Chinese researchers from Shanghai University have claimed a significant breakthrough in quantum computing, asserting that they breached encryption algorithms commonly used in banking and cryptocurrency. Led by Wang Chao, the team employed a quantum computer from Canada’s D-Wave Systems to exploit vulnerabilities in the Present, Gift-64, and Rectangle algorithms, which form the backbone of the Substitution-Permutation Network (SPN) structure underpinning advanced encryption standards (AES) widely used for securing cryptocurrency wallets.
While AES-256 is regarded as one of the most secure encryption standards, the researchers warn that the advent of quantum computers could pose a serious threat to traditional password protection. Their technique, based on quantum annealing, operates similarly to artificial intelligence algorithms, allowing for more efficient searches by circumventing obstacles that traditional methods struggle to overcome.
Despite these advancements, the researchers noted that practical limitations remain, such as environmental factors and hardware constraints that prevent a full-scale quantum attack at this time. However, they emphasised that future developments could uncover new vulnerabilities in current cryptographic systems.
Ethereum co-founder Vitalik Buterin has proposed a potential solution to mitigate the risk posed by quantum computing, suggesting a hard fork of the Ethereum blockchain to implement new wallet software and enhance security. He indicated that the necessary infrastructure for such a move could be developed promptly, providing a proactive approach to safeguarding user funds.
US regulators have imposed $32 billion in fines on crypto companies to resolve compliance disputes. A record $19.45 billion of that total came in 2024, primarily due to a $12.7 billion payment involving FTX and Alameda Research. In August, a judge ruled that the firms must pay $8.7 billion in restitution to those affected, along with a $4 billion fee for ill-gotten gains.
Terraform Labs also faced hefty fines in 2024, totalling $4.5 billion. Founder Do Kwon is required to pay $204.3 million in interest, fines, and compensation. Other significant fines include Binance’s $4.3 billion and Celsius’s $4.7 billion, both issued in 2023. Binance settled criminal charges, paying $1.81 billion in fines and $2.51 billion in compensation.
The surge in settlements reflects increased regulatory scrutiny following the FTX collapse in 2022. In 2023, US regulators settled eight lawsuits for $10.87 billion, a record-breaking 8,327% increase from the previous year. As of 2024, with eight more settlements totalling $19.45 billion, this year’s total has already surpassed 2023 by 78.9%.
Decentralised finance protocol Ethena has revealed plans to allocate $46 million from its Reserve Fund into tokenised real-world assets. The chosen assets include BlackRock’s USD Institutional Digital Liquidity fund, Mountain Protocol’s stablecoin, Sky’s stablecoin (USDS), and the Superstate Short Duration US Government Securities Fund.
Ethena’s risk committee, comprised of five members, assessed 25 options based on factors like liquidity, product maturity, and risk-adjusted yield. BlackRock’s fund will receive the largest portion, 40%, with the rest allocated to Sky’s stablecoin, Mountain Protocol, and Superstate.
These investments are part of Ethena’s strategy to integrate real-world assets into its Reserve Fund. The committee will oversee the assets closely and provide regular updates on their progress.
Australia, Canada, and Colombia have taken a step back from launching central bank digital currencies (CBDCs), raising concerns about their necessity and potential risks. While many governments push forward with digital currency plans, these countries’ central banks argue that existing payment systems already serve the public well. They also fear CBDCs could destabilise the financial system and accelerate the decline of cash.
The Reserve Bank of Australia and the Bank of Canada have both scaled down their CBDC projects, citing the need for further research. Colombia’s central bank similarly expressed doubts about the need for a CBDC, whether retail or wholesale. The decision reflects broader concerns within the financial industry, as critics warn that CBDCs could infringe on privacy and give governments excessive control over individual accounts.
Although CBDCs are still advancing in other parts of the world, the recent statements signal that their implementation may not be as inevitable as once believed. Central banks remain cautious, and the debate over the future of digital currencies continues.
Coinbase is preparing to delist stablecoins in Europe that fail to meet the EU’s Markets in Crypto-Assets Regulation (MiCA) by the end of 2024. However, uncertainty surrounds the regulatory status of Tether’s USDT, the world’s largest stablecoin. While Coinbase has yet to confirm whether USDT will be affected, there are reports that Tether could struggle to comply with MiCA’s requirements.
The European Securities and Markets Authority (ESMA) has not provided clear guidance on USDT’s compliance. Tether has raised concerns over MiCA’s reserve management rules, which the company believes could disrupt its business model and introduce risks to both local banking systems and stablecoins.
Tether CEO Paolo Ardoino hinted that the company might shift its focus towards developing markets, like Argentina, rather than navigating the regulatory complexities of the European Union.
Bitcoin’s bullish trajectory remains strong, with the cryptocurrency expected to reach $100,000 soon, regardless of the upcoming US election, according to Dan Tapiero of 10T Holdings. Speaking at a conference in Salt Lake City, Tapiero explained that Bitcoin’s rise is inevitable, driven by global trends and growing institutional interest.
The presidential race between Donald Trump and Kamala Harris highlights different attitudes towards crypto, with Trump promising to make the US a crypto hub and remove SEC Chair Gary Gensler. Harris, though quieter on the issue, recently emphasised blockchain’s importance. Despite these political shifts, industry experts believe Bitcoin will benefit from the election either way, citing concerns over US debts and deficits as a potential driver.
With the April Bitcoin halving boosting prices historically, the fourth quarter looks promising. The election may pass, but blockchain technology’s role in reshaping finance remains far more significant than any political outcome, Tapiero noted.
In 2019, Irish authorities seized $380 million worth of Bitcoin from convicted drug dealer Clifton Collins, who had accumulated the funds through his cannabis business. However, the Irish Criminal Assets Bureau has been unable to access the digital currency because Collins lost the access codes, which were written on a piece of paper stored in a fishing rod case. The case was lost following a break-in at one of his properties, leaving the authorities unable to unlock the 12 wallets containing the funds.
Originally valued at $58 million, the Bitcoin has significantly increased in value due to market growth, but remains inaccessible. Despite ongoing efforts, the digital keys have not been recovered. Authorities hope that future technological developments could provide a way to unlock the funds.
Meanwhile, Ireland is strengthening its cooperation with EU countries to ensure unified enforcement of cryptocurrency regulations under the Markets in Crypto-Assets Regulation (MiCA).
Gate.io has made a $10 million strategic investment in The Open Network (TON) blockchain, aimed at strengthening collaboration with the TON Foundation and supporting the expansion of Telegram-based projects. The exchange will play a key role in TON’s governance and development, including the introduction of a CeFi-driven Telegram mini-app and Gate Wallet within the messaging platform.
The initiative also sees Gate Group joining the TON Society’s Hackers League hackathon, one of the largest events of its kind, with a $2 million prize pool. The hackathon, spanning 19 cities, aims to drive innovation and global participation in TON-based projects.
With its fast, low-cost blockchain technology and extensive Telegram user base, TON offers a promising platform for Web3 applications and startups, positioning itself for widespread adoption and network growth..
The FBI has successfully orchestrated a crypto sting operation using a token it created to investigate market manipulation. The NexFundAI Token, launched on the Ethereum blockchain, was part of the operation that led to the indictment of 18 individuals and entities for their involvement in fraudulent activities.
The investigation uncovered a sophisticated scheme involving pump-and-dump operations and wash trading, which artificially inflated token prices. Over $25 million worth of cryptocurrency was seized, and several trading bots responsible for manipulating markets across 60 different tokens were shut down.
This operation, known as “Operation Token Mirrors,” is seen as a warning to crypto investors about the risks of market manipulation. Authorities, including the FBI and SEC, are continuing to investigate those involved in fraudulent crypto schemes.
Crypto.com has filed a lawsuit against the US Securities and Exchange Commission (SEC), accusing the agency of overreaching its legal authority by classifying most crypto transactions as securities. The lawsuit follows a Wells Notice issued by the SEC in August, signalling potential enforcement action. Crypto.com argues that the SEC’s inconsistent regulatory approach, exempting Bitcoin and Ether, undermines the crypto sector’s future in the US.
In its legal filing, Crypto.com claims the SEC bypassed essential procedural steps, including the notice and comment rulemaking process. The exchange aims to halt what it views as the agency’s ‘unlawful’ crackdown on cryptocurrency. Alongside the lawsuit, Crypto.com has petitioned the SEC and Commodity Futures Trading Commission (CFTC) for clearer regulation of cryptocurrency derivatives.
Several crypto firms, including blockchain technology company Consensys, have also sued the SEC this year after receiving Wells Notices.
