Helium ditches its blockchain

Helium is a network of wireless hotspots that decided to bolt on a cryptocurrency layer a few years after it was created. Through this, they hoped to convince people to spend hundreds of dollars on Helium hotspots, which earn an average of 0.07 HNT ($0.37) a day (2.1 HNT/$11.24 a month) for supplying connectivity to internet of things devices.

Now, Helium is ditching its custom Helium chain in favor of a Solana-based token, and scrapping the blockchain entirely for the portions of its service that actually used the blockchain for anything beyond handling rewards.

Helium seems to have realized, finally, that blockchains tend to be slow as hell. In a blog post about the change, they wrote that "specific transactions, including Proof-of-Coverage and Data Transfer Accounting, are processed on-chain unnecessarily. This data bottleneck can cause efficiency issues such as device join delays and problems with data packet communications, which bloats the Network and causes slow processing times." They outline their plans to move these portions of the project to a "more traditional large data pipeline"—that is, infrastructure that's actually well-suited to that kind of processing.

DC Attorney General sues Michael Saylor and MicroStrategy for tax evasion

Michael Saylor sitting in front of a large model shipMichael Saylor (attribution)
DC-based Bitcoin evangelist and former CEO (now chairman) of MicroStrategy has been accused by the DC Attorney General of avoiding years of taxes by pretending to live in Florida, a state without personal income tax. The AG says he evaded more than $25 million in DC taxes this way, with the help of MicroStrategy (which is also named in the suit for helping to enable the tax evasion).

DC permits the court to impose "treble damages" on Saylor if he is determined to have evaded the taxes he owes, which could end up costing him and MicroStrategy more than $100 million in taxes and penalties.

Compound Finance breaks their cETH market for a week

Compound Finance released an update to change the price feed used by the Compound v2 protocol. Despite being audited by three firms, no one caught a bug that caused all transactions for ETH borrowers and lenders to revert, effectively freezing the entire cETH market on the protocol. Because code changes require a seven-day-long vote, the change can't be reverted until a new proposal passes. In the meantime, users with positions they can't access will need to add collateral or repay loans carefully in order to avoid being liquidated if the price of ETH drops by the time the market is operational again.

Thodex CEO arrested over a year after fleeing Turkey in the wake of the exchange's collapse

Faruk Fatih Özer, the CEO of the Thodex cryptocurrency exchange, swore that when they halted trading and shut off customers' access to accounts in April 2021, it was just to investigate suspicious activity. Then he disappeared, leaving behind a collapsed exchange and total losses estimated to be anywhere from $24 million and $2.5 billion in assets (depending who you ask). He left a statement in which he claimed that he was only on the lam in order to "work and repay my debts" to customers, after which he would turn himself in to Turkish authorities.

His plan to somehow work off anywhere from $24 million to $2.5 billion in debts was stymied when he was apprehended by Albanian authorities. He faces extradition to Turkey, where a prosecutor has asked for sentences of 40,564 years for him and other executives (just in case, I guess).

Thai SEC punishes Bitkub CTO for trading Bitkub Coin on insider information

The Securities and Exchange Commission in Thailand took action against Samret Wajanasathian, the chief technology officer of the Thai crypto exchange Bitkub. The SEC fined him 8.5 million baht (~$234,000), and said they would bar him from serving as a director or executive at any crypto firms for a year.

The SEC reported that Wajanasathian had purchased around $61,000 of Bitkub Coin ($KUB) just before it was publicized that the Siam Commercial Bank would purchase a 51% stake in Bitkub. After the announcement, the value of KUB rose 100%.

Earlier that week, the SCM had announced they would not be following through on purchasing the planned $500 million stake in Bitkub, due to concerns over "various issues" that were raised by the Thai SEC.

Crypto.com wants back the $7.2 million they accidentally sent a customer last year

Crypto.com somehow managed to not only send a woman AUD$10.5 million (US$7.2 million) in May 2021, but not notice it for months afterwards. The woman had requested a $100 refund, but someone accidentally entered an account number into the refund amount section and granted this woman a sudden windfall.

Rather than contacting Crypto.com about the error, she put the money into a joint account shared with her sister, and purchased her sister a five-bedroom home with nearly US$1 million of the funds.

Crypto.com only discovered the error in a December 2021 audit, and sued the woman for the erroneously-sent funds. She's just been ordered by the Victoria Supreme Court to sell the home and return the remaining money.

Unlike with many crypto transactions, erroneous transactions on centralized exchanges can typically be reversed by the exchange. However, Crypto.com would have had to notice the error much sooner, before the recipient transferred the funds elsewhere.

Hacktivists make NFTs out of the stolen passports of Belarusian officials

The inside and outside of a Belarusian passport, with a photo and the name of Alexander Lukashenko. Identifying details have been blurredOne of the NFTs (attribution)
A hacktivist group calling themselves the Belarusian Cyber Partisans managed to gain access to the entire passport records of Belarus last year. On August 30, they began selling NFTs created from the passport data of various Belarusian officials, including the country's authoritarian president, Alexander Lukashenko. Other passports include those of the head of the Belarusian KGB, Lukashenko's press secretary, and the country's prime minister.

The group is selling the NFTs for between 0.2 and 6.5 ETH ($300–$9,700), and say that all proceeds will go towards "our work in hitting bloody regimes in minsk & moscow".

OpenSea took down the NFT collection shortly after it was published.

OptiFi developer accidentally closes the project contract, irretrievably locking $661,000

OptiFi, a derivatives defi project, accidentally and permanently shut down the project smart contract, irretrievably locking up $661,000—the project's entire fund. A developer had been trying to push an update to the project, and ran into issues related to Solana network congestion (a recurring issue). While trying to clean up from a partially-executed transaction, the developer accidentally ran a command that closed the project's primary smart contract.

OptiFi has promised to return user deposits and settle all positions. In a post-mortem, they wrote that they had learned that "Every deployment needs a rigorous process and single point failure can be avoided. Please don't rush like what we did, especially for defi projects". They further outlined a "peer-surveillance approach" in which three people would be required to deploy any changes together. They also asked the Solana team to implement a two-step confirmation for such a potentially destructive command.

Whistleblower website alleges that the creators of the Avalanche blockchain paid lawyers to attack competitors

Kyle Roche sitting in a dim restaurant setting, speaking and gesturing. A caption on the video reads "I'm just a crazy motherfucker".Roche in one of the secretly recorded videos (attribution)
An anonymous whistleblower website called "CryptoLeaks" has alleged that Ava Labs, the company behind the Avalanche blockchain, paid lawyers to sue competitors and obtain confidential information through legal discovery. The site includes secretly recorded videos of Kyle Roche, a founding partner of the Roche Freedman law firm which has filed class action lawsuits against numerous companies including Solana, Binance, and others. In some of the surreptitiously recorded videos, Roche is visibly drunk.

"A pact was formed that involved Ava Labs granting Roche Freedman a massive quantity of Ava Labs stock and Avalanche cryptocurrency (AVAX), now worth hundreds of millions of dollars, in exchange for Roche Freedman agreeing to pursue a hidden purpose," the site claims.

The site does include video clips of Roche saying some surprising things, although the clips are very short and devoid of context. The whole thing should be taken with a grain of salt.

Ava Labs founder Emin Gün Sirer dismissed the claims on the site as "conspiracy theory nonsense". Roche published a statement about the " numerous unsourced false statements and illegally obtained, highly edited video clips that are not presented with accurate context", in which he said that his statements about filing class action suits at the behest of Ava Labs were "false, and were obtained through deceptive means, including a deliberate scheme to intoxicate, and then exploit me, using leading questions. The statements are highly edited and spliced out of context."

CEO of Ragnarok metaverse game admits to treasury mismanagement, including nearly $2 million in trading losses and exorbitant salaries

Pixel art characters stand in a bar setting with a tiled floor made from hexagons. There are cardboard boxes, a jukebox, and a cook behind the bar.Ragnarok screenshot (attribution)
Ragnarok is a metaverse role-playing game that launched its character NFTs in April 2022. The project received $1.75 million in seed funding, plus another $17.5 million from NFT sales and royalties.

On August 26, CEO Fanfaron published a Substack post providing a breakdown of the project's finances, which he began by saying, "As a previous business owner, and because Ragnarok is a startup and not a DAO, our initial plan was never to operate our finances in public, which is why we have historically been closed and unwilling to share full accounting of our balance sheet." As the post went on, it became clear there might be other reasons they were reticent to publish it.

The post revealed that Fanfaron had lost $1.827 million buying ETH during the crypto downturn: "I made mistakes by buying ETH multiple times when I thought it was an advantageous investment for the project, but then to protect downside risk and with the plan to reinvest at a better time, I sold our position in ETH, multiple times.."

It also revealed that the project is paying its team members apparently enormous salaries: $5.4 million in team compensation, plus another $1.5 million spent to buy out a co-founder. "We’re a scrappy startup," he wrote, after also acknowledging that he pays himself $50,000 a month ($600,000 a year)—a number he already reduced by $600,000 from his original salary of $1.2 million per year. He ultimately promised in the post to pay back his trading losses.

As for the game, well, it exists, which means it's already ahead of a lot of crypto games. They launched an alpha version of the game in late July after multiple delays, with Fanfaron explaining, "Our vision was to create something similar to WoW... we were, however, overeager and optimistic with regards to how much time it takes to create such a world." The alpha is a multiplayer pixel art world where characters can walk around and talk to each other, and interact with buildings. Battling, leveling, quests, missions, and breeding are apparently all yet to come.

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