Websites for these exchanges now show notices announcing a law enforcement operation called "Operation Final Exchange". The page announces to visitors "This was your final exchange!", and in a letter addressed to "ransomware affiliates, botnet operators and darknet vendors", warns that authorities are now working to trace the illicit users of the exchange.
Germany seizes 47 cryptocurrency exchanges reportedly used by ransomware groups
German authorities have seized 47 cryptocurrency exchanges alleged to have been used to launder stolen funds by ransomware groups. The exchanges did not require KYC, allowing customers to remain anonymous throughout their transactions.
- "Germany seizes 47 crypto exchanges used by ransomware gangs", BleepingComputer
Almost $2 million taken from users of Telegram "Banana Gun" crypto trading bot
Some people use a Telegram-based crypto trading bot called "Banana Gun" to "snipe" crypto trades, copytrade, and perform other activities. On September 19, at least 11 victims lost around $3 million after their accounts were apparently compromised and drained.
Banana Gun acknowledged the attack on Twitter and shut down the bot. They posted that they did not believe their backend was compromised, and stated that they believed the attack occurred via a "front-end vulnerability" — though it was not clear what this might have referred to.
- "Telegram bot Banana Gun’s users drained of over $1.9M", CoinTelegraph [archive]
Arrests made after $243 million stolen from one individual in Gemini phishing attack
Two people have been arrested in relation to a phishing scam that successfully stole more than 4,000 BTC priced at around $243 million from a single individual. The victim was targeted with a phishing scam in which the attackers posed as Google support employees and convinced the victim to reset their two-factor authentication for their account on the Gemini cryptocurrency exchange.
The FBI raided a luxury home in Miami in connection to the theft, and arrested two men in their early twenties. Authorities worked with crypto investigators including zachxbt to trace the stolen funds.
Rari Capital settles with the SEC
The defi lending protocol Rari Capital, and its three co-founders, have settled charges from the SEC that it misled investors and engaged in unregistered broker activity. Rari Capital entities also settled charges that they conducted unregistered offerings of three securities, and engaged in unregistered securities offerings and unregistered broker activity. The SEC alleged that the firm and its co-founders made false statements to investors about supposedly automatic re-balancing of assets into the highest yield opportunities when, in fact, rebalancing was also done manually. The SEC also alleged that the company and its co-founders made misleading statements about the supposedly high yield from the platform, which they said did not account for fees, and which ultimately caused many investors to lose money.
The company and co-founders will pay fines, and the individuals will agree to five-year bans from serving as officers or directors.
The regional SEC director stated, "We will not be deterred by someone labeling a product as 'decentralized' and 'autonomous'," alluding to crypto firms' tendencies to try to skirt securities regulations by claiming to be "decentralized".
Rari has featured on Web3 is Going Just Great before, when they were exploited for around $80 million in April 2022 and when they were exploited for around $15 million in May 2021. The project effectively wound down soon after the second theft.
- "SEC Charges DeFi Platform Rari Capital and its Founders With Misleading Investors and Acting as Unregistered Brokers", U.S. Securities and Exchange Commission [archive]
Ethena website compromised
The website for the Ethena protocol was compromised by attackers who gained control of the project's domain registration. The protocol issued warnings to their users to urge them not to interact with the website, which could compromise their crypto holdings.
They later were able to deactivate the website and regain control of the domain. "Remember scammers are always chasing you," they wrote on Twitter.
$6 million taken from Delta Prime defi protocol
The DeltaPrime defi protocol suffered a $6 million loss after a private key was leaked. Access to the private key allowed the attacker to mint 1.1×1069 DPUSDC, which are tokens that allow holders to redeem the USDC stablecoin at a 1:1 ratio. They repeated the mint with several other deposit receipt tokens for bitcoin, ether, and other cryptocurrencies. Altogether, they redeemed a small fraction of these enormous quantities of deposit receipts, amounting to around $6 million in assets.
DeltaPrime acknowledged the attack on Twitter, and announced that "the risk is contained". They also stated that they were "looking into other ways to reduce user losses to a minimum", including by pulling from the protocol's insurance pool.
Flappy Bird creator disavows crypto spin-off
A blockchain-based version of the 2014 hit game Flappy Bird has emerged, taking advantage of the recent "tap-to-earn" crypto craze. The @flappy_bird Twitter account posted "I AM BACK!!" on September 12, with a video compilation showing people playing the original game. The tweet also claimed they were "working with [Flappy Bird's] predecessor", leading many to believe that the original Flappy Bird creator Dong Nguyen was involved with the project.
Nguyen famously removed the game from app stores shortly after it surged to popularity, stating that he felt guilty that people were becoming addicted to the game. This makes the game's reappearance — complete with loot boxes and other addictive features — feel somewhat dark.
On September 15, Nguyen returned from a seven-year Twitter hiatus to post: "No, I have no related with their game. I did not sell anything. I also don't support crypto."
Although Nguyen held the Flappy Bird trademark, he did not sell it to this group. Instead, they registered the trademark themselves after arguing he had abandoned it.
Eve Online developer angers fans with announcement that their new game will be blockchain-based
CCP, the developer of the Eve Online space MMORPG, has angered their fanbase with a new announcement that their upcoming game will be built on the blockchain and incorporate cryptocurrency for in-game transactions. According to an FAQ, the spin-off game (previously called "Project Awakening" and now titled "Eve Frontier") will use a layer-2 blockchain called Redstone.
"There is still time. You can still roll it back and pretend it never happened. Please. None of us want this crypto slop, this desperate cash grab, this attempt at 'creating something great,' this game where buzzwords seem more important than gameplay," wrote one player on the game's subreddit.
A tweet announcing the game was celebrated by some crypto advocates, but attracted some critical responses from players. One wrote, "releasing a blockchain game a year after the weird hype about that technology died so now you got a shitty concept and don't even get a pay-off for it. let's see how this is going to turn out :)"
eToro settles with SEC for $1.5 million, shuts down most crypto trading
The eToro stock and crypto trading platform settled with the U.S. Securities and Exchange Commission on charges that it was operating an unregistered broker and unregistered clearing agency, and facilitating trading certain crypto assets as securities. The platform agreed to pay $1.5 million in fines. As a part of the settlement, the platform will also restrict crypto trading for its U.S.-based customers to only bitcoin, bitcoin cash, and ether.
- “eToro Reaches Settlement with SEC and Will Cease Trading Activity in Nearly All Crypto Assets”, United States Securities and Exchange Commission [archive]
Adam Neumann's Flowcarbon refunds customers after failing to launch "Goddess Nature Token"
In May 2022, WeWork founder and former CEO Adam Neumann announced he would be launching a company called Flowcarbon, which would issue "tokenized carbon credits" called "Goddess Nature Tokens" and sell them to companies looking to green up their image. The company raised $70 million in funding from Andreessen Horowitz and others, at least half of which was raised through token sales.
Now, Flowcarbon has reportedly been issuing refunds after the tokens have failed to materialize more than two years later. Flowcarbon has reportedly been blaming "market conditions and resistance from carbon registries" for the failure to launch, according to a report from Forbes. Flowcarbon claimed they have been offering refunds "due to industry delays" since 2023.