SEC rejects Grayscale application to create Bitcoin ETF

The U.S. Securities and Exchange Commission rejected a proposal from Grayscale Investing that would turn their Bitcoin trust into an exchange-traded fund (ETF). If accepted, this would have been the first Bitcoin ETF. However, the SEC determined that the listing plan did not sufficiently prevent fraud or manipulation.

Also on the 29th, the SEC rejected an application from Bitwise to create a Bitcoin exchange-traded product (ETP).

Grayscale immediately announced they would be suing the SEC, a course of action they'd been suggesting for several months. Don't hold your breath, though — a litigation analyst estimated such a lawsuit would take 12–18 months to reach resolution.

Crypto games site "w3itch.io" blatantly copies itch.io, hosts stolen games

Tweet from w3itch.io: "We are really sorry about used itchio's CSS files. But we are really shot of designer. And if you check in detail the supported project types and features are very different between us and they are two different public goods. We will try to make a distinction in UI in future."Tweet by w3itch.io (attribution)
A somewhat blundering group of developers decided to create "w3itch.io", an online marketplace for game creators. The marketplace said it was intended to be friendly to games incorporating NFTs and other crypto-related technologies, unlike the indie game marketplace itch.io, which tweeted in February that "NFTs are a scam. If you think they are legitimately useful for anything other than the exploitation of creators, financial scams, and the destruction of the planet the we ask that [you] please reevaluate your life choices."

W3itch.io apparently decided the best way to accomplish their goal would be to not only steal itch.io's site design, but the source code itself. The games hosted on the website were also taken without the consent from their creators.

After being called out by the KennyNL Twitter account, W3itch.io admitted to stealing the CSS, as well as buying Twitter followers. However, they refused to take the website down, and seemed to claim they were unable to remove listings of stolen games.

Three Arrows Capital ordered to liquidate

A court in the British Virgin Islands ordered the liquidation of Three Arrows Capital, a crypto hedge fund. This follows initial rumors in mid-June that the firm was insolvent, then a report shortly after that the group was looking at options including asset selloff or a buyout.

The court action followed lawsuits from several creditors over its failure to pay debts. Those creditors included Voyager Digital, who reduced their platform's withdrawal limit after reporting their exposure to 3AC, as well as the crypto exchange Deribit.

CEO and CFO resign from Compass Mining

The CEO and CFO of Compass Mining, a Bitcoin mining hosting and brokerage services firm, both resigned suddenly on June 28. The sudden departures followed accusations the previous week from Dynamics Mining, who alleged that Compass owed them more than $600,000, and that employees had tried to break into a Bitcoin mining facility to steal back Bitcoin miners. Compass denied the allegations. Shortly afterward, the company closed its Discord channel with one day's notice, prompting allegations that they were attempting to thwart customers sharing information and complaints.

Hacker makes off with $3.8 million from the XCarnival "metaverse bank", returns half

XCarnival is a project describing itself as a "metaverse asset bank". The project drew in users by promising high rewards, with one marketing campaign promising 41% APY.

A hacker was able to exploit a flaw in the smart contract for the project, stealing crypto notionally worth $3.8 million. The loss to the protocol was likely higher. XCarnival paused its smart contract after learning about the hack from a crypto watchdog.

On June 26, XCarnival announced that they had reached an agreement to give a 1,500 ETH "bug bounty" to the attacker, who agreed to return the remaining 1,587 ETH ($1.9 million) with an agreement that XCarnival would not pursue legal action.

Even a free sports car couldn't get anyone to bid on Chevrolet's first NFT

An illustration of a bright green 2023 Chevrolet Z06 speeding through a vaporwave-style city centerChevrolet "Own The Color" NFT (attribution)
Chevrolet decided to create their first ever NFT, an illustration of a bright green 2023 Corvette Z06. The 1 of 1 edition NFT, titled "Own the Color", also would come with a "free" real-life souped-up version of the car, painted in the same color, and with the promise that the shade would never be used again on that model of car.

The NFT went up for sale on June 20, with bidding scheduled to last for four days, and a starting bid of 206 ETH (around $240,000). Apparently collectors decided the NFT wasn't enough to justify dropping that kind of cash on a car that is expected to sell for around $90,000, because the auction received no bids.

SuperRare, the marketplace used for the auction, explained that users must have missed the opportunity to bid "due to the craziness of NFT NYC" (a cryptocurrency conference that ran from June 20–23), and the project extended the bidding time by 24 hours. After the 24 hours had elapsed, they still had zero bids.

Crypto payments not so popular at the crypto-themed restaurant

Two television screens showing a beef menu and vegan menu, emblazoned with Bored Apes and Mutant Apes. Prices start at $13 for beef hamburgers and $15.50 for vegan burgers.Bored & Hungry menus (attribution)
The LA Times reported that the Bored Ape-themed "Bored & Hungry" restaurant in Long Beach, California had stopped accepting crypto payments. Despite excitedly announcing the first ever crypto purchase, made with Apecoin, when the restaurant opened in April, it seems crypto payments haven't been working out for them. The Times reported that the restaurant had stopped accepting crypto at some point in the past, and that an employee described the crypto payment option as both unwieldy and unpopular with customers.

The Times later updated the story, writing that the company's co-founder told them that the restaurant shuts off the payment system "'from time to time' for upgrades", but was still accepting crypto.

The menu lists prices in USD, not Ether or Apecoin, and most people buy their $13 hamburgers with plain old fiat.

Cryptocurrency exchange Bitpanda announces layoffs, rescindment of offers

The Austrian cryptocurrency exchange Bitpanda joined the recent litany of crypto companies laying off employees. In an announcement to staff, later shared publicly, the company cited changing market sentiment and unsustainably fast hiring as reasons for the layoffs.

The company announced they would be "scal[ing] down to a target organisational size of about 730 people". The company seems to have had around 1,000 employees, which means they are laying off around a quarter of their workforce. They also announced they would be rescinding employment offers they had extended recently.

Cryptocurrencies notionally worth $100 million stolen from Horizon Bridge

The Horizon Bridge is a blockchain bridge allowing assets to be used across Ethereum, BNB, and Harmony blockchains. The bridge is run by the Harmony blockchain project.

On June 23, someone was able to steal assets from the bridge that they then converted to more than 85,800 ETH. The stolen funds are notionally valued at almost $100 million, assuming the thief can cash them out successfully. Hours after the attack, most of the funds remained in the thief's wallet and had not yet been laundered.

A June 29 analysis by blockchain research firm Ellipsis claimed that "there are strong indications that North Korea's Lazarus Group may be responsible for this theft". Lazarus was also behind the $625 million bridge hack in March, targeting the Axie Infinity game.

Senators Lummis and Gillibrand solicit feedback on their proposed crypto legislation via Github and it's off to a predictably chaotic start

Github issue titled "Floppa Thread", with a comment reading "Feds are not looking post floppa". There's an image of an upside-down caracal wearing a crocheted red and white hatOne of several Github issues on the proposed legislation (attribution)
After announcing their crypto-friendly proposed legislation earlier in June, Senators Lummis and Gillibrand have uploaded it to Github to solicit feedback, as was apparently widely requested of them by crypto advocates.

As one might expect, apparently-unmoderated open comments from some of the most online people out there has been off to a chaotic start. The first comment on the proposal, by a user with a Pepe the Frog avatar, is titled "Taxation is theft!" and reads, "Why should we pay any taxes to a corrupt government that prints money out of thin air and gives it away for free! Eliminate the FED!!! BITCOIN FOREVER!"

Another comment thread begins, "Feds are not looking post floppa" and accumulated over 100 replies containing photos of caracals within half an hour.

A different person submitted a pull request replacing the entire text of the bill with "cryptocurrencies are banned lmao".

On July 13, the creators of the Github repository removed all the issues and archived the repository, apparently bringing the experiment to its end.

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