Ryder Ripps loses Bored Apes infringement lawsuit, ordered to pay $1.6 million and legal fees

October 25, 2023

Ryder Ripps loses Bored Apes infringement lawsuit, ordered to pay $1.6 million and legal fees

A judge has ordered Ryder Ripps and his co-defendant Jeremy Cahen to pay almost $1.6 million in disgorgement and damages after they created a collection of identical NFTs to the popular Bored Ape collection. The duo were sued for trademark infringement in June 2022 over their RR/BAYC project, which Ripps and Cahen tried to argue was an art project created to draw attention to racist imagery they and others have identified in the project.

In August, Ripps tried unsuccessfully to get the lawsuit dismissed via anti-SLAPP protections.

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.

Findings of Fact & Conclusions of Law, Yuga Labs v. Ripps [archive]

October 20, 2023

AuBit, the company behind Freeway, enters liquidation

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A judge in the Cayman Islands has placed Aubit, the firm behind the Freeway crypto project, into liquidation. Freeway was a crypto lending project that promised annual returns as high as 43%, at least until it halted withdrawals in October 2022, claiming it was due to "unprecedented volatility" in forex and crypto markets. Withdrawals were never re-enabled, leaving around $160 million in total customer assets out of reach.

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".

October 19, 2023

Treasury Department introduces proposal targeting crypto mixers

The U.S. Treasury Department introduced a proposal for new regulation that would require cryptocurrency mixers (also called tumblers) to up their recordkeeping and reporting processes. Needless to say, for a class of projects intended to help people anonymize their cryptocurrency transactions and make them more challenging for governments and others to track, this would somewhat undermine the whole point.

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".

"FinCEN Proposes New Regulation to Enhance Transparency in Convertible Virtual Currency Mixing and Combat Terrorist Financing", press release [archive]
"U.S. Targets Crypto Mixers Over Money Laundering Risks", The Wall Street Journal [archive]

October 19, 2023

Superdao to shut down

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Superdao, a project aiming to assist communities in forming DAOs, has announced it will be closing its doors. It was blunt in its announcement: "it became clear that the crypto industry itself becomes much smaller than its initial ambition ('the new internet') and specialized tools for crypto companies are unlikely to produce venture-scale outcomes."

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]

October 19, 2023

Gemini, Genesis, and DCG sued over $1 billion alleged fraud

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The New York Attorney General filed suit against Gemini, Genesis, and Digital Currency Group (DCG), a group of companies that have been involved in a bitter feud amongst themselves. As Genesis undergoes bankrutpcy proceedings, Gemini and its Winklevoss twin cofounders have been firing accusations of fraud at them as they try to recover around $900 million of their customer funds that were with Genesis when it collapsed.

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]

October 18, 2023

Hope Lend emptied in $825,000 hack

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A small defi protocol called Hope Lend was drained of nearly all its assets when attackers stole around 526 ETH (~$825,000). Hilariously, the project claims the hacker was frontrun by a watchful third party, who paid half of the stolen funds (~264 ETH, or around $414,000) to an ETH validator to allow them to frontrun the transaction. The original attacker who discovered the bug reportedly made no money at all.

The stolen assets represented the entire TVL of the project.

"Ethereum DeFi protocol Hope Lend drained after exploit", CoinTelegraph [archive]

October 17, 2023

Everscale halts bridge as "large number" of tokens stolen

(attribution)

The team behind the Everscale blockchain project disclosed that a "large number" of tokens had been stolen. In an attempt to thwart the attacker from cashing out, they announced that they had halted the project's bridge.

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.

"Everscale token price drops 20% as team says large number of EVER tokens were stolen", The Block [archive]

October 17, 2023

Reddit abandons blockchain-based Community Points

(attribution)

Reddit's attempt to blockchainify their signature Reddit karma has come to an end as the company has decided to pull the plug on the feature. The idea was that users could "own a piece of their community" (what?) by racking up points for their positive contributions, which they could then spend on perks like custom badges.

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."

Reddit announcement [archive]
"Reddit is killing blockchain-based Community Points", TechCrunch [archive]

October 17, 2023

Fantom Foundation and employees lose collective $7 million in mass hack

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An attack targeting the Fantom Foundation and its employees siphoned $7 million from wallets under their control. Of that, around $550,000 were funds belonging to the Fantom Foundation. One individual employee reportedly lost $3.4 million.

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.

"Fantom Foundation confirms $550K loss in broader $7M attack", CryptoSlate [archive]
Tweet by Spreek [archive]

October 16, 2023

TrueUSD tries to claim no affiliation with tokens created by its deployer address, raising further questions

(attribution)

A new, Euro-pegged stablecoin called $TEURO emerged on October 13, with an initial supply of around €70 million. However, TrueUSD subsequently tweeted that "we have zero affiliation with it". The post warned people to "step back and refrain from risky investments".

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.

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