Web3 is Going Just Great

After raising user funds, the project's creators drained its liquidity pools. They also convinced users to send funds to them with a technique known as "ice phishing". They then deleted their social media accounts and disappeared.

However, some confusing instructions resulted in the owner sending the punk to the burn address, effectively destroying the NFT. "I was trying to wrap it and don't know what I was doing... Thought I was following the directions exactly..." they later wrote. They also later shared that they had borrowed money in order to purchase the CryptoPunk.

After the collapse, Kwon became a fugitive. South Korea issued a warrant for his arrest in September, and Interpol issued a red notice. However, he's remained on the lam for some time, reportedly hiding in Serbia for a time — a country with no extradition agreement with South Korea.

Now, officials in Montenegro have announced they arrested Do Kwon, who was attempting to travel through the country using falsified documents. Montenegro is a Balkan country bordering Serbia.

According to Coinbase, the Wells notice related to "aspects of the company's exchange, our staking service Coinbase Earn, and Coinbase Wallet". It's not terribly surprising that the SEC might have Coinbase Earn in its crosshairs, as it has recently taken action against similar products, such as Kraken's staking service. In the wake of the action against Kraken, Coinbase seemed to try to pre-empt SEC arguments by sending an email to customers emphasizing things like "You earn rewards from the protocol, not Coinbase". It doesn't look like this has shifted the SEC's thoughts much, though.

This should be an interesting saga to watch, partly because Coinbase has expressed willingness in the past to go head to head with the SEC.