People were quick to blame those behind the project, primarily "Pharma Bro" Martin Shkreli (who has been accused of dumping his own token before). Shkreli was quick to shift the blame to Donald Trump's youngest son, Barron, who he has also claimed is behind the token (although this has not been independently confirmed). However, the owner of the wallet that dumped its tokens is not definitively known.
Trump-themed $DJT token rug-pulls, people blame Martin Shkreli or Barron Trump
$12 million taken by whitehats from Ronin bridge
Fortunately for the Ronin team, it seems that most of the losses actually went to whitehats and MEV bots that were frontrunning transactions by would-be exploiters. ETH and USDC priced at around $12 million were taken — the maximum amount before triggering a safety feature in the code. Later that day, Ronin announced that the ETH (worth around $10 million) had been returned, and that the USDC was in the process of being returned. They also announced that they would reward the whitehats with a $500,000 bug bounty reward.
The Ronin bridge was taken offline shortly after the flaw was detected, and the team announced it would undergo an audit before being brought back online.
CFTC subpoenas former company of Ben "BitBoy" Armstrong over crypto promotion
Kujira token tanks as team's leveraged bets melt down
The Kujira team apologized for the fiasco, and announced a plan to create a DAO to take over the project treasury.
ConvergenceFi hacked for $210,000
Although ConvergenceFi described itself as audited, they admitted they had made changes to that portion of the code after the audits.
They assured their users that all user funds were safe, but recommended that users remove their staked funds from the platform.
- "Post-mortem | 08/01/2024", ConvergenceFi Medium [archive]
ZKX decentralized exchange shuts down in what some VCs are describing as a rug pull
ZKX had raised $4.5 million in seed funding from investors including the now-bankrupt Alameda Research, Starkware, HTX, Amber Group, ArkStream Capital, and HashKey Capital. The project had announced a second, $7.6 million raise only a few weeks before its shutdown.
People at Amber Group, ArkStream, and HashKey publicly criticized the lack of transparency from ZKX around its financial situation. Ye Su, a founding partner at ArkStream, explained that he felt they had been "rug pulled".
Blockchain sleuth zachxbt joined the VCs in characterizing the project as a rug, and further elaborated that he felt the retail investors who had purchased the project's token only weeks earlier had been tricked into buying a token by the project team, who "misled the community/retail ... by giving the appearance the project was healthy and strong when in reality they were in a bad position and about to shut down."
BitClout founder arrested on wire fraud charges
According to the criminal charges, Al-Naji misled investors, including by taking $3 million from an investor and using it for his own personal expenses and gifts to family. Al-Naji had told investors that the sales of the platform's token would not go to him or to other employees.
The SEC complaint separately alleged that Al-Naji had tried to falsely present the BitClout project as decentralized, including by soliciting a letter of opinion from a law firm that his tokens were not likely to be deemed securities, which was based on mischaracterizations.
BitClout raised money from various prominent firms, including Andreessen Horowitz, Sequoia, Chamath Palihapitiya's Social Capital, Coinbase Ventures and Winklevoss Capital.
- "Founder Of 'BitClout' Digital Asset Charged With Fraud In Connection With Sale Of 'BitClout' Tokens", U.S. Attorney's Office, Southern District of New York [archive]
- "SEC Charges Nader Al-Naji with Fraud and Unregistered Offering of Crypto Asset Securities", U.S. Securities and Exchange Commission [archive]
- "SEC charges BitClout founder Nader Al-Naji with fraud; says proceeds paid for L.A. mansion, gifts", TechCrunch [archive]
DraftKings abruptly shutters its Reignmakers NFT project and marketplace due to "recent legal developments"
In an announcement in the project Discord and on their website, DraftKings wrote that the shutdown was "due to recent developments". They offered holders the ability to cash out their Reignmakers cards "based on factors that include, but are not limited to, the relative size and quality of your digital game piece collection". Holders were also invited to transfer their NFTs to their own cryptocurrency wallets, although the DraftKings-run "contests" in which people used their NFTs to try to earn rewards and win prizes will no longer exist. It's also unclear whether some NFTs, built to not be transferrable off-marketplace, will be able to be retained by their holders.
Members of the DraftKings Discord reacted with chagrin to the news, and doubt that the vague promises of cash payments would amount to much. "What kind of compensation u think we get coming to us? Pennies?" wrote one. "Yeah I'm out like $20k," said another. Some blamed the shutdown on a recent lawsuit from a holder of the Reignmakers NFTs who lost $14,000 — a lawsuit which recently survived the motion to dismiss stage.
Compound DAO passes $24 million proposal in alleged governance attack
Humpy has previously been accused of governance attacks on other protocols, including Balancer and SushiSwap.
Prior to the proposal's passage, some Compound Finance DAO members raised objections. "In my personal opinion, the actions of Humpy and the Golden Boys can be considered a governance attack if they persist in their attempts to take funds from the protocol in clear opposition to the will of all other Compound DAO delegates," stated Compound Finance security adviser Michael Lewellen, who also described the proposal as "a malicious attempt to steal funds from the protocol".
Afterwards, Lewellen wrote that "OpenZeppelin is working with all active delegates and Compound contributors to assess our options for protecting the protocol. We see serious risks to the future decentralization of the DAO as a result of Proposal 289 passing and so we are exploring options to mitigate or reverse this outcome."
- "Compound DAO asleep at the wheel as $25M governance 'attack' passes", Protos
- "$24 million Compound Finance proposal passed by whale over DAO objections", The Block
- "Trust Setup for DAO investment into GoldCOMP", Compound Finance discussion
- "Governance Security Notice: goldCOMP Proposal 247", Compound Finance discussion
MonoSwap hacked for at least $1.3 million
The malicious video chat software attack vector has been widely used in the crypto world, with a victim losing cryptocurrency to an attacker using the same technique and impersonating an Andreessen Horowitz partner last month.
So far, the MonoSwap attacker has laundered $1.3 million via the Tornado Cash cryptocurrency mixer.