CoinFLEX cuts "significant number" of staff

CoinFLEX, a yield farming platform that stopped withdrawals in late June, announced they had made major staff cuts to reduce their cost base by 50–60%. "The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX," they wrote in a blog post.

Restructuring plans reveal Babel Finance's $225 million losses during crypto market dip

Babel Finance, a crypto lender that suspended withdrawals in mid June, sustained "massive losses" thanks to its proprietary trading desk, which was trading with customer funds. According to a restructuring plan viewed by Bloomberg, Babel's prop desk lost around 8,000 BTC and 56,000 ETH, valued at around $225 million at the time of the loss. The trading team was not using risk controls, and their unhedged position led to forced liquidations that made Babel's lending and trading departments unable to meet its margin calls from counterparties like Zipmex.

Helium caught lying that Lime and Salesforce use their network

A graphic from Helium's website, with the header "Helium is used by:" and then a collage of logos including Lime and SalesforceScreenshot of Helium's website (attribution)
Helium, a network of wireless hotspots for low-power devices whose operators are incentivized by a crypto token, has been lying about its relationship with scooter rideshare company Lime. According to an investigation by Matt Binder in Mashable, Helium has been boasting that Helium is used by Lime on their website and describing them in press coverage as a prominent user of the network despite the fact that Helium and Lime never had a formal relationship. "Helium has been making this claim for years and it is a false claim", said a Lime spokesperson.

Helium is a common name that comes up when people are pressed to provide examples of web3 use cases. The New York Times ran a feature on the company in February 2022, titled "Maybe There's a Use for Crypto After All", where Kevin Roose lavished praise on the company and wrote that they had "largely avoided the hype and inflated claims that surround many crypto projects" (oops) and repeated the false claim about a Lime partnership (double oops). Lime said that the Times never contacted them to fact-check the claim; meanwhile, Helium founder Amir Haleem prominently points people to the article with a pinned tweet.

However, a recent Twitter thread by Liron Shapira drew attention to the fact that the company's total monthly revenue from network usage is only $6,500—raising questions about the feasibility of hotspot operators actually earning much in the way of rewards (as the rewards are distributed based on network usage).

Following the publication of Binder's article, Helium quietly removed Lime's logo from their website, along with that of Salesforce, a CRM software company. Salesforce also confirmed to The Verge that they had no partnership with Helium, and that the graphic on the Helium website where Salesforce's logo was displayed as a user of Helium was "not accurate".

Regulators order Voyager to stop saying they're FDIC insured

One of the ways Voyager Digital drew in customers was by promising that their funds in USD were protected from a collapse of the company by FDIC deposit insurance, which normally applies to bank accounts. When Voyager declared bankruptcy earlier this month, some of their customers were horrified to discover this was not the case.

The Federal Reserve and the FDIC sent a cease-and-desist to Voyager, asking them to remove the misleading statements about deposit insurance. It would have been nice if this had come a bit earlier—perhaps before people had deposited money into accounts with the company and could no longer get it out.

Nirvana Finance drained of $3.5 million

The Solana-based yield farming project, Nirvana Finance, was exploited by an attacker who used flash loans to drain the project of just under $3.5 million. The attacker took out a $10 million loan from the Solend project, used it to mint ANA tokens, swapped the ANA for $13.5 million, and then repaid the loan. The attack was similar to the attack on Crema Finance earlier in the month.

The attack caused the project's ANA token to plunge in value by 80%, and the project's NIRV stablecoin to lose its dollar peg, falling to $0.08. Nirvana Finance tweeted, "Please be advised: ANA has lost its collateral, and NIRV has lost its peg. Until the thief restores funds, these tokens will not have exchange value. Be very careful with trading NIRV & ANA, as they currently have no guaranteed value."

They also tweeted at the hacker, promising to stop investigating the hacker's identity and to pay a $300,000 "bounty" in exchange for the funds back. They wrote, "You have not taken money from VCs or large funds—the treasury you have taken represents the collective hopes of everyday people."

The project had promised its users over 60% APY, and its Twitter account described ANA as "the balanced risk investment with adaptive yield".

No more Dune or DAO for the Dune DAO

Photograph of the Dune storyboard bookDune script bible (attribution)
"DAO delusion was at its peak when the community went into this journey together", wrote SpiceDAO founder Soban "Soby" Saqib. SpiceDAO (named for the Dune drug) won an auction to buy a copy of the Dune script bible in January—at $3 million, far above its usual selling price, likely because it was public knowledge how much the DAO had raised. DAO members celebrated afterwards, excitedly anticipating an animated television series based on the book, apparently not realizing that buying a book (even for a very high price) does not confer rights to publish derivative works.

The DAO has stumbled along somewhat since its January victory, encountering issues with making the bible viewable to DAO members without breaking copyright laws, a diminishing treasury due to declining crypto prices, and controversy after Soby was linked to the Remilia Collective.

After all that, the project leader suddenly and apparently unilaterally announced a plan where members could redeem their SPICE for ETH, and stated that they would be removing project leaders, converting the DAO to a private company, and selling the Dune bible (likely at a major loss). It was nice knowing you, SpiceDAO.

KuCoin announces "Anti-FUD Fund" to track down and sue critics

Those in the crypto ecosystem have long claimed to embrace the principles of censorship resistance and freedom of speech, but apparently some of them draw the line at speech that's critical of them. Johnny Lyu, CEO of the KuCoin crypto exchange, announced on Twitter that the company would be creating an "Anti-FUD Fund" to combat "FUD"—an acronym for "fear, uncertainty, and doubt" that has come to be used to describe any criticism or tough questions directed at crypto projects.

In his Twitter thread, Lyu outlines how the fund will "implement Anti-FUD education", "motivate and acclaim industry leaders and influencers who are always responsible, delivering trusted information", and "effectively trace FUDers who intentionally spread FUD and take legal actions against them if needed".

Something tells me his list of "industry leaders and influencers" to "acclaim" won't include those who are rightfully skeptical of crypto.

OFAC has been investigating Kraken over suspected sanctions violations

The New York Times reported on July 26 that the Treasury Department's Office of Foreign Assets Control (OFAC) has been investigating major US-based crypto exchange Kraken for suspected sanctions violations. They reportedly believe that Kraken has been providing services to people in Iran and other sanctioned countries. The Times' sources have said that OFAC is likely to impose a fine on the company, which would make Kraken the largest crypto company to face enforcement from OFAC relating to the Iranian sanctions.

CEO of Titanium Blockchain Infrastructure Services pleads guilty to securities fraud

CEO Michael Stollery of Titanium Blockchain Infrastructure Services (TBIS) pled guilty to securities fraud in connection to a $21 million cryptocurrency scam. The company promoted its BAR token during 2017–2018, and did not register with the SEC for its ICO. TBIS made false claims including that they had ties to companies including Apple, Boeing, and IBM, and offered various services that did not actually exist. At least 75 people participated in the ICO, giving TBIS a combined $21 million, some of which went directly to Stollery's bank account and personal expenses like a condo in Hawaii.

Crypto platform Immutable lays off 17% of its gaming division staff

Screenshot of gameplay of a digital trading card game. There is a streamer overlaid in the bottom left corner.Gods Unchained gameplay (attribution)
The Australian crypto company Immutable fired 17% of staff from its gaming division. Immutable has said this amounted to 18 workers, though the Games Workers Australia union disputed the number and said that 30 roles were cut. The fired employees all worked on the Gods Unchained blockchain-based trading card game, and were given 24–48 hours notice of their firing.

The fired employees quickly began preparing a legal fight against immutable, questioning whether their firing was legitimate when many of the people who were sacked were about to reach the vesting date for more than $1 million in stock options.

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