Now they're on the hook for $1.375 million in profits they earned from their copycat project and $200,000 for domain cybersquatting violations. They also must transfer control of two domain names, two Twitter accounts, and the RR/BAYC smart contract. Worse yet, the court found that this was an "exceptional case" because of the defendants' behavior, which included being "obstructive and evasive", and "unnecessarily and inappropriately ma[king] disgraceful and slanderous statements about Yuga, its founders, and its counsel" throughout the case. As a result, they will also have to pay Yuga's attorney's fees.
A lawsuit from an institutional customer was filed against the company in August, calling the project "a scam".
AuBit has tried to argue that it should be allowed to restructure, but the Cayman Islands judge opted to force the firm to liquidate, citing "a real absence of proper accounting".
That seems to be the intention of the Treasury Department, who described mixers as primarily used for illicit money laundering "by a broad range of illicit actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups".
The project had raised $10.5 million in a 2021 seed funding round, and has said they intend to return remaining funds to its investors.
- "Superdao is closing down", Superdao blog [archive]
- "DAO-Builder SuperDao Shuts Shop, Returns Investor Money", CoinDesk [archive]
Now, the New York Attorney General is alleging that Gemini repeatedly lied to investors about its Gemini Earn program, assuring them that it was low-risk when internal analysis had revealed Genesis' loans to in fact be quite risky. Some personnel involved in evaluating this risk even withdrew their own funds from the program in the summer of 2022.
Genesis, DCG, and DCG CEO Barry Silbert are charged with defrauding both investors and the public when they tried to cover up $1.1 billion in losses. The lawsuit alleges that Genesis had not properly audited its borrowers, and lied to Gemini about regular reviews of borrowers' financial conditions.
In a press release, the AG claims that the companies' actions resulted in around $1 billion in losses, including in some cases their customers' entire life savings.
- "Attorney General James Sues Cryptocurrency Companies Gemini, Genesis, and DCG for Defrauding Investors", press release from the Office of the New York State Attorney General [archive]
The stolen assets represented the entire TVL of the project.
The team did not announce how many tokens were stolen. The price of $EVER suffered a 20% drop, though whether it was due to an attacker selling off tokens or collective panic by other token holders is not clear. The method of the theft was also not described.
Reddit attributed the decision to scaling difficulties, regulatory uncertainty, and the quantity of resources the company found itself having to put into the feature. The tokens were only used on a handful of subreddits, and the team had migrated them from the Ethereum blockchain to the Arbitrum Nova L2 chain, but despite that scaling continued to be a problem.
The news caused a massive dive in the prices of $MOON and $BRICK, the two Reddit tokens, as holders tried to exit their positions before the tokens became useless. Some angrily accused Reddit of rug-pulling, threatening legal action. One wrote, "I wish you guys knew how reckless this decision is and how many people you've hurt." Some accused subreddit moderators of selling when they learned about the decision an hour before it was made public.
Others were delighted at the news, however. One wrote, "Thank the effing Lord. This moons caused so much shit tier spamming for over a year."
It's not clear yet how the attack was perpetrated, although crypto researcher Spreek reposted a comment by an admin in Fantom's Telegram channel, where they blamed the theft on a zero-day exploit in Google Chrome.
TrueUSD tries to claim no affiliation with tokens created by its deployer address, raising further questions
However, the post raised only more questions, as the $TEURO token had been deployed by the address that deployed the primary TrueUSD token. This means that either TrueUSD is lying when they claim they're unaffiliated with $TEURO, or some of their private keys were compromised, allowing an unrelated party to deploy a contract appearing to belong to them.