HTX suspended withdrawals as they investigated the hack, and wrote that the company would "fully compensate for HTX's hot wallet losses". Security firm Cyvers said they believed the theft was enabled by a private key leak.
HTX (fka Huobi) and Heco Chain hacked for $115 million
Justin Sun confirmed that HTX (formerly Huobi) and its related Heco Chain protocol were hacked for a combined $115 million. It's been a rough few weeks for Sun, whose Poloniex exchange was hacked for around $120 million on November 10, and a rough few months for HTX, which was hacked for $8 million in late September.
Poloniex hacked for more than $120 million
Assets including Bitcoin, Ethereum, and Tron's TRX token, priced at more than $126 million, were stolen from Justin Sun's Poloniex cryptocurrency exchange. Researchers are still homing in on the exact amount of funds that were stolen from the company's hot wallets across multiple blockchains, but suffice to say it's a lot.
Poloniex was initially tight-lipped, posting on Twitter that they had "disabled for maintenance" an exchange wallet. Justin Sun later updated that they were investigating the "hack incident", and promised to "fully reimburse" the massive theft... somehow. He later tweeted that they would offer a 5% "bounty" to the hacker if they returned the funds within a week, threatening to "engage law enforcement" otherwise.
TrueUSD tries to claim no affiliation with tokens created by its deployer address, raising further questions
A new, Euro-pegged stablecoin called $TEURO emerged on October 13, with an initial supply of around €70 million. However, TrueUSD subsequently tweeted that "we have zero affiliation with it". The post warned people to "step back and refrain from risky investments".
However, the post raised only more questions, as the $TEURO token had been deployed by the address that deployed the primary TrueUSD token. This means that either TrueUSD is lying when they claim they're unaffiliated with $TEURO, or some of their private keys were compromised, allowing an unrelated party to deploy a contract appearing to belong to them.
Huobi exchange hacked for $8 million
Justin Sun confirmed on September 25 that his crypto exchange Huobi (recently rebranded to "HTX") had been hacked for 5,000 ETH ($8 million) the prior day. He reassured customers that the exchange would be covering the shortfall, and that "all user assets are #SAFU".
Sun offered a bounty to the hacker to return 95% of the funds, also promising to hire them as a "security white hat advisor" for the exchange. Otherwise, he threatened to go to law enforcement.
Two weeks later, the thief returned the funds, with a note that their hot wallet key had leaked. Huobi paid the $410,000 bounty.
Rumors swirl that Huobi executives have been arrested, exchange is insolvent
Hong Kong crypto news outlet Techub cited two insiders when reporting on August 5 that "at least three executives" at Huobi had been detained by Chinese police for investigation. The report sparked panic, and the exchange has seen net outflows of more than $73 million in the past week. Huobi's stablecoin balances are down 33% over the same period. Investor and crypto analyst Adam Cochran tweeted of "likely Huobi insolvency", citing Binance's bulk Tether sales, paused "audit" reports, and "weird balance shifts" at the exchange.
Huobi and related people have been busy refuting the rumors, with Huobi's social media head dismissing them as "baseless malicious attacks". Huobi "advisor" Justin Sun tweeted "4".
Minting of TrueUSD stablecoin through Prime Trust halted; TUSD deviates from peg
On June 10, TrueUSD announced on Twitter: "TUSD mints via Prime Trust are paused for further notification." They offered no further explanation. TUSD is the fifth largest stablecoin by market capitalization.
The decision may have been related to insolvency rumors surrounding Prime Trust, a US-based fintech company. On June 8, BitGo announced a non-binding letter of intent to acquire Prime Trust.
After the announcement, the TUSD stablecoin dipped as low as $0.9951. This is a seemingly small deviation from the $1 peg, but in the stablecoin world, such small variances can be serious.
- "TrueUSD stops minting via Prime Trust, loses dollar peg", CoinTelegraph
CZ smacks down Justin Sun for trying to game SUI airdrop
"Binance LaunchPool are meant as air drops for our retail users, not just for a few whales," tweeted Changpeng "CZ" Zhao, the CEO of Binance, after seeing an alert showing that Justin Sun had transferred $56 million to Binance. "LaunchPool" is a process in which Binance users can farm various tokens — now including SUI — and receive rewards. "Our team told Justin, if he uses any of these to grab the LaunchPool Sui token, we will 'take action against it'. SMH." wrote CZ.
Indeed, it later turned out that Sun's team had farmed around 279,000 SUI (SUI does not yet have a reliable dollar price because it is set to launch later this month). Sun blamed the event on a TUSD market maker, writing, "Regrettably, some of our team members were not fully aware of the intended purpose for these funds and inadvertently used a portion of them to participate in exchange campaigns. Upon realizing this error, we immediately contacted the exchange team and arranged for a full refund of the funds." Those replying to his comment seemed more than a little skeptical that the incident was truly a mistake.
Poloniex pays $7.6 million settlement for sanctions violations
A US entity that previously controlled the Poloniex crypto exchange has agreed to pay a $7.6 million fine to settle allegations that it violated US sanctions against Crimea, Cuba, Iran, Sudan, and Syria. The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) alleges that between January 2014 and November 2019, Poloniex allowed citizens in those jurisdictions to use the platform, despite knowing their locations thanks to KYC and IP address information. OFAC alleges that there were nearly 66,000 apparent sanctions violations, which amounted to more than $15 million in transactions.
Poloniex was a US-based crypto exchange founded in 2014, which in 2018 was purchased by Circle, who intended to get rid of the illegal activity for which it was known. However, when they discovered that the customers who used Poloniex no longer wanted to use it once they were subjected to scrutiny, they sold the platform to Justin Sun in late 2019, who relocated it to the Seychelles and shut down US operations. It appears that the OFAC fine will apply to the US entity most recently controlled by Circle, and not to Justin Sun's operation.
In August 2021, Poloniex also paid more than $10.3 million to settle allegations from the U.S. Securities and Exchange Commission that it had operated as an unlicensed exchange.
Lindsay Lohan, Jake Paul, and other celebrities charged for illegally touting Justin Sun's tokens
Celebrities Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo, and Akon were all charged by the SEC for violating anti-touting laws that would require them to disclose if and how much they were being paid to promote securities. The alleged securities in question are TRX and BTT, two tokens both closely tied to Justin Sun, who was also charged in relation to the scheme.
With the exception of Soulja Boy and Mahone, the celebrities paid a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges without admitting or denying them.
Justin Sun charged with offering unregistered securities and market manipulation
His (former?) Excellency Justin Sun has been charged by the US Securities and Exchange Commission for offering unregistered securities. His businesses, the Tron Foundation and two BitTorrent-related entities, were also named in the complaint. According to the SEC, Sun offered the unregistered securities TRX and BTT, and "fraudulently manipulat[ed] the secondary market for TRX through extensive wash trading". He also allegedly "orchestrat[ed] a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation".
Eight celebrities were also charged with violations of anti-touting law.