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CLEAR TIMELINE FILTERSWEB3 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.

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June 10, 2024
 * 


UWU LEND SUFFERS ALMOST $20 MILLION HACK

(attribution)
The defi lending protocol UwU Lend was hacked for around $20 million. After
various blockchain security firms observed suspicious outflows of funds, the
protocol acknowledged there had been a "situation" on their Twitter account, and
wrote that they had paused the protocol while they were investigating.

UwU Lend was founded by Michael Patryn, aka Omar Dhanani, aka "0xSifu" — a
co-founder of the ill-fated QuadrigaCX exchange and ex-con. He also
pseudonymously ran the defi cryptocurrency project Wonderland until his identity
was revealed after the protocol suffered a meltdown.

 * Tweet by UwU Lend [archive]
 * "UwU Lend hit by $20M crypto hack", CoinTelegraph [archive]

Other entries related to 0xSifu, a.k.a. Michael Patryn, flash loan attacks, or
oracle manipulation attacks
Theme tags: Hack or scam
Blockchain tags: Blockchain: Ethereum
Tech tags: DeFi, lending
June 9, 2024
 * 


LOOPRING'S "MOST SECURE" WALLET HACKED FOR AT LEAST $5 MILLION

(attribution)
Although Loopring markets its wallet application as "Ethereum's most secure
wallet", that's evidently a pretty low bar. They disclosed that they had
suffered a breach in their wallet recovery service, which allows individuals to
designate trusted entities to recover assets or freeze compromised accounts. An
attacker was able to "recover" assets from wallets that had only designated a
single Loopring guardian, pilfering at least $5 million.

Loopring announced that they had suspended their account recovery operations,
and were working with law enforcement to trace the attackers.

 * "Loopring suffers $5 million hack after 'Guardian' two-factor authentication
   service is compromised", The Block [archive]
 * Tweet by Loopring [archive]

Theme tags: Hack or scam
Blockchain tags: Blockchain: Ethereum
June 6, 2024
 * 


NEW YORK ATTORNEY GENERAL SUES OVER $1 BILLION NOVATECH AND AWS MINING CRYPTO
PYRAMID SCHEMES

Cynthia and Eddy Petion (attribution)
The New York Attorney General’s office has sued Cynthia and Eddy Petion over two
allegedly fraudulent cryptocurrency pyramid schemes called AWS Mining and
NovaTech. They particularly targeted victims of Haitian descent, promoting their
schemes in Creole, leveraging their victims’ religion, and promising them
“financial freedom” and “freedom from the plantation”.

In reality, the schemes were pyramid schemes in which investors earned crypto
for recruiting others to buy in. NovaTech also used the funds from newer
investors to pay out the supposed “returns” from the investment scheme, in a
classic Ponzi fashion. From August 2019 – April 2023, victims deposited more
than $1 billion into NovaTech. Though it was described as a trading operation,
only about $26 million ever went into crypto trading.

In June 2022, the couple secretly sold their Florida house and moved to Panama,
while continuing to pretend they were in the state. Speaking to another operator
of the scheme, Cynthia Petion advised: “leave the country…they can’t serve you
if they can’t find you lol.”

 * “Attorney General James Sues Cryptocurrency Companies NovaTechFx and AWS
   Mining for Defrauding Investors of More Than $1 Billion”, New York State
   Attorney General [archive]

Other entries related to affinity fraud
Theme tags: Hack or scam, Law

June 5, 2024
 * 


BLOCKCHAIN DEVELOPER LOSES OVER $48,000 AFTER POSTING PRIVATE KEY TO GITHUB

A blockchain developer posted on Twitter that he had lost almost $50,000 after
his cryptocurrency wallet was drained. He explained that he had been working on
a software project on Github in a private repository that contained his wallet's
private key. In order to apply for a funding grant from the Optimism project, he
had to make the repository public. However, he forgot that the secret key was in
the repository.

Generally, it is very bad practice to store sensitive secrets in Github, even
when projects are set to private.

"Got drained of everything," he wrote on Twitter. A commenter asked how long it
took for the attacker to steal the money after the private key became publicly
visible. "2 min", he replied.

 * Tweet by br1an.eth [archive]

Theme tags: Bad idea, Bummer, Hack or scam
Blockchain tags: Blockchain: Cosmos
June 4, 2024
 * 


LYKKE EXCHANGE HACKED FOR OVER $23 MILLION

(attribution)
The UK-based Lykke crypto exchange suffered an exploit that saw more than
$23.6 million stolen from the platform. The platform shut down trading two days
later, and some customers reported seeing balances of 0 in their accounts.

The theft was first noticed by outside researchers, who saw the suspicious
outflows and accused the platform of not communicating the security breach to
its customers. The following day, Lykke acknowledged the attack and informed
customers via email.

 * Tweet thread by SomaXBT [archive]
 * Tweet by Tayvano [archive]
 * Tweet by Lykke [archive]

Theme tags: Hack or scam

June 3, 2024
 * 


DOJ INDICTS EPOCH TIMES EXECUTIVE FOR CRYPTO SCAM

(attribution)
Widong "Bill" Guan, Chief Financial Officer of the far-right Epoch Times media
company, has been indicted on money laundering conspiracy and bank fraud charges
for his alleged involvement in a cryptocurrency scam and money laundering
operation. According to the Justice Department, Guan used cryptocurrency to
purchase prepaid debit cards that were loaded with fraudulently obtained
unemployment insurance benefits. Guan and others then laundered the funds
through bank accounts they'd fraudulently opened using stolen personal
information.

According to the DOJ, banks became suspicious when the revenue for the Epoch
Times increased 410% — from around $15 million to around $62 million — from the
previous year.

 * "Chief Financial Officer Of Multinational Media Company Charged With
   Participating In Scheme To Launder At Least $67 Million In Fraud Proceeds",
   U.S. Attorney's Office, Southern District of New York [archive]

Other entries related to U.S. Department of Justice or The Epoch Times
Theme tags: Hack or scam, Law

June 2, 2024
 * 


VELOCORE DECENTRALIZED EXCHANGE EXPLOITED FOR $6.8 MILLION, LINEA BLOCKCHAIN
HALTS IN RESPONSE

(attribution)
The Velocore DEX, built on the Linea Ethereum layer-2 blockchain, was exploited
for around $6.8 million in ETH. The hacker was able to take advantage of a bug
in the project's smart contract in the logic to calculate swap fees. Using a
flash loan attack funded through Tornado Cash, the attacker drained most of the
tokens from the pool, bridged the tokens back to the Ethereum mainnet, and then
tumbled the stolen funds back through Tornado.

In an unusual move, the operators of the Linea layer-2 blockchain chose to
unilaterally halt the chain in order to stop the outflow of stolen assets.
Because Linea — like many layer-2 chains — is highly centralized, it was
possible for the Linea team to unilaterally stop the production of blocks.

This was very controversial, as a single operator being able to unilaterally
control the operation of a blockchain goes against much of the cryptocurrency
ethos. Following their action, they tried to explain that "Linea's goal is to
decentralize our network - including the sequencer. When our network matures to
a decentralized, censorship-resistant environment, Linea's team will no longer
have the ability to halt block production and censor addresses - this is a
primary goal of our network".

 * "Velocore Incident Post-Mortem", Velocore [archive]
 * Tweet thread by Linea

Other entries related to flash loan attacks or Tornado Cash
Theme tags: Hack or scam
Blockchain tags: Blockchain: Ethereum
Tech tags: DeFi
May 31, 2024
 * 


JAPANESE CRYPTO EXCHANGE DMM BITCOIN LOSES $308 MILLION

(attribution)
A Japanese cryptocurrency exchange called DMM Bitcoin has announced that they
suffered an "unauthorized leak" of 4,502.9 bitcoin (~$308 million) from a
company wallet. They've provided very little in additional details around how
the loss occurred, or who may have been involved. They have taken some of their
services offline as they investigate the incident.

The company claims it will replace the lost funds with help from other companies
in their group.

This is one of the largest cryptocurrency thefts in recent history, rivaling the
roughly $320 million theft from the Wormhole bridge in February 2022 and the
$477 million theft from FTX in November 2022.

 * "Japan's DMM Bitcoin says over $300 mln of cryptocurrency lost", Reuters

Theme tags: Hack or scam
Blockchain tags: Blockchain: Bitcoin
May 28, 2024
 * 


FTX EXECUTIVE RYAN SALAME SENTENCED TO 7.5 YEARS IMPRISONMENT

Ryan Salame (attribution)
Ryan Salame was the CEO of FTX Digital Markets which was the Bahamian portion of
the FTX business. In September 2023, just before Sam Bankman-Fried's trial
began, Salame pleaded guilty to one count each of conspiracy to operate an
unlicensed money transmitting business and conspiracy to make unlawful political
contributions and defraud the Federal Election Commission. He was the only
co-conspirator of four to not plead under a cooperation agreement, and he did
not testify at Bankman-Fried's trial.

In his sentencing memo, Salame asked for a sentence of no more than 18 months
imprisonment, claiming that "he was duped, as was everyone else, into believing
that the companies were legitimate, solvent, and wildly profitable." Judge
Kaplan didn't seem to agree, ultimately passing down a sentence greater than the
five to seven years requested by prosecutors. He also will pay $6 million in
forfeiture, $5 million in restitution, and spend three years on supervised
release.

Salame is the first of Bankman-Fried's co-conspirators to be sentenced.

 * "Former FTX Executive Ryan Salame Sentenced To 90 Months In Prison", U.S.
   Attorney's Office, Southern District of New York [archive]

Other entries related to FTX collapse or Sam Bankman-Fried
Theme tags: Law


May 27, 2024
 * 


MEMECOIN TEAM ACCUSED OF HACKING INFLUENCER TWITTER ACCOUNT TO MANIPULATE
MARKETS

According to crypto sleuth zachxbt, the team behind the Solana-based $CAT
memecoin hacked the Twitter account of "Gigantic-Cassocked-Rebirth"
(@GCRClassic) crypto influencer.

First, the team sniped their own $CAT token launch to obtain 63% of the token
supply, ultimately selling a portion of it for around $5 million. Then, they
took out $2.3 million and $1 million long positions on the ORDI and ETHFI
tokens, respectively. Finally, they posted from the compromised influencer
account to shill the ORDI and ETHFI tokens to his massive following. Ultimately,
their gambit doesn't appear to have been incredibly successful: they made around
$34,000 on the ORDI position, but lost $3,500 on the ETHFI position. However, as
zachxbt noted, it's possible they also opened positions on centralized exchanges
where the outcomes aren't publicly visible.

 * Tweet thread by zachxbt

Other entries related to Twitter account compromises or zachxbt
Theme tags: Hack or scam, Shady business
Blockchain tags: Blockchain: Ethereum
Tech tags: DeFi

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