Shanghai’s Blockchain Development Plan Paves the Way for Web3 Innovation

Lack of Funds Sees Multichain Cease OperationsThe development team behind Multichain, a cross-chain protocol, has recently announced its decision to cease operations due to a lack of operational funds.This announcement follows a report by blockchain analytics firm Chainalysis, which suggested that insiders may have orchestrated a “rug pull” by withdrawing funds. The Multichain team took to Twitter on Friday to inform their community about the suspension of their business activities, citing a lack of alternative sources of information and operational funds as the primary reasons for their decision.One crucial factor contributing to the shutdown is the absence of communication with the CEO, Zhaojun, who had been missing and is now understood to be in the custody of Chinese authorities. The team explained that they had reached out to Zhaojun’s family and discovered that the police had seized his computers, phones, wallets, and mnemonic phrases.Photo by Christian Lue on UnsplashOperational controlThroughout the project’s lifespan, Zhaojun had maintained control over operational and investor funds. Consequently, the team, along with all their funds and access to servers, found themselves at Zhaojun’s mercy, as he now remains under police custody.Attempting to salvage the situation, Zhaojun’s sister initiated an asset preservation act and transferred some funds to addresses under her control. However, the team soon received news that Zhaojun’s sister, too, had been detained by the police and was now unreachable. Faced with these unfortunate circumstances, the team reluctantly announced the cessation of their operations.DeFi centralization risksThe debacle has raised concerns about the lack of decentralization demonstrated by the level of control Zhaojun had over the project. It prompted comment from Chris Blec, a DeFi Researcher & Analyst who has been highly critical of a whole host of DeFi projects on the basis that while many DeFi projects claim to be decentralized, they’re critically flawed and are centralized to a point that puts them at critical risk.Taking to Twitter, Blec stated: “Dude gets thrown in jail, admin keys to Multichain are on his computers, sister eventually uses his computer to steal money, now she’s in jail too. THIS IS WHY WE DECENTRALIZE.”The Multichain debacle traces back to May when the suspension of Multichain routes for an upgrade caused delays in fund transfers. The uncertainties surrounding the protocol prompted crypto exchange Binance to halt deposit and withdrawal support for certain Multichain bridged tokens.Adding to the platform’s woes, significant outflows from the Multichain MPC bridge platform raised concerns of an exploit. Observers analyzing the blockchain data reached a consensus on July 6 that the protocol had been hacked, as over $100 million worth of assets were withdrawn from the Fantom bridge on the Ethereum side.As Multichain now faces the unfortunate reality of halting its operations, it serves as a stark reminder of the challenges and risks inherent in the blockchain industry. The lack of operational funds, combined with the absence of communication with key figures and critical points of centralized failure have proven insurmountable for this cross-chain protocol.

Kaspersky Says Crypto Phishing on the Rise in the PhilippinesThe Philippines witnessed a significant increase in detected cryptocurrency-related attacks last year while Vietnam recorded the highest level in Southeast Asia, according to cybersecurity firm Kaspersky.Photo by Markus Spiske on UnsplashEase of crypto accessVietnam topped the list with over 64,000 detections. Meanwhile, the Philippines recorded 24,737 cases of crypto-phishing attacks in 2022, up from 9,164 cases in 2021, making it the second-highest number in Southeast Asia.Adrian Hia, Managing Director for Asia Pacific at Kaspersky, attributed the rise to the ease of accessing cryptocurrency in the Philippines. He explained that as users increasingly turn to mobile devices, they are inadvertently exposing themselves to potential breaches, as malware can be installed through various touch points.Research published by Malaysian crypto data aggregator, CoinGecko, earlier this month, also points to the Philippines as having the second highest level of interest in crypto in Southeast Asia, after Singapore.Targeting popular platformsCybercriminals commonly target accounts of popular online gaming platforms and crypto wallets using advanced stealers or “stalkerware” that allow them to spy on individuals through their mobile devices, Kaspersky stated. The firm’s monitoring data revealed that malware is spreading through legitimate channels such as official marketplaces and advertisements in popular apps.Across Southeast Asia, the total number of crypto-phishing detections decreased to 147,649 in 2022 from 164,330 in 2021, according to Kaspersky. However, only Singapore (down 74%), Thailand (down 51%), and Vietnam (down 15%) observed declines in detections. Besides the Philippines, crypto-related attacks also increased in Indonesia (from 19,584 in 2021 to 24,642 in 2022) and Malaysia (from 16,071 to 16,767).Kaspersky discovered an average of 400,003 new malicious files per day in 2022, representing an increase of 20,000 files per day compared to the previous year. Hia emphasized that scammers are relentless in their efforts to steal cryptocurrency due to its increasing popularity and adoption, particularly in Southeast Asia. He urged cryptocurrency adopters in the region to stay informed about the latest tricks used by crypto phishers to protect their digital assets.Email-based attacksRoman Dedenok, a spam analysis expert at Kaspersky, revealed that crypto phishers often employ email-based attacks to target crypto users. He explained that scammers entice victims with the prospect of participating in a cryptocurrency giveaway, offering popular digital assets such as Bitcoin, Ethereum, Litecoin, Tron, or Ripple.The scammers provide a three-point guide to claim the free cryptocurrency along with a link to the “promotion” website. Clicking on the link leads users to a phishing site where they are prompted to specify the wallet to which they want the funds transferred.In response to the growing cybersecurity concerns, Kaspersky is engaging in discussions with government institutions worldwide. In the Philippines, while the central bank does not directly regulate cryptocurrency, it has established guidelines for virtual asset service providers. The Chairman of the Securities and Exchange Commission (SEC) in the Philippines, Emilio Aquino, recently delayed publication of a regulatory framework for crypto, on the basis of having “to make sure people don’t get burned.”Entities involved with virtual assets are required to obtain a license from the Bangko Sentral ng Pilipinas, the central bank of the Philippines, to comply with regulations.

Bhutan Partners With Bitdeer on Crypto Mining FundSingapore-based Bitcoin mining firm Bitdeer has entered into a partnership with the commercial arm of the Royal Government of Bhutan to jointly develop green digital asset mining operations within the Kingdom of Bhutan.Bitdeer issued a press release on Wednesday to announce the partnership. Druk Holdings and Investments (DHI) acts as the commercial arm of the Royal Government of Bhutan. It was formed pursuant to a Royal Charter in 2007 with the mandate of making investments on behalf of Bhutan while optimizing usage of resources.Driving growthAccording to the information provided, the two companies will “launch the partnership through establishing a closed-end fund with an estimated size of up to US$500 million.” The initiative will see a canvas for funding commencing at the end of this month. Bitdeer’s role in the partnership is that of a general partner while DHI will act as a strategic limited partner.Bitdeer’s Chairman, Jihan Wu, expressed his enthusiasm in gaining access to Bhutan’s zero-emissions hydropower resources through the partnership. Wu stated that the fund represents “a pathway to foster global stakeholder networks that are driving growth and innovation in the technology sector in Bhutan.”Once funding has been raised, that capital will be channeled directly into greenfield operations on the ground in Bhutan. That encompasses the construction of data centers and what the joint parties to the initiative describe as “the acquisition of cutting edge technology.”Photo by Singkham on PexelsDigital transformationUjjwal Deep Dahal, CEO of DHI, stated: “The partnership with Bitdeer to launch a carbon-free digital asset mining data center represents an investment in a more connected and sustainable domestic economy, helping ensure we are at the forefront of global innovation.”Bhutan is executing on a plan to accelerate digital transformation and economic diversification by exploiting opportunities in emerging sectors. Further evidence that this is part of a broader longer term strategy emerged recently. Dahal had told a local Bhutanese publication that DHI had been engaged in bitcoin mining on behalf of the Kingdom since bitcoin had a unit price of $5,000. In that interview, Dahal acknowledged that the involvement from the outset of its bitcoin mining activities was part of a broader, long term strategy.Bitdeer’s Asia expansionAlthough Bitdeer is Singapore-based, its operations up until this point have been focused on facilities located in Northern Europe and North America. According to this latest announcement, the bitcoin miner sees this partnership as a “crucial expansion into Asia for Bitdeer.” A shift in geographical focus may be well timed by Bitdeer as it emerged today that President Joe Biden in the United States is considering the imposition of a 30% tax on crypto mining.The bitcoin miner completed a long overdue special purpose acquisition company (SPAC) merger with Blue Safari Group last month. As part of that process, it listed on the Nasdaq. That public listing process has been a baptism of fire for the company as shortly afterwards, the company traded down 30% from the point of its initial listing.A corporate filing made by the company with the Securities and Exchange Commission (SEC) provides more detail with regard to Bitdeer’s plans in Bhutan. “We expect to generate 100 MW out of the 550 MW power supply from Bhutan, where the construction of a mining data center is expected to begin in the second quarter of 2023 and complete in the third quarter of 2023,” the filing states.