Singapore Prime Minister issues warning on AI-generated crypto scam

Bitcoin layer-2 project Elastos sees ELA token surgeSingaporean blockchain developer Elastos has unveiled its BeL2 layer-2 network set to run on top of the Bitcoin blockchain, eventually prompting a token price surge.50% increaseThe project aims to address challenges such as transaction volume limitations and the complexity of programmable contracts within the Bitcoin ecosystem. Despite the initial muted response from the crypto community after the late November announcement, Elastos’ native token, ELA, has experienced an extraordinary surge on Wednesday. Over the course of the past 24 hours, the token’s unit price has jumped from $2.06 to $3.09. That represents a 50% increase.Photo by Kanchanara on UnsplashBringing smart contracts to BitcoinOn Dec. 2, the project released its BeL2 whitepaper, describing it as “a transformative approach to enhancing Bitcoin’s functionality.” BeL2 has the potential to bring about significant advancements by leveraging SmartWeb technology to introduce staking solutions and incorporate zero-knowledge proof technology.A zk proof is a cryptographic method through which one party can prove to another party that a particular statement is true, all the while avoiding the leakage of any additional information aside from confirming the statement is true. Up until now, zk proofs have been largely the preserve of Ethereum-centric projects.Alongside zk proofs, BeL2 will utilize Bitcoin-powered Ethereum Virtual Machine (EVM) smart contracts. This approach is expected to expedite transactions within the network and introduce governance through a decentralized model.BeL2 roadmapThe roadmap for BeL2 includes a three-month development phase for a proof-of-concept, followed by an additional three months dedicated to the decentralization of relayers. These relayers, acting as third-party services facilitating communication and data transactions between different blockchain networks, play a crucial role in the overall implementation of BeL2.Elastos envisions BeL2 as a Layer 2 network built on Bitcoin, introducing sophisticated BTC transactions on its blockchain. Beyond staking, the network aims to provide direct yield and affordable transactions on native decentralized applications. The move marks a significant shift, allowing Bitcoin holders to stake their assets directly, unlocking potential value exceeding $700 billion.Looking ahead, Elastos plans to chart the decentralized finance (DeFi) course on BTC by enabling smart contract deployment and irreversible digital agreements between participants.As interest in Bitcoin continues to rise, driven by innovations like inscriptions and spot ETF discussions in the United States, Elastos’ BeL2 initiative is garnering greater attention, relative to the potential to usher in a new era of possibilities for the world’s most popular digital currency.The project was founded in 2017 by Rong Chen, a former senior software engineer at Microsoft. Taking to the X social media platform earlier this month, Chen wrote:“I don’t see any other paths to the final #Web3 destination except:(1) A #BTC merge mining blockchain, plus smart-contract sidechains as needed;(2) A #SmartWeb operating system (OS) to facilitate personal node to own data, plus personal-node to personal-node direct communication links;(3) Personal Cloud Compute (#PC2) Runtime sandbox, so individuals are on the same footing as big brothers;(4) Digital goods software-development-kits (embedded OS #SDKs), entrusting your data to nobody else but yourself, i.e., your own code to check access tickets/tokens before loading and rendering data.”The Elastos ecosystem employs three-layer consensus mechanisms: auxiliary proof-of-work, proof-of-integrity and bonded proof-of-stake. It’s hoped that the project can improve upon the original layer-2 solution for Bitcoin, the Lightning Network, which has had issues in terms of scalability and centralization risk.

Binance Initiates Registration Process for AML Compliance in TaiwanGlobal crypto exchange Binance has set in motion the process of registering under Taiwan’s Money Laundering Control Act, the sole crypto-related regulatory framework currently established in Taiwan.In a confidential gathering on Tuesday, Taiwan’s Financial Supervisory Commission (FSC) conveyed to numerous domestic crypto service providers that Binance is in the process of applying for registration to ensure compliance with anti-money laundering (AML) regulations, according to a local media report.Photo by Thomas Tucker on UnsplashImportance of AML complianceTaiwan has mandated that virtual asset service providers (VASPs) adhere to its anti-money laundering statutes since the FSC introduced AML rules in July 2021. Outside of these measures, the cryptocurrency industry in the country remains largely unregulated.Speaking to The Block on Friday, an FSC official refrained from confirming whether Binance had already submitted the necessary documentation to register with the regulatory body. However, the official did emphasize the importance of offshore crypto platforms operating in Taiwan abiding by the local AML regulations.While Binance is not yet regulated in Taiwan, it has established a local entity named “Binance International Limited Taiwan Branch (Seychelles),” as per records from the Department of Commerce’s database. The registration particulars indicate that the Taiwanese government endorsed Binance’s company registration on May 12, 2023, with a registered capital of NT$30 million ($944,000) within Taiwan.Cooperation with law enforcementBinance has taken steps to cooperate with local law enforcement agencies to combat cybercrime in Taiwan. In June, the exchange revealed its collaboration with Taiwan’s Criminal Investigation Bureau, leveraging its expertise to assist over 200 Taiwanese law enforcement officers in addressing digital asset-related criminal activities.Damien Ho, Head of Global Partnerships at Binance, remarked in a blog post at the time:“As an increasing number of individuals in Taiwan show interest in cryptocurrency, ensuring a secure and comfortable crypto ecosystem for users becomes crucial.”Growing Asian influenceBinance’s influence is growing across Asia. This month, it officially launched operations in Japan after its acquisition of the local exchange Sakura Exchange BitCoin in November 2022, paving the way for regulatory oversight by the Japan Financial Services Agency (JFSA). Earlier this month, an investigative report carried out by the Wall Street Journal revealed that Binance is thriving in China in spite of the fact that crypto trading is a banned activity there.Regulatory guidelines anticipatedTaiwan’s FSC, which assumed the role of the primary regulator overseeing the crypto industry in March, is currently formulating comprehensive guidelines for trading and payments involving cryptocurrencies for VASPs.The FSC has disclosed plans to release the VASP guidelines by the end of September. Kevin Cheng, a Director at the Taiwan Fintech Association, revealed that the FSC intends to implement a stringent regulatory approach for crypto platforms in Taiwan, similar to its oversight of traditional financial institutions.Cheng noted: “The FSC plans to require VASPs to keep their own crypto assets separate from the clients’ crypto assets and to have accounting firms audit such assets every year.” However, Cheng highlighted the potential difficulty of this requirement, as many accounting firms might hesitate to serve crypto clients due to the specialized nature of crypto-related information.

The crypto space continues to suffer a disproportionate share of hacks and scams that were further exacerbated on Wednesday, with Malaysian crypto data aggregator the latest to succumb to a security breach. Serving as yet another stark reminder of the persistent threats plaguing the sector, a phishing scam targeted CoinGecko's X account, leading to a brief compromise that raised concerns about the safety of user information.Photo by GuerrillaBuzz on UnsplashPhishing scamDuring this incident, hackers posted a phishing link on CoinGecko's X account, falsely advertising a token airdrop for a cryptocurrency named GCKO. The deceptive post claimed that GCKO could be used for API services, including the cryptocurrency ANKR. Swift action by CoinGecko involved the removal of the fraudulent post and a public warning urging users to avoid interacting with any suspicious links or content. In an X post, CoinGecko wrote:”Our Twitter accounts @CoinGecko and @GeckoTerminal have been compromised. We're taking immediate steps to investigate the situation and secure our accounts. Please DO NOT click on any links or engage with suspicious content. Your security is our top priority.” Employee errorThe firm followed up with an update on Thursday, attributing the breach to a team member inadvertently clicking on a fraudulent Calendly link, granting unauthorized access to the hacker. Despite having two-factor authentication (2FA) enabled and employing robust security measures, CoinGecko emphasized that the inadvertent click allowed unauthorized access. The compromised accounts were then exploited to disseminate misleading information and potentially engage in malicious activities. CoinGecko expressed sincere apologies for any confusion or inconvenience caused by the incident. The company reiterated its commitment to platform security and continuous improvement of internal controls, assuring users that corrective measures were promptly implemented. SEC incompetenceCoinGecko's security incident occurred within 24 hours of a similar occurrence involving the U.S. Securities and Exchange Commission (SEC). The SEC's X account was compromised, with scammers posting a false message from Chair Gary Gensler about the approval of spot bitcoin exchange-traded funds (ETFs). While CoinGecko identified a vulnerability in its security regimen, the SEC later confirmed that the breach in its case was far more basic. It was not due to infrastructure attacks but rather the lack of 2-factor authentication (2FA) tied to the SEC's account, the most basic form of operations security. Gensler and the SEC have come in for major criticism from the crypto community in the U.S. due to a policy of regulation by enforcement that has been pursued. With that, the Commission came in for swift and harsh criticism in the immediate aftermath of its X account hack. Many pointed out the irony of Gensler advising consumers to secure their accounts back in October when the SEC itself had failed to do so. Others queried who would be responsible for what some interpreted as an episode of market manipulation, something that the SEC has perennially associated the crypto markets with. During the time that the account was compromised, millions of dollars of value were liquidated in short and long trading positions. CoinGecko's quick response serves as a valuable lesson in the importance of vigilance and proactive security measures amid the growing threats facing the cryptocurrency community.