An attempt to incorporate NFTs throws a wrench into a $40 million domain name auction

April 28, 2021

An attempt to incorporate NFTs throws a wrench into a $40 million domain name auction

Frank Schilling, founder of the Uni Naming & Registry (UNR) held an auction for 23 TLDs (the bit at the end of the domain, like .com or .org). These included .link, .help, .game, and even .christmas. The April auction grossed more than $40 million, but as of mid-December the transactions had not been completed. This is because UNR attempted to add some marketing flair to the auction by including NFTs for each of the TLDs, to go to the auction winners. ICANN, the group responsible for much of the domain world, objected to and withheld consent for the transactions, writing "we sought to understand the impact of the transactions on the Domain Name System ('DNS'), including how Non-Fungible Tokens (NFTs) created on the Ethereum Name Service (ENS) were being used, and were involved in the transactions. ICANN repeatedly asked UNR for documentation or other information related to NFTs in the hopes that UNR would provide fulsome and complete responses."

NFTs trip up Uniregistry's top level domain auctions, Domain Name Wire

April 28, 2021

Uranium Finance is drained of $50 million in hack

(attribution)

A bug in Uranium Finance, a DeFi exchange based on Binance Smart Chain, allowed an attacker to drain the liquidity pools for multiple token pairs. Uranium had just commissioned an audit which uncovered the bug, but the attack occured two hours before the patch went live. An apparent member of Uranium's development team wrote that they believed the attack had been the result of leaked information.

"Binance Chain DeFi Exchange Uranium Finance Loses $50M in Exploit", Coindesk
"Uranium Finance developer suspected of 'leaking' information leading to $50M exploit", Cointelegraph

April 21, 2021

German museum accidentally burns two valuable Cryptopunks NFTs in copy-paste error

A pixel art human wearing a purple baseball cap and smoking a cigarette

Cryptopunk #2838 (attribution)

An employee of the ZKM Centre for Art and Media in Karlsruhe accidentally sent two of their four Cryptopunk NFTs back to its smart contract address. This is referred to as "burning" the NFTs, because the address is inaccessible and the NFTs are permanently impossible to trade as a result. The employee had copied the Cryptopunks contract address while browsing Etherscan, and didn't realize that was what he was pasting while making the transfer — wallet addresses are long hex strings like 0xb47e3cd837ddf8e4c57f05d70ab865de6e193bbb and are prone to errors like this since they are not easily distinguished at a glance. The two NFTs were originally acquired for the museum for approximately $100 each in 2017, and are individually valued at around $187,000 as of January 2022.

April 21, 2021

CEO of Turkish crypto exchange Thodex apparently makes off with $2 billion in investments

(attribution)

Turkish Bitcoin exchange Thodex halted trading and limited customers' access to their investments, claiming it was to investigate suspicious activity and swearing it was not an exit scam. With an international manhunt now underway for the Thodex CEO, and no sign of the approximately $2 billion that was invested in the platform, it seems awfully likely it was a rug pull.

"Thodex CEO Denies Rug-Pull, Discloses Cyberattacks, Says 'Funds Are Safe'", Decrypt
"For the ruined, Turkey’s crypto crackdown comes too late", Al Jazeera
"Billion-Dollar Rug Pull? Turkish Bitcoin Exchange Goes Dark", Decrypt

April 19, 2021

$80 million taken from EasyFi lending platform

(attribution)

Hackers compromised a computer belonging to EasyFi founder Ankitt Gaur, accessing his private keys which allowed them to transfer $6 million in stablecoins and $120 million worth of EASY. The price of EASY crashed as a result of the low liquidity, limiting the hacker's total payout to around $80 million. EasyFi followed the breach with a hard fork to "EZ 2.0", and compensated users with a mix of stablecoins and "IOU tokens" that could later be redeemed for discounted EZ.

" Hackers stole over $4 billion in cryptocurrencies this year — Here’s a full list of the biggest crypto heists in 2021", Business Insider India
"Reeling from post-hack price slump, Easyfi reveals community compensation plan", Cointelegraph

April 13, 2021

Africrypt investors disappear with $3.6 billion of investor funds

The two founders of a South Africa-based crypto investment firm called Africrypt claimed they had been hacked, and all assets had been stolen. The duo disappeared as legal action began, and as skepticism grew as to the veracity of that story.

April 1, 2021

FTX loses $800 million to MobileCoin market manipulation

(attribution)

At some point in April 2021, a trader on the FTX cryptocurrency exchange successfully exploited the firm for around $800 million. They were able to take positions in relatively illiquid crypto tokens, including MobileCoin and BTMX, then manipulate the token prices to appear much higher than their true market value (for example, MobileCoin spiked to $70 a token, rather than around $6). Using these falsely high-valued tokens as collateral, the trader was able to borrow around $800 million in more liquid tokens, abandoning the relatively valueless collateral on the exchange.

During the October 2023 criminal trial of FTX founder and CEO Sam Bankman-Fried, he gave more detail on how the exploit took place, and admitted that he personally had disabled FTX's automatic liquidation systems for this account. Though he intended to closely monitor the account to prevent any losses to FTX, he said that it was actually his actions that allowed the trader to drain such a massive quantity of assets from the exchange.

Prosecutors alleged that Bankman-Fried later had his cryptocurrency trading firm, Alameda Research, shoulder the loss, saying that he'd hoped it would be less visible on Alameda's balance sheets than on FTX's.

"The FTX trial, day fourteen: Same events, new stories", Newsletter by Molly White

March 19, 2021

Creators of "Turtledex", a project offering decentralized storage, make off with $2.5 million

(attribution)

24 hours after pre-sale, the team behind Turtledex drained $2.5 million from the liquidity pool and disappeared. Turtledex's smart contract had been audited shortly before the sale, with no major issues found, leading some to question the point of such audits.

"Binance Smart Chain's TurtleDex rug-pulls shortly after launch", Cointelegraph
"Another Binance Smart Chain Project Turtledex Rug Pulls With Tokens Worth $2.5M Confirmed Stolen", Bitcoin.com

March 14, 2021

Social token platform Roll hacked for $5.7 million

(attribution)

Private keys for hot wallets on the Roll network were compromised, allowing the theft of around $5.7 million from various "social tokens". "Friends With Benefits", an a16z-backed DAO with an associated token that allows those who are approved by the DAO and can afford the ~$8,000 entrance fee access to exclusive parties, was one of the tokens affected, and it tanked in value by about 96%. Roll apologized and announced a fund to help those affected, though the $500,000 fund was only a small fraction of the money lost.

"Social Money Platform Roll Hacked For $5.7M as Social Tokens Dump", CryptoPotato
"Roll still doesn't know how its hot wallet was hacked", TechCrunch
"Social Tokens Crash After Reported Hack at Roll", Coindesk

March 11, 2021

A headline-making $69 million NFT sale looks an awful lot like a publicity stunt

"Everydays — The First 5000 Days" by Beeple (attribution)

Vignesh Sundaresan's $69 million purchase of an NFT by artist Beeple made headlines. However, Amy Castor outlined a few days later that Sundaresan is a business partner of Beeple's, and that Beeple himself owns 2% of the B20 tokens created by Sundaresan's cryptocurrency investment firm. She speculates that money may not have exchanged hands at all, but that Sundaresan and Beeple orchestrated the purchase to artificially inflate the value of the work, increase Beeple's popularity, and draw attention to Sundaresan and his company.

"Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme", Amy Castor
"JPG File Sells for $69 Million, as 'NFT Mania' Gathers Pace", The New York Times

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