Blockchain Bites: EY’s Auditing Slip and Bitcoin’s Long Line of Pseudonymous Developers

Balancer fell victim to a “flash loan” exploit, a mining conglomerate sees potential in blockchain and a shareholders association said EY should have caught Wirecard’s multi-billion-dollar blackhole earlier.

Flash loans are one of many novel financial products made possible through decentralized technologies. But with innovation comes risk. Here’s the story:

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Flash loans & hacks
A hacker exploited a smart contract loophole early Monday to drain $500,000-worth of tokens from DeFi liquidity provider Balancer Pool. CTO Mike McDonald said in a blog the attacker had borrowed $23 million-worth of WETH tokens in a flash loan from dYdX, and used those token to trade against themselves with a variety of investment-grade Stratera tokens. A flash loan was used in February to cripple the bZx exchange. These types of attacks leverage a protocol’s built in capabilities and novel financial instruments, rather than hacking the code base. This hack follows news of 870 bitcoins stored on Blockstream’s Liquid Network being made vulnerable to network moderators’ seizure last week, said Summa founder James Prestwich.

Blockchain deals
Mining conglomerate BHP completed a $14 million deal with a Chinese metals giant using the blockchain-based MineHub platform to process contract terms, exchange documents online and provide visibility and accountability along the supply chain. Elsewhere, the South Korean government chose blockchain startup Sendsquare to develop a proof-of-concept blockchain registry to help analyze, anonymize and store clinical data for diabetes.

Privacy and pseudo-anonymity 
Bitcoin’s culture is heavily influenced by the rights to pseudonymity and privacy online. Beginning with Satoshi Nakamoto, a long line of crypto developers…

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