An hour and a half after users began to report missing NFTs, OpenSea finally acknowledged the issue. They tweeted that they were "actively investigating rumors of an exploit associated with OpenSea related smart contracts", and wrote that they believed it was a phishing attack coming from outside of OpenSea, rather than an issue with their contract. It was later determined that an attacker had successfully phished 17 OpenSea users into signing a malicious contract, which allowed the attacker to take the NFTs and then flip them. Bizarrely, the hacker returned some of the NFTs to their original owners, and one victim inexplicably received 50 ETH ($130,000) from the attacker as well as some of his stolen NFTs back. The attacker later transferred 1,115 ETH obtained from the attack to a cryptocurrency tumbler, worth around $2.9 million.
Seventeen OpenSea users have their NFTs stolen and flipped for a total of $2.9 million by a phishing scammer
Panic erupted on February 19 as a few users saw their wallets emptied of valuable NFTs without knowing why, and many others feared the same could happen to them. Early explanations blamed a new contract that OpenSea had rolled out, or an airdrop from a new NFT marketplace called X2Y2. People urged NFT owners to revoke permissions for both the OpenSea contract and for X2Y2 until more was known, although one of the most popular websites helping people do so went down shortly after from the high traffic.
Former owner of a reportedly stolen Bored Ape files million-dollar lawsuit against OpenSea
Businessman Timothy McKimmy is the former owner of Bored Ape #3475, an NFT he purchased in December for 55 ETH (then about $232,000). In a lawsuit against OpenSea, McKimmy alleged that on February 7, a "security vulnerability allowed an outside party to illegally enter through OpenSea's code and access Plaintiff's NFT wallet, in order to list and sell Plaintiff's Bored Ape at a literal fraction of the value". The Bored Ape was purchased for 0.01 ETH (about $30), then flipped by the alleged thief within hours for 98.9 ETH (a bit over $300,000). McKimmy alleges that OpenSea knew about the reported vulnerability, and failed in their duties to him as a customer by not informing customers of the issue, or shutting down the platform while it was reportedly vulnerable. The lawsuit further argues that because Bored Ape #3475 has a higher "rarity score" than the one supposedly purchased by Justin Bieber for 500 ETH ($1.3M) in January, the value of #3475 is "arguably in the millions of dollars and growing as each day passes". The lawsuit seeks "any and all damages to which [McKimmy] may be entitled, including the return of the Bored Ape, damages equivalent to the valuation of the Bored Ape, and/or monetary damages over $1,000,000."
- McKimmy v. OpenSea on CourtListener
- Etherscan records for the Bored Ape NFT
Crypto.Chicks team member gives a non-apology for blatantly copying the work of another artist
Polly, a member of the popular Crypto.Chicks NFT team, apologized for "drawing inspiration from" artists and "inadvertently cop[ying]" their work, after it is discovered that she blatantly traced the artwork used in some of the Crypto.Chicks NFTs. Although she wrote that she had "redrawn" the NFT in question, the artwork was nearly identical to artwork by a Brazilian artist named Amanda, who apparently was never credited nor compensated. The Crypto.Chick in question had sold for $27,500 in late January.
The following day, Crypto.Chicks announced that they would be replacing Polly as a team member, and pausing their planned release of another NFT collection that also appeared to contain stolen artwork.
Appeals court allows legal claim to continue against online promoters of Bitconnect
An appeals court found that a legal claim could continue to be pursued against some of the major voices that promoted Bitconnect online. Bitconnect was a Ponzi scheme that collapsed in early 2018, defrauding investors of $2 billion. This claim, should it succeed, could set a frightening precedent for those irresponsibly hyping cryptocurrency schemes in online videos and other promotions.
Authorities raid Generación Zoe, an Argentine pyramid scheme propped up by cryptocurrencies
Authorities performed nine separate raids targeting Generación Zoe, a holding company raising money from thousands of Argentines. The company promised 7.5% monthly returns at the lowest level, but more if investors recruited others to the scheme. They said these returns came from cryptocurrency trading, sales of "coaching" courses, and other investment strategies. The group even had their own cryptocurrency, Zoe Cash, and had begun other ventures — including a church. The accountant from the firm and several others were arrested in the February 18 raid, but the head of the scheme was on the lam.
- "Detuvieron al contador de Generación Zoe", Página 12 (in Spanish)
- "Pierri será el abogado de Leonardo Cositorto, CEO de Generación Zoe", Infobae (in Spanish)
- "Estafas: qué es Generación Zoe y quién es Leonardo Cositorto", Clarín (in Spanish)
- "A bitcoiner against a powerful cryptocurrency pyramid from Argentina", Money Training Club
Kickstarter says they "won't make changes to Kickstarter without you" after blockchain backlash... but they will continue with blockchain plans
Kickstarter announced back in December that they planned to completely rebuild their product on a blockchain. It was quickly met with resistance from the community, including some big-name users announcing plans to stop using the service. Two months later, the company published an article titled "We Won't Make Changes to Kickstarter Without You". Despite the title, they did not appear to waver on the blockchain plans, and committed only to "not mov[ing] Kickstarter.com onto the new protocol unless it has been tested" and to gathering "input" while they move forward with the plans.
Kickstarter's COO, Sean Leow, did an interview with The Beat to discuss the announcement. He seemed to be a little bit confused on the whole concept throughout, and seemed to believe that "open source" is some sort of competing idea to blockchains. At one point he stated, "We believe that that data can be structured in a way through a blockchain where it ... can move in a much more efficient and effective way between services ... in a way that open source doesn't allow". Later in the interview he spoke about governance, saying, "our understanding is that [governance] is done more effectively with blockchain then with open-source."
Someone blows up a Lamborghini to "criticize greed", then makes NFTs out of the pieces
The person known on Twitter by the name SHL0MS bought a used Lamborghini Huracan, drove it to the desert, and recorded the enormous fireball as they blew up the car. The explosion, they said, was meant to be a "criticism of greed and short-termism in crypto".
SHL0MS then gathered 888 pieces of the wrecked car, took rotating videos of each one, and created NFTs from them. The NFTs were to be released on February 25 in an auction starting at 0.01 ETH (about $26), but the auction was delayed due to the news of Russia's military invasion of Ukraine.
It's likely SHL0MS will profit handsomely off the Lamborghini NFT. Their previous NFT collection, FNTN, involved similar rotating videos, in that case of an exploded toilet. The NFTs in that 185-piece collection have recently been trading at 1–2 ETH (several thousand dollars).
Andrew Yang announces plans to fight poverty with a lobbying group that distributes voting power in proportion to how much you pay
Perennial political candidate Andrew Yang, perhaps in a desperate bid to stay relevant, announced his plans to create "Lobby3". Lobby3 is a DAO which he says will push for crypto-friendly regulation and "eradicate poverty". Like many DAOs, the voting power is allocated based on how many tokens a member owns, meaning that those who pay more have more votes. A single token, representing one vote, costs 0.07 ETH (about $200). The "Founder" tier of participation in the DAO, which appears to offer access to Yang more than anything particularly lobbying-related, costs 40 ETH (about $125,000).
Interestingly, one of the people credited as a "contributing artist" to Lobby3 is "Robness", who had the previous day minted an NFT of a photo of a journalist as a child in an attempt to harass her.
Class action lawsuit names SafeMoon, its executives, Jake Paul, Nick Carter, and others in alleged pump-and-dump scheme
A class action suit was filed against SafeMoon, various executives, and a handful of influencers and celebrities who promoted the token. The plaintiffs allege that promotions included false or misleading statements, and that the defendants misrepresented their control over SafeMoon and its tokens in what is commonly called a "pump and dump". In addition to SafeMoon and its executives, the lawsuit named various celebrities and influencers who had promoted the token to their followers: Jake Paul, Nick Carter, Soulja Boy, Ben Phillips, and Lil Yachty. Promotions by the influencers occurred primarily between March and May 2021, and helped the coin spike to its all-time-highs of about $0.000008. However, the coin has spent most of its history worth less than half or, more lately, a quarter of that amount. The token underwent a migration in early 2022, which increased the price per token, but the value has continued to decrease.
These influencers join a growing list of celebrities who have been named in class action suits over alleged pump-and-dumps. The list includes names like Kim Kardashian, who was named among others in a January class action suit pertaining to a coin called EthereumMAX.
- "Jake Paul, Nick Carter, Soulja Boy, Lil Yachty Facing ‘Pump and Dump’ Class Action Over SafeMoon Tokens", ClassAction.org
- "I UNCOVERED A BILLION DOLLAR FRAUD", CoffeeZilla's YouTube channel
Binance halts activities and marketing in Israel over "licensing issues"—namely, the lack of one
Binance announced they had stopped "marketing to Israelis and all activities focused on Israel until we examine the issue of licensing." The "issue" in question seems to be that they don't have a license at all: according to the Israeli Capital Market, Insurance and Savings Authority, they never received an application that would license Binance to do business in Israel.