As the Ethereum Merge approaches to convert the network from a Proof-of-Work (PoW) consensus into a Proof-of-Stake (PoS) one, some Ethereum miners are calling for a hard fork that will split the chain to maintain a network using PoW.

As part of an investigation into instant personal loan fraud, India’s Directorate of Enforcement has announced it froze roughly $8.1 million in funds and conducted a search connected to local cryptocurrency trading platform WazirX.

Cryptocurrency exchange Huobi has said it will list any Ethereum hard fork following the network’s switch to Proof-of-Stake consensus as long as the fork meets five requirements. These include notifying the exchange, implementing two-way replay protection, and having an official client software ahead of the fork.

Top stories in the Crypto Roundup today:

• Ethereum Miners Back Hard Fork Ahead of The Merge
• Indian Authorities Seize $8.1 Million of WazirX Funds Amid Investigation
• Huobi to List Post-Merge Ethereum Forks that Meet its Requirements
• The Road to the Ethereum Merge

Ethereum Miners Back Hard Fork Ahead of The Merge

As the Ethereum Merge approaches to convert the network from a Proof-of-Work (PoW) consensus into a Proof-of-Stake (PoS) one, some Ethereum miners are calling for a hard fork that will split the chain to maintain a network using PoW.

The move away from PoW is said to make the network cheaper, faster, and more environmentally friendly, however, it will also mark the end of an income stream for Ethereum miners who were being rewarded for securing the network.

In theory, to keep their activities intact and avoid the obsolescence of millions of dollars worth of mining hardware, miners are looking to back an Ethereum fork called EthereumPOW.

The forked network would share Ethereum’s history until the date of the chain split. Chinese journalist Colin Wu has reported Chandler Guo, a Chinese miner and former Binance advisor, predicted at least half a dozen PoW forks will emerge, although Guo believes developers and protocols will support PoS Ethereum.

Backers of an Ethereum hard fork include TRON founder Justin Sun and the exchange he backs, Poloniex, which has offered support for the Ethereum fork, listing both ether and the forked token.

Justin Drake, a researcher at the Ethereum Foundation, has dismissed the threat of PoW forks, as he conceded at least “one person in the world” will try to extend Ethereum as a PoW chain, although he doesn’t see a situation where both PoW and PoS chains survive due to the prevalence of wrapped assets and tokens in decentralized finance protocols.

Indian Authorities Seize $8.1 Million of WazirX Funds Amid Investigation

As part of an investigation into instant personal loan fraud, India’s Directorate of Enforcement has announced it froze roughly $8.1 million in funds and conducted a search connected to local cryptocurrency trading platform WazirX.

The Directorate has alleged that WazirX facilitated transactions by unnamed fintech firms to “purchase crypto assets and then launder them abroad” as part of a scheme involving Chinese-backed companies circumventing India’s licensing regulations.

In its investigations, the Directorate ordered the bank accounts of WazirX, containing 646.7 million Indian rupees, to be frozen. The regulator claimed the exchange had “lax KYC norms” and “loose regulatory control” of transactions between WazirX and Binance.

Binance CEO, Changpeng Zhao, has said on social media that the firm did “"not own any equity in Zanmai Labs, the entity operating WazirX and established by the original founders” and added Binance only “provides wallet services for WazirX as a tech solution.” WazirX director, Nischal Shetty, disputed many of Zhao’s claims, saying Binance acquired Zanmai Labs.

The Directorate took action against WazirX in June 2021, ordering the exchange to show cause related to transactions of a money-laundering investigation. At the time, Shetty said the firm went “beyond [its] legal obligations by following Know Your Customer (KYC) and Anti Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required.”

Huobi to List Post-Merge Ethereum Forks that Meet its Requirements

Cryptocurrency exchange Huobi has said it will list any Ethereum hard fork following the network’s switch to Proof-of-Stake consensus as long as the fork meets five requirements. These include notifying the exchange, implementing two-way replay protection, and having an official client software ahead of the fork.

In a blog post, the exchange wrote:

“As long as the forked assets meet our security requirements, we will take the first move to support users to hold the assets and earn rewards. Trading services for those coins under the spotlight will be available as soon as possible per our rules after we get an overall picture of users' opinions.”

Huobi also requires the new chain to “not be covered or eliminated by the original chain” and for trading on the forked chains to “be differentiated so that the upgrade is required for all wallets (including light-weight nodes) to support the new chain.”

An exchange listing would further legitimize an Ethereum fork with a Proof-of-Stake consensus, while boosting its liquidity.

The Road to the Ethereum Merge

The Ethereum Merge is currently the leading narrative in the cryptocurrency market, with related assets rallying heavily after developers announced that the final testnet merge in Goerli is scheduled to take place over the coming week.

Ethereum miners, as described above in this newsletter, have campaigned to maintain a PoW version of the network called ETHPOW, which suggests an airdrop of ETHPOW tokens is possible.

In the short term, this looming airdrop may lead to positive price action for Ethereum and other tokens in its ecosystem as users try to gain as much of the airdrop as possible.

Other well-known hard forks, such as Ethereum Classic, or Bitcoin Cash maintain active communities, but they have been heavily overshadowed by their forked counterparts in Ethereum and Bitcoin.

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