Platypus was quickly able to recover $575,000 from this latest hacker, thanks to a flaw in their attack. Later, they recovered all but $167,400 of the stolen funds after coming to an agreement with the attacker that they would not pursue legal action.
Platypus Finance hacked for a third time this year
At this point, they should probably just have a form email ready to go. Platypus Finance has suffered a cumulative $2.23 million in losses thanks to several attacks on the platform over the course of several hours. This set of hacks followed a $8.5 million hack in February, and another hack of at least $150,000 in July.
CFTC and FTC sue Voyager CEO Stephen Ehrlich
Simultaneous civil lawsuits from the Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC) against former CEO of the collapsed Voyager crypto lender accuse him of fraud and making deceptive claims to customers.
The FTC lawsuit focuses on Voyager's claims suggesting to customers that accounts with the lender were FDIC insured. That complaint also names Voyager as a defendant. Voyager settled with the FTC, agreeing to pay a $1.65 billion judgment that will be suspended until customers are repaid.
- "CFTC Charges Former Chief Executive Officer of Digital Asset Platform with Fraud in Massive Commodity Pool Scheme", CFTC press release [archive]
- "FTC Reaches Settlement with Crypto Company Voyager Digital; Charges Former Executive with Falsely Claiming Consumers' Deposits Were Insured by FDIC", FTC press release [archive]
- "CFTC and FTC sue former CEO of bankrupt crypto lender Voyager", BlockWorks [archive]
- "Voyager Ex-CEO Charged by U.S. Regulators With Fraud, Making False Claims", CoinDesk [archive]
Black Hole Token exploited for $1.28 million
The Black Hole Token project suffered a $1.28 million apparent exploit, according to security firm PeckShield, though it's hard not to wonder if it might have been a rug pull.
Black Hole Token is a Chinese project built on BNB Chain, which promises an original mechanism that only goes up. "The more you sell, the more the price goes up", promises their website.
Sounds legit.
Fintoch scammers strike again with $1.6 million FinSoul scam
A metaverse gaming project called FinSoul promised users “sandbox worlds, multiplayer sports, leisure experiences, player socializing, MMORPG,” and other features. However, on October 10, the project team made off with $1.6 million, which they then tumbled through Tornado Cash.
The team behind the FinSoul project was reportedly the same as the group who pulled off the much larger $31 million Fintoch exit scam in May. They used similar strategies, including using paid actors to pose as their executive team, to push the FinSoul scam.
FSL token rug pulls for $1.68 million within 24 hours of launch
The BNB Chain-based FSL token rug pulled within 24 hours of launching, with developers draining $1.68 million of liquidity they had amassed.
Goldfinch lending platform facing $7 million loss
Goldfinch is a decentralized lending platform aiming to provide undercollateralized loans, an unusual strategy in the crypto world where loans are typically overcollateralized due to the difficulty in evaluating the trustworthiness of borrowers and in preventing them from just taking off with the loan funds.
They may now be discovering this was a bad idea, as an impending default on a $20 million loan from February 2022 threatens the platform with a possible $7 million loss.
The loan went to a fintech credit fund called Stratos, who in turn used the money for a risky real estate technology investment (now written down to zero), crypto investments of their own (not disclosed to Goldfinch, and sold at a "near full loss"), and other investments. Stratos is, awkwardly, an investor in Goldfinch, and Stratos' founder was an advisor.
This is not the first loan gone bad for Goldfinch, who suffered a loss when an African motorcycle taxi financing company used a $5 million loan to try to plug the hole in the finances of a sister company.
A commenter on the disclosure about the distressed loan wrote, "This is the second occurrence of a lack of transparency from a borrower or a lack of auditing capability from Goldfinch. We can all appreciate that Warbler Labs will backstop the loss, but it is increasingly worrying to discover a complete lack of control from the loan underwriter, especially in the context of Stratos being an equity investor in Goldfinch."
- "Real-World Asset Loan Worth $20M Sours on DeFi Platform Goldfinch, Bringing RWA Lending Under Scrutiny", CoinDesk [archive]
- "Update on Stratos Pool", post on Goldfinch governance forum [archive]
- "DeFi protocol Goldfinch aims to sever crypto's reliance on crypto", Axios
Trader Joe's sues Trader Joe
The American supermarket chain and cookie butter paradise, Trader Joe's, has filed a lawsuit against the popular Trader Joe decentralized exchange. According to the lawsuit, the supermarket believes the exchange is trying to benefit off the supermarket's popularity.
This is actually the second such lawsuit by the supermarket against the exchange, after the first was thrown out when defendants claimed that they had simply named the project after the co-founder's brother, Joe. However, shortly after the victory, a co-founder admitted on their blog that they "just named it Trader Joe, after the supermarket".
Trader Joe's is seeking all profits made by the exchange, plus damages and compensation for the failed lawsuit last year.
3Commas suffers another security breach
3Commas, a crypto trading bot provider, suffered another security breach in which some customer wallets were used to make unauthorized trades. They haven't disclosed how much in assets were lost.
This isn't the first security breach to tarnish 3Commas' reputation. In October 2022, customers reported losing a significant amount of assets in what 3Commas first tried to blame on phishing websites resembling FTX. 3Commas months later owned up to the fact that their database had been compromised, and that API keys were leaked.
UK's Financial Conduct Authority warns of Huobi and KuCoin
The United Kingdom's Financial Conduct Authority (FCA) has added another 146 entries to its "warning list" of unauthorized firms, including the crypto exchanges Huobi and KuCoin. The additions pertained to new regulations that require crypto firms who want to run promotions in the country to register with the FCA, and comply with regulations aiming to prevent misleading advertisements.
The warning list was created to notify potential users of these firms, and to inform them that losses related to the use of those platforms won't be covered by the UK's compensation scheme.
Huobi has claimed they don't operate or promote in the UK, while KuCoin gestured towards adjusting its practices in the UK. Firms on the warning list may be subjected to more serious enforcement actions in the future, including fines or even prison time.
Astrology-themed NFT project Lucky Star Currency rug pulls for $1.1 million
Lucky Star Currency was an NFT-focused project released by a group claiming to be made up of astrologists. The group was heavily promoted on Chinese news and Q&A platforms. However, not long after its release, the contract creator withdrew more than 1.6 million LSC tokens and swapped them for approximately $1.1 million.