BITCOIN, Heists, Thefts, Hacks, Scams, and Losses

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In summary: I don't know if this actually happened, but...?In summary, the website of major bitcoin exchange MtGox was offline Tuesday amid reports it suffered a debilitating theft. Around midmorning in the U.S., the company released a statement saying it had closed off transactions "to protect the site and our users." It offered no further details.
  • #106

Siblings Accused of $124 Million Crypto Scam Ran Times Square Ad​

https://www.bloomberg.com/news/arti...f-124-million-crypto-scam-ran-times-square-ad
  • Brother and sister fined by SEC for fraudulent token offering
  • John Barksdale criminally charged by Justice Department
A pair of siblings made false statements about a cryptocurrency and defrauded thousands of mom-and-pop investors out of more than $124 million, according to a federal regulator.

Starting in June 2017, John Barksdale, 41, and his sister, JonAtina, 45, lied to investors about the Ormeus Coin and falsely promoted the token as being backed by one of the largest crypto mining operations in the world, according to a statement from the Securities and Exchange Commission. John Barksdale, a U.S. citizen living in Thailand, was arrested abroad on Tuesday for making false statements, according to a separate filing from the Justice Department.

‘Pure Gambling’ Prompts Wild Swings in New Luna Cryptocurrency​

https://www.bloomberg.com/news/arti...rompts-wild-swings-in-new-luna-cryptocurrency
  • Relaunched token was distributed to investors on Saturday
  • New token is still relatively ‘illiquid,’ market maker says
Terra’s new Luna token is taking holders on a wild ride just days after being distributed to investors who saw the value of their cryptocurrencies tied to the failed blockchain destroyed.
:oops: :rolleyes:
 
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  • #107
As of this morning:
BTC-USD
Bitcoin USD		21,911.81-2,233.81-9.25%
ETH-USD
Ethereum USD		1,171.20-74.10-5.95%

https://www.marketwatch.com/story/b...ow-much-worse-a-selloff-could-get-11655124356
Bitcoin BTCUSD, -5.84% has slumped around 17% over the past 24 hours, trading as low as $20,889 on Monday night, according to Coindesk data, a level not seen since December 2020. Bitcoin is down more than 60% from its November 2021 high.

Ethereum ETHUSD, -6.31% fell more than 16% to around $1,099, also hovering at its lowest since December 2020.

Meme coin Dogecoin DOGEUSD, -2.56% lost 16%.

Also not helping sentiment were hints of industry panic. Crypto lending platform Celsius announced it was pausing all withdrawals and transfers amid “extreme market conditions,” as its CEL digital token plunged 50%. And shares of technology services group MicroStrategy MSTR, -25.18% slumped on worries a margin call may force it to sell bitcoins.

Ouch!
 
  • #108
I'm sure that they'll be fine once they settle down to the value of the assets backing them up. :oldtongue:
 
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  • #109
1655246796306.png
 
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  • #111
Astronuc said:
Cryptocurrency Bitcoin at an 18-month low.
MUCH more to the point is that it is WAY off (about 70%) of its high which was 7 months ago

EDIT: that is "18 month low" is not directly awful since a stock could be sailing along w/ little change and an "18 month low" could mean it's down 15% from its high. 70% down is a whole 'nother ball game.
 
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  • #112
  • #113
But
1655309059585.png
 
  • #114

Bubble-pop-disappointment.gif
 
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  • #115
Cryptocurrency is a refuge from inflation

And stonks only go up!

It's worth remembering that bulls make money, bears make money, but pigs get slaughtered.
 
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  • #116
1655344154614.png

I don't think this will end well for the President of El Salvador
 
  • #117
Bitcoin under $19K and ETH under $1000
 
  • #118
It's becoming itchy not to buy the falling knives, but I'd wait until Celsius and Tether bite the dust.
 
  • #119
On July 1,
BTC-USD
Bitcoin USD		19,541.29-246.87-1.25%

ETH-USD
Ethereum USD		1,114.69+18.23+1.66%
 
  • #120
Hackers pulled off a $620 million crypto heist by tricking an engineer into applying for a fake job and opening an offer letter containing spyware, report says
https://www.businessinsider.com/axi...fake-job-offer-letter-spyware-phishing-2022-7
Scammers used an elaborate fake job scheme to steal over $600 million in crypto from the online NFT-based game Axie Infinity, The Block reported Wednesday.

The hackers, who the US Treasury linked to North Korea's notorious Lazarus Group, posed as job recruiters on Linkedin and tricked a senior engineer at the game's developer, Sky Mavis, into going through "multiple rounds of interviews" for a position that did not exist, sources told the outlet.

They then sent the engineer a fabricated offer letter with "an extremely generous compensation package" that was laced with spyware, The Block reported.

Once downloaded, the hackers could access Axie Infinity's blockchain network known as "Ronin," where users transferred Ethereum-based digital currencies in and out of the game.
In the same article, there is a discussion of the virtual currency mixer Blender.io, which was used to obscure some of the stolen cryptocurrency.
"Virtual currency mixers that assist illicit transactions pose a threat to US national security interests," Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson said in a statement. "We are taking action against illicit financial activity by the DPRK and will not allow state-sponsored thievery and its money-laundering enablers to go unanswered."
Bloomberg has an article, Math Prodigy Whose Hack Upended DeFi Won’t Give Back His Millions, By Christopher Beam, May 18, 2022, 9:01 PM PDT It describes a hack by an individual who accessed a cryptocurrency exchange platform where he found a flaw or vulnerability, which he then exploited to steal millions of $ in tokens.

An 18-year-old graduate student exploited a weakness in Indexed Finance’s code and opened a legal conundrum about theft on the blockchain. Then he disappeared.

https://www.bloomberg.com/news/feat...orm-hack-rocks-blockchain-community#xj4y7vzkg

Indexed Finance is a cryptocurrency platform that creates tokens representing baskets of other tokens, like an index fund, but on the blockchain. The index platform was co-founded by Dillon Kellar.
Kellar and his team modeled Indexed on a type of index fund (like S&P500), using a mechanism called an "automated market-maker" to maintain the balance of underlying assets, as many DeFi platforms do. Unlike a traditional market-maker, the AMM wouldn't buy and sell assets itself; instead it would help the pool reach its desired asset balance by adjusting the "pool price" of component tokens to give traders an incentive to buy them from the pool or sell them into it. When the pool needed more of a particular token, its price within it would rise; when the pool needed less, the price would decline. This model assumed users would interact rationally with the protocol, buying low and selling high.
DEFI or DeFi = Decentralized Finance
The platform made its debut in December 2020, initially offering two index tokens: CC10, representing 10 of the top Ethereum-based tokens by market capitalization, and DEFI5, representing five top DeFi tokens. The project soon garnered a small but devoted following, including Day. He had a Ph.D. in theoretical computer science and a master's in financial engineering, for which h'd written a thesis on stock-market index portfolio optimization. Indexed aligned with his interests and his relatively low appetite for risk.

When Indexed went live, Andean Medjedovic, who goes by Andy, had just started working on his master's degree. He was on his way to finishing it in a year. He tended to do things quickly. He'd taken 10th grade math in elementary school, graduated from high school at 14, and cruised through his bachelor's in three years at Waterloo, one of Canada's top schools for math and computer science and the alma mater of Ethereum co-founder Vitalik Buterin. By fall 2021, Medjedovic had presented his master&'s thesis on random matrix theory and was planning to apply to Ph.D. programs.

Then, Medjedovic took an interest in DeFi, particularly the mechanics of AMMs.

After reading about Indexed on a forum, he pored over its smart contract and noticed a "mispricing opportunity" in the code - the instrument Kellar had worried might let users distort the pool's internal price calculations when new tokens were being introduced. He also saw it was possible to circumvent a safeguard limiting the size of certain trades within the pool. "At first, I didn't believe it," he said. He ran the calculations a few times, and, "on paper, it worked." He spent the next month writing a script to exploit the vulnerability.

One will have to read the article to read how Medjedovic pulled off the hack.

The article mentions,
The list of exploited crypto platforms is long and grows by the week: Wormhole, Cream Finance, Rari Capital, and many more. "There's a common saying in DeFi that there are two types of protocols," Day says. "Those that have been hacked and those that are going to be hacked."

Another take on the Indexed Finance hack
https://cryptobriefing.com/inside-the-war-room-how-indexed-finance-traced-its-16m-hacker/
 
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  • #121

Thousands of crypto investors have their life savings frozen as Voyager files for bankruptcy protection​

https://finance.yahoo.com/news/m-millions-dollars-thousands-crypto-223605273.html

[Investors] are unable to withdraw any of their money, as the company suspended trading on July 1 and filed for Chapter 11 bankruptcy protection late Tuesday.

Voyager also is not FDIC-insured, despite its advertisements that “In the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000).” Its “banking partner,” Metropolitan Commercial Bank, is FDIC insured, but Voyager is not.

Now these investors are learning how overleveraged Voyager was, and how it invested their savings in a now-defunct hedge fund that engaged in extremely risky behavior.Voyager has mainly blamed defunct hedge fund Three Arrows Capital (3AC) for its troubles, saying 3AC has not repaid a $650 million loan.

Like the rest of the crypto market, 3AC took a hit after the Terra ecosystem collapse in May. By June, major cryptocurrency lender Celsius Network was rumored to be bankrupt, and 3AC wasn’t far behind.

Failures of crypto brokers/exchanges may produce a cascade of failures.

Do diligent research before investing in exotic products and/or those promising high rates of return.

Article published by Fortune on July 8 -
https://fortune.com/2022/07/08/voyager-crypto-bankruptcy-protection-next-steps-life-savings/
 
  • #122
Astronuc said:
Failures of crypto brokers/exchanges may produce a cascade of failures.
Reminds me of an old song.

 
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  • #124
In February of 2021, Tesla announced that it was planning to sell cars using Bitcoin, while also buying up an appreciable $1.5 billion worth of the cryptocurrency.
https://futurism.com/tesla-sells-off-bitcoin-huge-loss

Tesla made $936 million in cash revenue from the sale, helping the company limp over the quarterly finish line, though barely meeting Q2 expectations. Investors expected revenue of $16.88 billion this quarter, with Tesla reporting $16.9 billion.

One Bitcoin was worth around $43,000 at the time Tesla made its investment last year. By autumn, the token rose to record highs of nearly $70,000, at least in part due to Tesla CEO Elon Musk's enthusiastic endorsements of crypto.

Some estimate that Tesla lost about $500 million from the Bitcoin investment.
 
  • #125
As digital assets crashed, Celsius, which said it had more than 1.7 million users as of June, halted withdrawals since June 12. The crypto lender allowed consumers to buy, borrow or deposit their cryptocurrencies and earn interest of up to 18.6% annually. Most “high yield” savings accounts in U.S. dollars offer annual percentage yields closer to 1% or less, according to Bankrate.

Celsius has a roughly $1.2 billion hole in its balance sheets, according to bankruptcy filings. It had $5.5 billion total liabilities as of July 13, including more than $4.7 billion owed to Celsius’s users. The company had $4.3 billion of total assets, according to a filing.

Celsius customers write pleas to bankruptcy court to get crypto back: ‘This is an emergency situation, simply to keep a roof over my family and food on their table.’​

https://www.marketwatch.com/story/c...my-family-and-food-on-their-table-11658784650

In bankruptcy filings, Celsius noted that its customers transferred ownership of their crypto to the company, a move experts say could potentially hint at its plans to request its users be treated as unsecured creditors in the bankruptcy process.
I'm sure the customers/depositors didn't see it that way, or perhaps they didn't read the contracts/fine print.

Flori Ohm, a single mother of two daughters headed to college next year, wrote in another letter: “I and my family are severely impacted both in financial and mental health by the bankruptcy and locked up cryptos. I always check the app if my cryptos are still there. I can’t focus [on] my job or sleep.”

Stephen Bralver, another Celsius customer, said he has less than $1,000 left in a Wells Fargo checking account to support his family, after Celsius froze all withdrawals.

In a letter filed on July 21, Sean Moran, a resident in Ireland, wrote that he lost his farm, and that his family was left homeless because of Celsius’s bankruptcy. “Family are distraught with my decisions of trusting Celsius and promising them a better future,” he wrote.

There is something dodgy about Celsius. RICO, perhaps?
 
  • #126
Astronuc said:

Celsius customers write pleas to bankruptcy court to get crypto back: ‘This is an emergency situation, simply to keep a roof over my family and food on their table.’​

https://www.marketwatch.com/story/c...my-family-and-food-on-their-table-11658784650I'm sure the customers/depositors didn't see it that way, or perhaps they didn't read the contracts/fine print.

There is something dodgy about Celsius. RICO, perhaps?
Mashinsky was acting as if there was no problem at all a few hours before celsius filled for bankrupcy. He was treating people bad who had problems withdrawing their crypto.from Celsius, accusing them to spread FUD.
If that guy doesn't lose his house (and yatch?) and end up like some of his customers, then something is unfair.
 
  • #127
fluidistic said:
If that guy doesn't lose his house (and yatch?) and end up like some of his customers, then something is unfair.
And of course that would be the first time anyone ever noticed that life is unfair :smile:
 
  • #128
That's the problem with 'Get Rich Quick' schemes, they've a very nasty knack of becoming 'Get Poor Faster'...

Had a neighbour become hooked on 'Derivative Day Trading'. Fortunately, his family found out and managed to extricate him before his losses became catastrophic...
 
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  • #129
Nik_2213 said:
That's the problem with 'Get Rich Quick' schemes, they've a very nasty knack of becoming 'Get Poor Faster'...
To make it worse, sometimes that happens with some reward gained first. So the poor subject will leave with the feeling of 'I was just nick away to became rich' - and given the chance he'll start again...
 
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  • #130
Forbes down on crypto - Crypto Turns Out To Be Nothing But A Massive Pump And Dump Scheme Fueled By Widespread Manipulation
https://www.forbes.com/sites/jayadk...ump-scheme-fueled-by-widespread-manipulation/

We have finally reached the long-predicted "Crypto Winter" where a number of major crypto companies such as Celsius Network, Voyager Digital and Zipmex have filed for bankruptcy protection, major crypto funds such as Three Arrows Capital have failed, and the price of all cryptos has fallen dramatically.

One day, crypto is the next big thing promising unlimited riches; the next, crypto seems like a bottomless pit of failures and the life savings of hundreds of thousands suddenly wiped out. May we then take this moment to reflect objectively, without all the hype of the next super-valuable token, on the crypto sector.

In the end, crypto was simply the latest financial mania, . . . .
 
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  • #131
It's not over 'til the lawyers get rich...

I'm reminded of the historical, utterly infamous 'Dutch Bulb' bubble. At its peak, rare blooms' bulbs were changing hands for outrageous prices.

One such consignment of bulbs arrived at a European dock. A hungry sailor helped himself to a bulb as sack was off-loaded, thinking them onions or shallots. Nibbled his snack. Noticed by owner, was sued for its absurd worth.
By the time the case came to court, the bubble had burst. Such bulbs were now beyond worthless as they were intractably toxic, unfit for human or animal food unless patiently processed as thoroughly as cassava. But, the owner still claimed the full value at that peak, reducing the sailor to a pauper...
 
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  • #132
@fresh_42 I think you got the bitcoin thread mixed up w/ the joke thread
 
  • #133
phinds said:
@fresh_42 I think you got the bitcoin thread mixed up w/ the joke thread
Thanks for mentioning it. And, no, I have no idea how this happened. I am pretty sure I clicked on the correct thread.
 
  • #134
https://www.cnbc.com/2022/08/02/hackers-drain-nearly-200-million-from-crypto-startup-nomad.html
  • Hackers yanked almost $200 million in crypto from Nomad, a so-called blockchain bridge.
  • Blockchain bridges allow users to transfer tokens from one network to another.
  • They’ve become a prime target for hackers seeking to swindle investors out of millions.
Is there anything unique about crypto that makes it easier and/or a target for hackers vs. people's brokerage accounts?

Why are there so many stories of crypto places getting hacked?

Why don't you hear Fidelity, Vanguard, Morgan Stanley, etc. brokerage accounts getting hacked to the same degree? Or, does it happen too and is just not reported as much?
 
  • #135
It doesn't happen, because those are large regulated entities with an army of programmers and a legal responsibility to keep things working.

The typical crypto project is run by three crypto bros who are trying to hack things together to get it out as fast as possible.

The real issue though is in crypto, code is law. There's no way to get that money back. In the real world, law is law. It takes time for money to transfer, and if you did hack Vanguard and steal abillion dollars, they would probably notice and cancel the transaction before it settlesThat said, there is this
https://en.m.wikipedia.org/wiki/2015–2016_SWIFT_banking_hack
 
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  • #136
Office_Shredder said:
The real issue though is in crypto, code is law. There's no way to get that money back. In the real world, law is law. It takes time for money to transfer, and if you did hack Vanguard and steal abillion dollars, they would probably notice and cancel the transaction before it settles
What do you mean by "code is law," OS? If authorities track down crypto hackers, are they not able to return the coins stolen?

...CNBC has this horrific story today:

Homeless, suicidal, down to last $1,000: Celsius investors beg bankruptcy judge for help​

  • Some of the 1.7 million Celsius customers ensnared by the alleged fraud are now directly pleading with the Southern District of New York to help them get their money back.
  • It is the latest sign that bankruptcy court has become the de facto arbiter of crypto policy in the U.S.
https://www.cnbc.com/2022/08/02/cel...illion-beg-judge-to-recover-life-savings.html

It's like every week there is a story like this. It's pretty scary.
 
  • #137
In traditional Ponzi schemes courts have gone after profits of past investors- so if you had invested in Madoff 20 years ago, doubled your money then redeemed before it blew up, you would have to return your gains to be divvied up by the court to those who lost money (which is why investors got such large recoveries from Madoff BTW). You start this with Celsius, 3 Arrows and the other scams blowing up now, it will get messy.
 
  • #138
kyphysics said:
What do you mean by "code is law," OS? If authorities track down crypto hackers, are they not able to return the coins stolen?
Have they actually "hacked" anything? Decentralized finance is based on, there's a protocol, people are allowed to interact with the protocol in defined ways, it turns out one way to interact with the protocol extracts all the money from it. Has a crime been committed?
 
  • #139
I heard a news item today that the National Women's Soccer League may not be able to pay players because they did some deal with Voyager and cryptocurrency. Voyager declared bankruptcy.

Astronuc said:

Thousands of crypto investors have their life savings frozen as Voyager files for bankruptcy protection​

https://finance.yahoo.com/news/m-millions-dollars-thousands-crypto-223605273.html
Meanwhile - Michael Saylor steps down as MicroStrategy CEO, company takes $917 million charge on bitcoin
https://finance.yahoo.com/news/michael-saylor-microstrategy-ceo-bitcoin-204325431.html
MicroStrategy (MSTR) announced on Tuesday its founder and CEO Michael Saylor will step down from the top job and take a new post as executive chairman, focused on the company's bitcoin strategy.

Phong Le, the company's president, will take over in the CEO role.

MicroStrategy reported quarterly results that were light of Wall Street estimates on Tuesday, with revenue coming at $122.1 million against expectations for $126 million. Losses in the quarter totaled $918.1 million, with $917.8 million attributable to the company's bitcoin holdings.

In a statement, MicroStrategy said Saylor will focus primarily on, "innovation and long-term corporate strategy, while continuing to provide oversight of the Company’s bitcoin acquisition strategy."
 
  • #140
Crypto hacks are bullish, because they mean people still believe there is enough value to take the trouble
 

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