unshETH compromised after private key leaked to GitHub

June 1, 2023

unshETH compromised after private key leaked to GitHub

After a developer leaked private keys to GitHub, someone used them to drain $375,000 from the unshETH defi project. The project emergency paused withdrawals of unshETH ether to prevent further damage.

The leaked key allowed the attacker to transfer ownership of project smart contracts to themselves, though they later returned ownership.

unshETH posted a message to the hacker, demanding they return 90% of the stolen funds. They threatened: "We want to be clear, and this is not a bluff: we know who you and some people connected to you (friends) are, and we will absolutely move forward with law enforcement if you have not returned the money by the deadline above. We don't want to do this to you or have to rope your friends in, and would prefer everything be settled and everyone just move forward, but if we don't get the funds back by the above-mentioned time, we will be left with no choice in order to protect our protocol."

"Sounds exactly like someone bluffing would say", wrote one commenter.

Tweet by unshETH

May 31, 2023

Trust Reserve employees arrested

(attribution)

A Chinese cryptocurrency publication has reported that the staff of Trust Reserve (formerly CNHC Group) were detained by police. A sign on the door of the company's office in Shanghai announced "judicial seizure".

Trust Reserve issues the CNH offshore yuan-pegged stablecoin and the HKDC Hong Kong dollar-pegged stablecoin. The company had received funding from sources including the KuCoin crypto exchange.

"Team Behind Offshore Yuan, Hong Kong Dollar Stablecoins Detained by Chinese Police: Report", CoinDesk
"独家：离岸人民币稳定币CNHC发行团队失联，或因涉案被司法部门带走", PA News (in Chinese)

May 31, 2023

Binance delists privacycoins in various European regions, later reverses decision

(attribution)

Seeming to bow to regulatory pressures, Binance announced they would delist various privacycoins including Monero, ZCash, and MobileCoin for some regions. Privacycoins are tokens that aim to obscure more of the information involved in a transaction, in contrast to the very public nature of the wallet addresses and transfer amounts of most cryptocurrency transactions.

Binance did not list the jurisdictions in which it would be ending privacycoin trading, but users in France, Spain, and Poland all reported receiving alerts. This suggested it could be related to the recent passage of the MiCA crypto legislation in the European Union. The resolution states: "The operating rules of the trading platform for crypto-assets shall prevent the admission to trading of crypto-assets that have an inbuilt anonymisation function unless the holders of those crypto-assets and their transaction history can be identified by the crypto-asset service providers operating a trading platform for crypto-assets."

In late June, Binance announced that they had reversed their decision, and would continue to offer the tokens.

"Binance delists privacy coins for European users amid layoff rumors", CryptoSlate

May 31, 2023

Binance reportedly begins layoffs

(attribution)

Crypto giant Binance has reportedly begun layoffs, according to independent crypto reporter Colin Wu, who cited several anonymous sources. The layoffs will amount to around 20% of Binance's 8,000-person workforce, said Wu.

Binance issued a statement that the firings were related to poor performance and "cultural fit", an unlikely explanation for such a substantial cut.

In January 2023, Binance CEO Changpeng Zhao had stated that Binance planned to grow its employee count by 15–30% in 2023, even after more than doubling its employees in 2022. In March, responding to rumors of layoffs, Binance stated that they were "not planning any layoffs" and that in fact they planned to hire more than 500 employees by mid-year.

May 30, 2023

NFL labor union is out almost $42 million thanks to crypto collapse

(attribution)

A report from The Athletic indicates that the National Football League Players Association, a labor union for NFL players, has been unable to collect nearly $42 million it is owed in licensing and sponsorship revenue. The Athletic cited sources suggesting the issue was directly related to the collapse of the crypto industry, and to its partners renegotiating licensing deals due to the downturn.

The amount is owed by affiliate OneTeam Partners. In April, Sportico reported that sports NFT platform Dapper Labs had discussed restructuring its deal with the NFL and NFLPA due to an extremely rocky year. So too had DraftKings, which had signed a deal with the NFLPA for its "Reignmakers" player trading card NFTs.

"NFLPA owed $41.8M in licensing and marketing payments from affiliate following crypto collapse", The Athletic

May 30, 2023

"Charity NFT project" by supposed cancer patient raises $117,000 with stolen art before being exposed as a fraud

Tweets by Andrew Wang: "I woke up today to see one of my friends trending on twitter, @Hopeexist1. she made a collection to help herself battle cancer and some awesome web3 people spotlighted her today, so i'd like to add to it

I'll put my rep on the line to say this is for real amidst all the scams in our space. I speak with her art teacher often when she's gone for treatment and he says she's the best student he's ever had, that her talent is too precious, that she must survive. He cares like a father"

Tweets by Andrew Wang promoting the scam (attribution)

A person claiming to be battling cancer created a "charity NFT project" ostensibly to help with her treatment. She convinced some crypto influencers to promote the project, including Andrew Wang, a popular Twitter account with nearly 200,000 followers. Wang tweeted, "I'll put my rep on the line to say this is for real amidst all the scams in our space". He claimed to have spoken with the NFT project creator's art teacher, writing: "he says she's the best student he's ever had, that her talent is too precious, that she must survive."

Several hours later, the project creator deleted her Twitter account, and crypto sleuth zachxbt unearthed evidence that the pixel art she had been selling as NFTs had been stolen from various others. Altogether, the "Pixel Penguins" NFT project she promoted raised around 63.5 ETH (~$117,000).

Wang later apologized for promoting the scam, claiming that he had tried to do due diligence but had been in contact with her for over a year, and had spoken on the phone with someone claiming to be her art teacher. However, zachxbt wrote, "Seems some people called it out last year. Not sure how much he actually 'verified'".

May 30, 2023

MoonPay executives pocketed $150 million raised from Series A

(attribution)

According to a report from The Information, MoonPay executives including CEO Ivan Soto-Wright pocketed $150 million from their $555 million Series A funding round completed in November 2021. MoonPay is a crypto payments platform known for its NFT "concierge" service popular among celebrities, and for the various allegations of undisclosed promotion leveled against it related to some of those celebrity deals.

According to The Information, MoonPay never disclosed that $150 million of the Series A funding was used to purchase shares from insiders including Soto-Wright, and never went to the company. Several weeks after the funding round, Soto-Wright purchased a $38 million Miami mansion.

"MoonPay CEO, Other Executives Cashed Out Before Crypto Business Dropped", The Information
"MoonPay insiders pocketed $150 million weeks before CEO bought $38 million mansion: The Information", The Block

May 30, 2023

Bybit exits Canada

(attribution)

The cryptocurrency exchange Bybit announced that they would be exiting Canada. The company cited "recent regulatory development" in the country for their decision to stop offering services to Canadian customers.

In June 2022, Bybit settled a complaint from the Ontario Securities Commission for operating an unregistered platform and offering unregistered securities to Ontarian investors. The company disgorged CA$2.5 million (US$1.9 million) as result. At the time, the OSC stated that Bybit was working to come into compliance with the OSC's requirements.

"Notice on Exit from Canadian Market", Bybit

May 29, 2023

Apparent whitehat exploits El Dorado Exchange, claiming developers built in a backdoor to steal user funds

(attribution)

The new Arbitrum-based El Dorado Exchange (EDE) was exploited for around $580,000. In an interesting twist, the attacker claimed to be a whitehat who was exposing that the developers had "implemented a backdoor that allowed them to force liquidate any position they desired. This activity involved intentionally signing incorrect prices to manipulate users' positions and steal their funds".

The attacker promised to return all funds, minus a 10% "white hat fee", if the developers "admit to manipulating the prices", and also offered to disclose other vulnerabilities they claimed to have found in the project.

The project founders wrote in response: "Yes we acknowledge making an ill-advised decision to manipulate the price. However our intention was to blacklist those who had previously exploited the system, fully aware that all transactions are recorded on the blockchain. We did not aim to misappropriate users funds as this would leave a traceable record. We will promptly remove the problematic bomb contract."

The exploiter began returning funds shortly afterwards.

Tweet thread by PeckShield

May 29, 2023

BKEX crypto exchange halts withdrawals due to money laundering investigation

(attribution)

The BKEX crypto exchange announced on May 29 that they would be suspending withdrawals, claiming it was related to a police investigation. "Recently, the platform users' funds were involved in 'money laundering' and BKEX is currently cooperating with the police to collect evidence, for which we will suspend withdrawals to cooperate with the work", they wrote in an announcement on their website.

The exchange offered no estimate of when withdrawals might be re-enabled.

"BKEX Announcement on Suspension of Withdrawals"

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