SBF ordered to jail, Bitcoin ETF delayed and SEC to appeal Ripple case: Hodler’s Digest, Aug. 6-12

Opinion by: Casey Ford, PhD, researcher at Nym TechnologiesWeb3 rolled in on the wave of decentralization. Decentralized applications (DApps) grew by 74% in 2024 and individual wallets by 485%, with total value locked (TVL) in decentralized finance (DeFi) closing at a near-record high of $214 billion. The industry is also, however, heading straight for a state of capture if it does not wake up. As Elon Musk has teased of placing the US Treasury on blockchain, however poorly thought out, the tides are turning as crypto is deregulated. But when they do, is Web3 ready to “protect [user] data,” as Musk surrogates pledge? If not, we’re all on the brink of a global data security crisis.The crisis boils down to a vulnerability at the heart of the digital world: the metadata surveillance of all existing networks, even the decentralized ones of Web3. AI technologies are now at the foundation of surveillance systems and serve as accelerants. Anonymity networks offer a way out of this state of capture. But this must begin with metadata protections across the board.Metadata is the new frontier of surveillanceMetadata is the overlooked raw material of AI surveillance. Compared to payload data, metadata is lightweight and thus easy to process en masse. Here, AI systems excel best. Aggregated metadata can reveal much more than encrypted contents: patterns of behaviors, networks of contacts, personal desires and, ultimately, predictability. And legally, it is unprotected in the way end-to-end (E2E) encrypted communications are now in some regions. While metadata is a part of all digital assets, the metadata that leaks from E2E encrypted traffic exposes us and what we do: IPs, timing signatures, packet sizes, encryption formats and even wallet specifications. All of this is fully legible to adversaries surveilling a network. Blockchain transactions are no exception.From piles of digital junk can emerge a goldmine of detailed records of everything we do. Metadata is our digital unconscious, and it is up for grabs for whatever machines can harvest it for profit.The limits of blockchainProtecting the metadata of transactions was an afterthought of blockchain technology. Crypto does not offer anonymity despite the reactionary association of the industry with illicit trade. It offers pseudonymity, the ability to hold tokens in a wallet with a chosen name. Recent: How to tokenize real-world assets on BitcoinHarry Halpin and Ania Piotrowska have diagnosed the situation:“[T]he public nature of Bitcoin’s ledger of transactions […] means anyone can observe the flow of coins. [P]seudonymous addresses do not provide any meaningful level of anonymity, since anyone can harvest the counterparty addresses of any given transaction and reconstruct the chain of transactions.”As all chain transactions are public, anyone running a full node can have a panoptic view of chain activity. Further, metadata like IP addresses attached to pseudonymous wallets can be used to identify people’s locations and identities if tracking technologies are sophisticated enough. This is the core problem of metadata surveillance in blockchain economics: Surveillance systems can effectively de-anonymize our financial traffic by any capable party.Knowledge is also an insecurityKnowledge is not just power, as the adage goes. It’s also the basis on which we are exploited and disempowered. There are at least three general metadata risks across Web3.Fraud: Financial insecurity and surveillance are intrinsically linked. The most serious hacks, thefts or scams depend on accumulated knowledge about a target: their assets, transaction histories and who they are. DappRadar estimates a $1.3-billion loss due to “hacks and exploits” like phishing attacks in 2024 alone. Leaks: The wallets that permit access to decentralized tokenomics rely on leaky centralized infrastructures. Studies of DApps and wallets have shown the prevalence of IP leaks: “The existing wallet infrastructure is not in favor of users’ privacy. Websites abuse wallets to fingerprint users online, and DApps and wallets leak the user’s wallet address to third parties.” Pseudonymity is pointless if people’s identities and patterns of transactions can be easily revealed through metadata.Chain consensus: Chain consensus is a potential point of attack. One example is a recent initiative by Celestia to add an anonymity layer to obscure the metadata of validators against particular attacks seeking to disrupt chain consensus in Celestia’s Data Availability Sampling (DAS) process.Securing Web3 through anonymityAs Web3 continues to grow, so does the amount of metadata about people’s activities being offered up to newly empowered surveillance systems. Beyond VPNsVirtual private network (VPN) technology is decades old at this point. The lack of advancement is shocking, with most VPNs remaining in the same centralized and proprietary infrastructures. Networks like Tor and Dandelion stepped in as decentralized solutions. Yet they are still vulnerable to surveillance by global adversaries capable of “timing analysis” via the control of entry and exit nodes. Even more advanced tools are needed.Noise networksAll surveillance looks for patterns in a network full of noise. By further obscuring patterns of communication and de-linking metadata like IPs from metadata generated by traffic, the possible attack vectors can be significantly reduced, and metadata patterns can be scrambled into nonsense.Anonymizing networks have emerged to anonymize sensitive traffic like communications or crypto transactions via noise: cover traffic, timing obfuscations and data mixing. In the same spirit, other VPNs like Mullvad have introduced programs like DAITA (Defense Against AI-guided Traffic Analysis), which seeks to add “distortion” to its VPN network. Scrambling the codesWhether it’s defending people against the assassinations in tomorrow’s drone wars or securing their onchain transactions, new anonymity networks are needed to scramble the codes of what makes all of us targetable: the metadata our online lives leave in their wake.The state of capture is already here. Machine learning is feeding off our data. Instead of leaving people’s data there unprotected, Web3 and anonymity systems can make sure that what ends up in the teeth of AI is effectively garbage.Opinion by: Casey Ford, PhD, researcher at Nym Technologies.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Toncoin Open Interest (OI) has jumped 67% over the past 24 hours following Telegram founder Pavel Durov’s reported departure from France, where he had been required to stay since his arrest six months ago.On March 15, Toncoin (TON) OI  — a metric tracking the total number of unsettled Toncoin derivative contracts such as options and futures —  reached $169 million, representing a 67% increase from the previous day when the reports of Durov’s departure first surfaced, according to CoinGlass data.Toncoin open interest reaches highest level in 42 daysIt is the highest level of OI in Toncoin since Feb. 1, when it was sitting at $171.49 million. TON is The Open Network’s native cryptocurrency and is the exclusive blockchain infrastructure for Telegram’s Mini App ecosystem.Toncoin open interest surged 67% on March 15. Source: CoinGlassTON’s price jumped 17% over the same period, trading at $3.45 at the time of publication, according to CoinMarketCap data. Trading resource account Crypto Billion said in a March 15 X post that Toncoin is “showing signs of a potential long-term accumulation phase as it stabilizes near key support levels.”However, if this rally is short-lived, around $18.8 million in long positions could be liquidated if TON’s price falls back toward the $3 level it was trading at on March 14.Toncoin open interest also surged after arrest in 2024The court reportedly allowed Durov to travel to Dubai, a city with no extradition agreements with many countries.The market’s reaction signals how significant this case is to the crypto industry. Many are worried that Durov’s arrest in August 2024 in France could set a precedent for cracking down on other privacy-focused services. He was accused of running a platform that enables illicit transactions.Related: Bitget predicts TON ‘de-Telegramization’ in the next 2 yearSimilarly, when Durov was arrested in August 2024, TON’s OI also surged. Following the news of Durov’s arrest on Aug. 24, 2024, TON’s OI spiked 32% over the following 24 hours, alongside its price falling almost 12%.On Jan. 21, Telegram announced it would cease support for all blockchains other than The Open Network for its messenger services.Magazine: Vitalik on AI apocalypse, LA Times both-sides KKK, LLM grooming: AI Eye

The Open Network (TON) Society released a statement on March 15 celebrating the return of Pavel Durov’s passport as a win for freedom of speech, online privacy, and innovation.According to the AFP news agency, Durov left France and headed to Dubai on the morning of March 15 after gaining permission from French officials to depart the European country.“We have stood behind Pavel since his arrest on August 24, 2024,” the TON Society wrote. The group added:”Pavel’s unwavering commitment to freedom of speech and transparency, despite facing the most challenging of circumstances, is a powerful reminder of the importance of standing by your principles, even when it is politically and personally detrimental to do so.”The TON Society previously penned a letter condemning the French government for detaining Durov and urging the country to release the Telegram founder.The TON Society celebrates the return of Durov’s passport by French law enforcement officials. Source: TON Society“The arrest of the Telegram founder, Pavel Durov, is a direct assault on a basic human right — the freedom of expression of everyone,” the TON Society’s Aug. 27 letter read.At the time, the organization also called on the United Nations, the Council of Europe (CoE), the Organization for Security and Cooperation in Europe (OSCE), and the European Union (EU) to intervene and push for Durov’s release.Free speech advocates in the crypto industry sounded the alarm over Pavel Durov’s arrest, citing the troubling implications for privacy and decentralized technologies in the face of state pressure to censor the internet and the potential for regulatory capture.Emmanuel Macron denies political motivation for Durov’s arrestShortly after French law enforcement officials detained the Telegram founder, President Emmanuel Macron denied the arrest was politically motivated and claimed that France was committed to free speech.French President Emmanuel Macron denies the arrest of Pavel Durov was politically motivated. Source: Emmanuel MacronIn a subsequent press conference, Macron also denied inviting Durov to France amid a torrent of backlash from the crypto community and free speech advocates.Chris Pavlovski, the CEO of the free-speech video platform Rumble, announced that he safely departed Europe shortly following the detention of Pavel Durov.In an Aug. 25 X post, the CEO said that the French government threatened Rumble and condemned state authorities for the crackdown on free speech.Magazine: Did Telegram’s Pavel Durov commit a crime? Crypto lawyers weigh in