GizmoLab Report: Cutting-Edge Developments in Web3📈

A Quick TL;DR:

- Bleap Raises $2.3M for Blockchain Banking Solution

- XT.com Halts Withdrawals Amid $1.7M Hack Report

- Coinbase Declines Celo Layer 2 Support, Draws Criticism

- Celsius Announces $127M Payout, Faces Criticism

- Axiom Ventures Welcomes Former UK Minister John Baker as Advisor

- OKX Launches Crypto Trading Platform and Wallet in Belgium

Ex-Revolut Founders Raise $2.3M to Launch Blockchain-Based Banking App Bleap

Former Revolut employees Joao Alves and Guilherme Gomes raised $2.3 million in pre-seed funding to develop Bleap, a self-custodial stablecoin payment app. The round, led by Ethereal Ventures, included support from Maven11, Alliance DAO, and angel investors from top crypto firms. Bleap aims to function as a "bank account on the blockchain," enabling real-world stablecoin payments via a linked Mastercard debit card. It promises no conversion fees, up to 2% cashback, and multi-currency savings accounts offering competitive interest rates powered by DeFi protocols. Built on Ethereum’s Layer 2 Arbitrum network, Bleap features gasless transactions, enhanced security through Multi-Party Computation (MPC) technology, and account recovery without seed phrases. Users can transfer funds globally, purchase stablecoins, and interact with DeFi products seamlessly.

The platform supports major stablecoins like USDC and USDT, enabling direct spending and conversion to fiat for merchant payments. Regulatory hurdles were addressed by partnering with crypto-savvy card providers. Bleap is registered as a Virtual Asset Service Provider (VASP) in Poland to serve EU customers under MiCA regulations. Currently in beta testing in Europe, Bleap plans a public launch in Q1 2025, with expansion into Latin America and a token launch in 2026. The founders envision blockchain transforming traditional banking, simplifying global transactions, and enhancing financial inclusivity. This launch highlights the growing adoption of stablecoins, which processed $5.1 trillion in global transactions in the first half of 2024, nearly rivaling Visa’s volume during the same period. Bleap’s innovation could position it as a leader in integrating crypto into mainstream finance.

Crypto Exchange XT.com Suspends Withdrawals Following Suspected $1.7M Hack

XT.com, a Seychelles-based cryptocurrency exchange handling $3.4 billion in daily trading, has suspended withdrawals after a suspected $1.7 million hack. The platform cited "wallet upgrade and maintenance" as the reason but later acknowledged an “abnormal transfer of platform wallet assets.” Blockchain security firm PeckShield reported the suspected hack, identifying stolen funds being swapped for 461.58 ETH. The assets remain at an Ethereum address flagged by PeckShield. XT.com reassured users that their funds are secure, noting the platform maintains reserves 1.5 times greater than user assets to ensure safety.

Established in 2018, XT.com facilitates the trading of over 1,000 digital assets. This incident underscores ongoing security challenges faced by centralized exchanges. XT.com has not confirmed details of the breach and did not respond to media inquiries as of publication. The situation is still developing, with further updates expected. This event adds to the growing list of security breaches in the crypto industry, raising concerns about the safety of centralized platforms. Users and analysts alike await more information on the incident's scope and XT.com's response strategy.

Coinbase Faces Backlash for Not Supporting Celo’s Transition to Layer 2 in Optimism’s Superchain

Crypto exchange Coinbase announced it will not support Celo’s migration from Layer 1 to Layer 2 in the Optimism Superchain ecosystem, scheduled for January 16, 2025. The decision sparked strong reactions from the Celo community, including cLabs CEO Marek Olszewski, who called it a setback for Ethereum’s Layer 2 scaling roadmap. Coinbase advised users to withdraw Celo (CGLD) tokens by January 13, 2025, to avoid inaccessibility, citing the technical challenges of the migration. Critics questioned the timing, as Celo’s Layer 2 transition plans were public since July 2023 and received governance approval earlier this year. Olszewski and other community members expressed hope that Coinbase might reconsider.

They noted the technical similarities between Celo and Base, Coinbase’s own Layer 2 chain within the Superchain. Ethereum advocates, including Anthony Sassano, suggested the decision might stem from internal miscommunication. Defenders of Coinbase pointed to potential technical, operational, and regulatory hurdles that exchanges face when supporting new Layer 2 solutions. Meanwhile, other stakeholders in the Superchain ecosystem, like Kraken’s Ink project, expressed full support for Celo’s integration. Celo’s token value dropped nearly 5% following the announcement, underscoring market uncertainty. The situation remains fluid as the Celo community pushes for Coinbase to reverse its decision.

Celsius to Distribute Additional $127 Million to Creditors Amid Ongoing Complaints

Celsius, the bankrupt crypto lender, announced it will distribute an additional $127 million to creditors from its “Litigation Recovery Account.” The funds will be allocated to creditors in classes 2, 5, 7, 8, and 9, which include retail borrower depositors and Earn program users. Excluded are creditors with convenience claims or those not entitled to illiquid recovery rights. Payments will be processed via PayPal, Venmo, Coinbase, or as cash for unverified accounts. Eligible corporate creditors may also receive payouts, but some remain excluded from the process, sparking dissatisfaction. On social media platform X, users criticized the payout, calling it inadequate and delayed. Some reported losing substantial funds, such as one investor who claimed to have lost eight Bitcoin.

These frustrations underline the persistent dissatisfaction among creditors seeking compensation. The company filed for bankruptcy in July 2022, leaving many creditors in financial distress. Former CEO Alex Mashinsky was arrested in July 2023 and charged with fraud for allegedly misleading depositors. His trial is set for January 2025. Despite the latest payout, critics argue that Celsius has not done enough to address its creditors’ losses. Ongoing complaints about the repayment process and the scale of losses reflect the long road ahead for the company to regain trust.

Bitcoin Venture Capital Firm Axiom Appoints Former UK Minister John Baker as Advisor, with Conditions to Ensure Fair Governance

Bitcoin-focused venture capital firm Axiom has hired former UK minister John Baker as a paid advisor for its second venture fund, Axiom Venture Fund II. The UK government’s Advisory Committee on Business Appointments (ACOBA) approved the role after a background check, ensuring that Baker’s prior governmental responsibilities would not improperly benefit Axiom or compromise government integrity. Baker, who previously served as the Minister of State at the Northern Ireland Office until 2024, is expected to bring his experience to Axiom's investment strategies. The firm has been raising $75 million for its new fund, which aims to support Bitcoin companies while avoiding pressures on founders to issue tokens—an approach that Axiom believes could harm the long-term success of such businesses.

The ACOBA’s approval comes with specific conditions designed to prevent conflicts of interest. Baker is required to adhere to the “7 Principles of Public Life,” emphasizing selflessness, integrity, and accountability. Notably, Baker is prohibited from using any sensitive government information to assist Axiom or lobbying government officials on behalf of the firm for the next two years. Additionally, he cannot provide advice on areas he previously managed while in government or use personal government contacts for Axiom’s benefit during this period. While the role brings attention to the growing intersection of former government officials and the crypto sector, it also raises concerns about potential misuse of influence and conflicts of interest. The oversight ensures that Baker's contributions to Axiom will not compromise the integrity of his former governmental role.

OKX Expands European Operations with Launch of Crypto Trading Platform and Wallet in Belgium

OKX, a global cryptocurrency exchange, has officially launched its trading platform and self-custodial wallet in Belgium, expanding its European presence. The platform allows Belgian customers to access spot trading and convert over 200 cryptocurrencies, including 60 trading pairs with the euro. The launch is part of OKX’s broader strategy to strengthen its foothold in Europe. However, the services are not directly regulated by Belgian authorities. Instead, OKX is operating through Okcoin Europe, a Malta-registered entity that holds a license from the Malta Financial Services Authority as a Virtual Financial Assets Service Provider. According to Erald Ghoos, OKX's general manager for Europe, the exchange does not have formal regulatory approval in Belgium but works under a non-rejection status. To facilitate euro deposits and withdrawals, OKX has partnered with Bancontact, a popular payment system in Belgium, allowing instant and free euro deposits.

Additionally, the exchange supports transactions through the Single Euro Payments Area, making it easier for European users to deposit and withdraw funds. Belgian residents can begin trading on OKX after completing verification via the Itsme identification app, a popular platform for secure online identification. The move to Belgium comes as the country’s crypto user penetration is expected to rise from 25% to 28% by 2028, according to data from Statista. Ghoos highlighted that Belgian investors tend to be cautious and prioritize security in their financial decisions. In line with this, the Financial Services and Markets Authority (FSMA) introduced regulations in March 2024 that require cryptocurrency advertisements to include clear risk warnings, aiming to protect investors from misleading information. This is part of OKX’s broader effort to promote transparency and user trust as it grows in the European market.

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