The Daily: FBI arrests SEC hacker behind fake Bitcoin ETFs approval post, Kraken enters the wrapped bitcoin game and more

Happy Thursday! In today's Daily, Kraken becomes the latest crypto firm to roll out its own wrapped bitcoin token, the FBI arrests an Alabama man connected with the pre-spot Bitcoin BTC -1.60% ETF approval SEC social media hack, former FTX exec Nishad Singh argues for no jail time and more.

Plus, Polymarket betting volume on the U.S. presidential election winner has now crossed $2 billion as Donald Trump takes a 25% lead over Kamala Harris on the decentralized predictions platform.

Meanwhile, crypto pundits decried Trump-backed World Liberty Financial's lackluster sales, calling it "a meme masquerading as a utility project."

Let's get started.

Kraken rolls out wrapped bitcoin alternative kBTC on Ethereum and OP Mainnet

Crypto exchange Kraken has launched its own version of wrapped bitcoin , kBTC, on Ethereum ETH -1.43% and OP Mainnet amid an increasingly competitive lineup of WBTC -1.61% alternatives.

• Kraken described kBTC as a cross-network compatible ERC-20 token, backed 1:1 by an equivalent amount of bitcoin custodied at Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution.
• The exchange also disclosed an onchain address for the product’s reserves, enabling users to verify the backing of kBTC themselves.
• The custody address shows a current balance of 100 BTC ($6.7 million), which corresponds to an 80 kBTC and 20 kBTC supply on Ethereum and OP Mainnet, respectively.
• Audited by Trail of Bits, kBTC can now be used in various decentralized applications, with deBridge, Definitive, Gauntlet, ParaSwap and Yearn among its day-one launch partners.
• Kraken also plans to extend kBTC's compatibility to additional EVM and non-EVM networks in the future.
• The launch comes just a month after Coinbase introduced cbBTC, adding to the competition against Wrapped Bitcoin (WBTC) — currently the largest tokenized BTC product with a market cap of $10 billion, according to The Block's WBTC Price Page .
• BitGo's recently announced partnership with BiT Global for WBTC custody raised security concerns in the crypto community, with Coinbase and Kraken seemingly sensing an opportunity to grab market share.

FBI arrests Alabama man behind SEC social media hack and phony spot Bitcoin ETF post

The FBI arrested Eric Council Jr. , 25, on Thursday over his involvement in hacking the Security and Exchange Commission's social media account and posting a false announcement regarding spot Bitcoin ETFs.

• Council was charged with conspiracy to commit aggravated identity theft and access device fraud, according to a statement by the U.S. Attorney's Office in the District of Columbia.
• The SEC's X account was compromised in January, falsely claiming that spot Bitcoin ETFs had been approved, just one day before the official announcement.
• Prosecutors said that access to the SEC's account was done through a "SIM swap," with the price of bitcoin gaining more than $1,000 after the post was sent.
• Following the hack, Council allegedly searched for phrases such as "SECGOV hack" and "how can I know for sure if I am being investigated by the FBI."

Former FTX exec Nishad Singh argues for no jail time

Lawyers for Nishad Singh, FTX's former engineering director, argued he should not serve jail time in a Wednesday filing, citing his limited role in the crypto exchange's collapse and his cooperation with authorities.

• Singh pleaded guilty to six criminal charges in February 2023, including fraud and conspiracy to commit money laundering, and later testified against former FTX CEO Sam Bankman-Fried, expressing deep remorse for his actions.
• His defense also argued that Singh only became involved in the conspiracy in September 2022, just two months before FTX's demise, with a passive role compared to key players like Bankman-Fried and Alameda CEO Caroline Ellison, and is deserving of leniency.
• Singh is set to be sentenced on Oct. 30.

Vitalik Buterin outlines ambitious 100,000 TPS goal for Ethereum

Ethereum co-founder Vitalik Buterin set an ambitious goal of 100,000 transactions per second across Layer 1 and Layer 2 networks as part of the next stage of the blockchain's rollup-centric scaling roadmap.

• He emphasized the importance of maintaining decentralization and security while scaling Ethereum's base layer and improving Layer 2 interoperability.
• Buterin also suggested improving data availability sampling as a way to scale transaction speed, enabling the network to verify information without needing every node to download and store all the data.
• In terms of scaling the base layer, he warned that simply increasing the Layer 1 gas limit too much could centralize the network, suggesting alternatives like charging different fees for different types of calculations or using a more efficient type of bytecode format.

Hamster Kombat founders tout 'high trading volume,' expansion plans and the game's next season amid token price decline

Hamster Kombat's founders remain optimistic despite a significant decline in the value of the HMSTR token following last month's airdrop on TON blockchain, touting "high trading volume" and expansion plans for the Telegram-based tap-to-earn game as it gears up for a new season.

• The Hamster Kombat team teased its second season on Thursday, tasking players with running their own "gaming platforms," with 15% of remaining HMSTR tokens allocated to Season 2.
• The clicker game also plans to expand beyond Telegram by collaborating with web2, web3 and desktop game developers to attract players from new regions and create a more integrated gaming experience.

In the next 24 hours

• U.S. FOMC members Raphael Bostic and Neel Kashkari will speak at 9:30 a.m. and 10 a.m., respectively, on Friday.
• The Avalanche Summit concludes in Buenos Aires.

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