SEC reportedly begins probe into insider trading at crypto exchanges

According to FOX Business, the SEC has sent an inquiry to at least one "major crypto exchange", in what their source said they believed was an investigation spanning several exchanges. It's not clear whether this is a targeted probe spurred by specific instances of alleged malfeasance that might be a harbinger of impending enforcement action, or a broader examination pertaining to broad regulatory interest.

Three Arrows Capital crypto hedge fund may be insolvent

Blockchain data showed that Three Arrows Capital (3AC), a crypto-focused hedge fund based in Singapore, appeared to be dumping stETH as quickly as possible. stETH is Lido-staked Ethereum, a project that is facing liquidity issues and deviating from its peg as of late. The sales appear to be 3AC selling off stETH to pay off debts, presumably due to margin calls as the crypto ecosystem as a whole fell dramatically.

Making matters worse, 3AC co-founder Su Zhu tweeted during the mass sell-off to promote stETH, which certainly gives the appearance that he was trying to pump the price to improve price or liquidity. BlockFi later confirmed that they had liquidated some positions that 3AC held with them.

Speculation about 3AC has swirled, with little comment from 3AC or its executives besides a June 14 tweet from Zhu: "We are in the process of communicating with relevant parties and fully committed to working this out". Meanwhile, other organizations including 8 Blocks Capital have reported that they've been unable to reach 3AC about money they're owed.

Merit Circle DAO votes to renege on deal with investor, provide 30% of what was owed

Members of the Merit DAO, a DAO operating in the play-to-earn space, voted on proposals renege on a deal signed with an early investor to the DAO, Yield Guild Games (YGG). The proposal argued that YGG had not "added value" to Merit (besides monetarily, of course).

YGG pointed out that the seed investor agreement did not require investors to "provide any specific value add services", and "there is no provision for Merit... to unilaterally cancel the contract". The core team replied to say that, "We would like to honor all agreements, however... the DAO holds the ultimate power". One minority voice in the community argued, "You can not just look back 6 months later and be angry with someone who took an early bet on you and say 'here is a refund'. We must uphold trust in compensating those who take early risks."

Surprisingly, YGG ultimately accepted a deal with the DAO rather than take it to court. The final decision did not entirely eliminate their promised returns, but still only granted them around 30% of what they would have been owed with the original deal (which would have been over $5 million).

In a Twitter thread, CEO of the 101.xyz web3 platform detailed the saga and wrote, "it's hard to see this as anything other than a horrendous stain on the reputation of web3... Merit Circle DAO may not need outside support anymore, but many other projects do. And now they've made it harder for earlier projects to get the capital they need. Investors might rightfully ask 'what if your DAO decides to fuck us'".

Axie Infinity says it was never about the money after describing their game as a job-creator

After playing up how Axie Infinity had "created hundreds of thousands of jobs in the Philippines" and other locations where salaries are low, Axie Infinity has crumbled. Some players had quit their traditional jobs to become full-time Axie players, and for a few months in 2021, some skilled players could make more than the average wage in the Philippines by playing the game.

Even without the $625 million hack in March, Axie's economy was in trouble. A November 2021 report from Naavik, titled "Infinite Opportunity or Infinite Peril?" wrote that the game's "economic policies are fundamentally unsustainable" and that "the value of new Axies and SLP is propped up by new players putting fresh money into the game".

As of May, even top-ranked players were making around $0.68 a day — certainly well below the $41.50 average daily wage in the Philippines that the game was once beating. Now, Axie Infinity downplays the financial promises of its game, with the company's head of product writing, "Axie Infinity first and foremost needs to be a game".

Coinbase lays off 1,100 employees in 18% cut

Coinbase announced that they would be cutting 18% of their employees, amounting to 1,100 people. This announcement came only two weeks after they rescinded already-accepted job offers from some new employees, a move that itself came only two weeks after the company announced a hiring freeze. Coinbase has attributed their decisions to "current market conditions" and "crypto winter".

Coinbase broke the news to affected employees in a particularly cold way: by email, sent to employees' personal email accounts because they immediately cut access to employees' work accounts. "Given the number of employees who have access to sensitive customer information, it was unfortunately the only practical choice, to ensure not even a single person made a rash decision that harmed the business or themselves," wrote CEO Brian Armstrong in a message to employees that was subsequently published as a blog post.

Known Origin is the latest project to have their Discord compromised

The Discord server for Known Origin, a fairly major NFT platform, was compromised. The scammer used their access to advertise a fake free NFT mint, which actually would steal NFTs if a user tried to connect their wallet.

This is the latest in a long string of Discord compromises. Other hacked servers in recent days included those for Curiosities, Meta Hunters, Parallel, Goat Society, RFTP, and Gooniez.

NFT collector sells pixel art toad at a $1 million loss

A bright blue pixel art toad skeleton with bright yellow eyes and a yellow watch, on a bright blue background that is almost the same color as the skeletonCrypToadz #2155 (attribution)
In October 2021, an NFT collector dropped 300 ETH (then $1.05 million) on CrypToadz #2155, a pixel art image of a blue toad skeleton on a blue background. On June 13, they sold the NFT for 6.9 ETH (~$8,300), a $1.02 million loss.

It's hard to say why the collector accepted such a low offer. Some have speculated that they were tax loss harvesting to offset other gains, while others have wondered if the collector's account might have been compromised. It's also possible that the collector was cutting losses, not expecting the demand for their NFT to rebound anytime soon.

Tron's algorithmic stablecoin (USDD) wobbles

USDD, the algorithmic stablecoin belonging to the Tron network, dipped as low as $0.91 from its $1 peg on June 13 amidst a day of turmoil elsewhere in the crypto ecosystem. Blockchain analytics firm Nansen observed that Oapital, one of the funds that successfully profited off the Terra de-peg, had started to move large amounts of USDD (as well as other stablecoins). "Doesn't look great", Nansen tweeted.

Tron founder Justin Sun tweeted that the Tron DAO would deploy $2 billion (with a B) in capital to fight short sellers, writing: "Short squeeze is coming".

Crypto.com and BlockFi announce layoffs

On June 10, Crypto.com announced they would be "making targeted reductions" of 260 people, amounting to around 5% of their workforce. On June 13, BlockFi announced that they were in "the gut wrenching position of needing to reduce our headcount" by around 20%. BlockFi has around 850 staff, suggesting they plan to lay off 170 people.

These announcements followed a June 2 layoff announcement by Gemini and the announcement by Coinbase that same day that they would be rescinding already-accepted job offers.

Rumors of a downturn across the tech industry more broadly have been swirling for several months, but crypto companies appear to be being hit particularly hard as they simultaneously endure "crypto winter".

Binance pauses Bitcoin withdrawals for 3 hours due to "stuck" transactions

Binance paused Bitcoin withdrawals for three hours on June 13, explaining that some network maintenance resulted in transactions becoming "stuck and not able to be processed successfully". Although founder and CEO Changpeng Zhao predicted the pause would only take thirty minutes, the issue took closer to three hours to resolve.

I love it when I go to my bank to grab some cash from the ATM and discover that I can't, because someone else's cash clogged up the pipe.

The pause occurred as Bitcoin was reaching record low prices not seen since 2020, contributing to the ongoing pattern of Binance suddenly pausing withdrawals or undergoing maintenance during periods of chaos in the crypto ecosystem.

No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.