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Record DeFi hack resolved, US Senate passes problematic infrastructure bill

2021.08.15 Adam James

After the Senate passed the contentious bill, the chairman of the U.S. SEC stated that the agency should have more oversight over crypto exchanges and DeFi.

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It’s been another busy week in the blockchain and cryptocurrency industry, particularly on the regulatory front. After the United States Senate passed a highly problematic infrastructure bill with unamended crypto-taxation language, the chairman of the country’s Securities and Exchange Commission has stated his belief that the agency should have more oversight over cryptocurrency exchanges and decentralized finance. Meanwhile, the perpetrator of the largest-ever DeFi-related hack has returned the stolen funds following their apparent identification by a blockchain security firm.

Here’s everything you need to know about these stories, and more, in this week’s edition of OKEx Insights’ News of the Week.

Poly Network hacker returns record $611 in stolen crypto

After cross-chain token-swapping platform Poly Network was hacked for $611 million across multiple blockchains — the largest loss in decentralized finance’s history — the hacker returned virtually all of the stolen funds.

As of the time of this writing, the only funds that have yet to be returned are the roughly $33 million in USDT frozen by Tether — though they are expected to be returned via a burn-and-reissuance process soon.

Key takeaways

  • The high-profile hack was the worst to ever occur in a space rife with exploits — and serves to show that protocol security is still paramount in the DeFi.
  • Though the exact reasons for returning the funds are unknown, many believe the apparent identification of the hacker by blockchain security firm SlowMist was the primary motivation for sending the stolen cryptocurrency back.

EIP-1559 burns over $130 million in roughly one week

A week after going live in the Ethereum London mainnet upgrade, EIP-1559 has burned more than 43,000 ETH — reducing new issuance of ETH by 34.29% — per data from Watch The Burn. The amount of ETH burnt so far, at current prices, is worth more than $130 million.

Key takeaways

  • The common misconception that EIP-1559 would reduce transaction costs has been verified as just that. Since the upgrade, various mintings of nonfungible tokens have pushed gas prices to the point that some blocks actually caused a deflationary effect.
  • The loss to Ethereum miners’ revenue is at least somewhat offset by the introduction of a priority fee, which serves as something of a tip for miners.

Messi receives fan tokens as part of PSG salary

Lionel Messi is receiving cryptocurrency in the form of fan tokens as part of his new deal with football club Paris Saint-Germain. The exact amount is unknown, but PSG claims the superstar “received a large number” of the club’s fan tokens as part of his annual salary of roughly $47 million, per a widely circulated press release.

Key takeaways

  • The announcement of the Messi-related news from PSG caused a surge in trading volume for the club’s fan tokens, per data from CoinGecko. Meanwhile, the token is up 110% over the past 30 days.
  • As easily one the most famous active football players today, Messi’s association with cryptocurrency is being seen as a net positive for proponents of fan tokens.

SEC chairman wants to regulate crypto exchanges

The chairman of the U.S. SEC, Gary Gensler, believes that the regulatory authority needs permission from Congress to regulate cryptocurrency exchanges and DeFi platforms. 

The belief was expressed in a response to Senator Elizabeth Warren, who has recently expressed her own negative views towards the industry.

Key takeaways

  • Most cryptocurrencies, such as BTC and ETH, do not fall under the purview of the SEC because most coins and tokens are generally classified as commodities in the U.S. 
  • Gensler would nonetheless like to expand the SEC’s authority over crypto, noting that “While each token’s legal status depends on its own facts and circumstances, the probability is quite remote that, with 50 or 100 tokens, any given platform has zero securities.”

Infrastructure bill passes without crypto amendments 

The U.S. Senate passed H.R. 3684 — commonly referred to as the infrastructure bill — on Tuesday, without amending any of the problematic language present regarding cryptocurrency taxation. As it currently stands, “any service effectuating transfers of digital assets on behalf of another person” may be considered a broker for the purposes of tax reporting to the IRS.

Key takeaways

  • The vague language of the infrastructure bill’s crypto provision opens the door for miners, stakers, node operators, software developers and others to be considered as brokers.
  • Many industry pundits believe that the ultimate passing of such regulations would force cryptocurrency companies out of the U.S. and into more crypto-friendly jurisdictions — placing the country at a competitive disadvantage in the emerging-tech industry.
  • The fact that debate surrounding the crypto provision was responsible for holding up the timely passing of the infrastructure bill highlighted just how large the cryptocurrency industry has become.


OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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