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5 years after The DAO crisis and Ethereum hard fork



A weak point in a smart contract in a private DAO fund firstly through the leak of cryptocurrency worth tens of millions of dollars (as of today billions) and then through the hard fork of the second largest blockchain network, Ethereum. You can find tons of articles investigating these events including a wiki page. Even if this is a question of conclusions, let us recall what happened five years ago.

The DAO was a startup that ran an investment fund in Ether (ETH) and operated as a smart contract on Ethereum. The DAO is a proper name that the founders chose to refer to a general concept of a decentralized autonomous organization or DAO. The fund claimed from the start that it was operating under the terms of its smart contract, which is nothing more than code of a program deployed on the blockchain. Their website did not contain any legal terms, but rather a notice proclaiming the supremacy of machine code over any human readable text explaining that code.

However, the DAO became notorious for a security flaw in their program that allowed an unknown user to siphon off a third of their money. The loss of 3.6 million ethers was then around $ 60 million or around $ 7.3 billion today. Given the negative impact and high public pressure (the fund had more than ten thousand investors) Ethereum was exposed to, the network leaders decided to introduce a retrospective hard fork on their blockchain.

As a result of the fork, funds in The DAO have been moved to a recovery address as if the leak never happened. Thus, the users of the fund could demand their investments back. There were objections to the hard fork, and so those who objected continued to use the original Ethereum blockchain and named it Ethereum Classic (ETC). It works to this day using the real blockchain where the unknown owns the funds that have flowed out.

One of the big debates centered around the question: Was it a theft at all? The United States Securities and Exchange Commission (SEC) has investigated the case and published its report. Although they did not ask this as the main question, their report included the words “steal” and “attacker” as if by default they were qualified. To date, there has been no criminal investigation, or at least the authorities have failed to deal with it properly.

Interestingly, the stranger (let’s call him more neutral, not the “attacker”) published an anonymous letter immediately following this behavior, stating that it was not a misconduct or any kind of violation of law or regulation based on this notorious statement the website of the DAO on the dissemination of smart contracts. In fact, many commentators supported the conclusion that the unknowns did nothing wrong, as they were exploiting the legitimate property of the code that objectively existed and was known even to the developers, some research further showed.


Regardless of who did this, the case still has a lot of unanswered questions that are much broader than it may seem and much more difficult, if not speculative. These are the questions philosophers, governments, and blockchain communities need to ask themselves to move forward.

The case showed the world how vulnerable smart contracts can be, which makes the whole concept of “Code is Law” questionable (American legal scholar Larry Lessig developed this concept much earlier than the invention of the blockchain). It also showed how retroactivity can occur in the blockchain when the majority supports it to remain immutable, despite the widespread feature of the blockchain.

What use is it if alternative branches in the story are possible? Do all the benefits of the technology multiply by zero? What if this is not a mistake but an advantage that we should learn to work properly? Let’s go further. What if we encountered a new phenomenon in law and governance? Should parallels be drawn in order to find answers?

  • Parallel to governance and law. Statutory laws passed democratically (e.g. by elected legislators) reflect the consensus of the majority. Usually the minority has to obey. You can’t break the law. If code is law and the blockchain is a “law” in which that law is written and executed in the form of a smart contract, what is a hard fork? Is it disobedience? Unlikely. Blockchain retroactivity and hard forks are always a possible option. The hard fork is (from the point of view of the Code) a legitimate way for the minority to protect their interests and to split off from the majority if the ledger is changed or other undesirable changes occur. Hard forks and retroactivity are not violations or malicious acts – they are normal with this technology.
  • At the same time out of business. Ethereum itself can be thought of as a kind of business, meaning miners create and validate blocks and generate income. If so, how is it possible for the business to fall apart? A department cannot be separated from the company simply by the will of such a department. However, this can be based on the decision of the shareholders or the authorities (e.g. a court). A distinction is usually made in companies between governance and production functions, e.g. shareholder and factory. So who are miners: the authorities or the producers?
  • Parallel to criminal law and justice. Opinions are contradicting whether the stranger has committed a crime or legitimately taken advantage of an undeclared opportunity in the Code. The DAO never introduced terms and conditions in human spoken language, stating that the smart contract defines the terms. So there is no official contract in the traditional sense, so we can define a violation. Any human word to describe this code would be someone’s interpretation. Those who do not believe it was a crime stress that “no one has reported trespassing.” The poor design of the smart contract failed to protect the fund. Users could act at their own discretion, but there were no legal prohibitions. People are not punished for drinking from a stream when there is no sign of private property. Hence, contractual and private laws did not protect it. Interestingly, the SEC used the words “attacker” and “steal” in its report, but no criminal investigation was found in other government reports.
  • Parallel to a mob law. If it was a crime, then what was the hard fork? Was it a mob law? “Stealing back” is not a legitimate route to justice and return of property. In a civilized society, it is also classified as a crime. This is exactly what the police, prosecutors, courts and marshals are set up for. Was it a phenomenon of the new blockchain justice based on a certain form of digital democracy?
  • Parallel to anarchy. If it wasn’t a crime or an act of justice, what then? Perhaps it was a pure form of market competition in which there are no authorities or state power. Then there is a word that describes this and that is anarchy, which can be defined as “the state of a society freely constituted without any authority or governing body,” or in this case cryptoanarchy.

All of these questions need further investigation. This will ensure the development of better public policy regarding blockchain technology and a better strategy for future DAOs.

This article does not provide investment advice or recommendations. Every step of investing and trading involves risk and readers should conduct their own research in making their decision.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.

Oleksii Konashevych is a Ph.D. Scholarship holder of the EU government-funded Joint International Doctoral Degree in Law, Science and Technology. Oleksii worked with RMIT University’s Blockchain Innovation Hub and researched the use of blockchain technology for e-governance and e-democracy. He is also working on real estate tokenization, digital IDs, public registers and e-voting. Oleksii co-authored a law on e-petitions in Ukraine, worked with the country’s presidential administration, and headed the nongovernmental e-Democracy Group from 2014 to 2016. In 2019, Oleksii participated in the drafting of a bill to combat money laundering and tax issues for crypto assets in Ukraine.

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1 in every 10 Irish investors hold cryptocurrency: Competition and Consumer Protection Commission survey



The Irish Competition and Consumer Protection Commission (CCPC) poll, published on September 16, revealed important facets of investment trends among the masses. CCPC is the legal body for promoting compliance and enforcement of consumer competition and protection laws in Ireland.
The survey came to the following results:


  • Information medium:
    • 62 percent of the 1,000 people surveyed used the Internet to obtain information about investments. The resources used by these people include online banking or investment websites, financial news websites, blogs, and social media platforms.
    • 38 percent sought advice from a bank or a financial advisor.

  • Investment form:
    • More than half, 56 percent of investors, prefer online investments.
    • Online investment options are more popular among those under 35.
      • In the under 35 age group, 36 percent preferred to use a trading platform or a mobile app such as XTB or Etoro
      • 29 percent of this age group use an online financial service provider like Revoult.
      • 22 percent of them preferred to invest through a bank or investment company.
      • 10 percent preferred brokers or agents.
  • Popular investment options:
    • For 1 in 5 people, stocks are the most popular investment option.
    • The second most popular investment option is government or corporate bonds, which are preferred by 12 percent of Irish investors.
    • 11 percent of investors held digital assets and a quarter of young Irish citizens speculated in cryptocurrencies.
      • The survey shows that more than 1 in 10 Irish investors have invested in one or more crypto assets.
      • Cryptocurrency investors in the 25 to 34 age bracket have grown to 25 percent. This group of investors is most open to savings in bitcoins or other digital coins.
  • Investment motivation:
    • 79 percent invested in order to achieve better returns for their money in the long term
    • 46 percent invested due to the current low interest rates.
      • In this 46 percent, 51 percent men invested more than 38 percent women because of low interest rates.
    • 26 percent invested in personal satisfaction
      • 47 percent of them were under 35 who invested in experiments.

Based on the results of the survey, Gráinne Griffin, Director of Communications at CCPC, concluded that Irish citizens switch online both when it comes to investing and looking for information about investing. The survey clearly indicates a transition to digitized investment, especially among the younger Irish population, Griffin said.
For the latest crypto news, investment tips, and real-time price updates, follow our Cryptocurrency page.

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Cryptocurrency: Here’s How the Top 5 Coins Have Performed Since April 2021



Cryptocurrencies have got off to a slow start this year, largely due to an order from the Reserve Bank of India (RBI) to banks telling them not to trade crypto. Cryptocurrency trading accelerated after the Supreme Court lifted the RBI ban in March and allowed coins such as Bitcoin, Ethereum, Dogecoin, and others to be traded. Since then, several online exchanges such as CoinSwitch Kuber and CoinDCX have flourished. But investing in these virtual assets requires due diligence given the extreme volatility of most cryptocurrencies. One way to do this is to look at the historical dates of these coins.

How cryptocurrencies have behaved in the past few weeks and months can give an idea of ​​their potential in the near future and whether a person should invest now or wait.

This is how the top 5 digital coins have behaved since the beginning of this financial year (as of April 1):


Bitcoin is the oldest cryptocurrency in the world. Since its introduction in 2009, it has remained an undisputed leader in the cryptocurrency market. It was Rs. 42 lakh on April 1st of that year, but by the end of May, when the market collapsed massively due to a Chinese crackdown on mining, it had hit a low of Rs. 22 lakh. However, Bitcoin has recovered. On September 17th it was Rs. 37 lakhs.


Experts say this is the only virtual currency that has a chance to challenge Bitcoin’s dominance, but it is far from realizing its true potential. At the beginning of this fiscal year, Ethereum was trading at Rs. 1.40 lakh. It broke the Rs. 2 lakh barrier by early August. This was the time when the Ethereum blockchain had the big London upgrade. Since then, it has grown in value continuously. As of September 17, at the time of writing, it was Rs. 2.76 lakhs.


Launched in 2017, Cardano is a relatively new cryptocurrency coin that has skipped the line to find its place in the top 5. Billed as a third-generation blockchain (Bitcoin and Ethereum are the first and second generation, respectively), Cardano achieved a return of almost 150 percent in just one month. On July 20, it was trading at Rs. 79.71 but by August it had peaked at Rs. 191.41. It saw further gains over the next few weeks, hitting an all-time high of Rs. 227 earlier this month. But profits have since started to decline. On September 17, at the time of writing, it was Rs. 187.82.


Tether is a stablecoin pegged to the US dollar. As the first coin, it is the most popular stablecoin. Since it is pegged to the dollar, meaning that each Tether coin should be backed by actual dollars in Tether Limited’s reserves, it is very stable compared to other cryptocurrencies. If this stability is predictable, it also limits the ability to grow wealth quickly. It stayed within the Rs. 73–75 this fiscal year. It was about Rs. 77 on 09/17.


It is the fifth ranked cryptocurrency in terms of market capitalization. Technically, Ripple is not a cryptocurrency. It facilitates open source payments and XRP is the cryptocurrency that runs on this network. The price has doubled from Rs since April 1st. 41 to Rs. 80 now. But it hasn’t seen a rally similar to what it did in late 2017, which hit its all-time high of Rs 242 in early January 2018. At the time of writing, it was Rs. 84.

Interested in cryptocurrency? We discuss everything about crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music, and anywhere you get your podcasts.

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financial: Cryptocurrency Hyper Fund under government scanner



NEW DELHI: The government is closely monitoring the cryptocurrency in the market based outside of the country after alerting that the authorities responsible for investigating financial fraud are watching a company called Hyper Fund.

Sources said Hyper Fund, a DEFI from the Hyper Tech Group, recently got under the radar. The group claims to have launched the Hyperfonds to provide a decentralized financial infrastructure. Hyper Fund was announced in mid-2020.

However, according to the company’s website, it is run by Ryan Xu, however, using the Multi-Level Marketing (MLM) model, Hyper Fund has attracted investors with higher returns and such offers, a common practice with Ponzi programs that have alerted authorities first place.

According to sources, complaints against such funds are piling up in several states. In India, the RBI, the Union Finance Ministry and SEBI had warned against trading in cryptocurrencies. The RBI plans to launch India’s official digital currency – E rupee – shortly.

The Treasury Department has made it clear that virtual currencies are not legal tender either. Therefore, VCs are not currencies. The RBI has also made it clear that it has not granted any company / company a license / authorization to operate or trade in Bitcoin or a virtual currency.

In June 2018, Amit Bhardwaj and his brother Vivek Bhardwaj were arrested by Pune police at Delhi Airport in connection with an alleged pyramid scheme. Bhardwaj, started his own Bitcoin mining operation and reportedly defrauded more than 8,000 people across the country for Rs 2,000 crore.

He has filed a complaint with the Delhi Police Department’s special cell alleging that he received a blackmail call and was asked to pay protection money on September 6, 2021 in exchange for promised higher returns.

UK regulators have issued warnings about such funds, and the Financial Conduct Authority (FCA) has issued warnings for both hyper-funds and fund advisers.

On its website, first published March 23, 2021 and later updated on August 31, the FCA said, “We believe this company may offer, advertise or sell financial services or products in the UK without our approval Any financial service or product required in the UK must be authorized or registered by us. This company is not authorized by us and is aimed at individuals in the UK. ”

She warns investors against such a fund and goes on to say, “You do not have access to the Financial Ombudsman Service or are protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if something goes wrong . ”

The website used by these companies under the FCA is,

Decentralized finance offering (DEFI) via blockchain technology from HyperTech Group, which is said to be based in Hong Kong, sources said Indian regulators and agencies have started monitoring the situation.

Following actions by financial regulators such as the US Security and Exchange Commission and the UK Financial Conduct Authority, Indian regulators and enforcement agencies have started overseeing investments in Hyper Fund – a decentralized financial offering powered by blockchain technology from the HyperTech Group.

Financial regulators around the world recognize the fact that Ponzi program organizers often use the latest innovations, technologies, products, or growth industries to attract investors and promise high returns on their program. Potential investors are often less skeptical of an investment opportunity when they judge something new, new or “current”. On its website, Hyper Fund claims to be “the strongest rocket in blockchain funding”.

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