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Crypto Scam

Avalanche Network-based Snowdog token tanks as developers relinquish ownership

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The wfirst meme coin in the Avalanche network, SnowdogDAO (SDOG), slipped by more than 90% yesterday after being live only for eight days. While many call it the platform’s largest rug pull, the SnowdogDAO team said that event wasn’t a rug pull. They named the millions of dollars lost as a “game-theory experiment gone wrong.”

SDOG attracted a lot of attention in the community and was scheduled to end with the major buyback after an 8-day long operation. 

The huge buyback, which would be financed by assets of the Snowdog treasury through mint sales, was to be the experiment’s climax. The treasury market value increased to $44 million in just eight days, allowing holders to fight for a piece of those funds during the buyback.

The main reason for such a huge loss was that only 7% of the Avalanche-based meme coin supply was eligible to be sold above market price before the buyback. However, the founders neglected to reveal to the community, or at least had not made it explicit enough.

Snowdog built its own AMM based on Uniswap V2, moving all SDOG liquidity from popular Avalanche DEX Trader Joe to prevent front running.

Avalanche-based meme coin causes loss in millions

Hundreds of users lost their funds within the seconds of buyback launch when a single address managed to grab around $10 million by exchanging SDOG for other cryptos. This reduced treasury’s buyback power by 25%

The address purchased around $180,000 worth of the Avalanche-based meme coin just before the buyback event with MIM and staked the token. Within 24 hours, it was able to drain more than $10 million worth of MIM. Apart from this, two more wallets drained $7.7 million and $3.3 million using a similar method.

Many believe that the addresses which comprise the “7% mark” were associated with the owners of the development team.

The development team of the Snowdog came out with a post after the failed blowback to clarify that the event wasn’t a rug pull.

“We understand that the buyback experience created frustration as only 7% of the supply holders would benefit from a price superior to the market price before the buyback. We deeply regret not having communicated more on this. We should have warned the community about the risks that waiting for the buyback to sell represented.”

Snowdog development team said

However, it failed to convince the investors who lost their funds and believed that the actions were pre-planned.

EthereumX scam token jumps 70,000,000% in a day

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A token named EthereumX (ETX) jumped by more than 70,000,000% in just over 24-hours, driving investors crazy over this bullish course of action. The token is a copycat of Ethereum, the world’s second-biggest cryptocurrency. Investors claimed to have witnessed the token reach as much as $50,000, generating instant millionaires.

Indeed the token is another scam that is made for the classic rug pull tactic. While the token’s bullish surge is something to admire, it seems that a glitch ticked off this scam event. If the price action was true, EthereumX would’ve broken barriers in the entire crypto industry.

According to a report presented by Watcherguru, the token reached $50,850 from $0.008945, generating a market capitalization of $4.4 trillion, which is nearly thrice of the world’s first and biggest cryptocurrency, Bitcoin. However, this seems to be a glitch from CoinmarketCap’s database and not an actual event.

EthereumX: another scam token

According to statements by members of the crypto community on Twitter, such scams have been prevalent in the crypto market for quite some time. Back in 2017, attempts were made to close the creation of such scam tokens. However, it seems that coins like EthereumX just keep popping up.

This shitcoin is up 66.5 million percent within the last 24 hours. Retail noobs be like: “ooooh wow! now looks like a good time to buy.”

said a Twitter user

These scam tokens need to be removed from the industry, and it seems that the government will have to take regulatory steps. The Infrastructure Bill that awaits President Biden’s approval is just one of the many regulatory processes against scam tokens.

Furthermore, another scam token, the Squid Game token, also ate millions of investors’ money as the token creators were not known. The website and the Twitter handle of the token responsible for promotions all vanished without a trace.

With such incidents prevailing currently, it is very important that every investor does their own research before trying their luck.

Terraform Labs receive Subpoena Enforcement Action for creation of MIR tokens

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Terraform Labs, the firm behind the Mirror Protocol, has received a Subpoena Enforcement Action by the United States Securities and Exchange Commission [SEC]. The co-founder and CEO of the firm, Do Kwon, also received a similar response from the monetary authority.

Mirror Protocol began its journey in 2020, and the platform had a unique use case in its mind. Terraform Labs built the Protocol on the Terra (LUNA) blockchain. The native governance token of the decentralized, community-driven Protocol was termed the MIR token.

Terraform Labs violation of federal securities law

According to the statement by the SEC, there are doubts if the firm has broken federal securities law. Terraform Labs protocol allows users to create and trade assets referred to as “mAssets.” These assets “mirror” the price activity of real-world assets in the U.S., allowing users to gain exposure to them.

“The SEC is investigating whether Terraform Labs, Kwon or others violated the federal securities laws by, among other things, not registering the offer or sale of securities, selling security-based- swaps outside of a national security exchange, acting as an unregistered broker or dealer, or engaging in securities transactions by an unregistered investment company.”

Said the SEC in their statement

The SEC claims that the Mirror Protocol is actually offering trading services to users, acting as a broker, without approval from proper authorities. Since the firm is not registered as a broker, dealer, or exchange, it is not authorized to allow the sale of these “mirrored” assets.

The SEC staff served Terraform Labs and its CEO Kwon with investigative subpoenas, compelling them to produce certain legal documents required for the investigation. However, the firm and its CEO failed to comply, refusing to produce any strong defense or the required documents.

As a result, the monetary authority has now filed a lawsuit against Terraform Labs and Kwon in the U.S. District Court for the Southern District of New York “to show cause why the court should not compel them to produce documents as required by the subpoenas and compel Kwon to appear for testimony.”

The investigation is still ongoing as the SEC hasn’t reached a conclusion.

Kerala police nab 4 over 100 crore INR crypto scam

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Key Takeaway

  • Law enforcement from Kerala, India went on to bust a money-laundering racket that involved cryptocurrnecy.
  • A total of four people were arrested after they raised about 100 crore Indian rupees by duping people.

Just as the value of crypto surged, scammy projects surrounding it also took off. Kerala police recently confronted something similar and uprooted the entire crypto project.

Hackers haven’t spared anyone. Now that cryptocurrencies were gaining traction in India, perpetrators who intend to pocket some easy money were onto innocent investors. Law enforcement wasn’t far behind as they have been quick in tracking down those behind these scammy projects.

Four men in Kerala, a state in India were arrested by the police for carrying out a racket that involved crores of Indian rupees.

Kerala police take down massive crypto racket

With the formation of a fake company, Long Rich Technology based in Bengaluru, Karanataka, a team raised about 100 crore in Indian rupees from their clients. The alleged scammers deceitfully professed 2 to 8% returns per day in cryptocurrency to their customers. This certainly lured in a large amount of investors who poured in their funds into the scammy project.

The Kerala police managed to arrest, Muhammed Riyas, C Shafeeque, Munavvarali as well as Muhammed Shafeeque. About 40 crore INR and 32 crore INR was transacted through two of the detained members separately.

However, the police revealed that the man behind the scam, Nishad, was still on the run. The largest amount was reportedly transferred into the account of Nishad.

While the police is still on the look out for Nishad, it was noted that he was previously arrested but managed to secure bail. Soon after garnering bail, he decided to bolt. The police succeeded in freezing his bank account where they secured 34 crore INR.

P P Sadanandan, the secior police officer of Kannur city revealed that Nishad could be hiding in the Middle-East.

The remarkable returns of the crypto market has been a huge selling point. However, the lack of education regarding the industry could hamper its growth while bringing in immense loss to many.

Another crypto hack; Synapse Protocol exploited, $8 million funds at risk

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Synapse Protocol, known for its native token, the SYN token, is an automated market maker or simply AMM known for its trustless cross-chain bridge. Recently, according to the tweet by well-known Chinese crypto journalist Colin Wu, the “Synapse Protocol was exploited and lost approximately US$8 million.”

Synapse was introduced in the crypto space as the platform that would eradicate the need for a centralized exchange in the DeFi industry, allowing the users to become their own banks. However, it seems that the recent hack proves otherwise.

According to the Twitter account by the username “ricosoon”, the Chinese journalist made a mistake in reporting the exploit. It seems that the Synapse $8 million were not lost as the bridge is on hold. The bridges are the center of the Protocol and are responsible for the swapping of tokens.

Synapse bridges intact

According to “Ricosoon,” the problem wasn’t with the bridge or the bridge contracts but with the implementation of the AMM contracts “that a few different stableswaps used, forked from the Saddle.”

According to the statement by the developers on their Discord channel, the hacker tried to move the funds by converting them into USDC while the validators were not online. Upon this issue being noticed, the AMM contracts were all put to rest so that the vulnerability didn’t spread.

Furthermore, the Protocol notified Saddle, who also closed their bridges. As a result, “the validators, by consensus are now electing not to process this transaction as it was malicious against LPs and the network as a whole:~$8 million nUSD will therefore not be minted to the attackers’ address on the destination chain.”

It seems that the Synapse developers are now in control of the situation as they are working to re-deploy the pools ‘to an older, less-complex version’ of the bridge contracts, re-enabling liquidity, buying time to solve the issue, and restart the original bridges.

Such an increasing number of exploits in the blockchain industry is currently being reviewed by many protocols. The Polygon network was recently exploited by an arbitrary bot, turning 14 ETH into 218.5 ETH. Similar hacks also happened on the ThorChain network.

3.1 million user email addresses compromised in CoinMarketCap hack

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Crypto lovers often head on to the prominent price-tracking space for digital assets, CoinMarketCap. The platform has been quite popular amongst the members of the crypto-verse. However, a recent hack that took place earlier this month on the firm put millions of its customers at risk.

The crypto market is not new to hacks or scams. The popularity of the crypto market not only lured in legit investors but also opened doors to perpetrators to were in to bag easy money through illicit means. Data theft has become a major problem. Throughout the years, hackers were seen eyeing the data of prominent companies.

CoinMarketCap underwent a similar hack on 12 October 2021 where 3.1 million user email addresses were compromised. However, this wasn’t discovered immediately.

CoinMarketCap’s big data theft

Recently, a website that monitors hacks, Have I Been Pwned, revealed that the email addresses stolen from the price-tracking website were being traded online.

CoinMarketCap affirmed that there was no data leak from the firm’s servers. This meant that the passwords of the users were still safe. However, following the latest revelation, it was the firm reinforced that the list surfacing online had matched its userbase. The platform stated,

“CoinMarketCap has become aware that batches of data have shown up online purporting to be a list of user accounts. While the data lists we have seen are only email addresses (no passwords), we have found a correlation with our subscriber base. “

Additionally, the platform assured its users that the root of the hack was being investigated. Users would hear from the firm following a discovery in the probe.

Furthermore, the platform seemed to be confident that the leak wasn’t from the CoinMarketCap servers. The platform pointed out that a “comprehensive security check” had been run and no traces of a security breach was noted in its servers.

While CoinMarketCap has always played a prominent role in the crypto industry, its latest partnership with Binance certainly bolstered the prominence of the firm. The crypto-based platform currently stands as a subsidiary of Changpeng Zhao’s Binance.

Coinbase hackers use authentication flaw to get into users’ accounts

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The crypto-verse has been a witness to the activities of the prominent cryptocurrency exchange, Coinbase. While some of them have benefited both the exchange and the crypto market, a few others have caused major problems. This year alone, the exchange endured an array of issues that even put its customers in jeopardy. Further prolonging this streak, the exchange was seen being exploited by hackers which impacted directly on thousands of users.

Coinbase was one of the first cryptocurrency exchanges and it has undoubtedly stayed relevant as well as successful over the years. The platform went public this year and garnered profound success. Apart from this, the timely developments and upgrades kept the exchange at the top of its game. However, constant glitches with its system time and again put the exchange in trouble.

Not too long ago, the users of the exchange were filled with angst after they received an email regarding the two-factor authentication [2FA] process. While users were just recovering from this mishap, news about 6,000 accounts being compromised over March and May 2021, began to surface.

Coinbase’s MFA glitch

The exchange sent out a message to its users about the same and notified them of “Unauthorized Access to Your Coinbase Account.” All the users that had their accounts compromised due to a bug in the multi-factor authentication [MFA] process at the exchange, had received this message.

In the message, the exchange noted that the hackers had exploited a single bug in Coinbse’s MFA system and garnered access to the accounts of the users. Following this, the perpetrators moved funds out of the exchange.

Further detailing the reason behind the hack, the exchange wrote,

“​​While we are not able to determine conclusively how these third parties gained access to this information, this type of campaign typically involves phishing attacks or other social engineering techniques to trick a victim into unknowingly disclosing login credentials to a bad actor. We have not found any evidence that these third parties obtained this information from Coinbase itself.”

Additionally, the exchange affirmed that all the lost funds would be reimbursed. Coinbase also noted that it would involve law enforcement and get to the bottom of its latest mishap.

Cryptocurrency Exchange Bilaxy Suffers Fund Losses as Hackers Attack Hot Wallet

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On Monday, the digital asset world woke up to the news of cryptocurrency exchange Bilaxy being hacked. Sources close to the exchange revealed that the hacker stole the funds by exploiting a bug in Bilaxy’s ERC-20 hot wallet. The exchange announced the details of the hack via a Telegram post early Monday morning.

During the hack, the perpetrator transferred 295 different ERC-20 tokens with the most recent transaction involving 50 ETH tokens. The address to which the funds were sent had a total grasp of 177.98 ETH or approximately $570,000. According to Bilaxy’s releases, the exchange suspended all activities to ensure the protection of the remaining funds.

The exchange contacted the affected users to inform them about their stolen funds with steps to recover them in the future. Bilaxy further assured its members that the unaffected funds were all moved to the cold wallet for safekeeping. In their official post, Bilaxy said:

“Bilaxy suffered heavy losses in this hacking incident and the problem has not been determined now, which will take lots of work and time to resume Bilaxy services. It may at least take 2 weeks to investigate the hack thoroughly and rebuild system architecture to secure the system and assets. We hope that users will have the necessary psychological preparation for it.”

The attack on Bilaxy comes a few weeks after the $100 million stings on Liquid. Fortunately, the exchange was able to recover the funds and transfer them back to the legal holders. Crypto fans kept their fingers crossed hoping that that is the case with Bilaxy too. Bilaxy also contacted CoinmarketCap, Coingecko, and Etherescan to put out notifications about the hack. As investigations for the funds’ progress, the company revealed that all the details have been divulged to the proper authorities.

Japanese crypto exchange, Liquid hit with an $80 million attack

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A prominent Japanese cryptocurrency platform, Liquid underwent a massive hack that caused the loss of crypto worth $80 million.

The crypto-verse isn’t new to hacks and attacks. Just as the value of the crypto market began to surge, it became a target to criminals who were looking to make easy money. Regulators started to intervene once the number of cybercrimes related to crypto began rising. While crypto platforms across the globe were seen strengthening their security, Liquid’s security was compromised.

The Japanese exchange alerted its users about the latest hack through its Twitter handle and revealed that hold on deposits and withdrawals was imposed.

Japanese exchange falls prey to a hack

In its tweet, the exchange noted that its warm wallets were compromised and the assets were reportedly being moved to the cold wallets. The tweet further read,

Furthermore, the Japanese exchange affirmed that the situation was being investigated and Liquid had found the hacker’s address. The exchange wrote,

“The following assets had been transferred to hacker’s following addresses (Further investigation to come):
BTC: 1Fx1bhbCwp5LU2gHxfRNiSHi1QSHwZLf7q
ETH/EWT: 0x5578840aae68682a9779623fa9e8714802b59946
TRX: TSpcue3bDfZNTP1CutrRrDxRPeEvWhuXbp
XRP: rfapBqj7rUkGju7oHTwBwhEyXgwkEM4yby”

As mentioned above prominent assets like Bitcoin [BTC], Ethereum [ETH], Tron [TRX], and XRP were stolen from the platform. The platform lost over 100 BTC, about 11 million XRP, and about 10 million TRX. Additionally, a whopping $60 million worth of Ethereum and other ERC20 tokens were taken from the Japanese exchange.

This security breach had undoubtedly urged other exchanges to not only stay alert but also look into their security system. Prominent cryptocurrency exchange, KuCoin decided to show support and stay alert by blacklisting the aforementioned addresses. The CEO of the crypto exchange, Jonny Lyu took to Twitter to affirm the same. The tweet read,

“We are aware of the #LiquidGlobal security incident, and the hacker’s addresses have been added to the blacklist of #KuCoin. Hope everything is OK. 🙏”

Binance asked to track down hackers by the London High Court

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The crypto-verse isn’t new to hacks and scams. However, it isn’t an everyday course that London’s Royal Courts of Justice urges a crypto firm like Binance to track down the perpetrators behind the Fetch.ai attack.

Just when the crypto-verse became increasingly valuable over the years, the crimes surrounding the industry began surging. Law enforcement isn’t too far behind as they have been keeping up with the ongoing trends. This has undoubtedly made it easier for them to track down cybercriminals.

While Binance has been tackling regulators from all across the globe, the exchange had once again come under the purview of the London High Court. The court went on to order the exchange to carry out an investigation to identify the hackers behind the $2.6 million hacks.

Binance to put on its detective cap

An artificial intelligence firm, Fetch.ai issued a plea to the High Court which involved Binance’s efforts in tracking down the criminals. While the firm garnered approval from the Court, CZ’s crypto exchange was required to track and seize the stolen amount.

The exchange’s spokesperson affirmed that the platform was in the process of helping Fetch.ai recover its lost assets. The spokesperson further added,

“Binance routinely freezes accounts that are identified as having suspicious activity occurring in line with our security policies and commitment to ensuring that users are protected while using our platform.”

Additionally, Fetch.ai’s legal team at Rahman Ravelli was looking into the case and Syedur Rahman, a partner at the firm debunked a few myths about the crypto-verse. He pointed out how people are under the belief that crypto-assets were anonymous while in reality they can be tracked, traced as well as recovered.

Fetch.ai further stated,

“We have been working closely with Binance and local enforcement to obtain details about the hacker. Issuing a court order for the release of this information is a standard process.”