Technologists draft an open letter to US lawmakers urging them to responsibly legislate crypto industry

A group of 26 technologists (disclosure: myself included) have signed an open letter to U.S. lawmakers urging them to "take a critical, skeptical approach toward industry claims that crypto-assets ... are an innovative technology that is unreservedly good". The letter is an effort to push back against the well-funded crypto lobbyists attempting to influence U.S. lawmakers.

The Financial Times writes, "While individuals have made similar warnings about the safety and reliability of digital assets, it marks a more organised effort to challenge the growing influence of crypto advocates who want to resist attempts to regulate the frothy sector."

Solana network halted again

Solana is one of the more popular proof-of-stake blockchains, and is often trotted out as an alternative to Ethereum when people bring up Ethereum's environmental impact, slowness, or high transaction costs.

However, Solana has been plagued with stability issues, and on June 1 it was taken offline by its developers for what CryptoWhale says was the eighth time this year. This occurred only days after an incident in which the Solana blockchain clock drifted significantly behind real-world time.

Former OpenSea executive arrested, charged with money laundering

Nate Chastain was asked to resign from his position as Head of Product at OpenSea in September 2021 following allegations of NFT insider trading. Online sleuths had discovered that he had apparently bought NFTs based on insider knowledge that they would later be featured on OpenSea's front page. On June 1, the U.S. Attorney's Office of the Southern District of New York unsealed an indictment charging Chastain with wire fraud and money laundering, alleging that he had used anonymous crypto wallets and OpenSea accounts to buy NFTs before they were featured on the front page, then resell them for two to five times what he paid for them.

After leaving OpenSea in the wake of the allegations, Chastain began pitching a new NFT platform called "Oval" to investors, seeking $3 million in seed funding.

Chastain was arrested on June 1. The two charges he faces each carry a maximum sentence of twenty years in prison. The Attorney's Office described the charges as the first ever relating to insider trading of digital assets, and stated that, "today’s charges demonstrate the commitment of this Office to stamping out insider trading – whether it occurs on the stock market or the blockchain."

  • Press release from the U.S. Attorney's Office of the Southern District of New York

Toronto Comic Arts Festival sparks outrage by featuring NFT creator Saba Moeel, Moeel found to have widely traced her artwork

Two images: on the left, an illustration of a pink cat sitting on a tank; on the right, original Tank Girl artwork from which the cat artwork was tracedPink Cat artwork (left); Tank Girl artwork from which it was traced (right) (attribution)
The Toronto Comic Arts Festival angered artists and fans alike when they invited Saba Moeel, the artist behind the Pink Cat NFT collection, to attend as a featured guest. This was in part because of opinions around NFTs more generally, but much of the ire was directed at Moeel specifically when she was found to have traced much of her work from sources including Tank Girl, Tom and Jerry, and various artists on Instagram without providing any credit. Others were concerned with various transphobic or racist statements Moeel has made in the past, as well as the creation of artwork by a non-Black artist that appeared to be caricaturing Black people.

Moeel responded to the criticism in a slew of tweets, writing in one: "Why did i trace tank girl art? Why did Occidental soldiers raid the Iraqi national museum of art and steal all of our cultural artifacts and history? Many questions to answer". Moeef also accused those expressing concerns about her appearance of racism, and described them all as "people who love the central banking system". "Big organizations come out to try to destroy my community of 90% women, mostly WOC like me", she wrote.

One other TCAF featured guest, Ngozi Ukazu, withdrew from the Festival, writing, "Not only do I disagree with the platforming of NFTS, but I also will not be a featured guest alongside an influencer who traces art and explicitly commodifies Black culture." TCAF wrote on Twitter that they were preparing a response to "valid concerns", and the subsequent day announced that they had rescinded the invitation due to "code of conduct violations and the concerns expressed by the comics community".

Superlative Apes team does a "slow rug pull" after drawing in $2.9 million

A colorful pastel Bored Ape illustration with half-lidded eyes, wearing a bowler hat and t-shirtSuperlative Ape #2127 (attribution)
The Superlative Apes NFTs are a collection of Bored Apes derivative NFTs that feature colorful pastels. The project amassed a large following (including, apparently, the rapper Eminem), and its first collection of 4,444 NFTs sold out after launching in December 2021, netting the creators 301 ETH (about $1.2 million at the time). They also sold most of their 8,888-piece Superlative Mutated Apes collection that launched in February, pulling in another 658 ETH (~$1.7 million at the time). The project featured a roadmap promising all kinds of things: a metaverse gallery, "access to our worldwide global tour", future minting passes, a cut of the project fees, and a project to fight global hunger.

The project has been plagued with issues including missed deadlines, accusations of plagiarism (somehow), and connections to another rug-pulled project. Additionally, a flawed staking contract required the team to have holders migrate their NFTs to a new contract—a slow and painful process that has resulted in most of the NFTs being "stuck" in a temporary contract. People who have questioned the project or accused them of rug pulling have been banned from the Discord and blocked on Twitter.

Despite the team's repeat (though very infrequent) claims that the project is still going and is not a rug pull, this appears to be a classic "slow rug"—that is, when a project team engages just enough to keep the community from accusing them of wrongdoing, while still effectively abandoning the project. On May 7, a former community moderator for the project stepped down, publicly stating that "the team has all but given up on the project, they come back every 4 weeks to put forth just enough 'minimal' (understatement) effort to not get sued", and accusing the project team of not paying them as agreed.

Another bug affecting Terra's Mirror Protocol loses the project $2 million (and counting)

Someone has been able to drain more than $2 million from the Mirror Protocol in the Terra ecosystem. It appears they are exploiting an issue with the price oracle for "Luna Classic" (formerly known as Luna, but renamed with the release of Luna 2.0). The oracle seems to be providing an incorrect price for LUNC that is far higher than its price on exchanges. This has allowed a person to use a relatively small amount of LUNC as collateral for loans of much larger amounts in other assets.

Terra sleuth FatMan wrote on Twitter on May 30, "So far, the mBTC, mETH, mDOT and mGLXY pools have been drained. In around 12 hours, the market feed will kick in, and the attacker will be able to drain all of the mAsset pools (such as mSPY and mAAPL, mAMZN, etc.)". He begged Mirror developers to fix the oracle, writing that they are "completely MIA".

Another Bored Ape owner makes a typo, sells NFT for $180,000 less than they intended

A Bored Ape with grey fur, wearing goggles and rainbow suspenders, on a blue backgroundBored Ape #3158 (attribution)
An NFT collector trying to list their Bored Ape NFT for sale on OpenSea made a typo, and accidentally listed it for sale for 10 ETH (around $19,000) instead of 105 ETH (around $200,000). The NFT was quickly bought up before the trader had the opportunity to correct their mistake. It is common for people to run bots that automatically buy pricey NFTs that are listed for sale far below a collection's floor price, as this one was.

The trader later confirmed on Twitter that it was their mistake rather than an account compromise or some other hack: "Yep, was a fat finger. Was trying to list at 105. Never thought it'd happen to me. Devastating."

Meanwhile, the NFT's new owner has it listed for sale for 110 ETH (about $219,000), which will net them a tidy profit if they find a buyer.

Luna 2.0 airdrop sends 2.1 million $LUNA to Mirror Protocol thief

All holders of Luna, who saw their holdings crash to nothing in the Terra collapse, received an airdrop of the new Luna tokens with the release of Terra 2.0 (electric boogaloo). The researcher who originally observed that at least $88 million worth of ill-gotten tokens had been siphoned from the Terra Mirror Protocol before a patch was quietly applied in early May noticed that the attacker had been among the recipients of the airdrop, receiving more than 2.1 million $LUNA. "A nice little reward for stealing money from thousands of Mirror users & locking their funds, causing them millions in losses", wrote the researcher.

The price of the new $LUNA token has been volatile on its first day, starting at around $17 and later valued around $5.70. This would make the attacker's holdings of airdropped tokens worth around $12.1 million, assuming they could find liquidity to cash out.

PokeMoney blockchain game rug pulls for $3.5 million

The token associated with yet another crypto Pokémon rip-off, PokeMoney, suddenly crashed in price when around 11,800 BNB ($3.5 million) worth of it was pulled out of the project. The incident appeared to be a rug pull.

The project creators claimed it was a hack, and stuck around to try to keep the hope alive. They claimed on Telegram that for some reason they couldn't access the project Twitter account, and so couldn't inform their community of the hack. They also began rallying their community around hopes for a project relaunch. Meanwhile, they announced a "CHAT MUTE UNTIL TOMORROW TO AVOID FUD"—as any reputable, not-rug-pulled project would do, I'm sure.

Elon Musk deepfake tries to get people to give scammers Bitcoin

Elon Musk, sitting with his hands clasped in front of a purple background. A logo for "BitVex" is visible in the bottom right.Screenshot from the deepfake video (attribution)
A somewhat robotic-sounding deepfake Elon Musk speaks to a deepfaked interviewer, who asks "what can you tell us about your project and how can it help people get rich right now?" Fake-Musk explains that people who invest in the (scam) project, "BitVex", will "receive exactly 30% of dividends every day", and that if Bitcoin falls in price they will still receive twice their investment back.

According to BleepingComputer, only about $1,700 in deposits appeared to have gone to addresses associated with the scam, although they acknowledged that the addresses are likely rotated and so the true amount may be larger.

Someone brought the scam to Musk's attention on Twitter, where he replied, "Yikes. Def not me." The YouTube channel hosting the videos was taken down shortly after.

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