Web3 is Going Just Great

According to Phillips, it took months before he was able to get in touch with Huobi and convince them to act on the leak. Phillips first notified Huobi of the leak in June 2022, and after repeated efforts to contact the company, the credentials were only revoked in June 2023.

Huobi has tried to downplay the hack, first stating that the user data leak was "on a small scale (4,960 individuals)" and "does not involve sensitive information and does not affect user accounts and fund security". They also claimed the leaked OTC data was test data. "The log shows that only [Phillips] has downloaded, and [Phillips] has also stated that he has deleted. Therefore no leakage is actually caused," they wrote.

According to CoinGecko, Huobi is the seventeenth-largest cryptocurrency exchange by volume.

The mint itself was plagued with issues, with many collectors complaining they weren't able to buy NFTs due to technical difficulties. A team member apologized for the issues, writing that they were "gutted over what happened" but that "we have an amazing reveal experienced planned that will kick off soon".

When the reveal happened, people were disappointed to say the least. They expected a unique look that would not "dilute" the value of the original Azuki collection, and were met with what many feel is a low-effort clone of the original Azukis. Some observed NFTs in the Elementals collection that appeared to be direct duplicates of ones in the original collection, which Azuki later wrote was a "technical glitch" that was quickly corrected. The floor price of the Elemental NFTs, as well as those of other Azuki projects, immediately suffered. While people paid 2 ETH for the NFTs, they're now going for 1.5 ETH (~$2,825) at floor, a 0.5 ETH (~$925) loss. The floor price of the original Azuki collection tanked from ~15 ETH (~$28,200) to ~9 ETH (~$16,920), a 6 ETH ($11,280) loss.

Azuki wrote an apologetic thread on Twitter, writing that they had "missed the mark... the mint process was hectic, the PFPs feel similar and, even worse, dilutive to Azuki." Perhaps they will wipe their tears with some of the 20,000 ETH they're sitting on.

On June 27, the developers set the governance role to a malicious smart contract, which used a "panic" function to withdraw funds from the Chibi project. They then quickly swapped the funds to 555 wETH (~$1.05 million), bridged them to the Ethereum main chain, and laundered them through Tornado Cash.

Chibi Finance has since deleted its website and Twitter profile. Meanwhile, some crypto influencers who had promoted the project caught heat for doing so.

Now, a report from the New Zealand Herald suggests that the company's director Colin Salisbury took more than NZ$3.24 million (~US$2 million) in customer funds, put it into multiple cryptocurrency platforms over a period of almost two years, and lost it all. Another ~US$800,000 was lost in at least four fraudulent crypto platforms which just "ceased to exist".

We Are Bamboo tried to blame the collapse of their business on the COVID-19 pandemic and on a group of customers whose "actions and online influence have broken us". "Our intentions here are not to play the victim but simply share with you the levels to which this group has gone to ensure our downfall, and made it their sole purpose to attack us, our families, our staff, and our customers with the intent to destroy Bamboo," they wrote. However, a liquidator in the We Are Bamboo bankruptcy says they discovered the cryptocurrency transactions, which explained the true demise of the company.

Salisbury reportedly engaged in the crypto trading because he was concerned that the US dollar might lose value. Guess he found out the hard way what crypto could do for the value of his customers' funds.