Doodled Dragons serial rug-puller revealed to be behind yet another Solana project

A green lizard with green flames in its forehead, biting a dagger and wearing a black turtleneck shirtLizard #2858 (attribution)
The serial rug-puller who was behind the Balloonsville rug pull in February and Doodled Dragons rug pull in January has popped up once again, this time with a Solana NFT project called Reptilian Renegades. A project called Hydra Launchpad, which had recently announced they would be adding Reptilian Renegades to their lineup, were the ones to expose the project team member, who went by "Fuopist" on this project. Hydra claimed that they had been able to take control of the project's mint authority and cut off Fuopist from receiving further proceeds from the project.

After the Balloonsville rug pull, which used the Magic Eden NFT marketplace, Magic Eden announced they would no longer be accepting anonymous projects on their platform. Despite that, this person was able to launch Reptilian Renegades on Magic Eden, where they were able to get their account verified.

Following the unmasking, the Reptilian Renegades Twitter account posted a slew of tweets supposedly exposing various NFT influencers for shady behavior including undisclosed promotions. "I'm literally the Batman. I stop crime whilst committing crimes," they wrote in response to a person who tweeted, "The balloonsville guy is back and he's ready to tell you how corrupt NFTs are while he steals from you. The lack of self awareness is truly next level."

Users threaten to sue after yield generation project Stablegains loses $44 million in Terra collapse

A class action law firm sent a letter to the yield generation project Stablegains, demanding records on customer accounts, marketing and advertising strategies, and communications relating to the Terra stablecoin. Stablegains described itself as aiming to "make it simple and safe for everyone to benefit from advances in financial technology", and promised that "regardless if crypto markets are soaring or crashing, the value of assets under our management remains stable".

Unfortunately for their customers, it turned out that Stablegains was heavily invested in the Terra project's Anchor protocol, which collapsed along with the rest of the Terra ecosystem last week. Stablegains' website had stated they primarily generated yields through the asset-backed stablecoin USDC. However, after the collapse of Terra, Stablegains admitted that "All users' holdings are in UST"—which lost over 90% of its value.

CZ admits Binance held Luna and UST in bizarre tweet threads

On May 15, Binance CEO Changpeng Zhao (widely known as CZ) created a tweet thread in which he attempted to speak nonchalantly about questions that had "just occurred to [him]" about whether Binance held any UST. In the thread he attempted to distance himself from decisions or knowledge around such holdings, speaking cavalierly about how "we probably do have some". Former FBI agent James Harris wrote an interesting analysis of the thread, concluding, "If people weren't worried before, they will be now. If investigators weren't suspicious before, they should be now."

The following day, CZ tweeted, "Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak." In this tweet, "not much" glossed over the fact that these LUNA, obtained in return for a $3 million investment and at one point nominally worth $1.6 billion, are now worth $2,900.

He also wrote that Binance had 12,000,000 UST—worth $12 million when UST was properly pegged, and now worth $1.16 million (assuming liquidity exists to sell it at all).

People continue to wait for a public accounting of what happened to Terra's $3.5 billion in Bitcoin reserves

Now that the dust is settling somewhat from the dramatic collapse of Terra, people are beginning to wonder when they'll hear more about what exactly happened to the 80,394 Bitcoin (priced at $3.5 billion at time of purchase; priced closer to $2.5 billion at the time of writing this entry) that previously belonged to Luna Foundation Guard (LFG). The project had previously purchased the assets to hold as reserves, and as UST began to lose its peg, LFG announced they would use those reserves to buy UST to help maintain the peg. Over the next few days, the reserves were emptied, but after they were moved to the Gemini exchange they became impossible to trace further. Although transactions are usually quite traceable on the blockchain, when funds are moved to services like the Gemini exchange, they become impossible to trace using public data because of how exchanges pool funds and transactions internally.

Terraform Labs CEO Do Kwon tweeted on May 13 that "We are currently working on documenting the use of the LFG BTC reserves during the depegging event. Please be patient with us as our teams are juggling multiple tasks at the same time." It's not clear when this documentation will be released. Binance CEO Changpeng Zhao joined the group of people asking about the BTC reserves, tweeting, "I would like to see more transparency from them. Much more! Including specific on-chain transactions (txids) of all the funds. Relying on 3rd party analysis is not sufficient or accurate."

CoinDesk reports that Terra's Do Kwon was behind another failed algorithmic stablecoin project

In a scoop published shortly after the catastrophes began with TerraUSD and Luna, CoinDesk reported that Terraform Labs CEO Do Kwan had also previously led a different failed stablecoin project. Using the pseudonym "Rick Sanchez", Kwon created "Basis Cash" (BAC), another algorithmic stablecoin. Basis Cash also aimed to peg to the US dollar, but never actually achieved this value. The coin has traded far below $1 for most of its existence, dropping and remaining below $0.01 in early 2021.

Do Kwon has never disclosed his involvement with this failed project. CoinDesk wrote that although their "default position is to respect the privacy of pseudonymous actors with established reputations under their well-known handles unless there is an overwhelming public interest in revealing their real-world identities", there was now "such public interest as Kwon’s UST stablecoin death spirals, wreaking havoc across the broader cryptocurrency market. Amid this precarious situation, investors deserve to know that UST was not Kwon’s sole attempt at making an algorithmic stablecoin work." It was not made clear in the article when CoinDesk first learned of Kwon's connection to Basis Cash, though the authors later stated they'd learned of it the night before they published.

Founder of popular Azuki project admits to past rug pulls

A human figure with brown-purple skin and blond hair tied back in a bun, holding a sword over her shoulder. She has a tattoo on her neck and the side of her face, and is wearing a parka with a furred collar.Azuki #2821 (attribution)
In a blog post titled "A Builder's Journey", the founder of the popular Azuki NFT project admitted that he had also been behind the NFT projects CryptoPhunks (note the "h"), Tendies, and CryptoZunks. CryptoPhunks were simply mirrored versions of the early CryptoPunks project. In his telling, he decided to "decentralize the [CryptoPhunks] project by handing over the reins to our community". Many, if not most, others consider CryptoPhunks to be a rug pull—abandoned by its founder in a betrayal of the community. The same is true for the other two projects that Zagabond admitted he ran.

This news came as a shock to many lovers of Azuki NFTs, pricey NFTs which regularly trade for 20–30 ETH (~$45,000–$70,000). Azuki is not without its own controversies, recently facing accusations of insider trading.

"Official" Teenage Mutant Ninja Turtles NFT project buys a fake IP rights contract

Illustration of a Teenage Mutant Ninja Turtle holding a boombox to its earTMNT NFT Twitter profile picture (attribution)
A project to create Teenage Mutant Ninja Turtles NFTs stirred up a lot of excitement, garnering more than 100,000 Twitter followers on a verified Twitter account that described itself as "The Official TMNT NFT". Crypto research project "Rug Pull Finder" wrote on March 29 that they didn't believe the project owned the IP rights they needed. The TMNT project posted later that day same day, "Let's make it clear: we own the NFT digital rights of the Original Teenage Mutant Ninja Turtles 1987". Rug Pull Finder followed up with a detailed thread in late March outlining their belief that the project didn't own the proper rights to create the NFTs, writing that, "unless they can get cooperation from Viacom for the release of their collection, it will absolutely be a rugpull".

In late April, the Twitter account was suddenly suspended. On April 30, the TMNT project announced in their Discord that they had discovered that they had been sold a "fake IP rights contract", which they learned after communication from Paramount. They, probably overly optimistically, wrote that they would be pausing the project but they were hoping to "continue the project hand in hand" with Paramount.

SEC files fraud complaint against NASGO organizers

The SEC charged four individuals with fraud violations in relation to their actions with NASGO, a company that created various tokens that the SEC has since described as unregistered securities. The defendants allegedly made claims that one of the tokens would increase in value by 10¢ every week, plus another 10¢ each time a new business joined their platform. The defendants also engaged in various other shady business, including hiring traders to trade the tokens amongst themselves to give the appearance of investor demand. This worked only until investors actually decided they wanted to cash out, causing the whole thing to fall apart because the market demand was faked. According to the SEC, NASGO misappropriated almost $4 million in investor funds.

Representative Madison Cawthorn faces accusations of insider trading and disclosure violations related to Let's Go Brandon coin

Instagram post of Madison Cawthorne posing with several others. Caption by jameskoutoulas reads "Never get sick of a @madisoncawthorn bro out". A comment by madisoncawthorn reads, "Tomorrow we go to the moon!"Cawthorn, pictured in an Instagram post by LGBCoin project leader James Koutoulas (attribution)
North Carolina Representative Madison Cawthorn was one of several influential people who helped to promote the "Let's Go Brandon" memecoin, which has since become the subject of a class-action lawsuit due to a reported pump-and-dump scheme. Cawthorn is not named in the lawsuit, but he may face his own troubles: although he has claimed to own the currency, he has never publicly disclosed any stake in the coin as is likely required by ethics legislation. Cawthorn also commented "Tomorrow we go to the moon!" on a post about the coin from his official Instagram account, the day before the team of NASCAR driver Brandon Brown announced the cryptocurrency would be the primary partner for the 2022 season. "This looks really, really bad," said governmental watchdog group member Dylan Hedtler-Gaudette. "This does look like a classic case of you got some insider information and acting on that information. And that's illegal."

Epoch Times writers mass-mail unsolicited "newspaper" promoting crypto

Photograph of the front page of a newspaper, titled "Wall Street Today" and with the headlines "Why Investors Are Making a Killing with Cryptocurrency" and "Slashing Bitcoin Costs by Up to 75%"Wall Street Today front page (attribution)
Bob Byrne and Tim Collins, two prolific contributors to the far-right Epoch Times, have expanded their grift to crypto. A twenty-page-long "newspaper" titled Wall Street Today appeared in many mailboxes, featuring misleading charts and a multi-page-long advertisement for a Bitcoin mining company—evidently hoping that its recipients might invest in crypto or in the penny stock for the mining firm. A small-print disclosure on page 17 revealed that the firm, Creek Road Miners, paid $1.9 million for the glowing "review".

Byrne and Collins published the paper via their co-founded company Streetlight Equity. The firm has also published ostensibly economic-focused articles that include conspiracy theories about how U.S. sanctions on Russia are all a part of a plan to "force the left's green agenda", and rail against pandemic lockdowns.

This is not the first unsolicited newspaper from the Epoch Times or its associates; the Falun Gong-associated and strongly anti-Chinese Communist Party publication previously distributed an unsolicited "special edition" which described COVID-19 as the "CCP virus". This led to pushback from Canadian postal union, who urged the Canadian government to ban its distribution as hate speech they feared would endanger Asian Canadians. Epoch Times have also spread QAnon and anti-vaccine conspiracy theories, spread false claims of fraud in the 2020 United States presidential election, and promoted far-right politicians in Europe.

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