El Salvador's national Bitcoin wallet Chivo has seen a hacking group leak snippets of its source code and virtual private network (VPN) access information on an online hacking forum.

Payments giant Block, formerly known as Square, has unveiled plans to develop a “full Bitcoin mining system,” after the firm successfully developed a three-nanometer chip specifically designed for Bitcoin mining.

The U.S. Department of Justice (DOJ) and lawyers for Changpeng Zhao, the founder and former CEO of Binance, the world's largest cryptocurrency exchange, presented starkly contrasting sentencing recommendations in recent filings, with the DOJ calling for three years in prison.

Top stories in the Crypto Roundup today:

• El Salvador's Chivo Bitcoin Wallet Experiences Data Breach, Source Code Leak
• Payments Giant Block Unveils Plans to Launch ‘Full Bitcoin Mining System’
• DOJ Seeks 3 Year Prison Sentence for Binance Founder Changpeng Zhao
• Transaction Fees Offer Miners Additional Revenue as Block Rewards Diminish

El Salvador's Chivo Bitcoin Wallet Experiences Data Breach, Source Code Leak

El Salvador's national Bitcoin wallet Chivo has seen a hacking group leak snippets of its source code and virtual private network (VPN) access information on an online hacking forum.

The leak, by the group CiberInteligenciaSV, marks the latest blow to the Chivo wallet, which has faced criticism and security concerns since its launch in 2021. The incident comes just days after the same group released the personal data of over 5 million Salvadorans as part of a separate exploit.

In a post, CiberInteligenciaSV wrote:

"This time I am bringing you the code that is inside the Bitcoin Chivo Wallet ATMs in El Salvador, remember that it is a government wallet, and as you know, we do not sell, we publish everything for free for you.”

The group claims to be motivated by the Salvadoran government's refusal to engage with them, though the nature of what it wants to discuss with the government remains unclear.

El Salvador adopted of Bitcoin as legal tender in 2021 in a bold move intended to bolster the economy. The country launched the Chivo wallet, a key part of the initiative, allowing Salvadorans to use Bitcoin for everyday transactions.

Payments Giant Block Unveils Plans to Launch ‘Full Bitcoin Mining System’

Payments giant Block, formerly known as Square, has unveiled plans to develop a “full Bitcoin mining system,” after the firm successfully developed a three-nanometer chip specifically designed for Bitcoin mining.

Block, led by former Twitter CEO Jack Dorsey, has been vocal about decentralizing Bitcoin mining since October 2021. In a blog post the firm noted that it had extensive discussions with a “wide variety of bitcoin miners” to identify the challenges they face, and building on its insights it now plans to offer “both a standalone mining chip as well as a full mining system” of its own design.

The company isn't new to Bitcoin hardware. In May 2023, Block completed a prototype for a five-nanometer mining chip, at the time expressing concerns about the centralization of chip development, pointing out its potential harm to the Bitcoin ecosystem.

Seeking further industry input, Block is inviting comments from the mining community, focusing on areas including challenges related to miner acquisition, maintenance, transparency, and software issues.

DOJ Seeks 3 Year Prison Sentence for Binance Founder Changpeng Zhao

The U.S. Department of Justice (DOJ) and lawyers for Changpeng Zhao, the founder and former CEO of Binance, the world's largest cryptocurrency exchange, presented starkly contrasting sentencing recommendations in recent filings, with the DOJ calling for three years in prison.

Prosecutors are seeking a three-year prison sentence along with a $50 million fine for Zhao, arguing his leadership enabled Binance to violate federal sanctions and money laundering laws. Zhao's defense team countered, urging probation, citing the fine paid and the former Binance CEO’s “extraordinary acceptance of responsibility.”

Zhao pleaded guilty to violating the Bank Secrecy Act last November, and the DOJ argues that the seriousness of his crimes justifies exceeding the 18-month sentence outlined in the plea agreement.

In their filing, they emphasize "the scope and ramifications of Zhao's misconduct," which they say facilitated illicit actors including darknet market operators and ransomware attackers over the lack of an effective anti-money laundering program at the exchange.

The defense disputes the extent of Zhao's knowledge, maintaining he was never “explicitly informed” of specific transactions on the exchange with criminal funds. They argue that although a conversation was cited in which Binance’s Chief Compliance Officer warned Zhao about users from sanctioned countries, as a non-U.S. company, Binance was not obligated to restrict users from these countries.

They further downplay the significance of any sanctions violations, claiming they constituted a minuscule portion of Binance's overall volume, which makes it “inconceivable that Mr. Zhao acted knowingly and deliberately to bring them about.”

Binance, the world’s largest cryptocurrency exchange, pleaded guilty to related charges last year, agreeing to a massive $4.3 billion fine and court-appointed monitoring, with the monitor yet to be appointed.

Transaction Fees Offer Miners Additional Revenue as Block Rewards Diminish

With block rewards dropping over the halving, miners securing the Bitcoin network are increasingly reliant on transaction fees to maintain profitability. The Bitcoin network’s future health depends on the growing demand for transaction processing and subsequent fee income.

Recently, a surge in demand for Bitcoin block space has been observed over the rise of ordinals and inscriptions, innovative features allowing users to embed ‘digital artifacts’ directly onto the Bitcoin blockchain, leading to a spike in transaction volumes.

Dig deeper via CCData’s latest blog post Bitcoin Halvent Event: A Cyclical Catalyst.

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