Digest the latest news from the crypto front with help from Olliv the Above. This week, we’re looking at why the SEC’s head thinks crypto exchanges don’t measure up as qualified custodians, how one hardware crypto wallet maker was hit with a phishing attack, and which company behind several blue-chip NFT collections is jumping on board the Bitcoin-based NFT craze.
Saying the quiet part out loud
U.S. Securities and Exchange Commission Chair Gary Gensler had some not-so-flattering words about crypto exchanges last week. "Based upon how crypto trading and lending platforms generally operate, investment advisers cannot rely on them today as qualified custodians," Gensler said. Ouch.
But does Gensler have a point? Looking back at the last 5 months or so of headlines in the crypto space, saying, “let’s scrutinize crypto exchanges right now” isn’t exactly a scorching hot take. Gensler’s remarks came as he was speaking about a set of rules that govern how investment advisers manage client funds. The SEC voted last week to approve the overhauled rules that would require investment advisers to place client funds with qualified custodians – a label that excludes places like crypto exchanges, according to Gensler.
All this discourse sheds more light on self-custody of crypto assets. Right now, the overarching sentiment toward centralized crypto exchanges is skeptical at best. Past assurances of “trust us” issued by now-defunct players like FTX and Genesis have left a sour taste in the mouths of both regulators and customers.
Will things change for the better with more visible guardrails and clearer regulation in the crypto space? Hopefully. But in the meantime, why trust exchanges with safeguarding digital assets when you could trust yourself instead? That’s the upshot to being the custodian of your own crypto. Btw, this is a feature that’s at the foundation of the Olliv platform. Jus’ saying.
Crypto wallet Trezor was the target of a recent phishing attack. Phishing scammers posing as the hardware crypto wallet manufacturer sent messages via email that prompted Trezor wallet owners to enter their recovery phrase on a bogus website. Hackers could then control the wallet and any assets within it once they had the all-important recovery phrase, or seed phrase. This is like handing a master key that opens every door in your house to someone posing as the cable guy.
Since we were just talking about the importance of a self-custodial model for crypto, why don’t we quickly visit the topic of crypto wallet security? Holding the keys to your own cheese comes with a heightened degree of responsibility. Keeping crypto assets in an offline, or “cold” wallet, provides a nice layer of protection from hackers and malicious software. When it comes to handling master passwords for a crypto wallet, we like to paraphrase one of pop culture’s favorite wizards: keep them secret, keep them safe.
For crypto holders who do go the hardware wallet route, it’s recommended to write down the recovery phrase, place it in a secure location, and NEVER share it with anyone. Hackers and scammers are always upping their game – stay vigilant.
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Yuga Labs — the company that owns the popular NFT collection Bored Ape Yacht Club — unveiled a limited series of Bitcoin-based NFTs called TwelveFold. Yuga is launching the series of 300 NFTs on Ordinals, which is a newly launched protocol that inscribes digital media onto Satoshis, or the fractional bits that make up an entire bitcoin.
The Ordinals protocol has taken off in recent weeks, with some speculation that the hype surrounding it contributed to a rally in BTC prices to start off 2023. What’s notable is that all of Yuga’s previously launched NFT series, including Bored Apes Yacht Club and CryptoPunks, have been based on the Ethereum network. Some NFT watchers might speculate that Yuga Labs jumping on the Ordinals craze lends credibility to the emerging protocol.
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