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24 reasons why Ethereum is “seriously underestimated”: DeFi, developers, meta universe… (www.blockcast.cc)

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Willy Woo predicts Bitcoin price trend: market and fundamentals are seriously deviated (www.blockcast.cc)

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US state regulators sued OCC, saying OCC did not take predatory loans seriously (www.blockcast.cc)

US state regulators sued OCC, saying OCC did not take predatory loans seriously

Eight states and the District of Columbia are in the process of filing lawsuits over the changes to the U.S. Office of the Comptroller of Currency (OCC) that have just taken effect.

According to a document dated January 5, the New York State Attorney General is leading a complaint against the OCC and the current director of the OCC, Brian Brooks.

As early as October last year, the OCC formulated the “True Lender” rule, which took effect at the end of December last year. The rule stipulates that loans with the National Bank as the lender can follow the OCC’s national guidelines rather than individual state guidelines. The controversy here is that many states have particularly strict anti-loan usury clauses, which set a ceiling on interest rates, hoping to prevent predatory loans. The allegation against OCC stated that OCC did not take these issues seriously:

“Although the OCC verbally condemns predatory loans, it has given full support to lending relationships that circumvent usury laws aimed at protecting users.”

In announcing this rule, OCC stated:

“The bank’s loan relationship with a third party helps people obtain affordable credit. However, increased legal uncertainty about this relationship may hinder banks’ cooperation with third parties, restrict competition, and hinder these partnerships. The innovation it brings. This may ultimately limit people’s access to affordable credit.”

In the complaint starting today, the state regulators claimed that the OCC is above state law (or preemptive) and has exceeded its powers. They stated that the OCC hurriedly rejected its rules without serious consideration of its proposed rules and violated the Administrative Procedure Law. In addition, state regulators require the court to “declare that the OCC violated the Administrative Litigation Act because its “genuine lender” rules are authoritarian, capricious and abuse of discretion, or violate the law.”

OCC rejected Cointelegraph’s request for comment on the lawsuit.

At the end of December last year, an association of national banking regulators filed a similar lawsuit against OCC, accusing it of chartering a non-custodial blockchain lending platform as a national bank. These regulators assured Cointelegraph that the ultra-violence of the OCC is the core legal issue.

At the same time, on January 5, the OCC issued a new letter of explanation, allowing the National Bank to operate stablecoin network nodes. Because of this and similar rulemaking, Brooks has become a civil hero in the crypto community since taking over as OCC director in May.

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US state regulators sued OCC, saying OCC did not take predatory loans seriously (www.blockcast.cc)

US state regulators sued OCC, saying OCC did not take predatory loans seriously

Eight states and the District of Columbia are in the process of filing lawsuits over the changes to the U.S. Office of the Comptroller of Currency (OCC) that have just taken effect.

According to a document dated January 5, the New York State Attorney General is leading a complaint against the OCC and the current director of the OCC, Brian Brooks.

As early as October last year, the OCC formulated the “True Lender” rule, which took effect at the end of December last year. The rule stipulates that loans with the National Bank as the lender can follow the OCC’s national guidelines rather than individual state guidelines. The controversy here is that many states have particularly strict anti-loan usury clauses, which set a ceiling on interest rates, hoping to prevent predatory loans. The allegation against OCC stated that OCC did not take these issues seriously:

“Although the OCC verbally condemns predatory loans, it has given full support to lending relationships that circumvent usury laws aimed at protecting users.”

In announcing this rule, OCC stated:

“The bank’s loan relationship with a third party helps people obtain affordable credit. However, increased legal uncertainty about this relationship may hinder banks’ cooperation with third parties, restrict competition, and hinder these partnerships. The innovation it brings. This may ultimately limit people’s access to affordable credit.”

In the complaint starting today, the state regulators claimed that the OCC is above state law (or preemptive) and has exceeded its powers. They stated that the OCC hurriedly rejected its rules without serious consideration of its proposed rules and violated the Administrative Procedure Law. In addition, state regulators require the court to “declare that the OCC violated the Administrative Litigation Act because its “genuine lender” rules are authoritarian, capricious and abuse of discretion, or violate the law.”

OCC rejected Cointelegraph’s request for comment on the lawsuit.

At the end of December last year, an association of national banking regulators filed a similar lawsuit against OCC, accusing it of chartering a non-custodial blockchain lending platform as a national bank. These regulators assured Cointelegraph that the ultra-violence of the OCC is the core legal issue.

At the same time, on January 5, the OCC issued a new letter of explanation, allowing the National Bank to operate stablecoin network nodes. Because of this and similar rulemaking, Brooks has become a civil hero in the crypto community since taking over as OCC director in May.

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Compound suddenly liquidated a huge amount of US$90 million, oracle security should be taken seriously (www.blockcast.cc)

November 26 was another extraordinary day. After many days of advancing, the cryptocurrency market suddenly retreated sharply today. The quote pages of major exchanges are scarlet, and mainstream currencies such as BTC, ETH, and XRP have appeared two times. The percentage drop above the digits, the 24-hour contract liquidation was as high as 1.373 billion US dollars.

However, the story does not end there.

House seemingly endless rain

Before the tears of the leeks were wiped away, new bad news came again. Debank data shows that the DeFi lending leader Compound suddenly appeared in clearing data of up to $87,837,568 this afternoon.

Compound突现9000万美元巨额清算,预言机安全应受重视

Hongbo, the founder of Debank, told Odaily Planet Daily that the huge liquidation of Compound was actually caused by the dramatic fluctuations in the DAI price of the oracle data source Coinbase Pro. Short-term price manipulation can be achieved by manipulating the information source that the oracle relies on. To mislead the price on the chain.

Chengdu Lian’an also stated that this liquidation event has nothing to do with Compound’s own contract, and it is suspected that offline oracle data sources have been attacked. Among them, the DAI of Coinbase Pro fluctuates greatly, which exceeds the fluctuation range of other exchanges.

Interestingly, in addition to the impact of users who borrowed DAI with non-stable assets such as ETH, users who borrowed stablecoins with stablecoins were also affected.

Debank Xu Yong posted a user who was greatly affected by the liquidation incident. The data shows that the user borrowed stablecoins (DAI+USDC+USDT) by depositing stablecoins (DAI+USDC+USDT) in Compound In-house COMP mining, although theoretically speaking, using stablecoins to borrow stablecoins is generally not affected by currency price fluctuations and the liquidation risk is relatively small, but extreme situations still occur.

Compound突现9000万美元巨额清算,预言机安全应受重视

A picture circulated in the community shows that the price of the USD stable currency DAI in Compound’s quotation system has reached an abnormal value of $1.22.

Compound突现9000万美元巨额清算,预言机安全应受重视

On Coinbase Pro, the price of DAI/USD began to climb gradually from 15:30, reaching a peak of 1.34 US dollars.

The large fluctuations in the price of stablecoins have led to large fluctuations in the mortgage rate (debt value/collateralized asset value) that usually seems safer, and thus triggers the liquidation line-the minimum requirements for the mortgage rate of different currencies in Compound are different , DAI is generally 75%.

For example, if a user uses 200 DAI + 100 USDC to lend 200 DAI + 10 USDC (mainly for COMP mining), if the prices of DAI and USDC can be stabilized at about 1 USD, the mortgage rate is 70%, but if DAI rises to 1.5 US dollars, then the value of its mortgaged assets and borrowing value will change, and the mortgage rate at this time will rise to about 77.5%.

What will happen after liquidation?

The liquidation happened, what does it mean?

First of all, it needs to be clear that the liquidation procedure is actually a fixed part of the loan agreement. It is designed to ensure that the withdrawal and lending of funds always have an excess cash capacity, while protecting the borrower from the risk of default.

In Compound’s liquidation mechanism, there will be a special identity called a liquidator, and anyone can become a liquidator. As long as the liquidator finds that the mortgage rate of a certain loan is too low, the liquidation process can be triggered. At this time, the liquidator can take away the mortgaged assets of the borrower at a certain discount price, and the funds paid are equivalent to repaying the loan for the borrower. To avoid bad debts on the platform and maintain solvency.

PeckShield gave an example to illustrate this incident. For example, a user borrowed 750,000 US dollars of DAI from the Compound with a house worth 1 million US dollars. At this time, the price of DAI unexpectedly increased, and the user needed to deposit more. More collateral can guarantee a 75% mortgage rate, if not, the liquidation process can be triggered. After the liquidation is executed, the house mortgaged by the user is no longer owned by the user. The liquidator can take out a normal price of Dai from another place to help the lender repay the money, and then take the house away.

Hongbo explained that in this incident, the attacker could play the role of liquidator and get the 5% discount on mortgage assets provided by the Compound system as an incentive.

The oracle control attack is raging

This is not the first recent attack on the quotation system.

Chengdu Lian’an also pointed out earlier that, in fact, the essence of the recent “lightning loan attack” that has ravaged Amber is to manipulate the oracle, causing internal and external price differences and arbitrage. Lightning loans are just a new type of financial tool used by attackers.

At the end of October, the DeFi project Harvest Finance was attacked. The hackers used only 20 ETH (mainly used to pay for gas, to facilitate the rapid completion of the attack) to leverage $30 million in revenue. This protocol uses the Curve y pool as the price feed source when fToken mints. Attackers manipulate price data and control the number of coins through huge exchanges, thereby arbitrage multiple times.

Last week, the Value DeFi protocol was also attacked. Hackers manipulated the price of the Curve asset pool through a series of inter-protocol operations, which eventually caused Value DeFi to lose more than $7 million.

There are countless similar examples. Cheese Bank and Origin Protocol have recently been attacked by hackers.

Judging from the example of Compound, the fundamental reason for the huge liquidation is that the data source of the oracle price is too single.

In this regard, Chengdu Lianan suggests that DeFi developers should strengthen targeted testing of oracles, especially before the project goes online, try to simulate various scenarios of price manipulation attacks as much as possible, find problems in time and find solutions, and effectively improve the project’s resistance to predictions The ability to attack aircraft.

After the project goes live, developers should also choose to access third-party oracle services, security testing services, etc. according to the situation; organize related bug bounty activities to timely check for deficiencies, optimize the overall structure, and minimize similar incidents The possibility of happening again.

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Survey: Many Investors Expect Bitcoin to Be Seriously Higher in One Month (www.blockcast.cc)

Bitcoin has undergone a strong rally since the lows seen just two weeks ago. The leading cryptocurrency currently trades for $13,050, far above the aforementioned lows and above the medium-term lows set during the September correction at $9,800.

Some have argued that the cryptocurrency is severely overbought. As reported by NewsBTC previously, one trader recently noted that the cryptocurrency’s one-day Fisher Transform indicator is currently at highs not seen since August, May, and February of this past year. As can be seen in the chart, each of the named periods marked medium-term highs in the price of Bitcoin.

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Chart of BTC's price action over the past year with analysis by crypto trader Moe (@Moe_momentum_ on Twitter). 
Source: BTCUSD from TradingView.com
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Bitcoin Could Be Seriously Higher in a Month

Despite this precedent, analysts think that BItcoin will be seriously higher in a month from now.

Real Vision, a leading financial media outlet followed by fund managers and retail investors across the globe, recently released its latest Real Vision Exchange Survey report. Members of the website are polled by Real Exchange to show how bullish or bearish the average user is on certain assets.

As can be seen, most investors are extremely bullish on Bitcoin and are expecting the asset to rally more than 5% in the month ahead:

“Most participants saw equities as well as the currencies (USD, EUR, AUD) heading slightly lower. US and EM equities were a little bit better off than their European counterparts (at least fort the 1m horizon). Bond yields are expected to head lower as well. The view on Bitcoin is still very positive despite or maybe because of the recent rally. While Gold is also expected to increase, upside potential is expected to be lower (short term) compared to Bitcoin.”

Frequency of participants responses for the 1 month horizon

Frequency of participants responses for the 1 month horizon

Another poll indicated that 80% of all Real Vision users are long on Bitcoin at the moment. The platform has been covering the cryptocurrency for multiple years, prior to it showing up on the radar of many in the mainstream.

Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

Fundamentals Suggest This To Be The Case

Fundamentals indicate that the cryptocurrency has room to move higher in the month ahead.

Bill Barhydt, CEO of Abra, recently commented that he is increasing his exposure to Bitcoin as he sees the investment case for this asset continuing to grow:

“A few weeks ago, I increased my ownership of #Bitcoin significantly and it’s now 50% of my investment portfolio. Why? I believe #Bitcoin is the best investment opportunity in the world right now. There are three reasons I believe this to be true today…. Fundamentals, Technicals, and Sentiment.”

Many think that the next fiscal stimulus bill has the potential to drive BTC even higher as the market embraces a narrative of the U.S. dollar devaluing.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Survey: Many Investors Expect Bitcoin to Be Seriously Higher in One Month

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Author: Refer to Source Nick Chong