Crypto has had a depressing month and it is solely the third day of August

Crypto has had a depressing month and it is solely the third day of August

It has been a tough month for the cryptocurrency sector and it’s only the third day of August.

From cross-chain bridge hacks draining a whole bunch of tens of millions of {dollars} in consumer funds to the Securities and Trade Fee coming after crypto Ponzi schemes, this nook of the market cannot catch a break.

The developments add to an already torrid yr for the crypto market, which has seen huge declines as a consequence of fears over tightening financial coverage and an absence of liquidity.

The flood of reports is tough to trace even for consultants, so here is a rundown of what is been lacking since Monday.


The headquarters of the US Securities and Trade Fee in Washington on February 23, 2022.

Al Drago/Bloomberg by way of Getty Pictures

the The Securities and Exchange Commission on Monday filed a civil lawsuit charging 11 people for their role in creating and promoting an allegedly fraudulent crypto-focused pyramid scheme that raised more than $300 million from investors.

The scheme, called Forsage, claimed to be a decentralized smart contract platform, allowing millions of retail investors to transact via smart contracts operating on the ethereum, tron, and binance blockchains. The SEC alleges that for more than two years, the setup operated as a standard pyramid scheme, in which investors made a profit by recruiting others into the operation.

In the SEC’s formal complaint, Wall Street’s top watchdog calls Forsage a “textbook pyramid and Ponzi scheme,” in which Forsage aggressively promoted its smart contracts through online promotions and new platforms. of investment, without selling “any real consumable product”. The complaint adds that “the main way investors made money from Forsage was to recruit others into the scheme.”

The SEC said Forsage operated a typical Ponzi structure, in which he allegedly used assets from new investors to pay old ones.

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a large scale and aggressively marketed to investors,” Carolyn Welshhans, acting head of the SEC’s Crypto and Cyber ​​Unit, wrote.

“Fraudsters cannot circumvent federal securities laws by focusing their schemes on smart contracts and blockchains.”

Forsage, through its support platform, declined to offer a method to contact the company and did not offer comment.

Four of the eleven individuals charged by the SEC are founders of Forsage. Their current whereabouts are unknown, but they were last known to be living in Russia, the Republic of Georgia and Indonesia.

The SEC also charged three US-based promoters who endorsed Forsage on their social media platforms. They were not named in the commission’s statement.

Forsage was launched in January 2020. Regulators around the world have tried to shut it down a couple of times. Cease and desist actions were first filed against Forsage in September 2020 by the Philippine Securities and Exchange Commission. In March 2021, the Montana securities and insurance commissioner attempted the same thing. Despite this, the defendants allegedly continued to promote the scheme while denying the claims in various YouTube videos and through other means.

Two of the defendants, who neither admitted nor denied the allegations, agreed to settle the charges, subject to court approval.


So-called blockchain bridges have become a prime target for hackers looking to exploit vulnerabilities in the world of decentralized finance.

Jakub Porzycki | NurPhoto | fake images

Cryptocurrency startup Nomad lost nearly $200 million in a devastating security exploit. Nomad is known as a “bridge”, where users can transfer tokens from one blockchain to another. The hackers exploited a security flaw that allowed users to enter any value into the system and siphon the funds, even if there were not enough assets available in Nomad’s deposit base.

The nature of the bug meant that users did not need programming knowledge to exploit it. Others took notice and deployed armies of bots to carry out copycat attacks.

“Without prior programming experience, any user could simply copy the original attackers’ transaction call data and substitute the address with their own to exploit the protocol,” said Victor Young, founder and chief architect of crypto firm Analog.

“Unlike previous attacks, the Nomad hack turned into a free-to-play game where various users began draining the network simply by replaying the original attackers’ transaction call data.”

Blockchain bridges are a popular way to move tokens out of networks like Ethereum, which has earned a reputation for slow transaction times and high fees, onto cheaper and more efficient blockchains. But sloppy programming choices have made them a prime target for hackers looking to scam investors out of millions. More than $1 billion in cryptocurrency has been lost to bypass exploits so far in 2022, according to blockchain analytics firm Elliptic.

“I can only hope that developers and projects know that they are running a critical piece of software,” Adrian Hetman, technology lead at security firm Web3 Immunefi, told CNBC.

“They need to keep safety first, be safety first in every business decision because they’re dealing with people’s money, a lot of that money is locked up in those contracts.”

Nomad said it is working with crypto security firm TRM Labs and law enforcement to track the movement of funds, identify the attackers, and return stolen tokens to users.

“Nomad is committed to keeping its community updated as it learns more in the hours and days ahead and thanks all those who acted quickly to protect funds,” the company said in the statement.

Michael Saylor, president and CEO of MicroStrategy, first got into bitcoin in 2020, when he decided to start adding the cryptocurrency to MicroStrategy’s balance sheet as part of an unorthodox treasury management strategy.

Eva Marie Uzcategui | Mayor Bloomberg | fake images

Later on Tuesday, MicroStrategy announced that CEO Michael Saylor will step down to become executive chairman of the company. Company chairman Phong Le will take the reins from Saylor.

Saylor has been the CEO since he launched the company in 1989. MicroStrategy went public in 1998.

MicroStrategy shares are down more than 48% this year. Bitcoin is down more than 51% during that same time period.

“I believe that splitting the roles of president and CEO will allow us to better pursue our two corporate strategies of acquiring and holding bitcoin and growing our business analytics software business. As CEO, I will be able to focus more on our bitcoin acquisition strategy and initiatives related to bitcoin defense, while Phong will be empowered as CEO to manage overall corporate operations,” Saylor said in the statement.

The announcement comes as the company announces its second-quarter earnings, in which its total revenue fell 2.6% compared to a year earlier. The company also reported a $918 million impairment charge on the value of its digital assets, presumably primarily bitcoin.

MicroStrategy may technically be in the enterprise software and cloud-based services business, but Saylor has said the publicly traded company doubles as the first and only Bitcoin spot exchange-traded fund in the US. USA

“We’re like your nonexistent spot ETF,” Saylor told CNBC on the sidelines of the Bitcoin 2022 conference in Miami in April.

Tuesday afternoon, Wednesday early

The Solana logo displayed on a phone screen and the representation of cryptocurrencies are seen in this illustration photo taken in Krakow, Poland, on August 21, 2021.

Jakub Porzycki | NurPhoto | fake images

And then on Tuesday night, unknown attackers went after active wallets connected to the solana blockchain.

Nearly 8,000 digital wallets have been emptied of just over $5.2 million worth of digital currency, including solana sol token and USD Coin (USDC), according to blockchain analytics firm Elliptic. The Solana Status Twitter account confirmed the attack, noting that as of Wednesday morning, approximately 7,767 wallets have been affected by the exploit. Elliptic’s estimate is slightly higher at 7,936 portfolios.

Solana’s sol token, one of the largest cryptocurrencies after bitcoin and ether, fell about 8% in the first two hours after the attack was initially detected, according to data from CoinMarketCap. It is currently down 1%, while trading volume is up 105% in the last 24 hours.

As of Tuesday night, multiple users began reporting that assets held in “hot” wallets, meaning addresses connected to the Internet, including Phantom, Slope and Trust Wallet, had been emptied of funds.

ghost said in Twitter that’s investigating the “reported vulnerability within the solana ecosystem” and doesn’t imagine it’s a Phantom particular concern. Blockchain Audit Agency OtterSec tweeted that the hack has affected a number of wallets “on all kinds of platforms.”

Elliptic chief scientist Tom Robinson informed CNBC that the basis reason for the breach remains to be unclear, however “it seems to be as a consequence of a flaw in sure pockets software program, relatively than the solana blockchain itself.” OtterSec added that the transactions had been being signed by the precise homeowners, “suggesting some type of non-public key compromise.” A personal key’s a safe code that provides the proprietor entry to their cryptocurrencies.

The id of the attacker remains to be unknown, as is the basis reason for the exploit. The hole is ongoing.

“Engineers from a number of ecosystems, with the assistance of varied safety corporations, are investigating depleted wallets in solana.” according to Solana Statea twitter account that shares updates for the complete solana community.

The solana community strongly advises customers to make use of {hardware} wallets as there isn’t a proof that they’ve been affected.

“Do not reuse your seed phrase in a {hardware} pockets – create a brand new seed phrase. Drained wallets must be handled as compromised and deserted.” read a tweet. Seed phrases are a group of random phrases generated by a crypto pockets when it’s first arrange and granted entry to the pockets.

A personal key’s distinctive and binds a person to their blockchain tackle. A seed phrase is a fingerprint of all a person’s blockchain property that’s used as a backup if a crypto pockets is misplaced.

The Solana community was seen as one of the crucial promising newcomers within the cryptocurrency market, with backers like Chamath Palihapitiya and Andreessen Horowitz touting it as difficult ethereum with quicker transaction processing instances and improved safety. However recently it has been dealing with plenty of points, together with downtime in busy durations and the notion of being extra centralized than Ethereum.

Leave a Reply

Your email address will not be published.