Day: July 5, 2024

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Multicoin Capital, a leading U.S. investment firm focused on cryptocurrency, has announced a pledge of up to $1 million to support Senate candidates with favorable views on the crypto industry. The firm plans to back four Republican candidates—Sam Brown in Nevada, David McCormick in Pennsylvania, Bernie Moreno in Ohio, and Tim Sheehy in Montana—through donations to the conservative super political action committee  Sentinel Action Fund.

Matching Crypto Donations

Multicoin’s support will depend on the outcome of Sentinel’s crypto donation drive. According to Sentinel’s website, Multicoin will match 100% of Solana (SOL) token donations sent to the PAC by July 14. Gemini is hosting the group’s crypto donations portal, accepting a variety of tokens, including SOL.

“We’re doing this because we realize that political engagement matters, and it starts with supporting the candidates who believe America needs to remain free for innovation,” said Multicoin Managing Partner Kyle Samani.

Bipartisan Support for Crypto-Friendly Candidates

Multicoin Capital, along with its leaders Kyle Samani and Tushar Jain, has previously supported pro-crypto candidates across party lines. Despite donating to Sentinel, a conservative group, Multicoin identified Sentinel as aligned with its crypto interests due to the specific candidates it is backing this cycle. All four Republican candidates supported by Sentinel have received “A” ratings from the Coinbase-led crypto advocacy group Stand With Crypto.

Candidate Ratings

While the opponents of these candidates are not uniformly critical of cryptocurrency, three out of four are rated as “neutral” or better by Stand With Crypto. However, Ohio Senator Sherrod Brown has received an “F” rating, partly due to his strong opposition to the crypto industry.

Strategic Political Investment in Crypto

Multicoin’s decision to support these races is driven by a desire to flip the Senate to Republican control. This shift could alter the balance of power in agency appointments and other key areas where crypto companies intersect with the federal government, such as the courts.

Tech Rollout: Dialect’s “Blink” Technology

The matching pledge also serves as a high-profile test of Dialect’s newly debuted “Blink” technology. This technology allows users of X  to execute on-chain Solana transactions through their social media posts. Blink will enable Solana users to donate to Sentinel via X and prompt donors to fill out required Federal Election Commission documentation.

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The value of cryptocurrency stolen in hacks worldwide more than doubled in the first six months of 2024 compared to the same period last year, driven by a few large-scale attacks and increasing crypto prices, according to blockchain researchers at TRM Labs.

Surge in Crypto Theft

Hackers stole over $1.38 billion worth of cryptocurrency by June 24, 2024, compared to $657 million in the first half of 2023, TRM Labs reported. The median theft size was one-and-a-half times larger than the previous year.

Ari Redbord, global head of policy at TRM Labs, noted, “While we have not seen any fundamental changes in the security of the cryptocurrency ecosystem, we have seen a significant increase in the value of various tokens—from Bitcoin to ETH (Ether) and Solana—compared to the same time last year.”

Increased Motivation for Cybercriminals

Rising cryptocurrency prices have motivated cybercriminals to target crypto services more aggressively. The increased value of tokens means that successful hacks result in larger hauls for attackers.

Crypto prices have rebounded from their late 2022 lows following the collapse of Sam Bankman-Fried’s crypto exchange, FTX. Bitcoin hit an all-time high of $73,803.25 in March 2024.

Major Thefts

One of the largest crypto thefts this year was the $308 million worth of Bitcoin stolen from Japanese crypto exchange DMM Bitcoin. The company described the incident as an “unauthorized leak.”

Cryptocurrency companies are frequent targets for cyberattacks, but thefts of this scale remain relatively rare. In 2022, stolen cryptocurrency volumes were around $900 million, with a significant portion attributed to the over $600 million stolen from a blockchain network linked to the online game Axie Infinity. U.S. authorities have connected North Korean hackers to that theft.

North Korean Cyber Activities

The United Nations has accused North Korea of using cyberattacks to fund its nuclear and missile programs. North Korea has denied these allegations of hacking and cyberattacks.

Implications for the Crypto Industry

The significant increase in cryptocurrency thefts highlights the ongoing challenges the industry faces in securing digital assets. As the value of cryptocurrencies continues to rise, so does the incentive for cybercriminals to exploit vulnerabilities.

Conclusion

The first half of 2024 has seen a dramatic rise in cryptocurrency thefts, with hackers stealing more than double the amount taken in the same period last year. As the crypto market continues to evolve, the industry must remain vigilant and invest in robust security measures to protect against increasingly sophisticated cyber threats.

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Prices for major cryptocurrencies, as well as shares of Coinbase Global (NASDAQ:COIN) and MicroStrategy (NASDAQ:MSTR), slumped on Friday as the collapsed crypto exchange Mt. Gox began paying back creditors.

Nobuaki Kobayashi, the trustee for the Mt. Gox bankruptcy estate, announced that the estate has “made repayments in Bitcoin and Bitcoin Cash to some of the rehabilitation creditors through a part of the Designated Cryptocurrency Exchanges etc. in accordance with the Rehabilitation Plan.” He noted that other creditors would be “promptly” repaid once certain conditions were met, ensuring that payments could be made “safely and securely.”

Bitcoin and Ether Prices Drop

As of 10:45 a.m. ET Friday, Bitcoin (BTC) was trading around $55,700, down roughly 2.4%. Ether (ETH) was also down about 3.4%. The anticipation of the Mt. Gox news, which Kobayashi indicated last month would occur in July, had already begun to impact the crypto market. The latest announcement sent Bitcoin to its lowest level in five months.

Mt. Gox Hack and Its Aftermath

Mt. Gox was once the world’s largest crypto exchange, handling 70% of Bitcoin transactions at its peak. A hack in 2014, which resulted in the loss of an estimated 740,000 Bitcoin, led to the exchange’s collapse. The ongoing repayments to creditors have continued to create uncertainty in the market.

Impact on Coinbase and MicroStrategy

The repercussions of the Mt. Gox repayments have also been felt by Coinbase and MicroStrategy. Coinbase reported $935 million in revenue from customer crypto trading in the first quarter, double what it was in the fourth quarter. MicroStrategy disclosed in its first-quarter financial report that it owns 214,400 Bitcoin.

As of 10:45 a.m. ET Friday, Coinbase shares were down about 5% to $213.87, while MicroStrategy shares fell more than 6% to $1,220.11. Despite these declines, shares of Coinbase and MicroStrategy have surged about 23% and 93% year-to-date, respectively.

Market Reactions and Future Outlook

The anticipation and realization of the Mt. Gox repayments have created significant volatility in the crypto market. Investors are closely watching how the repayment process will unfold and its potential impact on Bitcoin and other cryptocurrencies. The continued distribution of the Mt. Gox estate could lead to further fluctuations in the market.

Conclusion

The Mt. Gox repayment process has significantly impacted the crypto market, causing a notable drop in Bitcoin and Ether prices. Shares of Coinbase and MicroStrategy also experienced declines amid the news. As the repayment process continues, market participants will be keenly observing the developments and their implications for the broader cryptocurrency landscape.

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