Today in crypto, Sky’s (formerly MakerDAO) use of externally owned accounts (EOAs) to manage $756 million in USDC reserves has raised questions about security and transparency, Donald Trump has picked David Sacks as his “A.I. & Crypto Czar,” and MicroStrategy has $17 billion in unrealized profits on its Bitcoin holdings as the cryptocurrency’s price topped a record $100,000.
Sky faces scrutiny over potential $756 million exploit flaw
Sky, formerly known as MakerDAO, is facing criticism for its reliance on an externally owned account (EOA) to manage $756 million in USD Coin reserves within its lite peg stability module (PSM).
Concerns have been raised by an X user around the protocol’s reliance on an EOA to manage a substantial portion of its reserves amounting to $756 million in USD Coin (USDC).
Critics argue this custodianship model could leave funds vulnerable to potential exploits or insider misuse.
After its recent rebrand to Sky and concerns surrounding the ability to implement a freeze function in the future, the risk of a breach or misuse of these EOA-managed funds could further impact the protocol’s reputation and user trust.
The lite PSM is a mechanism designed to assist Sky in maintaining the peg of its stablecoin to the United States dollar by allowing users to swap the stablecoin for USDC at a fixed rate.
Source: wjmelements
As part of the migration plan, Sky will transfer reserves from the older PSM to the lite PSM in three phases, with $20 million initially moved.
However, the Lite PSM funds are allegedly controlled by an EOA, as claimed by the X user’s post on social media and the Sky forum page related to the lite PSM, raising accountability and security concerns.
Trump picks David Sacks for “AI and crypto czar”
Donald Trump has named former PayPal operating chief and now All In podcast host David Sacks as his lead policy adviser on artificial intelligence and crypto.
“David O. Sacks will be the ‘White House A.I. & Crypto Czar,’ Trump wrote in a Dec. 6 post on his social media platform Truth Social. “He will work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the U.S.”
The role moves toward Trump making good on his campaign promise to make the US “the world capital of crypto,” which in turn garnered him millions in donations from crypto industry executives.
Source: Donald Trump
Trump added that Sacks will also lead the Presidential Council of Advisors for Science and Technology.
Sacks was an early executive of the payment giant PayPal and co-founded the business social network platform Yammer, which Microsoft bought for $1.2 billion in 2012. He’s now turned to investing, founding the venture capital firm Craft Ventures.
The appointment shows the president-elect is rewarding the high-profile business leaders who supported his campaign, as Sacks has been a major Trump backer this year, hosting a fundraiser for the then-Republican candidate which raised $12 million.
MicroStrategy’s Bitcoin treasury hits $17 billion in profits
MicroStrategy’s Bitcoin buying spree has earned the company more than $17 billion in unrealized profit after the BTC price smashed through $100,000 for the first time in history.
According to MSTR Tracker, MicroStrategy was sitting on nearly $40.8 billion worth of Bitcoin when the price crossed the historic milestone. The business intelligence firm, which has pivoted to becoming a “Bitcoin treasury company,” has roughly 402,000 BTC on its balance sheet as of Dec. 5.
Source: MSTR Tracker
MicroStrategy is showing no signs of slowing its Bitcoin acquisition strategy. Earlier this week, the company announced that it purchased 15,400 BTC for $1.5 billion between Nov. 25 and Dec. 1.
One week earlier, between Nov. 18–24, MicroStrategy purchased $5.4 billion worth of Bitcoin at an average price of $97,862.
MicroStrategy’s stock, which trades under the ticker MSTR, has outperformed Bitcoin this year, gaining 511% since January, according to Yahoo Finance.
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