There was a huge DeFi hack this week -- for more than $600 million -- on what is called the Ronin bridge, which is a way of connecting two blockchains (or in this case, a blockchain and a side chain).
The Ronin bridge hack wasn't your typical DeFi hack, however. It was something far more sophisticated.
On this Friday's episode of Unchained, Arjun Bhuptani, the founder of ConnextNetwork, explains what happened in this hack. He also explores why it is that there have been so many hacks of blockchain bridges recently, and what that says about the inherent security of bridges. We also unpack how bridges might be constructed with better security.
It's a fascinating show and one that might make you reconsider your use of bridges in crypto!
A 200-page proposal published by the US Securities and Exchange Commission on Tuesday could spell significant trouble for DeFi despite not mentioning DeFi once.
The SEC’s proposal would change the definition of a “government securities dealer” to include entities that provide more than $50 million in liquidity. While not written explicitly mentioning digital assets, the proposal could bring DeFi participants like automated market makers and liquidity providers under the jurisdiction of the SEC.
According to Delphi Digital’s Gabriel Shapiro, this “is an all-out shadow attack on decentralized finance” by the SEC.
Shapiro believes that the regulator’s proposal would characterize AMM liquidity providers as unregistered dealers, a felony in the US. “SEC will argue that all AMM LPs are unregistered dealers. That would be like saying all Bitcoin miners are VASPs--if enforced, it would kill the tech. Many of us warned SEC could take this view, but never thought they'd secretly rewrite the rules to avoid having to prove it,” Shapiro argued.
Blockchain Association’s Jake Chervinsky had a similar take on Twitter. “The SEC just proposed a rule that would expand the definition of regulated 'dealers' to include people who "employ passive market-making strategies" that have "the effect of providing liquidity" to others.”
In addition to this week’s 200-page proposal, The DeFi Education Fund (DEF), which was somewhat infamously spun out of Uniswap’s treasury, took to Twitter to warn against a 591-page proposal that includes “danger signs” for DeFi. In a nutshell, while DEF is unsure what the final implications of the proposal would be if passed, the proposal has the potential to “require any organization, association, or group of persons that 'makes available' a 'communication protocol system' (CPS) to comply with financial regulations designed for organizations like the New York Stock Exchange if the CPS allows people to interact and agree to terms of a trade.”
DEF pointed out, “The language is so broad that even the proposal itself clarifies web chat providers like Facebook Messenger and utilities like cell phones—which could meet the novel definition of a CPS—would not be required to register as securities exchanges.” The public has until April 18th to comment – which DEF, along with other crypto lawyers, has been promoting quite hard on Twitter.

Ryan Selkis's response to SEC chair Gary Genlser on Twitter this week epitomizes the industry's feelings towards the regulator.
As covered in this week’s episode of Unchained with Do Kwon, Luna Foundation Guard is converting a $3 billion treasury into bitcoin with the express purpose of building a forex reserve for Terra’s algorithmic stablecoin UST.
This week, CoinDesk was able to confirm Luna Foundation Guard’s BTC wallet. According to blockchain data, the wallet currently holds over 30,000 BTC, worth well over $1 billion. BitInfoCharts data shows that LFG is now the 29th largest Bitcoin address. However, as noted on Unchained and elsewhere, LFG has plans to expand its bitcoin holdings to $10 billion and wants to become the second-largest holder of bitcoin outside of Satoshi.

Source: Frank Chapparo
Not to be outdone by Terra, software firm MicroStrategy announced that one of its subsidiaries, cheekily named MacroStrategy, closed on a $205 million loan from Silvergate Bank to buy more bitcoin using its already purchased bitcoin as collateral. MicroStrategy reported having 125,051 BTC on its balance sheet in February 2022, to which this $205 million loan will add to.
Solana NFTs will soon be listed on OpenSea, the largest NFT marketplace by volume, this month. The news was revealed by OpenSea on Tuesday by OpenSea’s Twitter account. No specific date was given – only that support would go live in April.

Source: Trading View
SOL, Solana’s native token, is up 25%+ on the week, with the chart showing a marked push from $110-$120 in the day following the OpenSea announcement. The total market cap of Solana NFT projects also experienced a nice bump, jumping 12.38% on Wednesday to $1.7 billion, according to Hyperspace.xyz.
Crypto: Worldwide Regulation Roundup
Checking in on Europe
On Thursday, the European Union began another set of negotiations on its Markets in Crypto Assets (MiCA) regulatory package. MiCA aims to simplify the expansion of crypto businesses throughout the EU by standardizing rules for crypto issuers, service providers, and stablecoins. MiCA recently made headlines after a PoW ban was inserted in Parliament before getting cut from the package at the last moment.
In related European news, two committees in European Parliament voted on amendments that could potentially block EU-based crypto exchanges and service providers from interacting with crypto addresses they cannot identify on Thursday. As of recording time, Patrick Hansen, head of strategy and biz dev at Unstoppable DeFi, reports that the committees will vote in favor of a “crackdown” on unhosted wallets. Hansen says, however, that the final vote will take a few months to occur and that he is “optimistic that we can still achieve changes.”
2. India's New Tax Law
India passed a capital gains law that will see crypto gains taxed at a rate of 30% starting April 1st. In addition, Indian citizens will pay a 1% tax deducted at source on every purchase or sale of crypto, as well as taxes on crypto gifts, beginning July 1st. Furthermore, taxpayers will not be able to take deductions on losses.
Nishal Shetty, the co-founder of India’s largest exchange WazirX, told CoinDesk that this was a big mistake. “This is not conducive for the government or the crypto ecosystem of India. It is poised to do more harm than good," said Nischal Shetty. “This can result in cascading participation on Indian exchanges and lead to a rise in capital outflow to foreign exchanges," added Shetty.
3. Coinbase's Latest Rule Is...
Coinbase Global will soon require customers in Canada, Japan, and Singapore sending crypto to other exchanges to provide the name and address of the recipient. When asked for a response, here is what Coinbase had to say to CoinDesk:
“While we will always advocate for what we think the laws should be, we must respect the laws that exist if we want to offer the suite of Coinbase services to customers in that country. I also want to make it clear that these changes, as outlined in our FAQ, only apply to Canada, Singapore, and Japan, where the laws require us to collect additional information. We are not applying this globally to customers.”
The new rules will take effect in early April.
BNY Mellon, one of the oldest banks in the US, has agreed to be the primary custodian for USDC’s reserve assets. Notably, BNY Mellon’s crypto custody unit is powered by crypto infrastructure firm Fireblocks. As of press time, there are over 50 billion USDC in circulation.
On Wednesday, the Ministry of Transformation of Ukraine launched an NFT collection of 2182 pieces of art via the MetaHistory NFT Museum. Each NFT was drawn by a Ukrainian artist and depicts an event from the war.

While Ukraine had previously hinted that an NFT drop would take place, it was confirmed for the first time on March 25th by Ukraine’s Mykhailo Fedorov. “While Russia uses tanks to destroy Ukraine, we rely on revolutionary blockchain tech. @Meta_History_UA NFT-Museum is launched. The place to keep the memory of war. And the place to celebrate the Ukrainian identity and freedom,” explained Fedorov on Twitter.
According to Meta History’s website, 100% of proceeds were sent directly to the ETH address of Ukraine’s Ministry of Finance. At .15 ETH/mint, this means Ukraine raised an additional 327.2 ETH, worth approximately $1,000,000, from, by all accounts, the first NFT drop spearheaded by a country. Despite the unprecedented backstory and previous success of Ukraine in leveraging crypto to fundraise, the NFTs were slow to mint. As of Thursday morning, the collection has yet to sell out.
Mark Karpeles, the former CEO of Mt.Gox, is dropping a collection of 1,066,097 NFTs on Ethereum, with each NFT commemorating (and readily able to claim by) a single account from Mt. Gox once the individual has gone through a verification process. Mt. Gox was famously hacked in 2014 for roughly 850,000 BTC – which are now worth $40 billion.
“Owning a MtGox NFT proves you’re OG. You were there in the early days of Bitcoin, and now you can prove it on the blockchain,” explains the website.
In other weird OG news, Ripple co-founder Chris Larsen is launching an attack on Bitcoin’s proof-of-work consensus mechanism and has funded a $5 million campaign to convince Bitcoiners to “Change the Code, ‘Not the Climate,” or, in other words, move to proof-of-stake. Bitcoiners, not surprisingly, did not take kindly to the intrusion, as exemplified by BTC mining expert Zack Voell:
“Chris Larsen of Ripple is funding a $5M ad campaign advocating for Bitcoin switching to Proof of Stake. I guess the only thing I have to say is: Fuck off, Chris.”

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Cover photo: Original photo --> Reuters, Meme --> Unchained intern.