GizmoLab Report: Cutting-Edge Developments in Web3 📈

Today’s key beats:

- Canadian Exchange ezBtc Gambles Away $9.5M in User Funds

- Lido Greenlights wstETH Bridging to BNB Chain

- Mt. Gox’s $2.1B Bitcoin Wallet Stirs After Dormancy

- Bitfarms Reshuffles Leadership Amid Takeover Bid

- Hamster Kombat Turns Down VC Offers

- Essential raises $11M in funding

Canadian Crypto Exchange ezBtc Misappropriated $9.5 Million of Users' Bitcoin and Ether for Gambling and Personal Use, Says Regulator 

The British Columbia Securities Commission (BCSC) revealed that Canadian crypto exchange ezBtc and its founder, David Smillie, defrauded customers by misappropriating 13 million CAD ($9.5 million) of Bitcoin and Ether. The funds were used for gambling and personal expenses, leading to significant investor losses.

The platform, which operated between 2016 and 2019, falsely claimed to store user assets in cold storage. Sanctions against Smillie, ranging from fines to market bans, are expected by September 24. This case underscores the challenges of crypto adoption in Canada, where traditional payment methods remain dominant.

Lido Community Approves Bridging Wrapped Staked ETH (wstETH) to BNB Chain via Wormhole and Axelar

The Lido community has approved a proposal to bridge Wrapped Staked ETH (wstETH), Lido's liquid staking token, onto the BNB Chain using Wormhole and Axelar as the canonical bridges. The vote, which saw 50 million LDO tokens cast in favor, marks the first time wstETH will expand to another Layer 1 network, having previously only been bridged to seven Layer 2 networks.

The integration, leveraging technology from two competing interoperability protocols, is expected to boost liquidity and support builders across ecosystems. Despite the news, Lido’s native token, LDO, remains down 42% in 2024 amid broader market challenges.

Dormant $2.1B Bitcoin Wallet Linked to Mt. Gox Activates, Sparks Speculation of Bitgo’s Role in Creditor Repayments

A Bitcoin wallet, suspected to be controlled by Bitgo and holding $2.1 billion in BTC from the defunct Mt. Gox exchange has been activated with a test transaction. The wallet, which contains 33,105 BTC, had been dormant for two weeks before the activity. Speculation suggests Bitgo may be facilitating the ongoing distribution of funds to Mt. Gox creditors, who have waited over a decade for repayment.

Despite the transfer of over $3.2 billion worth of BTC to creditors, no significant market sell-off has occurred. Mt. Gox’s rehabilitation plan includes repayments through exchanges like Kraken, Bitstamp, and Bitgo.

Bitfarms Announces Leadership Changes Amid Regulatory Challenges and Takeover Bid from Riot Platforms 

Bitcoin mining firm Bitfarms has announced significant leadership changes as it faces regulatory challenges and a takeover bid from Riot Platforms. Ben Gagnon, CEO of Bitfarms, has joined the board of directors, while Brian Howlett has been appointed as the independent chairman of the board, replacing co-founder Nicolas Bonta.

Additionally, Liam Wilson has been named the new COO, effective August 26. These changes follow the Ontario Capital Markets Tribunal's decision to nullify Bitfarms' initial shareholder rights plan, implemented in response to Riot Platforms' $950 million acquisition attempt.

Hamster Kombat Rejects Venture Capital Offers to Preserve Player-Centric Vision

Hamster Kombat, a popular Web3 game with over 300 million users, has declined multiple venture capital offers to protect its player-focused approach. The game's developers aim to maintain a meritocratic environment where rewards are earned through gameplay rather than driven by investor interests.

The team has allocated 60% of the upcoming HMSTR token for players, with the remaining portion set aside for liquidity, partnerships, and ecosystem development. Despite its success, the game has faced challenges, including scams and phishing attacks targeting its growing community.

Essential Secures $11M in Series A Funding Led by Archetype

Essential, an intent-centric Ethereum Layer 2 (L2) solution, has successfully raised $11 million in a Series A funding round. The round was led by Archetype, with significant participation from prominent investors, including IOSG Ventures, The Spartan Group, Mirana Ventures, Amber Group, Maven 11 Capital, Bodhi Ventures, Big Brain Holdings, Heartcore Capital, and Selini Capital.

This fresh injection of capital will enable Essential to accelerate the development of its cutting-edge L2 technology, which is designed to optimize transaction efficiency and enhance scalability for Ethereum. By focusing on intent-centric architecture, Essential aims to address some of the most pressing challenges in the Ethereum ecosystem, offering faster and more cost-effective solutions for dApps.

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