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Web3 is Going Just Great

...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.

Created by Molly White. Subscribe to her newsletter for weekly recaps.

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High-profile streamers bail on MrBeast-promoted Creator League after learning there are blockchains involved

Collage of eight influencers, with a "Creator League" logo above themPromo image for the Creator League (attribution)
A group of high-profile streamers and social media influencers agreed to join eFuse's "Creator League", where they would lead community e-sports teams. The project was announced on September 2, and was promoted by mega-influencer MrBeast. Only days later, the project has been put on hold after some of those influencers balked once they learned blockchains were involved.

YouTuber CDawgVA publicly withdrew from the project on September 3, writing, "I was not told or made aware at any point that there was Blockchain technology and was only made aware of that information when the event went live. I was given assurances that it had nothing to do with NFT's. Given my vocal hatred of such tech, I would never agree to join had I known that."

The creator of the OTK Network, which had agreed to participate in the League, wrote: "We were told there was no NFT/crypto component but looks like that may not be the case."

Creator League issued a statement attempting to downplay its blockchain usage, emphasizing that people who purchased "Creator Passes" were not buying cryptocurrency or NFTs. "The Creator League is not an NFT project and we have never sold tokens," they insisted. "Those buyers who remain uncomfortable with the blockchain technology can request a refund," they continued.

Now, Creator League has been postponed. eFuse, the company behind it, has also just announced a 30% layoff amid company restructuring.

Theme tags: Bad idea, Layoffs, Shady business

Stolen LastPass vaults possibly cracked to enable crypto thefts

In November 2022, popular password management tool LastPass disclosed that hackers had stolen "password vaults" containing data belonging to more than 25 million users. Although the vaults themselves are encrypted, some experts now believe that these vaults are being cracked to enable access to crypto credentials stored within.

A report by cybersecurity expert Brian Krebs outlines how various experts have come to this conclusion after analyzing a long string of crypto thefts perpetrated against people with otherwise strong security practices. Altogether, the thefts suspected to have been enabled by the LastPass breach amount to more than $35 million.

Theme tags: Hack or scam

GMBL.COMPUTER crypto casino exploited hours after launch

The brand new Arbitrum-based defi casino GMBL.COMPUTER was exploited for around 471 ETH (~$770,000). The project, which promises to "generate yield from casino games", had officially launched only hours earlier. The GMBL team later stated that they believed the exploit was due to a flaw in the platform's referral system, where people could place bets without depositing any funds and use them to generate referral bonuses.

GMBL offered a "bug bounty" to the attacker, inviting them to return 90% of the stolen funds in exchange for a promise not to pursue legal action. The exploiter later returned 235 ETH (~$382,000), or half what they had stolen.

GMBL promised that "we are going to thoroughly test everything again before re launching".

Theme tags: Hack or scam
Blockchain tags: Blockchain: Ethereum

MetaMask phishing scammers hijack government websites

Phishing scammers hoping to lure victims into visiting fake websites resembling that of the popular MetaMask crypto wallet have adopted a new approach: compromising government websites. CoinTelegraph identified websites on domains belonging to the governments of countries including India, Nigeria, Egypt, Colombia, Brazil, Vietnam that had been compromised and modified to redirect to these scam sites. Some of them included the websites of the Nigerian postal service and, ironically, of Egypt's Consumer Protection Agency.

Once victims visit the fake site, they're prompted to connect their MetaMask wallets to access various services, which would allow the scammers to steal any assets in the wallets.

Theme tags: Hack or scam

Genesis to close U.S. spot trading business

Although Genesis Global Capital filed for bankruptcy in January 2023, portions of the larger business were not included in bankruptcy proceedings and continued to operate. One such portion was Genesis's U.S.-focused spot trading platform, at least until an email to clients announcing that their accounts would be closed at the end of the month.

"The decision was made voluntarily and for business reasons," the email claimed.

Genesis is a subsidiary of the Digital Currency Group (DCG) conglomerate, which has since the beginning of the year seen its Genesis platform enter bankruptcy, shuttered its TradeBlock subsidiary, and is reportedly approaching a deal to sell its CoinDesk crypto media outlet.

Theme tags: Collapse

Nima Capital accused of rug pull

"Even VCs are rugging now", remarked someone on Twitter as Nima Capital was observed selling 9 million $SYN (priced at ~$3.7 million before the sudden sale caused the token price to drop) and removing all stablecoin liquidity from the Synapse decentralized blockchain bridge. In April 2023, Nima had entered into a deal with Synapse to lock $40 million of liquidity in the project in exchange for the $SYN tokens, with an agreement to not sell the tokens for twelve months. However, it appears they've just dumped their tokens seven months early. Not only that, Nima Capital took their website offline and made their Twitter account private in typical rug-pull fashion.

Synapse posted on Twitter that they were "investigating unusual activity" on the wallets of one of their liquidity providers, and were "working to get in touch with them".

The $SYN token plummeted almost 25% after the sell-off, later recovering somewhat.

Theme tags: Rug pull
Tech tags: DeFi

Crypto casino Stake hacked for over $40 million

Attackers managed to make transactions from hot wallets operated by the Stake betting platform, stealing approximately $15.7 million from their Ethereum wallet and around $25.6 million from BSC and Polygon. Blockchain analysis project Cyvers attributed the theft to a private key leak, though Stake co-founder Edward Craven later denied that. Craven claimed that the attack was achieved through a "sophisticated breach" targeting a service the company uses to approve transactions.

Stake acknowledged the attack on their Twitter account, writing that "We are investigating and will get the wallets up as soon as they're completely re-secured."

Stake is an Australia-based cryptocurrency casino and sports betting platform that has enjoyed endorsements from various celebrities, and which shelled out $100 million in 2022 for an endorsement deal with Drake.

On September 6, the FBI announced that they believed the Lazarus Group was behind the theft. Lazarus is a group of North Korean state-sponsored hackers allegedly responsible for crypto hacks totaling hundreds of millions of dollars.

Theme tags: Hack or scam
Blockchain tags: Blockchain: BNB Chain, Ethereum, Polygon

Gala Games co-founders sue each other over claimed hundreds of millions in losses

The two co-founders of blockchain gaming company Gala Games are suing each other. One lawsuit, filed by Gala Games CEO Eric Schiermeyer, alleges that Gala's director Wright Thurston stole $130 million in $GALA, directing it through his company and then into a "complex web of obfuscatory transactions" between September 2022 and May 2023. According to the lawsuit, at one point, Thurston explained that he was selling some of the $GALA tokens in order to purchase ammunition for firearms. The lawsuit also outlines how Gala issued the GALA v2 token in May 2023 in order to hide the alleged theft from Gala's token holders.

In a competing lawsuit, Wright Thurston alleges that Schiermeyer unilaterally misused over $600 million in company funds in wasteful actions that were "often for his own personal benefit", including to buy a private jet and hire architects and designers for personal real estate projects.

The $GALA token dropped 5% on the news of the lawsuits.

Theme tags: Law
Tech tags: blockchain gaming

Starknet upgrade leaves $550,000 inaccessible

"The wallets that did not upgrade in time will lose their assets," a StarkWare customer support representative said on Discord to an individual inquiring why they could no longer access their cryptocurrency. The company had been urging users to upgrade their wallet software for months, but not everyone expected they might lose access to funds if they weren't carefully monitoring their wallet software's social media channels.

After user backlash over a cumulative $550,000 in funds that were inaccessible to people who hadn't heard about the breaking change, Starkware re-enabled the ability for people to upgrade their wallets – leading some to question why it was ever disabled in the first place if it could be trivially re-enabled to prevent the loss of half a million in assets.

Theme tags: Hmm

Blockchain gaming streamer loses life savings after exposing private key on stream

Brazilian blockchain gaming streamer Fraternidade Crypto says he lost his life savings after accidentally exposing his crypto wallet seed phrase during a livestream pertaining to Bitcoin and blockchain games. Presumably not realizing it was on the same screen he was streaming, he opened a text file containing a password for a gaming account so he could log into it. However, the file also contained his MetaMask private key, which was displayed to the roughly 70 viewers of the stream.

Apparently realizing his mistake, Fraternidade Crypto ended the stream, and says he tried to relocate the crypto to a new wallet. It was too late, however, and someone watching had already taken the around 86,000 MATIC (~$50,000) and various NFTs in the wallet.

Fraternidade Crypto posted an emotional video after the fact, explaining that the stolen funds were his life savings. He said he planned to file a police report, and also offered a reward for the return of the funds.

Fortunately, he was able to recover the stolen MATIC, though he says he has not been able to recover the NFTs, which have "incalculable value as they are NFTs, estimated value of approximately 15k dollars still lost".

Theme tags: Hack or scam
Blockchain tags: Blockchain: Polygon

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