Bored Ape collectors experience searing eye pain after "ApeFest" party

November 4, 2023

Bored Ape collectors experience searing eye pain after "ApeFest" party

Bored Ape #9291. A brown-furred ape, wearing a slouchy orange beanie and black t-shirt, has its mouth open in a sort of smile. There are red laser beams shooting out of (or perhaps into) its eyes.

All this time I thought the lasers were going in the other direction (BAYC #9291) (attribution)

Bored Ape collectors attending an ApeFest party in Hong Kong have now been subjected to the kind of eye pain the rest of us have felt for years having to look at their hideous, pricey JPEGs.

The going theory is that event organizers skimped on lighting costs by using UV lights intended for sanitization, not for entertainment, causing burns to the eyes and skin. The eye condition, photokeratitis, is better known as "snow blindness" or "welder's flash", as it more typically affects people who haven't worn proper eye protection while welding or while exposed to sunlight reflected from ice and snow.

Several attendees reported having to seek emergency medical treatment after experiencing excruciating eye pain and vision problems, and tweet threads began circulating giving various other ApeFest attendees advice on recovering from the painful condition.

Bored Ape creator Yuga Labs belatedly issued a tweet two days after the incident, claiming only a small fraction of attendees had experienced "eye-related issues", but encouraging anyone with symptoms to "seek medical attention just in case".

November 2, 2023

Sam Bankman-Fried convicted on seven charges

Sam Bankman-Fried (attribution)

After less than five hours of deliberation, a jury convicted Sam Bankman-Fried of seven fraud and money laundering charges. The conviction followed a five-week-long trial which culminated in Sam Bankman-Fried himself taking the stand, only to appear evasive and sullen as he told prosecutors he couldn't recall many significant events from his time as FTX CEO.

Sentencing is scheduled for March 28, 2024, though scheduling could be affected by factors including whether the US decides to continue pursuing an additional five charges also set to be tried in March.

"Sam Bankman-Fried: guilty on all charges", Molly White's Newsletter [archive]

November 1, 2023

Onyx hacked for $2.1 million

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The Onyx Protocol was hacked for 1,164 ETH (~$2.1 million) after an exploiter took advantage of a known vulnerability affecting forks of Compound Finance. The bug allows attackers to siphon funds from new and unfunded markets on Compound forks — in this case, a new pool that had been created for the PEPE token.

After pulling off the hack, the attacker received the usual flood of on-chain messages from people asking them to share some of their ill-gotten funds. Unusually, the attacker followed through, ultimately sharing 19.5 ETH (~$36,000) out of their spoils.

Onyx is far from the first Compound fork to fail to patch known vulnerabilities and suffer hacks as a result. Hacks stemming from known Compound bugs, such as the attacks on Rari Capital and Sonne Finance, have netted tens of millions of dollars apiece for attackers in the past.

"Onyx Protocol Hack Explained: A Deeper Dive Into $2.1M Exploit", Hacken

November 1, 2023

Monero discloses that its community crowdfunding wallet was drained

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Monero's Community Crowdfunding System (CCS) funds projects that aim to improve the ecosystem of Monero, a privacycoin. The CCS is funded by donations, and up until September 1, 2023, held a balance of 2675.73 XMR (~$460,000). Two months after the fact, "Luigi" (a Monero developer and one of the two people with access to the wallet seed phrase) disclosed on Github that the wallet had been drained entirely. According to Luigi, he only discovered this a month after the theft.

The other person with access to the wallet is a former Monero developer named "fluffypony", or Ricardo Spagni. He surrendered to US authorities in July 2023 for extradition to South Africa, where he has been charged with invoice fraud against a cookie company (think chocolate chip, not software). However, he was released in late September, and has been working to "address this matter" while free but under court supervision.

November 1, 2023

Safemoon executives charged and arrested

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An indictment charging SafeMoon executives with defrauding investors via their SafeMoon token was unsealed in the Eastern District of New York. Three defendants were charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy for their roles in creating Safemoon, a crypto token that once boasted a "market cap" of around $8 billion.

SafeMoon promised buyers it would "safely go to the moon" by locking the liquidity pool so that its developers couldn't rug pull. In reality, the "locking" didn't prevent the developers from removing tokens from the liquidity pool in other ways, which they did to the tune of millions of dollars. They then spent the proceeds of their crimes on personal expenses, like luxury sports cars and real estate.

Alongside the charges from the Department of Justice, the Securities and Exchange Commission simultaneously brought a lawsuit against the SafeMoon executives for violating registration and anti-fraud provisions of securities laws.

October 25, 2023

Ryder Ripps loses Bored Apes infringement lawsuit, ordered to pay $1.6 million and legal fees

A judge has ordered Ryder Ripps and his co-defendant Jeremy Cahen to pay almost $1.6 million in disgorgement and damages after they created a collection of identical NFTs to the popular Bored Ape collection. The duo were sued for trademark infringement in June 2022 over their RR/BAYC project, which Ripps and Cahen tried to argue was an art project created to draw attention to racist imagery they and others have identified in the project.

In August, Ripps tried unsuccessfully to get the lawsuit dismissed via anti-SLAPP protections.

Now they're on the hook for $1.375 million in profits they earned from their copycat project and $200,000 for domain cybersquatting violations. They also must transfer control of two domain names, two Twitter accounts, and the RR/BAYC smart contract. Worse yet, the court found that this was an "exceptional case" because of the defendants' behavior, which included being "obstructive and evasive", and "unnecessarily and inappropriately ma[king] disgraceful and slanderous statements about Yuga, its founders, and its counsel" throughout the case. As a result, they will also have to pay Yuga's attorney's fees.

Findings of Fact & Conclusions of Law, Yuga Labs v. Ripps [archive]

October 20, 2023

AuBit, the company behind Freeway, enters liquidation

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A judge in the Cayman Islands has placed Aubit, the firm behind the Freeway crypto project, into liquidation. Freeway was a crypto lending project that promised annual returns as high as 43%, at least until it halted withdrawals in October 2022, claiming it was due to "unprecedented volatility" in forex and crypto markets. Withdrawals were never re-enabled, leaving around $160 million in total customer assets out of reach.

A lawsuit from an institutional customer was filed against the company in August, calling the project "a scam".

AuBit has tried to argue that it should be allowed to restructure, but the Cayman Islands judge opted to force the firm to liquidate, citing "a real absence of proper accounting".

October 19, 2023

Treasury Department introduces proposal targeting crypto mixers

The U.S. Treasury Department introduced a proposal for new regulation that would require cryptocurrency mixers (also called tumblers) to up their recordkeeping and reporting processes. Needless to say, for a class of projects intended to help people anonymize their cryptocurrency transactions and make them more challenging for governments and others to track, this would somewhat undermine the whole point.

That seems to be the intention of the Treasury Department, who described mixers as primarily used for illicit money laundering "by a broad range of illicit actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups".

"FinCEN Proposes New Regulation to Enhance Transparency in Convertible Virtual Currency Mixing and Combat Terrorist Financing", press release [archive]
"U.S. Targets Crypto Mixers Over Money Laundering Risks", The Wall Street Journal [archive]

October 19, 2023

Superdao to shut down

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Superdao, a project aiming to assist communities in forming DAOs, has announced it will be closing its doors. It was blunt in its announcement: "it became clear that the crypto industry itself becomes much smaller than its initial ambition ('the new internet') and specialized tools for crypto companies are unlikely to produce venture-scale outcomes."

The project had raised $10.5 million in a 2021 seed funding round, and has said they intend to return remaining funds to its investors.

"Superdao is closing down", Superdao blog [archive]
"DAO-Builder SuperDao Shuts Shop, Returns Investor Money", CoinDesk [archive]

October 19, 2023

Gemini, Genesis, and DCG sued over $1 billion alleged fraud

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The New York Attorney General filed suit against Gemini, Genesis, and Digital Currency Group (DCG), a group of companies that have been involved in a bitter feud amongst themselves. As Genesis undergoes bankrutpcy proceedings, Gemini and its Winklevoss twin cofounders have been firing accusations of fraud at them as they try to recover around $900 million of their customer funds that were with Genesis when it collapsed.

Now, the New York Attorney General is alleging that Gemini repeatedly lied to investors about its Gemini Earn program, assuring them that it was low-risk when internal analysis had revealed Genesis' loans to in fact be quite risky. Some personnel involved in evaluating this risk even withdrew their own funds from the program in the summer of 2022.

Genesis, DCG, and DCG CEO Barry Silbert are charged with defrauding both investors and the public when they tried to cover up $1.1 billion in losses. The lawsuit alleges that Genesis had not properly audited its borrowers, and lied to Gemini about regular reviews of borrowers' financial conditions.

In a press release, the AG claims that the companies' actions resulted in around $1 billion in losses, including in some cases their customers' entire life savings.

"Attorney General James Sues Cryptocurrency Companies Gemini, Genesis, and DCG for Defrauding Investors", press release from the Office of the New York State Attorney General [archive]