Katherine Ross

Elliptic pushed back against a Wall Street Journal report from earlier this month alleging that Hamas used crypto as a way to fund its attacks on Israel.



The report from the Journal was also cited by Democratic lawmakers asking the Biden administration about the use of crypto by terrorist groups.



Blockworks previously reported that, based on expert interviews, the likelihood of crypto being used as a funding tool was <a href="https://blockworks.co/news/crypto-seizures-security-experts-fundraise-israel">slim due to the nature of a public blockchain</a>. Law enforcement, Elliptic wrote in its previous report, are able to “successfully freeze crypto assets held by terrorist groups.”



The Journal’s <a href="https://www.wsj.com/world/middle-east/militants-behind-israel-attack-raised-millions-in-crypto-b9134b7a">report</a> claimed that Hamas was able to raise “millions” in crypto.



“However, there is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted,” Elliptic <a href="https://www.elliptic.co/blog/setting-the-record-straight-on-crypto-crowdfunding-by-hamas">said</a>. “No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources.”



Read more: <a href="https://blockworks.co/news/crypto-financing-terrorism-biden">Warren, Democrat lawmakers demand plan on crypto terror financing prevention</a>



“We have spoken to representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify this,” the post continued.



Elliptic further tracked some of the funds, noting that “only $21,000 in cryptocurrency has been donated since Oct. 7, and thanks to the efforts of crypto businesses and researchers, much of this has been frozen — preventing Gaza Now from being able to use these funds.”



Chainalysis <a href="https://blockworks.co/news/chainalysis-crypto-terror-financing">pushed for a more nuanced approach</a> when looking into how terrorist organizations potentially use crypto, after Warren and 100 other Democrats penned their letter.&nbsp;



“To the untrained eye, it might appear that $82 [million] worth of cryptocurrency was raised for terror financing,” Chainalysis wrote.&nbsp;



“But it is much more likely that a small portion of these funds were intended for terrorist activity and a majority of the funds processed through the suspected service provider were unrelated.” Crypto has, however, been used as a way to fundraise for humanitarian causes.



 <a href="https://blockworks.co/news/crypto-aid-charity-donations">Crypto Aid Israel</a> raised over $185,000 in crypto and the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) enabled crypto donations a few years ago.



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‘No evidence’ Hamas raised millions in crypto, Elliptic says

Ben Strack

<div id="highlights-block_6324da90fccd9" class="highlights">
 <ul>
 <li>Blockchain analytics provider names chief legal officer</li>
 <li>Creator of crypto-focused team at US Department of Justice is reportedly leaving his post</li>
 </ul>
 
</div>



PolySign subsidiary MG Stover recently appointed several executives to meet the growing demand for its digital asset services. The fund administration firm services hedge funds, private equity funds and venture capital funds.



The hires included <a href="https://www.linkedin.com/in/keepingitpc/" target="_blank" rel="noreferrer noopener">Patrick Clancy</a> as head of digital asset strategy; <a href="https://www.linkedin.com/in/kennybroom/" target="_blank" rel="noreferrer noopener">Kenny Broom</a> as director of venture capital; <a href="https://www.linkedin.com/in/ray-kamrath-67560111/" target="_blank" rel="noreferrer noopener">Ray Kamrath</a> as chief revenue officer; <a href="https://www.linkedin.com/in/nik-rowlston-14a92a28/" target="_blank" rel="noreferrer noopener">Nik Rowlston</a> as head of fund services for Canada; and <a href="https://www.linkedin.com/in/brian-wolf-3665a513/" target="_blank" rel="noreferrer noopener">Brian Wolf</a> as senior vice president of people and culture. 



Clancy and Broom both previously worked at consulting firm Armanino. Clancy was a managing director of digital assets, while Broom was a senior manager who performed financial statement audits of digital asset funds.



Kamrath was most recently Amber Group’s head of institutional prime services and also previously was in foreign exchange trading roles at Jefferies and Goldman Sachs.



Rowlston, who joined the firm to build a team of accountants and investor services professionals in Halifax, was formerly a managing director of fund administration at SS&amp;C.



Wolf comes from Mediaocean, where he was also a senior vice president of people and culture and has worked at Kraken and Northern Trust.



Blockchain analytics provider Elliptic, meanwhile, tapped <a href="https://www.linkedin.com/in/john-melican-91b613a3/" target="_blank" rel="noreferrer noopener">John Melican</a> as its new chief legal officer after the executive had joined the firm in January as chief of external affairs. 



Melican has led teams focused on anti-money laundering, sanctions and anti-corruption compliance at financial institutions, most recently overseeing global financial crimes consulting at Exiger. He has also led compliance functions at American Express, Bear Stearns and Bank of Tokyo-Mitsubishi.



Earlier in his career, Melican was an assistant district attorney in New York focused on money laundering and other financial crimes prosecutions. He also spent time as trial counsel for the New York Stock Exchange.



“The crypto analytics tools that are used in this industry to implement effective and efficient compliance programs, as well as the tools used by governments to regulate and investigate the industry, are essential for ensuring that crypto is a mature and well-regulated part of the global financial system,” Melican said in a statement.



Toposware, the lead developer of open interoperability protocol Topos, recently created its Technology Advisory Council to boost expertise in distributed systems, cryptoeconomics and business.



The first advisers of the unit are <a href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fwww.linkedin.com%2Fin%2Fraovj%2F&amp;esheet=52856456&amp;newsitemid=20220907005047&amp;lan=en-US&amp;anchor=Vijay+Rao&amp;index=2&amp;md5=fcd2988318b1b39d8ddc247796cbe729" target="_blank" rel="noreferrer noopener">Vijay Rao</a>, director of infrastructure at Meta, and <a href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fwww.linkedin.com%2Fin%2Fsara-tucci-piergiovanni-1582672%2F%3ForiginalSubdomain%3Dfr&amp;esheet=52856456&amp;newsitemid=20220907005047&amp;lan=en-US&amp;anchor=Sara+Tucci-Piergiovanni&amp;index=3&amp;md5=3bc0f2a9ba3e50fd8ae7c46ba11e5b73" target="_blank" rel="noreferrer noopener">Sara Tucci-Piergiovanni</a>, the head of laboratory and a senior research engineer at CEA List at Paris-Saclay University.



“Blockchain interoperability is a feature increasingly important to make the vision of the future Internet a reality, but it is still a big challenge to address,” Tucci-Piergiovanni said in a statement. “Toposware is working today on very promising ideas, always grounded on solid research, to make inter-chain interactions scalable and secure.”



<a href="https://www.linkedin.com/in/nicholas-mcquaid-b0977a4a/" target="_blank" rel="noreferrer noopener">Nicholas McQuaid</a>, a principal deputy assistant attorney general for the US Department of Justice’s criminal division, is leaving his post, <a href="https://news.bloomberglaw.com/us-law-week/justice-departments-criminal-division-deputy-mcquaid-departing" target="_blank" rel="noreferrer noopener">Bloomberg reported</a>.



McQuaid created and led a team dedicated to investigating and prosecuting crypto-related schemes at the government agency, the outlet reported.&nbsp;



He worked at the White House from April 2013 to January 2017 as a deputy counsel and deputy assistant to the president, according to his LinkedIn profile. He had spent the next few years as a partner at law firm Latham &amp; Watkins.



It is unclear where McQuaid is headed. He did not immediately return a request for comment.



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Latest in Crypto Hiring: Fund Admin Firm Adds Execs To Expand Digital Asset Services

Jack Kubinec

<div id="highlights-block_62bc42c09b064" class="highlights">
 <ul>
 <li>Few DeFi companies employ dedicated security personnel</li>
 <li>Industry experts believe bridges will become more secure as DeFi matures</li>
 </ul>
 
</div>



As investment in cryptocurrency grows, so does the incentive for criminal actors to exploit the DeFi (decentralized finance) space. Cross-chain bridge hacks have been the weapon of choice for crypto thieves in 2022. Bridge hacks have accounted for more than a billion dollars in stolen funds this year, according to research from blockchain analytics and compliance firm Elliptic.



Cross-chain bridges allow assets to be moved between different blockchain protocols, meaning the networks contain a large concentration of crypto assets. The recent string of bridge attacks has caused some industry leaders to question whether the benefits of bridges outweigh their risks. A top analyst at Elliptic believes bridge hacks are just growing pains that DeFi will eventually surmount.



<a href="https://cms.blockworks.co/defi-cross-chain-horizon-bridge-hacked-for-100m/" target="_blank" rel="noreferrer noopener">Harmony</a>, <a href="https://cms.blockworks.co/sky-mavis-ronin-network-bridge-exploited-for-over-600m/" target="_blank" rel="noreferrer noopener">Sky Mavis</a>, and <a href="https://cms.blockworks.co/in-second-largest-defi-hack-ever-blockchain-bridge-loses-320m-ether/" target="_blank" rel="noreferrer noopener">Wormhole</a> all suffered blockchain exploits exceeding $100 million this year. Mudit Gupta, Chief Information Security Officer at Polygon, believes bridge insecurity is an industry-wide problem.



“Most of the hacks are happening due to companies not having proper security experts and not knowing what to do themselves,” Gupta said in a Twitter DM. “There are very few DeFi companies with [dedicated] security personnel.”



DeFi protocols have proliferated rapidly in the past six years, but security infrastructure has not kept up with the now over-$900 billion industry. For this reason, hacks totaling in the hundreds of millions are not surprising.&nbsp;



On April 1, a trader tweeted their concern that a major Harmony Horizon Bridge exploit would only require a hacker to obtain two of the protocol’s five validator keys. In June, that exact scenario occurred — and Harmony was ransacked for $100 million.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Since the current narative du-jour is bridges &amp; bridge hacks, I wanted to do some digging on the harmony bridge on Ethereum which secures ~$330m worth of tokens.&mdash; Ape Dev (@_apedev) <a href="https://twitter.com/_apedev/status/1510007663832223751?ref_src=twsrc%5Etfw">April 1, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Vitalik Buterin, co-founder of Ethereum, believes cross-chain bridges are inherently prone to security breaches.



“The fundamental security limits of bridges are actually a key reason why…I am pessimistic about cross-chain applications,” Buterin wrote in a lengthy January Reddit post. The influential founder went on to express his belief that assets should be held in the same blockchain ecosystem, rather than shuffled between chains.



Tara Annison, Head of Technical Crypto Advisory at the crypto research firm Elliptic, disagrees.



“We’re not going to live in a single chain world,” Annison said. It will always be necessary to move assets between blockchains, so “we shouldn’t characterize bridges in general as bad just because some have been hacked.”



Annison believes bridge hacks are caused by the concentration of value within cross-chain bridges, not by the bridges themselves.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“If you think of wars, you try to bomb bridges to stop goods and services moving across,” Annison said. Recent cross-chain bridge hacks are not happening “because bridges are inherently weak infrastructure, it’s because they have a concentration of value.”</blockquote>



Annison believes that all crypto assets come with risk, and bridges are just the risk “flavor of the month” following stablecoins in May and NFTs before that. Bridges should become more secure as protocols become more technologically mature.



It remains to be seen if market participants agree.



Sky Mavis’ Ronin Bridge, which was compromised for $625 million in April, <a href="https://cms.blockworks.co/sky-mavis-reopening-ronin-bridge-with-enhanced-security/" target="_blank" rel="noreferrer noopener">reopened</a> this morning. Close to $9 million in assets have already left the chain, according to Messari.



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Cross-chain Bridge Thefts Top $1B in 2022

Jacquelyn Melinek

<div id="highlights-block_616456c209801" class="highlights">
 <ul>
 <li>“Interest in crypto continues to grow at pace, and it’s clear that banks and tech companies have recognized that crypto is an inevitable part of our future finance and tech ecosystems,” Maini said</li>
 <li>The London-based company provides services to traditional financial institutions, FinTechs, crypto businesses and government agencies</li>
 </ul>
 
</div>



Elliptic, a blockchain analytics and crypto compliance company, raised $60 million in a Series C funding round led by Evolution Equity Partners, the company said in a statement Monday.&nbsp;



The round included new investment from SoftBank Vision Fund 2 and included existing investors Wells Fargo Strategic Capital, AlbionVC, Digital Currency Group, Octopus Ventures, SBI Group, SignalFire and Paladin Capital Group.



“Interest in crypto continues to grow at pace, and it’s clear that banks and tech companies have recognized that crypto is an inevitable part of our future finance and tech ecosystems,” Simone Maini, CEO of Elliptic, said to Blockworks in an email. 



The fundraise will be used to help the company capitalize on this growing momentum and interest in the space through team expansion and product development, Maini said.



The London-based company provides services to traditional financial institutions, FinTechs, crypto businesses and government agencies. To date, it has raised $100 million and is on track for 100% year over year growth in revenue by early 2022, Maini said.



Elliptic was founded in 2013, and in the span of eight years, the crypto landscape has changed dramatically, Maini said. According to its <a href="https://www.elliptic.co/" target="_blank" rel="noreferrer noopener">website</a>, the business has over 100 customers across 29 countries and about ⅔, or 66%, of crypto volume runs through exchanges using Elliptic, which provides more than 100 crypto assets and over 10 billion data points. 



“Awareness, excitement, innovation and regulatory clarity have all grown considerably and this has changed the investment landscape for us at the same time,” Maini said. “We’ve been committed to bringing about mainstream crypto adoption for many years and that clarity of purpose has served us well,” she added. 



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