...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.
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"I just got scammed out of $125k of stEth while trying to claim the $LFG airdrop. And I'm a fking founder of a wallet startup that's trying to improve wallet security..." wrote Lou on Twitter. "This is the first time I've been scammed. I always read about others but you never think it could happen to you..." he wrote.
If the founder of a wallet security project can't avoid scams in the crypto world, what hope do the rest of us have?
Orbit began sending the attacker on-chain messages, writing that "we will track you down and restore the damage you incurred to the ecosystem. And we will not stop." Orbit also wrote on Twitter that they were working with various law enforcement agencies.
The attack was perpetrated by the Pink Drainer group, which had recently compromised the Twitter account of Compound Finance to try to lure its more than 250,000 followers into authorizing the malicious drainer. It's not clear if that's how this wallet was drained, however, as Pink Drainer uses numerous strategies to attract victims.
This is a major decision in the crypto world, which recently celebrated a decision in the SEC v. Ripple case, which found that some sales of Ripple's XRP token did not constitute unregistered securities offerings.
The SEC has maintained a position that the majority of crypto asset offerings are securities offerings, which has been an unpopular opinion among those in the cryptocurrency industry — which broadly does not wish to be regulated by the SEC.
The attack was unusual in that it lasted almost two weeks, going unnoticed because it was draining pools slowly enough that the Levana team assumed it was organic activity. However, when the network became congested, the attack suddenly became more profitable — and more noticeable.
Grayscale is in the midst of an application process with the SEC for approval to convert the trust into a spot bitcoin ETF. This has been an ongoing effort by Grayscale, and has been denied before.
DCG, meanwhile, is in the middle of financial difficulties and ongoing legal battles, including a lawsuit from the New York Attorney General alleging a $1 billion fraud by DCG and its Genesis subsidiary. The lawsuit from the NYAG also names Silbert personally.
Telcoin later announced that they "plan[ned] to restore all wallets to their previous balances", though did not say whether or how they would be making up the $1.25 million deficit.
Telcoin had been audited by CertiK, though CertiK tweeted to say that "this contract was not in the scope of the audit conducted by CertiK".
On December 25, Tether minted 1 billion of its USDT dollar-pegged stablecoin. CEO Paolo Ardoino announced on Twitter that the mint was an "authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps". This seems to be a recent trend for Tether, as similar language was used for a $1 billion mint in September.
The activity has raised more questions around where the real money backing Tether is coming from, and if it even exists at all. Some have argued that these recent Tether mints are being used to artificially inflate the price of Bitcoin, which has been on an upward trend since mid-October.
Tether, which boasts a market cap of more than $90 billion, has never been audited, and has lied about its backing in the past.
Megabot had advertised itself as an AI trading bot that would earn users "up to 30% monthly". The team had promised that the bot would perform trades while "sidestepping potential risks such as honeypots, rugs, and slow rugs".
"No one will be able to rug you anymore", their website boasted. Ah, well.
The SEC charged that the group had not registered their sale of the bonds as was required under US securities laws. BarnBridge shut down very shortly after the complaint was filed, without any input from its community, despite ostensibly being community governed.
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