Here comes Friday, February 16th. As the ongoing week elapses, we can focus on the industry highlights over the past few days.
Trust Wallet on iOS under probe by U.S. officials
The National Institute of Standards and Technology (NIST) is seeing how the land lies in Binance’s Trust Wallet app for iOS to identify its vulnerabilities.
According to the description, the wallet misuses the trezor-crypto library (heavily optimized cryptography algorithms), consequently generating mnemonic words for which the device time is the only entropy source.
Such a bug paves the way to the wallet’s exploits, thus allowing attackers to create mnemonics for each timestamp and associate them with addresses to steal funds.
MITRE Corporation, a non-profit organization, has requested an analysis along with links to vulnerability research from experts at the Milk Sad and SECBIT Labs projects, which were published in January.
It has been brought to a wider attention that a significant number of wallets, totaling over 6,500, may be at risk. There have been several incidents in July 2023 that have resulted in the loss of almost 33 BTC.
Back in the summer of 2018, Binance acquired Trust Wallet at the time when it specialized in Ethereum assets. Later that year, support for bitcoin was also introduced.
The first desktop version of the wallet was released for macOS in 2019.
As for April 2023, a critical vulnerability was discovered by developers in the core software library of the Trust Wallet browser extension.
Short sharp shock of Binance CEO postponed to late April
The sentencing of Changpeng Zhao due to money laundering has been rescheduled to April 30th, as per CNBC citing the notice of the Seattle federal court
The reason for the delay in passing the ruling was not specified in the document. It was originally anticipated to be announced on February 23rd.
Zhao’s case carries a maximum sentence of 18 months in prison, the publication noted. Earlier, prosecutors had voiced their desire to pursue a far more severe sentence totaling up to 10 years.
In November, Zhao pleaded guilty to failing to maintain an effective anti-money laundering program at his renowned CEX. As part of an agreement with the U.S. Justice Department, CZ has decided to pay a $50 million fine and resign from their position.
For Binance, the settlement cost $4.3 billion.
The ex-CEO has posted $175m bail to remain free until sentencing. However, prosecutors are requesting that he be prohibited from leaving the United States due to concerns about flight risk.
In late 2023, the court declined the businessman’s request to return home to the UAE, despite his offer of a bail amounting $4.5 billion.
Daily inflows into bitcoin ETFs bounce back to record highs
On February 13th, net inflows into Bitcoin ETFs totaled $631.2 million, which is the second-highest amount after the first day of trading when it reached $655.2 million.
The daily AUM (assets under management) growth of bitcoins hit 12,736 BTC.
BlackRock’s fund raised $493 million (9943 BTC) in a timely manner, while the iShares Bitcoin Trust balance currently surpasses 105,000 BTC mark.
The capitalization of the Grayscale Bitcoin Trust ETF (GBTC), which was converted from a trust that had been operating since 2015, is shrinking. At the time of conversion to the ETF, GBTC’s assets were valued at roughly $29B. Since the fund’s conversion began on January 11, investors have withdrawn over $6.5 billion (~156,300 BTC).
Grayscale maintains a fee rate of 1.5%, which differs from the policies of most of its rivals.
Some industry experts expressed skepticism about the potential appeal of Grayscale’s spot bitcoin ETF to the market prior to its approval by the SEC. Despite this, Michael Sonnenschein, CEO of Grayscale, attributes the fees to a “10-year track record of operating successfully” and a “diversified investor base,” anticipating that most of the 11 bitcoin ETFs launched have yet to build up their reputations.
In October 2023, Grayscale won a court case against the SEC. The court dismissed the Commission’s appeal of a previous decision that required it to reconsider its refusal to convert GBTC into a spot ETF. This has reinforced the community’s expectation that applications for such products will be favorably approved. In December, it was acknowledged by SEC Chairman Gary Gensler that the agency’s position had changed due to court rulings.