The Algorand Foundation reassured people that the funds potentially lost to Hodlnaut were less than 3% of the Foundation's assets, and "we do not anticipate operational or liquidity issues due to this action". They also wrote that they would be "pursuing all legal remedies to maximize asset recovery".
Algorand Foundation discloses $35 million exposure to Hodlnaut
The Algorand Foundation is a group responsible for managing Algorand, a proof-of-stake blockchain. On September 9 they disclosed that they had put $35 million of the project's treasury into Hodlnaut, a lending firm that halted withdrawals on August 8 and applied for creditor protection a week later. Hodlnaut was in turn heavily exposed to Terra, the ecosystem that collapsed in May.
- "Algorand Foundation exposure to Hodlnaut", Algorand Foundation
New Free DAO loses $1.25 million in flash loan attack
A flash loan attack against the New Free DAO project resulted in a $1.25 million loss. The project's token also crashed 99% in the wake of the theft. The hacker quickly sent 1,500 BNB (~$415,000) of the stolen funds through the Tornado Cash cryptocurrency mixer, and sent another 2,900 (~$803,000) to the PancakeSwap decentralized exchange.
Shiba Inu developers leak AWS credentials on Github
If Amazon would like to buy the rights to the slogan "Web3, powered by AWS™️", feel free to reach out, because I'm registering it.
On September 8, a security researcher published a blog post reporting that the developers behind the Shiba Inu coin — one with reality-defying levels of popularity at #13 on the list of coins by market cap — had apparently published their AWS credentials to Github. After making the discovery, his team attempted to contact the developers, but were not able to find a bug bounty program, responsible disclosure policy, or even people they could reach out to personally.
Luckily for Shiba Inu (and somewhat miraculously), the tokens were invalidated two days later before anyone malicious apparently took advantage of the vulnerability. The researcher wrote that the exposure had "the potential to cause serious security breaches, including but not limited to user fund theft, token embezzlement, disruption of services, etc."
Coinbase funds lawsuit against the Treasury Department over Tornado Cash sanctions
In the wake of OFAC adding Tornado Cash to the U.S. sanctions list in early August, Coinbase has announced they will fund a lawsuit against the Treasury Department to challenge the decision. Coinbase itself is not a plaintiff in a lawsuit, though two of the plaintiffs are Coinbase employees, who along with four other individuals filed suit in a Texas court. They say they previously used Tornado Cash for licit purposes, and are now suffering financial damages because they can't legally use the service.
In the suit, they argue that the Treasury Department overstepped its authority in what it can sanction, claiming that "Tornado Cash software, including the smart contracts, consists of immutable open-source software code, which is not property, a foreign country or a national thereof, or a person of any kind." They've also argued that the designation is unconstitutional under both the free speech protections of the First Amendment and the due process protections of the Fifth Amendment.
Crypto reacts to Queen Elizabeth's death
The news of Queen Elizabeth II's death resulted in the creation of at least 40 memecoins, multiple Queen Elizabeth-themed NFT collections, and special edition NFTs in various existing NFT projects.
Is there a way to include in one's will that you don't wish to be turned into an NFT or commemorated with a "Queen Inu" token when you die? Asking for a friend.
Company begins selling Celsius-themed Monopoly game... three months after Celsius suspends withdrawals
After what USA Strong Head of Sales & Partnerships described as "months and months" of work, apparently the company had decided they had sunk too much effort into the Celsius-themed game of Monopoly to scrap the project, and opted to push ahead. What could be more fun to any of the large group of users who have significant funds locked up in the platform than gathering around the table to play "Celsiusopoly", which they can buy for $99 (if they have that kind of money to spare). The center of the board is adorned with the Celsius logo and the slogan "Do Good. Then do well", and there is a "HODL Mode activated" square that might have been a lot funnier before the company involuntarily activated "HODL mode" for all its users.
If you were wondering who might decide to sell such a product, well, USA Strong's founder and CEO is none other than Krissy Mashinsky, wife of Celsius founder Alex Mashinsky.
Both the announcement tweet and the game product page were taken down shortly after the announcement, likely due to the less-than-enthused response from Celsius users.
- Tweet by Stephanie Martin
- Celsiusopoly on USA Strong
Investors face $11 million loss in VBit Technologies/Advanced Mining Group, an alleged crypto Ponzi scheme
The Philadelphia Inquirer published a report on VBit Technologies, later Advanced Mining Group, a company that promised investors to buy and operate Bitcoin miners on their behalf and pay them out the returns. Much of the group's operations relied on a system of "affiliates" bringing in more investors — a sort of suspicious triangular-shaped scheme — and executives and top-performing affiliates enjoyed lavish rewards including expensive wines, six-figure sports cars, and fancy vacations.
However, customers trying to withdraw their "rewards" saw increasing delays in receiving their payouts — days, then weeks, then an indefinite pause. A COO hired by the group left the company only three weeks later. On June 27, the group sent an email to its customers explaining that there was a "potential pending settlement" with the SEC — the first customers heard of the existence of any investigation — and that they would no longer serve customers in the U.S. On July 15, the company promised to refund customers what they paid to sign up with the program, but no refunds or further updates have materialized.
The company has faced lawsuits in Washington state and Delaware, and apparently operated for two years after executives had acknowledged they were violating securities laws. The Delaware lawsuit describes the operation as a Ponzi scheme, and alleges that the company sold packages that would have required far more computing power than the company actually had access to.
- "Investors fear millions lost in Pennsylvania’s largest cryptocurrency scandal based in South Philly", The Philadelphia Inquirer
David Bowie NFTs anger fans
The latest entry in "group launches NFTs, fans hate it" comes from the David Bowie estate, who decided that "Bowie on the Blockchain" would be a cool idea to raise money for charity.
A tweet from OpenSea announcing the project received some positive replies, and a lot of other NFT projects trying to promote Bowie-themed NFTs they'd included in their collections. However, the tweet from David Bowie Twitter account seemed to be received almost universally negatively, with many commenters writing that they wished the estate would just raise money for charity without getting into NFTs, and others writing that they didn't think Bowie would have supported NFTs.
On September 10, the account announced that "Out of respect for the people of the UK and Queen Elizabeth II, we will be postponing the 'Bowie on the Blockchain' sale. We will update soon."
Flash loan attack nets attacker $370,000 from several sources
An attacker using the Avalanche blockchain successfully executed a flash loan attack impacting one contract and several other liquidity providers. The attacker made around $370,000 in USDC from the attack.
Binance plans to convert USDC and other stablecoins into their own BUSD stablecoin
Binance users who hold USDC (USD Coin), USDP (Pax Dollar), or TUSD (True USD) will find their holdings "converted" into Binance's stablecoin, BUSD, on September 29. The three stablecoins that Binance plans to convert are the second, fifth, and sixth largest stablecoins on the market as of September 5.
Binance claims the move is to "enhance liquidity and capital-efficiency for users", but the conversion and Binance's related decision to stop trading on spot pairs involving those same stablecoins seems like an attempt to increase the status of its own stablecoin against that of rivals.