13 hours ago
In a fascinating turn of events in the crypto world, leading crypto exchange Bybit has officially requested DeFi protocol Paraswap to return fees amounting to 44.67 wETH. This sum, valued at approximately $100,000, was earned by Paraswap from swaps that are allegedly linked to the infamous Lazarus Group’s audacious hack on Bybit. This bold proposal has ignited a vigorous debate within the Paraswap Decentralized Autonomous Organization (DAO), highlighting a fundamental tension within the DeFi space. Let’s dive into this contentious situation and understand the core issues at play. Why is Crypto Exchange Bybit Asking for the Return of Fees? The request from crypto exchange Bybit is rooted in the aftermath of a security breach attributed to the Lazarus Group, a notorious cybercriminal organization with alleged ties to North Korea. Following the hack, Bybit traced some of the stolen funds moving through the DeFi ecosystem, eventually leading to swaps executed on Paraswap. While Paraswap itself was not compromised, it inadvertently processed transactions involving illicitly obtained funds and, as a result, earned fees from these swaps. Bybit argues that these fees are essentially proceeds of crime and should be returned. To put it simply, Bybit’s perspective is: Stolen Funds: Lazarus Group hacked Bybit and stole cryptocurrency. Funds Traced: Some stolen funds were used for swaps on Paraswap. Paraswap Earned Fees: Paraswap collected transaction fees from these swaps. Ethical Obligation: Bybit believes Paraswap should return these fees due to their origin in a criminal act. This situation raises a critical question: Does a DeFi protocol have an ethical or even legal obligation to return fees earned from transactions linked to criminal activity, even if the protocol itself was not involved in the crime? The DeFi Governance Dilemma: Code is Law vs. Industry Solidarity The proposal has thrown the Paraswap DAO into a complex DeFi governance dilemma. On one side, there’s the argument for industry solidarity and responsible behavior. Proponents of returning the funds emphasize that: Industry Reputation: Returning the fees would demonstrate a commitment to ethical conduct within the crypto space and enhance the reputation of both Paraswap and the broader DeFi sector. Regulatory Scrutiny: Ignoring such requests could attract negative attention from regulators, who are increasingly concerned about illicit activities in crypto. Cooperating could be seen as a proactive step towards compliance and responsible innovation. Moral Imperative: Some DAO members believe there’s a moral obligation to not profit from criminal activities, even indirectly. Keeping the fees could be perceived as condoning or benefiting from the Lazarus Group hack. However, a significant portion of the Paraswap DAO is pushing back, citing DeFi’s core principle: “code is law.” Their arguments revolve around: Code is Law: This principle asserts that smart contracts execute exactly as programmed, and there’s no room for subjective interpretation or intervention after the fact. Paraswap’s code functioned as intended, processing transactions and collecting fees. Dangerous Precedent: Returning the fees could set a dangerous precedent, potentially opening the floodgates for similar requests in the future. Where do you draw the line? If Paraswap returns fees this time, what prevents other exchanges or victims of crime from demanding fee returns whenever illicit funds are traced through DeFi protocols? Immutability and Decentralization: Demanding retroactive changes based on off-chain events undermines the immutability and decentralized nature of DeFi. It could create uncertainty and erode trust in the system. Past Precedent: A similar situation arose in 2013 where Paraswap (or its predecessor) refused to return processing fees in a comparable scenario. Some DAO members are referencing this historical precedent as a reason to maintain consistency and deny Bybit’s request. This clash of ideologies – industry solidarity versus the rigid application of “code is law” – perfectly encapsulates the ongoing evolution of DeFi governance and its grappling with real-world ethical and legal complexities. Lazarus Group Hack: Understanding the Scale and Impact To fully grasp the context of Bybit’s request, it’s essential to understand the nature of the Lazarus Group hack . The Lazarus Group is a sophisticated cybercriminal organization believed to be linked to North Korea. They are notorious for carrying out large-scale cyberattacks, often targeting financial institutions and cryptocurrency exchanges to generate revenue for the North Korean regime. Key aspects of the Lazarus Group and their activities include: Aspect Description Attribution Widely attributed to North Korea, although direct confirmation is often difficult to obtain. Targets Financial institutions, cryptocurrency exchanges, government agencies, and critical infrastructure. Motivations Primarily financial gain to support the North Korean regime, but also espionage and disruption. Tactics Advanced Persistent Threats (APTs), phishing, malware, social engineering, and supply chain attacks. Impact Billions of dollars stolen, significant financial losses for victims, and reputational damage. The hack on crypto exchange Bybit is just one instance in a long history of Lazarus Group’s cybercriminal activities. These attacks not only cause direct financial harm but also undermine trust in the cryptocurrency ecosystem and raise concerns about security and regulation. Analyzing the Crypto Fees in Question: Is $100,000 Significant? The amount of crypto fees in question, 44.67 wETH (approximately $100,000), while significant, is relatively small in the context of major crypto hacks and the overall scale of DeFi transactions. However, the principle at stake is far more important than the monetary value. The debate is not just about $100,000; it’s about setting a precedent for how DeFi protocols should respond to illicit funds and criminal activities. Consider these points regarding the crypto fees : Symbolic Value: Even if $100,000 is a small fraction of Paraswap’s total revenue, returning it could send a powerful message about ethical conduct and industry responsibility. Precedent Setting: The decision in this case will likely influence future similar situations. A positive outcome for Bybit could encourage other victims to seek fee returns from DeFi protocols. A negative outcome could embolden those who argue for absolute adherence to “code is law,” regardless of ethical considerations. DAO Governance: This situation serves as a crucial test case for Paraswap’s DAO governance model. It will demonstrate how effectively the DAO can balance competing interests, ethical considerations, and the principles of DeFi. What are the Potential Outcomes and Actionable Insights? The Paraswap DAO is currently deliberating on Bybit’s proposal. Several outcomes are possible: Return of Fees: The DAO could vote to return the 44.67 wETH to Bybit. This would be seen as a victory for industry solidarity and ethical considerations, but could potentially set a precedent that some DAO members fear. Rejection of Proposal: The DAO could vote to reject Bybit’s proposal, citing “code is law” and the precedent argument. This would uphold the principle of immutability but could damage Paraswap’s reputation and attract negative scrutiny. Compromise Solution: The DAO might seek a compromise, such as donating an equivalent amount to a charity focused on cybercrime victims or contributing to a fund that supports blockchain security research. This could be a middle ground that addresses ethical concerns without directly contradicting the “code is law” principle. Actionable Insights for the Crypto Community: Enhanced Security Measures: This incident underscores the importance of robust security measures for all crypto exchanges and DeFi protocols to prevent hacks and illicit fund flows. Clearer Governance Frameworks: DeFi projects need to develop clearer governance frameworks that address ethical dilemmas and potential conflicts between “code is law” and real-world responsibilities. Industry Collaboration: Increased collaboration between centralized exchanges and DeFi protocols is crucial for combating cybercrime and ensuring the integrity of the crypto ecosystem. Regulatory Dialogue: Open dialogue with regulators is essential to establish a balanced regulatory framework that fosters innovation while mitigating risks and addressing illicit activities. Conclusion: A Defining Moment for DeFi The DeFi protocol Paraswap ‘s decision on Bybit’s request is more than just a vote on returning $100,000 in fees. It represents a defining moment for the DeFi space, forcing a critical examination of its values, principles, and responsibilities. The outcome will likely have far-reaching implications for DeFi governance , industry ethics, and the future relationship between decentralized protocols and centralized entities in the crypto exchange Bybit and wider ecosystem. As the debate continues, the crypto community watches closely, eager to see how this Lazarus Group hack fallout will reshape the landscape of decentralized finance and the handling of crypto fees derived from illicit activities. To learn more about the latest DeFi governance trends, explore our article on key developments shaping DeFi regulatory landscape.
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Crypto News bybit Crypto hack DeFi. Lazarus Group ParaSwap
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How Crypto Is Making It Easy for Investors to Get Visas to Portugal
Lisbon-based investment firm FundBox together with trading platform Kvarn X is launching the KvarnPortugal Fund, a first-of-its-kind crypto product based on the CoinDesk 20 index that helps people who invest at least 500,000 euros in the fund easily establish residency there. Here, Jason Dominic, the co-founder of KvarnPortugal, and Anders Bjorkman, an asset manager at the fund, discuss why many high-net worth individuals are flocking to Portugal now, and how their new fund makes it simple for them to create a back-up plan for today’s unpredictable world. Question: Can you tell us what the genesis of this product was? Jason: We realized that there`s this big evolution going on in Portugal around fintech and crypto and our fund also is eligible for the “Portuguese Golden Visa,” which grants residency rights to people who invest at least 500,000 euros in the country. So we thought, wouldn`t it be great if somebody could actually marry the two together and be able to appeal to this new market that’s emerging? So if you want to invest in bitcoin and the CoinDesk 20 index, we combined it into a unique fund where you put in the minimum amount for a Golden Visa, and then because it`s 100 percent invested through a Portuguese company, it is Golden Visa eligible. We partnered with the CoinDesk 20 index because that gives you a nice diverse spread. There`s a huge demand now for Portuguese residency via such an investment product, and the U.S. is the number one market in the world for Portuguese Golden Visas. And there`s also synergies with that in terms of the growth in crypto, especially with what`s been going on politically in America. Also in Asia, you`ve got China, which is the second-biggest market for Portuguese Golden Visas. Hong Kong also just officially embraced crypto with the massively attended CoinDesk Consensus event there. The financial secretary did an opening speech welcoming crypto businesses into the city, and in his new budget just announced, brought in new policies to achieve this. Hong Kong is expected to be a major hub for crypto assets over the next few years. Question: What’s so attractive about Portugal right now? Jason: In the last five to six years, Portugal has essentially become a Latin Switzerland. There’s been a real evolution of wealth moving into the country, along with growing entrepreneurship. And that`s to do with there being a restructuring of the economy post economic crisis, in which the government brought in all these new tax reforms and made it tax-free for people for ten years on certain overseas income, and made investments like crypto completely tax-free in many instances. So there`s a huge migration of wealth going on globally and Portugal is one of those main hubs, in addition to Dubai. Anders: There’s also a thriving crypto community here — a lot of Meetups, projects, etc and a lot of people involved in crypto around the Lisbon area. It’s the best place for crypto in all of Europe, if you ask me. Jason: The thing about ultra high net worth folks is they tend to need mobility. And if you look at how this product works, they only have to actually be in Portugal for 35 days over the course of five years, and then they`ll be eligible for permanent residency or a passport. It`s all blended into one product and it`s tax free, which is what they always look for. It’s for people who want to have a Plan B, or they want to have another residency without too many strings. Question: Why are many affluent people looking to establish residency elsewhere these days? Jason: This year is shaping up to be a record year for wealth migration. The latest studies expect about 142,000 ultra high net worth individuals to relocate out of mainly the U.S., China, the U.K., Brazil, India, South Africa and Vietnam. The reasons why are a mixture of things. One, there’s all this global instability, and it`s similar to how wealthy people used to have holiday homes; now they want to have a second passport option for the family. Also, maybe their governments are becoming very tax heavy, like what`s just happened in the U.K. In the last few months, for example, over 10,000 multi-millionaires have left the U.K. mainly because of the tax regime changes with the Labour government. In China, it has to do with geopolitical shifts and the desire to diversify into other assets. With Covid and the lockdown that went on there for almost two years, a lot of ultra high net worth individuals in China want to have the option, if it happens again, to be able to get on a plane and go to Europe and not have to worry about getting a visa. In the U.S., it`s to do with what`s been going on politically because things have become so polarized. People just want to have a safe exit strategy if they need one. So it`s basically to do with what`s going on globally — the world`s just become way more unpredictable and unstable. Portugal is now a well established safe haven. Question: How does FundBox, the manager of the KvarnPortugal Fund, differentiate itself from its rival asset managers?We`re very careful with onboarding clients. We make sure that everything`s done properly with due diligence, following all the regulations of the Portuguese regulator. It doesn`t matter where you`re from and how much money you`ve got — if you don`t fit the legal criteria, then you`re simply not allowed to invest. There is a big team. There`s about 33 people in the office and it`s a multidisciplinary company. So we have lawyers, compliance officers, the onboarding team, etc. in addition to the investment managers. Question: Do you have to be a Golden Visa candidate to invest in your fund?No, the fund is not just open to ultra high net worth individuals. The minimum investment is 100,000 euros. So it`s run similar to an ETF like BlackRock’s, for example, where you can put in lower amounts. And if you want to just sit there and have your crypto investment fully managed, then it`s an easy way to do that. For more information visit: https://www.kvarnportugal.com/ . Authors` views and opinions are their own and not associated with CoinDesk Indices. The interview was conducted by CoinDesk Indices and is not associated with CoinDesk editorial. Bitcoin World
Zircuit Launches Garfield Testnet with Cancun and Pectra Opcodes, Enhanced Prover
George Town, Grand Cayman, March 5th, 2025, Chainwire Zircuit is rolling out Garfield, its latest testnet, launching the week of February 24, 2025. This upgrade introduces full support for all Cancun opcodes, prepares for the Pectra upgrade, and delivers a high-performance prover capable of proving all blocks more efficiently. Garfield Testnet: Advancing Ethereum Scaling The Garfield testnet serves as a crucial testing ground for Pectra-related updates, set for Zircuit mainnet integration in March 2025. Key improvements include: Full Cancun Opcode Support – Developers can leverage the latest Ethereum Virtual Machine (EVM) enhancements for building and testing applications. Pectra Compatibility – Garfield is structured to designed to accommodate Pectra upon its activation on Ethereum seamlessly Enhanced Prover – A new, more powerful prover capable of validating all blocks, enhancing speed and scalability. Testing of the Proving Cluster – Garfield enables rigorous optimization and evaluation of Zircuit’s proving infrastructure. EIP-7702 Readiness – The testnet is equipped for EIP-7702, with a targeted update planned in the coming days. New Network, Fresh Setup Required Garfield is a brand-new network with no prior testnet history. Developers must update their configurations, including a new chain ID and RPC endpoint. The testnet features a dedicated bridge front end and block explorer: Chain ID: 48898 RPC Endpoint: https://garfield-testnet.zircuit.com Block Explorer: https://explorer.garfield-testnet.zircuit.com Bridge URL: https://bridge.garfield-testnet.zircuit.com All relevant details will be published in the official documentation before launch. Transition Plan: Sunsetting of Current Testnet The existing Zircuit testnet will sunset on May 31, 2025. Users must withdraw any Sepolia ETH or testnet assets before the transition. An escape hatch will be activated before sunset, allowing withdrawals after May 31, 2025. Garfield Update Coming to Zircuit Mainnet Zircuit will implement Garfield updates on the mainnet in March 2025, ahead of Pectra’s Ethereum mainnet activation. This transition will occur seamlessly, with no anticipated downtime or user action required. For real-time updates, users can follow @ZircuitL2 on X or join their Discord . Mainnet Enhancements: Faster RPC, Upgraded Explorer, and Improved Bridge Alongside Garfield, Zircuit is introducing significant improvements: New RPC Endpoints – A high-speed, low-latency RPC service enhancing stability. While current endpoints remain active, users are encouraged to migrate. Block Explorer Enhancements – Sourcify integration enables easier smart contract verification, boosting transparency. Revamped Bridge – The withdrawal process is streamlined, with further optimizations planned. Escape Hatch Deployment – An escape hatch feature will be connected to Testnet 1.0 before its sunset, ensuring decentralized permissionless withdrawals from Zircuit forever in case the sequencer is not available. Mainnet will be equipped with this functionality right after testing. Looking Ahead Zircuit remains committed to continuous innovation and seamless user experience. With the Garfield testnet, developers gain access to cutting-edge Ethereum upgrades, while users benefit from a faster, more robust mainnet infrastructure. More details, including EIP-7702 support and prover optimizations, will be shared soon. About Zircuit Zircuit : Where innovation meets security, designed for everyone. Zircuit offers developers powerful features while giving users peace of mind. Designed by a team of web3 security veterans and PhDs, Zircuit combines high performance with unmatched security. Experience the safest chain for DeFi and staking. To learn more about Zircuit, users can visit zircuit.com , and follow their Twitter/X @ZircuitL2 Contact Head of Communications Jennifer Zheng jen@zircuit.com Bitcoin World
