U.S. Department of Justice charges one person behind the "Baller Apes" rug pull

Illustration of a purple neon themed bar scene with crypto price charts on the wallsBaller Ape Club website (attribution)
The U.S. Department of Justice announced charges against Le Anh Tuan, who was one of the individuals behind the "Baller Ape" NFT rug pull in October 2021. According to the DoJ, Tuan and his partners made off with $2.6 million of investor funds through the Baller Ape NFT project. He was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering, and faces up to 40 years in prison if convicted of all counts.

The people behind the Baller Ape NFT project were also reportedly behind at least two other NFT rug pulls, including "Big Daddy Ape Club". These projects were not mentioned in the DoJ press release.

FTX reportedly approaches a deal to buy BlockFi in "fire sale"

According to CNBC, the cryptocurrency exchange FTX is hammering out the details on an agreement to acquire crypto lending platform BlockFi. Earlier in June, it was reported that FTX had agreed to lend BlockFi $250 million, bailing out the exchange after it suffered substantial losses.

BlockFi was last valued at $4.8 billion, but FTX is expected to pay around $25 million to buy the company. BlockFi CEO Zac Prince refuted what he described as a "market rumor": "I can 100% confirm that we aren’t being sold for $25M." A leaked call with Morgan Creek Digital investors suggested they were trying to counter FTX's offer, and that BlockFi was being valued at less than $500 million. The call also revealed that BlockFi's loan to Three Arrows Capital had been $1 billion, and that it was backed by collateral of $1.33 billion in Bitcoin and GBTC.

CNBC reported that, according to one of their sources, "equity investors in BlockFi are 'wiped out' and are now writing off the value of their losses."

FOIA request reveals that Coinbase has been providing ICE with blockchain analytics tools

A Freedom of Information Act request has revealed an August 2021 contract between U.S. crypto company Coinbase and U.S. Immigrations and Customs Enforcement (ICE). The contract shows that Coinbase is providing ICE with access to their "Coinbase Tracer" intelligence-gathering tool, which is used to trace blockchain transactions and thwart laundering of funds through crypto tumblers.

Cryptocurrency has long been touted as a tool for the unbanked, including those who don't have access to banking because they're undocumented, and for people hoping to operate free from government observation. Coinbase, however, has actively courted government contracts such as this one, which has not won them favor among the more libertarian-leaning crypto enthusiasts.

SEC rejects Grayscale application to create Bitcoin ETF

The U.S. Securities and Exchange Commission rejected a proposal from Grayscale Investing that would turn their Bitcoin trust into an exchange-traded fund (ETF). If accepted, this would have been the first Bitcoin ETF. However, the SEC determined that the listing plan did not sufficiently prevent fraud or manipulation.

Also on the 29th, the SEC rejected an application from Bitwise to create a Bitcoin exchange-traded product (ETP).

Grayscale immediately announced they would be suing the SEC, a course of action they'd been suggesting for several months. Don't hold your breath, though—a litigation analyst estimated such a lawsuit would take 12–18 months to reach resolution.

Crypto games site "w3itch.io" blatantly copies itch.io, hosts stolen games

Tweet from w3itch.io: "We are really sorry about used itchio's CSS files. But we are really shot of designer. And if you check in detail the supported project types and features are very different between us and they are two different public goods. We will try to make a distinction in UI in future."Tweet by w3itch.io (attribution)
A somewhat blundering group of developers decided to create "w3itch.io", an online marketplace for game creators. The marketplace said it was intended to be friendly to games incorporating NFTs and other crypto-related technologies, unlike the indie game marketplace itch.io, which tweeted in February that "NFTs are a scam. If you think they are legitimately useful for anything other than the exploitation of creators, financial scams, and the destruction of the planet the we ask that [you] please reevaluate your life choices."

W3itch.io apparently decided the best way to accomplish their goal would be to not only steal itch.io's site design, but the source code itself. The games hosted on the website were also taken without the consent from their creators.

After being called out by the KennyNL Twitter account, W3itch.io admitted to stealing the CSS, as well as buying Twitter followers. However, they refused to take the website down, and seemed to claim they were unable to remove listings of stolen games.

Three Arrows Capital ordered to liquidate

A court in the British Virgin Islands ordered the liquidation of Three Arrows Capital, a crypto hedge fund. This follows initial rumors in mid-June that the firm was insolvent, then a report shortly after that the group was looking at options including asset selloff or a buyout.

The court action followed lawsuits from several creditors over its failure to pay debts. Those creditors included Voyager Digital, who reduced their platform's withdrawal limit after reporting their exposure to 3AC, as well as the crypto exchange Deribit.

CEO and CFO resign from Compass Mining

The CEO and CFO of Compass Mining, a Bitcoin mining hosting and brokerage services firm, both resigned suddenly on June 28. The sudden departures followed accusations the previous week from Dynamics Mining, who alleged that Compass owed them more than $600,000, and that employees had tried to break into a Bitcoin mining facility to steal back Bitcoin miners. Compass denied the allegations. Shortly afterward, the company closed its Discord channel with one day's notice, prompting allegations that they were attempting to thwart customers sharing information and complaints.

Hacker makes off with $3.8 million from the XCarnival "metaverse bank", returns half

XCarnival is a project describing itself as a "metaverse asset bank". The project drew in users by promising high rewards, with one marketing campaign promising 41% APY.

A hacker was able to exploit a flaw in the smart contract for the project, stealing crypto notionally worth $3.8 million. The loss to the protocol was likely higher. XCarnival paused its smart contract after learning about the hack from a crypto watchdog.

On June 26, XCarnival announced that they had reached an agreement to give a 1,500 ETH "bug bounty" to the attacker, who agreed to return the remaining 1,587 ETH ($1.9 million) with an agreement that XCarnival would not pursue legal action.

Even a free sports car couldn't get anyone to bid on Chevrolet's first NFT

An illustration of a bright green 2023 Chevrolet Z06 speeding through a vaporwave-style city centerChevrolet "Own The Color" NFT (attribution)
Chevrolet decided to create their first ever NFT, an illustration of a bright green 2023 Corvette Z06. The 1 of 1 edition NFT, titled "Own the Color", also would come with a "free" real-life souped-up version of the car, painted in the same color, and with the promise that the shade would never be used again on that model of car.

The NFT went up for sale on June 20, with bidding scheduled to last for four days, and a starting bid of 206 ETH (around $240,000). Apparently collectors decided the NFT wasn't enough to justify dropping that kind of cash on a car that is expected to sell for around $90,000, because the auction received no bids.

SuperRare, the marketplace used for the auction, explained that users must have missed the opportunity to bid "due to the craziness of NFT NYC" (a cryptocurrency conference that ran from June 20–23), and the project extended the bidding time by 24 hours. After the 24 hours had elapsed, they still had zero bids.

Crypto payments not so popular at the crypto-themed restaurant

Two television screens showing a beef menu and vegan menu, emblazoned with Bored Apes and Mutant Apes. Prices start at $13 for beef hamburgers and $15.50 for vegan burgers.Bored & Hungry menus (attribution)
The LA Times reported that the Bored Ape-themed "Bored & Hungry" restaurant in Long Beach, California had stopped accepting crypto payments. Despite excitedly announcing the first ever crypto purchase, made with Apecoin, when the restaurant opened in April, it seems crypto payments haven't been working out for them. The Times reported that the restaurant had stopped accepting crypto at some point in the past, and that an employee described the crypto payment option as both unwieldy and unpopular with customers.

The Times later updated the story, writing that the company's co-founder told them that the restaurant shuts off the payment system "'from time to time' for upgrades", but was still accepting crypto.

The menu lists prices in USD, not Ether or Apecoin, and most people buy their $13 hamburgers with plain old fiat.

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