Someone buys a Bored Ape, gets scammed out of it two hours later

An illustration of an ape with black fur, sticking out its tongue, wearing a tuxedo t-shirt and a gold stud earringBored Ape #887 (attribution)
In what might be a new record, someone bought a Bored Ape NFT for 70.69 ETH (~$116,000) and had it stolen from them less than two hours later. The scammer quickly flipped the NFT for 61.6969 ETH (~$101,000), then bridged the funds through RenBridge to cover their tracks.

Hodlnaut seems to have lied about their Terra exposure

When Terra was collapsing in May, concerned users of the Hodlnaut lending platform asked whether the firm was exposed. CEO JT wrote on Twitter, "Hodlnaut as a firm did not take any losses on UST, users who held/bought UST on our platform did". Their social media manager wrote, "[Holdnaut] had 0 company exposure to [Anchor Protocol]", referring to the Terra-based lending protocol.

However, documents from the legal proceedings surrounding the now-underwater firm revealed that Hodlnaut had 317 million UST, which it liquidated at a loss when the previously dollar-pegged UST hit $0.85. In the filing, they wrote, "Due to the market's lack of liquidity, the average exit price of UST to USDC was around 42 cents on the dollar, resulting in realized losses to Hodlnaut Trading Ltd of about USD 189.7M. As a result, Hodlnaut's total debt to depositors of USD 500M became backed by realisable assets of around USD 315M as of 13 May 2022 due to the de-pegging event."

Swyftx crypto exchange cuts 21% of staff

The Australian crypto exchange Swyftx laid off 21% of its workforce, affecting 74 employees. One such employee was on her honeymoon in Hawaii when she learned she was suddenly out of a job. The company blamed "an uncertain business environment, with levels of domestic inflation not seen in over two decades, rising interest rates, highly volatile markets across all asset classes, and the potential for a global recession" for the cuts.

Swyftx had announced in June that it would be merging with trading platform Superhero in a $1.5 billion deal.

Sub-primate lending: $5.3 million in Bored Apes used as loan collateral are at risk of being liquidated

Chart showing the floor price of the Bored Ape collection over the last 30 days. On July 20 the floor price was 92.7 ETH; it is now at 69.4 ETH.Bored Ape Yacht Club floor price over the last 30 days (attribution)
When people started sinking hundreds of thousands of dollars into Bored Ape NFTs, it wasn't long before people came up with the genius idea of using those NFTs as collateral for loans. BendDAO is one such platform offering the service, allowing people to post their Ape as collateral in exchange for a crypto loan equal to 30–40% of the Bored Apes collection's floor price. At one point, one borrower had 10,000 ETH (~$17.5 million) in loans from BendDAO against his 60-ape-strong collection (though he since repaid the loans).

However, NFTs in general haven't been doing so hot lately, and the Bored Apes haven't been immune from the slump. As the Bored Apes collection floor price has decreased, more than 15% of the apes used as collateral for BendDAO loans are in the "danger zone" — close to being auctioned off. These 45 apes are valued at roughly $5.3 million. Liquidation could lead to cascading liquidations, as the auctions could themselves cause the floor price to decrease.

As Bennett Tomlin put it, "I hate that y'all somehow created a risk for cascading liquidations of JPEG backed loans".

The FDIC sends cease and desist letters to FTX US and other entities who claim their products are insured

The Federal Deposit Insurance Corporation (FDIC) sent cease and desist notices to the FTX US crypto exchange and four websites that they allege are falsely claiming their products are FDIC-insured. Most people are familiar with FDIC insurance because it covers up to $250,000 per account with federally regulated banks, but crypto companies enjoy no such protections.

In July, the FDIC and Federal Reserve sent a cease and desist to Voyager, a company currently undergoing bankruptcy proceedings, which drew in customers with false promises that USD entrusted to the company were safe from any potential Voyager collapse thanks to FDIC insurance.

After choosing to keep the crypto, divorcee wants a do-over

A letter-writer seeking advice from the Financial Times wrote, "I got divorced last year and as part of the financial agreement, my ex-wife and I agreed that I would keep my cryptocurrency assets while she got the lion's share of my pension and other investments, and we split the family home. When we negotiated last autumn, the crypto market was riding high and I was convinced it would go higher still, but following the recent crash my digital assets have more than halved in value. I'm now considerably worse off than my ex and worried about my financial future. She says I only have myself to blame and won't discuss the matter further. Can I go to court to renegotiate our financial order?"

As expected, the lawyer consulted by the FT informed them that their chances of a do-over were pretty slim, and suggested that individuals negotiating a split with a partner don't take on all the high-risk assets like this person did.

As of August 20, Bitcoin was trading at around $21,200–70% lower than at its all-time-high of $69,000 in November 2021. Other major cryptocurrencies are faring similarly poorly, with ETH down 67% to $1,630 from its all-time-high of $4,890.

DegenTown NFT project rug pulls after promotion from Magic Eden

Cel shaded illustration of a humanoid figure with purple skin smirking. They have a roof of a house on their head with Japanese characters and lanterns hanging from it, and are wearing a grey cape with a black clasp. Behind them is fire and a night sky with a large moon.Degen Degen #4901 (attribution)
DegenTown, a collection of brightly-colored cel shaded humanoid figures, launched with much promotion from Magic Eden on their Launchpad minting service. Magic Eden aims to provide collectors with a level of trust in the project by requiring creators to disclose their identities to the company.

DegenTown first suffered issues in July, when the project's Twitter account was allegedly hacked, and users were tricked into approving a contract that drained their wallets. One individual behind the project promised they would compensate the users whose wallets were drained, but never did.

The project ultimately rug pulled instead, with Magic Eden acknowledging it in a blog post and Twitter thread on August 17. They wrote that they were "urging the original Degen Town founders to return the funds" — however, this is complicated somewhat by the fact that the identity of one of them is not known to Magic Eden. They explained, "Our prior policy was that we doxxed founders. NFTRamo claimed to be an advisor but we learned that he was actually the founder of the project and used being an advisor as a way of skirting our doxxing processes." This is not the first time their identity verification process was sidestepped — they introduced it after a serial rugpuller used their platform to anonymously sell and then rug pull another NFT project, but that same person was able to do it again only a few months later.

The DegenTown project minted 8,000 NFTs for 3 SOL apiece, bringing in $923,000. Beyond that, the creators took 7.5% in royalties on secondary sales. Magic Eden has said that they were able to get one of the two founders to return the funds they'd earned from the mint, and that they planned to use them to compensate buyers.

Bribe Protocol team disappears after raising $5.5 million

The Bribe Protocol promised a DAO infrastructure tool where "token holders get paid to govern", and raised $5.5 million in funding in January to work on their extensive roadmap. However, the project leaders have effectively disappeared. There are no posts on the project's Twitter account since May, their Medium page has been untouched since March, and the Discord is a ghost town aside from the occasional message asking about the status of the project and the inevitable reply that the developers had rug pulled.

Bribe Protocol was incubated by Advanced Blockchain AG and Composable. Composable might ring a bell, because in February its pseudonymous head of product, 0xbrainjar, was revealed to be Omar Zaki, who had settled with the SEC over charges that he had misled investors while operating an unregistered investment advisement company and hedge fund. At the time, he wrote that "I do not want a mistake in my youth to cloud all of the team's efforts", though the SEC charge was filed less than three years prior, when Zaki was 21.

An employee of Figment Capital, one of the investors in Bribe Protocol, claimed that the project had formally shut down and returned 86% of the funds raised from institutional investors, though "retail took a huge L". However, this doesn't appear to have been publicly announced by the project.

Bribe Protocol is, of course, not to be confused with the other Bribe Protocol, a defi project that was abandoned in May 2021.

Experienced crypto trader suffers $470,000 theft after signing malicious message

An experienced crypto trader lost $470,000 to a hack when they signed a malicious message that permitted an attacker to drain all of their USDC stablecoins from their crypto hot wallet. Unlike most crypto hacks that involve approving malicious contracts, this hack was perpetrated when the trader was tricked into simply signing a malicious message. Signing a message tends to be a safer and more common action with crypto wallets, and so traders are not always as careful, though as this trader discovered, it can still have catastrophic impacts.

Crypto.com reportedly lays off hundreds more employees than they announced, tries to hide it

In mid-June, Crypto.com announced they would be laying off 260 people, or around 5% of their employees. However, The Verge has reported that "hundreds more" employees were quietly laid off since then. They report: "Crypto.com has been trying to limit knowledge of the extent of these departures even within the company, with CEO Kris Marszalek refusing to answer a question about the total figure in a recent employees-only town hall meeting."

Marszalek also tried to discourage employees from leaking about the layoffs, saying at a company town hall: "A number [of employees laid off] makes for a great headline, it's a great thing to gossip about. [But] as co-owners of this company, you should ask yourself, 'is it in my interest for this number to be out there?'" One employee told The Verge that this did nothing to assuage their fears about the layoffs, and that "[it felt like] I got told to shut up and get back to work. It felt insulting."

One recent review on Glassdoor claims that Crypto.com had laid off "more than 1,000 employees", and alleged that "They've removed the company directory so we can't see the numbers go down."

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