WEBVTT 00:00:00.000 --> 00:00:05.320 Hello and welcome to Distributed Systems and Blockchain in the News. 00:00:05.320 --> 00:00:14.560 My name is Thomas Bocek and this week in the news we have network failures and it's 00:00:14.560 --> 00:00:17.400 the following article here. 00:00:17.400 --> 00:00:27.760 So, in November 2023 an Optus network outage in Australia affected almost half the population 00:00:27.760 --> 00:00:30.640 that's roughly 10 million people. 00:00:30.640 --> 00:00:36.120 They were cut off with disrupting phones, disrupted internet and disrupted broadband services. 00:00:37.800 --> 00:00:44.960 The outage lasted a whole day, so a whole day without internet and impacted hospitals, 00:00:44.960 --> 00:00:50.920 businesses, public transport and emergency services. 00:00:50.920 --> 00:00:57.720 And the cause was unspecified but it wasn't believed to be a cyber attack but the cause 00:00:57.720 --> 00:01:01.760 is still unknown or there are speculations about it. 00:01:01.760 --> 00:01:08.960 And the incident raised significant concerns about the robustness of Australia's telecom 00:01:08.960 --> 00:01:16.800 infrastructure and led to the discussion on emergency service access and the management 00:01:17.750 --> 00:01:25.510 national services. Optus parent company it's called Singtel they acknowledged the outage 00:01:25.510 --> 00:01:33.990 without explanation and interestingly their shares fell by almost five percent. 00:01:33.990 --> 00:01:44.710 And there are some rumors what was the cause and it might be a misconfigured 00:01:45.350 --> 00:01:54.230 network configuration that might have caused some spikes in BGP announcements that was at the time 00:01:54.230 --> 00:02:03.110 when the outage happened. That was also monitored by Cloudflare but this is only speculation at the 00:02:03.110 --> 00:02:10.710 moment. I hope that there will be a postmortem so a detailed description about this incident what 00:02:10.710 --> 00:02:17.910 happened. However I'm not sure if the telco provider provides such a postmortem. 00:02:17.910 --> 00:02:30.870 The next article starts with crypto topics and it's about the Poloniex exchange. 00:02:30.870 --> 00:02:35.350 This article here the Poloniex crypto 00:02:35.500 --> 00:02:43.300 exchange which is owned by this guy here Justin Sun. He's a polarizing figure in 00:02:43.300 --> 00:02:51.460 the cryptocurrency world. They suffered a hack resulting in the loss of almost 00:02:51.460 --> 00:02:59.700 126 million US dollar in various crypto assets and the breach involves transfer 00:02:59.700 --> 00:03:08.340 from Poloniex wallet to the hackers wallet. They stole Ethers, they 00:03:08.340 --> 00:03:18.540 stole Tron, stablecoins, USDT, TUSD and some meme coins. And additionally over 00:03:18.540 --> 00:03:31.420 188 million in Trons native token TRX and almost 900 bitcoins were stolen. And 00:03:31.420 --> 00:03:37.860 the hackers transferred these assets to another wallet before swapping most for 00:03:37.860 --> 00:03:44.940 USDC. And Poloniex initially stated the wallet was under maintenance, later 00:03:44.940 --> 00:03:51.460 confirming the hack. Justin Sun he assured that the exchange would reimburse 00:03:51.460 --> 00:03:55.060 the affected funds. 00:03:55.060 --> 00:04:00.250 and was collaborating with other exchanges for the recovery of these funds. 00:04:00.250 --> 00:04:11.250 And the security researcher suggested that it might have been compromised private keys, malware, or social engineering as a potential cause. 00:04:11.250 --> 00:04:15.250 And here as well, the details are not known yet. 00:04:15.250 --> 00:04:30.250 Later on, Justin Son then offered a 5% white hat bounty for the Poloniex hacker so that he will return the stolen funds and he will get 5% of those funds. 00:04:30.250 --> 00:04:41.250 And he said that he will give the attacker 7 days to return the funds before they start working with law enforcement authorities. 00:04:41.250 --> 00:05:02.250 A very interesting detail, it's in this article here, is that the hacker was in the process of this native currency, TRX, and he did exchange it for USDT. 00:05:02.250 --> 00:05:11.250 And this caused a spike, so that we can see here, that caused a spike in... 00:05:11.250 --> 00:05:20.460 TRX by 25% and this unintentional boost could offset some of the financial 00:05:20.460 --> 00:05:29.700 losses that Justin Sun committed to reimbursing. Additionally in their haste 00:05:29.700 --> 00:05:35.140 so the hackers to convert the stolen assets into cash and it is believed that 00:05:35.140 --> 00:05:44.460 the hacker mistakenly sent around 2.6 million in Golem Network tokens GLM 00:05:44.460 --> 00:05:50.420 directed to the tokens official contract and this of course results in the 00:05:50.420 --> 00:05:56.780 permanent loss of these funds. So always make sure where you're sending the money 00:05:56.780 --> 00:06:10.500 to. The next article is about miner extracted values (MEV). so there are miner 00:06:10.500 --> 00:06:19.940 extracted value (MEV) bots and this bot was exploited for almost 2 million US 00:06:19.940 --> 00:06:26.620 dollars after figuring out there's a vulnerability in the smart contract 00:06:26.620 --> 00:06:30.620 code of this bot. 00:06:30.620 --> 00:06:33.750 And this is the following article and tweet here. 00:06:33.750 --> 00:06:38.750 I talked about sandwich attacks and the MEV bots, 00:06:38.750 --> 00:06:43.750 they can execute those attacks. 00:06:43.750 --> 00:06:48.750 And the hacker that attacked these bots 00:06:48.750 --> 00:06:53.750 figured out that there's a vulnerability in the bot. 00:06:53.750 --> 00:06:56.750 So the vulnerability allowed anyone 00:06:56.750 --> 00:07:00.750 to call a function that sold wrapped Bitcoins 00:07:00.750 --> 00:07:02.750 for wrapped Ethers. 00:07:02.750 --> 00:07:04.750 And using a flash loan, 00:07:04.750 --> 00:07:07.750 the attacker could create an imbalance 00:07:07.750 --> 00:07:12.750 on the wrapped Ether, wrapped Bitcoin pool on curve. 00:07:12.750 --> 00:07:17.750 And then this led the bot was buying wrapped Bitcoin 00:07:17.750 --> 00:07:20.750 for an inflated price. 00:07:20.750 --> 00:07:25.750 And the attacker then sold the wrapped Bitcoins for a profit. 00:07:25.750 --> 00:07:29.750 And this incident, which occurred on Tuesday night, 00:07:29.750 --> 00:07:33.750 highlighted the risk associated with unprotected functions 00:07:33.750 --> 00:07:38.750 in bot codes within the complex MEV ecosystem. 00:07:38.750 --> 00:07:42.750 And this also resulted in significant fees 00:07:42.750 --> 00:07:44.750 for the curve protocol. 00:07:44.750 --> 00:07:46.750 So they could also pay for it. 00:07:46.750 --> 00:07:51.500 and the ones who lost were the creators of this MEV bot. 00:07:51.500 --> 00:07:59.460 So if you write any kind of production ready smart contract, 00:07:59.460 --> 00:08:01.220 doesn't matter what it is, 00:08:01.220 --> 00:08:04.420 always perform an audit of the code 00:08:04.420 --> 00:08:07.660 from a reputable company. 00:08:07.660 --> 00:08:10.500 And I've been involved in a couple of crypto projects 00:08:10.500 --> 00:08:12.900 and in each single project, 00:08:12.900 --> 00:08:17.820 we did a security audit either by me or by another company, 00:08:17.820 --> 00:08:21.220 but every smart contract that went to production 00:08:21.220 --> 00:08:23.220 was security audited. 00:08:23.220 --> 00:08:28.340 This is also a kind of interesting write up. 00:08:28.340 --> 00:08:31.980 So here are the details, what exactly happened, 00:08:31.980 --> 00:08:34.460 how the attack took place. 00:08:34.460 --> 00:08:36.700 So you can take a look at it. 00:08:36.700 --> 00:08:39.860 Here also a link to Etherscan, 00:08:40.900 --> 00:08:45.900 how it went and the details in this article here. 00:08:45.900 --> 00:08:55.420 The next article is about a hack as well. 00:08:55.420 --> 00:08:59.740 It's a hack of Monero's community wallet. 00:08:59.740 --> 00:09:04.140 And the damage is... 00:09:04.250 --> 00:09:09.850 well below 1 million US dollars, so it's not even worth mentioning. 00:09:09.850 --> 00:09:13.650 But there's something very interesting about this hack. 00:09:13.650 --> 00:09:15.090 So what happened? 00:09:15.090 --> 00:09:24.210 Monero's community crowdfunding wallet was compromised on September 1st, 2023, losing 00:09:24.210 --> 00:09:34.130 its entire balance of more than 2.5 million Moneros, which is around almost half a million US dollars. 00:09:35.930 --> 00:09:45.930 And the hack details were disclosed in November by the developer Luigi here in this incident 00:09:45.930 --> 00:09:51.410 report and with no clear source of the breach identified. 00:09:51.410 --> 00:09:55.450 So it's not clear how it actually happened. 00:09:55.450 --> 00:10:04.570 The wallet was only accessed by two people, by Luigi1111 and Fluffypony, and it's still 00:10:04.570 --> 00:10:10.730 not clear how the hacker could gain access to those keys. 00:10:10.730 --> 00:10:20.090 There are rumors that the keys were compromised through an exposed wallet key or by a breach 00:10:20.090 --> 00:10:22.010 of Luigi's Windows machine. 00:10:22.010 --> 00:10:26.320 because he mentioned here in this incident that he is using a Windows machine. 00:10:26.320 --> 00:10:34.240 That could be part of botnet but there's lots of speculation going on and it's not yet clear 00:10:34.240 --> 00:10:43.680 how those keys were obtained. And this incident impacted the community crowdfunding system 00:10:43.680 --> 00:10:52.320 which funds Monero community development proposals and I mentioned something struck out. 00:10:52.320 --> 00:11:01.200 The following analysis struck out from Moonstone Research and keep in mind Monero is a privacy 00:11:01.200 --> 00:11:10.080 focused chain where you should not be able to figure out who sent how much cryptocurrencies 00:11:10.080 --> 00:11:18.240 to each other so that should be fully anonymous. And Moonstone Research which is an analyzing 00:11:18.240 --> 00:11:25.440 company for complicated cases, they showed off their skills in tracing Monero transactions 00:11:25.440 --> 00:11:33.360 and here this is their conclusion. We were able to reliably trace forward through three of the 00:11:33.360 --> 00:11:40.160 attackers transfers and they also mentioned down here 00:11:40.160 --> 00:11:43.750 So this is how their analysis looks like. 00:11:43.750 --> 00:11:48.750 So these are the three addresses and they say, 00:11:48.750 --> 00:11:50.750 if you receive these transactions, 00:11:50.750 --> 00:11:52.750 please contact us. 00:11:52.750 --> 00:11:55.750 We can help advise you on the next steps. 00:11:55.750 --> 00:11:57.750 And if you're a Monero community member, 00:11:57.750 --> 00:12:01.750 please reach out to all exchange parties you can think of, 00:12:01.750 --> 00:12:03.750 including instant exchangers, 00:12:03.750 --> 00:12:07.750 to see if they receive deposits in these transactions. 00:12:07.750 --> 00:12:13.750 So somehow they could figure out that those transactions are involved 00:12:13.750 --> 00:12:19.750 and now calling the community members to watch out for these transactions. 00:12:19.750 --> 00:12:24.750 The last article are about ETFs, 00:12:24.750 --> 00:12:26.750 exchange traded funds. 00:12:26.750 --> 00:12:28.750 As a short reminder, 00:12:28.750 --> 00:12:34.750 an ETF is a type of investment fund that tracks the performance of a specific 00:12:34.750 --> 00:12:39.750 basket like stocks, bonds, or commodities in the crypto world, 00:12:39.750 --> 00:12:41.750 Bitcoin or Ethers, 00:12:41.750 --> 00:12:48.750 and it's traded on regular stock exchanges similar to stocks. 00:12:48.750 --> 00:12:55.750 And this caused a green wave in the crypto world. 00:12:57.750 --> 00:13:01.830 And the reason most likely is this announcement here 00:13:01.830 --> 00:13:06.190 from BlackRock about Ethereum ETF. 00:13:06.190 --> 00:13:08.990 They already filed for Bitcoin ETF. 00:13:08.990 --> 00:13:13.990 And here we now see almost all cryptocurrencies are green. 00:13:13.990 --> 00:13:18.950 So it's a good day in the crypto world. 00:13:18.950 --> 00:13:23.950 So what happened on the 9th of November, 00:13:23.950 --> 00:13:27.990 BlackRock, the world's largest asset manager 00:13:27.990 --> 00:13:31.350 filed for an Ether ETF. 00:13:31.350 --> 00:13:36.350 And this led to a significant increase in the Ether price. 00:13:36.350 --> 00:13:41.630 And it was even surpassing 2000 US dollars 00:13:41.630 --> 00:13:44.590 for the first time in over a year. 00:13:44.590 --> 00:13:48.470 This filing followed BlackRock's earlier application 00:13:48.470 --> 00:13:51.630 for a Bitcoin ETF I already talked about. 00:13:51.630 --> 00:13:55.950 The announcement had a bullish effect on the crypto market, 00:13:55.950 --> 00:13:59.870 including a rise in other altcoins as well. 00:13:59.870 --> 00:14:05.870 BlackRock's move to file for an Ethereum Trust ETF 00:14:05.870 --> 00:14:10.910 indicates that its intention is to diversify 00:14:10.910 --> 00:14:15.910 beyond Bitcoin in the ETF space, generating more money. 00:14:15.910 --> 00:14:23.540 Positive responses from the crypto community and some comments were 00:14:23.540 --> 00:14:31.300 that BlackRock's interest in an Ether ETF is a sign that the Bitcoin ETF is 00:14:31.300 --> 00:14:38.820 imminent. Again, speculation and this development has been welcomed by 00:14:38.820 --> 00:14:46.660 industry observers who believe that an Ether ETF could be highly attractive to 00:14:46.660 --> 00:14:54.380 asset managers due to the potential yield it offers to the ETF holders. So 00:14:54.380 --> 00:15:02.540 again, speculation, everything is kind of in motion currently. It might get accepted, 00:15:02.540 --> 00:15:10.620 it might not get accepted, so the next few days I would say we'll see either the 00:15:10.620 --> 00:15:18.180 trends confirming, going up, so more green colors, or if the ETF is denied we will 00:15:18.180 --> 00:15:27.100 see probably red colors. So that's it from my side. Happy trading and this is a 00:15:27.100 --> 00:15:33.740 gentle reminder that tomorrow everything could be red again.