The Federal Reserve and the FDIC sent a cease-and-desist to Voyager, asking them to remove the misleading statements about deposit insurance. It would have been nice if this had come a bit earlier — perhaps before people had deposited money into accounts with the company and could no longer get it out.
Regulators order Voyager to stop saying they're FDIC insured
One of the ways Voyager Digital drew in customers was by promising that their funds in USD were protected from a collapse of the company by FDIC deposit insurance, which normally applies to bank accounts. When Voyager declared bankruptcy earlier this month, some of their customers were horrified to discover this was not the case.
Nirvana Finance drained of $3.5 million
The Solana-based yield farming project, Nirvana Finance, was exploited by an attacker who used flash loans to drain the project of just under $3.5 million. The attacker took out a $10 million loan from the Solend project, used it to mint ANA tokens, swapped the ANA for $13.5 million, and then repaid the loan. The attack was similar to the attack on Crema Finance earlier in the month.
The attack caused the project's ANA token to plunge in value by 80%, and the project's NIRV stablecoin to lose its dollar peg, falling to $0.08. Nirvana Finance tweeted, "Please be advised: ANA has lost its collateral, and NIRV has lost its peg. Until the thief restores funds, these tokens will not have exchange value. Be very careful with trading NIRV & ANA, as they currently have no guaranteed value."
They also tweeted at the hacker, promising to stop investigating the hacker's identity and to pay a $300,000 "bounty" in exchange for the funds back. They wrote, "You have not taken money from VCs or large funds — the treasury you have taken represents the collective hopes of everyday people."
The project had promised its users over 60% APY, and its Twitter account described ANA as "the balanced risk investment with adaptive yield".
No more Dune or DAO for the Dune DAO
"DAO delusion was at its peak when the community went into this journey together", wrote SpiceDAO founder Soban "Soby" Saqib. SpiceDAO (named for the Dune drug) won an auction to buy a copy of the Dune script bible in January — at $3 million, far above its usual selling price, likely because it was public knowledge how much the DAO had raised. DAO members celebrated afterwards, excitedly anticipating an animated television series based on the book, apparently not realizing that buying a book (even for a very high price) does not confer rights to publish derivative works.
The DAO has stumbled along somewhat since its January victory, encountering issues with making the bible viewable to DAO members without breaking copyright laws, a diminishing treasury due to declining crypto prices, and controversy after Soby was linked to the Remilia Collective.
After all that, the project leader suddenly and apparently unilaterally announced a plan where members could redeem their SPICE for ETH, and stated that they would be removing project leaders, converting the DAO to a private company, and selling the Dune bible (likely at a major loss). It was nice knowing you, SpiceDAO.
KuCoin announces "Anti-FUD Fund" to track down and sue critics
Those in the crypto ecosystem have long claimed to embrace the principles of censorship resistance and freedom of speech, but apparently some of them draw the line at speech that's critical of them. Johnny Lyu, CEO of the KuCoin crypto exchange, announced on Twitter that the company would be creating an "Anti-FUD Fund" to combat "FUD" — an acronym for "fear, uncertainty, and doubt" that has come to be used to describe any criticism or tough questions directed at crypto projects.
In his Twitter thread, Lyu outlines how the fund will "implement Anti-FUD education", "motivate and acclaim industry leaders and influencers who are always responsible, delivering trusted information", and "effectively trace FUDers who intentionally spread FUD and take legal actions against them if needed".
Something tells me his list of "industry leaders and influencers" to "acclaim" won't include those who are rightfully skeptical of crypto.
OFAC has been investigating Kraken over suspected sanctions violations
The New York Times reported on July 26 that the Treasury Department's Office of Foreign Assets Control (OFAC) has been investigating major US-based crypto exchange Kraken for suspected sanctions violations. They reportedly believe that Kraken has been providing services to people in Iran and other sanctioned countries. The Times' sources have said that OFAC is likely to impose a fine on the company, which would make Kraken the largest crypto company to face enforcement from OFAC relating to the Iranian sanctions.
- "Kraken, a U.S. Crypto Exchange, Is Suspected of Violating Sanctions", The New York Times
CEO of Titanium Blockchain Infrastructure Services pleads guilty to securities fraud
CEO Michael Stollery of Titanium Blockchain Infrastructure Services (TBIS) pled guilty to securities fraud in connection to a $21 million cryptocurrency scam. The company promoted its BAR token during 2017–2018, and did not register with the SEC for its ICO. TBIS made false claims including that they had ties to companies including Apple, Boeing, and IBM, and offered various services that did not actually exist. At least 75 people participated in the ICO, giving TBIS a combined $21 million, some of which went directly to Stollery's bank account and personal expenses like a condo in Hawaii.
Crypto platform Immutable lays off 17% of its gaming division staff
The Australian crypto company Immutable fired 17% of staff from its gaming division. Immutable has said this amounted to 18 workers, though the Games Workers Australia union disputed the number and said that 30 roles were cut. The fired employees all worked on the Gods Unchained blockchain-based trading card game, and were given 24–48 hours notice of their firing.
The fired employees quickly began preparing a legal fight against immutable, questioning whether their firing was legitimate when many of the people who were sacked were about to reach the vesting date for more than $1 million in stock options.
- "Australian crypto platform Immutable sacks 6% of staff despite plans to 'hire aggressively'", news.com.au
- "Sacked crypto unicorn staff plan legal challenge to redundancies", The Australian Financial Review
Brazilian authorities challenge NFT company Nemus after it claims ownership to land in the Amazon, allegedly pressures Indigenous people to sign documents they could not read
Nemus is an NFT project already described in W3IGG for its plans to become "Guardians" of the Amazon rainforest and saviors of its Indigenous populations by selling Ethereum NFTs and reopening a Brazil nut plantation.
On July 20, they issued a press release claiming that "the World's First Non-Fungible Territory has been officially renamed by indigenous people in Brazil in coalition with Nemus". The company claims to own 41,000 hectares (~100,000 acres) of land in the Amazon.
On July 25, Brazil's Federal Prosecution Office (MPF) issued a statement that they had demanded Nemus provide proof of ownership of the areas they claim, clarification on the projects they've been promising online they would undertake, and proof that they've received authorization by the National Indian Foundation (FUNAI) or any other public body that would allow them to operate in the area and engage with various Indigenous groups.
According to the MPF, members of Indigenous groups in the area reported the company had violated their rights. They also explained that Nemus had expressed to them their plans to use heavy machinery to open an airstrip and build a road in order to access Brazil nut groves in the area. Apurinã leaders alleged that company representatives had pressured Indigenous people who do not read well to sign documents, and did not provide them with copies.
- "MPF aciona empresa que vende ativos digitais (NFTs) de áreas da Amazônia", Ministério Público Federal (in Portuguese)
- Press release by Nemus
After five years in prison for a Ponzi scheme and a lifetime ban from the pharmaceutical industry, Martin Shkreli announces his new venture: a web3 drug discovery platform
Martin Shkreli, sometimes known as "Pharma Bro", earned notoriety after obtaining the patent for an anti-parasitic drug and hiking the price from $13.50 a pill to $750. An FTC lawsuit ordered Shkreli in January 2022 to return almost $65 million in wrongfully obtained profits, and banned him for life from the pharmaceutical industry.
In 2018, he was sentenced to federal prison for unrelated securities fraud; a U.S. Attorney stated he "essentially ran his company like a Ponzi scheme". He spent five years in prison, and was released in May 2022.
Shkreli is also banned from the securities industry, and from serving as an officer or director of any publicly traded company.
If this was anyone other than Martin Shkreli, I might have been surprised to hear that, only a little over two months out of prison and while still staying in a halfway house, Shkreli is launching a "web3 drug discovery software platform".
- "Announcing Druglike - a Web3 Drug Discovery Platform", press release
- Martin Shkreli, Wikipedia
$4.5 million taken from Teddy Doge project in apparent rug pull
The Teddy Doge defi project saw its token price plummet over 99% as 30 billion TEDDY were transferred from the project's deployer and distributed to various wallets, which then converted the TEDDY to over 10,000 BNB ($2.56 million) and 2 million BUSD, a dollar-pegged stablecoin.
Although the project admins blamed the theft on an outside attacker, writing on Telegram that they were "not certain whether it is a bug in our cross-chain bridge or a leaked developer wallet", that is a common refrain by developers who rug pull their own projects.