Elexir draws in more than $1.3 million, then announces an end to the project a week later and "reimburses" investors with $300,000

Elexir Finance promised a platform where users could build passive income via "yield bearing NFTs". They drew in more than $1.3 million in investments since the project's launch on February 22. However, on February 28, the team suddenly sold off their assets, tanking the $ELXR price in the process. They explained in Discord that this was because they had discovered a flaw in their tokenomics design, and so they had sold in order to cut losses and put "almost all early investors... either in positive profit or breakeven". The team also announced that they would distribute $300,000 to other early investors via airdrops. They notably failed to mention their plans for people who were not "early investors", or who were unknowingly snapping up doomed tokens that the project was offloading. Notably, the announcement also mentioned that the remaining treasury of more than $1 million would stay with the project developers, to be used for some new project they did not describe.

After their announcement went over about as poorly as you might expect, Elexir offered their community a choice: take the $300,000 they planned to airdrop, and either continue with that plan or re-add it to the liquidity pool. Community members by and large seemed to support an unlisted third mention, which was to refund the entire treasury to people who bought in, but the project developers seem intent on keeping that amount.

The project development team had had their identities verified by the organization StaySAFU, who subsequently tweeted that "We are currently communicating with both the team behind Elexir and the legal authorities", and that they had identity documents for the team members as well as video confirming they were responsible for rug pulls.

Cryptocurrency exchanges refuse requests by Ukrainian Vice President to freeze Russian and Belarusian addresses

Jesse Powell
@jespow
5/6 Sometimes the hardest thing about having power is knowing when not to use it. Our mission is better served by focusing on individual needs above those of any government or political faction. The People's Money is an exit strategy for humans, a weapon for peace, not for war.Tweet by Kraken CEO Jesse Powell (attribution)
Ukrainian Vice President Mykhailo Fedorov publicly requested major cryptocurrency exchanges to freeze addresses of all Russian and Belarusian users, to increase economic pressure on Russia to end its attacks on Ukraine. Several crypto exchanges including Binance, Kraken, and KuCoin publicly refused to do so. CEO and co-founder of the U.S.-based Kraken Exchange, Jesse Powell, wrote a Twitter thread in which he stated that Bitcoin was "the embodiment of libertarian values" and supposed to be "a weapon for peace, not for war".

Although perhaps unsurprising that these exchanges refused a request like Fedorov's, it will be interesting to see if and how sanctions may affect various cryptocurrency exchanges' actions. Binance, the largest crypto exchange, has already indicated it will comply with sanctions. Kraken, whose executives have tended towards more ideological stances, has also indicated that it will comply with legal requirements to freeze accounts.

Gavin Wood decides war in Ukraine is a great opportunity to promote his Polkadot project

Gavin Wood
@gavofyork
Replying to 
@Ukraine
If you post a DOT address I'll personally contribute $5m.Tweet by Gavin Wood (attribution)
On February 26, the Ukrainian government tweeted Bitcoin and Ethereum addresses, allowing cryptocurrency donations directly to the government to support their resistance to the ongoing Russian invasion. Gavin Wood, a co-founder of Ethereum who is now primarily involved with the Polkadot cryptocurrency network, apparently thought this could be a great marketing opportunity for Polkadot if the Ukrainian government would list a Polkadot address alongside BTC and ETH. He took to Twitter to offer a generous donation contingent on them doing so: "If you post a DOT address I'll personally contribute $5m". I'm sure the Ukrainian government have nothing more important to do than futz around with making wallets for every millionaire who wants to promote his crypto project.

Some with a more optimistic view of Wood's tweet suggested that perhaps his request was motivated by a desire to avoid capital gains taxes that could be incurred by converting his DOT to ETH before donating it, but another commenter pointed out that 1) Wood almost certainly holds more than $5M in ETH already as a co-founder of the project, and 2) Wood lives in Switzerland, where private individuals are generally exempt from capital gains taxes.

Co-founder and primary artist for Starcatchers NFT project uses insider knowledge to buy the project's rare NFTs to flip after reveal

An illustration of a human figure with a star for a head, wearing a pink baseball cap and looking unhappy, wearing a rainbow hoodieStar Catcher #1755 (attribution)
The Starcatchers NFT project sold NFTs which did not immediately show the image associated with them, but would instead be revealed at a later date. An observant collector noticed that several of the NFTs in the project sold for considerably higher than others. Following the reveal, it turned out that these were the rarest NFTs in the project. One of the NFTs (#1755, pictured) has been described as the "project mascot", and later sold back to the Starcatchers team for 30 ETH (~$83,400).

It turned out that "Beutrec", a co-founder and the primary artist behind the collection, had used his access to the project metadata to identify and buy the rarest NFTs in the collection. Although he attempted to use distinct wallets to perform the transactions, they were trivially linked back to him. He made around 50 ETH (~$140,000) in profit from flipping the NFTs he bought with insider knowledge. After his actions were revealed in April 2022, Beutrec's new NFT project, Boki, announced that Beutrec would no longer be a part of their team.

Discord server for the Doodles NFT project is compromised

A cartoon person with blue hair in two buns and an open mouth wears a purple and orange hoodie and a yellow backpackDoodle #1691 (attribution)
The enormously popular "Doodles" NFT project announced on February 26 that their Discord server had been "penetrated by a hacked bot", and that all messages should be ignored. They wrote, "Our lawyers, friends at discord, and the community are helping us". Later that day they announced that they had regained control of the server, and that they would compensate community members affected by the attack. It wasn't clear the scale of losses that may have been suffered by members of the Discord who believed that messages coming from an attacker were from the official team.

Howlerz NFT drop goes incredibly badly, with heavy botting, a poorly-implemented contract, and buyers falling for a scam contract

An illustration of a grey wolf skeleton wearing a purple turtleneck, with gold teeth and earrings, and laser beams shooting from its eyes, on a gold backgroundHowlerz #3074 (attribution)
A heavily-hyped NFT project called "Howlerz" released its project via "secret mint" with no allowlist, and it went very, very poorly. Would-be buyers who were excitedly waiting for the mint to begin were fooled by a fake contract that scammed buyers for a total of 250 ETH ($675,000). When the project did mint for real, its NFTs sold out within seconds to the swarm of bots waiting to snap up the assets. Some prospective buyers who tried to buy the NFTs ran into "out of gas" problems, where they spent too little gas to cover the transaction, and ended up losing the gas fee on a failed transaction. This is a problem that is usually addressed by NFT developers in their contracts by adding a buffer to the estimated gas required.

Part of this collection's draw has been the promise that "you own the art". However, the artwork is released under the CC0 license, which dedicates the work to the public domain — that is, any ownership of the work in a copyright sense no longer exists.

Crypto and NFT scammers take advantage of the invasion of Ukraine to boost their grifts

Engr. 🇺🇦🇺🇦@MRchildofGod·1hCan anyone help me please I’m stranded in Ukraine with my family2Engr. 🇺🇦🇺🇦@MRchildofGod·1hBTC 

17rd6cGoopC7vH71S5fgLDpDfW1M3PRtRdPerson claiming to be stranded in Ukraine requests Bitcoin (attribution)
Cryptocurrency scammers have turned to the crisis in Ukraine to provide fodder for their scams. Some have taken the tactic of pretending to be a person trying to escape the country and asking people via private message to send cryptocurrency; others have set up sketchy crowdfunding projects that claim they will send the money to various Ukrainian causes. One scam project tried to get people to buy "UkraineToken", with vague promises of "regular donations and support".

Ukraine-themed NFT projects have also sprung up all over the place, promising to donate portions of proceeds, with very few avenues to distinguish the legitimate from the scams. Some existing NFT projects have created Ukraine-themed items to add to their collections. Other NFT projects that have nothing to do with Ukraine have tried to tempt buyers by claiming they will donate a portion of proceeds (5%, in one case) to Ukrainian war relief funds. Individual sellers have also tried to use the crisis to increase the sales of NFTs they own, promising to donate their profits.

Needless to say, my advice if you're hoping to donate to relief would be to skip the cryptocurrency and NFTs altogether and pick any of the many verified relief funds out there.

Pixelmon raises $70 million only to reveal hilariously bad NFTs

A poorly 3D-rendered approximation of a Squirtle, with both eyes pointing in different directionsSquirtle is looking rough these days (attribution)
The Pixelmon project promised an ambitious roadmap including a Pokémon-like game where the pixelized Pokémon could be caught and traded, a land project, and rewards to buyers of their "Generation 1" Pixelmon. The 3D pixelized Pokémon on their flashy website and on social media certainly looked promising to the buyers who sunk a total of $70 million into the project. Those buyers, who spent 3ETH per mint (~$9,300), were excited to unveil their "fully modeled 3D character[s] that you can interact with". However, when they "hatched" their Pixelmon, buyers were greeted with some truly terrible models, if they were lucky enough to have a model at all — some unveiled just an empty patch of grass, and others found their models appearing partway in the ground.

Although the project lead wrote on the Discord that they had "made a horrible mistake" but that they would "completely revamp and redesign" the NFTs, the project appeared to be a cash grab. On the night of the reveal, 1,000 ETH ($2.8 million) had already been transferred out of the project and split among various addresses. One of the recipients who received 400 ETH ($1.1 million) immediately went on a shopping spree, buying various big-ticket NFTs with their windfall.

Bitconnect founder indicted by federal grand jury on charges of orchestrating a global Ponzi scheme

BitConnect founder, Satish Kumbhani, founded the Bitconnect "investment program" in 2016, which attracted investors with its impossibly high payouts. From then until its dramatic 2018 shutdown, Kumbhani and his team drew in around $2.4 billion from investors. The whole thing turned out to be a Ponzi scheme, as many had suspected, and Kumbhani now faces a long list of charges: "conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering". If convicted of all charges, Kumbhani faces up to 70 years in prison.

The Associated Press continues to mishandle its NFT fiasco with mass Discord bans and scrubbing of messages

Dwayne — Today at 11:00 AM
What are your thoughts on the adoption by finance? We see networks like Pyth seeking to replicate traditional financial pricing awareness on chain.
Dwayne — Today at 11:02 AM
Seems they also have an existential driver to move transactions on chain.
Dwayne — Today at 11:03 AM
So, what's the technology's future? Do you think there's no turning back?
Dwayne — Today at 11:04 AM
Alas. I, too, shunned Bitcoin and my wife has not let me forget it.Gaps in conversation where most messages were removed (attribution)
After the fiasco the previous day in which some group of people at the Associated Press apparently decided turning an image of human suffering into an NFT was a brilliant idea, some at the Associated Press seem to be intent on tarnishing the organization's reputation even further. Horrified individuals took to the project's Discord, as the AP had previously invited people to use that as a way to give feedback and ask questions. The AP's "Director of Blockchain" Dwayne Desaulniers spent a while trying (but not really succeeding) to explain why the AP has decided to turn some of its photojournalism into NFTs. However, around 24 hours after the initial NFT tweet had been made, he apparently decided enough was enough and nearly everyone who'd asked a question was banned from the Discord, with their messages were removed. Some of Desaulniers' replies were also removed, such as where he had replied "Fucking right" to a user who said, "Dwayne wants a world without adblock, without archive.is, without a possibility that someone somewhere might wring a tiny bit of the AP's journalistic output out of them without paying for the privilege."

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