Crypto Flipsider News – Crypto Ponzi Scheme; Nomad Hack; Coinbase Adds ETH Staking; Polygon Token Unlock; Binance Delists AMP
2022.08.02 19:41
Crypto Flipsider News – Crypto Ponzi Scheme; Nomad Hack; Coinbase Adds ETH Staking; Polygon Token Unlock; Binance Delists AMP
Read in the Digest:
- SEC charges 11 people in $300M Forsage crypto “pyramid scheme” case.
- Nomad Bridge exploited – $190 million Stolen in “free-for-all” hack.
- Coinbase (NASDAQ:COIN) Prime adds ETH staking – Ethereum gas fees at multi-year low.
- Polygon unlocks 1.4 billion unclaimed MATIC from vesting contract.
- Binance.US to delist AMP (OTC:AMLTF) after the SEC labels the token a security.
SEC Charges 11 People in $300M Forsage Crypto “Pyramid Scheme” Case.
The Securities and Exchange Commission has filed a lawsuit against 11 individuals at the U.S. District Court in Illinois for their alleged roles in creating Forsage, which has been judged a fraudulent crypto pyramid and Ponzi scheme.
According to the SEC filing, Forsage was marketed as a decentralized smart contract platform supporting Ethereum, Tron, and Binance blockchains, which saw the 11 individuals behind it subsequently raise over $300 million from millions of retail investors worldwide.
The U.S. regulator alleges that Forsage ran the pyramid scheme for over two years, using money from new investors to pay existing clients, and reward them for recruiting more people.
The regulator explained that the founders continued to operate Forsage despite two cease and desist action orders being issued from the Philippines in September 2020, and from the Montana Commissioner of Securities and Insurance in March 2021.
Flipsider:
- Two of the defendants, Ellis and Theissen, did not admit or deny the allegations, but agreed to pay disgorgement and civil penalties as determined by the court to settle the charges, subject to court approval.
Why You Should Care
This latest crypto crackdown against Forsage will intensify the already heated scrutiny of the industry, brought about by the implosion of Terra in May.
Nomad Bridge Exploited – $190 Million Stolen in “Free-for-All” Hack
Cryptocurrency cross-chain bridge Nomad suffered a major exploit on Monday, August 1st, leading to virtually all of the funds on the protocol being drained.
The Nomad team acknowledged the exploit in a statement. Via Nomad’s official Twitter (NYSE:TWTR) account, the team wrote:
Update: We are working around the clock to address the situation and have notified law enforcement and retained leading firms for blockchain intelligence and forensics. Our goal is to identify the accounts involved and to trace and recover the funds.1/2
— Nomad (⤭) (@nomadxyz_) August 2, 2022
Unlike other bridge exploits perpetrated by a single individual, Nomad’s case was a “free-for-all” affair. A flaw in Nomad’s smart contract allowed users to make small deposits to the bridge, and then withdraw much larger funds that they had never owned.
The first unauthorized withdrawal was recorded at 9:32 UTC, when 100 wrapped bitcoin (wBTC) worth $2.3 million was moved from the protocol’s account. In total, $190.7 million was stolen from Nomad over the course of the incident.
Flipsider:
- According to Nomad, some of the funds remain secure with white hat “friends,” who continue to hold them for the protocol’s safety while the exploit is patched.
Why You Should Care
According to a researcher at Paradigm using the Twitter handle @samczsun, a recent change to Nomad’s smart contracts made it possible for users to make such fake transactions.
Coinbase Prime Adds ETH Staking – Ethereum Gas Fees at Multi-Year Low.
In a blog post made on Monday, August 2nd, Coinbase announced that users of its institutional client platform, Coinbase Prime, are now able to access an end-to-end staking experience for Ethereum (ETH), ahead of the much-anticipated ‘Merge’ event.
The expansion means that domestic U.S. institutional clients are able to lock up their ETH holdings directly on Coinbase for yield rewards. Coinbase believes the 4.08% yield reward will be enough to persuade more institutional clients to put money into the crypto industry.
Data from Glassnode displayed more positive sentiment for Ethereum as average ETH gas fell to 17.5 Gwei, its lowest level since May 2020, and the mainnet ‘Merge’ is expected to cause a further reduction to gas fees—a source of massive hype for the network’s users.
Flipsider:
- Despite the positive sentiment, inflation on Ethereum has soared to scary heights, with fees on the network reaching unacceptable values.
- The amount of ETH tokens being burned by EIP1559 has reached an all-time low of only 11%, further increasing inflationary pressure on the token.
Polygon Unlocks 1.4 Billion Unclaimed MATIC from Vesting Contract
Ethereum Layer-2 scaling protocol Polygon has unlocked approximately 14% of MATIC’s total supply (amounting to 1.4 billion MATIC) from its vesting contract address. The tokens, which were previously unclaimed, will now be distributed.
According to the drawn up distribution table, the Polygon team is set to receive 640 million MATIC (6.4%), which will be directly staked by the co-founders. The Polygon Foundation will receive 546,609,632 $MATIC (5.46%), while 200 million $MATIC (2%) will be provided as staking rewards.
According to Polygon Co-Founder Sandeep Nailwal, the token unlock is taking place in line with a schedule outlined a year ago. However, Nailwal’s explanation was not enough to stem the tide of fear, uncertainty, and doubt (FUD) from building around MATIC.
MATIC has been trading in the red of late, dropping in value by more than 4% in the last 24 hours to as low as $0.8759.
The 24 hour price chart for Polygon (MATIC). Source: CoinMarketCap
Flipsider:
- Polygon has been gaining substantial ground, with its price soaring 83% over the course of one month, and recording a 49% reduction in costs per transaction over the same period.
Why You Should Care
Nailwal assured investors that the unlock doesn’t mean MATIC is bearish, and promised a major announcement before the tokens are officially moved from the vesting contracts.
Binance.US to Delist AMP After the SEC Labels the Token a Security
Binance.US, the U.S. branch of the world’s largest cryptocurrency exchange Binance, announced via a blog post on Monday that it will delist Flexa’s AMP token on August 15th after the SEC referred to it as a security in a recent insider-trading case.
The blog post stated that, although AMP had previously passed the SEC’s risk assessment process to determine whether or not the token could be listed, the recent filing from the SEC served to make the exchange delist AMP “out of an abundance of caution.”
The exchange highlights the rapidly evolving crypto industry as one possible reason for the new regulatory development, saying: “in some circumstances, delisting an asset best protects our community from undue risk.”
Binance users in other parts of the world will still have access to AMP trading services, but the asset will be delisted from its Binance.US platform on August 15th at 21:00 ET (0:00 UTC), and remove its AMP/USD trading pair two hours later.
Flipsider:
- Binance.US notes that it will relist the AMP token in the event that more clarity around the classification of the token is provided.
Why You Should Care
The classification of cryptocurrencies by the SEC has been a heavily discussed subject, with many calling for the regulator to provide a clear-cut definition for security tokens.
Continue reading on DailyCoin
