On July 20, PREMINT's CEO announced they would be compensating all users affected by the hack by sending them ETH equivalent to the floor price of the stolen NFTs. "I realize that the NFTs stolen were not all floor NFTs... You might feel like this compensation isn't enough. But I don't think there's any other scalable and objective way to do this," he said. The total repayment will amount to about 340 ETH ($525,000). PREMINT also bought the two most expensive stolen NFTs from their new owners for the prices they had paid to buy them from the hacker — 92 ETH ($138,000) for a Bored Ape and 12 ETH ($17,800) for an Azuki. Those NFTs were returned to their original owners.
PREMINT NFT tool hacked, user wallets drained
PREMINT is an NFT service intended to help project creators build access lists for new NFT projects based on various qualifications. The project was compromised on July 17, and users were asked to sign transactions that allowed hackers to drain all assets from their wallets. 314 NFTs were stolen, including from pricey collections such as Bored Ape Yacht Club, Otherside, Moonbirds Oddities, and Goblintown. The thiefs were able to flip the stolen NFTs for 270 ETH ($375,000), which they then tumbled through Tornado Cash.
NFTs valued at $150,000 stolen via phishing link posted to the hacked Twitter account of NFT artist DeeKay
On July 16, hackers compromised the Twitter account belonging to the well-known NFT artist DeeKay, who sold an NFT for 310 ETH (then $1 million) to Snoop Dogg in April. The 180,000 followers of DeeKay's compromised Twitter account saw it post a link announcing a new limited quantity airdrop, which directed them to a website mimicking DeeKay's real site. Some people fell for the scam, and in trying to claim their NFTs, actually approved transactions that allowed the scammers to empty their wallets. One victim lost four Cool Cat NFTs and three Azuki NFTs, which have floor prices of around 4 ETH (~$5,350) and 12 ETH (~$16,200) respectively.
Altogether, the stolen NFTs were valued at around $150,000. DeeKay reported that he wasn't sure how his Twitter account had been compromised, but that "my guess is that [two-factor authentication] was off for that specific time". DeeKay wrote that he was considering compensating his followers who were victim to the scam, but that "[a] few are pretending to be affected and looking for opportunities", and "this also encourages hackers to keep doing their thing". "There were some kind souls who were affected and have shown me great flexibility for me to compensate in different ways. Some are asking for high demands as if I was the hacker...😪", he wrote in the thread.
Coinbase plans to shut down its affiliate-marketing program, sparking rumors of an impending crisis
A leaked email revealed that Coinbase is planning to temporarily end its affiliate-marketing program, which pays influencers to convince their followers to sign up. Some influencers were earning $40 for each person they pulled on to the platform in early 2022, though the rewards had reportedly dwindled to as low as $2/person more recently. In the leaked email, Coinbase stated that they would be shutting down the program on July 19 "due to crypto market conditions and the outlook for the remainder of 2022". They also said they planned to re-enable the program at some point in 2023.
The news sparked rumors about Coinbase, including that they might be facing a liquidity crisis or insolvency. Others dismissed those rumors as unfounded, and normal behavior for a company facing a market downturn. Coinbase CEO Brian Armstrong tweeted that Coinbase was "well capitalized".
Boneheads rug pull for $3.1 million
Crypto sleuth zachxbt has accused the NFT project "Boneheads" of rug pulling only weeks after the project minted in August 2021. Although they promised physical collectibles, more NFT collections, merch giveaways (including, of all things, rugs), and other perks, they never followed through.
zachxbt traced the funds to various centralized crypto exchanges, and also found that some of the money had been used to purchase other pricey NFTs including Bored Apes, CryptoPunks, and others. He also identified two individuals he suspected were behind the pseudonymous creators of the project, who had mysteriously begun posting luxury trips, designer purchases, and an expensive Mercedes after the project mint.
After zachxbt's thread, the project tweeted for the first time in a very long time, writing "for the 2736463266474th time, itz not rug 😪, just a very deliberately slow creative process, lots of pivots..." However, the project never followed through on their promised new deadline. The social media account showing evidence of the alleged creator's lavish spending was also deleted.
Betty Boop launches "Boop & Frens" NFT project
The studio behind Betty Boop decided there was no better time to launch a Betty Boop NFT collection than during a period of record low interest in NFTs (or, more likely, they started the project during the NFT craze and decided they'd sunk too much money into it to pull the plug). The Betty Boop Twitter account announced Boop & Frens, an 8,888-piece NFT collection.
Reception on Twitter was brutal, with one person commenting, "And that's another one for Beloved Icons Ruined By Pyramid Scheme Bingo". Another described the decision to launch an NFT project as "jumping on the bandwagon while it's actively collapsing". The reception on Discord was also tepid, with only 130 people joining the server in the two days following the announcement.
OpenSea NFT marketplace lays off 20% of employees
OpenSea, the largest NFT marketplace, announced that they would be laying off around 20% of their employees, or around 60 people. CEO Devin Finzer blamed "crypto winter" for necessitating the decision, a common phrase that has been referenced by multiple CEOs who have announced layoffs in the past two months.
John McAfee associate fined $376,000 for pump & dump scheme and undisclosed promotion of ICOs
In October 2020, the SEC filed charges against anti-virus software magnate, two-time Libertarian presidential candidate, and all-around shady character John McAfee, as well as his bodyguard, Jimmy Watson Jr. They alleged that the two had promoted several initial coin offerings (ICOs) without disclosing that they were being paid to do so. The SEC also charged the pair with participating in a pump and dump scheme, where they secretly bought large amounts of a cryptocurrency token before hyping it on Twitter (where McAfee had millions of followers), then selling the tokens as the price increased.
McAfee died by suicide in June 2021 in a Spanish prison, shortly before he was due to be extradited to the United States on tax evasion charges. His death kicked off a tornado of conspiracy theories by QAnon followers.
Now, the SEC has wrapped up the investigation, finding his partner in crime responsible for the undisclosed promotion and pump and dump scheme. In addition to a $376,000 fine, Watson is prohibited from any professional cryptocurrency trading.
Celsius files for bankruptcy
One month after pausing customer withdrawals, crypto lending firm Celsius Network filed for Chapter 11 bankruptcy. Celsius had recently hired a new group of restructuring lawyers from Kirkland & Ellis, the same group counseling Voyager Digital in their bankruptcy proceedings announced on July 6.
- "Crypto Lender Celsius Files for Bankruptcy After Cash Crunch", Bloomberg
- "Troubled Crypto Lender Celsius Hires New Restructuring Lawyers", The Wall Street Journal
Citizen Finance claims to have been hacked for around $100,000
Citizen Finance, a multichain platform that has something to do with NFTs and blockchain gaming, claimed to have suffered an attack by an outside party who obtained access to a private key for the BNB and Polygon chains. The attacker then used their access to transfer 244 BNB (~$55,000), 57,637 MATIC (~$32,300), and 7,000 USDC for a total windfall of around $94,300. The theft also caused the value of the CIFI token to plummet more than 50%.
As with many of these attacks, it's not immediately clear if there was truly an outside party who gained unauthorized access, or if the "attack" was actually a rug pull or an inside job. The project tweeted on July 16 that they were "continu[ing] to investigate" and had hired outside security firms to try to help them identify the hacker and recoup lost funds.
More than $8.17 million stolen in phishing attack targeting Uniswap users
In a successful, broadly-targeted phishing campaign, more than 70,000 addresses connected to Uniswap were airdropped tokens that baited users into approving transactions that allowed attackers to control their wallets. After some initial confusion that there might be a vulnerability in Uniswap itself, it was determined that the thefts were being perpetrated through the airdrop, which also linked users to a website that resembled the authentic Uniswap site. Users were tricked into signing the contract, and cryptocurrency and NFTs were stolen from wallets.
One single wallet targeted by the phishing attack lost more than $6.5 million worth of Ether and Bitcoin, and another targeted by attackers lost around $1.68 million worth of those currencies.