Web3 is Going Just Great

According to the regulators, Silvergate "had serious deficiencies" in its anti-money laundering programs, including in its intra-customer crypto transfer product. In particular, the SEC highlighted $9 billion in suspicious transfers among FTX entities that should have been detected by compliance programs. The SEC also alleged that Silvergate misrepresented its financial state during the post-FTX collapse bank run.

The SEC's lawsuit claims that Consensys violated securities laws by acting as an unregistered securities broker, and by offering staking services that constituted unregistered securities offerings. The SEC has previously cracked down on staking offerings by other firms, including Coinbase and Kraken.

In the lawsuit, Paul claims that Coffeezilla knowingly falsely accused Paul of being in on the scam in hopes of getting more attention on his videos. Paul is seeking more than $75,000 in damages.

In January 2024, Paul filed suit against the advisers he's described as "conmen". He's also pointed the finger at them while defending a potential class action complaint from defrauded investors.

In one case, a victim was able to transfer $150,000 in cryptocurrency to the attackers before their cryptocurrency exchange blocked the suspicious transfers. However, in their other attempts to physically steal crypto, they were unsuccessful, with victims either refusing to hand over their crypto or successfully escaping.

In one case, St. Felix and his associates targeted a woman from whom his group had already stolen $3 million in a SIM swapping attack. When they broke in and held the woman at gunpoint to try to steal the $500,000 in crypto she had left, the woman refused to turn over her password to her cryptocurrency account, so dismayed by her earlier loss that she told the men just to shoot her.

St. Felix was convicted on nine counts by a federal jury, and faces a sentence of seven years to life in prison. Thirteen co-conspirators also pleaded guilty.

23.8 million FAR were taken from a wallet, and the majority were sold for around $164,000 in USDT. The exploiter still holds 3.4 million FAR, which are notionally worth $83,250 but not likely to be sellable for that amount.

Farcana raised $10 million in seed funding in November 2023 from investors including Animoca and Polygon Ventures.

SportsBet has not yet disclosed any theft.

The application asks its users to connect their wallets to allow it to track their holdings, but promises on the website that it offers "the ultimate security for your digital assets". "Since we ask for read-only access only, your holdings are perfectly safe under any conditions," the website promises, later touting its "military-grade encryption".

CoinStats shut down the platform while investigating the incident. Losses have been estimated at around $10 million.

50 Cent also claimed in the post that "Who ever did this made $300,000,000 in 30 minutes." It's not clear where 50 Cent got this number, because the token has only done $19.8 million in volume. One wallet made around $722,000 off the token, and three others also made over $100,000.

It appears that assets notionally worth around $55 million were stolen. Furthermore, the exploiter sold substantial amounts of some cryptocurrencies, including Luna Classic, causing major price movements in those tokens.

According to newly installed Binance CEO Richard Teng, Binance froze $5.3 million of the stolen assets.

However, others have noted that the number of transactions and amount of cryptocurrency taken by CertiK while "investigating" the bug seems to far exceed the norm for whitehat security researchers, and that they took cryptocurrency amounting to millions of dollars — making their "testing" look a lot more like a blackhat theft. Furthermore, CertiK made several transfers to Tornado Cash as part of their "testing" — an entity that is sanctioned by the United States.

Kraken alleged that CertiK did not disclose the full extent of their employees' transactions, and refused to return the $3 million they had taken. They also alleged that CertiK had attempted to extort them. Kraken said they had been in contact with law enforcement, and were "treating this as a criminal case".

Ultimately, CertiK returned the funds. However, it's not clear if criminal action may be ongoing.

Shkreli attempted to frontrun the news in a Twitter space, and came out with his own claims that he had collaborated with Barron Trump to create the token, and with Andrew Tate to pump its price. However, fellow felon and memecoin pumper Roger Stone subsequently crawled out of the woodwork to claim that neither Barron nor Donald Trump was involved with $DJT.

Shkreli has yet to provide solid proof that he created the memecoin, though zachxbt's research tends to be very strong. If true, Shkreli faces potential legal repercussions, as he is still on parole after his release in 2022. The terms of his parole require him to "refrain from engaging in self-employment which involves access to client's assets, investments, or money, or solicitation of assets, investments, or money", and to make financial disclosures to the courts. Shkreli was also banned from the securities industry in 2018, as part of a settlement with the SEC.

One of the addresses involved in the exploit appears to have contributed to the Holograph protocol, though it's not clear if they took advantage of insider knowledge to pull off the heist.

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.