This isn't the first time Cuban has been burned by the crypto industry. In June 2021, he lost "enough that I wasn't happy about it" in the collapse of the Titan stablecoin. Cuban is also a defendant in a class action lawsuit related to his endorsement of Voyager, a crypto broker that collapsed in July 2022.
Crypto booster Mark Cuban hacked for $870,000
Billionaire crypto evangelist Mark Cuban apparently fell victim to a hack when an attacker was able to siphon around $870,000 in multiple cryptocurrencies from a wallet belonging to him. Cuban later acknowledged the hack to DL News. "They must have been watching," he said, explaining that "I'm pretty sure I downloaded a version of MetaMask with some shit in it".
Genesis closes trading entirely
After announcing on September 5 that Genesis would be closing their U.S. spot trading business in a "decision ... made voluntarily and for business reasons", Genesis has now announced that they will be closing all trading. They again write that "This decision was made voluntarily and for business reasons" - the kind of statement that gets less believable the more they repeat it.
Although Genesis Global Capital filed for bankruptcy in January 2023, portions of its business were excluded from the bankruptcy and continued to operate.
SEC charges Mila Kunis-backed Stoner Cats NFT project
In a rather amusing press release, the SEC announced they had charged "Stoner Cats 2 LLC" with conducting an unregistered securities offering when they raised $8.2 million selling NFTs that were intended to finance an animated web series called Stoner Cats.
The series was developed by Mila Kunis and her production company, and she, Ashton Kutcher, and Chris Rock all performed in the show, which ultimately aired six episodes accessible only to those who hold the NFTs. The premise, according to the SEC, is "house cats that become sentient after being exposed to their owner's medical marijuana".
The SEC determined that the project had marketed the NFTs as an investment in a web series enterprise, and had therefore violated securities laws by not registering with the SEC. Stoner Cats 2 LLC agreed to a cease-and-desist order, and will pay a $1 millon penalty.
OneCoin cofounder gets 20 years in prison
Karl Sebastian Greenwood, co-founder of the notorious OneCoin ponzi scheme, was sentenced to 20 years in prison after pleading guilty to fraud and money laundering charges. He will also forfeit $300 million, much of which he spent on real estate, luxury vacations, and a yacht.
OneCoin operated out of Bulgaria, and was founded by Greenwood and "Cryptoqueen" Ruja Ignatova, the latter of whom has been on Europol's most wanted list since May 2022. The fraud amounted to around $4 billion and affected at least 3.5 million victims.
- "Co-Founder Of Multibillion-Dollar Cryptocurrency Scheme “OneCoin” Sentenced To 20 Years In Prison", press release by the U.S. Attorney's Office, Southern District of New York [archive]
Binance.US CEO Brian Shroder bails as the company cuts 1/3 of its employees
Brian Shroder, the CEO of Binance's US entity, has left the crypto exchange as it faces an existential lawsuit from the U.S. SEC. Shroder is only the latest exec to leave Binance and its various regional arms in what is becoming a mass exodus in recent months. The company has also lost its general counsel, chief strategy officer, head of investigations, a senior VP of compliance, and two leaders of Binance's Russian arm.
Simultaneously, Binance.US announced it would be cutting 1/3 of its employees, or more than 100 people. This is the second staffing cut since the SEC lawsuit was filed in June — Binance.US cut around 50 positions, then around 10% of employees, shortly after the lawsuit was announced. The primary Binance entity also fired more than 1,000 people in July.
- "Binance.US CEO Leaves Embattled Crypto Exchange", The Wall Street Journal [archive]
CoinEx hacked for $70 million
Various blockchain watchers noticed suspicious transfers from a hot wallet known to belong to the CoinEx cryptocurrency exchange. CoinEx later confirmed a "security incident" involving "unauthorized transactions", and disclosed that around $70 million was stolen. Outside researchers have suggested that the thieves appear to be a part of the North Korean state-sponsored hacking group, Lazarus.
CoinEx is based out of Hong Kong, and was recently forced to stop serving US customers as part of a settlement with the New York Attorney General which also required them to pay a $1.7 million fine.
Developer steals $1 million from the group behind Milady NFTs
A developer working on an NFT project spearheaded by Remilia, the DAO behind the Milady NFT project, stole around $1 million from the group by diverting fees generated by their new Bonkler "experimental finance art project". According to leader Charlotte Fang, the developer "also seized codebases and coordinated with two others on the team in an attempt to seize control of our social media, followed by demands for a significant portion of our treasury, including the NFT reserves." Fang stated that they believed they knew the thief's identity and had filed a lawsuit against them, and promised that they "will now be dealt with through the heavy hand of the law".
Remilia is a very controversial group, particularly after it was exposed that leader Charlotte Fang was a major figure in a white supremacist cult known as Kali Yuga Accelerationism (abbreviated "kaliacc"), and involved in a 4chan suicide cult.
Fang announced the theft on September 11 in a tweet accompanied by a glitch art image derived from a photo of the Twin Towers engulfed in flames and smoke shortly after the 9/11 terrorist attacks.
Banana Gun bot launches token, sparks rug pull fears as they disclose a bug
The team behind Banana Gun, a Telegram bot to help "snipe" token launches, launched a token associated with the project on September 11. Only hours later, they announced in a tweet that they'd uncovered a bug in their smart contract that meant that when people sold tokens, the 4% tax that was meant to go to the project was also kept in individuals' wallets.
The team wrote in an announcement that they had no choice but to sell the treasury wallet to drain the liquidity pool, which is locked to... well, stop the project team from draining the project and rug-pulling. At the time of announcement, the project team had around 950 ETH (~$1.5 million) in the treasury wallet.
Some pointed out that they could simply set the tax to 0% and carry on without the hefty sales tax, but that didn't seem to appeal to the project's creators. Some also speculated that the team might just take the money and run after draining the LP.
Fortress Trust hit by "security incident", bailed out by Ripple
Fortress Trust is a crypto custody and blockchain infrastructure company, founded by Scott Purcell. Purcell is also known for founding Prime Trust, which later lost over $75 million in customer funds, squandered another $8 million gambling on Terra/Luna just before its collapse, and then filed for bankruptcy in August 2023. Purcell is also embroiled in a lawsuit from former company Banq, now also bankrupt, which alleges he stole trade secrets and other valuable material to start Fortress.
On September 7, Fortress Trust disclosed that several customers had been "impacted by a third-party vendor" compromise. On September 8, Fortress Trust announced they had been acquired by Ripple. On September 11, The Block reported that Ripple had covered undisclosed losses to customers as a part of the acquisition deal. The losses were later disclosed to be around $15 million, and the third-party vendor was said to be a company called Retool, who blamed the compromise on a social engineering attack against one of their employees.
- Tweet thread by Fortress Trust [archive]
- "Ripple Acquires Crypto-Focused Chartered Trust Company Fortress Trust", CoinDesk [archive]
- "Ripple made Fortress customers hit by security incident whole as part of acquisition", The Block [archive]
- "Episode 125 – How to Steal Almost $100 Million: Prime Trust goes Bust", Crypto Critics' Corner [archive]
Paxos pays $500,000 fee to send $1,865
A wallet on the Bitcoin blockchain paid a 19.82 BTC ($499,171) fee to transfer 0.074 BTC ($1,865). Put another way, they spent 270x the transaction value to pay the fee. Bitcoin transaction fees are required to make any action on the Bitcoin blockchain, and people can opt to pay higher fees to incentivize their transactions being processed sooner. 19.82 BTC is far outside the realm of someone just hoping to get a speedy transaction, however — the next-highest transaction fee in that block was 0.006 BTC ($159.20).
Bitcoiner Jameson Lopp speculated that the transaction "looks like an exchange or payment processor with buggy software" based on its transaction history. "The address in question that made the fee calculation error has the characteristics of a withdraw-only hot wallet from an enterprise," he wrote.
His observations were well-founded, as it later came out that the wallet belonged to the Paxos blockchain company, who attributed the overpayment to a bug. Luckily for Paxos, the miner who snapped up the outsized fee agreed to refund it.
- Bitcoin transaction on Blockchain.com explorer [archive]
- Tweet thread by Jameson Lopp [archive]