Edgen Crypto·Nov 07 2025, 13:10
[1] Commonware Receives $25 Million in Funding Led by Tempo (https://www.techflowpost.com/newsletter/detai ...)[2] Cryptocurrency Trading App Fomo Raises $17M in Series A Led by Benchmark - MLQ.ai (https://www.mlq.ai/cryptocurrency-trading-app ...)[3] Former Ava Labs engineering lead raises $9 million to build 'anti-framework' blockchain developer tools | The Block (https://vertexaisearch.cloud.google.com/groun ...)
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Nov 07 2025, 12:32
Crypto Tracing Leads to Arrest in Global Child Abuse Network Takedown
## Executive Summary Law enforcement agencies from the United States, Germany, and Brazil, in collaboration with blockchain analytics firm **TRM Labs**, successfully dismantled a global child abuse network. This operation culminated in the arrest of a Peruvian national in Brazil, identified as the alleged administrator of the network. The investigation heavily relied on sophisticated crypto tracing techniques to uncover illicit financial pathways, despite the perpetrator's attempts to obscure transactions through various digital means. This case highlights the evolving capabilities of blockchain forensics in combating serious online crime. ## The Event in Detail A Peruvian national was apprehended in Brazil following a **TRM Labs**-led crypto-tracing operation. The individual was allegedly linked to German-hosted dark web child sexual abuse material (CSAM) networks. These platforms had amassed over **350,000 users** globally, distributing more than **21,000 illicit videos**, amounting to approximately **660 hours** of content and nearly **900,000 views**. Memberships for accessing this material were offered for as little as **$10**. The suspect employed various methods to conceal the financial trail, including the use of mixers, numerous wallets, and third-party accounts, while operating under fake identities. However, **TRM Labs'** analysis successfully connected fragmented digital identities and identified shared blockchain infrastructure linking the old and new platforms used by the network. Investigators traced payments from customers through intermediaries to final cash-outs at Brazilian crypto exchanges, providing critical evidence for the arrest. ## Market Implications This high-profile takedown demonstrates the increasing efficacy of blockchain intelligence in law enforcement operations. The transparency inherent in public blockchains, despite attempts at obfuscation, proved to be a critical asset for investigators. As **TRM Labs' Ari Redbord** noted, "By following the money, investigators were able to connect fragmented digital identities." The incident is expected to intensify the ongoing regulatory scrutiny of crypto privacy tools, such as mixers and certain privacy-focused cryptocurrencies. While tools like **Samourai Wallet** and **Tornado Cash** face enforcement actions, projects like **Zcash** are navigating a path toward regulatory flexibility with optional privacy models. The case may strengthen calls for enhanced due diligence from stablecoin issuers and associated entities (**USDT**, **USDC**, **DAI**) to detect and act against sanctions evasion and other illicit activities. Regulators are anticipated to demand greater ecosystem monitoring capabilities and the ability to detect red flags using blockchain analytics. ## Expert Commentary Law enforcement and financial intelligence units are expected to leverage blockchain analytics increasingly to combat illicit financial activity. The ability to trace funds, even through complex schemes involving multiple wallets and mixers, underscores a paradigm shift in digital forensics. This development places further pressure on cryptocurrency projects and exchanges to bolster their compliance frameworks and collaborate with authorities to prevent misuse of their platforms. ## Broader Context This operation exemplifies a growing trend where the transparent nature of blockchain technology, when combined with advanced analytics, becomes a potent tool against criminal enterprises. While some perceive privacy coins and mixers as enabling illicit activities, this case illustrates that comprehensive tracing can still yield results. The ongoing challenge for the Web3 ecosystem will be to balance innovation and user privacy with the imperative to prevent and prosecute financial crimes. The regulatory landscape will likely continue to evolve, with an emphasis on balancing privacy principles with robust anti-money laundering (AML) and counter-terrorist financing (CTF) measures, potentially shaping the development and adoption of both privacy-enhanced and transparent digital assets.
Nov 07 2025, 12:08
Columbia Study Reveals 25% Wash Trading on Polymarket
## Executive Summary Columbia University researchers have reported that approximately 25% of **Polymarket**'s trading volume over the past three years was due to wash trading, prompting platform acknowledgement and calls for enhanced market integrity measures. ## The Event in Detail A new study from Columbia Business School, led by Professor Yash Kanoria, indicates that a significant portion of trading activity on the decentralized prediction market **Polymarket** has been artificially inflated. The research, conducted over the past three years, attributes approximately 25% of all transactions on the platform to "wash trading." This practice involves a single entity simultaneously buying and selling an asset to create misleading volume metrics without actual change in ownership. The study further disaggregated the extent of wash trading across different market categories on **Polymarket**. Sports markets exhibited the highest manipulation, with 45% of their all-time volume identified as wash trading. Election markets followed at 17%, politics at 12%, and crypto-related markets showed the lowest impact, with only 3% of their volume attributed to wash trading. Despite these findings, **Polymarket** experienced a surge in activity in October, attracting over 477,000 active traders—a 48% increase from the previous month—and total trading volume surpassing $3 billion. ## Market Implications The revelation of substantial wash trading on **Polymarket** carries potential implications for investor confidence in decentralized prediction markets and could intensify regulatory scrutiny. While the study clarifies that the platform itself was not directly responsible for the wash trading, researchers suggest its design might have inadvertently enabled the manipulation. The findings could lead to a broader reevaluation of transparency and integrity mechanisms within the Web3 ecosystem, particularly for platforms that rely on reported trading volumes as a measure of activity or liquidity. **Polymarket** has acknowledged the study's findings, describing the situation as "unprecedented." A spokesperson for the platform stated a commitment to "build up systems, monitoring, and more to make sure this doesn't repeat itself," indicating an intent to implement robust safeguards. However, **Polymarket**, supported by **UMA**, has confirmed that past markets were resolved according to established protocols, and users will not be reimbursed for any previous market outcomes, despite some user backlash. ## Expert Commentary Professor Yash Kanoria and his team from Columbia Business School conducted the analysis, highlighting the prevalence of wash trading across various market categories on **Polymarket**. Their research provides specific data points, such as the 45% wash trading volume in sports markets and the 3% in crypto-related markets, offering a granular view of where such activities are most concentrated. The researchers noted that while **Polymarket** was not directly implicated in initiating the wash trades, the platform's structure potentially facilitated their occurrence.
Nov 07 2025, 10:37
DIMO Network Administrator Wallet Compromised, 30 Million Tokens Extracted and Sold
## Executive Summary CertiK, a blockchain security firm, reported suspicious activity involving an administrator wallet within the **DIMO Network**. This incident led to the extraction of **30 million DIMO tokens**, which were subsequently sold for approximately **$40,000**. The event has contributed to a notable decline in **DIMO** token value, with the price plummeting by **24.99%** in the last 24 hours and **31.13%** over the past seven days. The current real-time **DIMO** price stands at **$0.0261**, with a market capitalization of **$10,657,132**. ## The Event in Detail The suspicious activity was centered around the **DIMO Network** administrator wallet, specifically involving an upgrade to the proxy contract identified as `0x07C64bd1B23b7C9B0ABf80b8613f58e5B00ED5dD`. In blockchain systems, smart contracts often utilize a proxy pattern to enable upgrades while maintaining the contract's address and state. This involves two contracts: a proxy contract that acts as the interaction point and forwards transactions, and a logic contract that contains the actual code. Transparent proxies embed upgrade and administration logic directly within the proxy. The administrator, or owner, of the contract initiates upgrades. When an administrator interacts with the proxy, they can access administrative functions, preventing their calls from being forwarded to the implementation logic. Following the contract upgrade, **30 million DIMO tokens** were extracted from the wallet and liquidated for approximately **$40,000**. ## Market Implications The immediate market reaction to the incident has been a bearish trend for **DIMO** tokens. The significant price depreciation of **24.99%** within 24 hours reflects investor concern regarding the security and operational integrity of the **DIMO Network**. With a current market rank of **#565** and a circulating supply of **408,448,392 DIMO coins** out of a maximum supply of **1,000,000,000**, such events can erode investor trust and liquidity. The incident also highlights the inherent risks associated with smart contract management and the potential for administrator key compromises to impact token valuations. Looking ahead, the **DIMO Network** is scheduled to unlock approximately **25 million tokens**, valued at **$1.63 million**, on September 12, 2025, an event that could further influence market dynamics and liquidity. ## Expert Commentary Blockchain security firm **CertiK** identified the activity as suspicious, underscoring the vigilance required in monitoring on-chain transactions and smart contract interactions. The nature of the event, particularly the unauthorized extraction and sale of tokens, is consistent with scenarios that can severely damage project credibility and investor confidence in the decentralized finance (DeFi) space. ## Broader Context This incident occurs within a broader landscape of evolving threats to digital assets. While this specific event relates to an administrator wallet compromise and contract upgrade, the wider crypto ecosystem faces challenges from sophisticated malware that can compromise private keys, seed phrases, and exchange API keys. Such vulnerabilities, whether through direct malware attacks or compromised administrative access, pose a direct threat to both individual users and blockchain platforms. The **DIMO Network** has also been engaged in various strategic initiatives, including partnerships with **Revolut** and **Hakuhodo KEY3**, expansion into the Japanese market, and a planned migration to **Base** in 2025. These developments underscore the contrast between ongoing strategic growth and the critical need for robust security measures in decentralized environments. The compromise incident serves as a reminder of the continuous security scrutiny required in the rapidly developing Web3 sector.