US Lawmakers Push Back On Proposed CFPB Rule, Highlighting Potential Crypto Impact

Here are some of the major developments from the world of crypto over the past few days.
some of the major developments from the world of crypto
some of the major developments from the world of crypto

US lawmakers, including Representatives Patrick McHenry, Mike Flood, and French Hill, are pushing back against a proposed rule from the Consumer Financial Protection Bureau (CFPB), citing potential implications for the cryptocurrency space. Leaders of the US House Financial Services Committee and Subcommittee on Digital Assets, Financial Technology, and Inclusion are requesting an extended comment period to assess the unclear impact of the November 2023 proposal. The rule seeks to expand the CFPB's supervisory authority to cover depository institutions, encompassing digital assets in its definition of "funds" and targeting wallets. Concerns centre around the lack of clarity for crypto exchanges, potentially discouraging peer-to-peer transactions through wallets hosted on these platforms.

In a letter to CFPB Director Rohit Chopra, the lawmakers emphasized the need for precision in applying the proposal to specific entities within the digital asset ecosystem. They expressed worries that capturing certain digital asset wallet providers, without ongoing relationships with consumers, could introduce regulatory risks. The representatives urged the CFPB to avoid pursuing a broad definition and call for an additional 60 days for public comments on the proposal, particularly to gather feedback regarding its impact on the crypto industry. The Crypto Council for Innovation has also raised concerns about regulatory fragmentation and suggested waiting for Congress to establish a more suitable regulatory framework for the digital asset space. The lawmakers' request for an extended comment period reflects the growing scrutiny and calls for clarity in regulatory measures affecting the cryptocurrency sector.

Traders pumped and dumped another 'JUP' during the $700M Jupiter airdrop

During the recent $700 million airdrop for the Solana-based exchange aggregator Jupiter, a trading frenzy ensued, leading to a situation where some traders speculated on the wrong token. Notably, a seven-year-old defunct Ethereum-based protocol named Jupiter (JUP) briefly experienced a surge, possibly due to confusion with the ongoing airdrop. On January 31, just before the launch of Solana-based Jupiter's "JUP" airdrop, the price of the Ethereum-based JUP token spiked by over 430%, reaching $0.026 from $0.005 on January 30. However, this surge was short-lived, and the token quickly dropped back to its current value of $0.007. It appears that the similar ticker names contributed to the misunderstanding.

While the Ethereum-based Jupiter protocol, launched in 2017, is inactive, the Solana-based Jupiter operates as a decentralized exchange aggregator for the Solana network. The confusion around the token names led to speculative trading on the outdated Ethereum-based JUP, highlighting the challenges associated with similar ticker symbols across different blockchains, particularly during high-profile events such as airdrops. Despite the confusion, the Solana network successfully executed one of the largest airdrops, handling 2.5 million non-vote transactions in the first 2.5 hours of the Jupiter claims going live. Solana Foundation's head of strategy, Austin Federa, praised the network's performance, even in the face of significantly spiked gas fees, jokingly referred to as the "astronomical fee" of 0.01 SOL, or roughly $1.02 at current prices. Despite some reported issues with third-party apps during the airdrop, 41% of eligible wallets have claimed their JUP tokens, representing 57% of the total airdrop allocation.

Argentina Drops Plans for Crypto Regulation in Milei's Economic Reform

Citizens of Singapore are being cautioned by authorities about the increasing threat of cryptocurrency drainers or wallet drainers, which have been employed in cyberattacks to pilfer funds from investors. In a collaborative advisory, the Singapore Police Force (SPF) and the Cyber Security Agency of Singapore (CSA) aim to heighten awareness regarding these cyber threats. Cryptocurrency drainers, a form of malware specifically targeting crypto wallets, are often utilized in phishing attacks to illegitimately extract funds without authorization. Of particular concern are 'commercial' crypto-draining kits that offer less experienced cybercriminals access to advanced malware at no upfront cost, with attackers adopting the drainer-as-a-service (DaaS) model, sharing a predetermined percentage of the stolen loot with the service provider.

The advisory from SPF and CSA details the typical modus operandi of crypto-drainer-related attacks, starting with phishing campaigns that may involve compromising influential social media accounts or distributing fraudulent emails to users from hacked databases of major service providers. Clicking on phishing links redirects victims to a counterfeit trading website, where they are prompted to connect their Web3 wallets. Subsequently, a malicious smart contract is injected into the victim's system, enabling hackers to withdraw funds without further authorization. While there have been no reported instances of such attacks in Singapore as per the advisory, concerns persist, given the recognition of these practices among hackers. Notably, the off-the-shelf crypto drainer known as MS Drainer contributed to hackers stealing $59 million worth of cryptocurrency in 2023.

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