KyberSwap attacker used ‘infinite money glitch,’ Australia’s tax agency won’t clarify DeFi rules: Finance Redefined

Ezra Reguerra4 hours agoKyberSwap attacker used ‘infinite money glitch,’ Australia’s tax agency won’t clarify DeFi rules: Finance RedefinedAustralia’s tax regulator did not clarify whether investors must pay taxes on liquid staking or transfer to layer-2 bridges.704 Total views14 Total sharesListen to article 0:00NewsletterJoin us on social networksWelcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.

The attacker who stole $46 million from the KyberSwap protocol has used a complex strategy described by a DeFi expert as an “infinite money glitch.” With the exploit, the attackers tricked the platform’s smart contract into believing it had more liquidity available than it did.

Australia’s tax regulator has failed to clarify its rules on DeFi despite Cointelegraph reaching out for answers. The regulator could not answer whether capital gains taxes apply to liquid staking and transferring assets to layer-2 bridges.

The DeFi ecosystem flourished in the past week thanks to ongoing bullish market momentum, with most of the tokens trading in green on the weekly charts.KyberSwap attacker used “infinite money glitch” to drain funds — DeFi expert

DeFi expert Doug Colkitt laid out a thread on X (formerly Twitter), describing the smart contract exploit engineered by the KyberSwap attacker who drained $46 million from the protocol. 

Colkitt described the exploit as an “infinite money glitch,” where the hackers tricked the smart contract into believing that KyberSwap had more liquidity than it really had. Colkitt also highlighted that it’s the “most complex” smart contract he’s ever seen.

Continue readingAustralia’s tax agency won’t clarify its confusing, “aggressive” crypto rules

On Nov. 9, the Australian Taxation Office (ATO) released new guidance on DeFi. However, the regulator failed to clarify whether capital gains taxes apply to various DeFi features, such as liquid staking and sending funds to layer-2 bridges. 

Cointelegraph reached out to the ATO to clarify the new rules. However, a spokesperson from ATO said that the tax consequences of a transaction “will depend on the steps taken on the platform or contract, and the relevant surrounding facts and circumstances of the taxpayer who owns the cryptocurrency assets.”

With the non-answer, investors could be unable to comply with the possible consequences of the unclear guidance.

Continue readingDYdX founder blames v3 central components for “targeted attack,” involves FBI

Antonio Juliano, the founder of DeFi protocol dYdX, went on X to share the findings of the investigation into the $9 million insurance funds within the platform. Juliano said the dYdX blockchain was not compromised and noted that the insurance claims happened on the v3 chain. The fund was being used to fill gaps within the Yearn.finance liquidation processes. 

The dYdX founder also expressed that instead of negotiating with the exploiters, the protocol will offer bounties to those most helpful in the investigation. “We will not pay bounties to, or negotiate with the attacker,” Juliano wrote.

Continue readingDeFi market overview

Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bullish week, with most tokens trading in green on the weekly charts. The total value locked into DeFi protocols remained above $47 billion.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.# FBI# Taxes# Security# Australia# Hackers# Cybersecurity# Hacks# DeFiAdd reactionAdd reactionRead moreHow to manage crypto losses on tax returns in the US, UK and CanadaHow to backup your crypto wallet private keysSafeMoon hacker’s use of centralized exchanges could help law enforcement — Match Systems