The regulator also demanded Binance return all crypto assets to customers, or transfer them to a company authorized in Belgium. They also noted that "The Crown Prosecutor of Brussels has been informed of the acts that are liable to constitute a criminal offence."
Binance ordered to halt operations in Belgium
Belgium's Financial Services and Markets Authority alleged on June 2023 is violating prohibitions against "offering and providing exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services, from countries that are not members of the European Economic Area". The regulator ordered Binance to immediately stop providing "any and all such services" in the country.
$1.25 million stolen in 2 months in Polygon NFT phishing scheme
A phishing scam in which scammers airdropped fake NFTs impersonating real projects has landed the scammers around $1.25 million in the last two months. The scammers have created more than 1,350 fake NFTs appearing to come from real projects including RocketPool, ApeCoin, Polygon, Uniswap, and Aave, then airdropped them to more than 500,000 wallets. When they viewed the NFTs, the victims were directed to phishing sites where they signed malicious signatures.
Around $1.25 million in various assets have been stolen thus far, with the largest single loss exceeding $150,000.
Former Home Improvement child star Zachery Ty Bryan accused of crypto scamming
What is it with former child stars and the siren song of crypto? Zachery Ty Bryan, who played Brad on the sitcom Home Improvement in the 90s, got rich when he used his earnings to buy in early to Bitcoin thanks to a tip from fellow child star-turned-crypto-mogul, Brock Pierce. Then, he got into selling fake tokens that he said were connected to an agricultural scheme called "Producers Market", which promised to help farmers by "connecting farmers and makers directly to you".
The project was real, and they had in fact brought on Bryan as an advisor and investor. Bryan later stated in a YouTube video that he had "[taken] the majority of my Bitcoin and rolled it into this technology". However, the firm scrapped its plans for an initial coin offering in 2019. Despite this, Bryan continued pitching the ICO to friends and family with the promise of big returns. One investor, a college student, he reeled in after matching with her on the dating app Bumble. Various sources told The Hollywood Reporter they'd lost between $5,000 and $25,000, for a total of almost $50,000.
In October 2020, Producers Market cut ties with Bryan. This coincided with Bryan being arrested for felony strangulation and other charges in regards to a drunken assault on a girlfriend, which he later pled down to misdemeanor menacing and fourth-degree assault.
Ponzi scheme promising a blockchain app to identify dogs by their nose-prints scams investors out of $127 million
A company that promised an app that could identify dogs by their nose-prints — built on the blockchain, of course — has been alleged by South Korean police to be "a typical Ponzi scheme" that lured investors with promises of up to 150% returns in 100 days. The company raised around ₩166.4 billion (~$127 million) from approximately 22,000 people. The victims, according to Korean police, are mostly "in their 60s or older with no expertise in cryptocurrencies".
As for the noseprint reader, well, it was found to be a fake product that (shockingly) didn't use a blockchain at all. The company had also promised to build "theme parks for pets", but had not leased any of the sites it had identified.
Prime Trust is insolvent
The Nevada Financial Institutions Division issued a cease and desist to the Prime Trust crypto custodian. Earlier in the month, the apparently embattled Prime Trust signed a non-binding letter of intent of acquisition with BitGo, but BitGo announced the deal was off on June 22. The same day, Stably announced that they had received a letter from Prime Trust announcing that deposits and withdrawals would be halted, which attributed the move to an order from the NFID.
Now, the cease and desist, filed June 21, has become public. It alleges that "the overall financial condition of [Prime Trust] has considerably deteriorated to a critically deficient level" and that "On or about June 21, 2023, Respondent was unable to honor customer withdrawals due to a shortfall of customer funds". The NFID alleged that Prime Trust "has materially and willfully breached its fiduciary duties to its customers by failing to safeguard assets under its custody and is unable to meet all customer disbursement requests."
Prime Trust had been a partner of the TrueUSD stablecoin, which halted minting on June 10 for undisclosed reasons.
- Order to cease and desist, State of Nevada Department of Business and Industry Financial Institutions Division
Prime Trust halts withdrawals as acquisition falls through
The planned acquisition by BitGo of the Prime Trust crypto custodian fell through on June 22, as BitGo announced that they had "made the hard decision to terminate its acquisition" after "considerable effort and work to find a path forward". BitGo had announced its intention to acquire Prime Trust on June 8.
Shortly after BitGo's announcement, Prime Trust client Stably announced that they had received a letter from Prime Trust announcing that deposits and withdrawals would be halted. Prime Trust stated that the halt was by order of the Nevada Financial Institution Division, which had been issued the previous day.
Web3 influencer Elena tries to sell NFT collection of stolen art
Web3 influencer Elena announced she would be launching an NFT collection titled "Atomic Ordinals", which would be inscribed on the Bitcoin blockchain. She claimed that the 200 images "fus[ed] my love for medicine and artistic expression fueled by a passion for emerging tech and education." She wrote, "I've spent countless hours pouring my heart and soul into each piece 🥺" The NFTs were set to mint for 0.05 BTC, meaning the collection would have earned her around 10 BTC ($300,000) if it minted out.
As it turned out, Elena had actually directly copied the pixel art from various sources. When accused of copying it, she published a screen capture video claiming to show that she had created the artwork "pixel by pixel", but people were quickly able to find the true sources of the artwork.
Eventually, she came as close to an admission as she is apparently going to get in an announcement that she would be pausing the sale: "I have heard your concerns about the art and I will be working to fix the file quality and any images that might be seen as 'copied' as they were only retraces and I never had any ill intent whatsoever."
Binance cancels registration in the United Kingdom
Binance's footprint is shrinking even further, as the company has canceled its registration with the United Kingdom's Financial Conduct Authority (FCA). This means that the company will not be able to perform any regulated activities in the country.
Binance had applied for registration after being warned by the FCA in July 2021 to seek registration before launching its business in the region.
Since the beginning of June, Binance has also announced it will exit the Netherlands and Cyprus amid regulatory issues.
Financial Times alleges Crypto.com is trading against its own customers
A report out of the Financial Times alleges that the Singapore-based Crypto.com exchange runs proprietary trading and market making teams. This is a controversial activity — though not uncommon in the crypto world — because of the conflicts of interest that are introduced when these functions are combined with those of an exchange. Speaking to CNBC about similar activities by other exchanges, US SEC chair Gary Gensler said, "These trading platforms, they call themselves exchanges, are commingling a number of functions. In traditional finance, we don't see the New York Stock Exchange also operating a hedge fund, making markets."
Sources cited by the FT allege that Crypto.com made "absolutely dramatic sworn statements that Crypto.com was in no way involved in trading" to other trading houses, and claim that employees were asked to lie about the existence of internal market makers. Crypto.com has refuted these allegations, and acknowledged that they run a market maker.
"This is not a controversial practice," Crypto.com said about the controversial practice.
- "Trading teams at Crypto.com exchange raise conflict questions", Financial Times
Machi Big Brother sues zachxbt
Crypto personality and creator of C.R.E.A.M. Finance Jeffrey Huang, aka "Machi Big Brother", has filed a defamation lawsuit against crypto sleuth zachxbt. Huang alleges that zachxbt has defamed Huang with false claims via a Medium article that accuses Huang of multiple pump-and-dump schemes that enriched Huang to the tune of 22,000 ETH (~$38 million at today's prices).
Huang is also annoyed at zachxbt's observations about the multiple hacks of C.R.E.A.M. Finance, which zachxbt wrote had been exploited three times "due to negligence". "Putting aside that Cream Finance was exploited two, not three times", Huang hilariously writes in the lawsuit, taking issue with the fact that zachxbt supposedly intentionally omitted that some funds were returned and that Huang claims to have been no longer involved with the project by that point. It's not made clear in the lawsuit which of the three hacks recorded on Web3 is Going Just Great — to the tune of $37.5 million (February 2021), $25–30 million (August 2021), and $130 million (October 27, 2021) — supposedly didn't happen.