1. Poly Network hacked for $611M

The Facts:

• Poly Network, a cross-chain protocol, was hacked for $611 million worth of cryptocurrencies.
• According to blockchain security firm SlowMist, they were able to identify the hacker.
• The hacker has since returned $256 million to addresses set up by the Poly Network team.

Why it’s important:

• This was the largest DeFi exploit to date.
• The hacker started moving funds around shortly after the hack and received multiple messages through transactions on Ethereum as a primary means of communications. They also did a “Q&A”, outlining some of the motifs behind the hack.

2. Tether publishes Assurance Opinion

The Facts:

• Tether has published an assurance opinion by accounting firm Moore Cayman.
• The report breaks down Tether’s reserves backing their stablecoin USDT.
• As of June 30, Tether holds around $30 billion of commercial paper and CDs, with maturities of up to 365 days with ratings mostly between A-3 and A-1.

Why it’s important:

• Tether’s new report provides further clarity as to the assets backing USDT, which has long been unclear.
• The commercial paper is significant in size. While the exact counterparties are not disclosed, they might be – for example – crypto exchanges that facilitate trading against USDT.

3. Arbitrum opens up to users

The Facts:

• Arbitrum, a second layer scaling solution, is opening up to users in August.
• Over 400 projects have obtained mainnet access, with many already completing deployment.
• During the early phases, users should still be prepared for occasional downtime and outages.

Why it’s important:

• Second layer scaling solutions are a crucial part of being capable to onboard more users and handle their demand.
• Arbitrum is set up to closely match data formats and instruction sets of Ethereum to facilitate easy transition from Ethereum to Arbitrum while maintaining security. It will be interesting to see how much early adopter protocols benefit from the additional scalability provided by an L2.

4. BitMEX and Poloniex settle

The Facts:

• BitMEX has agreed to pay $100 million to settle charges brought up against the derivatives exchange by the CFTC and FinCEN.
• Part of the reason for the lawsuit against BitMEX was the lack of proper KYC measures, which BitMEX has since added to its platform.
• Poloniex settled with the SEC by paying more than $10 million for charges of running an unregistered digital asset exchange.

Why it’s important:

• BitMEX, once the leader in the Bitcoin derivatives space, has declined in trading volume after it was charged by the CFTC and competitors started to emerge.
• Poloniex, acquired by Goldman Sachs-backed Circle in 2018 and sold again 18 months later to undisclosed Asian investors, has also lost relevance over the past years, potentially due to competitors in the altcoin space such as Binance.

5. U.S. infrastructure bill passed without amendments

The Facts:

• The U.S. infrastructure bill, which includes paragraphs related to the crypto, passed through the Senate without amendments.
• In the original text, the definition of a “broker” extends beyond persons that facilitate buying, selling or trading of digital assets and might include entities such as miners or validators.
• The amendment needed unanimous support – but a single senator objected to the amendments despite broad bipartisan agreement.

Why it’s important:

• The current text imposes reporting requirements on parties that have no chance at identifying any counterparties, such as a miner validating a block of transactions.
• The new regulations would likely not go into effect until 2023.

In other news

• VanEck tries again for Bitcoin Strategy ETF with SEC (via CoinDesk)
• Venmo launches crypto cashback for credit cards (via The Block)
• Coinbase crushes Q2 earnings expectations (via TechCrunch)