Binance will continue to operate its spot exchange product in Australia, but customers will no longer be able to trade derivatives on the platform after April 21.
Binance closes its derivatives arm in Australia
Binance announced it would be closing its derivatives business in Australia "following recent engagement with ASIC", referring to the Australian Securities and Investments Commission. The subsequent day, Reuters reported that ASIC had withdrawn Binance's financial services license at Binance's request, related to an ongoing investigation into Binance. The investigation has been underway since at least February, and involves misclassification of some Binance retail customers as wholesale users. Though Binance has forfeited its license, the investigation is ongoing.
Someone accidentally spends 100 ETH (~$190,000) on a free NFT
OpenSea launched a collection of "Gemesis" NFTs to celebrate the launch of their Pro platform and their acquisition of Gem, a rival NFT platform. Anyone who bought NFTs from the Gem platform was eligible to mint the NFT for free. The NFTs have been trading on the secondary market for around 0.06 ETH (~$110).
A trader apparently trying to bid $100 for one of the NFTs seems to have mistakenly entered 100 ETH, or around $190,000. The trade was of course quickly accepted by a seller who made a tidy 1666x the typical floor price.
Some have speculated the massive offer was money laundering, but the fact that the bid was an open offer that could be accepted by anyone seems to make that theory less likely.
- "NFT trader accidentally bids 100 eth on a freely minted NFT", r/CryptoCurrency
- Transaction on Etherscan
Sentiment protocol hacked for almost $1 million
The Sentiment liquidity protocol on the Arbitrum blockchain was attacked on April 4 for almost $1 million in various tokens, including wrapped Bitcoin and Ether, and several different stablecoins.
The attacker apparently took advantage of a re-entrancy vulnerability to execute the theft, then swapped the tokens and bridged them to the Ethereum main chain.
Sentiment tweeted that they were aware of the attack and investigating what had happened. They also stated that they were working with law enforcement. Later that evening, they sent a message to the hacker, offering to let them keep 10% of the stolen funds as a bounty if they returned the rest. Sentiment was audited by two crypto security firms.
On April 6, Sentiment announced that the exploiter had returned 90% of the funds, keeping $95,000 and receiving a promise from the organization that they would not try to prosecute the theft.
Paxful abruptly shuts down
Paxful, a peer-to-peer marketplace where people could trade Bitcoin, Tether (USDT), and USDC, suddenly announced on April 4 that they would be immediately suspending the marketplace. "We are not sure if it will come back," wrote CEO Ray Youssef.
Youssef was vague as to the reasons for the closure, writing that "While I cannot share the full story now, I can say that we unfortunately have had some key staff departures. Also, regulatory challenges for the industry continue to grow, especially in the peer-to-peer market and most heavily in the U.S."
Youssef later elaborated in a Twitter Space, explaining that he feared for the safety of user funds because of a lawsuit from his co-founder, who he also accused of "[driving] away all of our senior level staff".
Some had trouble withdrawing funds from the platform, though this seemed to be due to the overload. Youssef tweeted, "Paxful database is a bit overloaded now as everyone is withdrawing funds. It is making transfers slow. I promise funds r safe and they will clear soon".
On May 8, Paxful came back online, though it was unclear whether or in what capacity the business would continue to operate going forward.
Rumor tweet by crypto influencer causes BNB and Bitcoin sell-off
Crypto influencer Cobie made a wild guess on April 3 that an Interpol red notice might be issued for Changpeng "CZ" Zhao, the CEO of Binance. Binance has recently been hit with a civil complaint out of the US CFTC, whose contents are causing many to reasonably speculate that CZ might face criminal charges from the US in the near future.
Cobie decided he wanted to make a record of his prediction, so he tweeted the SHA-256 hash of the string "Interpol Red Notice for CZ". Typically, this would allow him to later reveal the seed, allowing him to prove after the fact that he had indeed made a correct prediction. Why? I don't know. Bragging rights I guess?
Anyway, according to Cobie, one of Cobie's inner circle leaked the seed, and the contents of Cobie's prediction were widely circulated on Twitter. Some thought the prediction was inside knowledge of events that had already transpired. Someone else began circulating a doctored screenshot of the Interpol website, purporting to show a red notice. People began offloading their BNB tokens (the native token for Binance and Binance's blockchain), causing a sudden 3% dip in the token price. Bitcoin also fell on the news.
Over $25 million taken from an MEV bot by malicious validator
It's a dog-eat dog-world in the crypto universe, where everyone's trying to steal money from everyone else.
MEV bots are a phenomenon that became popular in recent times: bots that use various techniques to extract value by inspecting pending blockchain transactions and then sending advantageous transactions of their own. In this case, a bot was performing a "sandwich attack": sending transactions just before and just after a pending transaction, which manipulate the price of the underlying asset, allowing the bot operator to "steal" value from the victim — "steal" in quotes, because there is some debate over whether MEV bots are really stealing, or are operating within the rules laid out for them.
In order to manipulate prices in this way, they have to put a substantial amount of money at risk. A "rogue" Ethereum validator appeared to replace some of the transactions that were being executed by the bot, leading to a loss of WBTC, USDT, Dai, and WETH totaling a bit over $25 million.
First Arbitrum DAO vote spirals into disaster: DAO rejects $1 billion spending proposal, but Arbitrum already started spending
After a bumpy start to the airdrop that distributed governance tokens to Arbitrum users, the first use of those governance tokens arguably went even worse. Arbitrum submitted a proposal for DAO members to vote on various governance processes, as well as the distribution of 750 million ARB tokens to an "Administrative Budget Wallet" — tokens that were priced at around $1 billion.
The vote, which still has a day left before completion, is currently standing at 75% against and 25% in support. However, it was discovered that Arbitrum had already begun spending those 750 million tokens, including via the movement of a substantial amount of tokens, and "conversion of some funds into stablecoins for operational purposes".
Another Arbitrum team member subsequently published a post in which they claimed that the proposal was not really a vote but rather a "ratification" of decisions that had already been made by the Arbitrum team, leading many to question what the DAO was even for in the first place. Others questioned the fact that Arbitrum was receiving so much money to use however they liked, not subject to DAO approval.
Things got even messier when the Arbitrum Twitter account "clarified" that "40M $ARB tokens have been allocated as a loan to a sophisticated actor in the financial markets space", and the rest had been sold off for "operational costs". The loan of $52 million worth of ARB to an unnamed actor and the conversion of another $13 million to stablecoins led some to accuse the Arbitrum team of "selling off", cashing in far more than would likely be required for foundation costs in a brief period of time.
Dynasty Loop NFT games studio allegedly owes millions to employees
Dynasty Loop is a Montreal-based video games studio launched in 2020 to create NFT games. In March, gaming news outlet Polygon reported that the studio allegedly owed more than $2 million to its employees in unpaid wages and other expenses. Employees also told Polygon that they'd been asked to return equipment and couldn't access the office space, but that Dynasty Loop had told them they had not been laid off.
In April, four employees filed a lawsuit against the company, claiming around CAD$519,000 in unpaid wages.
Allbridge cross-chain bridge exploited for around $574,000
The Allbridge cross-chain bridge project was exploited for around 283,000 BUSD and 291,000 USDT (~$574,000). The thief was able to manipulate a vulnerability in the project's smart contract that allowed them to manipulate the price of assets in the Allbridge liquidity pool.
Allbridge announced that they were investigating the theft, and were working with law enforcement. Meanwhile, the project suspended operations and announced that they were preparing a user compensation plan.
Bittrex crypto exchange to close US operations
Bittrex, one of the oldest and largest cryptocurrency exchanges serving US customers, announced that it would be shuttering its US platform. "It's just not economically viable for us to continue to operate in the current U.S. regulatory and economic environment," explained CEO Ritchie Lai, who went on to blame "unclear" regulatory requirements that are "enforced without appropriate discussion or input". The exchange gave its customers until April 30 to withdraw their funds.
In October 2022, Bittrex was fined a combined $29 million by the US Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN). The OFAC fine pertained to Bittrex's service of users based in Crimea, Cuba, Iran, Sudan, and Syria, who altogether performed $263 million in transactions using the platform. FinCEN's fine was imposed as a result of alleged "willful violations" of requirements around anti-money laundering and suspicious activity reports.
Bittrex will continue operations outside of the US, and currently operate in Europe, South America, and elsewhere.