https://web3isgoinggreat.com/?id=treasury-department-introduces-proposal-targeting-crypto-mixers HomeAboutWhat is web3?FAQLicenseTwitterMastodonNewsletterRSS LeaderboardGlossaryContributeSkip to timeline Illustration: A sad-looking Bored Ape Yacht Club NFT monkey looks at a world engulfed in flames. Web3 is Going Just Great ...and is definitely not an enormous grift that's pouring lighter fluid on our already smoldering planet. Follow on Twitter, Mastodon, or RSS. Created by Molly White. Subscribe to her newsletter for weekly recaps. Start from the top October 19, 2023 * Treasury Department introduces proposal targeting crypto mixers The U.S. Treasury Department introduced a proposal for new regulation that would require cryptocurrency mixers (also called tumblers) to up their recordkeeping and reporting processes. Needless to say, for a class of projects intended to help people anonymize their cryptocurrency transactions and make them more challenging for governments and others to track, this would somewhat undermine the whole point. That seems to be the intention of the Treasury Department, who described mixers as primarily used for illicit money laundering "by a broad range of illicit actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups". * "FinCEN Proposes New Regulation to Enhance Transparency in Convertible Virtual Currency Mixing and Combat Terrorist Financing", press release [archive] * "U.S. Targets Crypto Mixers Over Money Laundering Risks", The Wall Street Journal [archive] Theme tags: Law October 19, 2023 * Superdao to shut down An orange shape resembling a bird wing, followed by "Superdao" in black(attribution) Superdao, a project aiming to assist communities in forming DAOs, has announced it will be closing its doors. It was blunt in its announcement: "it became clear that the crypto industry itself becomes much smaller than its initial ambition ('the new internet') and specialized tools for crypto companies are unlikely to produce venture-scale outcomes." The project had raised $10.5 million in a 2021 seed funding round, and has said they intend to return remaining funds to its investors. * "Superdao is closing down", Superdao blog [archive] * "DAO-Builder SuperDao Shuts Shop, Returns Investor Money", CoinDesk [archive] Theme tags: Collapse Tech tags: DAO October 19, 2023 * Gemini, Genesis, and DCG sued over $1 billion alleged fraud The text "Genesis" in black sans serif. There is a block missing from the G where the horizontal connector meets the curve of the letter. (attribution) The New York Attorney General filed suit against Gemini, Genesis, and Digital Currency Group (DCG), a group of companies that have been involved in a bitter feud amongst themselves. As Genesis undergoes bankrutpcy proceedings, Gemini and its Winklevoss twin cofounders have been firing accusations of fraud at them as they try to recover around $900 million of their customer funds that were with Genesis when it collapsed. Now, the New York Attorney General is alleging that Gemini repeatedly lied to investors about its Gemini Earn program, assuring them that it was low-risk when internal analysis had revealed Genesis' loans to in fact be quite risky. Some personnel involved in evaluating this risk even withdrew their own funds from the program in the summer of 2022. Genesis, DCG, and DCG CEO Barry Silbert are charged with defrauding both investors and the public when they tried to cover up $1.1 billion in losses. The lawsuit alleges that Genesis had not properly audited its borrowers, and lied to Gemini about regular reviews of borrowers' financial conditions. In a press release, the AG claims that the companies' actions resulted in around $1 billion in losses, including in some cases their customers' entire life savings. * "Attorney General James Sues Cryptocurrency Companies Gemini, Genesis, and DCG for Defrauding Investors", press release from the Office of the New York State Attorney General [archive] Theme tags: Collapse, Law, Shady business Tech tags: lending [robber] October 18, 2023 * Hope Lend emptied in $825,000 hack A wavy blob shape made from concentric white lines, followed by "hope.money"(attribution) A small defi protocol called Hope Lend was drained of nearly all its assets when attackers stole around 526 ETH (~$825,000). Hilariously, the project claims the hacker was frontrun by a watchful third party, who paid half of the stolen funds (~264 ETH, or around $414,000) to an ETH validator to allow them to frontrun the transaction. The original attacker who discovered the bug reportedly made no money at all. The stolen assets represented the entire TVL of the project. * "Ethereum DeFi protocol Hope Lend drained after exploit", CoinTelegraph [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Ethereum Tech tags: DeFi [robber] October 17, 2023 * Everscale halts bridge as "large number" of tokens stolen A purple v shape pointing up and to the right, followed by "Everscale" in black(attribution) The team behind the Everscale blockchain project disclosed that a "large number" of tokens had been stolen. In an attempt to thwart the attacker from cashing out, they announced that they had halted the project's bridge. The team did not announce how many tokens were stolen. The price of $EVER suffered a 20% drop, though whether it was due to an attacker selling off tokens or collective panic by other token holders is not clear. The method of the theft was also not described. * "Everscale token price drops 20% as team says large number of EVER tokens were stolen", The Block [archive] Theme tags: Hack or scam October 17, 2023 * Reddit abandons blockchain-based Community Points A cartoon bumpy light yellow moon with holes in it(attribution) Reddit's attempt to blockchainify their signature Reddit karma has come to an end as the company has decided to pull the plug on the feature. The idea was that users could "own a piece of their community" (what?) by racking up points for their positive contributions, which they could then spend on perks like custom badges. Reddit attributed the decision to scaling difficulties, regulatory uncertainty, and the quantity of resources the company found itself having to put into the feature. The tokens were only used on a handful of subreddits, and the team had migrated them from the Ethereum blockchain to the Arbitrum Nova L2 chain, but despite that scaling continued to be a problem. The news caused a massive dive in the prices of $MOON and $BRICK, the two Reddit tokens, as holders tried to exit their positions before the tokens became useless. Some angrily accused Reddit of rug-pulling, threatening legal action. One wrote, "I wish you guys knew how reckless this decision is and how many people you've hurt." Some accused subreddit moderators of selling when they learned about the decision an hour before it was made public. Others were delighted at the news, however. One wrote, "Thank the effing Lord. This moons caused so much shit tier spamming for over a year." * Reddit announcement [archive] * "Reddit is killing blockchain-based Community Points", TechCrunch [archive] Theme tags: Good news Blockchain tags: Blockchain: Ethereum [robber] October 17, 2023 * Fantom Foundation and employees lose collective $7 million in mass hack Two line drawings of stacked boxes in blue, followed by "Fantom" in lowercase(attribution) An attack targeting the Fantom Foundation and its employees siphoned $7 million from wallets under their control. Of that, around $550,000 were funds belonging to the Fantom Foundation. One individual employee reportedly lost $3.4 million. It's not clear yet how the attack was perpetrated, although crypto researcher Spreek reposted a comment by an admin in Fantom's Telegram channel, where they blamed the theft on a zero-day exploit in Google Chrome. * "Fantom Foundation confirms $550K loss in broader $7M attack", CryptoSlate [archive] * Tweet by Spreek [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Ethereum, Fantom [shades] October 16, 2023 * TrueUSD tries to claim no affiliation with tokens created by its deployer address, raising further questions A blue circle with a white T. There is a gap in the T on the top left portion(attribution) A new, Euro-pegged stablecoin called $TEURO emerged on October 13, with an initial supply of around EUR70 million. However, TrueUSD subsequently tweeted that "we have zero affiliation with it". The post warned people to "step back and refrain from risky investments". However, the post raised only more questions, as the $TEURO token had been deployed by the address that deployed the primary TrueUSD token. This means that either TrueUSD is lying when they claim they're unaffiliated with $TEURO, or some of their private keys were compromised, allowing an unrelated party to deploy a contract appearing to belong to them. * Tweet thread by ChainArgos [archive] * Tweet thread by zachxbt [archive] * Tweet by zachxbt [archive] Theme tags: Shady business Blockchain tags: Blockchain: Ethereum Tech tags: stablecoins October 16, 2023 * Almost $100 million liquidated over false news of Bitcoin ETF approval A sudden spike and then rapid decrease in the price of Bitcoin, from just under $28,000 to $30,000 and then back to around $28,000October 16 Bitcoin price spike (attribution) A post falsely announcing that the SEC had approved a spot Bitcoin ETF caused $100 million in liquidations as the market briefly surged on the news. $81 million in short positions were liquidated as Bitcoin shot up to $30,000 from just under $28,000, and another $31 million in long positions were liquidated as the news turned out to be false. The post by crypto media outlet CoinTelegraph was based on a faked screenshot of what appeared to be the Bloomberg Terminal. The post quickly propagated through the crypto world before people began to question its veracity. CoinTelegraph later issued an apology, blaming the incident on a failure by employees to follow the normal editorial approval process. This adds to the list of incidents that illustrate the extent to which false reporting by traditional or crypto media, or by influential personalities, can move crypto markets. Past incidents have included a crypto Twitter personality tweeting the false rumor that Interpol had issued a red notice for Binance CEO Changpeng Zhao, and two instances of token price spikes based on false press releases claiming major corporations would accept the tokens as payment. * "Clarification on sharing false spot Bitcoin ETF news", CoinTelegraph [archive] Theme tags: Hmm, Reporting Blockchain tags: Blockchain: Bitcoin [shades] October 16, 2023 * South Korean regulators allege Sui Foundation manipulated markets A blue teardrop shape with a S-shaped line through the middle (attribution) A lawmaker in South Korea has alleged that the Sui Foundation has engaged in market manipulation to enrich themselves. The South Korean Financial Supervisory Service reportedly launched an investigation into the distribution of the SUI token following Representative Min Byeong-deok's allegations, intending to determine whether there was truth to his claims that they had paid themselves interest by staking tokens that should have been left untouched in the non-circulating supply. The Sui Foundation has disputed the allegations on Twitter, calling them "unfounded and materially false". * "Sui token struggles to regain despite denial of 'unfounded' allegations", Cointelegraph [archive] * Tweet by the Sui Foundation [archive] Theme tags: Shady business No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.