Deribit is also among the primary creditors of failed crypto hedge fund Three Arrows Capital, which defaulted on an $80 million loan from the exchange.
Crypto exchange Deribit hacked for $28 million
Major crypto exchange Deribit suffered a hot wallet compromise that resulted in a $28 million theft. The exchange halted withdrawals to perform security checks, but urged that customer funds were safe and that the loss was covered by company reserves.
Founders of Hodlnaut attempt to hide financial records from court
Hodlnaut, a crypto lending platform that halted withdrawals on August 8, has been undergoing court proceedings while it's determined if the insolvent company has a path to stabilization or if they will need to be liquidated. A Singaporean court document shows that the company founders tried to hide financial documents from the court, and that the records that do exist "have not been properly maintained". According to the Interim Judicial Managers, the founders and some other employees were uncooperative, obstructed the advisors' work, and tried to stop them from "taking into possession various key books and records of the Company".
Sounds like everything's above board over there! It was also exposed in August that the company had lied to its users about their exposure to the Terra collapse.
French fry-themed DAO loses $2.3 million due to Profanity exploit
friesDAO describes itself as a "a decentralized social experiment where a crypto community builds and governs a fast food franchise empire via wisdom of the crowd". Welcome to the future.
Anyway, friesDAO seems to have fallen victim to the same Profanity vulnerability that has affected projects who used the tool to generate vanity wallet addresses. friesDAO wanted a wallet address beginning with 51D35 ("SIDES"), and as a result they opened themselves up to a major loss.
The project had previously announced that they had raised $5.4 million in funding, suggesting this attack drained almost half of the project's funds.
Core Scientific Bitcoin mining operator warns of missed payments, possible bankruptcy
One of the largest public crypto mining firms in the United States, Core Scientific, filed a notice with the SEC that they would miss upcoming debt payments due in October and November. They also wrote that the company "potentially could seek relief under the applicable bankruptcy or insolvency laws. In the event of a bankruptcy proceeding or insolvency, or restructuring of our capital structure, holders of the Company's common stock could suffer a total loss of their investment."
Core Scientific blamed their precarious financial situation on "the prolonged decrease in the price of bitcoin, the increase in electricity costs, the increase in the global bitcoin network hash rate and the litigation with Celsius Networks LLC and its affiliates". Bankrupt crypto platform Celsius owes Core Scientific around $5.4 million.
Core Scientific's stock plummeted from around $1 a share to around $0.20 on the news, an 80% decrease. The stock started the year at $10.43 a share, and has decreased in value by 98% year-to-date.
$14.5 million stolen from Team Finance
Team Finance is a project that helps projects lock their tokens to be released after a certain period or on a schedule. A hacker exploited a vulnerability in a smart contract that enabled users of Team Finance to migrate from version two to version three of their project, despite that contract being audited. The attacker made off with $14.5 million thanks to the vulnerability.
Monkey Drainer steals ~$1 million in 24 hours
A phishing scammer called "Monkey Drainer" stole around 700 ETH (~$940,000) in 24 hours on October 25, according to blockchain sleuth zachxbt. The scammer used malicious phishing sites to trick users into signing transactions that then drained cryptocurrencies and NFTs from their wallets. Some individual victims lost crypto valued at hundreds of thousands of dollars, and others lost NFT collections. Zachxbt estimated the total amount solen by Monkey Drainer to be around $3.5 million.
Oracle manipulation attack on a QuickSwap market earns exploiter $188,000
Adding to the recent string of oracle manipulation attacks is an attack on the miMATIC ($MAI) market on the QuickSwap decentralized exchange. An exploiter was able to manipulate the spot price of assets to borrow funds, ultimately making off with 138 ETH ($188,000) that they mixed through Tornado Cash. The vulnerability was due to the use of a Curve LP oracle, which contains a vulnerability that was disclosed by a security firm earlier that month.
Security firm PeckShield initially suggested the issue might have been with QiDAO, which creates the $MAI stablecoin. The vulnerability is not with their project, although it's possible that the theft will impact the collateralization of their stablecoin.
Freeway halts withdrawals, accused of $160 million rug pull
Freeway, a financial scheme where users buy "Superchargers", which are crypto "simulations" that promise to pay out rewards of up to 43% annually, seems to have taken the off-ramp. The project announced to its users that due to "unprecedented volatility in Foreign Exchange and Cryptocurrency markets in recent times", they would be pausing their Supercharger program. The project reportedly halted withdrawals on more than $160 million worth of assets.
Worryingly, the company also removed all mentions of its team from their website, and reportedly removed an attestation to the company's financial backing as well.
The day before the project announced the pause, crypto whistleblower and researcher FatMan published a Twitter thread urging people to withdraw funds immediately because he believed they were operating a Ponzi scheme. "In my opinion, it's likely that Freeway will collapse within the next few months and that all depositors will lose everything."
Attacker drains tokens from Layer2DAO, project buys some of them back
An attacker was able to siphon nearly 50 million L2DAO tokens from a multi-sig wallet on the Optimism protocol. These tokens would nominally have been valued at around $400,000 at the price at the time of the hack, although the token has low liquidity and the attacker would not likely have been able to sell them for that price. The stolen tokens amounted to 5% of the project's total token supply.
The attacker swapped 16.7 million of the tokens before the project was able to negotiate a deal to buy back the remaining 33.2 million tokens at a price of $0.001. In the end, the hacker made off with the $33,200 paid by Layer2DAO, plus 40.4 ETH (~$54,000) from the tokens they were able to sell.
The Layer2DAO team seemed unsure how the hack had happened, but said that they believed it was similar to the June 2022 incident in which an attacker got hold of 20 million Optimism tokens after Wintermute provided an incorrect wallet address.
Several users report losing more than a million dollars each in 3Commas/FTX theft
Several users of the automated trading bot 3Commas reported losing over a million dollars each in a hack or phishing scam affecting users who had connected it to their FTX accounts. 3Commas has blamed the losses on phishing, but affected users have said they were confident they were not phished.
One user wrote they lost almost 104 BTC (~$2 million) from an account that they said they only ever connected to FTX a year ago, with an API key they had not saved, and which had since expired and been downgraded to a free account. Another reported losing about $1.5 million.
FTX CEO Sam Bankman-Fried wrote on Twitter that FTX would compensate the affected users for roughly $6 million in total. He wrote in all caps that he did not want this to be considered a precedent, and it was "a one-time thing". He also stressed that FTX was not responsible for the exploit, and that the users had been tricked by phishing sites impersonating other reputable trading services.