Web3 is Going Just Great

A former employee — whose real identity is known — brazenly took credit for the theft on Twitter. They wrote: "everybody be cool, this is a r o b b e r y. ... I'm about to change the course of history. n then rot in jail. am I sane? nah. am I well? v much not. do I want for anything? my mom raised from the dead n barring that: life without parole."

In a Twitter Spaces chat, the attacker stated that he had worked for the company briefly, and that he had grievances against its management. "I just kind of wanted to kill Pump.fun because it's something to do... It's inadvertently hurt people for a long time," he said.

Pump.fun paused trading shortly after the attack, and stated that they were "cooperating with relevant parties, including law enforcement, to minimize the damage." The attacker responded to the post: "Neener neener neener".

The attacker was successfully able to transfer around 13.8 million STX (~$2 million) on the Stack BTC layer-2 chain. However, their attempts to steal assets notionally worth around $4.3 million from the project's BNB Chain implementation failed when they upgraded the project contract to a malicious version, but failed to prevent other people from calling the withdraw function. The attacker's first transactions to withdraw the funds themself failed, and an apparent whitehat hacker was able to step in and complete the withdrawal ahead of the exploiter. They later negotiated a deal for the funds' return, after offering a 10% "bounty".

The exploiter had also tried, and failed, to steal assets notionally worth around $5 million on the Ethereum blockchain, but failed to do so. ALEX Lab later announced they were able to recover or secure around $4.5 million of those assets. ALEX also later announced that they believed the attackers were part of the North Korean Lazarus Group.

After being alerted to the theft by several security companies, Sonne announced they had paused the contract on the Optimism Ethereum layer-2 chain.

In the past, Robinhood has removed cryptocurrencies from trading after they were alleged to be securities by the SEC, such as Solana (SOL), Cardano (ADA), and Polygon (MATIC) in the wake of the lawsuits against Binance and Coinbase. However, given the SEC's stance that most cryptocurrencies are securities, it seems likely that the SEC believes one or more of the 14 non-bitcoin cryptocurrencies Robinhood offers may also be a security.

Robinhood's Chief Legal Officer issued a statement that "We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be."

Cred had claimed to customers that they engaged in only "collateralized or guaranteed lending", hedged their investments, and "comprehensive insurance", but hid that "virtually all the assets to pay the yield were generated by a single company whose business was to make unsecured micro-loans to Chinese gamers." Furthermore, they did engage in uncollateralized lending, did not hedge their investments, and did not hold insurance as they had claimed.

Around $150 million in customer funds were lost in the collapse based on prices at the time, though those crypto assets would have been priced substantially higher at various times since.