further declines. BTC steadied itself over the weekend and began rising again, reaching just over $63,000 by Monday. A slight dip to $61,200 on Tuesday was quickly reversed following lower U.S. inflation rate announcements on Wednesday. This news sent BTC soaring past $66,000, despite a brief pullback, with Bitcoin ETF inflows pushing it to a 5-week high of over $67,400.

Despite some retracement, BTC remains around $67,000, with its market cap increasing to $1.320 trillion. Its dominance over altcoins has slightly decreased to 51.6%. Ethereum (ETH) has finally joined the rally. After struggling to reclaim the $3,000 mark for several weeks, ETH surged past this resistance level, reaching over $3,100 yesterday for the first time in over a week.

Most large-cap altcoins are also seeing gains of around 1-2%. However, Toncoin has fallen by more than 3%, and HEAR is down by 4%. The overall crypto market cap has grown by approximately $20 billion overnight, now standing at $2.560 trillion.

Other Markets

The Dow has surpassed 40,000 for the first time as investors show optimism about potential rate cuts. Stock markets worldwide are hitting record highs. Meanwhile, multinational companies are seeking ways to protect themselves against the strengthening Mexican peso. The recent surge in meme stocks has led to significant volatility for some traders. The S&P is experiencing a profit boost, driven by big tech companies and strong consumer spending.

In other news, a recent survey indicates that most Thais support the proposal to reclassify cannabis as a drug. Mexico has issued a state of alert for its power grid due to an ongoing heat wave. Traders are now navigating new U.S. tariffs on Chinese goods. At Gildan, executives are pushing for board changes and the return of former CEO Chamandy, while major funds are anticipating an end to the Anything But Bonds trade.

Additionally, the owner of Inter Milan FC has criticized creditor Oaktree as a loan deadline approaches. Fund managers are looking to benefit through Italian tax incentives, and Russia has frozen the assets of Deutsche Bank, Commerzbank, and UniCredit. Lastly, the FBC Holdings in Zimbabwe has acquired a unit of Standard Chartered.

Kraken is contemplating the removal of Tether (USDT) on its European Union (EU) platform to adhere to upcoming Markets in Crypto-Assets (MiCA) regulations, based on a recent Bloomberg report. The EU is instituting MiCA rules for crypto trading, particularly focusing on stablecoins such as USDT and USDC. These regulations will come into effect in July, likely imposing restrictions on how these stablecoins are offered within the EU.

As the European Banking Authority finalizes the technical standards for MiCA, exchanges like Kraken are preparing for a future where the present variety of stablecoins may not be viable in Europe. Earlier this year, OKX, another significant crypto exchange, already restricted USDT functionality in the EU.

Clarity Needed

During an interview on Thursday, Marcus Hughes, the Global Head of Regulatory Strategy for Kraken, mentioned that they are awaiting clearer guidelines on the rules before making a final decision. In light of the MiCA regulations, Tether highlighted the need to concentrate on Euro liquidity for European clients while keeping USDT as a transactional gateway.

Tether CEO Paolo Ardoino has also expressed concerns regarding certain MiCA requirements, indicating that Tether will keep engaging with regulators but does not plan to be regulated under MiCA in the medium term. Moreover, as MiCA regulations aim to create a licensing framework for stablecoin issuers and enforce stricter corporate governance and reserve management standards, Kraken foresees that many stablecoins presently available in the EU will likely be removed in the near future.

Tether Is On Board

The scope of the type and number of stablecoins that are offered today in Europe are unlikely to be able to be offered going forward, Hughes stated, before adding that at some point in the future, a lot will depend on which assets are being properly registered within the European Union under the e-money regime.

As of right now, there are no current plans to delist Tether or alter USDT trading pairs. As a leading crypto exchange, Kraken is constantly evaluating their global strategy and operations to ensure that they remain compliant both now and in the future. Regarding MiCA, Kraken claims to be fully committed to following the rules as they continue their mission of accelerating the adoption of cryptocurrencies on a global scale.

Neel Somani, the initiator behind the Ethereum (ETH) layer-2 blockchain Eclipse, has stepped down as CEO amidst accusations of sexual misconduct. On May 16th, 2024, Eclipse Labs announced on X that Vijay Chetty would assume the role of CEO immediately, succeeding Neel Somani, who is departing.

Time For Change

Chetty, formerly the Chief Growth Officer at Eclipse, brings leadership experience through Uniswap Labs, dYdX Trading, and Ripple Labs, along with investment expertise gained at BlackRock. In an operational update on behalf of Eclipse Labs, it was stated that with immediate effect, Vijay Chetty will be appointed CEO of Eclipse Labs, taking over after Neel Somani, who is stepping down. Chetty, will now assume all CEO responsibilities, as per the latest announcement.

Somani had mentioned on May 9th that he would be temporarily reducing his public role within the firm due to serious allegations about sexual misconduct against him, which he has refuted. He stated that he had never sexually assaulted or harassed any woman and vowed to work to clear my name and defend myself.

A New Era

There has been a notable shift in the sociopolitical climate in recent years, especially regarding issues of sexual misconduct and other misdemeanors. With the rise of social media and increased awareness around issues of harassment and discrimination, there has been a heightened scrutiny on the behavior of individuals, particularly those in positions of power or influence.

Organizations are facing increased pressure to address allegations of misconduct swiftly and transparently. This shift is partly due to the MeToo movement, which has empowered survivors to come forward with their experiences and demand accountability. As a result, many companies are implementing stricter policies and procedures for addressing allegations of misconduct, and there is a growing expectation for swift and decisive action when such allegations arise.

Chinese law enforcement authorities have made a significant breakthrough in their efforts to combat illegal financial activities. They have dismantled a sizable underground banking network believed to be facilitating unlawful transactions using the USDT stablecoin. The operation, which spanned across multiple provinces, has reportedly facilitated over $2 billion worth of illicit USDT transactions.

Recently, Tether froze approximately $5.2 million USDT in response to findings by the crypto tracking and compliance platform MistTrack. The platform identified 12 Ethereum addresses associated with phishing operations, prompting Tether to implement new security measures in collaboration with Chainalysis to monitor secondary markets and detect suspicious transactions promptly.

A Huge Case

A major underground banking case involving a massive 13.8 billion Yuan ($1.9 billion) was uncovered by the Chengdu Municipal Public Security Bureau, according to local reports. The operation extended across 26 provinces, municipalities, and autonomous regions. A total of 193 suspects have been apprehended nationwide, with public security agencies in each jurisdiction initiating 58 cases. Authorities have also seized 149 million Yuan in funds linked to the operation.

The investigation began in November 2022 when the Longquanyi District Branch flagged suspicious fund settlements through underground banks, indicating potential involvement in illegal foreign exchange activities.

The Chengdu Municipal Public Security Bureau formed a task force comprising various departments, including economic investigation, cyber security, legal affairs, and technical investigation. On June 1st, 2023, the task force conducted coordinated arrest operations in several locations under the command of the Ministry of Public Security and the Public Security Department.

The Crackdown

25 criminal suspects, including Lin, Weng, and Chen, were apprehended, and significant evidence, such as bank cards and payment instruments, was seized. The investigation uncovered that the criminal gang, led by Lin, Weng, Chen, and others, primarily operated within the import and export business sector.

Authorities claim they exploited USDT to provide illegal services to customers seeking to transfer funds abroad, primarily involving illegal foreign exchange, payment, and settlement businesses. These activities reportedly facilitated various criminal operations, including drug smuggling, overseas asset purchases, and fraudulent tax refund schemes.

Tether has taken swift action against criminal operations utilizing its digital currency in response to allegations of involvement in illicit activities. Tether CEO, Paolo Ardoino, has reiterated the company remains committed to combating illicit activity and has denounced Tether as the dumbest choice for doing illicit activity.

A customer recently initiated a lawsuit against Dolce & Gabbana USA on Thursday, alleging that the NFTs they acquired lost 97% in value due to a mishandled delivery on part of the company. According to Bloomberg on Friday, the Italian fashion brand sold the NFTs on Ethereum, assuring buyers of a slate of digital, physical and experiential benefits.

Unusable Digital Fashion

The company purportedly informed consumers that purchasing their DGFamily NFTs would provide access to various digital rewards, physical items, and exclusive events. The lawsuit further claims that Dolce & Gabbana did not deliver the NFTs and promised benefits on schedule. The digital outfits, which were delivered 20 days late, could only be used in a metaverse platform with minimal users.

Even after the delayed delivery, token holders reportedly had to wait another 11 days before they could utilize them. The complaint asserts that Dolce & Gabbana had not in fact obtained prior approval by the metaverse platform. Their typical approach has been to promise products they fail to deliver, then abandon a project and community they promised to support, the complaint stated.

NFT Market Growth Slows In 2024

Plaintiff Luke Brown claims he incurred a loss of $5,800 on the NFTs he bought. Brown mentioned he is suing on behalf of others who purchased digital assets associated with this NFT project. His lawsuit also implicates NFT marketplace UNXD, including it in the legal action.

Meanwhille, the NFT market has exhibited growth so far in 2024, with estimates indicating a 41% increase in marketplace value compared to 2023. However, this represents a significant deceleration compared to the explosive growth of previous years.

NFTs offer several advantages, including verifiable proof of ownership and authenticity for digital assets, allowing artists and creators to earn royalties through future sales of their work. They open up new monetization opportunities across various industries such as art, music, and gaming, and provide a way to collect and trade unique digital items. However, there are also significant drawbacks. The creation and trading of NFTs can have a substantial environmental impact due to the energy-intensive blockchain processes involved. The market is highly volatile and speculative, which can result in financial losses for investors.

The Solana meme coin frenzy persists while major meme coins such as Shiba Inu (SHIB), Dogecoin (DOGE), and DogWifHat (WIF) have been trading flat lately and losing steam. However, Diamond Paws (DIAPAWS) has the potential to go viral, much like Shiba Inu and Dogecoin before it. Launched just yesterday, DIAPAWS, also a Solana-based meme coin, surged over 700% within just a few hours before stabilizing as some initial investors took massive profits.

A Possible Turnaround

Despite seemingly being left holding the bag, the majority of DIAPAWS investors are holding onto their tokens, anticipating a listing on MEXC later this week, which is expected to cause another surge. Many of these investors believe that the current valuation of DIAPAWS offers an excellent opportunity to buy at a lower price ahead of the next rally. Others however, remain unconvinced, and believe that the ship has already sailed.

Still, with a market cap currently below $9,000, DIAPAWS is projected to reach a modest market cap between $200,000 and $500,000, potentially offering early investors returns of 2,000%-3,000% in a short span. Certain analysts claim this meme coin could even rally another 12,000% in the next couple of days while also potentially achieving a multi-million dollar market cap within weeks.

Presently, DIAPAWS is available for purchase on Solana decentralized exchanges, such as Jupiter and Raydium. To acquire Diamond Paws on these platforms, users need to connect their Solflare, MetaMask, or Phantom wallet, and exchange SOL for DIAPAWS by entering its contract address in the receiving field.

A Risky Endeavor

While the returns may indeed be substantial, it is important to remember that meme coin investments are very risky due to their extreme volatility, lack of intrinsic value, and reliance on social media hype. Prices can surge rapidly but also plummet just as quickly, often influenced by speculative trading rather than fundamental factors. This makes them highly unpredictable and susceptible to significant financial loss.

As a matter of fact, major meme coins such as Shiba Inu, Dogecoin, and DogWifHat all provided fantastic returns at one point or another but every single one of these and more just like them have been trading flat lately and losing steam. This is prompting many SHIB, DOGE, and WIF investors to turn towards new Solana meme coins like DIAPAWS, but this is also risky as experts believe it to be just a matter of time before this latest project is seemingly abandoned in favor of the next ultra popular meme coin, at which point the cycle repeats itself.

El Salvador has extracted 473.5 Bitcoin (BTC) in the past three years by harnessing the geothermal power of the Tecapa volcano, as reported by Reuters earlier today. With the current price of Bitcoin, this translates to a $29 million surge in value.

Advocating For Bitcoin

The nation now holds a total of 5,750 BTC, equivalent to nearly $354 million, according to data by the Bitcoin Office, a government-owned agency. The mining endeavors in El Salvador position it as a leader in environmentally friendly crypto mining, which stands in stark contrast to the energy-intensive methods often criticized for their ecological impact.

President Nayib Bukele, a vocal advocate of Bitcoin, has been spearheading local adoption of the cryptocurrency since it was recognized as legal tender in 2021. He mainly legalized Bitcoin in El Salvador to promote financial inclusion, attract investment, and foster innovation in the domestic economy.

A Smart Investment

In November 2022, Bukele introduced a national Dollar-Cost Averaging (DCA) strategy, aiming to purchase one Bitcoin daily. This approach has yielded unrealized profits exceeding 43% on their Bitcoin holdings, according to data by the Nayib Bukele Portfolio Tracker.

In addition, El Salvador has also taken a further step towards Bitcoin transparency. The Bitcoin Office unveiled a brand new platform yesterday that can be utilized by all El Salvador citizens, enabling anyone to access its Bitcoin investment data via a personalized mempool.

A meme coin with a frog theme, Pepe PEPE/USD, reached its highest value ever on Tuesday, making all of its holders profitable at one point during the day. Within the last 24 hours, the coin emerged as the top gainer in the meme coin market and one of the leading performers in the broader market, showing gains of over 10%, as per data by Benzinga Pro.

Huge Profits

Nearly 98% of PEPE holders were in profit at the time of publication, as per data by IntoTheBlock, with the number reaching 100% earlier in the day. This meme token surpassed well-known cryptocurrencies like Solana SOL/USD, BNB BNB/USD, and Dogecoin DOGE/USD in terms of 24-hour trading volume, totaling $3.8 billion.

The sudden rise attracted the attention of investors, prompting some to invest in PEPE. According to Spotonchain, a trader withdrew more than 407 billion tokens, valued at $4.4 million based on prevailing market prices.

PEPE Roars

This significant acquisition indicated expectations of the value of PEPE potentially increasing even further in the near future. The surge in value was likely fueled by the excitement surrounding the return of retail trader Roaring Kitty, which also propelled various other meme tokens upward.

This upswing additionally marked the beginning of the second bull market for meme coins this year, the first of which occurred in March and resulted in substantial profits for enthusiasts of this cryptocurrency category. In fact, one cryptocurrency trader highlighted how meme coins were delivering substantial returns, while fundamental and utility tokens were underperforming.