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Cryptocurrency News 11 months ago
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Cyber Heist on KyberSwap, ATO's DeFi Policy in Limbo, and DeFi Market Trends - Weekly Report

Algoine News
Summary:
This article discusses the significant developments in decentralized finance (DeFi) over the past week. It highlights a recent cyber attack on KyberSwap protocol, where a hacker stole $46 million using a complex method known as an "endless money flaw." The article also mentions the Australian Tax Office's failure to clarify its rules on DeFi. It proceeds with the findings of an investigation into $9 million insurance funds within the DeFi protocol dYdX. The piece concludes with recent DeFi market trends.
Welcome to Finance Redefined - a guide that delivers must-know information about decentralized finance (DeFi) on a weekly basis. Our compact newsletter focuses on the crucial developments from the previous week. A cunning cybernetic thief filched $46 million from KyberSwap protocol employing a labyrinthine mechanism, dubbed by DeFi pundits as an "endless money flaw." This trickery duped the platform's smart contract into thinking there was more liquidity than what was actually available. The Australian tax authority has not managed to elucidate its policies on DeFi despite Cointelegraph seeking clarification. The official body remains muddled about whether the capital gains tax is applicable to liquid staking and moving assets to layer-2 bridges. A surge in the bullish market has fostered DeFi's growth in the last week, with the majority of tokens showing a positive trend on weekly graphs. The infamous glitch emerged in a thread by DeFi expert Doug Colkitt on X (known earlier as Twitter), where he discussed the highly intelligent tactic used by the KyberSwap offender who siphoned off $46 million from the platform. Colkitt referred to the hack as an "endless money flaw," in which the fraudsters deluded the smart contract into thinking that KyberSwap had excess liquidity than available in reality. He emphasized that this is the most intricate smart contract he's ever seen. The Australian Taxation Office (ATO) released fresh guidelines about DeFi on November 9, but still sat on the fence regarding the question of capital gains tax applied to various DeFi attributes, including liquid staking and funds transfer to layer-2 bridges. Despite Cointelegraph's request for clarity, the ATO could neither confirm nor deny the application of the tax. Consequently, the investors could face challenges complying with the potential effects of these opaque directives. Antonio Juliano, the mind behind DeFi protocol dYdX, shared the outcome of the probe into the $9 million insurance funds on platform X. The investigation declared that the dYdX blockchain remained untouched and the insurance claims pertained to the v3 chain. Furthermore, Juliano stated that bounty rewards will be given to those assisting in the investigation instead of negotiating with the deceivers. Data from Cointelegraph Markets Pro and TradingView indicates that the list of the top 100 DeFi tokens by market capitalization had a lucrative week with most tokens displaying a positive trend on weekly charts. The total amount locked into DeFi protocols stayed above the $47 billion mark. Stay tuned for the most relevant DeFi updates next Friday. Thanks for reading and delving into this rapidly evolving space with us.

Published At

11/24/2023 8:00:00 PM

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