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šŸ‘‰After BNB Chain Hack, Operators Must Face Question of DecentralizationšŸ‘ˆ
Lack of automated response to security incidents in crypto space must be addressed, blockchain security firm exec says
October 08, 2022
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(Dinarian Note: All the World's a Stage and there are NO COINCIDENCES!

All Roads Lead To Regulation and Control by BIG One World Government and their New Technology, AI (Artificial Intelligence))

  • BNB Chain contacted community validators to stop incident from spreading
  • ā€œEither be fully decentralized, or be centralized enough to have responsibility for responding to security incidents,ā€ OpenZeppelin head of solutions architecture says

Following attackers exploiting Binance’s BNB ChainĀ and withdrawing 2 million BNB, šŸ’„the crypto industry is now grappling with questions of decentralization,šŸ’„ responses to security incidents and the prevalence of hacks.

Operators and protocols in the space must choose to become fully decentralized or be better prepared to respond to hacks, said Michael Lewellen, head of solutions architecture at blockchain security firmĀ OpenZeppelin.

BNB Chain saidĀ in a statement FridayĀ that the latest exploit affected BSC Token Hub — the native cross-chain bridge between BNB Beacon Chain and BNB Smart Chain.

Blockchain analytics unitĀ Chainalysis estimated in AugustĀ that $2 billion worth of crypto had been stolen across 13 cross-chain bridge hacks. Attacks on bridges accounted for 69% of total funds stolen this year, the company said at the time.

ā€œDecentralized chains are not designed to be stopped, but by contacting community validators one by one, we were able to stop the incident from spreading,ā€ BNB Chain said in a statement Friday.

BNB Smart Chain has 26 active validators and 44 in total, the network stated, adding that it seeks to expand the validators to boostĀ further decentralization.

Though BNB Chain reported ā€œthe vast majority of the funds remain under control,ā€ a spokesperson did not immediately return a request for further comment.Ā 

The latest hack is likely to spur operators to address the lack of automated response to security incidents in the crypto space, Lewellen told Blockworks.Ā 

Founded in 2015, OpenZeppelin has a platform allowing users to manage smart contract administration, such as access controls, upgrades and pausing. The company safeguards tens of billions of dollars in funds for organizations such as Coinbase and the Ethereum Foundation.

Keep reading for excerpts from Blockworks’ interview with Lewellen following the hack.

Blockworks:Ā What do you make of this latest hack on the BNB Chain?

Lewellen:Ā This is actually kind of a weird one, as this is a bug that was in a pre-compiled smart contract.

With Binance Chain, they were just adding a lot of features into the native protocol to support smart contracts, and that’s where the bug ended up coming in. So I think there needs to be a question of whether these sorts of changes should be in a native protocol. Maybe it should be contained within a smart contract and kept outside of the scope of the protocol because these things are risky.

We don’t know how the bug appeared inside of the protocol or its original source. But where code is — and the level of safety pieces of code have depending on what layer they’re in — need to be better.

These proof-of-authority chains and bridges kind of complicate that. It’s no longer a clear hierarchy. There’s now a lot of different layers happening in parallel that people need to be a lot more conscious of.Ā Ā Ā 

Blockworks:Ā How could the response to this hack have been better?

Lewellen:Ā While I think they responded well overall here, there’s a larger question of…was this really the best that could be done if that role was embraced.

I can’t speak to what the Binance Chain validator community does or how they coordinate or practice for these sorts of things…but they’ve obviously practiced it once now.

I’m speaking as someone from the outside, but seeing other DeFi projects respond to this as their client, I think there could be a lot more diligence and embracing the role of someone that has the ability to respond to security incidents.Ā 

And if they don’t have the role, they just need to be very up-front with that. Whether there’s a hesitancy to utilize it in some cases and maybe not in others, right now obviously it exists and I think it could be done better in the future if we learn a lot from this.Ā Ā Ā 

Blockworks:Ā Can you point to any examples of an effective automated instant response to a hack?

Lewellen:Ā We’re still in the early stages. I think we’re seeing teams that are getting better at detecting things and responding, but I think honestly these hacks have been occurring on bridges that I don’t think have been embracing that same level of due diligence.

I don’t think we’ve seen a good case for that. We know it’s possible, we’ve done the simulations at OpenZeppelin to know it’s feasible, and we’ve built tools to address it. But ironically I think the teams best prepared for that might be the teams that are least susceptible to being hacked in the first place.

The people that are being hacked the most are also the ones that I think are the least prepared to be hacked.

Blockworks:Ā What sorts of tools or practices should be used to quickly defend against hacks?Ā Ā 

Lewellen:Ā What [operators] really need is something that gives you immediate notification, or basically something that is watching everything on-chain…analyzing it and then determining, ā€œwere any risks exposed here?ā€

If large amounts of funds get moved, it’s probably fine and part of the day-to-day operations, but if it falls out of the norm…[it’s important to have] immediate notification of that.

If you can go further and detect things that should never occur, such as money moving out of a vault that should be locked or more tokens than what should be in the token supply existing…you know something’s happening. If not getting people immediately on call to respond, maybe even automating some of the ways that you might immediately cut down some of the exit ramps…or getting your validators to be ready to respond and maybe even doing drills with them.

Blockworks:Ā What is the key for operators as they seek to address security risks going forward?Ā 

Lewellen:Ā I think it’s going to be becoming a little bit more honest with the role of different operators and protocols and what the administrative powers are.Ā 

With the Ethereum blockchain, the way that Binance Chain responded would not have been possible for Ethereum, but Ethereum also creates this expectation that the chain isn’t going to step in and save you.

If you’re going to have that sort of approach where you have a network where people can respond, either embrace it or move away from it. Either be fully decentralized, or be centralized enough to have responsibility for responding to security incidents. Embrace the role fully by trying to be as prepared as possible and telling node operators for your network that this will be their responsibility.

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The future of Crypto x AI is about to go crazy.

šŸ‘‰ Here’s what you need to know:

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OP: Smqkedqg

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Musk Turns On Starlink to Save Iranians from Regime’s Internet Crackdown

Elon Musk, the world’s richest man and a visionary behind SpaceX, has flipped the switch on Starlink, delivering internet to Iranians amid a brutal regime crackdown.

This move comes on the heels of Israeli strikes targeting Iran’s nuclear facilities, as the Islamic Republic cuts off online access.

The former Department of Government Efficiency chief activated Starlink satellite internet service for Iranians on Saturday following the Islamic Republic's decision to impose nationwide internet restrictions.

As the Jerusalem PostĀ reports, that the Islamic Republic’s Communications Ministry announced the move, stating, "In view of the special conditions of the country, temporary restrictions have been imposed on the country’s internet."

This action followed a series of Israeli attacks on Iranian targets.

Starlink, a SpaceX-developed satellite constellation, provides high-speed internet to regions with limited connectivity, such as remote areas or conflict zones.

Elizabeth MacDonald, a Fox News contributor, highlighted its impact, noting, "Elon Musk turning on Starlink for Iran in 2022 was a game changer. Starlink connects directly to SpaceX satellites, bypassing Iran’s ground infrastructure. That means even during government-imposed shutdowns or censorship, users can still get online, and reportedly more than 100,000 inside Iran are doing that."

During the 2022 "Woman, Life, Freedom" protests, Starlink enabled Iranians to communicate and share footage globally despite network blackouts," she added.

MacDonald also mentioned ongoing tests of "direct-to-cell" capabilities, which could allow smartphone connections without a dish, potentially expanding access and supporting free expression and protest coordination.

Musk confirmed the activation, noting on Saturday, "The beams are on."

This follows the regime’s internet shutdowns, which were triggered by Israeli military actions.

Adding to the tension, Israeli Prime Minister Benjamin Netanyahu addressed the Iranian people on Friday, urging resistance against the regime.

"Israel's fight is not against the Iranian people. Our fight is against the murderous Islamic regime that oppresses and impoverishes you,ā€ he said.

Meanwhile, Reza Pahlavi, the exiled son of Iran’s last monarch,Ā called onĀ military and security forces to abandon the regime, accusing Supreme Leader Ayatollah Ali Khamenei in a Persian-language social mediaĀ postĀ of forcing Iranians into an unwanted war.

Starlink has been a beacon in other crises. Beyond Iran, Musk has leveraged Starlink to assist people during natural disasters and conflicts.

In the wake of hurricanes and earthquakes, Starlink has provided critical internet access to affected communities, enabling emergency communications and coordination.

Similarly, during the Ukraine-Russia conflict, Musk activated Starlink to support Ukrainian forces and civilians, ensuring they could maintain contact and access vital information under dire circumstances.

The genius entrepreneur, is throwing a lifeline to the oppressed in Iran, and the libs can’t stand it.

Conservative talk show host Mark Levin praised Musk’s action,Ā repostingĀ a message stating that Starlink would "reconnect the Iranian people with the internet and put the final nail in the coffin of the Iranian regime."

"God bless you, Elon. The Starlink beams are on in Iran!" LevinĀ wrote.

Musk, who recently stepped down from leading the DOGE in the Trump administration, has apologized to President Trump for past criticisms, including his stance on the One Big Beautiful Bill.

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šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
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Your generosity keeps this mission alive, for all! NamastĆ© šŸ™ Crypto Michael ⚔ Ā The Dinarian

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GENIUS Act lets State banks conduct some business nationwide. Regulators object

The Senate passed the GENIUS Act for stablecoins last week, but significant work remains before it becomes law. The House has a different bill, the STABLE Act, with notable differences that must be reconciled. State banking regulators have raised strong objections to a provision in the GENIUS Act that would allow state banks to operate nationwide without authorization from host states or a federal regulator.

The controversial clause permits a state bank with a regulated stablecoin subsidiary to provide money transmitter and custodial services in any other state. While host states can impose consumer protection laws, they cannot require the usual authorization and oversight typically needed for out-of-state banking operations.

The Conference of State Bank Supervisors welcomed some changes in the GENIUS Act but remains adamantly opposed to this particular provision. In a statement, CSBS said:

ā€œCritical changes must be made during House consideration of the legislation to prevent unintended consequences and further mitigate financial stability risks. CSBS remains concerned with the dramatic and unsupported expansion of the authority of uninsured banks to conduct money transmission or custody activities nationwide without the approval or oversight of host state supervisors (Sec. 16(d)).ā€

The National Conference of State Legislatures expressed similar concerns in early June, stating:

ā€œWe urge you to oppose Section 16(d) and support state authority to regulate financial services in a manner that reflects local conditions, priorities and risk tolerances. Preserving the dual banking system and respecting state autonomy is essential to the safety, soundness and diversity of our nation’s financial sector.ā€

Evolution of nationwide authorization

Section 16 addresses several issues beyond stablecoins, including preventing a recurrence of the SEC’s SAB 121, which forced crypto assets held in custody onto balance sheets. However, the nationwide authorization subsection was added after the legislation cleared the Senate Banking Committee, with two significant modifications since then.

Originally, the provision applied only to special bank charters like Wyoming’s Special Purpose Depository Institutions or Connecticut’s Innovation Banks. Examples include crypto-focused Custodia Bank and crypto exchange Kraken in Wyoming, plus traditional finance player Fnality US in Connecticut. Recently the scope was expanded to cover most state chartered banks with stablecoin subsidiaries, possibly due to concerns about competitive advantages.

Simultaneously, the clause was substantially tightened. The initial version allowed state chartered banks to provide money transmission and custody services nationwide for any type of asset, which would include cryptocurrencies. Now these activities can only be conducted by the stablecoin subsidiary, and while Section 16(d) doesn’t explicitly limit services to stablecoins, the GENIUS Act currently restricts issuers to stablecoin related activities.

However, the House STABLE Act takes a more permissive approach, allowing regulators to decide which non-stablecoin activities are permitted. If the House version prevails in reconciliation, it could result in a significant expansion of allowed nationwide banking activities beyond stablecoins.

Is it that bad?

As originally drafted, the clause seemed overly permissive.

The amended clause makes sense for stablecoin issuers. They want to have a single regulator and be able to provide the stablecoin services throughout the United States. But it also leans into the perception outside of crypto that this is just another form of regulatory arbitrage.

The controversy over Section 16(d) reflects concerns about creating a regulatory gap that allows banks to operate interstate without the oversight typically required from either federal or state authorities. As the two Congressional chambers work toward reconciliation, lawmakers must decide whether stablecoin legislation should include provisions that effectively reduce traditional banking oversight requirements.

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If you find value in my content, consider showing your support via:

šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
2) or visit https://www.paypal.me/thedinarian

šŸ”— Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! NamastĆ© šŸ™ Crypto Michael ⚔ Ā The Dinarian

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Dubai regulator VARA classifies RWA issuance as licensed activity
Virtual Asset Regulatory Authority (VARA) leads global regulatory framework - makes RWA issuance licensed activity in Dubai.

Real-world assets (RWAs) issuance is now licensed activity in Dubai.

~ Actual law.
~ Not a legal gray zone.
~ Not a whitepaper fantasy.

RWA issuance and listing on secondary markets is defined under binding crypto regulation.

It’s execution by Dubai.

Irina HeaverĀ explained:

ā€œRWA issuance is no longer theoretical. It’s now a regulatory reality.ā€

VARA defined:

- RWAs are classified as Asset-Referenced Virtual Assets (ARVAs)

- Secondary market trading is permitted under VARA license

- Issuers need capital, audits, and legal disclosures

- Regulated broker-dealers and exchanges can now onboard and trade them

This closes the gap that killed STOs in 2018.

No more tokenization without venues.
No more assets without liquidity.

UAE is doing what Switzerland, Singapore, and Europe still haven’t:

Creating enforceable frameworks for RWA tokenization that actually work.

Matthew White, CEO of VARA, said it perfectly:

ā€œTokenization will redefine global finance in 2025.ā€

He’s not exaggerating.

$500B+ market predicted next year.

And the UAE just gave it legal rails.

~Real estate.
~Private credit.
~Shariah-compliant products.

Everything is in play.

This is how you turn hype into infrastructure.

What Dubai is doing now is 3 years ahead of everyone else.

Founders, investors, ecosystem builders:

You want to build real-world assets onchain.

Don’t waste another year waiting for clarity.

Come to Dubai.

It’s already here.

Ā 

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šŸ™ Donations Accepted šŸ™

If you find value in my content, consider showing your support via:

šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
2) or visit https://www.paypal.me/thedinarian

šŸ”— Crypto – Support via Coinbase Wallet to: [email protected]

Or Buy me a coffee: https://buymeacoffee.com/thedinarian

Your generosity keeps this mission alive, for all! NamastĆ© šŸ™ Crypto Michael ⚔ Ā The Dinarian

Ā 

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