Web3 is Going Just Great

The rumor has been amplified by Tron founder Justin Sun, who tweeted: "First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets." First Digital responded by insisting they were solvent, and denounced Sun's comments as "a typical Justin Sun smear campaign to try to attack a competitor to his business".

On March 31, the attacker sent an on-chain message to the platform, writing: "Hello I tried to move funds to tornado but I used a phishing website and all the funds have been lost. I am devastated. I am terribly sorry for all the havoc and losses caused. All the 2930 eth have been taken by that site owners. I do not have coins. Please redirect your efforts towards those site owners to see if you can recover some of the money. I am sorry."

The zkLend project instructed the thief to return any remaining funds to their wallets, though no such transfer has happened yet.

There has been substantial conversation over whether the hacker had truly been in turn scammed out of the stolen funds, had made up a fake phishing site to try to obscure the path of stolen money, or perhaps whether the whole event had been an April Fools' joke. However, zkLend noted on Twitter that the phishing website, which imitates the Tornado Cash platform, has been operational for five years and is likely not connected to the hacker.

An instructional video posted to social media by the platform encourages people to "do [their] patriotic duty" by going to a District Court in a blue state, then "Secretly snap a photo of the judge. Don't let the bailiff see you." The video shows a person uploading a photograph of Judge James Boasberg, who is presiding over the Trump administration deportation flights case, and reporting him for "terrorism".

The project has been likened to Stasi programs in which citizens were paid to spy and report on their neighbors.

The founder of ICERAID, Jason Meyers, claims that he had had conversations with the White House about the project, although the website for the tool states it is not affiliated with any government agency and is not a website of the US government. Meyers has faced several enforcement actions resulting in disciplinary penalties over his involvement in security sales, and in 2014 was permanently banned by FINRA from broker-dealer activities after misappropriating investor funds. Meanwhile, multiple users have complained about not receiving their promised ICERAID tokens, and the project reportedly changed its terms after the token presale to reduce the amount of money buyers would earn for participating.

zachxbt has previously accused Coinbase of not doing enough to protect customers from hundreds of millions of dollars in scams, and he noted that in these cases, Coinbase had not marked the thief wallets as malicious in various cryptocurrency compliance tools.

In addition to promoting the token through the usual means, Novogratz got a large tattoo on his shoulder representing the token. Sadly for him, although the LUNA token would later fade away after crashing in spectacular (and fraudulent) fashion, tattoos are forever.

HyperLiquid validators voted to delist the JELLY token. They also evidently overrode the JELLY price provided by the market oracle in an attempt to reduce their losses, leading an unrelated crypto executive to question "Is that even legal?"

Recently, $7 million was spent in a Polymarket market over whether Ukraine would agree to Trump's proposed mineral deal. Though no mutual agreement was reached, the market resolved to "yes". When it was challenged, a large holder of the UMA token cast a substantial number of yes votes to sway the outcome of the resolution, leaving the outcome in place.

Although Polymarket acknowledged that "This market resolved against the expectations of our users and our clarification" (referring to a Polymarket clarification that the resolution was too early as no mutual agreement was reached), they also refused to issue any refunds, writing that "this wasn't a market failure". "This is an unprecedented situation, and we have been in war rooms all day internally and with the UMA team to make sure this won't happen again. This is not a part of the future we want to build," the team member added.

This is the second time Abracadabra has been exploited, after suffering a $6.5 million theft in January 2024.

Binance announced that they had fired the employee, as "This behavior constitutes front-running based on non-public information obtained from his previous role and is a clear breach of company policy." The company became aware of the insider trading after they were alerted by outside parties who submitted tips to the company.

This is the second Zoth exploit in two weeks, following a $285,000 theft on March 6 by an attacker who took advantage of a bug in one of the platform's smart contracts.

Four.Meme acknowledged the latest theft on Twitter, writing that they intended to reimburse users who lost money.