Blockchain-based diamond tracking firm Everledger collapses

Everledger was an Australian company that hoped to use blockchains to track provenance of diamonds, other precious gems, fine wines, and other luxury goods. Things apparently didn't pan out, though, when an investor's planned funding fell through and the company was placed into voluntary administration.

Everledger had in the past raised US$37 million in funding. AUD$3 million (~US$2 million) of that funding came from the Australian government's blockchain grants program in 2021.

Bittrex files for bankruptcy

A bit over a month after Bittrex announced it was closing US operations, and less than a month after the US SEC charged the company with operating an unregistered exchange, Bittrex has filed for Chapter 11 bankruptcy protection. According to court filings, the company has assets and liabilities both within the $500 million and $1 billion range, and has more than 100,000 creditors.

Bittrex used to be a much larger presence in the US, enjoying more than 20% of US market share in 2018. It has since dropped to below 1%.

The entity that filed for bankruptcy in the US is Bittrex, Inc., which is separate from Bittrex Global. "This announcement does not impact Bittrex Global, which will continue operations as normal for its customers outside the U.S.," said a Bittrex spokesperson.

Ethereum user pays 64 ETH ($118,000) transaction fee on 84 ETH ($155,000) swap

Value:
84 ETH
$156,107.28
Transaction Fee:
64.012561122708491262 ETH
$118,962.22
Gas Price:
418,859.102002987 Gwei (0.000418859102002987 ETH)Etherscan screenshot showing transaction fee (attribution)
A recent surge in memecoin popularity has caused Ethereum transaction fees to skyrocket. One trader paid the price, eating a 64 ETH ($118,000) transaction fee just to perform a simple swap of 84 ETH to another token. Welcome to the future of finance.

Deus Finance suffers third hack

Deus Finance suffered yet another hack as around $7 million was taken from the protocol. This was not the first time the platform had been targeted, suffering a $3 million exploit in March 2022 and a $13.4 million exploit in April 2022. Then, in May 2022, Deus Finance's algorithmic stablecoin lost its intended dollar peg in the wake of the Terra collapse and never recovered.

In the most recent hack, around $7 million was stolen as attackers discovered a vulnerability in the contracts of the DEI token. Some of the attackers were apparent whitehats, who executed the exploit to safeguard the funds until they could be returned to a secure address. As of May 8, $5.5 million of the $7 million stolen had been returned.

WallStreetBets coin tanks 90% after insider dumps holding

WallStreetBets is a subreddit that became popular during the pandemic-fueled everyone-should-become-a-daytrader era, and is known for its memestocks and its users who often make enormously risky gambles on the stock market. The only surprise to me in this particular incident is that it took this long for them to rally around a crypto token, because it's a match made in heaven.

The WSB coin launched as an "official memecoin of r/wallstreetbets". The whitepaper explains the token allocation, saying that "It's the fairest launch memecoin you will find with no team allocation and no presale. Just a free airdrop and some coins for the community. 10% of the $WSB supply is reserved as a treasury for the r/wallstreetbets sub to do with as they please. I’m sure they will spend it wisely and definitely not waste it gambling or convincing each other to drink their own urine." Compelling!

The token launched, and quickly achieved a $50 million "market cap". However, on May 3 the token suddenly lost 90% of its value as one of the token creators, "zjz", dumped a massive quantity of the tokens allocated to the team, trading them for 334 ETH (~$635,000).

zjz has claimed that he only sold the tokens because another creator — "WSBMod" — was secretly draining the token by creating huge airdrops and then claiming them for himself. WSBMod, on the other hand, claims that zjz's actions were theft, and has threatened to involve the police and FBI.

Crypto sleuth zachxbt has since gotten involved in the fray, and along with another prominent crypto figure has joined a multi-sig wallet to try to help secure the funds' return without giving any of the creators involved in the dispute unilateral control.

Former OpenSea executive convicted of fraud and money laundering in NFT insider trading case

Nate Chastain, the former Head of Product for the popular OpenSea NFT marketplace, was convicted by a jury of fraud and money laundering for illegally profiting from his insider knowledge of which NFTs would be featured on the site. The two charges each carry a maximum sentence of twenty years in prison.

Chastain was asked to resign by OpenSea in September 2021 after a Twitter user discovered apparent evidence that he had been engaging in insider trades. He was arrested and charged with money laundering in June 2022.

Chastain unsuccessfully argued in his defense that information about which NFTs would be prominently featured on OpenSea wasn't insider knowledge, and "nobody told Nate that he couldn't use or share that information". However, prosecutors argued that attempt to use anonymous accounts to make the trades suggested that he knew what he was doing was wrong.

This case has been described as the first NFT-related insider trading case, and could set a precedent for other similar charges.

OKX suddenly drastically limits withdrawals for users who haven't completed KYC

As regulatory groups have started to pay more attention to crypto platforms, it hasn't been terribly unusual to see them tighten their identification requirements — particularly for customers engaging in high-value transactions. However, the Seychelles-based OKX exchange suddenly and without warning implemented a $5,000 total withdrawal limit for users of its crypto exchange that hadn't provided detailed identification (KYC), leaving some users who were unwilling to provide such identification with large sums of crypto assets trapped on the exchange. Previously, users who had submitted only the base level of identification were able to deposit or withdraw $50,000 per day. These users weren't notified of the change, even when they deposited funds, and only discovered the new limit when they went to withdraw or heard about it on social media.

It's not clear when precisely the change went into effect, but reports of the limitation began appearing in April 2023.

Crypto is the end of Storybook Brawl

Storybook Brawl, a card based autobattler game that was beloved by Sam Bankman-Fried, took its servers offline on May 1. The game had no connection to the crypto industry until its studio was acquired by FTX Ventures in March 2022. This was not taken well by its existing playerbase, who left a flood of negative reviews on Steam based on the developers' intentions to incorporate cryptocurrencies and NFTs. According to SBF, Storybook Brawl was going to be "the vanguard for the ethical integration of gaming and crypto transactions."

The end of FTX seems to have directly spelled the end of Storybook Brawl, which stopped announcing updates in November. However, Protos has pointed out that the game may likely be auctioned off as a part of FTX bankruptcy proceedings.

CZ smacks down Justin Sun for trying to game SUI airdrop

Justin Sun stands with his arms crossed in front of a green and blue background with the Tron logoJustin Sun (attribution)
"Binance LaunchPool are meant as air drops for our retail users, not just for a few whales," tweeted Changpeng "CZ" Zhao, the CEO of Binance, after seeing an alert showing that Justin Sun had transferred $56 million to Binance. "LaunchPool" is a process in which Binance users can farm various tokens — now including SUI — and receive rewards. "Our team told Justin, if he uses any of these to grab the LaunchPool Sui token, we will 'take action against it'. SMH." wrote CZ.

Indeed, it later turned out that Sun's team had farmed around 279,000 SUI (SUI does not yet have a reliable dollar price because it is set to launch later this month). Sun blamed the event on a TUSD market maker, writing, "Regrettably, some of our team members were not fully aware of the intended purpose for these funds and inadvertently used a portion of them to participate in exchange campaigns. Upon realizing this error, we immediately contacted the exchange team and arranged for a full refund of the funds." Those replying to his comment seemed more than a little skeptical that the incident was truly a mistake.

Level Finance exploited for ~$1.1 million

The Level Finance decentralized perpetual exchange was exploited after an attacker discovered a vulnerability in one of the project's smart contracts. They were able to drain 214,000 LVL tokens, which they swapped to 3,345 BNB ($1.1 million). The contract had been audited by Obelisk and Quantstamp, but neither firm apparently discovered the vulnerability.

The attack caused the LVL token to drop substantially in price, plunging from around $9.00 to as low as $4.20 before recovering to around $7 — a loss of 22%.

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