Crypto Three Things (8/9)
Aug 9, 2022
“They always say time changes things, but you actually have to change them yourself.” —Andy Warhol
1) U.S. Treasury cracks down on Tornado Cash: The Treasury Department imposed sanctions on Tornado Cash – a crypto mixer used to obscure transactions that would otherwise be traceable on public ledgers. The blacklisting, which now bars Americans from using the service, was prompted by allegations that the service laundered more than $7B since its founding in 2019 and has also helped North Korean hackers evade U.S. penalties.
Titan’s Takeaway: Sanctions against Tornado Cash highlight the administration’s effort to prevent criminal activity related to cyberattacks and money laundering. Besides cleansing illicit funds, however, the platform was also used as a legitimate way for users to protect their privacy – a need that will now have to be met elsewhere.
2) Hodlnaut freezes customer withdrawals: Hodlnaut, a cryptocurrency lender operating in Singapore and Hong Kong, became the latest digital-asset company to suspend activity on its platform. Launched in 2019, the troubled firm handled roughly $100M from over 1,000 users and promised up to 7.25% annual percentage yield on token deposits. With clients currently unable to access their funds, Hodlnaut has vowed to provide an update on Aug. 19.
Titan’s Takeaway: Hodlnaut’s collapse is a reminder that the recent market rout is still haunting crypto players. This begs the question: if legacy banks are limited in their ability to offer high yields, how can a less liquid, more volatile organization like crypto advertise outsized returns?
3) Cashmere raises $3M to build secure Solana wallets: Cashmere, a crypto firm that offers enterprise wallet solutions for Solana users, closed its seed funding round, sealing a $30M valuation. The fundraise included Coinbase Ventures, FBG Capital, and YCombinator. Cashmere has taken up the challenging task of developing Solana wallet security for companies that hold their assets in online-based ‘hot’ wallets.
Titan’s Takeaway: In light of last week’s breach of Solana’s hot wallets that drained millions of dollars, Cashmere’s ambitions to bring institutional-grade security without relying on cold storage are commendable. This said, performance is a better indicator than headlines, and we will be watching to see if Cashmere’s ecosystem is as secure as they claim.
Cash Management
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