Web3 is Going Just Great

February 14, 2025

Argentinian president Javier Milei promotes memecoin that then crashes 95% in apparent $100 million+ rug pull

Portrait of Javier Milei (attribution)

A tweet from Argentina's president Javier Milei promoted a memecoin called Libra, which he described as a "private project [that] will [be] dedicated to encouraging the growth of the Argentine economy by funding small Argentine businesses and startups". The token quickly soared in price as traders poured in.

However, within hours of the launch, insiders began selling off their holdings of the token. The token had been highly concentrated among insiders, with around 82% of the token held in a small cluster of apparently insider addresses. Those insiders cashed out around $107 million, crashing the token price by around 95%.

After the crash, Milei deleted his tweet promoting the project. He later claimed he was "not aware of the details of the project and after having become aware of it I decided not to continue spreading the word (that is why I deleted the tweet)."

February 12, 2025

zkLend hacked for around $9.5 million

(attribution)

The Starknet-based lending platform zkLend was exploited for around $9.5 million. zkLend paused the protocol after the attack was discovered, and began working with various crypto security groups to try to trace the stolen funds and identify the thief. zkLend also sent a message to the attacker, offering a 10% "bounty" and a "release from any and all liability" if they returned 90% of the funds. As of twelve hours after the hack, no reply had been made.

February 11, 2025

Trader accidentally sends 2,000 SOL to bankrupt FTX

(attribution)

A former FTX customer made an expensive mistake in October 2023 when he transferred 2,000 SOL (~$64,000 at the time, almost $400,000 today) to an old FTX account, about a year after the company went bankrupt. Unlike you might expect with an attempt to wire traditional funds to a bank account that's been closed, the funds didn't bounce back. Instead, they've been sitting around under control of the FTX bankruptcy estate, requiring the former customer to seek a court order to get his funds back.

All in all, this customer is actually pretty lucky as far as erroneous transfers go. FTX's bankruptcy team still has access to FTX wallets, and are still actively working on recovering and disbursing assets to creditors. In some cases in the crypto world, erroneous transfers are lost forever.

"FTX User Accidentally Deposited 2,000 Tokens Year After Collapse", Bloomberg

February 11, 2025

BNB-based pump.fun competitor Four.Meme loses $183,000 to attack

(attribution)

A BNB Chain memecoin platform, Four.Meme, announced on Twitter that they were "currently experiencing a malicious attack". The team briefly paused a portion of the service while deploying a fix, but brought it back online later that day. Around $183,000 was lost to the attack.

February 3, 2025

Coinbase accused by crypto sleuth zachxbt of allowing more than $300 million per year in social engineering attacks on its customers

(attribution)

Crypto sleuth zachxbt has accused the popular American cryptocurrency exchange Coinbase of "fail[ing] to stop its users losing $300M+ per year to social engineering scams". He identified $65 million in crypto thefts from Coinbase in just the most recent two months, but noted that the "number is likely much lower than the actual amount stolen as our data was limited to my DMs and thefts we discovered on-chain which does not account for Coinbase support tickets and police reports we do not have access to."

zachxbt recounted how scammers routinely spoof phone numbers and use stolen personal information to gain trust with victims on phone calls, where they claim to be Coinbase employees informing users of unauthorized account access. They then walk victims through "securing" their accounts, but in reality they direct people to cloned versions of the Coinbase website where the victims are made to transfer their assets to the scammers.

zachxbt concluded, "Coinbase needs to urgently make changes as more and more users are being scammed for tens of millions every month. ... Coinbase is in a position where they have the power to make these changes and set a good example but they have chosen to do little to nothing ."

Tweet thread by zachxbt [archive]

February 1, 2025

AlleyCat project developer takes presale money to fund gambling habit

(attribution)

The creator of the AlleyCat Solana-based cryptocurrency project has reportedly taken about 600 SOL (~$130,000) raised during the project's presale and transferred it to gambling platforms including Sportsbet.io and Bitcasino. Although the project raised hundreds of thousands of dollars in presale funds, stating it was needed for token liquidity on launch, only 18 SOL (~$11,000) was ever used for liquidity.

Altogether, around $827,000 has passed through the AlleyCat creator's Sportsbet.io account in seven months. Crypto scam-spotting account Rug Pull Finder has alleged that the AlleyCat creator is also behind other rugpulls.

The AlleyCat cryptocurrency project is based on the 1983 Atari game of the same name, though the crypto project does not appear to have any affiliation with (or approval from) the game's creators.

"AlleyCat - The Gambling Deployer!", Rug Pull Finder

January 31, 2025

Dogwifhat memecoin lies about deal to put the meme on the Las Vegas Sphere after raising $700,000 to pay for it

A photo of the shiba dog from the dogwifhat meme, with the Las Vegas Sphere photoshopped on its head, holding an old cell phone with "Q1 2025" on it

Meme used in the post to announce the falsified deal (attribution)

In late January, the creator of the "dogwifhat" memecoin announced "Officially confirmed. Viva hat vegas." in a tweet accompanied by a photo overlaying the dog meme with the Las Vegas Sphere. Project organizers had raised around $700,000 in March 2024 to fund the project, hoping that the attention-grabbing stunt would spike the memecoin price. The announcement alone had somewhat of a similar effect, causing the $WIF price to spike by more than 30% shortly after.

However, crypto media firm Decrypt reached out to a spokesperson for the Las Vegas Sphere and discovered that no such deal had been reached.

Dogwifhat creators have since backtracked, replacing the tweet with a version omitting the "officially confirmed" portion, but still claiming that they "have been in ongoing negotiations with various parties to collaborate on the Sphere ad placement". They promised to return the funds "if, by any chance, the plan is not executed".

"Solana Meme Coin Dogwifhat Has No Deal With Las Vegas Sphere, Venue Says", Decrypt [archive]

January 31, 2025

DogWifTools rugpuller tool rug pulls the rugpullers

A message from the DogWifTools attackers, containing a picture of a person with clown mask on. Text reads: DogWifTools Breach

Hello, this is our one and only statement about the DogWifTools breach.

We are a group of individuals. We specifically targeted scammers in the crypto market who were using tools to gain an unfair advantage over innocent, day-to-day traders.

DogWifTools message (attribution)

A suite of software tools called DogWifTools was popular among memecoin creators looking to rug pull unsuspecting traders. By helping token creators mask supply control and fake trading activity, the tool was used to convince outside traders that a token had potential — at least, up until the token creator pulled the rug out from under them.

However, poor security by the software developers allowed attackers to ship a remote access trojan (RAT) along with the DogWifTools release. Once the package was downloaded, the trojan began scanning infected devices for crypto private keys, login information, and other sensitive data. Attackers even used scans of identification documents taken from their targets' computers to create Binance accounts.

Ultimately, around $10 million was stolen from would-be scammers. Along with the virus, the people who compromised DogWifTools left an angry note on infected machines: "Solana is a fucking joke and a scam from the beginning, it was designed for criminals by criminals! As a result, we have confiscated all your crypto, because you deserved it! You people who use automated tools to run these scam tokens are fucking disgusting to us. It's about time you got fucked over for once. Solana is nothing more than a shitty platform that enables scammers and rug pullers to steal from innocent users."

They also launched an onion website containing a message: "We specifically targeted scammers in the crypto market who were using tools to gain an unfair advantage over innocent, day-to-day traders. ... We believe it was morally correct to confiscate money that was not rightfully theirs." They added that they would soon be publishing the user data they stole on the scammers.

"Poetic Justice", Rekt [archive]

January 30, 2025

Tsotchke "quantum-enhanced AI" crypto project appears to be based on lies

(attribution)

A project called "Tsotchke" has convinced a lot of people to buy up its token based on claims that it uses "spin-based quantum computing" to "enable quantum-enhanced AI at room temperature". However, cryptographers and quantum computer scientists have serious doubts about the claims made by the project's anonymous developers. "[If they] just said it was an advanced random number generator, it would be moderately accurate", remarked the CEO of a separate quantum/crypto crossover company. Another reviewer described the project as "primarily marketing language around a conventional PRNG."

Tsotchke's developers have reacted as any reputable scientists would to those questioning their lofty claims: "Disrespect me again and you're gone", threatened someone in charge of the project's Twitter account.

January 30, 2025

Newly freed Silk Road founder Ross Ulbricht appears to squander $12 million in potential memecoin profits

Ross Ulbricht leaving prison in January 2025, wearing a grey sweatsuit and carrying a small potted plant

Ross Ulbricht leaving prison in January 2025 (attribution)

Ross Ulbricht, the founder of the Silk Road darknet market place, earned a presidential pardon on January 21 as an apparent thank you by President Trump to the Libertarian Party. When fans created a token called $ROSS to celebrate his release, they sent a substantial number of the tokens — 50% of the supply — to donation wallets that his family have operated for years, used to raise money to campaign for his release.

It's not clear whether Ulbricht has taken over control of these wallets, or if they are still being operated on his behalf. Either way, whoever does control the wallets made a big mistake when they tried to cash out on their memecoin stash by adding single-sided liquidity on Meteora. They accidentally initialized the liquidity pool at too low a price, allowing a MEV bot to snap up 5% of the token supply (notionally ~$1.5 million) at a discount and resell them.

The wallet operator then made the same error again with a larger quantity of tokens, selling off another 35% of the supply and losing out on around $10.5 million in notional value.

Tweet thread by Arkham [archive]

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