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With momentum carried over from the relatively smooth hard fork upgrades Shapella (Shanghai+Capella) and Dencun (Deneb+Cancun), Ethereums next hard fork was supposed to be a breeze. Nevertheless, several analysts are waving red flags about one of its code changes, EIP-3074.

Through EIP-3074, Pectra will introduce codes that permit users to delegate all of their Ethereum assets to so-called Invokers externally owned accounts (EOA) that users must trust to not steal their money.

Following the naming convention of star + city portmanteau, the upcoming hard fork Pectra (Electra+Prague) will introduce two new operation codes: AUTH and AUTHCALL. Together, these codes make up Ethereum Improvement Proposal number 3074 (EIP-3074).

The two codes are easy to understand. AUTH delegates power to an Invoker to conduct transactions while AUTHCALL calls that prior authorization to conduct subsequent transactions using that authorization.

Incredibly and for the first time in Ethereums history these two codes allow a third-party entity to send or transact Ethereum assets, including NFTs and ERC-20 tokens like USDC, inside your wallet forever. Unless developers modify the EIP before Ethereum hard forks later this year, the delegated powers remain with the Invoker permanently.

Read more: Ethereum Foundation ditches warrant canary

Although further details of the AUTH and AUTHCALL codes are quite technical, a final item of general importance to most crypto participants is EIP-3074s entrusting of unprecedented powers to wallet makers.

Because Ethereum developers realize the expansive and permanent power of AUTH instructions to the Ethereum Virtual Machine (EVM), they have decided to limit the EOAs to which users may delegate their assets. Specifically, they have proposed limiting EOAs to a whitelist maintained by pre-approved wallet providers like MetaMask.

The solution to this blockchain problem? Trusted third-parties.

ChainArgos CEO Jonathan Reiter explained Invokers newfound powers in EIP-3074 even more explicitly, saying, I delegate authority over my account to an Invoker something that can now call code over my assets and that thing now has the ability to do stuff with my assets. And theres no way to revoke that delegation The problem here is, because you cant revoke it, if I delegate to a contract even if I think that contract is okay today if its upgradeable, they can steal my tokens in the future.

Security researchers and auditors have raised similar concerns. Indeed, its not enough for the user to simply ensure that they delegate only to presently trustworthy EOAs. If those EOAs are upgradeable smart contracts, the owner of those EOAs private keys could swap honest code for malicious code in the future.

Worse, even if an EOA is immutable, if that EOA interacts with additional smart contracts and those third-party smart contracts are upgradeable, EIP-3074 could expose users assets to theft via malicious, third-party code upgrades in the future.

Read more: Blast L2 hack prompts debate over centralization of Ethereum rollups

Given all of these risks, what exactly is the point of EIP-3074 in the first place? Mostly, in the opinion of co-author Matt Garnett, the code will save users time and money assuming Invokers stay honest. Consider a first-timers experience using Uniswap. First they must manually sign to authorize Uniswap. Then they need to pay to activate ETH on Uniswap before signing up and paying gas to activate USDC. Then they sign and pay gas to swap ETH for USDC and if more assets are involved, each one must also be activated with a separate signature and gas fee.

In the post-Pectra hard fork world, many of these signatures and gas payments could consolidate. For the user, they would only sign once to AUTH an Invoker with permission to perpetually trade their ETH or USDC on their behalf without subsequent signatures.

In summary, EIP-3074 adds more trust and power with centralized and already quite powerful corporations like MetaMask by Consensys. Unless developers rethink this software change, the upgrade will entice users to entrust perpetual authority with third-party Invokers. These entities may now control users wallets and might, by way of their own or third-party smart contract upgrades, change the rules of the game in the future to simply steal users money.

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Original post:

Ethereum's EIP-3074 'upgrade' could let wallet makers steal your money - Protos

Hong Kong is expected to approve Bitcoin and Ethereum exchange-traded funds (ETFs) as early as Monday, according to Bloomberg.

According to sources familiar with the matter, the issuers expected to receive approval for spot-crypto ETFs are an international arm of Chinese asset manager Harvest Fund Management Co. and a collaboration between Bosera Asset Management (International) Co. and HashKey Capital.

These firms intend to launch their respective ETFs by the end of the month, following final approval from the Securities and Futures Commission (SFC) and completion of listing details with Hong Kong Exchanges & Clearing Ltd. (HKEX).

JUST IN: Hong Kong set to approve spot #Bitcoin & Ethereum ETFs by Monday, Bloomberg reports.

Also read: Shiba Inu: AI Forecasts SHIB Price For April 15, 2024

The expected approvals follow reports earlier this week that Harvest was on the verge of receiving permission to launch a spot-Bitcoin ETF in Hong Kong. The SFC had previously granted Harvest and China Asset Management clearance to provide virtual-asset related fund management services on April 9.

The introduction of spot Bitcoin ETFs in the United States on January 11 has contributed to a resurgence in cryptocurrency markets this year.

Also read: Cryptocurrency: Top 3 Ethereum ERC20 Coins To Watch This Week

Hong Kong has been actively working to position itself as a hub for digital asset firms. The city has also implemented a regulatory regime for virtual asset service providers in June 2023.

Thus far, the city has approved platforms operated by HashKey Group and OSL Digital Securities. Prior to the anticipated approval of spot-crypto ETFs, Hong Kong had already permitted the launch of futures-based crypto ETFs. The three products, CSOP Bitcoin Futures, CSOP Ether Futures, and Samsung Bitcoin Futures, collectively hold assets of around $170 million.

The report comes at a time when the industry as a whole is anticipating Bitcoin Halving. With only seven days to go for the halving, Hong Kong is bringing good news to Bitcoin enthusiasts.

Read more here:

Hong Kong To Approve Spot Bitcoin & Ethereum ETFs By Monday - Watcher Guru

Key Takeaways

Bitcoin (BTCUSD) traded flat while spot bitcoin exchange-traded funds (ETFs), which have been driving up bitcoin demand and consequently its price, experienced a rare week of net outflows as the markets geared up for the halving event later this week.

Uniswap Labs received a Wells notice from the U.S. Securities and Exchange Commission (SEC). Monad Labs raised $225 million from Paradigm and others.

Last week, U.S. spot bitcoin ETFs experienced net outflows, a rare occurrence that has only happened three times since these funds were introduced in January.

Between April 8 and April 12, the category, which comprises 11 funds, reported a loss of about $83 million in assets, according to data from BitMEX Research. This represents a significant swing from the previous week's net inflows of $485 million. Despite this setback, spot bitcoin ETFs have amassed $12.5 billion in net positive inflows since they were launched.

Notably, the Grayscale Bitcoin Trust ETF (GBTC) continued to post a decline, with $767 million exiting the fund last week alone. In contrast, other leading funds such as BlackRocks iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) brought in $487 million and $90 million, respectively, but these gains were insufficient to counterbalance the substantial outflows from GBTC.

Demand generated by spot bitcoin ETFs has been credited for the recent rally in bitcoin prices, and it is also considered a key differentiator for the upcoming bitcoin halving versus prior instances.

Decentralized crypto exchange Uniswap last week disclosed receiving a Wells notice from the SEC, indicating impending enforcement actions.

This led to a sharp drop in the price of Uniswap's native token, UNI, falling from above $11 before the news broke to under $8. Uniswap Labs CEO Hayden Adams shared his disappointment and readiness to contest the charges on X. Wells notices serve as preliminary alerts about potential regulatory charges and often precede formal enforcement actions.

The SEC's concerns centered on allegations of Uniswap operating as both an unregistered securities broker and exchange, Uniswap executives Mary-Catherine Lader and Marvin Ammori clarified at a press conference, according to CoinDesk. The specifics of whether UNI itself might be classified as a security weren't clear from the notice. Ammori referenced a favorable recent court decision for Coinbase, which he sees as a positive indicator for Uniswap's defense against similar charges.

Monad Labs has secured $225 million in a funding round led by Paradigm, enabling the company to expand its team and advance the development of its blockchain, which is designed to contend with Ethereum.

This financial backing aims to transition Monad's test version of its blockchain into a full production stage. Its Layer 1 blockchain maintains compatibility with the Ethereum Virtual Machine (EVM). According to Monad's announcement on Substack, the EVM processes more than 96% of all investments in decentralized finance (DeFi).

While Ethereum is currently limited to processing fewer than 20 transactions per second, Monad's newly operational testnet, launched in March, demonstrates a capacity to handle approximately 10,000 transactions per second. This significant increase in transaction throughput is part of a broader trend in the crypto community, which sees various entities, including both Layer 1 and Layer 2 solutions, striving to enhance DeFi's efficiency. Monad's approach incorporates parallel execution to significantly boost performance across the protocol.

This round of funding also attracted investments from several notable firms, including Electric Capital, Castle Island Ventures, Animoca Ventures, Coinbase Ventures, and CoinFund, underscoring broad industry support for Monad's technology.

All eyes are on the anticipated bitcoin halving this week, as the fourth iteration of the scheduled decrease in the cryptocurrency's issuance rate is expected to take place by the end of the month.

Halving, which occurs after every 210,000 blocks, or roughly every four years, cuts the pace of new bitcoin mined and halves miner incentives.

While previous halvings have led to bull runs for bitcoin in the past, multiple industry reports have indicated the spot bitcoin ETF market may have a bigger impact on the cryptocurrency's supply-and-demand dynamics at this point.

Despite the upcoming decline in bitcoin-denominated revenue for miners, it's possible miners could enjoy an increase in revenue in dollar terms due to the potential for a bitcoin price run-up combined with the developments of Ordinals and various Layer 2 networks.

Excerpt from:

Cryptocurrency Market News: Spot Bitcoin ETFs Shift to Outflows Ahead of Halving - Investopedia

Proposed rules for marijuana banking and cryptocurrency regulation may be combined into a single bill.

The legislation has not been finalized, but there have been talks in the U.S. Congress about combining a cannabis bill, the Secure and Fair Enforcement Regulation (SAFER) Banking Act, and a stablecoin measure, Marijuana MomentreportedSunday (April 14).

Senate Majority Leader Chuck Schumer (D-NY) has said that he aims to pass legislation to safeguard cannabis banking and achieve that in the weeks and months ahead, according to the report.

The SAFER Banking Bill has been awaiting action by the Senate since being passed by the Senate Committee on Banking, Housing and Urban Affairs in September 2023, Seeking AlphareportedMonday (April 15).

The bill could impact a number of multistate operators and cannabis exchange-traded funds (ETFs), according to the report.

It was reported April 1 that while more than half of all Americans live in a state that has legalized marijuana, banks wont work withcannabis sellersbecause the drug is still illegal under federal law.

As a result, legitimate cannabis businesses still find themselves wondering what to do with all their cash, as it is nearly impossible for them to accept payments in anything other than cash.

While the U.S. House has passed a bipartisan bill that would make it easier for cannabis companies to find banking services, the Senate has never voted on its version. However, that vote could come this year.

Some saw a possible opening of the door to more cohesive payments systems in the sector in August 2023, when U.S. health officials recommended easingrestrictions on cannabisand reclassifying it as a Schedule III drug under the Controlled Substances Act.

Currently, cannabis is classified as a Schedule I substance, which implies a high risk of abuse and no accepted medical use. If cannabis were to be reclassified as a Schedule III drug, it would be seen as less dangerous and could be obtained legally with a prescription.

As an indicator of the size of potential business payments, the business-to-business (B2B) cannabis platform LeafLinkreported that it passed the $1 billion transaction mark in September 2022 with its payment solutions and expected more growth.

Continued here:

Marijuana Banking, Cryptocurrency Regulation May Be Combined Into Single Bill - PYMNTS.com

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