The lawsuit also alleges that Gryphon has " dutifully collected its exorbitant Management Fee while shirking its duties under the MSA and delivering abhorrent management services" and "skimm[ed] off the top (i.e., st[ole]) from Sphere's assets".
Bitcoin mining firm sues business partner after they allegedly lose $500,000 in Bitcoin to fraudster
Bitcoin mining firm Sphere 3D has filed a biting lawsuit against its partner, Gryphon Digital Mining. According to Sphere 3D, Gryphon's CEO was fooled by multiple spoofing attacks in which fraudsters pretending to be Sphere 3D executives instructed him to transfer 26 Bitcoin (~$500,000). Sphere 3D further alleges that "Gryphon panicked when Sphere suggested that the incident be reported to law enforcement, including the Federal Bureau of Investigations ('FBI'), insisted that the issue could be handled between the
parties, and demanded that no one report the theft to the authorities."
dYdX exchange announces it will shut down Canadian operations
dYdX announced that it would be shutting down its decentralized derivatives exchange in Canada. They gestured toward regulatory issues in the post, writing that, "We hope that the regulatory climate in Canada will change over time to allow us to resume services in the country."
Canada has become more strict on cryptocurrency exchanges in recent months, particularly following the collapse of FTX.
Someone steals the Bored Ape belonging to former NFL star Dez Bryant
The latest ape escape has affected Dez Bryant, a former NFL player now turned "web3 innovator". Bryant was the proud owner of Bored Ape #2902, an ape with leopard print skin wearing shades, a sailor shirt, and a crown. However, on April 7, Bryant was apparently hacked, and the thief stole not only his ape but Moonbirds, World of Women, and RumbleKongLeague NFTs (one each) and some various cryptocurrencies.
The Bored Ape would likely fetch somewhere around $125,000 if resold. The other three NFTs would likely resell for somewhere around $8,700. Together with around $3,400 in stolen tokens, Bryant's total loss is around $139,000.
After some observers spotted the suspicious-looking transactions, Bryant confirmed on Twitter: "Yes my ape was stolen and I don't know how this is crazy".
- dez.eth on Etherscan
- Tweet by Dez Bryant
Gemholic raises 921 ETH (~$1.7 million) in a token sale only to realize funds are stuck
The Gemholic project raised 921 ETH (~$1.7 million) in a token sale only to discover there was no way for them to transfer those funds out of the smart contract. The project is built on the zkSync layer 2, and the smart contract developers implemented their transfer function using
.transfer() — a common function used with Ethereum projects that is not supported by zkSync.The zkSync project evidently came to the rescue of Gemholic, announcing that they would change the protocol in a new release to add support for Solidity functions such as .transfer(), which will ultimately free Gemoholic's locked funds.
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.
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.
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.