...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.
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One single victim was defrauded out of more than $100,000.
The NYAG has seized $2.2 million in Tether, and is pursuing legal action against the as-yet-unidentified scammers. Because of the unknown identities of the defendants, the NYAG will serve notice of the lawsuit via NFT — something they describe as a first by government regulators.
Another $1.47 million in assets were vulnerable as a result, but the whitehat blockchain security firm Seal911 successfully drained those funds to later be returned to the protocol once it was secured.
"The team is not sure what happened," wrote Orange Finance in a tweet announcing the hack, encouraging people to revoke contract approvals for the compromised addresses.
Orange Finance attempted to negotiate with the attacker via on-chain message, writing, "If you respond positively to our offer within 24 hours, we guarantee that no law enforcement agencies will be involved, and the matter will be treated as a white-hat hack."
Victims estimate that between €1.5 million and €4.5 million (~$1.54 million – $4.64 million) was stolen.
The man contacted Canadian police, who told him the assets had been transferred out of the country and that they were unable to trace it.
This time, the FEG project team blamed an issue with the project's bridge, which is a tool used to deposit and withdraw tokens from the project. An attacker was able to maliciously withdraw a large amount of FEG tokens via the flaw in the bridge, which they then sold off for around $1.07 million, tanking the FEG token price by 99% in the process. The bridge had been audited by the PeckShield blockchain security firm.
The SEC also found that Tai Mo Shan had acted as a statuary underwriter for the Terra sister token Luna, which was an unregistered security.
Tai Mo Shan agreed to the fine, and to a prohibition on future violations of securities laws.
For example, a "Vault of Gems" NFT project falsely claimed to be the "first NFT pegged to a hard asset, like jewelry", which would have its own exchange. A "Faceless" NFT project promised to produce comic books, a movie, and a clothing company. None of the promises ever materialized, and Hay and Mayo abandoned the projects soon after launching them.
Hay and Mayo worked to hide their involvement with their scams, and have been charged with harassment for attempting to threaten those who connected them. In one case, after a person revealed Hay and Mayo to be the ones behind the Faceless NFT project, the duo sent threatening emails and text messages to the man and his parents. In an email to his parents, they impersonated a law firm, and even threatened to make false sexual abuse claims against the man.
The more than 1,100 customers lost more than US$5 million. While some of the customers were likely sophisticated investors, Kraken made no effort to limit the product to such a group. Around 81% of the customers who used Kraken's margin product lost money.
This is far from Kraken's first run-in with regulators. The company has settled with US regulators over sanctions violations and failure to comply with securities regulations pertaining to its staking product. They also have an open lawsuit from the US SEC over alleged unregistered securities offerings and commingling corporate and customer funds.
Some blamed the theft on an apparent malicious Ethereum transaction the user had signed nearly three years prior. However, while a malicious transaction signature on Ethereum could explain the NFT thefts, it should not alone enable the theft of assets on the separate bitcoin blockchain.
Despite this, Ledger blamed its customer, telling a media outlet that "As we know, the user got phished when it comes to the ETH wallet, we can assume user error on the BTC side too".
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