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Poly Network Exploit Results in Billions of Nonexistent TokensPoly Network, the China-based interoperability platform, was targeted by hackers over the weekend in a major attack that resulted in the creation of billions of tokens out of thin air. It’s the second time in as many years that the cross-chain bridge has been exploited by hackers.The attacker exploited a vulnerability in Poly Network’s cross-chain bridge tool, allowing them to generate a substantial number of tokens that previously did not exist, as reported by Arhat, the Founder of 3z3 Labs, on Twitter.Photo by Shubham Dhage on UnsplashNetwork suspensionThe Shanghai-based project team behind Poly Network promptly informed its users on Sunday that its services were temporarily suspended due to the attack. The platform assured its users that it was diligently assessing the extent of the breach and the impact on assets. They emphasized their commitment to safeguarding users’ assets and urged everyone to remain calm.The hacker, at one point, held nearly $43 billion worth of cryptocurrency in their digital wallet, according to DeBank, a decentralized finance portfolio tracker. This staggering figure was corroborated by PeckShield, a blockchain data and security firm.Bridge vulnerabilitiesBridges play a crucial role in the Web3 ecosystem, enabling users to transfer assets across different networks. However, they have often been attractive targets for hackers. In this attack on Poly Network, the hackers issued themselves nearly 100 million BNB and $10 billion worth of BUSD, the Binance-branded stablecoin, on the layer-2 network Metis, revealed Colin Wu, a Chinese crypto journalist.Similarly, on the Heco network, approximately 100 trillion units of the dog-themed meme coin, Shiba Inu, were created. Additionally, a significant number of altcoins were generated on Polygon and Avalanche networks.Illiquid Metis tokensMetis clarified that the BNB and BUSD tokens issued on its network by the hackers are effectively worthless since there is no available sell liquidity. Poly Network also locked these tokens, ensuring they cannot be utilized. Arhat of 3z3 Labs acknowledged that the impact of the Poly Network attack was somewhat mitigated by the lack of liquidity, which prevented the hackers from realizing substantial gains on Metis.However, on other networks like Ethereum, the stolen tokens were exchanged on decentralized exchanges. Arhat estimated that the attacker managed to convert only a small portion of the tokens, amounting to approximately $400,000 worth of crypto, while the remaining tokens lacked liquidity and were essentially worthless.SlowMist, a blockchain security firm, suggested that the hacker’s total gains were higher. They reported that over $4 million worth of digital assets from the attack had been cashed in, including 1,500 Ethereum worth $3 million and 93 billion SHIB worth $700,000.Poly Network had previously made headlines in 2021 when it experienced a historic attack, considered the largest exploit in decentralized finance at the time. The project suffered a loss of $600 million as funds were siphoned away from Ethereum, Binance Smart Chain, and Polygon. However, the hacker eventually returned $342 million worth of stolen crypto, and Poly Network took steps to repay affected users.

Hong Kong Broadens Pilot Program for China’s Digital YuanA senior Hong Kong official announced last week that the Chinese autonomous territory plans to expand its pilot program of the e-CNY, China’s digital yuan, to include additional banks and payment platforms.Photo by Chi Lok TSANG on UnsplashDriving cross-border payment efficiencyThe e-CNY project is China’s ambitious endeavor to bring a digital counterpart to its national currency, the yuan, into mass market, everyday use. The primary objectives of this latest initiative are to enhance the efficiency and convenience of cross-border payments and to bolster greater use of the digital yuan on an international basis.Given Hong Kong’s status as a special administrative region of China and bearing in mind that it is a global financial hub, its role in the e-CNY project is likely to be of paramount importance to the Chinese administration.Hong Kong has been actively involved in the e-CNY project for some time. Previously, the local regulator, the Hong Kong Monetary Authority (HKMA), and the People’s Bank of China (PBOC) jointly explored and tested e-CNY’s feasibility and interoperability in cross-border scenarios.Ongoing collaborationOver the years, these two authorities have conducted numerous technical trials to assess the practicality of implementing the e-CNY. The PBOC initiated e-CNY testing in mainland cities in 2019, followed by cross-border trials involving Hong Kong and Macau. Collaboration between Hong Kong and the mainland relative to the digital yuan was initiated in December 2020 when a pilot program was launched.That program enabled Hong Kong residents to utilize e-CNY wallets for purchases at specified merchants in Shenzhen, aligning at the same time with a separate initiative, the objective of which is to achieve closer economic and social integration between Hong Kong, Macau, and nine cities in Guangdong province.Hong Kong and Mainland China had also partnered on technical testing in 2021 aimed at evaluating the technical feasibility, operational efficiency, regulatory implications, and legal considerations of employing the e-CNY for cross-border trade settlement between the two areas. That testing program is likely to be providing valuable insights, which Chinese authorities can use to expand the e-CNY’s scope and use cases relative to cross-border transactions.Completion of initial testing phaseHong Kong recently successfully concluded the first phase of its e-CNY trial, featuring local banks and the Hong Kong Monetary Authority (HKMA). This phase primarily focused on assessing the technical feasibility of employing the e-CNY for cross-border payments between Hong Kong residents and mainland merchants.What Christopher Hui, Secretary for Hong Kong’s Financial Services and the Treasury, was referring to last week at a fintech event, is effectively the second phase of that overall trial program. This upcoming phase will involve a broader array of banks, payment service providers, and use cases, expanding the scope of e-CNY testing.Taking this latest development into account from the point of view of e-CNY development by the Chinese government, it’s patently obvious from the myriad of initiatives that keep coming week after week that the Chinese authorities are determined to drive the e-CNY towards ever greater real-world use.

Infinite Block Selected For Tech Startup Incubator ProgramSouth Korean blockchain fintech company Infinite Block announced Monday that it has been selected to participate in the Tech Incubator Program for Startups (TIPS) program.“Being selected for TIPS as the first domestic custodial services company to do so carries significant importance, as it acknowledges our technological capabilities and business viability on an international scale,” said the company’s CEO Jeong Gu-tae.Photo by Mimi Thian on UnsplashPaving the way for an innovative futureTIPS is a private investment-led technology entrepreneurship program organized by the Korea Business Angels Association and Korea Institute of Startup and Entrepreneurship Development (KISED) — two affiliated institutions under the Ministry of SMEs and Startups — to foster startups that possess innovative technology.The program appoints and designates venture founders to serve as angel investors and leaders of technological enterprises as a given startup’s incubator and/or accelerator. Throughout the two-year duration of the program, the startups can take advantage of angel investor networking and mentoring and receive KRW 500 million (approximately $370,000) in research and development (R&D) funding from the government. They can also receive an additional KRW 200 million in commercialization funds.Infinite Block, which specializes in custody services tailored to corporate-owned virtual assets, was selected for TIPS by attracting investment from the fintech innovation fund operated by venture company Infobank. This is part of a series of strategic investments that it secured within just six months of its establishment, including those from leading domestic financial institutions like banks and securities companies.Pioneering fintech developmentThe company has consistently been boosting efforts to expand into a prominent fintech platform, starting by receiving approval from Korea’s Financial Services Commission (FSC) to become a virtual asset service provider (VASP) and later on obtaining ISO 27001 certification for the information security management system of its blockchain platform. More recently, it launched a custody-based Ethereum staking service for corporate clients.“We will strive to provide trustworthy digital asset infrastructure by implementing a fintech platform that not only offers innovation through blockchain and cyber security technology but also meets regulatory requirements assigned by financial authorities,” Jeong stated.