Binance launches Sharia-compliant staking product

The Philippines' financial regulator announced that it is implementing what amounts to a ban on Binance in the Southeast Asian nation by blocking local access to the leading global cryptocurrency exchange. This decision, publicized via a press release on March 25, comes as the Securities and Exchange Commission (SEC) raised concerns last November over Binance's operations in the country, citing a lack of necessary licenses for certain investment products. According to the press release, the SEC revealed that it sought assistance from the National Telecommunication Commission (NTC) to enforce the ban, expressing worries about the security of Filipino investors' funds on the platform. In a letter addressed to the NTC, SEC Chairman Emilio Aquino stated:"The SEC has identified the aforementioned platform and concluded that the public's continued access to these websites/apps poses a threat to the security of the funds of investing Filipinos.”Photo by Krisia on PexelsA similar move was taken last December by the Financial Intelligence Unit (FIU) in India, as it acted to block access to what it deemed to be non-compliant global crypto exchanges. Unlicensed servicesThe SEC alleges that Binance offers services like leveraged trading and crypto savings accounts without the required licenses, violating the country's Securities Regulation Code. Consequently, the ban is set to be implemented within three months, allowing investors time to exit their positions held through Binance. Furthermore, the SEC has requested Google and Meta to restrict Binance-related advertisements targeted at Filipino users on their platforms, extending the regulatory measures to online advertising as well. A similar stance was taken by authorities in Thailand last August with the Ministry of Digital Economy and Society (MDES) engaging in talks with Facebook in an effort to curb questionable crypto-related advertising on the platform. Regulatory setbackThis move by the Philippines' financial watchdog marks another regulatory setback for Binance, which has faced increasing scrutiny globally. In December 2023, a U.S. court ordered Binance to pay significant fines to the Commodity Futures Trading Commission (CFTC) for evading federal law and operating an illegal derivatives exchange. As part of the settlement, Binance's former CEO, Changpeng Zhao (CZ), agreed to step down from his position, with Zhao also facing civil and criminal charges related to anti-money laundering laws. The SEC's cautionary stance against Binance dates back to November 2023, shortly after Zhao's legal troubles in the U.S. emerged. At that time, the SEC expressed its intention to ban Binance in the Philippines, though the execution was postponed due to changes in the leadership of the regulatory body. Notably, Kenneth Stern, who headed up Binance's operations in the Philippines, exited the company in July 2023, amidst mounting regulatory pressures and legal challenges. Binance had seen many leading executives part ways with it in the lead-up to the company’s settlement with the U.S. Department of Justice (DoJ) last year. With regulatory actions tightening around Binance globally, the future of the exchange in various jurisdictions remains uncertain. The ban in the Philippines adds to the ongoing regulatory challenges faced by the company and underscores the growing importance of compliance within the cryptocurrency industry.

Socket, a cross-chain infrastructure protocol, and its interoperability bridging platform, Bungee, have restarted operations following a temporary pause prompted by an exploit that led to the apparent theft of $3.3 million.Photo by Anna Tarazevich on PexelsSecurity incidentTaking to the company’s Discord, Socket team hospitality lead Taylor Melvin clarified that it had “experienced a security incident which affected wallets with infinite approvals to Socket contracts.” The incident, which occurred on Tuesday, involved an unknown attacker draining millions worth of stablecoins and other tokens from the Bungee bridging aggregator. The attackers targeted wallets with infinite approvals to Socket contracts, exploiting authorizations for blockchain-based tools that allow applications to access tokens in a user's wallet. Security researcher "@speekaway" was the first to flag the exploit on Tuesday. The attacker's wallet, connected to the exploit, held nearly $3 million in ether (ETH) and $300,000 worth of other tokens. By 2:47 p.m. ET, the attack seemed to have ceased, with the researcher recommending users to revoke approvals for Socket to safeguard their assets. Pausing contractsIn response to the security breach, Socket announced the pause of affected contracts on Tuesday at 3:15 p.m. ET. The project's team promptly identified and addressed the issue, taking swift action to mitigate the exploit's impact. @speekaway chimed back in once contracts had been paused, writing:”Think this pause fixed it, very likely no more attacks are possible. So if you are currently freaking out about revoking you can probably relax.” Normal service returnsAs Socket paused activity during the incident, preventing further propagation of the attack, developers worked to fix the issue. Early Wednesday, Socket developers announced that the problem had been resolved, and normal activities had resumed. The team also stated that plans for compensation were in progress. Cross-chain bridges, like Socket's Bungee, facilitate token transfers between different blockchains but remain susceptible to exploitation. Blockchain security and data analytics company PeckShield confirmed that at least $3.3 million had been lost, highlighting the need for enhanced security measures in the rapidly evolving blockchain ecosystem. The exploit involved the exploitation of a recently added route, which has since been disabled. The attacker targeted users who had over-approved Socket, draining funds up to the limit of their approval. This incident follows the $81 million hack of Orbit Chain, a cross-chain bridge connecting Ethereum to other networks, earlier in January. Cross-chain tools' complexity contributes to the frequency of such attacks, emphasizing the importance of understanding the security measures in place when utilizing these bridges. In a message to CoinDesk, Sergey Nazarov, co-founder of Chainlink, emphasized the need for users to scrutinize the security of their chosen bridge, considering the various levels of cross-chain security. With the complexities involved, users are encouraged to be vigilant and informed about the security spectrum of the bridges they employ. Socket was founded by Indian duo Rishabh Khurana and Vaibhav Chellani. In September, the company raised $5 million, with funding coming from Framework Ventures and Coinbase Ventures. 

BIS Collaborates with Singapore’s MAS, Bringing CBDC Pilot to a CloseThe Bank for International Settlements (BIS) has recently signified the culmination of Project Mariana, a pilot initiative centered on exploring the cross-border trading and settlement of wholesale central bank digital currencies (CBDCs).Photo by Pixabay on PexelsUpdating financial market infrastructureThe bank of central banks published the findings of the project on Thursday. Conceived in partnership with the Monetary Authority of Singapore (MAS) alongside the central banks of France and Switzerland, the endeavor could have profound implications for the future landscape of financial market infrastructure.Project Mariana, conducted under the patronage of the BIS, harnessed principles gathered from the emerging world of DeFi to probe the viability of employing automated market makers (AMMs) for CBDC trading and settlement.The project involved three key facets:DeFi Ingenuity: Project Mariana took inspiration and cues from the DeFi universe, particularly AAMs, to streamline foreign exchange trading and settlement. This approach was designed to bolster market efficiency while curtailing settlement risks.Cross-Border CBDC Transactions: Hypothetical wholesale versions of the Swiss franc, euro, and Singapore dollar in CBDC form were tested for cross-border trading and settlement. The central banks of France, Singapore, and Switzerland orchestrated simulated transactions via AAMs to gauge feasibility.Interoperability and Token Standards: The project showcased the practical application of a standardized technical token format offered by a public blockchain, enabling seamless interoperability across various currencies. This interoperability element played a pivotal role in facilitating cross-border CBDC transactions.While the project represents a significant move forward for the BIS in its consideration of decentralized technology, the organization is still mindful that these decentralized tools are in their infancy and in need of further scrutiny and experimentation.With that, the BIS Innovation Hub has outlined its intent to further explore the prospective advantages and obstacles associated with DeFi-infused solutions within pertinent use cases going forward.Proof of conceptWhile the BIS and participating central banks were happy with the outcome of the project, the exercise was still a proof of concept and doesn’t mean there will be any immediate adoption of CBDCs by the participating nations.Rather, it spotlights the potentials of CBDCs and DeFi in streamlining financial transactions and enhancing efficiency. Central banks can oversee wholesale CBDCs without necessarily exerting control over the underlying infrastructure, thereby furnishing commercial banks with a potent tool for instantaneous FX trading and settlement while simultaneously mitigating credit and settlement risks.The project also shone a spotlight on certain challenges, including the logistical intricacies arising from the 24/7 availability of wholesale CBDCs. Nevertheless, the manifold advantages of instant foreign exchange trading and settlement appear to outweigh these hurdles.Central bankers are likely to want a different outcome from the use of this technology by comparison with those who are currently knee-deep in building out DeFi. One commentator on X had a cynical take on the project, stating: “Intermediaries attempting to justify their existence in an age with bitcoin.”Notwithstanding that, FX is the largest financial market in the world, where $7.5 trillion in value is traded every day. To utilize DeFi technology in that context would likely be profound, regardless of the nature of the application of the technology.