This episode is brought to you by Gate.io and Solice (Airdrop). Pantera Capital is promising to close Pantera Blockchain Fund for about $1.3 billion; after India charges a 30% tax on profits from crypto transactions, trading volume on top Indian crypto exchanges had declined 70%; former Ethereum developer Virgil Griffith was sentenced to 63 months in prison and charged a $100,000 fine for helping North Koreans use crypto to evade sanctions. Followed by a Deep Dive into the follow-up of Axie Infinity’s $650M Ronin Bridge hack.

In today’s Headlines:

1. Shiba Inu And Solana Soared After Robinhood Added Four More Cryptocurrencies| 1 | 2 |

2. NFT Avatar Startup Genies Valued At $1B Following Series C Funding Round | 1 | 2 |

3. Pantera Capital Set to Close $1.3B Blockchain Fund | 1 | 2 |

4. Indian crypto exchanges’ volume plunges as 30% tax goes into effect | 1 | 2 |

5. Ethereum Dev Virgil Griffith Gets Five Years in Prison for North Korea Trip | 1 | 2 | 3 |

Sponsor: Solice (Airdrop)

Deep Dive: The Aftermath Of Axie Infinity’s $650M Ronin Bridge Hack | 1 | 2 | 3 | 4 |

Introduction:

Welcome back to the Altcoin News Podcasts, this is the show to get a neutral perspective on some of the latest headlines in DeFi, Metaverse, NFTs, and Big Tech. Brought to you by Gate.io, a centralized exchange with a neutral stance on current events and uphold privacy & security.

The information presented in this podcast is to help you stay up-to-date on the latest happening in the crypto space, and nothing presented hereby is financial advice. The news that I cover in this podcast will have the original source at your discretion. Stick by this podcast as I show you how to stay vigilant and learn to do your own research.

Now, without further ado.

Shiba Inu And Solana Soared After Robinhood Added Four More Cryptocurrencies | 1 | 2 |

Fintech trading platform Robinhood added four new crypto tokens on Tuesday morning, bringing its total to 11. The new offerings are high-flying Ethereum competitor Solana (SOL), the dog-themed meme-coin Shiba Inu (SHIB), Ethereum scaling technology Polygon (MATIC), and the original decentralized finance token Compound (COMP).

SHIB surged almost 25% an hour after the news, with the other’s jumping in the high single digits. Solana was up 4% while polygon surged 6% and compound rose 5%. Meanwhile, much of the rest of the crypto space was under pressure, with Bitcoin declining 2% and Ether hovering just below flat.

However, each of the four tokens has struggled in 2022, with SHIB in the lead by only losing 17% on the year. COMP, SOL, and MATIC are each down approximately 40%. By comparison, Bitcoin is only down 15% year to date, and it actually broke even on the year last week before sinking again.

Robinhood stock also rose

Ever since Robinhood began offering crypto trading in 2018, customers had been clamoring for the opportunity to buy and sell more tokens. SHIB was a focus of investor interest in particular, as it is perceived as a complementary token to Dogecoin, which became one of Robinhood’s most traded assets when it was added in the summer of 2018.

However, the company avoided listing SHIB until now because of fears about its outsize volatility, even for crypto. Steve Quirl, the chief brokerage officer at Robinhood, said in a statement: “We’re excited to add more choices for our customers as we work to make Robinhood the best place to invest in crypto”.

Speaking last Thursday at the Bitcoin 2022 conference in Miami, Robinhood Chief Product Officer Aparna Chennapragada noted that the company recently announced that it had extended cryptocurrency wallets to more than 2 million users, but digital assets are unlikely to shift the needle at Robinhood.

Robinhood stock rose 3% Tuesday while the shares have lost almost 37% so far this year. The group faces headwinds from a slowdown in crypto trading volumes, in addition to a wider downturn in the engagement of retail investors.

Analysts at Goldman Sachs downgraded the company to Sell from Neutral last week, citing a limited path to near-term profitability amid “softening retail engagement levels.” Goldman has a target price on Robinhood stock of $13, 66% below the group’s initial offering price and about 10% higher from where the shares were trading on Tuesday.

NFT Avatar Startup Genies Valued At $1B Following Series C Funding Round | 1 | 2 |

Non fungible token (NFT) startup Genies announced on Tuesday that it has secured $150 million in Series C funding at a valuation of $1 billion, making it the latest crypto-focused platform to attain “unicorn” status in the metaverse space.

Los Angeles-based Genies makes avatars that people can customize to their own needs, and it also provides celebrities with avatars that can be used as stand-ins for them at online events. The company said it has a 99% celebrity avatar market share, it also sees itself as enabling people to jump around from different places in the metaverse while keeping the same identity.

The funding round was led by private equity firm Silver Lake, which manages $88 billion in assets as of 2021, with additional participation from existing investors Tamarack Global, BOND and NEA. Genies said the funding will be used for continuous hiring across engineering and to further invest in the core technology of Genies’ avatar universe.

The company will push its blockchain-based strategy and continue to roll out avatar creator tools that enable anyone to create their own avatars, avatar fashion collections, and avatar homes and experiences. So far, though, Genies isn’t being used in games.

Founded in 2017, Genies is an avatar technology company that first set out to target social media and messaging platforms. Since its last $65 million funding round in May 2021, Genies partnered with Universal Music Group and Warner Music Group to serve as each company’s official avatar and digital goods NFT provider.

It recently launched The Warehouse, an avatar ecosystem NFT marketplace enabling creators to buy, sell, and trade these avatar ecosystem creations. All creations are minted on Dapper Labs’ blockchain network, Flow.

Genies also started to roll out its mass consumer avatar creator tools to small groups via a private [invitation-only] beta, allowing users at every level of technical ability to create their own web 3-native avatars and avatar fashion collections, and eventually, avatar homes and social experiences.

Pantera Capital Set to Close $1.3B Blockchain Fund | 1 | 2 |

Pantera Capital announced during an investor call on Wednesday that it plans to close the Pantera Blockchain Fund, its first blockchain fund, in the next three to four weeks with about $1.3 billion in committed capital.

The amount is more than double the $600 million target when the company began fundraising last November. Pantera last month said commitments then had surpassed $1 billion. The Blockchain Fund will invest in Web3 startups, early-stage tokens and digital tokens with established liquidity levels.

At the same time, Pantera plans on spinning up a sequel to the Blockchain Fund in 2023 and then exploring a growth-stage fund in 2024. Franklin Bi, director of portfolio development at Pantera, said the follow-up will have essentially the same objectives as the initial fund – new deals in early-stage, private tokens and venture capital.

“We will come back with a larger and more diversified and probably longer-investment-period growth-stage fund, say in 2024,” Bi added.

Pantera Capital is the largest crypto hedge fund in the world by AUM. In 2013, it launched the first investment fund focused on Bitcoin in the United States. As of Jan 2022, Pantera had $5.6 billion in assets under management. Pantera works by taking investor money, allocating it toward projects it finds promising, and delivering returns to investors in exchange for fees.

It joins four other funds: Venture, Bitcoin, Early-Stage Token, and Liquid Token. The firm is also planning a $200 million Select Fund, to be focused on "more mature, revenue-generating companies than our typical Seed and Series A venture investments."

Despite this week's crypto price correction—which shaved 15% off of both Bitcoin and Ethereum in seven days—spending among Web3 venture capital firms remains heavy. As we reported previously, Kathryn Haun, formerly a general partner at Andreessen Horowitz, last month announced she had raised $1.5 billion for her Haun Ventures to invest in early-stage and growing Web3 ventures. Last June, Andreessen Horowitz itself collected $2.2 billion for its Crypto Fund III. In November, Paradigm, led by Matt Huang and Coinbase co-founder Fred Ehrsam, upped the ante by announcing a $2.5 billion fund.

Indian crypto exchanges’ volume plunges as 30% tax goes into effect | 1 | 2 |

Trading volume on top Indian crypto exchanges had declined as high as 70% in only 10 days since April 1, the day a new tax on crypto profits came into effect, according to data collected by Crebaco, a cryptocurrency research firm.

India now has a 30% tax on profits from crypto transactions and doesn't allow offsetting gains with losses from other crypto transactions. The most controversial provision – the 1% tax deducted at source (TDS) liability – won’t take effect until July 1.

The volumes of the four major Indian exchanges were collated by analyzing data on CoinMarketCap and Nomics, a data firm. The data reveals a drop of 72% (from $47.8 million on April 1 to $13.2 million on April 10) on WazirX, 59% on ZebPay, 52% (from $12.16 million to $5.76 million) on CoinDCX and 41% on BitBns.

Apart from harsh crypto tax laws directly inspired by India’s gambling laws, many payment processing partners that offer Unified Payments Interface (UPI) accessibility have also severed ties with crypto exchanges. Meanwhile, payment processors such as MobiKwik had cut ties with the likes of WazirX and other crypto exchanges after a recent warning from the government.

In fact, many stakeholders in the crypto community have warned that these impractical tax measures and added restrictions on crypto trading would do more harm to the thriving crypto economy in the country, and the early effects are visible.

Sathvik Vishwanath, co-founder and CEO of Unocoin, another Indian exchange, said the new tax law is indeed affecting the market.

“People earning less than 1,000,000 Indian rupees (US$13,000) per year are affected by 30% fixed income tax on crypto. 1% tax deducted at source (TDS) is affecting the market makers and liquidity providers. Both are needed for a better crypto ecosystem in India.”

Still, some believe that the drop in volumes on Indian exchanges is largely in line with a global trend. Anton Gulin, regional director of the AAX crypto exchange, said the drop in volume should be short term.

"I believe that the tax rate may be revised to attract more taxpayers, as this is the ultimate goal for any government," Gulin said.

Ethereum Dev Virgil Griffith Gets Five Years in Prison for North Korea Trip| 1 | 2 | 3 |

Former Ethereum developer Virgil Griffith was sentenced to 63 months in prison on Wednesday and charged a $100,000 fine for helping North Koreans use cryptocurrencies to evade sanctions. Also known as Romanpoet, another achievement of Griffith is the development of wiki scanners.

After giving a talk at a cryptocurrency conference in Pyongyang in April of 2019, Griffith was then arrested 7 months later and charged with conspiracy to violate The International Emergency Economic Powers Act, accused of helping North Koreans learn how to use cryptocurrency to evade U.S. sanctions.

The developer also traveled to North Korea without permission from the U.S. government. U.S. Attorney Geoffrey S. Berman previously alleged in a letter that Griffith “provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.”

As a well-known hacker, Griffith also developed “cryptocurrency infrastructure and equipment inside North Korea,” prosecutors wrote in court papers. At the 2019 conference, he advised more than 100 people – including several who appeared to work for the North Korean government – on how to use cryptocurrency to evade sanctions and achieve independence from the global banking system.

However, the US and the UN Security Council have imposed increasingly tight sanctions on North Korea in recent years to try to rein in its nuclear and ballistic missile programmes. The US government amended sanctions against North Korea in 2018 to prohibit “a US person, wherever located” from exporting technology to Pyongyang.

Griffith pleaded guilty to the single charge of conspiracy in September 2021 in a deal with federal prosecutors. Though the crime carried a maximum penalty of 20 years, Griffith’s plea deal with federal prosecutors brought the sentence down to a range of 63 to 78 months – approximately five to 6.5 years. Griffith has already spent approximately two years in custody, though he was released on bail for 14 of those months. The court will count the remaining 10 months as time served.

Sponsor | Solice

Before I continue with today’s deep dives, I must tell you about today’s sponsor, Solice, a VR Metaverse built on the Solana blockchain, which strive to deliver a high-quality immersive experience by providing users an environment where users can play, build, own, socialize and monetize their virtual experiences across multiple platforms.

While the Solice community has been in chaos for weeks brought by its first and highly anticipated land sale, the team announced at the beginning of this month that the soft launch would initiate shortly after the land sale ended.

Solice first introduced soft launch in December, 2021, when they successfully closed $4.36 million in a seed and private sale led by Three Arrows Capital, Animoca Brands and Defiance Capital. The Solice Metaverse will have its soft launch (limited spots) for early adopters to play and enjoy the metaverse. The first version of the soft launch will include VR compatibility giving users the immersive metaverse experience.

Solice provides an infrastructure to support the metaverse. The Solice metaverse supports multiple platforms that remove the barrier of different hardware, software, and operating systems. This allows more users to invite and connect with their friends and family to increase the possibilities for exponential growth of the user base.

Solice is such a comprehensive and ambitious metaverse project with a huge pool of target users, from gamers (P2E aspect), to DeFi users (staking), to businesses (buy or build and then rent out ad spaces) which forms great adoption for Solice metaverse as a whole.

Will you be the next user of Solice? Get started with the Gate.io podcast airdrop. 75 winners have the chance to share 1,500 SLC tokens from Apr 14 to Apr 21. Join now!

DD | The Aftermath Of Axie Infinity’s $650M Ronin Bridge Hack | 1 | 2 | 3 | 4 |

The Hack

As we previously reported in late March, Ronin, an Ethereum sidechain built for the popular play-to-earn NFT game Axie Infinity, was hacked for over 173,600 Ether (ETH) and 25.5 million USD Coin (USDC) for a combined value of over $600 million.

According to the official report published by Sky Mavis, the developer behind Axie Infinity, the hackers managed to get access to private keys to validator nodes resulting in the compromise of five validator nodes, which is also the threshold required to approve a transaction. The Ronin chain currently consists of nine validator nodes and the hacker managed to get access to four of them along with a third-party validator run by Axie DAO.

Further analysis found that the root cause for the exploit could be traced back to last year when Axie DAO gave access to Sky Mavis to sign off on transactions on its behalf to mitigate user volume. However, this access was never revoked, which eventually led to backdoor access by hackers this year.

Worse still, the exploit in fact took place on March 23, but was discovered nearly a week later after hackers behind the attack used the stolen funds to short Axie Infinity (AXS) and Ronin (RON). If Sky Mavis realized the bug earlier, could this hack have been avoided?

The need for decentralization is highlighted by this enormous hack on Ronin. When designing systems for the public with the goal of distributing power and security, it must be just that: distributed. The use of nine validators, four of which are controlled by a single party, has been proved to be insecure.

While the makers of the game claim that the exploit didn’t take place because of any technical shortcomings, the fact that hackers managed to exploit and get a backdoor entry to one of their validator nodes because the developers forgot to revoke access to the third-party validator certainly highlights a certain level of centralization in the validator approval process. This eventually became the reason for the loss of $600 million worth of crypto assets.

The Aftermath

The Ronin bridge was closed in the aftermath, with all deposits and withdrawals halted until the investigation was complete and it may take several weeks before the bridge opens for public use again. The developers behind the game have since sought help from various crypto exchanges and crypto analytic group Chainalysis to track the movement of funds and recover them.

Moreover, Sky Mavis had promised that they would ensure affected users be reimbursed even if the lost funds aren’t recovered. On April 6, the firm announced a $150 million raise, led by Binance and other investors, to honor its promise.

However, the bearish prospects appear despite a strong assurance from Sky Mavis. AXS, the native token of Axie Infinity, has fallen by nearly 30% in two weeks. AXS/USDT dropped to $44 on Gate.io on April 11, its lowest level since March 16, signaling a dampening buying sentiment among traders and investors following the hacking incident.

Many in the crypto world hoped that the hacker behind the Ronin Bridge exploit would eventually return the stolen funds, as it’s quite difficult to launder such a high amount of money. However, Elliptic, a crypto data analytics company, has traced down $540 million of the stolen funds and believes the hackers have already begun laundering the money.

First, the stolen USDC was swapped for ETH on decentralized exchanges (DEXs) in order to avoid it being frozen. After swapping USDC for ETH, the hackers started to launder the ETH via three centralized exchanges. Besides, the wallet belonging to the hackers has also started sending funds to currency mixer services such as Tornado Cash.

The lessons

When Logan Evans found out that Axie Infinity fell victim to one of the largest digital heists of all time, he worried he had lost everything. “My first reaction was ‘holy s---, is my money gone? Did I just buy all these cute little Pokemon for nothing?’”Evans said he was frustrated with what he saw as a slow reaction from the company, “I think that’s the worst part. The negligence of not hearing about it for six whole days.”

Therefore, the first and most important point is, for a game like Axie Infinity with a $4 billion valuation and a user base ranging in millions, the developers could have definitely done better with cross-bridge security, especially when cross-bridge platforms have been at the receiving end of some of the biggest crypto heists in the past couple of years.

At the same time, a common misconception about crypto hacking is that “this won’t happen to me because my security awareness is high and I use a hard wallet.” It might be true that a direct malicious hack could be avoided through good security practice, but anyone could become an indirect victim of a hack targeting someone else. When the number of hacks increases, the chance of becoming an indirect victim is also much higher.