The world of cryptocurrencies has seen significant developments in the past week, from a surge in hacking attempts to a boost in digital asset investments and market turbulence caused by geopolitical conflicts. Additionally, disturbing revelations emerged about cryptocurrency being used to fund terrorism. Here are the key highlights from the past week in the crypto world.
Upbit Experiences a Surge in Hacking Attempts
South Korean cryptocurrency exchange Upbit, operated by Dunamu, made headlines after reporting an astonishing increase in hacking attempts. In the first half of 2023, Upbit encountered over 159,000 hacking attempts, marking a 117% increase from the same period in 2022 and an astounding 1,800% increase from the first half of 2020. This alarming surge in hacking attempts has raised concerns about the security of cryptocurrency exchanges.
To enhance security, Upbit has increased the proportion of funds held in cold wallets, which are less susceptible to hacking compared to hot wallets, to 70%. Remarkably, Upbit has not experienced any security breaches since the $50 million exploit it suffered in 2019. However, the recent suspension of Aptos token services due to a failure to recognize a fake token underscores the ongoing challenges of security in the crypto space.
Investment Funds Witness Inflows
The past week also witnessed a substantial influx of $78 million into digital asset investment funds, marking the highest inflow since July. Notably, Bitcoin investment funds accounted for the majority of these inflows, totaling $43 million. This period also saw a 16% increase in Bitcoin trading volumes. Some investors allocated around $1.2 million to short Bitcoin positions in response to recent price gains.
Bitcoin's price had risen from approximately $26,200 at the end of September to about $28,400 at the beginning of October. However, the launch of the Ethereum futures ETF in the U.S. received less than $10 million in its first week, indicating modest investor interest in this new financial product.
Middle East Conflict Impact on Crypto Markets
Geopolitical tensions in the Middle East led to a significant market downturn in the crypto space. Ether (ETH) experienced a nearly 4% drop, while several altcoins suffered even greater declines. This market turmoil resulted in over $100 million in liquidation losses, with approximately $105 million worth of long positions being wiped out. This marked the most substantial amount of long liquidations in a single day since September 11.
The escalating conflict between Israel and Hamas, along with increasing turmoil in the region, triggered concerns among investors, causing a temporary decline in crypto prices. Bitcoin (BTC) was down over 2% at one point but later recovered to reach $27,600, while Ether (ETH) saw a nearly 5% drop. Notably, ETH derivatives traders bore the brunt of the losses, with $32.78 million of long positions liquidated over the past 24 hours.
Cryptocurrency Financing Terrorism
In a startling revelation, it was reported that the recent Hamas attack on Israeli territory was financed through cryptocurrency. Israeli government data and a Wall Street Journal report revealed that three groups, including Hamas, Palestinian Islamic Jihad (PIJ), and Hezbollah, received substantial sums of money through cryptocurrency.
In response, the Israeli government froze cryptocurrency accounts linked to these donations, as these groups turned to unregulated cryptocurrencies due to sanctions.
Crypto researcher Elliptic reported that PIJ received approximately $93 million in cryptocurrency between August 2021 and June 2023, and wallets associated with Hamas received around $41 million during a similar period. This revelation highlights the challenges authorities face in monitoring and regulating the use of cryptocurrencies for illicit purposes.
Cryptocurrency Scam in Huron County
Locally, a cryptocurrency scam in Huron County resulted in significant financial losses for a resident. The victim lost $100,000 due to an internet investment scam that occurred between July and September 2023. The police are investigating the incident and have issued a warning to the public about the risks associated with online investment opportunities.
The victim initially invested $500 and was promised returns on their investment, leading them to invest an additional $100,000. Unfortunately, the fraudsters behind the scam froze the investment and ceased all communication with the victim. The incident underscores the importance of exercising caution when dealing with online investments and reporting any fraudulent activity to the authorities.
In conclusion, the past week in the cryptocurrency world has been eventful, with a surge in hacking attempts, a boost in digital asset investments, market turbulence due to geopolitical conflicts, and concerning revelations about cryptocurrencies being used to finance terrorism. These developments highlight the ongoing challenges and opportunities in the rapidly evolving world of digital assets.
