📉Markets Shaken By Looming Court Decision On FTX Asset Sales

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The crypto markets are down across the board in anticipation of both incoming U.S. inflation data and a Sept. 13 court decision that could greenlight FTX's plans to offload its crypto holdings. Assets among FTX's largest holdings suffered heavier losses, including SOL, XRP, and APT.

If approved, the plan would see Galaxy Digital sell FTX's assets at a rate of up to $200M per week. FTX said reducing its exposure to volatile crypto assets will maximize the value returned to debtors.

Blockchain sleuths have identified an airdrop hunter operating 21,877 wallets on ZkSync Era. The user even launched a closed decentralized exchange and token to facilitate trades between their various wallets.

CoinEx, a Hong Kong-based centralized exchange, suffered a $43M loss after its hot wallets were breached by a hacker yesterday. The exchange said the balances of all affected will be restored.

And the hyped launch of BANANA, the memecoin for revenue-sharing telegram trading bot, Banana Gun, ended in tears after hackers exploited a bug in the token's code.

✍️ In today’s newsletter:

Digital assets pull back
Court decision on FTX asset sale looms
Sleuth identifies ZkSync Era Sybil attack spanning 21,877 wallets
Hacker drains $43M from CoinEx's hot wallets
BANANA crashes 99% within hours of launching

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📈 Markets in last 24 hrs:

Ticker	Value	24h
BTC	$25,945	↗ 0.43%
ETH	$1,592	↙ -1.58%
S&P 500	$4,462	↙ -0.57%
GOLD	$1,936	↗ 0.66%
Arch WEB3	0.68pts	↙ -3.74%
↳ FINANCE	0.71pts	↙ -3.68%
↳ INFRA	0.64pts	↙ -3.48%
↳ CONSUMER	0.77pts	↙ -4.44%

Learn more about Arch Indices here.

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Markets

Crypto Assets Slump Ahead Of US Inflation Report

TLDR Digital assets are down as investors prepare for a looming court verdict that could permit FTX to begin selling its cryptocurrency holdings, plus fresh reporting on U.S. inflation. The failed exchange said selling its digital assets would ensure the greatest return to its debtors by eliminating its exposure to the volatile crypto markets.

SO WHAT Following a bullish first half to 2023, the combined market cap of crypto assets is down 20% since tagging a local top of $1.25T in July. With investors fearing $3.4B worth of crypto could soon be dumped on the markets, further downside momentum may still be yet to come.

Markets

SOL Drops Ahead Of Court Verdict On FTX Asset Sales

TLDR Solana and other top holdings on FTX's balance sheet are losing value as investors hedge their bets ahead of this week's court verdict on the failed exchange's proposed plan to offload its crypto portfolio. If approved, Galaxy Digital would begin selling the assets on FTX's behalf at a maximum rate of $200M per week.

SO WHAT In April, FTX said it had recovered $7.3B of its missing assets after estimating $8.9B in customer funds were unaccounted for the previous month. However, with SOL, its largest crypto holding, down 28% from its mid-April high, FTX said it wants to offload its digital assets to protect debtors' value.

zkSync Airdrop Farmer Deploys 21,877 Wallets

TLDR A vast network of 21,877 wallets has been identified carrying out a Sybil attack on ZkSync Era. The wallets were executing trades between one another via a closed DEX and token in a bid to spoof any future ZkSync airdrops.

SO WHAT ZkSync has emerged as the top Layer 2 by transaction volume in recent months, with the network now even rivaling the Ethereum mainnet by throughput. However, with sophisticated entities seeking to game the possibility of a future airdrop, much of ZkSync's on-chain activity may not be organic.

Hacks

CoinEx Exchange Hacked For $28M

TLDR CoinEx, and Hong Kong-based centralized exchange, suffered an exploit on Tuesday. According to PeckShield, a blockchain security firm, CoinEx lost $43M worth of assets across six different networks.

SO WHAT CoinEx attributed the incident to hot wallet breaches, assuring that all affected users will be fully compensated. CoinEx's CET token is down 11% in 24 hours in response to the news.

READ MORE: CoinEx Exchange Hacked For $28M

Markets

Hyped Banana Token Launch Wrecked By Contract Bug

TLDR The highly-anticipated launch of BANANA, the token for the Banana Gun Telegram trading bot, ended in disaster for investors. After quickly amassing a $70M market cap, the token shed more than 99% of its value after a hacker took advance of bugs in the token's code.

SO WHAT The incident highlights the risks associated with investing in brand new projects, with the bugs in BANANA's code passing two audits. While chasing new memecoins may be a fast route to fortune some, low-cap cryptocurrencies pose significant risks for investors, and can quickly lead to ruination for undisciplined investors.

🔎 OUR REPORTERS ARE WATCHING

🌍 ELSEWHERE

Binance Says SEC’s Request for Depositions is ‘Overbroad’ and 'Unduly Burdensome' (CoinDesk)
BIP-300 biff: Debate reignites over years-old Bitcoin Drivechain proposal (Cointelegraph)
ApeCoin Plunges to New Low, Down 42% Over Last Month (Decrypt)