"Normie" memecoin plummets 99% after exploit

An attacker perpetrated a flash loan attack on the "Normie" memecoin on the Base layer-2 blockchain to drain millions of NORMIE tokens. The vulnerability was evidently discovered in March, but never patched.

Although the token claimed to have a market cap of $42 million, the attacker was only able to cash out around 224 wETH (~$882,000). However, the losses to some holders of the token were much more substantial. One individual had put around $1.16 million into $NORMIE, and those holdings are now priced at around $150.

The attacker has been negotiating the possible return of funds to the project team, who has expressed interest in relaunching the token.

Caitlyn Jenner launches memecoin amid deepfake confusion

Tweet by Caitlyn Jenner: "make america great again!!! 🇺🇸 and we love crypto! @pumpdotfun 🫡" with a photo of Jenner grasping hands with Donald TrumpJenner's launch tweet (attribution)
Olympic athlete-turned-Trumpworld media personality Caitlyn Jenner has confused many by apparently launching a memecoin on pump.fun and heavily promoting it on her Twitter account with more than 3 million followers. Her original post featured a photo of her grasping hands with Donald Trump, with the text "make america great again!!! 🇺🇸 and we love crypto!".

At first, people widely believed her account had been hacked, given how frequently celebrity token promotions turn out to be compromised Twitter accounts. Then, she began joining Twitter spaces and posting videos about the token, but with the emergence of more and more convincing deepfakes, even those didn't convince people that it was truly Jenner behind the token.

Despite the confusion — or perhaps because of it — the token has been popular.

The token launch was linked to Sahil Arora, a person allegedly connected to multiple celebrity rug pulls and pump-and-dumps. However, Jenner quickly turned on Arora shortly after the token's launch, posting on Twitter "FUCK SAHIL! He scammed us! BIG TIME!" and that "Sahil appears to be fully out".

Jenner is not the first in her family to get mixed up with crypto. In October 2023, her stepdaughter Kim Kardashian was fined over $1 million for unlawful touting of a crypto security.

Gala Games suffers $21 million hack

Someone was able to mint 5 billion $GALA tokens, the native token of the Gala Games blockchain gaming project. The tokens would be notionally worth around $200 million based on their paper value, although such a massive amount wouldn't be sellable without impacting the token price. Furthermore, the Gala Games team was able to add the attacker's address to a blocklist shortly after the theft a few hours after the attack began, preventing them from swapping more of the tokens.

Altogether, the attacker was able to swap around $21 million of the GALA tokens into ETH before the address was frozen.

The attacker was able to perform the exploit because they had access to a wallet with admin access to the Gala Games smart contract. It's not clear if the attacker is a rogue employee, or if an admin wallet was compromised.

As of writing, Gala Games has not publicly acknowledged the attack.

Crypto scam money launderers charged for laundering more than $73 million through Deltec

Two people were charged in California for laundering money obtained from cryptocurrency and fiat "pig butchering" scams. After receiving the money from the investment scammers, the launderers then allegedly helped to obfuscate at least $73 million in transactions by moving the money through Deltec Bank in The Bahamas and converting it into the Tether stablecoin.

Deltec is a well-known bank in the cryptocurrency world, mostly for its ties to Tether and to FTX. In July 2023, US authorities seized tens of millions from Deltec accounts in connection to a cryptocurrency money laundering investigation. It's not clear if that was the same investigation.

"Crypto King" Aiden Pleterski arrested

Aidan Pleterski and a woman with her face blurred stand in front of a lime green Lamborghini in what appears to be an upscale suburbAiden Pleterski (attribution)
Aiden Pleterski, a 25-year-old who goes by "Crypto King", has finally been arrested and charged with fraud and money laundering. In 2022, he was sued by a group of investors who have lost at least CA$41.5 million (~US$30.5 million) they entrusted to him to invest on their behalf. He had promised massive profits, and told them that any losses on their initial investments would be repaid in full. A judge froze his assets in July 2022, and the court ordered him and his company into bankruptcy the following month. The bankruptcy proceedings have so far recovered around CA$3 million (US$2.2 million).

Investigators for the bankruptcy proceedings found that Pleterski had invested less than 2% of customer funds. Around $16 million instead went to personal expenses, including luxury cars, a $45,000-a-month lakefront mansion, private jets, and vacations.

Even after being sued, filing for bankruptcy, and being kidnapped and beaten by angry investors, Pleterski flaunted his supposed wealth online. Much to the indignation of the creditors in his bankruptcy, he has continued to regularly livestream himself gambling for hours, spending $150,000 on Legos, and driving luxury cars.

Pleterski was released the same day he was arrested, thanks to a CA$100,000 (~US$75,000) surety bond posted by his parents.

Pump.fun suffers $2 million loss to former employee who claims he wanted to "kill" the project for "inadvertently hurt[ing] people"

Pump.fun is a Solana-based memecoin generator that soared to popularity recently amid a resurgence in memecoin trading. On May 16, the project suffered a $2 million exploit by an attacker who then began airdropping the money to somewhat random wallets.

A former employee — whose real identity is known — brazenly took credit for the theft on Twitter. They wrote: "everybody be cool, this is a r o b b e r y. ... I'm about to change the course of history. n then rot in jail. am I sane? nah. am I well? v much not. do I want for anything? my mom raised from the dead n barring that: life without parole."

In a Twitter Spaces chat, the attacker stated that he had worked for the company briefly, and that he had grievances against its management. "I just kind of wanted to kill Pump.fun because it's something to do... It's inadvertently hurt people for a long time," he said.

Pump.fun paused trading shortly after the attack, and stated that they were "cooperating with relevant parties, including law enforcement, to minimize the damage." The attacker responded to the post: "Neener neener neener".

Brothers indicted for $25 million MEV bot exploit

Two brothers, Anton and James Peraire-Bueno, were indicted for a theft involving MEV — maximal extractable value. MEV involves previewing upcoming transactions on a blockchain and taking actions to extract additional profits — which can sometimes be substantial — based on that information.

According to the Justice Department, the Peraire-Buenos exploited a flaw in popular MEV software called "MEV-boost", which is used by most Ethereum validators. By creating their own validators and "bait transactions", they were able to trick MEV bots into proposing transactions involving illiquid cryptocurrencies, which the brothers then frontran. They were able to create false signatures that tricked a MEV-boost relay into releasing information about upcoming blocks that they were able to tamper with.

The brothers were charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, and face up to 20 years in prison for each charge.

The Justice Department is describing the case as a "first-of-its-kind manipulation of the Ethereum blockchain". The case is an interesting one, as some believe the practice of MEV itself exploits Ethereum users. Others believe anything you can do with code should be allowed — "code is law". However, by signing false transactions and tricking the relay into releasing private information, the brothers' actions do seem to go beyond simply making profits in a "code is law" Wild West, and into the realm of actual fraud.

$2 million stolen from ALEX's XLink bridge by bumbling exploiter

An attacker tried to pull off what could have been a ~$12 million heist from ALEX Lab's XLink bridge after a private key was compromised. However, the sloppy work by the attacker enabled an apparent whitehat hacker to step in.

The attacker was successfully able to transfer around 13.8 million STX (~$2 million) on the Stack BTC layer-2 chain. However, their attempts to steal assets notionally worth around $4.3 million from the project's BNB Chain implementation failed when they upgraded the project contract to a malicious version, but failed to prevent other people from calling the withdraw function. The attacker's first transactions to withdraw the funds themself failed, and an apparent whitehat hacker was able to step in and complete the withdrawal ahead of the exploiter. They later negotiated a deal for the funds' return, after offering a 10% "bounty".

The exploiter had also tried, and failed, to steal assets notionally worth around $5 million on the Ethereum blockchain, but failed to do so. ALEX Lab later announced they were able to recover or secure around $4.5 million of those assets.

Tornado Cash developer sentenced to more than five years imprisonment in the Netherlands

Alexey Pertsev, one of the developers of the Tornado Cash mixing service, was found guilty of money laundering and sentenced to 64 months imprisonment in the Netherlands. Prosecutors claimed that Pertsev knew the service was being used to launder money, but "chose not to intervene". They argued that, although the developers could not necessarily prevent bad actors from laundering money through the service directly, they could have done more to prevent people from using the web interface to wash funds from known criminal wallets.

The case is a concerning one, as sanctioning software developers for how the code they write is used — particularly when it comes to software intended to protect privacy — has frightening implications. Although there is some precedent in the United States that "code is speech", and merely writing and publishing code is protected by the First Amendment, that obviously does not apply to the Netherlands. A collaborator to Pertsev, Roman Storm, is set to be tried on charges of money laundering and sanctions violations in the United States in September, and that case is likely to grapple with this exact issue.

Sonne Finance hacked for at least $20 million

The Sonne Finance lending protocol was exploited for at least $20 million as an attacker was able to exploit a vulnerability in some of their smart contracts. Sonne is a fork of the Compound Finance project, which has known vulnerabilities that are sometimes not properly addressed by people who reuse the code — as has happened with Radiant Capital and Rari.

After being alerted to the theft by several security companies, Sonne announced they had paused the contract on the Optimism Ethereum layer-2 chain.

Cypher contributor admits to stealing over $300,000 due to "crippling gambling addiction"

After the founder of the Solana-based Cypher futures trading protocol publicly accused a core contributor of stealing funds, the contributor — publicly known only as "hoak" — has confessed to the thefts.

Cypher was hacked for $1 million in August 2023, but was able to recover around $600,000 of the stolen funds, which they promised to distribute to impact users via a redemption fund. However, over a period of months and unbeknownst to the rest of the team, hoak had been dipping into the recovered funds — taking around half of what was in the fund for himself.

After he was accused, hoak fessed up in a public statement where he wrote that his actions were a "culmination of what snowballed into a crippling gambling addiction and probably multiple other psychological factors that went by unchecked for too long." He continued: "I know likely nothing I say or do will make things better - perhaps other than rotting in jail. To address the elephant in the room, the allegations are true, I took the funds and gambled them away. I didn’t run away with it, nor did anyone else."

SEC sends Wells notice to Robinhood Crypto

Robinhood has disclosed that they received a Wells notice from the US Securities and Exchange Commission in relation to their "Robinhood Crypto" product. This indicates that the SEC believes that some of the assets that can be traded via Robinhood Crypto are securities.

In the past, Robinhood has removed cryptocurrencies from trading after they were alleged to be securities by the SEC, such as Solana (SOL), Cardano (ADA), and Polygon (MATIC) in the wake of the lawsuits against Binance and Coinbase. However, given the SEC's stance that most cryptocurrencies are securities, it seems likely that the SEC believes one or more of the 14 non-bitcoin cryptocurrencies Robinhood offers may also be a security.

Robinhood's Chief Legal Officer issued a statement that "We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be."

GNUS.ai exploited for $1.27 million

An exploiter was able to create a fake version of the $GNUS token on the Fantom blockchain, then bridge the tokens to Ethereum and Polygon where they were then sold as though they were authentic. They were able to drain $1.27 million from the project's liquidity pools.

GNUS.ai (short for "Genius", not a reference to the animal) is one of many AI-related blockchain projects that has sprung out of the recent AI hype. This particular one promises to allow people to "utiliz[e] unused cycles" on various computing devices for computation-intensive AI systems, using cryptocurrency for payments.

Cred executives indicted

The former CEO, CFO, and CCO of the cryptocurrency lending service Cred have been indicted on multiple charges involving wire fraud and money laundering. They were charged in connection with their operation of the Cred platform, which went bankrupt in November 2020 after hiding its insolvency for several months.

Cred had claimed to customers that they engaged in only "collateralized or guaranteed lending", hedged their investments, and "comprehensive insurance", but hid that "virtually all the assets to pay the yield were generated by a single company whose business was to make unsecured micro-loans to Chinese gamers." Furthermore, they did engage in uncollateralized lending, did not hedge their investments, and did not hold insurance as they had claimed.

Around $150 million in customer funds were lost in the collapse based on prices at the time, though those crypto assets would have been priced substantially higher at various times since.

Wallet loses over $72 million to address poisoning

An Ethereum wallet was apparently drained of 1,155 wrapped bitcoin (~$72.7 million) when they transferred it to a malicious address that had been operating an address poisoning scheme.

Address poisoning is a scam tactic that takes advantage of crypto traders' tendencies to copy and paste wallet addresses from their transaction histories, since the addresses are long strings of characters that are not practical to type from memory. By creating a new wallet address with identical start and/or ending character strings to addresses used by the victim, and spamming the victim with transactions from that similar address, scammers are sometimes able to get victims to erroneously copy the spoofed address for future transfers.

That's what appears to have happened in this case, when a victim transferred 1,155 wrapped bitcoin — tokens pegged to the bitcoin price meant for use on the Ethereum blockchain — to the malicious address.

The victim and the exploiter later reached an agreement for the return of most of the funds, with the exploiter keeping $7.2 million as a "bounty".

Pike Finance exploited for $2 million in two separate attacks

Pike Finance, a cross-chain lending protocol, was exploited twice in four days as attackers discovered vulnerabilities in the project's smart contracts.

The first attack, on April 26, was enabled by a flaw in the security measures related to transfers of the USDC stablecoin. An attacker was able to change the recipient address and amount, ultimately making off with almost $300,000 in the stablecoin. Pike released a postmortem two days later, acknowledging that the bug had been identified by a third-party auditor but had not been rectified by their team.

When the Pike team went to patch the smart contracts to thwart this attack, they introduced new, even worse vulnerabilities. As a result, on April 30, an attacker was able to upgrade the project's smart contracts to malicious ones, then withdraw $1.68 million in ETH, ARB, and OP tokens.

Pike Finance has offered a 20% reward for the return of the funds or information pertaining to the attacker, and has promised "a plan to make users whole". Pike, which launched in early 2024, is backed by Circle and Wormhole.

Roger Ver arrested for $50 million tax fraud

Portrait of Roger VerRoger Ver (attribution)
Roger Ver, an early bitcoin investor who later became an outspoken evangelist for the fork Bitcoin Cash, has been arrested on tax fraud charges. According to the Department of Justice, Ver evaded almost $50 million in owed taxes by concealing income and lying to tax preparers about his bitcoin assets as he attempted to renounce his US citizenship and become a citizen of the tax haven St. Kitts and Nevis.

Ver was arrested in Spain, and the United States will seek his extradition.

Besides his tax woes, Ver has also been caught up in accusations by CoinFLEX that he owed the platform around $84 million after failing to meet a margin call. Ver has in turn claimed that CoinFLEX owed him money. CoinFLEX filed for restructuring in August 2022.

Changpeng Zhao sentenced to four months imprisonment

Changpeng ZhaoChangpeng Zhao (attribution)
Former Binance CEO Changpeng "CZ" Zhao has been sentenced to four months in prison after pleading guilty to money laundering-related charges. The charges were filed in November, and Zhao entered a guilty plea, resigned from the company, and agreed to pay a $50 million fine.

Prosecutors sought a three year sentence for Zhao, while Zhao requested to serve no time. The judge ultimately decided on a sentence closer to the five-month sentence that was being recommended by the Probation Office.

Rain cryptocurrency exchange hacked for $14.8 million

Bahrain-based cryptocurrency exchange Rain was exploited for around $14.8 million dollars on April 29. The exchange did not publicly disclose the hack until the suspicious outflows across wallets on multiple blockchains were noticed by blockchain investigator zachxbt.

After zachxbt sounded the alarm on May 13, Rain admitted that they had had a "security incident", but stressed that customer funds were safe, and stated that the Rain Group had "covered any potential losses resulting from this incident".

ZKasino scam suspect arrested by Dutch police

In the wake of the $33 million ZKasino rug pull, Dutch police have arrested an as yet unnamed 26-year-old who is likely "Derivatives_Ape", the creator of the project. The police also seized assets estimated at more than €11.4 million (~US$12.3 million) including real estate, a luxury car, and crypto. According to police, they began investigating the project only days earlier, after hearing reports of the rug pull on Twitter.

Instagram influencer Jay Mazini sentenced to seven years in prison for crypto fraud

Jay MaziniJay Mazini (attribution)
Jay Mazini, an influencer who often boasted of his wealth on Instagram by doing cash giveaways to random strangers, has been sentenced to seven years in prison after running "overlapping fraud schemes" that scammed victims out of at least $8 million. One of them involved a multi-million dollar cryptocurrency scam in which he would promise to pay higher prices for crypto, and would convince those who were interested to transfer their funds to him by providing doctored images of wire transfer confirmations to suggest that he'd fulfilled his end of the deal.

Mazini also ran a scam targeting the Muslim community in New York, via a company called Halal Capital. In reality, this was a Ponzi scheme, and payouts to his investors were funded in part by the crypto scam he was also running.

Mazini was arrested in March 2021 on kidnapping charges, after he kidnapped and beat someone who might have witnessed his frauds. He was sentenced to five years in prison for that charge, to which he pled guilty. His new fraud sentence will be served concurrently with the kidnapping sentence.

In addition to seven years in prison, Mazini has been ordered to forfeit $10 million. Restitution has not yet been determined.

Samourai Wallet operators charged over crypto mixer operations

Keonne Rodriguez and William Lonergan Hill, founders of the Samourai Wallet, were arrested and charged with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. The charges relate to their operation of a cryptocurrency mixer that the DOJ says helped to launder over $2 billion in unlawful transactions. $100 million of that, they say, was connected to dark web markets including Silk Road and Hydra Market. Indeed, Samourai had actively marketed its products to "Dark/Grey Market participants".

Rodriguez was arrested in the United States; the United States will seek extradition for Hill, who was arrested in Portugal.

Samourai Wallet advertised itself as "a bitcoin wallet made for the streets", which would "keep your transactions private, your identity masked, and your funds secure". It touted features including "remote self-destruct", and would hide itself from a phone's applications list. As charges were filed in the United States, the wallet's website began displaying a seizure notice that informed visitors of a coordinated law enforcement action by the US Attorney's Office in the Southern District of New York, FBI, IRS, Europol, and Portuguese and Icelandic police. The app was also removed from the Google Play Store.

ZKasino rug pulls after raising $33 million

A project promising to build a decentralized casino managed to raise $33 million, despite an anonymous team that had exhibited several instances of shady behavior throughout ZKasino's development. The project promised that everyone who bridged ETH to their layer-2 chain would be able to receive their ETH back 1:1 in thirty days.

Instead, the project's creators transferred those more than 10,500 ETH ($33 million) to Lido, an Ethereum staking service. As for the "return" of funds, the project team indeed followed through with their promises to return the crypto... except instead of ETH, depositors received the project's native token, ZKAS, which would vest over a period of 15 months. The project announced that they had calculated the ZKAS distribution based on a discounted rate, "as a favour to our users who have bridged to participate in the ecosystem". Gee, thanks!

One investor in the project wrote, "We made a mistake investing in Zkasino early. ... [I]t sounds like a scam, but 95% of crypto consists of such crap. With memecoins pumping every day, people believe this could be the next one."

It seems that ZKasino's creators have links to other crypto scams, including a failed "ZigZagExchange", which raised around $15 million that was allegedly misallocated to work on the ZKasino project. Crypto sleuth zachxbt had also described the team as "proven bad actors" in December, listing multiple instances in which they had avoided making promised payments.

After the rug pull, the project's planned IDO on Ape Terminal and AIT Launchpad were canceled, and MEXC (which had invested in the project's seed round) canceled the token listing.

Hedgey Finance hacked for almost $45 million

Hedgey Finance, a platform used to manage token claims, lockups, and vesting, was hit with a flash loan attack that drained $44.7 million of customer funds from the platform.

The majority of assets were stolen from Hedgey on the Arbitrum layer-2 network, although around $2.1 million of them were stolen from the version deployed on the Ethereum mainnet.

Hedgey Finance confirmed the exploit, and sent an optimistic and congratulatory message on-chain: "Well done for finding it! We're assuming you executed this exploit as a white hat, so we'd like to get in touch with you to discuss next steps." No on-chain response thus far.

Hong Kong police arrest 72 people, freeze $29 million in connection to JPEX

Police in Hong Kong have arrested 72 people and frozen HK$228 million (~US$29 million) in connection to the collapse of the JPEX cryptocurrency exchange in September 2023. The South China Morning Post has described the collapse as the largest alleged fraud of its kind in Hong Kong.

According to Hong Kong police, they have received more than 2,600 complaints about JPEX, involving HK$1.6 billion (~US$204 million) in assets.

Avi Eisenberg convicted of $110 million Mango Markets heist

A jury found Avi Eisenberg guilty of fraud and market manipulation after he stole $110 million from the Mango Markets defi protocol in October 2022. Although he tried to argue that "code is law", and that his actions were legal as they were allowed by the project's smart contracts, jurors ultimately agreed with prosecutors that his manipulation of token prices constituted fraud.

Shortly after he was identified as the person behind the attack, Eisenberg tweeted that he "was involved with a team that operated a highly profitable trading strategy last week. I believe all of our actions were legal open market actions". Sadly for him, jurors didn't share this belief.

Eisenberg faces up to 20 years in prison.

Roger Stone endorses $TRUMP memecoin with misleading posts

Roger StoneRoger Stone (attribution)
Amid tweets alleging corruption among jurors in his 2019 criminal case, far-right activist and Trumpworld figure Roger Stone has posted several tweets endorsing "MAGA Memecoin", one of the many memecoins with the $TRUMP ticker. In several posts, he's suggested the token enjoys support from Trump himself, mentioning that the token is "the largest holding in Donald Trump's crypto wallet". "Donald Trump has at least $2M in @MAGAMemecoin in his crypto wallet - get yours- this cryptocurrency is going UP!", he wrote in another.

What he failed to mention is that the tokens in Trump's wallet were airdropped to him, likely without Trump even realizing it. Several of Trump's crypto wallets are publicly known, and people send coins and NFTs to them all the time. Trump has no more endorsed Stone's "MAGA Memecoin" than he has the "HarryPotterTrumpHomerSimpson777Inu" tokens that also sit in his crypto wallet.

Elsewhere, Stone disclosed, "My promotion of MAGAMemecoin is, of course, sponsored." I haven't been able to find where he has disclosed the amount he was paid for these promotions, as he is required to do.

$2 million emptied from Grand Base real world asset platform

Grand Base, a real world assets platform built on the Base layer-2 blockchain, has seen $2 million exit the platform in a hack or rug pull.

The team behind the project claimed that the deployer wallet had been compromised, allowing an attacker to drain the project's liquidity pool. Altogether, 615 ETH (~$2 million) was taken from the project.

Grand Base is a platform where users can trade "gAssets", which are crypto tokens that represent stocks in tech companies including Amazon, Apple, Google, Meta, and Microsoft.

tea.xyz causes open source software spam problems, again

The tea.xyz protocol first earned an entry on Web3 is Going Just Great in late February, when their plan to reward open source software contributors resulted in crypto enthusiasts with no intention of participating in OSS opening endless pull requests to claim ownership of prominent OSS projects. This spam was disruptive to said projects, whose (usually volunteer) maintainers had to figure out what was going on and then try to stop the spammy PRs.

Max Howell, the creator of tea.xyz (and creator of homebrew, though he's no longer involved), seemed apologetic, and promised to make changes to the protocol to stop this spammy behavior.

Now, deprived of that avenue, people are just creating massive waves of empty software packages, with nothing other than a "teafile" with their crypto wallet address for rewards, and submitting them to package managers like NPM and RubyGems.

This spam prompted a blog post from RubyGems, who wrote that they had to devote time to strengthening limits on package publishing and "ensuring [accounts] didn't disrupt the community further."

Security researchers at Phylum also wrote up the protocol's impact on the JavaScript world, which has seen as many as 7x as many packages published on NPM as previous daily averages. "Automated sustained spamming of this volume for months on end is rare and does nothing but cause heavy strain on the ecosystem itself, degrading the performance of the ecosystem for genuine users and straining open source security researchers," they wrote.

$26 million liquidated in surprise Pac Finance smart contract change

Pac Finance, a fork of the Aave lending protocol deployed on the Blast blockchain, surprised some of its users as an unannounced and unexpected code change lowered the liquidation threshold. Pac Finance said that they had asked an engineer to make changes to the smart contract, and that that person had unexpectedly decreased the threshold at which positions could be forcibly liquidated. This change resulted in $26 million being liquidated across the project.

Pac Finance has said they are "actively developing a plan with [impacted users] to mitigate the issue."

Australian NGS Crypto mining fund collapses

NGS Crypto, which sold "crypto mining packages" to interested investors, has been put into receivership. The Australian firm encouraged customers to set up a self-managed super fund — a type of retirement fund — to achieve returns they said were powered by crypto mining. The firms advertised returns of up to 16% annually, and promised that investors would receive 100% of their initial investment back at the term's completion — even "in the unlikely event that crypto mining becomes unprofitable".

NGS and its associated business is believed to have pulled in around AU$62 million (US$42 million) from around 450 Australians.

Australian DCA Fund collapses with up to $65 million owed to creditors

Liquidators have been appointed for three cryptocurrency companies owned by Ash Balanian. DCA Capital, Digital Commodity Assets, and the Digital Commodity Assets Fund have all entered liquidation after investors raised red flags about the fund's management and licensure.

So far, losses are estimated to affect around 100 investors, who have up to AU$100 million (US$65 million) in claims.

Balanian had boasted of his career experience as a former NASA mission planner, and targeted his fund to wealthy investors with a minimum initial deposit of AU$50,000 (~US$33,000).

Crema Finance and Nirvana Finance hacker sentenced to three years imprisonment

Shakeeb Ahmed, the hacker who stole a combined $12 million from Crema Finance and Nirvana Finance in July 2022, has been sentenced to three years in prison. Ahmed had previously worked for Amazon, where he led a bug bounty program focused on paying whitehat hackers to discover flaws in Amazon's software.

US Attorney Damian Williams described this as the first ever conviction for a smart contract hack.

Ahmed forfeited around $12.3 million in stolen funds, and will pay more than $5 million in restitution.

MarginFi suffers huge outflows amid CEO ragequit

The MarginFi decentralized lending project on Solana has been at the epicenter of some major drama recently, amid concerns around oracle problems, withdrawal failures, and accusations that the project has not been paying out its promised rewards. Much of this came from a Solana staking pool, SolBlaze; MarginFi responded by describing their allegations as a "hit piece" and "misinformation".

On April 10, CEO Edgar Pavlovsky tweeted that he had resigned from MarginFi, publicly calling that he "d[idn't] agree with the way things have been done internally or externally". Pavlovsky had been criticized for his response to the controversy around MarginFi, in which he had been argumentative and insulting, tweeting things like "take your money out, go fuck yourself" to those who accused him and MarginFi of malfeasance.

Amid the chaos, more than $210 million in TVL has exited the protocol.

SEC sends Wells notice to Uniswap

The US Securities and Exchange Commission issued a warning to the Uniswap decentralized exchange in the form of a Wells notice. Wells notices are used to inform the recipient of an impending lawsuit, and give them a last-ditch opportunity to convince the SEC that the suit is unwarranted.

The notice was received with an adversarial posture by Uniswap, who announced its receipt with a blog post titled "Fighting for DeFi". "Taking into account the SEC's ongoing lawsuits against Coinbase and others as well as their complete unwillingness to provide clarity or a path to registration to those operating lawfully within the U.S., we can only conclude that this is the latest political effort to target even the best actors building technology on blockchains," they wrote.

The news was met with outrage in the crypto community, who generally saw the action as indicative of an overly aggressive posture by the SEC to crack down on defi and crypto more broadly.

$23 million goes missing amid STFIL claims that they're being investigated

STFIL, a protocol that promises liquid staking and "leverage mining" to holders of Filecoin's FIL token, announced on Twitter that "We believe that the STFIL core technical team is under investigation by local Chinese police."

According to STFIL, while some of the core team members were detained by Chinese police, FIL tokens were moved to an unknown wallet. They also acknowledged that there had been "abnormal, unscheduled upgrades to the protocol". They asked their community members for help in tracking the wallet.

Some speculated that the story was fake, and that the project had stolen the funds. However, Chinese police have in several instances cracked down on people and companies involved in Filecoin-related projects, including an $83.3 million alleged pyramid scheme in August 2023 and a group of Filecoin Ponzi schemers in 2021. Filecoin mining became popular in China after its 2018 initial coin offering, and also became a magnet for Ponzi schemes and other scams.

MuskSwap and related projects exit scam for over $5 million

A person or group have raised funds for various crypto projects only to abandon them, empty the project wallets, and launder the funds through Tornado Cash. The largest of the projects was called "MuskSwap", which proclaimed: "$MUSK & MuskSwap was born to show admiration to elon musk's super projects like solarcity, tesla, space x and his constant influence on the world finance & the crypto market."

The project described itself as a DEX with a native $MUSK token, and launched in July 2021. However, the token tanked on December 25, 2021. Although the project team tried to blame the crash on "liquidity issues" and promised paths forward, they locked the project Telegram chat on March 11, 2022. On April 5, 2022, the team withdrew remaining funds and deleted the website.

Crypto analysis firm CertiK linked the MuskSwap project to several other scam tokens and projects: RocketDoge, InfinityGame, SpaceX, MUFC (themed after Manchester United), and Elona Musk. Altogether, the rug pulls have drawn in $5.1 million.

Bored Ape-themed fast food restaurant shuts down

It's hard to believe that the hamburger joint themed around the owner's Bored Ape NFT failed to take off. Although there was novelty value in the themed restaurant, which for a time boasted that it accepted cryptocurrency payments, the excitement seemed to wear off quickly after a few early news articles. After a while, the restaurant's crypto payments became spotty, with employees saying the system was unwieldy and unpopular among customers.

Some more recent Yelp reviews described fairly mediocre food, which "[t]he NFTs don't make up for".

The restaurant opened in April 2022, a month after owner Andy Nguyen purchased Bored Ape #6184 for $268,000, along with three Mutant Apes for an additional combined $187,000. #6184 became the restaurant's logo, and the others were incorporated into the restaurant's branding. The NFTs haven't been resold since, although it's unlikely they could recoup close to their original purchase prices — Bored Apes have been averaging a little under $50,000 in recent sales, and Mutants around $8,500 each.

Do Kwon and Terraform Labs found liable for $40 billion fraud

After hearing arguments that Terraform Labs was "built on lies" during a two-week-long trial, the jury in the civil case against the company and its founder Do Kwon found that both were liable for fraud.

Kwon and his company were behind the algorithmic stablecoin, Terra, which dramatically collapsed in May 2022, sending huge ripple effects throughout the ecosystem. He and his company had lied about the stability of the token, ultimately causing massive financial damage to the tune of around $40 billion.

Kwon is in custody in Montenegro after attempting to flee criminal cases in both the United States and South Korea. The civil case in the US proceeded without him.

SushiSwap team votes to give themselves control of much of the "decentralized" project's treasury

The leadership team behind SushiSwap, a popular defi platform, submitted proposals for a DAO governance vote that would transfer control of around $40 million from the DAO to a small centralized organization called "Sushi Labs". That organization would also receive all future airdrops awarded to SushiSwap. According to the proposal, this was motivated by a desire for efficiency and faster development.

The "yes" votes are currently in the lead with a 63% margin. The most yes votes came from sushigov.eth, the official SushiSwap team address, which also created the proposal. It is the first time that address has ever participated in a governance proposal.

The 5.5 million yes votes from the team wallet, plus another 3.1 million delegated from other community members, were enough to push the vote to majority support. A former SushiSwap contributor has also alleged that the SushiSwap team was manipulating the vote with additional wallets.

On Twitter, Sushi's "Head Chef" claimed that he had consulted with lawyers and then authorized the voting activity out of fear of an "extortative [sic] governance attack attempt".

Project promising to rug pull raises almost $29,000

A project describing itself as "The world's first memecoin pre-announced as a rugpull" was explicit in its marketing: "do not buy this coin, as it will go to zero."

Despite that, people sent the creator over 8.8 ETH (almost $29,000) for the project's "pre-sale", even as they repeated on Twitter that the project was a scam and that no one should buy it.

FixedFloat exchange hacked again

The FixedFloat cryptocurrency exchange was exploited again, this time for around $2.8 million. This follows shortly after a February 18 hack in which attackers made off with $26 million.

FixedFloat acknowledged the theft in a Twitter post, and blamed the same thieves. They claimed that this theft was enabled by a vulnerability in a third-party service.

Solana faces wave of drain attacks linked to trading bots including Solareum

The Solana ecosystem is grappling with a spate of drained wallets. A cause has yet to be definitively determined, but some of the thefts were linked to the use of trading bots like Solareum. Solareum speculated that the exploits may have been linked to compromised Telegram bot tokens, which could have allowed the attackers to obtain private keys from message history.

Solareum later wrote that they would be closing the project, and deleted their website. This drew some criticism from users who accused them of doing nothing to investigate the hack, or even being responsible themselves. The project wrote on Twitter, "We at #SOLAREUM team can clarify that we DO NOT steal money." Ah, well, in that case.

Other bots may have been involved in the theft, though it's not clear at this point. Though there was some speculation that a trading bot called BonkBot was to blame, that seems to have been unfounded.

The total theft amount is not clear, but exceeds $500,000.

Prisma Finance hacked for $12 million; attacker makes detailed demands

The defi protocol Prisma Finance was hacked for 3,257 ETH ($11.5 million). An attacker was able to take advantage of a flaw in the project's smart contracts, allowing them to manipulate users' positions and steal some of their collateral. Two other watchful attackers observed the attack strategy and replicated it, stealing a combined additional 173 ETH (~$610,000).

Plasma paused the protocol after detecting the attack.

The first attacker, who stole the bulk of the assets, sent an on-chain message to Prisma claiming that they had performed a "whitehat rescue", and inquired about returning the funds. In later messages, however, they asked the project to answer questions about their security practices and projects' responsibilities to users to prevent attacks. The attacker then transferred the stolen funds to Tornado Cash — indicating their return is unlikely.

In another message, the attacker was angry that Prisma had not expressed gratitude to them or remorse to their users, and was angry they had used terms like "exploit" and "attack" in their description of the incident. They demanded that the team reveal their identities, apologize, and thank the attacker in an online press conference.

Sam Bankman-Fried sentenced to 25 years in prison

Sam Bankman-FriedSam Bankman-Fried (attribution)
Sixteen months after the collapse of his FTX cryptocurrency exchange, Sam Bankman-Fried has been sentenced to 25 years in prison. He has also been ordered to pay an $11 billion monetary judgment.

The sentence follows his conviction on all seven felony charges in November 2022 — a decision reached by the jury within hours of beginning their deliberations.

Bankman-Fried intends to appeal the conviction.

  • Minute Entry for proceedings held before Judge Lewis A. Kaplan: Sentencing held on 3/28/2024 for Samuel Bankman-Fried [archive]

LENX co-founder accused of $10 million rug pull

The LENX cross-chain bitcoin liquidity protocol has recently been accused of a $10 million rug pull after community members observed massive withdrawals of treasury funds which were then sent to Binance accounts.

One of the co-founders, known only as "Paul", claimed on Discord that he was "trying to investigate" the movement of funds, which have been blamed on the project's other co-founder, John Kim.

Conversations on Discord suggest that a remaining $3 million in treasury funds were protected, and that the remaining LENX team may have been able to convince Binance to freeze the account that received stolen funds. However, little has been verifiably confirmed to date.

LENX is backed by the Frax Finance lending protocol.

KuCoin and founders criminally charged

The cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, were indicted in the Southern District of New York on charges of conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act. Both founders are Chinese citizens, and neither has been located or arrested.

According to prosecutors, they tried to conceal that the exchange had customers from the United States in order to claim that they were exempt from US anti-money laundering laws. They also marketed KuCoin as a KYC-optional exchange where customers from the US could operate unverified accounts.

The charges against the founders carry maximum sentences of five years in prison.

"Munchables" crypto game exploited for $62.5 million

A small round furry shape with big blue eyes and thin legs, somewhat resembling a soot spriteA Munchable (attribution)
The "Munchables" crypto game explains: "Schnibbles grow on every realm across the Munchable's world. Each realm has their own unique and distinctive schniblet, and the Munchables react differently based on their compatibility to the schniblets fed to them. When creating an account for the Munchables, you must choose the location of your snuggery." Right then.

Things went awry in the land of the schnibbles and snuggeries when an attacker siphoned around 17,400 ETH ($62.5 million). Various descriptions of the attack circulated, with blockchain sleuth zachxbt attributing it to a recently hired developer, and crypto developer 0xQuit claiming the theft appeared to have been "planned since deploy".

Some began discussing the possibility that the Blast layer-2 blockchain might forcibly roll back the chain to "undo" the hack. Some have argued this is contra to the crypto ethos or would set a bad precedent, while others have argued that as a blockchain focused more on gaming and experimentation and less on decentralization and other facets of crypto ideology, it would be a reasonable step.

Some hours after the attack, the exploiter was convinced to return the funds.

Curio RWA project suffers $16 million exploit

Curio, a crypto project that creates tokens based on "real-world assets" (RWAs) like cars, watches, wine, and other goods, has suffered an attack that saw around $16 million drained from the project's funds.

A bug in the project's Ethereum smart contract enabled an attacker to mint 1 billion of the project's CGT governance token. Although the tokens were notionally priced at around $40 million, the loss to the project was estimated at closer to $16 million.

Curio DAO announced that they intended to compensate users affected by the theft over a year-long period.

Solana memecoin frenzy sparks trend of incredibly racist meme tokens

A screenshot of many Solana tokens on DEXScreener, including:
JEWS "Jews did 911"
卐 "NAZI"
N*** TRUMP "N*** Trump"
N***OLAS "N***OLAS CAGE"
COVID "chinadidcovid"
N***Butt "N*** Butt Token"
APERAH "aperah wenfree"
BDN "Big Dick N***"
CHIGGA "Chinese N***"
HITLER "I was right"
BOJE "Book of J***ers"
WODNDOR "AuschwitzWoodenDoor"
LIBTARD "Go Woke Go Broke"
BULLJEW "BULL JEW"
wifcancer "kate wif cancer"
N*** TRUMP "N*** TRUMP 2024"
GayPedo "Gays Are Pedos"
J*** "J*** Buice"Racist Solana tokens on DEXScreener (attribution)
Solana memecoin trading has been booming lately, with people making money by speculating on tokens themed around various memes and jokes. Amid an explosion in trading innocuously-named meme tokens like dogwifhat has also been a rise in blatantly racist tokens, named after racial slurs, featuring racist caricatures, or named after antisemitic conspiracy theories.

The tokens became so popular that projects showing newly-released tokens, like DEXScreener, became full of such tokens. DEXScreener released a statement on Twitter to say that "We'll be reviewing our token profile moderation policy in the coming days. We won't be the gatekeepers of what happens on-chain, but we're definitely not here to spread hate." The replies to the tweet were, predictably, full of people accusing DEXScreener of "censorship" and "going woke".