Hacked Azuki Twitter account enables theft of pricey NFTs and crypto priced at more than $1.74 million

A green zombie-looking ape with a red warty mouth and sharp teeth, with a turquoise hachimaki and a tie-dye shirtMutant Ape #16924, which most recently sold for ~$23,400 (attribution)
Hackers were able to compromise the Twitter account belonging to the popular Azuki NFT project, which they then used to promote a fake NFT drop to its 334,000 followers. Users who tried to mint the NFTs instead had their wallets emptied of pricey NFTs and cryptocurrencies.

Stolen NFTs included 74 Otherdeeds (floor price ~$2,700 each), 3 Porsche NFTs (floor ~$3,100), 57 Beanz (floor ~$2,600), 12 Doodles (floor ~$10,600), 2 Mutant Apes (floor ~$24,300), and 49 Pudgy Penguins (floor ~$9,200) to the attacker. Altogether, those stolen NFTs could fetch almost ~$1 million if sold at floor price.

One single wallet transferred 750,000 of the USDC stablecoin to the attacker, resulting in a particularly brutal loss for one individual.

Coinbase fined $3.6 million by Dutch central bank

The Dutch central bank levied a €3.3 million ($3.6 million) fine against Coinbase, who began operating in the Netherlands without properly registering. The fine is reportedly unusually large, because of Coinbase's prominence and because it had accumulated a significant number of Dutch customers without the proper registration. Coinbase had been noncompliant from November 2020 to August 2022.

Bithumb executives charged with embezzlement

South Korean prosecutors filed charges against several executives of the Korean cryptocurrency exchange Bithumb. Those charged included its owner, Kang Jong-Hyun, and his sister Kang Ji-Yeon, who rurns Bithumb affiliates Inbiogen and Bucket Studio. The charges included embezzlement, breach of trust, and fraudulent illegal transactions. The charges follow reports that Bithumb and affiliated companies were being investigated for possible tax evasion, though those investigations are a separate matter unrelated to these charges.

In December, the largest Bithumb shareholder, Park Mo, was found dead outside his home in an apparent suicide after he was named as a suspect by prosecutors in an investigation into embezzlement and stock manipulation.

Korean prosecutors had previously charged the former chairman of Bithumb over an alleged $100 million in fraud, though he was acquitted for lack of proof.

Kevin Rose loses pricey NFTs to wallet hack

A rainbow scribble, with a filter applied to make it appear somewhat blurryChromie Squiggle #9639, which Rose bought for 16 ETH (~$26,000) in August 2022 (attribution)
Kevin Rose, perhaps best known as the founder of Digg, but also a prominent crypto investor and entrepreneur, lost a substantial number of pricey NFTs when he apparently signed a malicious transaction. The hacker stole 25 Squiggles NFTs, which are trading at a floor price of 13.3 ETH, putting the estimated price based on the floor price at around 332.5 ETH (~$519,000). Rose acquired the Squiggles for between 6.3 and 16 ETH each (~$10,000 to $25,000).

The thief also stole an Autoglyph NFT, which rarely change hands, but which have most recently sold for around 200 ETH ($312,000). Rose had been offering his Autoglyph for sale for 345 ETH ($539,000), but had yet to find a buyer.

Fortunately for Rose, the hacker was apparently unable to steal a CryptoPunk NFT he owned that resembles a zombie. The rare zombie variant of the already pricey NFT have fetched millions — albeit in periods of stronger interest in NFTs.

Porsche bungles NFT roll-out

A photo of a white Porsche 911, pictured from the front onPorsche NFT (attribution)
For some reason, Porsche decided they needed to release a set of Porsche 911 NFTs so that customers could buy "the opportunity to co-create Porsche's future in the Web3 universe" (whatever that means). The set of 7,500 NFTs were available to mint for 0.911 ETH apiece, or around $1,490. If the project sold out, Porsche would have been looking at a windfall of more than $11 million.

Unfortunately for them, things didn't quite go as planned, with collectors balking at the high pricetag. Mints slowed to a crawl far before the 7,500 limit was reached, and the NFTs quickly began trading at a discount on secondary markets (meaning it was cheaper to buy a resold NFT than mint a new one).

Porsche decided to pump the brakes on the mint when fewer than 2,000 had sold. However, they botched that too — they announced they had stopped the mint before they actually did so, which caused the collection's secondary floor price to rise back above the mint price in anticipation of higher scarcity. Observant traders who noticed this were able to arbitrage the price difference, minting new NFTs and immediately flipping them for a profit on secondary markets.

NFT collectors criticized Porsche for appearing to try to jump into web3 without knowing the space, and asking for an exorbitant mint price without a clear plan.

Binance announces that users won't be able to use SWIFT for transfers below $100,000

Binance informed its users that they would no longer be able to perform transactions below $100,000 via the SWIFT financial network. According to Binance, this was because their banking partner, Signature Bank, had announced they were implementing that floor for all cryptocurrency exchange clients.

Signature Bank has suggested it intends to step back somewhat from the crypto industry. It is one of the relatively few US banks that services crypto clients, and provided services to FTX among others.

Patrick McKenzie speculated that the change might have been related to AML/KYC, and Binance's "Bond villain compliance strategy".

Nexo fined $45 million by US SEC

More bad news for Nexo, whose Bulgarian offices were raided a week prior amidst allegations of organized financial crime. Now, the United States SEC and state securities regulators have fined the company a total of $45 million for violations of securities law — only the latest in a string of regulatory enforcement actions against companies offering interest-earning cryptocurrency accounts or lending services.

In a spin attempt rivaling those of Olympic gymnasts, Nexo wrote that the large fine was good, actually: "Nexo believes that the company has been recognized for what it truly is - a pioneer, like Uber and Airbnb, providing disruptive solutions in a fast-paced environment," they wrote.

In February, following similar action against BlockFi, Nexo stopped offering their interest program to new customers in the US. Now, Nexo will also stop offering its lending product to US customers as part of the settlement agreement.

Genesis files for bankruptcy

The Genesis cryptocurrency lending platform filed for bankruptcy, following weeks of turmoil after the FTX collapse. Genesis halted withdrawals shortly after FTX's failure, and shortly afterwards warned of possible bankruptcy if they couldn't raise at least $1 billion in new capital. The past few months have also featured a public conflict between Genesis, along with its parent company DCG and DCG's CEO and founder Barry Silbert, and the Winklevoss twins behind the Gemini crypto exchange.

It remains to be seen what the impact of a Genesis bankruptcy may have on its parent company, Digital Currency Group (DCG). DCG owes Genesis more than $1.65 billion, according to bankruptcy filings, including a $1.1 billion promissory note created to absorb Genesis losses in the Three Arrows Capital collapse.

Founder of Bitzlato crypto exchange charged for processing more than $700 million in illicit funds

US authorities arrested and charged Anatoly Legkodymov, the founder of the Bitzlato cryptocurrency exchange. Although the exchange is relatively unknown, the justice department alleges that it was instrumental to darknet criminal marketplaces, including Hydra Market. The DOJ alleges that users of Hydra Market processed more than $700 million in cryptocurrency through Bitzlato, which also helped to facilitate more than $15 million in ransomware proceeds. Although Bitzlato claimed not to serve users in the United States, the DOJ claims that the exchange "did substantial business with U.S.-based customers".

Three Arrows Capital founders seek funding for an exchange to enable customers to trade claims against firms 3AC helped to bankrupt

Kyle Davies and Su Zhu, the founders of the bankrupt Three Arrows Capital crypto hedge fund, have joined forces with Mark Lamb and Sudhu Arumugam, the founders of the CoinFLEX platform, which is undergoing restructuring due to its own solvency issues. Davies and Zhu are still on the run from liquidators. What a dream team.

The group is seeking $25 million to create a cryptocurrency exchange they're calling "GTX" for now — which they write in the pitch deck is "because G comes after F".

Not only that, but the exchange plans to focus on claims trading — that is, the trading of claims held by creditors against debtors who are undergoing bankruptcy proceedings, like FTX, Celsius, BlockFi, or Mt. Gox (throwback!). The fact that 3AC was a major catalyst in kicking off the string of bankruptcies we saw throughout 2022 was not lost on observers, with Nic Carter of the Castle Island venture capital firm commenting that the endeavor "is akin to arsonists returning to the scene of the crime and offering to charge their victims for buckets of water".

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