Another Week in Crypto #67 — October 21, 2024

Below is some of the top crypto news from the week of October 14-21, 2024. The views shared in this document represent my views and my views alone and are not intended as financial advice.

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Hacks and exploits

Radiant Capital appears to suffer a $51m exploit on BNB Chain and Arbitrum - Radiant Capital, an omnichain money market, has fallen victim to a major exploit, leading to over $51m in losses. The attack began on Radiant’s Arbitrum market before moving to the BNB Chain, according to Arkham Intelligence. The suspected exploiter's wallet holds $32m in Arbitrum-based assets and $18m on BNB Chain. Web3 security firm Ancilia discovered that the vulnerability came from a contract allowing unauthorized token transfers. Security experts warn users to revoke Radiant contract approvals, as the exploit involved a compromised multisig setup. Radiant previously lost $4.5m in a flash loan attack earlier this year.

• Key takeaways - Radiant Capital is the latest protocol to fall victim to exploit and unfortunately it won’t be the last. As a community, we need to be more vigilant and selective with whom we entrust our money to. As these continue to happen, we can hope that every exploit brings some new knowledge of how to protect user funds from hackers.

Fake Coinbase website leads to $20m fraud, 5-year sentence - Chirag Tomar was sentenced to five years in prison for defrauding Coinbase users through fake websites imitating the Coinbase Pro platform. Tomar and his co-conspirators stole users' login credentials and convinced victims to grant remote access to their computers, leading to the theft of cryptocurrency. One North Carolina victim lost over $240k. Tomar, active since 2021, defrauded victims of over $20m, using the stolen funds to support a lavish lifestyle. Arrested in 2023, the total estimated losses from his scheme reached $37m. His co-conspirators remain unidentified.

• Key takeaways - Whenever interacting with a crypto (or any) website, it’s imperative to check the URL, especially when receiving communications from “them.” Luckily this scammer was caught and this sentence will hopefully deter others from doing this in the future.

Memecoins

GOAT memecoin makes Truth Terminal the first AI crypto millionaire - Truth Terminal, an AI chatbot created by researcher Andy Ayrey, became the first AI crypto millionaire due to its involvement with the meme coin "GOAT" on the Solana blockchain. The project gained momentum when venture capitalist Marc Andreessen donated $50,000 in BTC, sparking the creation of the GOAT coin by an anonymous developer. Truth Terminal's promotion boosted the value of GOAT to over $400m, with its wallet holding over $1m in assets.

• Key takeaways - The rise of Truth Terminal highlights the growing connection between AI, meme culture, and cryptocurrency. The intersection of AI and crypto is a fascinating area where we’re just starting to scratch the surface, and hopefully the benefits of crypto (decentralization) and AI (centralized efficiency) will work in tandem to make the world a better place.

Dogecoin jumps 7% as Musk touts D.O.G.E at Trump’s Pennsylvania campaign - Elon Musk's announcement of a proposed "Department of Government Efficiency" (D.O.G.E.) led to a 7% surge in Dogecoin (DOGE), pushing its price over 13 cents for the first time since July. Musk discussed these plans at a Pennsylvania town hall, supporting Donald Trump's campaign and fueling speculation that D.O.G.E. could become part of the government under a Trump presidency. The proposed department will seek to make government spending of taxpayer money more efficient while streamlining departments that handle spending.

• Key takeaways - Elon Musk's promotion of the D.O.G.E. shows the powerful influence of high-profile endorsements on cryptocurrency markets, particularly for memecoins like Dogecoin. Investors should be cautious with any sort of political endorsements of crypto, given the volatility of crypto as well as how difficult the actual process of those implementations would be.

Hacked X accounts

EigenLayer’s official X account hacked to promote fake airdrop - The hack was confirmed by developer Eigen Labs. The hackers posted about a fraudulent reallocation of EIGEN tokens for Season 2 of EigenLayer’s airdrop, sharing malicious links, with blockchain sleuth ZachXBT and anti-scam platform Scam Sniffer quickly warning users. Eigen Labs urged people to avoid suspicious links and verify interactions with the official site. Social media hacks promoting crypto scams have been on the rise, with notable incidents involving accounts of Hulk Hogan, Metallica, Doja Cat, and McDonald's.

• Key takeaways - Hacking a social media account has been one of the most effective ways for hackers to steal money, as X accounts are often the most trusted source for crypto projects. An abundance of caution should always be preferred, especially with hot posts such as “new airdrop” and anything where you need to connect your wallet.

FBI arrests alleged SEC hacker linked to fake tweet saying Bitcoin ETFs were approved - The FBI arrested 25-year-old Eric Council Jr. from Alabama for his involvement in hacking the SEC’s X account. Council and co-conspirators posted a false message on January 9, claiming that the SEC had approved Bitcoin exchange-traded funds (ETFs). This caused Bitcoin’s price to initially spike by $1,000 before falling $2,000 after the SEC deleted the tweet and clarified it was false. Council was paid in Bitcoin for the hack, and the SEC ended up approving the ETFs the following day.

• Key takeaways - Although the tweet had little effect on the long term outcome of the Bitcoin ETF, it still caused some reputational damage to the SEC and U.S. Government as a whole. If Council is found guilty, he’ll likely receive a strong sentence for his involvement.

Other

TechCrunch founder says Stripe has acquired Bridge for $1.1 billion - Stripe has acquired the stablecoin platform Bridge in a $1.1 billion deal, according to TechCrunch founder Michael Arrington. This marks Stripe's largest acquisition and one of the biggest in crypto history. The deal comes as Stripe, valued at $70 billion, continues to expand its presence in the stablecoin payment space. Bridge, founded in 2022 by former Coinbase executives Zach Abrams and Sean Yu, operates a stablecoin-based payments network designed to rival SWIFT and credit cards. This acquisition follows Stripe's recent integration of Circle's USDC stablecoin into its platform.

• Key takeaways - Stripe's acquisition of Bridge for a staggering $1.1 billion highlights the growing convergence of traditional finance and cryptocurrency, as the company aims to enhance its stablecoin payment capabilities. We might start to see an increase in web3 companies getting acquired by web2 giants in the race to gain market share.

Polymarket betting volume for U.S. presidential election winner crosses $2 billion - The betting volume for the 2024 U.S. presidential election on the decentralized prediction platform Polymarket has surpassed $2 billion. This rapid growth came after reaching $1 billion just 23 days earlier, with Donald Trump leading with $608m in bets and a 62.3% chance of winning, while Kamala Harris has $405m and a 37.5% chance. The U.S. election has been the primary driver of growth for Polymarket, with October's volume already doubling September's. Polymarket previously raised $45m in Series B funding and plans to raise more.

• Key takeaways - Polymarket is one of the best new use-cases for crypto that we’ve seen recently, with results from its polls and betting markets plastered all over social media and even traditional media.

Sam Altman-backed Worldcoin project launches mainnet blockchain following a rebrand - The Sam Altman-backed Worldcoin project has rebranded to "World Network," or simply "World," and launched its Ethereum-secured Layer 2 blockchain, World Chain, on mainnet. The rebrand reflects the project's broader mission of verifying human identity online. World Network focuses on its three pillars: World Chain, World ID (a digital identity solution), and Worldcoin (its cryptocurrency). The project aims to differentiate humans from AI as online spaces become more populated by bots. World Network has over 10 million signups in 160 countries.

• Key takeaways - Over the past 6-12 months, we’ve seen many crypto companies rebranding their projects and tokens in an effort to reinvigorate interest, as well as expand their functionalities.

“High-risk” crypto loans surge to a two-year high of $55m on Benqi - The amount of crypto-collateralized loans within 5% of their liquidation price on Avalanche's decentralized lending platform Benqi has surged to over $55m, the highest level since June 2022, according to IntoTheBlock. This increase in high-risk loans raises concerns about potential liquidation cascades and market volatility, as loans close to their liquidation prices are at greater risk of being liquidated if collateral values drop. Such liquidations can trigger a chain reaction, leading to further declines in crypto prices, increased market turbulence, and potential downward price spirals.

• Key takeaways - As in traditional finance, liquidation of a series of stacked loans can have catastrophic consequences if not kept in check. Hopefully we can learn from past financial events and put proper safeguards in place to avoid these potential consequences.