Crypto News Digest: TON Outages, Celsius Payouts & Russia’s Crypto Shift

August 30, 2024

Crypto World

Maciej Zerelik

Stay informed with StealthEX and CryptoDaily! This week, we bring you the biggest news in the cryptocurrency world. Want to know the latest trends? Our digest delivers clear insights, fresh takes, and the latest updates in the crypto space. Stay ahead with our brief yet comprehensive coverage, so you’re always up to date on the crypto scene.

TON Blockchain Faces Consecutive Outages, Raising Concerns

The TON blockchain, which powers the Toncoin (TON) cryptocurrency, encountered two major outages within a span of 24 hours, causing significant disruptions. The issues were attributed to an overload stemming from the minting of the DOGS token, leading to a complete halt in block production for over three hours.

The first disruption started during Asia trading hours on Wednesday, lasting about seven hours. This outage was triggered by the heavy traffic generated by the DOGS token airdrop, which overwhelmed the network. Despite the severity of the issue, Toncoin’s price showed resilience, experiencing only a minor 2% drop immediately following the incident.

Less than a day later, the network faced another outage, beginning at 19:19 UTC. The TON Core team responded by urging mainnet validators to restart their nodes. Despite these efforts, the network struggled to resume normal operations.

In the wake of these disruptions, Toncoin’s price remained relatively stable, with only a slight decline of 0.99% over four hours and a 4% decrease over 24 hours. 

Celsius Network Distributes $2.53 Billion to Creditors in Major Bankruptcy Milestone

Celsius Network’s bankruptcy administrator has successfully distributed over $2.53 billion to about 251,000 creditors. This marks a crucial step in resolving one of the most significant cryptocurrency bankruptcy cases in recent years. The payouts were made in both liquid cryptocurrency and cash, aiming to address the financial crisis that has plagued the defunct lending platform.

As of August 2024, the distribution has covered roughly two-thirds of all eligible creditors by number, representing 93% of the total value owed. The valuation of these assets was based on prices as of January 16. The distribution is part of an ongoing effort to ensure all eligible creditors receive their due share, a process expected to continue over the coming months.

The case, one of the most complex Chapter 11 proceedings in the crypto industry, involves distributing assets to approximately 375,000 creditors spread across more than 165 countries. The process has required careful coordination over the past seven months, with the administrator working closely with advisors to facilitate distributions through platforms like Coinbase, PayPal, and Venmo.

Despite significant progress, 121,000 eligible creditors have yet to claim their distributions. Many of these unclaimed amounts are relatively small, potentially deterring creditors from completing the necessary steps to receive their funds.

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Phishing Attack on Crypto Whale Leads to $55 Million Theft in Dai Tokens

A sophisticated phishing attack has resulted in the theft of approximately $55 million worth of Dai tokens from a prominent crypto whale. The attack, reported by blockchain analytics firm Lookonchain and cybersecurity experts at CertiK, was carried out by an entity known as “Fake_Phishing187019.” 

On August 20, 2024, at 5:40 PM UTC, the attacker exploited vulnerabilities in Externally Owned Accounts (EOAs) to steal 55,473,618 Dai tokens. The victim was tricked into signing a transaction that unknowingly transferred ownership of DSProxy #166,776 to a phishing address, setting the stage for the theft.

Once the attacker gained control, they swiftly minted and withdrew the stolen tokens. The stolen assets were then laundered through a series of complex transactions, starting with the transfer of $36 million to an unknown address, followed by $17.5 million routed through the CoW protocol. To further obscure the trail, the hacker exchanged the stolen Dai tokens for Ethereum (ETH) and Bitcoin via Uniswap V3, complicating efforts to trace and recover the funds.

CertiK identified the phishing technique as part of the “Inferno Drainer” category, a smart contract exploit that manipulates transaction permissions to redirect assets. This incident is part of a growing trend of cyberattacks in the Web3 space, where losses from breaches, hacks, and fraud incidents have surged. In the first half of 2024 alone, nearly $500 million were stolen through similar phishing attacks.

Russia Embraces Cryptocurrency for Cross-Border Trade Amid Sanctions

Facing increasing economic sanctions, Russia is turning to cryptocurrency to facilitate cross-border trade. Starting on September 1, 2024, the country will begin trials for cryptocurrency exchanges and the use of digital tokens in international transactions, a move spearheaded by the Finance Ministry. This initiative is designed to ease the economic strain on Russian businesses struggling to settle international trades due to Western sanctions.

The Russian government plans to launch two state-backed cryptocurrency exchanges, primarily aimed at facilitating trade with BRICS nations and other partners. Finance Minister Anton Siluanov has emphasized that these exchanges represent a shift away from reliance on the U.S. dollar. The Central Bank of Russia will oversee these platforms, ensuring that transactions are secure and comply with regulations. This strategy aligns with BRICS’ broader goal of reducing dependency on the U.S. dollar, a priority intensified by recent sanctions.

The trials will utilize the National Payment Card System, managed by the Central Bank of Russia since 2014. This system, known for handling domestic interbank payments and the Mir card network, will be key in testing ruble-cryptocurrency conversions. The use of this established infrastructure reflects the government’s cautious yet determined approach to integrating cryptocurrency into Russia’s financial systems.

The shift toward cryptocurrency comes as Russian businesses face increasing difficulties in paying international suppliers and receiving payments for exports. U.S. sanctions have isolated Russia from global financial systems, with Chinese banks also ceasing yuan payments to Russia. In response, Russia passed legislation in July 2024 to legalize crypto mining and establish a framework for digital tokens in cross-border transactions, solidified by President Vladimir Putin’s approval in August.

If successful, these trials could pave the way for the Moscow Exchange and St. Petersburg Currency Exchange to launch their own cryptocurrency platforms. As Russia remains excluded from the SWIFT banking system, cryptocurrency could become a crucial tool for sustaining international trade.

Kamala Harris May Signal Support for Cryptocurrency Industry Growth

A senior adviser to Kamala Harris’ presidential campaign has suggested that the Vice President might back policies aimed at fostering growth in the cryptocurrency industry, although specific details remain unclear. 

Brian Nelson, a key adviser to Harris’ campaign, emphasized her willingness to support policies that enable emerging technologies like cryptocurrencies to thrive. Nelson highlighted the need for clear “rules of the road” in the crypto sector, especially after high-profile incidents such as the collapse of the FTX exchange. This suggests Harris may advocate for a more structured regulatory environment, balancing the need to prevent industry mishaps while encouraging innovation.

While Harris has not explicitly stated her position on cryptocurrency, her campaign team has been engaging with key figures in the industry, including companies like Coinbase, Circle, and Ripple Labs. This outreach has drawn support from various crypto community members, with notable endorsements coming from figures like J.P. Thieriot, former CEO of Uphold. In a virtual town hall on August 14, crypto advocates discussed how Harris might support the industry if elected, with Senate Majority Leader Chuck Schumer hinting at potential pro-crypto legislation by 2025.

Harris’ potential support for the crypto industry is seen as a possible shift from the Biden administration’s approach, which some in the tech sector view as restrictive. However, despite these signals, Harris’ campaign has been cautious in publicly defining its stance on digital assets and blockchain technology.

This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.