MarketMinder

Headlines

Here we analyze a selection of third-party news articles—both those we agree and disagree with.

Please note: Though we make every effort to source articles from freely available sites, we will also regularly include articles on sites that have limited content for non-subscribers. Doing so is increasingly unavoidable, as more and more financial media is published behind paywalls.


Beanstalk Cryptocurrency Loses $182 Million of Reserves in Flash ‘Attack’

MarketMinder’s View: Errrr we guess this is another thing to add to your pro/con list if you are considering the cryptocurrencies known as stablecoins, which claim a fixed value and are backed by a basket of reserve assets. That backing, in theory, makes them more money-like and, well, stable than the free-floating cryptos like bitcoin. It is all well and good until someone comes in and steals the reserves in a way that might be technically legal. That is what happened with the titular coin known as “Beanstalk” when an unidentified investor executed a hostile takeover and made off with the reserve assets. “A still-unidentified attacker had borrowed $80m in cryptocurrency and deposited it in the project’s silo, gaining enough voting rights in exchange to be able to pass any proposal instantly. With that power, they voted to transfer the contents of the treasury to themselves, then returned the voting rights, withdrew their money, and repaid the loan – all in a matter of seconds.” It was all consistent with Beanstalk’s rules, which grant voting rights to depositors, and there will likely be little to no recourse for the remaining investors, who now own tokens that have no backing and trade at 12 cents. Lesson: Always know exactly what you are buying and what the rules are so that you can determine and weigh the risks—especially when you are in a very lightly regulated and newly established area.