...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet.
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The transfers and change to the multisig sparked fears that the project was rug pulling, or had been hacked. This led to a massive $PEPE sell-off, with the token plunging around 17%.
A day after the transfers, a PEPE team member posted on the project's Twitter account, alleging that the transfers were indeed theft by three of the project's other team members.
Someone observed the DEA wallet send a small test transaction before transferring the remaining seized funds, and quickly used a crypto wallet address with identical characters at the beginning and end to send an airdrop to the DEA source wallet. When the DEA agent went to send the remaining funds, they copied-and-pasted the address, believing it was the same one they'd sent the test transaction to. This is a common scam in the crypto world known as "address poisoning", and is successful primarily because crypto wallet addresses are very long strings of characters that people usually copy-and-paste, and only identify by the characters at the start and end.
Upon discovering that they'd been duped, the DEA contacted Tether to ask them to freeze the funds. However, by that time, the scammer had already converted the money into ETH, which couldn't be frozen. The DEA is now working with the FBI to try to trace the theft.
Rather than "100x-ing", the token immediately plummeted when DeSalvo sold his ~41 billion Blazar tokens. DeSalvo is accused of using his profits from the scheme to speculate on other crypto tokens, pay for personal expenses, and reimburse one investor who threatened legal action.
DeSalvo is also being charged over a separate investment scheme he operated, where he solicited investments on Facebook, promising to use his claimed trading expertise to earn massive returns. The SEC alleges he lost most of the money in bad investments, and stole the rest for himself, blaming the losses on market movements.
The Feds claim that the two founders knew Tornado Cash was widely being used to launder hundreds of millions of dollars by North Korea, but "turned a blind eye" and claimed to be complaint with sanctions laws. They also state that they refused to implement anti-money laundering and KYC programs, as is required of money transmitting services.
These charges are likely to be controversial — as has been the sanctioning of Tornado Cash — among crypto advocates and others, as they run up against thorny First Amendment questions and conflicting ideas about who, if anyone, is liable for running decentralized services.
Balancer had around $850 million TVL prior to the announcement. Since revealing the issue, users have removed more than $150 million in assets from the project. Balancer has stated that "only 1.4% of the total TVL is at risk", though 1.4% of $850 million would still be a sizeable $12 million windfall for any potential exploiter.
On August 21, an individual searched for "celer bridge" to find the website for the Celer blockchain bridge. The first result appeared legitimate, even displaying the correct URL for the actual Celer bridge. However, once they clicked the result, they were redirected to a phishing website.
Once the victim connected their crypto wallet, it was immediately drained of $900,000 in the USDC stablecoin. They wrote on Twitter that it was "most of [their] net worth".
Titan advertised "annualized" performance results of up to 2,700% on its Titan Crypto trading strategy, which the SEC says was misleading because it failed to include material information about how the performance was calculated. Titan had based the calculation on three weeks of performance, assuming it would continue for a full year.
Titan has agreed to a cease-and-desist order, censure, and over a million in disgorgement and penalties.
According to data on DefiLlama, TVL on the project dropped from around $370,000 to only $81,000. The TVL was already significantly down from the project's peak of almost $1.5 million.
Lawrence is now suing Crypto.com, although this may be challenging given they apparently weren't behind the scam. Lawrence has also said that he has sold his house to pay for legal costs.
In December 2021, the company offered $300 "Recur Passes", which promised holders early access to NFT drops and other perks. One of them resold for $88,888 in February 2022.
Now, Recur has announced they will be closing up shop, and warned users to migrate their assets away from the platform in advance of a November shutdown. The company cited "unforeseen challenges and shifts in the business landscape".
As for the Recur Passes, they're currently selling for somewhere between $7 and $11.
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