BIS thinks DeFi has no use cases, but CZ is bullish: Finance Redefined
Welcome 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 past week in the DeFi ecosystem was filled with ups and downs, from the United States Commodity Futures Trading Commission’s (CFTC) investigation into multiple DeFi protocols to Binance CEO Changpeng “CZ” Zhao’s forecast that DeFi would outgrow centralized finance (CeFi) in the next bull run.
While CZ anticipates a bright future for DeFi, a report from the Bank for International Settlements (BIS) argues that a pure form of DeFi cannot survive independently and has little use case in the real world.
The Shiba Inu ecosystem’s layer-2 network, Shibarium, has continued its rapid growth post-relaunch, with over one million wallets created; however, its progress has yet to impact the price of the Shiba Inu (SHIB) token.
The top 100 DeFi tokens had a late Friday surge, with most of the tokens posting positive weekly gains.
Binance CEO CZ forecasts DeFi outgrowing CeFi in the next bull run
Binance CEO Changpeng Zhao predicts that DeFi has the potential to surpass centralized CeFi in the next bull run.
During a Sept. 1 live X (formerly Twitter) Spaces, titled CZ AMA, Zhao shared his thoughts on the future of DeFi. “I think the more decentralized the industry becomes, the better,” he declared, adding that it may not be long before it takes over CeFi trading volumes.
CFTC cracks down on DeFi protocols Opyn, ZeroEx and Deridex
The U.S. CFTC is taking regulatory action against three DeFi protocols for allegedly failing to register various derivatives trading offerings. The U.S. commodities regulator announced it had issued orders against protocols Opyn, ZeroEx and Deridex in a Sept. 8 statement.
Deridex and Opyn were charged for failing to register as a swap execution facility or designated contract market and failing to register as a futures commission merchant. The two protocols also failed to comply with customer provisions set out in the Bank Secrecy Act, the CFTC said.
“Pure” DeFi has little chance for real-world use because of need for oracles: BIS
The need for an oracle in DeFi is a major impediment to adoption in the real world, according to the authors of a Bank for International Settlements bulletin. The problems with oracles are both practical and principled, and the study’s authors saw no way around them.
An oracle is a third party that provides real-world data flowing to or from a DeFi protocol. An oracle is centralized by nature, and its presence means a protocol is not fully decentralized — if that is tolerated, then trustlessness is lost, the authors said. That is likely to be a fatal flaw for use with real-world assets, the authors wrote.
Binance to reimburse users $1 million for Cyber Earn incident
Crypto exchange Binance is refunding users $1 million of Tether (USDT) over its handling of the CyberConnect (CYBER) token incident.
As described by the exchange on Sept. 7, a price discrepancy on listed CYBER tokens occurred the week prior due to a liquidity crunch constricting CYBER cross-chain bridges on the Korean cryptocurrency exchange Upbit. This led to arbitrageurs borrowing CYBER from Binance to profit from the difference. In turn, Binance users who staked CYBER in its Flexible Earn Program were barred from redemptions, as the staked assets had been borrowed, reaching the loan limit.
Shibarium hits one million wallets amid meteoric growth, SHIB yet to catch up
The total number of wallets on Shiba Inu’s newly launched layer-2 network, Shibarium, has surpassed the one million mark in a meteoric rise since its relaunch.
The milestone — announced in a Sept. 3 blog post by the official Shibarium team — means there were at least 900,000 wallets created since Shibarium’s relaunch on Aug. 28, and only two weeks after the Shibarium network first went live — albeit with some technical hiccups.
DeFi market overview
Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a late bullish surge, with most tokens trading in the green on the weekly charts. The total value locked into DeFi protocols touched $49.73 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.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
German law enforcement seized 34 million euros ($38 million) in cryptocurrency from eXch, a cryptocurrency platform allegedly used to launder funds stolen after Bybit’s record-breaking $1.4 billion hack.
The seizure, announced on May 9 by Germany’s Federal Criminal Police Office (BKA) and Frankfurt’s main prosecutor’s office, involved multiple crypto assets, including Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Dash (DASH). The move marks the third-largest crypto confiscation in the BKA’s history.
The authorities also seized eXch’s German server infrastructure with over eight terabytes of data and shut down the platform, the announcement added.
eXch exchanged crypto without AML
In the statement, the BKA described eXch as a “swapping” service that allowed users to exchange various crypto assets without implementing Anti-Money Laundering (AML) measures.
The platform had operated since 2014 and reportedly facilitated about $1.9 billion in crypto transfers, some of which were believed to be of “criminal origin,” including assets laundered during the Bybit hack.
“Among other things, a portion of the $1.5 billion stolen from the Bybit crypto exchange, which was hacked on Feb. 21, 2025, is said to have been exchanged via eXch,” the authorities wrote.
Multisig, FixedFloat among laundering cases
According to a post by crypto sleuth ZachXBT, eXch was also involved in laundering millions of funds from other crypto thefts and exploits, including Multisig, FixedFloat and the $243 million Genesis creditor theft.
Those were in addition to “countless phishing drainer services over the past few years with refusal to block addresses and freeze orders,” ZachXBT said.
ZachXBT was among the first security analysts to report on eXch’s links to laundering $35 million of crypto assets stolen from Bybit soon after the hack was confirmed.
Related: Hacken CEO sees ‘no shift’ in crypto security as April hacks hit $357M
“Lazarus Group transferred 5K ETH from the Bybit Hack to a new address and began laundering funds via eXch (a centralized mixer) and bridging funds to Bitcoin via Chainflip,” ZachXBT wrote in a Telegram post on Feb. 22.
eXch announced termination of services by May 1
After initially denying involvement in laundering funds from the Bybit hack, eXch eventually announced it would cease operations by May 1 in a Bitcoin Talk post published in mid-April.
“Even though we have been able to operate despite some failed attempts to shut down our infrastructure […], we don’t see any point in operating in a hostile environment where we are the target of SIGINT [Signals Intelligence] simply because some people misinterpret our goals,” it wrote.
Addressing the seizure, senior public prosecutor Benjamin Krause stressed the importance of action against “quick and anonymous opportunities for money laundering for any amount.”
“Crypto swapping is an essential component of the underground economy, used to conceal incriminated funds from illegal activities such as hacking or trading in stolen payment card data, thus making them available to perpetrators,” he said.
Magazine: Finally blast into space with Justin Sun, Vietnam’s new national blockchain: Asia Express
Politics
Red Wall MPs should focus on two-child benefit cap rather than winter fuel, Harriet Harman says
Red Wall MPs should push for the two-child benefit cap to be lifted rather than a reversal of the winter fuel payment policy, Baroness Harriet Harman has said.
Baroness Harman, the former Labour Party chair, told Sky’s Electoral Dysfunction podcast that this would hand the group a “progressive win” rather than simply “protesting and annoying Sir Keir Starmer” over winter fuel.
Earlier this week, a number of MPs in the Red Wall – Labour’s traditional heartlands in the north of England – reposted a statement on social media in which they said the leadership’s response to the local elections had “fallen on deaf ears”.
They singled out the cut to the winter fuel allowance as an issue that was raised on the doorstep and urged the government to rethink the policy, arguing doing so “isn’t weak, it takes us to a position of strength”.
Labour’s decision to means test the policy has snatched the benefit away from millions of pensioners.
But Baroness Harman said a better target for the group could be an overhaul of George Osborne’s two-child benefit cap.
The cap, announced in 2015 as part of Lord David Cameron’s austerity measures, means while parents can claim child tax credit or Universal Credit payments for their first and second child, they can’t make claims for any further children they have.
Labour faced pressure to remove the cap in the early months of government, with ministers suggesting in February that they were considering relaxing the limit.
Baroness Harman told Beth Rigby that this could be a sensible pressure point for Red Wall MPs to target.
She said: “It could be that they have a kind of progressive win, and it might not be a bad thing to do in the context of an overall strategy on child poverty.
“Let’s see whether instead of just protesting and annoying Sir Keir Starmer, they can build a bridge to a new progressive set of policies.”
Jo White, the Labour MP for Bassetlaw and a member of the Red Wall group, suggested that her party’s “connection” to a core group of voters “died” with the decision to means test the winter fuel payment for pensioners.
“We need to reset the government,” she told Electoral Dysfunction. “The biggest way to do that is by tackling issues such as winter fuel payments.
“I think we should raise the thresholds so that people perhaps who are paying a higher level of tax are the only people who are exempt from getting it.”
Pic: AP
A group of MPs in the Red Wall, thought to number about 40, met on Tuesday night following the fallout of local election results in England, which saw Labour lose the Runcorn by-election and control of Doncaster Council to Reform UK.
Following the results, Sir Keir said “we must deliver that change even more quickly – we must go even further”.
Some Labour MPs believe it amounted to ignoring voters’ concerns.
Read more:
UK and US trade deal will save thousands of UK jobs – Starmer
Starmer faces rebellion from Labour MPs over welfare reforms
One of the MPs who was present at the meeting told Sky News there was “lots of anger at the government’s response to the results”.
“People acknowledged the winter fuel allowance was the main issue for us on the doorstep,” they said.
“There is a lack of vision from this government.”
Another added: “Everyone was furious.”
Downing Street has ruled out a U-turn on means testing the winter fuel payment, following newspaper reports earlier this week that one might be on the cards.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway