tl;dr
We do not normally like to do this, but today we have two cautionary tales for you.
Market Snap
Market Wrap
I have nothing to say. There is so little going on of interest. That’s August for you.
Curious Cryptos’ Commentary – Another warning, I’m afraid
Another day. Another data hack. These matters are not confined to the decentralised world, but sometimes their impact is greater – one cannot reverse transactions that have been recorded in perpetuity on the blockchain.
SafePal (the name is asking for trouble) is a non-custodial wallet provider that also sells hardware wallets backed by Binance and Animoca Brands. Online wallets provide convenience but not the security of a hardware wallet. I use MetaMask unprotected by Ledger for some miner DeFi and other interactions but the value of the cryptos I would have there will always be minimal.
SafePal has identified a flaw that means customer details of nearly 40,000 users who placed orders between 2nd March last year and 11th April this year. Details include name, email address, shipping address, phone number, and purchase details.
Let’s be clear here, No seed phrases, private keys, wallet passwords, payment-card details, bank-account details, or government-issued ID documents were leaked.
The problem is that anyone on that list should expect to receive a torrent of phishing scams now, by email, and phone. I know of some people who have been subject to such scams and persuaded to input their seed phrase into a website to help “… secure the crypto assets”. We know how that turns out.
I know none of us think that could happen to us but trust me it does, all the time. These feral scumbags are great actors and salespeople. I always have fun with them, teasing them with my pretend naivety until they catch on, but to be fair, the best advice is always, always, put the phone down. After perhaps a brief period of name-calling, the details of which I cannot share in a family-friendly publication.
Curious Cryptos’ Commentary – USDT
USDT, the biggest and baddest of USD stablecoins, has been a phenomenal success, making its founders billionaires many times over. The business model is simple, take in cash, issue USDT, invest the proceeds, and any interest earned is paid to the very few people who work at Tether.
I have no problem with any of that. It is more that stablecoins should have collateral of more than 100% invested in cash or cash-like securities. That is what the GENIUS Act mandates, and it is the only sensible option for anyone who cares for the crypto revolution over and above simply enriching themselves.
Tether has reined in some of its more extreme assets that act as collateral, not least the private loans made to Chinese crypto-related entities, one of the most stupid financial decisions I have ever seen in my life.
Tether was recently audited by KPMG, though as a private company it isn’t obliged to divulge the details. And guess what? It hasn’t. Except for saying it has received an “unqualified opinion.”
As did Enron before its collapse. And Lehman Brothers. As did – for UK readers – Northern Rock, Bradford & Bingley, and HBOS. Tether’s reticence to supply the audit details should concern us all, not least because of CEO Paolo Ardoino’s reaction to criticism of his and his company's secrecy:
“Honestly, I don’t care”.