UwU Lend was created by Michael Patryn, aka Omar Dhanani, aka "0xSifu", who has been behind several cryptocurrency projects that have suffered major exploits. This is not exactly helping concerns among some observers that perhaps Sifu is the common denominator in these suspicious losses.
UwU Lend re-enables protocol after hack, immediately gets hacked again
After suffering a $20 million loss in a June 10 hack, the UwU Lend defi lending protocol has now seen another $3.7 million in suspicious outflows only days later. Although UwU Lend paused the protocol after the attack, they re-enabled it on June 12, claiming to have identified and resolved the vulnerability. This apparently wasn't the case, given the same attacker quickly repeated their exploit.
Phishing scammers impersonate Andreessen Horowitz employee to drain crypto wallets
Attentive phishers noticed when Andreessen Horowitz partner Peter Lauten changed his Twitter username from
@peter_lauten to @lauten, and snapped up the previous username. They then began contacting various targets in the cryptocurrency world, asking to set up meetings to arrange appearances on the venture capital firm's crypto podcast.The scammers followed a familiar playbook in which they asked their targets to download video call software called "Vortax", which was actually wallet draining malware. However, these scammers had a leg up on some others who have been running that scheme: the Andreessen Horowitz website still listed Lauten's old username on their website, giving even skeptical victims some reassurance that the account was legitimate.
According to crypto sleuth zachxbt, who first reported on this incident, one victim lost $245,000 when his wallets were drained by the malware.
Terraform Labs, Do Kwon reach $4.5 billion settlement with the SEC
Terraform Labs and its former CEO Do Kwon have agreed to settle the SEC's civil action against them with a $4.5 billion payment of disgorgement, interest, and penalties. Kwon and the company were behind the collapsed Terra/Luna stablecoin project, which imploded in May 2022. It was among the first dominoes in what ended up being an industry-wide collapse.
If the settlement is approved by the judge, Kwon will personally be responsible for around $200 million of the settlement payment, with Terraform Labs shouldering the rest. Although the settlement is among the largest the SEC has received in a securities fraud lawsuit, it's unlikely the company will ever pay anything close to the total amount, as it is in bankruptcy and claims to have only around $150 million in assets remaining. Both the company and Kwon will be banned from trading crypto asset securities.
The substantial fine is among the lesser of Kwon's worries at the moment, as he is still in jail in Montenegro pending extradition to either South Korea or the United States to face serious criminal charges for his role in the fraud.
- "Do Kwon's Crypto Firm Agrees to Pay $4.5 Billion Penalty to SEC", Wall Street Journal [archive]
UwU Lend suffers almost $20 million hack
The defi lending protocol UwU Lend was hacked for around $20 million. After various blockchain security firms observed suspicious outflows of funds, the protocol acknowledged there had been a "situation" on their Twitter account, and wrote that they had paused the protocol while they were investigating.
UwU Lend was founded by Michael Patryn, aka Omar Dhanani, aka "0xSifu" ā a co-founder of the ill-fated QuadrigaCX exchange and ex-con. He also pseudonymously ran the defi cryptocurrency project Wonderland until his identity was revealed after the protocol suffered a meltdown.
Loopring's "most secure" wallet hacked for at least $5 million
Although Loopring markets its wallet application as "Ethereum's most secure wallet", that's evidently a pretty low bar. They disclosed that they had suffered a breach in their wallet recovery service, which allows individuals to designate trusted entities to recover assets or freeze compromised accounts. An attacker was able to "recover" assets from wallets that had only designated a single Loopring guardian, pilfering at least $5 million.
Loopring announced that they had suspended their account recovery operations, and were working with law enforcement to trace the attackers.
New York Attorney General sues over $1 billion NovaTech and AWS Mining crypto pyramid schemes
The New York Attorney Generalās office has sued Cynthia and Eddy Petion over two allegedly fraudulent cryptocurrency pyramid schemes called AWS Mining and NovaTech. They particularly targeted victims of Haitian descent, promoting their schemes in Creole, leveraging their victimsā religion, and promising them āfinancial freedomā and āfreedom from the plantationā.
In reality, the schemes were pyramid schemes in which investors earned crypto for recruiting others to buy in. NovaTech also used the funds from newer investors to pay out the supposed āreturnsā from the investment scheme, in a classic Ponzi fashion. From August 2019 āĀ April 2023, victims deposited more than $1 billion into NovaTech. Though it was described as a trading operation, only about $26 million ever went into crypto trading.
In June 2022, the couple secretly sold their Florida house and moved to Panama, while continuing to pretend they were in the state. Speaking to another operator of the scheme, Cynthia Petion advised: āleave the countryā¦they canāt serve you if they canāt find you lol.ā
Blockchain developer loses over $48,000 after posting private key to Github
A blockchain developer posted on Twitter that he had lost almost $50,000 after his cryptocurrency wallet was drained. He explained that he had been working on a software project on Github in a private repository that contained his wallet's private key. In order to apply for a funding grant from the Optimism project, he had to make the repository public. However, he forgot that the secret key was in the repository.
Generally, it is very bad practice to store sensitive secrets in Github, even when projects are set to private.
"Got drained of everything," he wrote on Twitter. A commenter asked how long it took for the attacker to steal the money after the private key became publicly visible. "2 min", he replied.
Lykke exchange hacked for over $23 million
The UK-based Lykke crypto exchange suffered an exploit that saw more than $23.6 million stolen from the platform. The platform shut down trading two days later, and some customers reported seeing balances of 0 in their accounts.
The theft was first noticed by outside researchers, who saw the suspicious outflows and accused the platform of not communicating the security breach to its customers. The following day, Lykke acknowledged the attack and informed customers via email.
DOJ indicts Epoch Times executive for crypto scam
Widong "Bill" Guan, Chief Financial Officer of the far-right Epoch Times media company, has been indicted on money laundering conspiracy and bank fraud charges for his alleged involvement in a cryptocurrency scam and money laundering operation. According to the Justice Department, Guan used cryptocurrency to purchase prepaid debit cards that were loaded with fraudulently obtained unemployment insurance benefits. Guan and others then laundered the funds through bank accounts they'd fraudulently opened using stolen personal information.
According to the DOJ, banks became suspicious when the revenue for the Epoch Times increased 410% ā from around $15 million to around $62 million ā from the previous year.
- "Chief Financial Officer Of Multinational Media Company Charged With Participating In Scheme To Launder At Least $67 Million In Fraud Proceeds", U.S. Attorney's Office, Southern District of New York [archive]
Velocore decentralized exchange exploited for $6.8 million, Linea blockchain halts in response
The Velocore DEX, built on the Linea Ethereum layer-2 blockchain, was exploited for around $6.8 million in ETH. The hacker was able to take advantage of a bug in the project's smart contract in the logic to calculate swap fees. Using a flash loan attack funded through Tornado Cash, the attacker drained most of the tokens from the pool, bridged the tokens back to the Ethereum mainnet, and then tumbled the stolen funds back through Tornado.
In an unusual move, the operators of the Linea layer-2 blockchain chose to unilaterally halt the chain in order to stop the outflow of stolen assets. Because Linea ā like many layer-2 chains ā is highly centralized, it was possible for the Linea team to unilaterally stop the production of blocks.
This was very controversial, as a single operator being able to unilaterally control the operation of a blockchain goes against much of the cryptocurrency ethos. Following their action, they tried to explain that "Linea's goal is to decentralize our network - including the sequencer. When our network matures to a decentralized, censorship-resistant environment, Linea's team will no longer have the ability to halt block production and censor addresses - this is a primary goal of our network".