Party Parrot team prepares to "vote" to allocate themselves 80% of initial offering funds, around $60 million

July 21, 2023

Party Parrot team prepares to "vote" to allocate themselves 80% of initial offering funds, around $60 million

You almost have to hand it to the Party Parrot team, they really figured out how to take advantage of ostensibly "decentralized" governance to line their own pockets. After raising $80 million in an "IDO" — initial DEX offering — in September 2021, the project is now embarking on a governance "vote" that would cash out the project treasury and distribute it to PRT token holders. However, the project team also unilaterally decided to unlock tokens held by the team in November 2022, meaning that the project now has access to 80% of the token supply — the same tokens that will decide the outcome of the vote.

If the vote passes, and it likely will given the massive supply of tokens available to the team, the team will have just decided to distribute around $60 million in remaining funds to themselves, leaving $12 million to the token holders.

One commenter on the proposal described the move as "a pure financial crime". Another wrote, "The community has already explained in painstaking detail why we're not interested in this. The pro-rata value is an extreme lowball and fails to account for many of the team's misuses of the treasury without the community's consent. The team also prematurely unlocked the team and VCs' vesting tokens, so they are the majority token holders, making this vote meaningless and a total farce."

July 21, 2023

Conic Finance exploited for $3.2 million

(attribution)

A re-entrancy vulnerability in the Conic Finance defi project enabled an attacker to steal 1,700 ETH (~$3.22 million) from the project's ETH pool.

Conic Finance announced that they had disabled deposits on the front-end of their project, and were working to patch the vulnerable smart contract. The team also attempted to contact the exploiter via blockchain message, asking if they "would be open to discussing any potential next steps".

Tweet thread by Conic Finance

July 20, 2023

Melania Trump's space NFTs likely violate NASA policy

A photo of Buzz Aldrin in a space suit on the surface of the moon, superimposed on an iPod Nano-esque object where the screen would be

Man on the Moon NFT (attribution)

Melania Trump doesn't seem willing to let the flop of her first NFT project, which ended with her allegedly buying the NFT herself, slow her down. She's just announced a line of Apollo 11-themed NFTs, because apparently our former first lady is a big space buff. The Man on the Moon NFTs sell for $75 each, and feature a 1969 photo of Buzz Aldrin on the moon surface, bizarrely superimposed on what appears to be a 2007-era iPod Nano.

As a photo produced by a federal agency, NASA's image is not copyrighted. However, NASA policy outlines "strict laws and regulations", including that "NASA is not approving any merchandising applications involving Non-Fungible Tokens (NFTs), as they are not consistent with the categories of products the agency is approved to merchandise... NASA does not wish for its images to be used in connection with NFTs."

The NFTs don't seem to be exactly flying off the shelves. The collection contains 500 copies, and according to the website, only 55 have been sold in the week following the project's release, garnering Mrs. Trump $4,125.

"Melania Trump Has Released an Apollo 11-Themed NFT That May Violate NASA’s Merchandising Policy", ArtNet

July 18, 2023

GMETA rug pulls for $3.6 million

The GMETA project on BNB Chain saw its price plummet to near zero as the project creators drained the funds from the project. The contract creator was able to transfer large amounts of the token and swap them for the Tether stablecoin, cashing out a total of around $3.6 million.

Tweet thread by Beosin Alert

July 17, 2023

Feds seize tens of millions from Deltec Bank in connection to fake crypto investment schemes

(attribution)

Documents unsealed on July 17 reveal that the U.S. Secret Service performed multiple asset seizures on U.S. bank accounts controlled by Deltec Bank, a Bahamian bank with close ties to the crypto industry. Deltec is known for its ties to the Tether stablecoin, and it has also done business with FTX/Alameda.

According to the court filing, the Secret Service was authorized to seize up to $58.5 million after establishing there was probable cause for wire fraud, bank fraud, or money laundering. The affidavit describes "organized, international criminal money laundering syndicates operating cryptocurrency investment and other wire fraud scams" which allegedly fraudulently induced victims to "transfer money into shell companies, at which point the money underwent a series of transfers, generally ending overseas, designed to conceal the source, nature, ownership, and control of the funds".

The scheme reportedly involved fake crypto sites that tricked victims into depositing money under the belief that they were investing it. Like many such scams, the sites appeared to show victims' investments increasing in value, inducing them to deposit more funds. However, when they tried to withdraw, they found they could not.

"US law enforcement seizes tens of millions from Deltec-tied accounts", The Block
Affidavit

July 17, 2023

Neopets shuts down its Neopets Metaverse project

An "Acara" Neopet with a plushie body, sad expression, and squid hat and scarf

Neopet #1315 (attribution)

After announcing a Neopets Metaverse project — complete with NFT collections and two different crypto tokens — in 2021, Neopets has announced they will be "transition[ing] away from the Neopets Metaverse game and redistribut[ing] those resources to the development of a game that we feel can better reflect our values and vision." The announcement came along with an announcement that the company had raised $4 million, and undergone a major change in leadership. They reassured their community that its new project, "World of Neopets", will not have any NFTs and "is NOT built on a crypto model".

The announcement referred to wanting to "design a game that's more in line with what the community has been asking for", a nod to the backlash from the Neopets community when the company decided to go web3. In September 2021, one of the most popular Neopets fan communities tweeted, "The Neopets community overwhelmingly rejects the new NFT cashgrab project. We're hard pressed finding someone outside of the NFT community that wants this."

Holders of Neopets NFTs seemed somewhat split on the announcement that the NFTs would remain tradable on secondary markets, but would not be incorporated into any game. Some described the project as a "rug", and were disappointed that the NFTs they'd purchased would never be useful in-game. "Once an NFT has no use, the price tends to tank", one person (accurately) remarked. Another commented that they'd always viewed the NFTs as little more than a collectible, and were satisfied with it never going beyond that.

"Neopets Metaverse Transition: A Message from The Neopets Team", Medium post
"Neopets Metaverse showcases web3's most unnecessary tendencies", Input
"Neopets will finally fix its games in $4 million overhaul", Mashable

July 17, 2023

Five men, including inspector in bankruptcy proceeding, charged with kidnapping "Crypto King" alleged scammer

Aidan Pleterski and a woman with her face blurred stand in front of a lime green Lamborghini in what appears to be an upscale suburb

Pleterski, in better days (attribution)

Five men are facing charges for allegedly kidnapping, confining, and beating Aiden Pleterski, the young, self-proclaimed "Crypto King" accused of losing $35 million in investor funds. One of the men, Akil Heywood, reportedly lost $740,000 to Pleterski's scam, and had been named by other investors to be an inspector in the bankruptcy proceeding, a role where he was intended to represent the interests of other investors. Perhaps that's what he was trying to do when he allegedly helped the group of other men kidnap Pleterski, beat him, and force him to record a video explaining what happened to the funds.

As an inspector in the bankruptcy, Heywood would have had access to details from the investigation by the bankruptcy trustee. Heywood is, incidentally, also charged with threatening the trustee in an attempt to get him to pay out $2 million in crypto. Shortly before the alleged kidnapping, Pleterski stated in an interview for the bankruptcy proceedings that Heywood had been "still, by the way, uttering threats, and very dangerous, violent threats, to me over Instagram comment sections and text messages".

Heywood has told reporters he is innocent.

"Investor who lost $740K to Ontario's Crypto King among 5 men charged with kidnapping him", CBC

July 17, 2023

Hector Network begins shutdown after Multichain collapse

(attribution)

Hector DAO, the governing body behind the Hector Network, voted to liquidate the project's $16 million treasury and distribute it to tokenholders, effectively putting an end to the project.

On July 14, a community manager wrote on Discord that "Hector Network ha[d] suffered significant damage to its ability to operate" after the Multichain collapse, and that the project faced a choice between liquidating the treasury and winding down or migrating to a new blockchain and trying to rebuild. The community chose the former.

According to a post on Discord, the winding-down process will likely take 6 to 12 months as the project appoints a liquidator, legal counsel, and auditor.

"Hector Network Votes to Liquidate $16M Treasury Following Multichain, Fantom Losses", CoinDesk

July 17, 2023

Scammer "Soup" makes more than $1 million through Discord hacks

A Mutant Ape wearing a leather aviator hat with teeth on the brim, with Xs for eyes, with a beer can wrapped in a serpentine tongue, and with leopard print fur

Mutant Ape #21080, stolen by Soup (attribution)

A Canadian named Dan, who goes by "Soup" online, made more than $1 million through various phishing scams targeting Discord projects including those belonging to the Pika Protocol and Orbiter Finance. In one scam, he impersonated crypto journalist Luke Hamilton, trying to convince victims to join a fake Decrypt Discord server so he could steal their credentials.

Soup was exposed by crypto sleuth zachxbt, who also described how the scammer had spent some of his ill-gotten funds on exclusive Roblox items that sell for "high 5 figs".

Tweet thread by zachxbt

July 14, 2023

Geist Finance shuts down after Multichain-related losses

(attribution)

Defi lending project Geist Finance announced they would be shutting down after more than $200 million was drained from the Multichain project in two separate events in early July. Geist Finance had previously allowed people to borrow against assets bridged via Multichain, and had over $29 million TVL. However, price oracles are no longer reporting accurate prices of the bridged equivalents of tokens, which are now largely unbacked thanks to the missing assets, and trading at a massive discount to the original tokens.

Geist paused their smart contracts on July 6, then reenabled the withdraw and repay functions on July 9, while waiting for news from Multichain. Now that Multichain has confirmed that the missing hundreds of millions will not be recovered, Geist has announced they will not reopen. If they were to do so, the platform would almost immediately take on bad debt as people exploited the price discrepancies.

Multichain added, "Just to be clear this is in no way an attempt to blame Chainlink oracles which worked as they should. There are no oracles for the Multichain assets themselves because there was the expectation to exchange them 1:1. Nobody is to blame except Multichain here."

Tweet thread by Geist Finance
"Crypto lender Geist Finance shuts down permanently over Multichain hack", CoinTelegraph

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