https://www.web3isgoinggreat.com/?id=do-kwon-and-terraform-labs-found-liable-for-40-billion-fraud HomeAboutWhat is web3?FAQLicenseTwitterMastodonBlueskyInstagram ThreadsNewsletterRSSLeaderboardGlossaryContributeSkip 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. Created by Molly White. Subscribe to her newsletter for weekly recaps. * Twitter * Mastodon * Bluesky * Instagram * Threads April 5, 2024 * Do Kwon and Terraform Labs found liable for $40 billion fraud Do KwonDo Kwon (attribution) After hearing arguments that Terraform Labs was "built on lies" during a two-week-long trial, the jury in the civil case against the company and its founder Do Kwon found that both were liable for fraud. Kwon and his company were behind the algorithmic stablecoin, Terra, which dramatically collapsed in May 2022, sending huge ripple effects throughout the ecosystem. He and his company had lied about the stability of the token, ultimately causing massive financial damage to the tune of around $40 billion. Kwon is in custody in Montenegro after attempting to flee criminal cases in both the United States and South Korea. The civil case in the US proceeded without him. * "Terraform Labs and founder Do Kwon found liable in US civil fraud trial", Reuters [archive] * Verdict in Securities and Exchange Commission v. Terraform Labs Pte Ltd. [archive] Theme tags: Law Blockchain tags: Blockchain: Terra [rug] April 3, 2024 * Project promising to rug pull raises almost $29,000 A poorly drawn cartoon of a man in a suit and tie with eyes pointing in different directions(attribution) A project describing itself as "The world's first memecoin pre-announced as a rugpull" was explicit in its marketing: "do not buy this coin, as it will go to zero." Despite that, people sent the creator over 8.8 ETH (almost $29,000) for the project's "pre-sale", even as they repeated on Twitter that the project was a scam and that no one should buy it. Theme tags: Rug pull Blockchain tags: Blockchain: Ethereum [robber] April 1, 2024 * FixedFloat exchange hacked again "Fixed" in orange caps, followed by "float" in black caps, with a symbol of overlapping orange and black diagonal arrows in the middle (attribution) The FixedFloat cryptocurrency exchange was exploited again, this time for around $2.8 million. This follows shortly after a February 18 hack in which attackers made off with $26 million. FixedFloat acknowledged the theft in a Twitter post, and blamed the same thieves. They claimed that this theft was enabled by a vulnerability in a third-party service. * Tweet by FixedFloat [archive] * Tweet by CyversAlerts [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Ethereum Tech tags: DeFi [robber] March 30, 2024 * Solana faces wave of drain attacks linked to trading bots including Solareum A logo based on the green and purple Solana logo, with arrows above and below it, and a circle around it(attribution) The Solana ecosystem is grappling with a spate of drained wallets. A cause has yet to be definitively determined, but some of the thefts were linked to the use of trading bots like Solareum. Solareum speculated that the exploits may have been linked to compromised Telegram bot tokens, which could have allowed the attackers to obtain private keys from message history. Solareum later wrote that they would be closing the project, and deleted their website. This drew some criticism from users who accused them of doing nothing to investigate the hack, or even being responsible themselves. The project wrote on Twitter, "We at # SOLAREUM team can clarify that we DO NOT steal money." Ah, well, in that case. Other bots may have been involved in the theft, though it's not clear at this point. Though there was some speculation that a trading bot called BonkBot was to blame, that seems to have been unfounded. The total theft amount is not clear, but exceeds $500,000. * Tweet by Solareum Project [archive] * Tweet by BonkBot [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Solana [robber] March 28, 2024 * Prisma Finance hacked for $12 million; attacker makes detailed demands A rainbow-colored version of the Ethereum diamond logo, followed by "Prisma" in black lowercase(attribution) The defi protocol Prisma Finance was hacked for 3,257 ETH ($11.5 million). An attacker was able to take advantage of a flaw in the project's smart contracts, allowing them to manipulate users' positions and steal some of their collateral. Two other watchful attackers observed the attack strategy and replicated it, stealing a combined additional 173 ETH (~$610,000). Plasma paused the protocol after detecting the attack. The first attacker, who stole the bulk of the assets, sent an on-chain message to Prisma claiming that they had performed a "whitehat rescue", and inquired about returning the funds. In later messages, however, they asked the project to answer questions about their security practices and projects' responsibilities to users to prevent attacks. The attacker then transferred the stolen funds to Tornado Cash -- indicating their return is unlikely. In another message, the attacker was angry that Prisma had not expressed gratitude to them or remorse to their users, and was angry they had used terms like "exploit" and "attack" in their description of the incident. They demanded that the team reveal their identities, apologize, and thank the attacker in an online press conference. * On-chain messages * "Prisma Finance Exploit - March 28, 2024 - Post-Mortem" Theme tags: Hack or scam Blockchain tags: Blockchain: Ethereum Tech tags: DeFi March 28, 2024 * Sam Bankman-Fried sentenced to 25 years in prison Sam Bankman-FriedSam Bankman-Fried (attribution) Sixteen months after the collapse of his FTX cryptocurrency exchange, Sam Bankman-Fried has been sentenced to 25 years in prison. He has also been ordered to pay an $11 billion monetary judgment. The sentence follows his conviction on all seven felony charges in November 2022 -- a decision reached by the jury within hours of beginning their deliberations. Bankman-Fried intends to appeal the conviction. * Minute Entry for proceedings held before Judge Lewis A. Kaplan: Sentencing held on 3/28/2024 for Samuel Bankman-Fried [archive] Theme tags: Law [rug] March 26, 2024 * LENX co-founder accused of $10 million rug pull "LENX" in white capitals. The X has a circle where the two lines cross.(attribution) The LENX cross-chain bitcoin liquidity protocol has recently been accused of a $10 million rug pull after community members observed massive withdrawals of treasury funds which were then sent to Binance accounts. One of the co-founders, known only as "Paul", claimed on Discord that he was "trying to investigate" the movement of funds, which have been blamed on the project's other co-founder, John Kim. Conversations on Discord suggest that a remaining $3 million in treasury funds were protected, and that the remaining LENX team may have been able to convince Binance to freeze the account that received stolen funds. However, little has been verifiably confirmed to date. LENX is backed by the Frax Finance lending protocol. * "Unexplained transfers on LENX protocol spark rug pull concerns", Cointelegraph [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Bitcoin, Ethereum March 26, 2024 * KuCoin and founders criminally charged A green K with additional lines forming a diamond shape, followed by "KuCoin" in green capitals(attribution) The cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, were indicted in the Southern District of New York on charges of conspiring to operate an unlicensed money transmitting business and conspiring to violate the Bank Secrecy Act. Both founders are Chinese citizens, and neither has been located or arrested. According to prosecutors, they tried to conceal that the exchange had customers from the United States in order to claim that they were exempt from US anti-money laundering laws. They also marketed KuCoin as a KYC-optional exchange where customers from the US could operate unverified accounts. The charges against the founders carry maximum sentences of five years in prison. * "Prominent Global Cryptocurrency Exchange KuCoin And Two Of Its Founders Criminally Charged With Bank Secrecy Act And Unlicensed Money Transmission Offenses", U.S. Attorney's Office, Southern District of New York [archive] Theme tags: Law [robber] March 26, 2024 * "Munchables" crypto game exploited for $62.5 million A small round furry shape with big blue eyes and thin legs, somewhat resembling a soot spriteA Munchable (attribution) The "Munchables" crypto game explains: "Schnibbles grow on every realm across the Munchable's world. Each realm has their own unique and distinctive schniblet, and the Munchables react differently based on their compatibility to the schniblets fed to them. When creating an account for the Munchables, you must choose the location of your snuggery." Right then. Things went awry in the land of the schnibbles and snuggeries when an attacker siphoned around 17,400 ETH ($62.5 million). Various descriptions of the attack circulated, with blockchain sleuth zachxbt attributing it to a recently hired developer, and crypto developer 0xQuit claiming the theft appeared to have been "planned since deploy". Some began discussing the possibility that the Blast layer-2 blockchain might forcibly roll back the chain to "undo" the hack. Some have argued this is contra to the crypto ethos or would set a bad precedent, while others have argued that as a blockchain focused more on gaming and experimentation and less on decentralization and other facets of crypto ideology, it would be a reasonable step. Some hours after the attack, the exploiter was convinced to return the funds. * "Crypto game 'Munchables' on Blast exploited for $63M", Cointelegraph [archive] * Tweet by 0xQuit [archive] Theme tags: Hack or scam Blockchain tags: Blockchain: Ethereum Tech tags: NFT, blockchain gaming [robber] March 25, 2024 * Curio RWA project suffers $16 million exploit A blue outline of a circle, cropped into a C shape, with a portion in the middle resembling a pie chart with multicolored pastel sections (attribution) Curio, a crypto project that creates tokens based on "real-world assets" (RWAs) like cars, watches, wine, and other goods, has suffered an attack that saw around $16 million drained from the project's funds. A bug in the project's Ethereum smart contract enabled an attacker to mint 1 billion of the project's CGT governance token. Although the tokens were notionally priced at around $40 million, the loss to the project was estimated at closer to $16 million. Curio DAO announced that they intended to compensate users affected by the theft over a year-long period. * "Hacker mints 1B tokens in $16M Curio smart contract exploit", Cointelegraph [archive] * Tweet by Cyvers Alerts [archive] * "CurioDAO Q1 2024 Exploit Recovery Strategy", CurioDAO [archive] Theme tags: Bug, Hack or scam Blockchain tags: Blockchain: Ethereum Tech tags: DAO No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.