This Week in Crypto: 15.12.2023

Welcome to another edition of “This Week in Crypto,” your trusted source for navigating the ever-changing world of digital assets. This week, we bring you crucial updates and insights to help you stay ahead in the crypto space.

Key Highlights:

1. Urgent: Massive Hack Alert!

2. Unlocking the Future: “Enshrined ZK-EVM” Explained!

3. UAE: Crypto Hub Optimism!

Let’s dive in!

🚨 Urgent: Massive Hack Alert! 🚨

Ledger, the cryptocurrency hardware wallet manufacturer, confirmed a significant security breach involving its Connector library. Malicious actors replaced an authentic version of the library with a harmful file, resulting in potential exploits for various decentralized applications (dApps) from multiple wallets. The breach occurred when a former Ledger employee was phished, granting hackers access to their NPMJS account. Subsequently, the attackers released altered versions of the Ledger Connect Kit, embedding malicious code that redirected funds to a wallet controlled by the hacker. Users unwittingly approved fake transactions displayed by deceptive prompts upon connecting to dApps, potentially draining their wallets. However, the breach did not compromise Ledger wallets or seed phrases directly. Ledger quickly resolved the issue, deploying a fix within 40 minutes, and encouraged users to “Clear Sign” their transactions for enhanced security. CEO Pascal Gauthier acknowledged the security lapse and pledged to implement stronger controls, advocating industry-wide adoption of secure signing standards.

Unlocking the Future: “Enshrined ZK-EVM” Explained!

The concept of an “enshrined ZK-EVM” is gaining traction in the cryptocurrency sphere, especially within Layer-2 Ethereum Virtual Machine (EVM) protocols. These Layer-2 solutions, like optimistic rollups and ZK rollups, rely on EVM verification, but this dependence on a sizable codebase poses security risks. Furthermore, even when aiming for EVM parity, ZK-EVMs require governance for implementing Layer-1 EVM changes into their system. It explores the idea of incorporating a native ZK-EVM within the Ethereum network, highlighting the trade-offs, design challenges, and reasons for or against its implementation. Key considerations include basic functionality, compatibility with Ethereum’s multi-client philosophy, auditability, upgradeability, and support for “almost-EVMs.”

The discussion encompasses open versus closed multi-client systems, the need for speed in ZK-EVMs, and the potential extension of stateful provers. Despite an enshrined ZK-EVM, Layer-2 projects would maintain essential roles in the cryptocurrency ecosystem, such as providing fast pre-confirmations, implementing MEV mitigation, introducing EVM extensions, and nurturing user and developer communities, emphasizing the complexities and trade-offs involved in its adoption.

UAE: Crypto Hub Optimism!

Despite potential regulatory changes in the United States, crypto firms, including Binance, remain optimistic about the United Arab Emirates (UAE) as a crypto hotspot. The UAE’s distinctive “regulation by education” approach, focusing on supporting projects and fostering innovation, sets it apart. Binance, for instance, will continue its presence in the UAE, maintaining custody licenses in Abu Dhabi and operational services in Dubai. The UAE’s commitment to technology and infrastructure development, coupled with its appealing lifestyle, makes it a favored destination for crypto businesses. As the landscape potentially evolves in the U.S., the UAE remains a steadfast choice for crypto companies.

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This Week in Crypto: 15.12.2023 was originally published in MXC Foundation on Medium, where people are continuing the conversation by highlighting and responding to this story.