Crypto market sentiment remained positive last week, despite the news of one of the largest crypto heists to date. Bitcoin started Q2 as it did the new year, at just over $46k, which is still about 30% below its record high set in November. Of the higher market-cap alts, AAVE, NEAR, and LUNA have all been on a tear this past week – posting gains of 33%, 19%, 17% respectively.

Meanwhile, the institutional digital asset space continues to get a little more crowded. Fresh data from CoinShares shows institutional investments into assets continue to recover, attracting inflows of $180m last week.

Crypto has also recently won increased legitimacy in other ways. Earlier today, the UK government announced plans to bring stablecoins within the regulatory parameter, paving their way for use in the UK as a recognised form of payment... A pretty huge development that follows a torrent of developments in the stablecoin space this past week, including the launch of a new algorithmic stablecoin from Fantom, and Terra looking to BTC to diversify its reserves. Our research team also put out a timely report examining the growth of stablecoins, which combined would rank them in the top 20 US financial institutions by bank deposits.

Tomorrow, the largest global Bitcoin conference returns to Miami Beach, and the US Copper team will be there from the opening through to Saturday 9th April. We're expecting plenty of exciting announcements and big news to emanate from this conference, so buckle up!

Best Regards,

Iva Lila

Beneath the headlines

 Axie Infinity's Ronin bridge hacked for over $624m in the largest crypto hack to date. Another example of multi-sig setups backfiring? 

Ronin Network, an Ethereum-based side network operated by Sky Mavis that plays an instrumental role in powering the popular crypto game, Axie Infinity, suffered a major hack after 173.6k ETH and 25.5m USDC was stolen by attackers in two transactions. At the time of writing, the stash is worth $624m, narrowly making this incident the biggest crypto hack on record.

Bizarrely, the exploit occurred on Wednesday 23 March, but was not spotted by developers until Tuesday 29 March – a full six days later. Not exactly a great look for Sky Mavis.

On the back of the PolyNetwork and Wormhole exploits, there’s been a lot of discourse about cross-chain bridges being more susceptible to exploits. However, it looks like the Ronin hack differs somewhat from previous bridge hacks in that the root cause was not a smart contract exploit, but a multi-sig compromise.

The Ronin bridge is a five-of-nine validator bridge, meaning funds are secured by nine validators, and any five of which can be used to move funds around. The hacker was able to gain access to the centralised server at Sky Mavis, where four keys were stored, and only needed one more multi-sig to authorise any transaction within the protocol. The attacker then discovered a backdoor and managed to gain access to the third-party validator controlled by Axie DAO.

The key lesson here, yet again, is not to blindly trust systems that claim to be decentralised. Ronin is not the first, nor will it be the the last 'web3' network where validators are centralised to a few parties. At what point does this kind of shoddy security practice become outright negligence?

Since the incident, Ronin has raised the validator threshold to eight out of nine. Two thoughts on this: 1) Too little, too late, and 2) using multi-sig to secure funds ceased being the industry standard two+ years ago; the best means to eliminate a single point of risk is through secure multi-party computation (MPC).

Many are questioning to what extent this hack is a setback for trust in the digital asset space. If we look back to the last time an exploit of this scale occurred, which was PolyNetwork in August 2021, retail and institutional confidence in DeFi wasn't too badly shaken as the ordeal was over pretty quickly and all of the stolen funds were swiftly returned. PolyNetwork also became more robust and the community moved on.

I think reaction and recovery will also matter greatly in this instance, especially as it takes place at a time when various governments around the world are looking even more closely at digital assets. The growing number of attacks in DeFi are already an enormous cause of concern, so if the stolen funds of the now largest-hack in crypto history aren't recovered, trust in this space may seriously erode as it encourages more malicious actors to consider attacking the sector.

On a positive note, Sky Mavis has already made a pledge to reimburse victims and is actively working with various exchanges as well as blockchain analytics firm, Chainalysis, to try and trace the drained funds. Wishing them all the best.

UST becomes the first stablecoin to adopt the Bitcoin standard. A unique event or a sign of what’s to come from other web3 players?

In what was probably the most exciting news of last week, Do Kwon, founder of Terraform Labs and Ethereum L1 blockchain competitor, Terra, announced plans to accumulate a whopping $10bn worth of BTC to add to the project’s stablecoin reserves.

TerraUSD (UST) is the world's fourth largest stablecoin, sitting at more than $16bn in market cap. The digital asset is now undergoing a major makeover that will see the algorithmic token transition to a Bitcoin-backed stablecoin. Luna Foundation Guard (LFG), the non-profit organisation which launched in January to grow the Terra ecosystem, has already amassed more than $1.5bn in Bitcoin over the past two months.

Though Terra launched in 2018, it's only recently that the network has truly boomed to become one of the most important players in the space. In addition to making an indelible mark on the Bitcoin ecosystem with this pioneering move, Terra is also one of the most important hubs in DeFi, boasting the the second-largest DeFi ecosystem (over $30bn TVL).

LFG's bulk bitcoin purchases helped the leading cryptoasset break through a key resistance level and spike above $47k last week. Meanwhile, LUNA, has also risen more than 26% over the past seven days to a new ATH of over $115. The development is being hailed as the biggest Bitcoin news since El Salvador adopted the cryptoasset as legal tender, but many are asking: why BTC? And why now?

In recent interviews with Laura Shin and Frank Chaparro, Kwon points to two schools of thought that he labels the Economic and Diplomatic arguments.

The Economic argument is that diversifying the UST reserves with Bitcoin (and eventually other assets) is smart and increases the strength of its peg.

In his Diplomatic argument, Kwon explains that for UST to gain a strong foothold outside of the Terra ecosystem, it requires a neutral reserve asset that instills confidence with other blockchain ecosystems. He points to tribalism between smart contract platforms, and comments that users of other blockchains don’t really feel about LUNA (Terra's governance token that helps maintain UST's peg) in the same way as users of the Terra blockchain do. He highlights that what everyone does seem to agree on is Bitcoin's role as the strongest digital reserve asset.

Steering away from fiat currency and integrating BTC is a brilliant experiment from Do that could bring tremendous benefits to Terra and will be fascinating to watch unfold. What I find myself somewhat disturbed by, are the following:

1) The custody of the BTC stash, currently being held in a multi-sig vault with keys distributed between six LFG council members. Seems to me, this creates a centralised point of failure. As highlighted in the previous story, using multi-sig to secure funds is much more vulnerable than people seem to realise.

2) The Bond-villain level of hubris from Do Kwon, especially in his recent statement."Besides Satoshi, we will be the largest single holder of BTC in the world. The failure of UST is equivalent to the failure of crypto itself."  On Crypto Twitter, the community appears to be divided on whether Kwon's ambition to make UST 'too big to fail' is bullish or a threat.

What will also be extremely interesting to see unfold in the coming weeks and months is the protocol's relationship with regulators. Terra already has the SEC breathing down its neck over the Mirror Protocol, which the watchdog alleges that Terraform Labs violated US securities laws. What's to say the SEC won't next set its sights on UST? After all, only last Monday, the regulator drew up a new proposal to redefine the definition of a securities dealer. According to a footnote in the 200-page document, the definition also applies to digital assets that use automated and algorithmic trading technology to execute trades and provide liquidity in the market. As an algo stablecoin, UST looks set to be impacted by the proposal that's currently sowing widespread alarm and confusion among the DeFi community.

Roundup of other key developments


  • WisdomTree launches crypto ETPs for Solana, Cardano, Polkadot in Europe. 


  • CME Group is considering altcoin futures on Solana and Cardano. 


  • SEC rejects spot bitcoin ETF application from Ark 21Shares. 



  • EU Parliament passes bill requiring crypto firms to KYC non-custodial wallets. 


  • Japan plans to tighten crypto exchange regulation to enforce sanctions. 


  • Vietnam to devise legal framework for crypto. 


  • US lawmakers introduce a bill targeted at stablecoins. 


  • UK Treasury outlines plan to regulate stablecoins and issue an NFT. 


  • 30% crypto tax becomes law in India following Finance Bill approval. 


  • US companies must disclose customer crypto holdings, says SEC. 



  • BitMEX lays off 75 employees after bank acquisition collapses. 


  • Turkey seeks 40,000-year jail sentences for Thodex CEO. 


  • Coinbase to buy the $2.2bn Brazilian unicorn behind Mercado Bitcoin. 


  • MicroStrategy takes a $205m loan to buy more bitcoin. 


  • Robinhood crypto lead Christine Brown leaving to start crypto venture. 


  • Binance is sponsoring the Grammys this year. 



  • Aave’s token rockets 97% since upgrade strengthening DeFi capabilities. 


  • OpenSea set to integrate Solana in April, further expanding the NFT ecosystem. 


  • Ola Finance exploited for $3.6m in re-entrancy attack. 


  • Inverse Finance exploited for $15.6m. 


  • Fantom introduces stablecoin USDB. 


  • Azuki NFT sells for record $1.4m. 


  • Bored Ape Yacht Club confirms its Discord was hacked. 


What to watch out for over the coming days


  • MetaFabric staking launch. 


  • Secret Network Twitter Spaces. 



  • Day one - Bitcoin Miami 2022. 


  • Iris Network CoinSwap V0.6. 



  • AlgoTalks Brunch, Miami. 



  • Cosmos JACKAL airdrop snapshot. 


Independent custody

connected to multiple exchanges

Our settlements and clearing service is backed by our award winning custody technology


The latest forward thinking research, straight to your inbox.

By ticking this box, I agree that I've read the Privacy Policy and consent to the given information being used by Copper to contact me