Some US-based employees of FTX reportedly discovered a secret feature in the cryptocurrency exchange’s code that allowed its sister company Alameda Research to access billions of dollars of customer funds before FTX collapsed in November 2022.

Bitcoin financial services firm Sawn is launching a new “collaborative custody” service using Blockstream’s Jade hardware wallet. The service is meant to allow users to maintain control of their Bitcoin, while knowing it’s stored in a secure way offline.

Popular cryptocurrency exchange Kraken has announced plans to acquire Netherlands-based cryptocurrency trading platform Coin Meester B.V. (BCM) as it keeps moving to expand in Europe.

Top stories in the Crypto Roundup today:

• FTX Employees Unearthed Secret Code Favoring Alameda Before the Collapse
• Swan and Blockstream Launch Crypto Collaborative Custody Service
• Kraken Acquires Dutch Crypto Platform BCM Amid EU Expansion
• Crypto Market Movers – MKR, LOOM, STORJ

FTX Employees Unearthed Secret Code Favoring Alameda Before the Collapse

Some US-based employees of FTX reportedly discovered a secret feature in the cryptocurrency exchange’s code that allowed its sister company Alameda Research to access billions of dollars of customer funds before FTX collapsed in November 2022.

The employees who found out about the hidden feature in FTX’s code told their division head, who talked to one of the top executives of FTX founder Sam Bankman-Fried. However, nothing was done to fix the issue.

In 2022, the person who led the team that questioned Alameda’s access to customer funds was sacked and the secret feature is now key evidence in the fraud case against Bankman-Fried, who is facing a criminal trial in a federal court in New York.

The ex-FTX boss has denied any wrongdoing, but prosecutors say he stole funds from FTX’s customers in part through the use of the hidden feature. Court filings revealed that within FTX’s code there was a hidden line allowing Alameda to have a negative balance of up to $65 million.

FTX’s regular users were bound by an automatic liquidation process that forced them to sell their assets before their balances dropped below zero.

Swan and Blockstream Launch Crypto Collaborative Custody Service

Bitcoin financial services firm Sawn is launching a new “collaborative custody” service using Blockstream’s Jade hardware wallet. The service is meant to allow users to maintain control of their Bitcoin, while knowing it’s stored in a secure way offline.

"Collaborative custody" means using a multi-signature wallet setup with help from a third party for important tasks like backup and transfer, making Bitcoin storage easier and safer according to both companies.

This new service tries to solve a common problem in the cryptocurrency world: balancing security with ease of use. Cryptocurrency platforms often struggle to provide security without making it too complicated for users to manage their own digital assets.

Kraken Acquires Dutch Crypto Platform BCM Amid EU Expansion

Popular cryptocurrency exchange Kraken has announced plans to acquire Netherlands-based cryptocurrency trading platform Coin Meester B.V. (BCM) as it keeps moving to expand in Europe.

Details on the cost of the acquisition have not been disclosed, but the move comes after the European Union set new cryptocurrency rules through its Markets in Crypto-Assets (MiCA) regulation.

The move, according to Kraken’s CEO David Ripley, will “give Kraken a sizable position in the Dutch market and will allow BCM’s clients to benefit from an even more robust product offering.”

The announcement highlights Kraken’s plans to grow across Europe, after the firm acquired a virtual asset service provider (VASP) in Ireland, Italy, and Spain.

BCM was launched in 2017 and offers crypto trading and staking services for over 170 digital assets. The firm is registered as a Dutch cryptocurrency service provider with the country’s central bank, Da Nederlandsche Bank.

The deal is subject to regulatory approval.

Crypto Market Movers – MKR, LOOM, STORJ

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

Maker (MKR) - MakerDAO is an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization created in 2014. The project is managed by people around the world who hold its governance token, MKR.

Loom Network (LOOM) - Loom Network is a blockchain-based platform designed to allow developers to create and deploy decentralized applications (dApps). It was launched in March 2018 as an open-source project that provides developers with the tools they need to build scalable blockchain applications that can be easily integrated into existing systems.

Storj (STORJ) - Storj is a decentralized cloud storage platform that allows users to store their data securely and privately on a distributed network of nodes. The platform uses blockchain technology and cryptographic protocols to ensure that user data remains secure and immutable.

State of the Crypto by Top Tier Exchange Volume

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