Hello, and welcome to this week's edition of Overbit News.
We start today by looking at some fallout from the recent 'Beijing Ban' when Beijing announced a blanket ban on all crypto trading and mining on Friday. It seems now that cryptocurrency exchanges and suppliers of crypto services are racing to cut connections with mainland Chinese clients.
Ten powerful Chinese government bodies, including the central bank, said overseas exchanges were barred from providing services to mainland investors via the internet - a previously grey area - and vowed to jointly root out "illegal" cryptocurrency activities, capping years of efforts to rein in the sector.
Huobi Global and Binance, two of the world's largest exchanges with a substantial Chinese user base, have halted new account registrations from mainland Chinese users.
Du did not specify how many of Huobi's users would be affected, just that the company, which was previously the world's largest crypto exchange, had begun on a worldwide development plan many years ago and had experienced consistent growth in Southeast Asia and Europe.
Crypto asset manager and trading business Huobi Tech fell 23% on Monday, while OKG Technology Holdings Ltd, a fintech company primarily controlled by Xu Mingxing, the creator of exchange OKcoin, fell 12%. In a message to clients, TokenPocket, a prominent crypto wallet service provider, also stated that it would terminate services to mainland Chinese clients who risked breaching Chinese rules and that it would "Actively embrace" regulation.
Other sorts of Chinese crypto firms are taking a different approach and have been relocating out of China in recent months as a result of the crackdown, according to Flex Yang, founder and CEO of Babel Finance, who added that the impact of the current legislation will be "Limited."
This month, the Chinese crypto financial services company launched a new office in Singapore. Cobo, a cryptocurrency asset management and custodial platform, also recently relocated its headquarters from Beijing to Singapore.
Cryptocurrency being a worldwide phenomenon, it will certainly be interesting to see how this fallout continues, with China being home to some of the world's most significant mining and exchange operations.
Closing out this week's edition is a minor slip up in the cryptocurrency world that resulted in a significant loss. According to TheBlock, Bitfinex paid $23.7 million in transaction fees to transfer $100,000 in Tether, apparently due to a misunderstanding.
Etherscan data reveals the exchange completed the transaction early on Monday, 29th September. The money was transferred from Bitfinex's primary wallets to one of Deversifi's wallets; a non-custodial exchange split out from Bitfinex in 2019.
"At 11:10 UTC on the 27th September a deposit transaction was made using a hardware wallet from the main DeversiFi user interface with an erroneously high gas fee," said a spokesperson for DeversiFi.
"DeversiFi is currently investigating the cause to determine how this occurred and will keep you updated. No customer funds on DeversiFi are at risk and this is an internal issue for DeversiFi to resolve. Operations are unaffected," they added.
The transaction was a smart contract interaction, with the sum of Tether being sent to one wallet and then passed over to Deversifi's wallet. Ironically, it used the recently developed EIP-1559 transaction type to make Ethereum fees more predictable.
The transaction was included in a block generated by an unidentified Ethereum miner, who is among the top ten miners in terms of blocks mined in the last seven days.
In financial terms, this could be the biggest Ethereum transaction charge ever paid. Two transactions totaling $5.2 million in fees were completed in June 2020, a previous remarkable occurrence.
While the world talks of mass adoption, errors like this remind the ecosystem how much ground still has to be covered in terms of security and user experience.
Thanks for reading, and we'll see you next week.