The team did not announce how many tokens were stolen. The price of $EVER suffered a 20% drop, though whether it was due to an attacker selling off tokens or collective panic by other token holders is not clear. The method of the theft was also not described.
Reddit attributed the decision to scaling difficulties, regulatory uncertainty, and the quantity of resources the company found itself having to put into the feature. The tokens were only used on a handful of subreddits, and the team had migrated them from the Ethereum blockchain to the Arbitrum Nova L2 chain, but despite that scaling continued to be a problem.
The news caused a massive dive in the prices of $MOON and $BRICK, the two Reddit tokens, as holders tried to exit their positions before the tokens became useless. Some angrily accused Reddit of rug-pulling, threatening legal action. One wrote, "I wish you guys knew how reckless this decision is and how many people you've hurt." Some accused subreddit moderators of selling when they learned about the decision an hour before it was made public.
Others were delighted at the news, however. One wrote, "Thank the effing Lord. This moons caused so much shit tier spamming for over a year."
It's not clear yet how the attack was perpetrated, although crypto researcher Spreek reposted a comment by an admin in Fantom's Telegram channel, where they blamed the theft on a zero-day exploit in Google Chrome.
TrueUSD tries to claim no affiliation with tokens created by its deployer address, raising further questions
However, the post raised only more questions, as the $TEURO token had been deployed by the address that deployed the primary TrueUSD token. This means that either TrueUSD is lying when they claim they're unaffiliated with $TEURO, or some of their private keys were compromised, allowing an unrelated party to deploy a contract appearing to belong to them.
The post by crypto media outlet CoinTelegraph was based on a faked screenshot of what appeared to be the Bloomberg Terminal. The post quickly propagated through the crypto world before people began to question its veracity. CoinTelegraph later issued an apology, blaming the incident on a failure by employees to follow the normal editorial approval process.
This adds to the list of incidents that illustrate the extent to which false reporting by traditional or crypto media, or by influential personalities, can move crypto markets. Past incidents have included a crypto Twitter personality tweeting the false rumor that Interpol had issued a red notice for Binance CEO Changpeng Zhao, and two instances of token price spikes based on false press releases claiming major corporations would accept the tokens as payment.
- "Clarification on sharing false spot Bitcoin ETF news", CoinTelegraph [archive]
The Sui Foundation has disputed the allegations on Twitter, calling them "unfounded and materially false".
Attackers previously stored the malicious code on typical webhosting services, but those services began to take it down. Now, some have started using Binance's blockchain to store these payloads, taking advantage of the immutable nature of blockchains to prevent anyone from taking it down.
The de-peg occurred amid a "liquidity crunch" as holders rushed to redeem their USDR for the DAI stablecoin, draining the project of its DAI reserves. The team behind the project, TangibleDAO, issued a statement stating that "the real estate and digital assets backing USDR still exist and will be used to support redemptions." However, despite their insistence that the problem is just a liquidity issue rather than a solvency one, a dashboard on their own website showed that the stablecoin isn't fully backed and has a deficit of around $3.4 million.
In a related incident, a trader trying to swap their $131,350 in USDR for the USDC stablecoin lost every penny of it when their transaction was arbitraged by a MEV bot.
Platypus was quickly able to recover $575,000 from this latest hacker, thanks to a flaw in their attack. Later, they recovered all but $167,400 of the stolen funds after coming to an agreement with the attacker that they would not pursue legal action.
The FTC lawsuit focuses on Voyager's claims suggesting to customers that accounts with the lender were FDIC insured. That complaint also names Voyager as a defendant. Voyager settled with the FTC, agreeing to pay a $1.65 billion judgment that will be suspended until customers are repaid.
- "CFTC Charges Former Chief Executive Officer of Digital Asset Platform with Fraud in Massive Commodity Pool Scheme", CFTC press release [archive]
- "FTC Reaches Settlement with Crypto Company Voyager Digital; Charges Former Executive with Falsely Claiming Consumers' Deposits Were Insured by FDIC", FTC press release [archive]
- "CFTC and FTC sue former CEO of bankrupt crypto lender Voyager", BlockWorks [archive]
- "Voyager Ex-CEO Charged by U.S. Regulators With Fraud, Making False Claims", CoinDesk [archive]