After Lieber put these questions to ZenLedger, the company fired Hannum. ZenLedger founder Pat Larsen was cagey around the circumstances under which Hannum was hired, and an outside spokesperson for the company laid the blame on a bad referral and a federal background check that returned "no flags regarding his education or work history". A venture capital firm that invested in the company reported that they "did more due diligence than a traditional venture capitalist would have done" on the company but had not checked Hannum's background.
Crypto tax software firm ZenLedger fires executive after the New York Times discovers he lied extensively about his background
New York Times reporter Ron Lieber began fact-checking a story in March about a deal between crypto tax software firm ZenLedger and the Internal Revenue Service. Lieber ran into trouble fact-checking the claims of ZenLedger COO Dan Hannum, who told a compelling story of being arrested as a juvenile, then turning his life around and earning college degrees, working at several major Wall Street firms, and becoming a crypto millionaire. Lieber discovered that Hannum had never earned the degrees he claimed, nor worked at the Wall Street firms he listed. He also found no evidence that Hannum had ever managed $100 million in assets like he said, nor that he had made so much on crypto that he was paying "millions in taxes" alone.
Exxon Mobil reportedly gets in on Bitcoin mining
According to Bloomberg, Exxon Mobil has begun a pilot program to set up Bitcoin miners at an oil well in North Dakota. The project reportedly runs off 18 million ft³ of natural gas that would otherwise be flared. Although early proponents waxed poetic about how anyone could mine Bitcoin, the increasing hardware specialization and massive electricity costs have made it practical at scale only for those with access to the hardware and cheap sources of electricity — including, now, the world's second largest oil company.
Some crypto proponents have spoken positively about using excess gas that would otherwise be flared for Bitcoin mining, though climate experts have spoken out against it being a sufficient or reasonable solution. "It's like if you had a leaky gasoline pipeline and, instead of fixing the problem, you plugged in a Humvee next to the leak and left the engine on in perpetuity with the A/C on full blast," said UC Santa Barbara professor Paasha Mahdavi.
Hacked verified Twitter accounts impersonate BAYC founders, scam $1 million with fake ApeCoin airdrop
Some scammers obtained hacked verified Twitter accounts, then rebranded them to claim to be founders of the Bored Ape Yacht Club. They then tweeted about how their team's ApeCoin launch had been so successful, they'd decided to airdrop more tokens. Users who clicked the link and connected their wallets quickly discovered they'd been scammed when their high-value NFTs were transferred from their accounts, then flipped for resale. One victim of the scam said they'd lost $600,000, and tweeted: "@BhawanaCAN put out a tweet refering for more $ape available- I trusted the blue checkmark @twitter @jack now the ape and my gutter cat is gone - fuck you @BhawanaCAN". @BhawanaCAN, prior to the hack, was an account belonging to the former CEO of the Cricket Association of Nepal.
There were multiple scammer accounts involved in the scheme, and one researcher has estimated that the scammers had made around $1 million from reselling the NFTs as of March 24. A similar hack had occurred several days earlier, in which a hacked verified account impersonated a BAYC founder and successfully stole three pricey Bored Apes from a collector.
Roller derby community resoundingly rejects NFT project
After three roller derby stars announced an NFT project called "'Bout Time", the roller derby community was fairly united in its displeasure with the idea. Though the project intended to donate some of their proceeds back to the roller derby community, the overwhelming response appeared to be that engaging with NFTs was indefensible even if the project did provide money for the derby leagues. Most concerns seemed to revolve around the environmental impact of NFTs in general, as well as the scams that are rampant in the NFT world. After considering the feedback to their project, the three skaters announced that they would not be continuing with the project, which was due to mint on March 31. One of the project founders told Vox, "If this community doesn't want us to run this project, then we're not going to do this project for them. The whole reason was to raise money for the derby community, and they so strongly spoke out against us."
- "When NFTs came to roller derby, roller derby put up a fight", Vox
- Bout Time NFTTT website, with statement about project closure
Department of Justice charges the scammers behind the January "Frosties" NFT rug pull with fraud and money laundering shortly before they launch their second project
On January 9, an ice cream-themed NFT project called "Frosties" made off with $1.1 million in a rug pull only an hour after the NFTs were launched. Less than three months later, the U.S. Attorney's Office for the Southern District of New York announced that they had charged the two 20-year-old individuals behind the scheme with conspiracy to commit wire fraud and conspiracy to commit money laundering. Although it is bizarrely common to see people question whether NFT rug pulls are actually crimes, the USAO was quite clear: "Rather than providing the benefits advertised to Frosties NFT purchasers, Nguyen and Llacuna transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control." The Special Agent in Charge stated, "the same rules apply to an investment in an NFT or a real estate development. You can't solicit funds for a business opportunity, abandon that business and abscond with money investors provided you."
The statement also alleged that the duo were working on another NFT project called "Embers", which they hoped would generate around $1.5 million. The project was set to mint on March 26, and the 60,000-member Discord has been thrown into disarray. Some of the community moderators began deleting links to the D.O.J. announcement, and attempted to suggest that the Department of Justice website had been faked to "FUD" the project.
The individuals behind the Frosties scheme face charges that each carry a maximum sentence of 20 years in prison, if they are convicted.
Pye suffers a $2.6 million loss in a flash loan attack
The security firm PeckShield reported that the Pye ecosystem had been targeted with a flash loan attack, which drained around $2.6 million from the protocol. Pye is a group of defi software projects built on the Binance Chain. The project had just undergone a large migration, and it appeared the bug may have been introduced in the new contracts.
The guy behind the "NFT band" on Ellen thinks you should have to pay royalties on dance moves
I tried to get a good screengrab of the "NFT band" but the videographer, reasonably, seemed to find the human performer more interesting (attribution)In the latest installment of "large television program launders the reputations of NFTs", an "NFT band" performed on Ellen... Well, some animated characters danced on a screen while a human performed, a concept that is not exactly new.
The animator who created the band animation, however, has big dreams for the possibilities NFTs could bring to dancers. Dancers "can now claim digital ownership over a series of moves or routines by means of NFTs". Imagine, he says, "owning the original Moonwalk". Yes, everyone, just imagine how much better the world could be today if everyone had had to pay royalties whenever they imitated Michael Jackson's signature move.
- "NFT Band Debuts With Singer Kiesza on Ellen Degeneres Show", Decrypt
- "Kiesza Performs 'Passenger'", YouTube video
Parts of the "Caked Apes" NFT project team both sue each other
Two lawsuits were filed nearly simultaneously, each alleging misconduct by the other party with respect to the "Caked Apes" NFT project — a project full of illustrations that were very clearly derived from the popular Bored Apes project, but feature neon colors and psychedelic motifs. Caked Apes so far has done around $1.9 million in sales.
Both lawsuits center on Taylor Whitley and his departure from the project, but they diverge considerably from there. Whitley's suit claims that he was wrongly ousted from the project; the other lawsuit claims that Whitley engaged in "unhinged, destructive, and egotistical acts... to sabotage... "Caked Apes", after Whitley failed to usurp ownership and control of the project entirely for himself". They also allege that Whitley misused DMCA takedowns to have the collection removed from online marketplaces. The lawsuits are liable to be complicated somewhat by the fact that a partnership agreement doesn't appear to have ever been written up.
A Robin Hood-esque attacker steals $52 million from Cashio, then returns smaller amounts and pledges to donate the rest to charity
A hacker was able to exploit an infinite mint glitch in the protocol of Cashio, a Solana stablecoin project. They were able to pull around $50 million out of the platform, while also tanking the value of the $CASH token in the process. The attacker left a note in the input data of their Ethereum transactions that "Account with less 100k have been returned. all other money will be donated to charity."
Saber, the providers of the Cashio liquidity pool, published a postmortem of the attack in which they wrote that "We do not have the money to pay back depositors." The hack was the second largest in Solana history, behind the February Wormhole hack. Saber entreated the hacker to return the funds, writing, "accounts with over $100k are often users' life savings on leverage, and many of us will seriously be affected financially after this incident."
On March 28, the attacker sent a message saying that "the intention was only to take money from those who do not need it, not from those who do", and invited users who had over $100,000 to apply to receive their funds back with "an explanation of the source of this money and why you need it back. more detail is better. money will not be refund to rich american and european that don't need it." Somewhat strangely, Cashio themselves began hosting a website to allow affected users to plead with the hacker to return the money.
VeVe marketplace goes offline for over a day after an exploit results in a "large amount of gems being acquired illegitimately"
The VeVe marketplace has developed a bit of a reputation as the partner of choice for some big names who have dipped their toes into "licensed digital collectible" NFTs, including Marvel, Pixar, and Coca-Cola. It is also notable for using in-app tokens called Gems, which can be purchased with credit cards, but have been impossible to cash out since the mid-2021 launch (though VeVe has very recently said they are beta testing a cashout system).
On March 22, VeVe tweeted that "We have become aware of an exploit of our systems which resulted in a large amount of gems being acquired illegitimately", and that they had closed the market, as well as purchases and transfers of Gems. The market remained closed for over a day as VeVe apparently triaged the problem. It's not clear yet what the impact has been to the platform or its users, though many reported that their NFTs appeared to have plunged in value.