Even if things had worked out as this person planned, it seems like the bank might have wanted to know where $300,000 suddenly came from, and I don't know how "I took out a sketchy loan against my Bitcoin holdings, which you already don't think can qualify me for a mortgage" would have shaken out.
Someone tries to take out a loan against their Bitcoin holdings to get a mortgage, loses over $300,000
A prospective house-buyer wanted to pad their bank account to try to convince their bank to approve them for a mortgage. Their bank didn't consider Bitcoin holdings when evaluating a person's suitability for a mortgage (can't imagine why), and so the person decided to take out a loan on the BlockFi platform, putting up $600,000 worth of Bitcoin as collateral for a $300,000 loan. However, the borrower had bought their Bitcoin from a private source (rather than through one of the major exchanges), and it turned out the Bitcoin had previously come through a cryptocurrency mixer. Because of what BlockFi described to the borrower as "indirect mixing exposure", BlockFi called back the loan and the borrower "lost more than half of [their] BTC holdings, have a huge tax bill, and was screwed out of a fortune".
- "Blockfi Horrible Loan Experience (FORTUNE Lost)" on r/CryptoCurrency
Hackers steal $1.9 million from KLAYswap crypto exchange
Some sophisticated hackers managed a BGP hijack on the servers powering KakaoTalk, a marketing and customer service application used by the South Korean KLAYswap cryptocurrency exchange. The hijacking enabled the hackers to serve malicious JavaScript that allowed hackers to intercept funds as a user initiated a transaction. Over a two-hour period, the hackers stole cryptocurrency totaling ₩2.2 million (about $1.9 million) from 325 customer wallets. The exchange acknowledged the hack the same day, and promised to compensate affected users.
Nike sues StockX for selling unauthorized NFTs of their shoes
Nike filed a lawsuit in New York federal court against StockX, an online reseller that decided to get in on NFTs in January. StockX started selling "NFTs tied to physical products", and say that buyers are also purchasing the "opportunity to take possession of [the corresponding physical item]" at any time". Nike has objected to this, stating that the NFTs infringe their copyright, are likely to cause confusion among customers, and have hurt their reputation. According to the complaint, StockX has already sold more than 500 NFTs of Nike products. The StockX site shows that some Nike NFTs have traded for thousands of dollars. Amusingly, although the NFTs exist on the Ethereum blockchain, "cryptocurrencies are not an acceptable payment method for NFTs at this time" and NFTs can't be transferred or traded outside of the StockX platform. According to their FAQ, "StockX maintains custodial authority of all NFTs traded on the platform".
This lawsuit is somewhat similar to the January lawsuit by Hermés against artist Mason Rothschild, who has been selling "MetaBirkin" NFTs (though MetaBirkins describes itself as an art project, and promises no physical items).
Miami mayor Francis Suarez's MiamiCoin gambit lands the city $5.2 million, investors not so lucky
Miami mayor Francis Suarez eagerly hyped "MiamiCoin" ($MIA), a cryptocurrency created by a private company and not actually controlled by Miami. Suarez appeared on CoinDesk TV to say that MiamiCoin has "been mainstreaming significantly faster than bitcoin", despite trading for pennies, and not being listed on any exchange aside from the Singaporean OKCoin.
On February 2, Suarez excitedly announced that they had received their "first-ever disbursement... totaling $5.25M". He didn't mention that the coin is trading at 90% below its all-time-high and 35% less than its initial price of $0.01. Both the OKCoin exchange and the coin creator previously advertised that buyers could earn "430% APY" by participating in some sort of staking program with the coin. All current holders of the coin, such as the Miamians Suarez encouraged to invest, have lost money even when factoring in staking rewards, says Protos.
Wormhole, a cross-blockchain bridge, is hacked for more than $320 million in one of the largest hacks to date
The Wormhole Network is a blockchain bridge between Solana and various other blockchains, allowing assets to be traded across the different and not otherwise interoperable chains. After an attacker was able to spoof a guardian account, Wormhole was exploited on February 2 for 120,000 wETH, or about $326 million. The network was taken down for maintenance, and Wormhole promised that "ETH will be added over the next hours to ensure wETH is backed 1:1". The parent company of Wormhole, Jump Trading, replaced the funds that had been drained; meanwhile, Wormhole offered a $10 million bounty to try to tempt the attacker into returning the funds. The hack was the fourth-largest cryptocurrency theft of all time, trailing behind the $480 million Mt. Gox theft in 2014, the $547 million Coincheck theft in 2018, and the $611 million Poly Network theft (that was later returned) in 2021.
Game studio behind Worms games series does a quick U-turn on their NFT project after massive backlash
Team17, the studio behind the many Worms games, announced their plans for "MetaWorms": NFTs based on the characters from the games. The announcement on January 31 apparently blindsided development teams who've published with Team17 — shortly after the announcement, three teams published statements condemning NFTs. One team, Aggro Crab, also announced they wouldn't be working with Team17 going forward. The three statements also all urged fans not to harass Team17 staff and community managers, with one announcement by Playtonic saying they were "unwittingly affected by NFT announcements". Backlash from fans had been swift and fierce, and in some cases extreme. The following day, Team17 wrote that they were ending the project and "step[ping] back from the NFT space".
HitPiece catches heat for selling song and album NFTs without seeking consent from the artists
You have to admit they have guts for so prominently listing stolen IP from the notoriously-litigious Disney (attribution)The industrial band Choke Chain tweeted, "Yo a bunch of industrial scene acts (including me) have NFTs for sale on the site hitpiece.com I did not put it online and I assume you probably didn't either, fucked up". A look through the site shows that it is chock full of almost certainly unauthorized NFTs of music not just from industrial bands, but from contemporary pop music artists, k-pop groups, Disney, and many others. The group appears to be simply scraping Spotify and publishing everything as NFT auctions.
The project's website writes, "Each time an artist's NFT is purchased or sold, a royalty from each transaction is accounted to the rights holders account." They do not write about how this is supposed to work when the artists have had zero involvement in the NFT being created to begin with, or have no cryptocurrency wallets at all. The FAQ also includes a hilariously handwavy answer to the question most people learning about NFTs have: "What utility does owning an NFT give me?" HitPiece writes, "Artists provide NFT owners access and experiences."
Someone sends COVID-19 NFTs to all ~100,000 active users of the HEN NFT marketplace, whether they want them or not
Artist bayneko created and airdropped NFTs of microscope pictures of SARS-COV-2 (the virus that causes COVID-19) to all 96,186 users of Hic et Nunc (HEN) who hold at least one NFT. HEN is an NFT marketplace built atop the Tezos blockchain. The NFT description read, "Your wallet has been infected by SARS-CoV-2, the virus responsible for COVID-19... in an act symbolic of the invasive and ubiquitous nature of the virus and its psychological effects." It cost the creator 1,623 ꜩ (about $5,900) to accomplish — a chunk of change, though considerably less than it would cost on higher-fee blockchains like Ethereum. Users reacting to the airdrop expressed a mixture of interest, confusion, annoyance, fear — some were scared to burn or transfer the NFT because of past NFTs that executed malicious contracts upon being destroyed. Others were unhappy with receiving an unsolicited NFT, which they felt was spammy. Others spoke about how, although this particular project appeared to be a good-faith art project, it illustrated the susceptibility of these systems to spam and abuse, especially on blockhains with lower transaction fees.
About 30 posts in a subreddit about gambling addiction mention crypto in the month of January
Crypto trading and crypto casinos have presented a new challenge to those battling gambling addiction. There are options for problem gamblers who are struggling to stop gambling in the traditional format: many states and countries require traditional casinos to allow individuals to "self-exclude" — that is, ban themselves from gambling at an establishment. Online gambling is more challenging, but there is software like Gamban and GAMSTOP that attempts to restrict access. However, posters in r/problemgambling have discussed the relative ease of finding online and crypto casinos not restricted by the software — particularly easy with cryptocurrency-based platforms because of the anonymity afforded by crypto.
Regardless of whether they are trying to use blocking software or not, some people in the subreddit appear to be struggling with the challenges presented to them by cryptocurrencies. Some speak about gambling in cryptocurrency casinos, while others have realized that the behaviors that many people involved with cryptocurrencies simply refer to as "investing" are actually manifestations of their gambling addiction. One poster wrote, "Realised yesterday whilst out walking my dog that i'd used crypto as a way to satisfy my gambling urges. I've self excluded from gambling sites for a few years now and managed to taper off. Crypto pulled me back in with trading. I was lying to myself that I was 'investing' so its fine which eventually turned into 24/7 chart watching and leverage trades."
The World Wildlife Fund announces their upcoming NFT project... for nature!
The UK branch of the World Wildlife Fund (WWF) announced their upcoming "Tokens For Nature" NFT project, which is meant to support endangered species. The WWF was quick to tout that its project would be eco-friendly because it uses the Polygon blockchain, though commenters were skeptical. One commenter wrote, "This is like if David Attenborough did a piece to camera about his environmental activism while politely snapping swans' necks throughout." Other commenters expressed that it was irresponsible of the WWF to engage with NFTs at all, given the overall environmental damage of the concept, and because it brings more people into a space full of predatory projects. The WWF ended up shuttering the project on February 4, after all the negative feedback.
This was not the WWF's first foray into NFTs — the German arm of the WWF released a "Non-Fungible Animals" NFT project in November 2021, which has enjoyed less than $10,000 in trading volume. It also did't appear to be the only project the WWF UK had planned — their NFT website advertised upcoming collaborations with CyberKongz (built on the Ethereum blockchain) and World of Women (also built on the Ethereum blockchain).