Tsotchke's developers have reacted as any reputable scientists would to those questioning their lofty claims: "Disrespect me again and you're gone", threatened someone in charge of the project's Twitter account.
Tsotchke "quantum-enhanced AI" crypto project appears to be based on lies
A project called "Tsotchke" has convinced a lot of people to buy up its token based on claims that it uses "spin-based quantum computing" to "enable quantum-enhanced AI at room temperature". However, cryptographers and quantum computer scientists have serious doubts about the claims made by the project's anonymous developers. "[If they] just said it was an advanced random number generator, it would be moderately accurate", remarked the CEO of a separate quantum/crypto crossover company. Another reviewer described the project as "primarily marketing language around a conventional PRNG."
Newly freed Silk Road founder Ross Ulbricht appears to squander $12 million in potential memecoin profits
Ross Ulbricht, the founder of the Silk Road darknet market place, earned a presidential pardon on January 21 as an apparent thank you by President Trump to the Libertarian Party. When fans created a token called $ROSS to celebrate his release, they sent a substantial number of the tokens — 50% of the supply — to donation wallets that his family have operated for years, used to raise money to campaign for his release.
It's not clear whether Ulbricht has taken over control of these wallets, or if they are still being operated on his behalf. Either way, whoever does control the wallets made a big mistake when they tried to cash out on their memecoin stash by adding single-sided liquidity on Meteora. They accidentally initialized the liquidity pool at too low a price, allowing a MEV bot to snap up 5% of the token supply (notionally ~$1.5 million) at a discount and resell them.
The wallet operator then made the same error again with a larger quantity of tokens, selling off another 35% of the supply and losing out on around $10.5 million in notional value.
"On-chain Microstrategy" clone Ether Strategy loses over $500,000 of ETH
A Ethereum-based project promising to duplicate the bitcoin leveraged investment strategy used by MicroStrategy has announced that, prior to even launching, 165 ETH (~$535,850) was lost when a misconfiguration in the project interface resulted in tokens being sent to the wrong address. The project appears to have determined that those tokens are irrecoverably lost, because they announced that they had contributed 165 ETH of their own to reimburse users for their costly mistake.
KuCoin pleads guilty, pays nearly $300 million fine in criminal case
The KuCoin cryptocurrency exchange has pleaded guilty to a charge filed against them in March that they were operating an unlicensed money transmitting business. Since at least 2019, the company willingly ignored US laws requiring them to implement anti-money laundering and know-your-customer programs. Since its founding in 2017, the business permitted around 1.5 million users based in the US to use the platform, despite its lack of registration or compliance with US laws.
According to US prosecutors, "KuCoin was used to transmit billions in suspicious transactions and potentially criminal proceeds, including proceeds from darknet markets and malware, ransomware, and fraud schemes."
KuCoin has agreed to pay $297 million in penalties, and will leave the US market for at least two years. Furthermore, two company founders who were also charged will no longer work for the company. Prosecutors reached a deferred prosecution agreement with the two founders, who will also forfeit around $2.7 million each.
- "Kucoin Pleads Guilty To Unlicensed Money Transmission Charge And Agrees To Pay Penalties Totaling Nearly $300 Million", U.S. Attorney's Office, Southern District of New York [archive]
Zero Edge crypto casino enters liquidation after founder gambles away its seed money
Richard Kim, the founder of the Zero Edge crypto casino, resigned on July 2, 2024 after blowing most of the project's seed funding. Kim was a former executive of Galaxy Digital, and Galaxy was among Zero Edge's investors. Within a day of closing a seed financing round on June 20, Kim had begun putting the money into leveraged crypto bets, resulting in "the significant loss of company funds". On June 29, he admitted in an email to Zero Edge shareholders that he had blown around $3.67 million in company funds.
Kim admitted in an interview with CoinDesk at the time that "I really fucked up. I lost this money. It was grossly negligent. But I didn't intend to go run away with this money." He claimed that it all began when he lost $80,000 to a phishing website. "This triggered my old demons, the need to 'make it back' to preserve my reputation. ... [I] started down a negative spiral of leverage trading, raising more capital, and hiding the truth. ... By the seed round's close, I was ready to rebuild, to start fresh, putting past demons aside. But the moment I received the proceeds, something snapped. I felt compelled to make up for my missteps. Within days, millions were in leveraged longs. When bitcoin crashed, I experienced a complete wipeout."
What remains of the Zero Edge company has petitioned for voluntary liquidation in the Cayman Islands, where it was registered. Company liquidators tell a slightly different story from Kim: that Kim misappropriated most of the company's assets and then "disappeared".
ThorChain is insolvent
The ThorChain project is in crisis amid news that the project is insolvent. In order to prevent what would effectively be a bank run and likely death spiral, the project has paused portions of the protocol while determining how best to handle the problem. According to Twitter user TCB, the project has almost $200 million in liabilities, with only $107 million in assets — assets which can be quickly withdrawn or depleted in the case of a panic.
The team has announced that the pause will last for 90 days as they explore options to save the project.
- Tweet thread by TCB [archive]
Phemex exchange hacked for at least $70 million
The Singapore-based Phemex cryptocurrency exchange has acknowledged the compromise of some of the exchange's hot wallets, which saw outflows of at least $37 million across multiple blockchains. Phemex wrote on Twitter that they were "look[ing] into" reports that their hot wallets had been compromised.
Trump crossposting Twitter account advertises fake memecoins that make $1.25 million
A Twitter account called @TrumpDailyPosts has more than 1.3 million followers on Twitter. While the account does automatically crosspost to Twitter any posts Donald Trump makes on his Truth Social account, it also posts Trump-related news and other tweets.
After the Trump family actually did launch the $TRUMP and $MELANIA memecoins, several more tweets by the @TrumpDailyPosts account appeared to crosspost additional announcements by Donald Trump on Truth Social of memecoins with names like $POTUS, $WIN, $POWER, and $MAGA. The tweets contained the date and timestamps that normally establish that a post on the account is a repost of Trump's genuine Truth Social posts.
It's not clear if the @TrumpDailyPosts Twitter account was hacked or if those running it decided to scam their followers. However, by sharing the now-deleted posts to their large following, they made around $1.25 million from people who were hoping to hop on the trend and buy in early to new Trump-backed memecoins.
Trump inauguration pastor launches memecoin that tanks by over 90%
Reverand Lorenzo Sewell, a pastor and vocal Trump supporter who delivered the benediction at Donald Trump's inauguration, followed in his hero's footsteps by trying to shill a memecoin to his followers. In a video posted to Twitter hours after his speech, in which he seemed to still be wearing the same outfit, Sewell urged: "I need you to do me a favor right now. I need you to go buy the official Lorenzo Sewell coin."
The reaction to his post was not exactly warm, with lawyer Ari Cohn tweeting: "🎶Look at this grift, isn't it neat? Wouldn't you say God's debasement's complete? 🎶"
After a very brief spike in token price, the memecoin collapsed.
Students for Trump co-founder Ryan Fournier admits to rugpulling memecoin while trying to deny rugpulling memecoin
Ryan Fournier, a co-founder of the Students for Trump organization, worked with a memecoin creator to create a $TIKTOK memecoin, which he said was intended to celebrate TikTok lifting its brief restriction on US users amid an impending ban. The token quickly increased in price amid early attention. However, when the price began to drop, Fournier dumped 505 million TIKTOK for around $700,000 in SOL.
Fournier posted on Twitter, claiming he was scammed by his collaborator. When accused of rugging the token, Fournier replied "I'm very new to crypto and I promise you I didn’t rug it." "Buddy, we see your wallet. It’s all on-chain," replied another person. Fournier, apparently not knowing he was describing a rug pull, wrote: "I literally sold because it was going down increasingly. I don’t know who wouldn’t do that."