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After BlockFi declared bankruptcy today, it's time to take a closer look at Nexo.
As you can see Nexo is paying 10% on stablecoins. Where does this yield come from?
If the yield is greater than the “risk free” market rate, they are by definition taking directional risk to chase said “yield“. This is a big red flag!
Nexo makes interest via collateralized borrowing to users, and it’s higher rate than the yield provided. The problem here is that in a system with no lender of last resort, the commercial bank model on crypto rails can blow up, quickly. “Liquidity issues”, and every customer have lost their money.
Nexo also controls over 82% of the total supply of its tokens:
85% of Nexo’s total assets held on Ethereum are Nexo tokens. This means that the platform’s backing could become compromised if liquidity issues mount.
Nexo is full of red flags and could be the next company to fall!
If you hadn't seen my previous post about Binance and its child company CoinMarketCap misleading users about PoR, a quick tl;dr: Binance, indirectly through CoinMarketCap, was misleading users about Binance having provided PoR, when in fact, it had only publicly disclosed wallets in its control.
Soon after my original post, Binance "released" its "Proof of Reserves" system. Unfortunately, once again, Binance is misleading users about having produced full proof of its reserves.
As a quick disclaimer, Binance has not provided full Proof of Reserves. My post here is meant to show the efforts Binance is taking to portray itself as having done so when, in fact, it has not. This is not a post claiming that Binance doesn't have reserves to match user liabilities. There's no way to know because Binance has not provided sound proof.
What is Proof of Reserves (PoR)?
Let's first establish what PoR is. There isn't one standard definition for PoR, but there is a right and wrong way. Nic Carter, a blockchain expert, has covered this topic in-depth for several years, so I'll reference info from his website:
Proof of Reserves is the idea that custodial businesses holding cryptocurrency should create public facing attestations as to their reserves, matched up with a proof of user balances (liabilities). The equation is simple (in theory):
Proof of Reserves + Proof of Liability = Proof of Solvency
So what is the recommended way to conduct PoR?
Proving liabilities is tricky, and generally requires an auditor to engage in a full assessment. For instance, exchanges can omit certain liabilities to ‘cheat’ a PoR attestation. This is why I recommend both a user-facing PoR protocol, allowing users to obtain ‘herd immunity’ by collectively verifying their individual balances, and an auditor-facing PoR protocol, to prove that the claimed liabilities are faithful to reality.
Binance "releases" its "Proof of Reserves" system
So, yesterday, Binance announced the launch of a feature that allows users to "verify" that their deposited cryptocurrency has been included in an "audit." The problem is that there has been no public disclosure of a third-party audit of Binance's liabilities to users as of writing this post.
Binance is misleading users. Again.
The announcement directs users to Binance's Proof of Reserves landing page. This is where the misleading info really comes to light.
In order to show that Binance has all user assets 1:1, we have built and implemented the Merkle tree (shown below) to allow people to verify their assets within the platform...
This way people will be able to confirm that their funds are held 1:1 and they can have it verified by a third-party audit agency...
We use these properties of Merkle Trees during our Proof of Reserves assessments to verify individual user accounts are included within the liabilities report inspected by the auditor...
The Record ID enables you to independently verify that your account balance was included by the third-party auditor...
Snippet from the UI example on Binance PoR landing page
Where is the liabilities report inspected by an auditor? Who is the auditor? We don't know because Binance hasn't done any of this yet. Binance has announced plans for third-party audited reserves but has yet to produce anything from an external auditor. So yes, they may very well do this at some point, but they haven't yet. So why are they portraying that they have?
Well, at least, all the way at the bottom, below all the instructions and info about the new feature:
Snippet from the Binance PoR landing page
As it stands
Binance has not produced the very form of PoR that it is branding in the new feature, meaning they haven't disclosed any report or data from a third-party auditor that would prove that the claimed liabilities are faithful to reality.
At least this time, not all media ate it up...
While I was writing this post, CoinTelegraph.com dropped this article covering Jesse Powell's (Kraken co-founder) criticisms of Binance and its misleading PoR branding. Jesse calling out Binance is not surprising, considering Binance is also misleading users about the origin of "its" PoR implementation (which it hasn't even implemented yet).
Snippet from the Binance PoR landing page
For context, Gate.io (in 2020) followed by Kraken (in 2021) were the original exchanges to implement a PoR model that Binance is now claiming to have "built". Also, Binance didn't build anything other than a UI for this already open-source PoR method. Moreover, before any third-party auditors were available or capable of doing such audits, Kraken was doing PoR all the way back in 2014 (minus the third-party audit, opting for an attestation from Stefan Thomas).
Final note
Something I hadn't highlighted in my last post is that even Nic Carter called out CoinMarketCap, and indirectly, Binance, for this user-misleading behavior.
Recently, some exchanges have begun to post informal attestations as to their reserves, for instance by sharing a list of cold wallet addresses. CoinMarketCap has even taken to calling summary data on exchange holdings (see e.g. Binance) ‘Proofs of Reserve’, even though these are issued without any proof of ownership. These attestations do not satisfy either side of the conventional PoR procedure: there is no cryptographic proof of assets held (merely disclosing an address is insufficient, as it could belong to anyone), and there is no accompanying proof of liabilities outstanding. To call this a ‘Proof of Reserve’ is a blatant misuse of the term. Users should demand the highest standard and should be extremely wary of exchanges using PoR in marketing collateral without committing to the rigorous version of the practice (see the caveats in the PoR wall of fame above).
I'm in a twitter space with mario Nawfal, Charles hoskins, Kim Dotcom, and a lot of other people where they are covering all of this live.
https://twitter.com/MarioNawfal/status/1591797754526851072 tweet deleted, this is the newest one: https://twitter.com/marionawfal/status/1591803227003129858?s
please take all of the information that is coming in now with a grain of salt. Nothing has been confirmed by relevant parties yet.
In the words of the twitter space host, as well as the person who tweeted that information, he is stating live "There are a lot of indicators that CDC is safe."
If there is a goal, it is clear: nefarious actors are trying to create a run on CDC either with hacked funds or without funds and just trying to screw with our heads.
Don't panic, stay calm, don't do anything irrational. Last I checked, the Eth funds transferred from CDC to gate were sent by mistake and all funds have, essentially, been returned. However, something about all of this doesn't sound 100% legitimate.
EDIT: CZ is about to join the space. I'll deliver live-reports through further edits if there is more relevant information.
EDIT 2: CZ joined. kim dotcom asked about regulatory licensing. Talks about his licensing with Paxos, and explains that BUSD is NOT ISSUED BY BINANCE, it is issued by Paxos because they have an NYDFS license and is one of the best groups to go through for issuing assets.
EDIT 3: The spaces host is getting requests from politicians and ex chief-of-staff members (advisers to presidents).
EDIT 4: there's too much shit to cover and I'm tired. I need a break, I'm going to get some sleep.
We know with almost certainty that FTT was used as an 'infinite money' scheme between Alameda and FTX. Basically, FTT tokens could be printed and lent(realistically given) to Alameda, with which Alameda used to post as collateral to borrow against for (free) cash. This could be done over and over. Today, even MORE illicit FTT was issued by the FTT Main Deployer address. Usually, FTT is released at schedules periods. But over early this morning over 100M FTT amount into $400M was released out of schedule. Binance and Huobi blocked deposits of these millions of FTT. Funds are still being tracked at the moment.
This is another turn in events where insiders used FTX to push a malicious update to FTX apps(and possible website) where they gained access to user accounts and drained their balances. SBF also built a backdoor into FTX accounts and record-keeping such that funds could be manipulated without raising compliance issues.
Basically at this point FTX seems to be full of rats and scumbags who are taking advantage of the situation and trying to take the firm for whatever monetary value it has left. That said, based on it's management, the firm seemed to full of rats and scumbags from the beginning so perhaps this is only to be expected.
Money is being moved out quickly and swapped. Messages sent in eth domains from the hackers. There is an update for all the apps as well.
The important thing is that you do not update the app. None of the fTX related apps.
It's in your interest to delete them and be very cautious.
People's balances are being deleted and some big things are happening. No clue how this will end or where this originated from. It might be an inside job or a state actor. Who knows. Aspects of this hack are sloppy and other parts are very planned out.
So again DO NOT UPDATE FTX APPS!!!!!! You might lose a lot more!
Edit: id also recommend people monitor any connected bank accounts or debit/credit cards for the next few months. And use credit karma to make sure no new cc have opened under your name. We don't know what customer data was stollen.
edit: UPDATE. My bank account has been accessed by FTX using Plaid today. Please please remove FTX from accessing your account https://twitter.com/mikemcg0/status/1591477400634023938
I was able to remove access by going into my chase app
The message reads:
Hi there,
Attention! Due to the pressure on the blockchain, some wallets have failed to complete the merge to enter the new ecosystem. Therefore, you need to merge your wallet before 25/09/2022!
What if I don't complete the merge manually?
We require all customers to verify their wallets to continue using our service. If you don't update your wallet, your will lose all your assets.
Then proceeds to offer you a button to "complete the merge".
We all know they'll ask you for your private keys. The email's design seems trustworthy for the naive user.
No company will ever ask you to input your seed phrase anywhere. If a "company" does so, it is a scam. Stay away from that!
Spread the word and stay safe out there.
EDIT: put a screenshot below
Two days in a row I received micro transactions of about .000001 with a memo that said
How to keep a community happy - take a look at the newest ALGO distribution initiative - [insert phishing website address].
The second scam memo said:
Algorand is making big moves - what does this mean for your ALGO bags? - [insert phishing website address].
By visiting this fake airdrop link, you are taken to a fake website domain that is “alqorand.com”. Notice how they used a "q" instead of a "g", and therefore it is really easy to assume you have been sent to the real website as it looks so similar!
This scam site gives you options to link your wallet to sign up for the airdrop or it will redirect you to another imposter website for myalgo wallet lookalike scam site “wallet.myalqo.com”. Again, notice how they used a "q" instead of a "g"
Stay safe and do not follow any links sent to you in a transactional memo, especially if you are not aware of the original sender!
So a while ago I logged into my AscendEX account to find my MITX had disappeared with no warning. I thought I’d been hacked, but nope. It was simply an exchange (AscendEx) having the audacity to think it was ok to delist a coin and not tell the effected users.
Actually what they did do was hide it within a news story. No emails. No app alerts nothing. So without happening to look on the right day and catch that story by chance there was no warning the coins would be removed.
Normally this wouldn’t be a huge issue as you would be able to withdraw somewhere else. But they also blocked withdrawals as well and the token completely disappeared from the wallet.
If you are not on the ball and you don’t check you’re account regularly I can only assume this is a practice they will repeat - so without careful observation you could end up with coins ‘randomly’ disappearing from you account - in effect AscendEX is doing theft by stealth. I’m quite sure they know what they are doing.
After much back and forth and supposedly being put on a ‘list of effected users’. They said they would withdraw the coins to another wallet that I could provide them with. I did this and only weeks later did they, without warning, credit my account with the supposed value of the coins in USDT, though not the tokens. Case closed, you would think.
But my partner has not been so lucky… Over two months later we are still waiting return of her money or tokens. The replies from AscendEX stopped coming from the person she was dealing with from ‘customer service’. ‘Mohammed’ simply stopped replying to her messages asking for an update. The last response was along the lines of ‘please be patient’ then complete radio silence.
We started a new support request considering AscendEX have stopped acknowledging the last one. And a quick reply from them it’s again “please be patient”. But little action. So after two months, and stealthily stealing both of our funds. My partner is still nowhere closer to gaining the money/ tokens which is rightfully hers.
So here I am using social media to try and get AscendEX to pay a bit more attention until she gets her money returned.
Now this isn’t the only case I’ve heard of this. I’ve heard this happen to a friend on Bybit as well with a token disappearing with no warning.
TLDR: like many in this space AscendEX is a dodgy exchange. Don’t trust it with your funds. You are better off elsewhere (or as is often said, use an electronic wallet).
There's a new scam promoting a supposed Amazon coin called AMZTR followed by numbers.. and i these people have bots spamming every crypto related videos on youtube it seems..
Obviously the message is don't fall for it..
But i noticed that one bot comment had 800+ likes on it. Does that mean that these people have 800+ accounts on youtube that are part of a botnet?
How the hell does Youtube keep allowing these accounts to run rampant.. it's getting annoying that every time you comment on a video you get bots asking you to whatsapp you or be part of their 10k a month investment opportunity..
One of the biggest events in the history of Crypto is just around the corner.
Many Crypto enthusiasts are expecting this, the speculations about the prices and what will come next are in all time high, but there is one very important aspect that each one of us should be aware of.
The scammers are eagerly waiting as well, this will be a golden opportunity for them. As a rule of thumb lots of people are lacking basic knowledge and common sense, making them easy victims during major events.
So during the big shift, be extra cautious, turn off your DMs if needed, always doubt what you are said and if in doubt first ask the community before it's too late!
Take care and stay safe!
Today I got several mails from "Ledger" advising me to install an important security update.
My curiosity was piqued, so I entered the URL on my Android tablet and got to a Google site which looks remarkably like the Ledger Live app under Windows.
Screenshot of "Ledger Live App" with error message
Fun fact: No Ledger device was connected at the time when the error occured ;)
So, stay safe out there! And NEVER follow such a link from an email. Always user your bookmarked browser links!
Dogechain is a new Layer 2 Ethereum that uses DOGE as gas fee. It's basically a chain filled with shitcoin scam and not approved by the majority of DOGE community.
Now they launched their own token called DC by airdropping to any wallet that uses Dogechain before 23rd August.
The developer got 20B tokens upfront and dumping 1-2M every minute in Uniswap. At the time of writing they have dumped 150M token (estimated worth $225k)
Developer wallet dumping token in Uniswap
User Getting Airdrop Can't Dump Because the Bridge is Manipulated
For some reason, most of the liquidity is in Eth mainnet Uniswap. So if anyone getting airdrop want to sell, they need to bridge from Dogechain to Ethereum mainnet.
But the minimum amount to bridge is 9M token (worth $16,000) and has 8M fee. Safe to say only few people has enough tokens to cover the bridge cost.
Advice: Just stay away from this shitcoin.
Source: Crypto detective zachxbt has called out Dogechain developer in Twitter for this malpractice
First and foremost, let's explain why bitcoin is not a ponzi: supply and demand. The conversation ends there. If you are still convinced bitcoin is a ponzi scheme, then you are arguing in bad faith if you would also say that gold is not a ponzi scheme. And don't tell me "BuT gOlD hAs InDuStRiAl UsEs." I've worked for PC hardware manufacturers at their HQs in Taiwan and the role of gold in the construction of some products is overblown by the speculators. Secondly, a ponzi scheme depends on a very high amount of gullibility from the buyer, if not a high amount of deceptiveness from the seller - and there is only one buying / selling route or financial offramp / onramp for the asset being sold. When Bernie Madoff was scamming his investors, the only possible way for investors to get their money was to go directly through his company to buy or sell. He fudged the numbers and put everything under a veil of secrecy that no one could see except himself and some of his staff. Bitcoin is not the same.
Alright then, wise guy, what makes uniswap / pancakeswap different from a ponzie scheme?
Blockchain explorers. Open-source code that can be inspected on Github repositories, need I say more?
What are the red flags?
https://imgflip.com/i/6me4nc - appropriate meme.
If the project requires other investors to join and invest a base amount, that sounds like a red flag. If the project requires other investors to join, and then you get a financial reward for it, that sounds like a problem. If you are unable to see your funds locked in to a smart contract, then that sounds like an even bigger problem! Oh, and let's not forget unusually high APYs rated at anything above 10%.
That is all. Have a good Monday.
News is just coming in that "a wealthy individual" has been liquidated on CoinFLIX and owes the company $47m USDC. The CEO of CoinFLIX confirmed this so far, and has said they have issued a notice of default to Ver.
CoinFlix CEO: Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him
However, Roger Ver in a throwback to his days of degeneracy and racketeering immediately denied this.
Instead he claims CoinFLIX owes him money!
Hence the CEO of Coinflix has issued additional clarifications that Roger is lying.
This is some welcome back into crypto for "Bitcoin Jesus" who infamously foked BTC into BCash.
Literally all he had to do was hold on to his early BTC, and instead he created a shitcoin BCash which is sinking badly, and now he has been liquidated longing this shitcoin.
Even more incredibly, CoinFlix has turned this debt owed by Roger Ver, which is denied by Roger Ver, into another debt and have sold this debt of a debt to other users as rvUSD token promising a 20% APY on these tokens.
This is just incredibly scammy and pathetic from every party concerned here.
The biggest SCAM in Crypto history is going on right now and they're using PR, YouTube and Telegram to get the crime done.
Do a search for Mehracki on Google and look at their articles.
Then do a search on any project from boostx.finance (they are all scams)
Logarithmic Finance
Firepin
Seesaw Protocol
Parody Coin
Calyx Token
Securipop
PacmanFrog
Aquas Protocol
Quitriam
Automish Token
Acranup Network
Explorachain
Mehracki
These are all the projects I found that are scamming people right now live as we speak using PR to drive people to their telegrams and their bogus websites to scam people.
here are all their domain names
.
Here are the defanged URLs
hxxps[://]www[.]boostx[.]finance/
hxxps[://]paymentsnow[.]io/
hxxps[://]seesawprotocol[.]io/
hxxps[://]securipop[.]io/
hxxps[://]firepin[.]io/
hxxps[://]automish[.]io/
hxxps[://]capricefinance[.]com/
hxxps[://]acranup[.]io/
hxxps[://]aquasis[.]io/
hxxps[://]calyxtoken[.]io/
hxxps[://]explorachain[.]io/
hxxps[://]securipop[.]io/
hxxps[://]parodycoin[.]io/
hxxps[://]pacmanfrog[.]io/
hxxps[://]quitriam[.]io/
hxxps[://]logarithmic[.]finance/
hxxps[://]mehracki[.]io/
hxxps[://]cashfi[.]app/en
hxxps[://]gnox[.]io/
hxxps[://]mushe[.]world/
hxxps[://]sanzooz[.]finance/en
hxxps[://]cylum[.]finance/
hxxps[://]planetfinance[.]io/
They are claiming a "pre sale" for a fake token, people send their money, they release a fake token that no one can cash out, have users connect their crypto wallets to a scam website and then wipe out their entire wallets.
The longer they remain up and running, the more people get scammed.
Everyone report to the FTC, icann.org, Telegram, YouTube and everywhere else you can and do not connect your wallet to any of those.
Reporting links
https://www.icann.org/complaints-office
4 hours ago a shit ton of lives started with fake giveways "Give X, we give back 2X" and they are beeing viewed by 10k-30k people.
They lead to twiter posts and other web applications with malicious content (for obvious reasons I wont post it here).
List of SCAM youtube lives:https://www.youtube.com/watch?v=qw6Vge1FrJUhttps://www.youtube.com/watch?v=rOE57Uk-JJohttps://www.youtube.com/watch?v=n0qQs3g1Dtwhttps://www.youtube.com/watch?v=6EgqA3cJTvghttps://www.youtube.com/watch?v=Gi65ODVSAGMhttps://www.youtube.com/watch?v=rOE57Uk-JJo(...)the list keeps going and going
Please im not sure if i can post this links but if i can report them!
Edit: You can report this videos by pressing the litle flag -> Spam or misleading -> Scams or fraud.
Move to earn apps are gaining popularity and many seem to even think all of this is sustainable. A huge number of such apps have just launched out of nowhere.
Stepn for their part helps further the scam by closely controlling how many invites can be sent out each day, thereby ensuring supply/demand and the ponzi scheme doesnt collapse overnight. However they can only do this for so long. New people buying shoes are paying for early entrants to exit. Some time ago, the cheapest shoe to enter was around $700. At the end of this scheme, many will lose their investments they have put into the scheme.
It is just similar to bitconnect where new depositors withdrawals were limited (you could only withdraw after some time in the system). If you control the entry and exit parametric of a devious ponzi scheme, you can further the time till it all collapses.
However, Solana's founder thinks this is a \"paradigm shift\"
Based on these recommendation from "public figures", people are putting money into this expecting profits. If everyone understands it's a ponzi and still decides to play the game, knowing the first one out win and the last one baghold to zero - thats fine given how devious this industry is. But to promote it as a "paradigm shift".... bruh
Some seem to think its not a scam because "the app makes me go an extra mile a day and I also made $100, I cant possibly be scam". - this is the same kind of thought process that led to $40 BN being wiped off the market just 2 weeks ago.
If you don't know who he is, you probably know him by this screenshot||
He has been involved in different pump and dump coins but the recent coin he tweeted was a complete rugpull. Here's the screenshot of his tweet.
Please stay away from these YouTubers always do your research before investing into these shitcoins just because he shilled Bitcoin doesn't mean his all shills are legit.
Report him to the Dubai police so he gets what he deserves, he has deleted his tweets.
https://twitter.com/DubaiPoliceHQ
https://twitter.com/Davincij15/status/1514054596376907781 Here he's shilling another scam which got rugpulled too, if you check out the replies people still don't believe he was involved in it they think his account got hacked.
So, I just received an email claiming to be from Metamask saying because of new regulations, all users have to comply by...whatever date. It looks legit, even the email address sounds right...however, a quick search shows that it is a common phishing scam.
I messaged Metamask Support and they confirmed it.
" Please note, there are an ever increasing number of phishers on other sites pretending to be MetaMask Support. MetaMask support team will never ask for your seed phrase or private key! We will never need to "connect to", "synchronize", or "update the firmware" of your Metamask wallet for any reason. "
link to other site that confirms. https://piunikaweb.com/2022/03/12/metamask-kyc-emails-are-scams-confirms-support/
While it may seem obvious to many here, scammers wouldn't be trying if they didn't think people would fall for it.
This is just a friendly heads up...have a good weekend
EDIT - for all those asking about whether or not i used an email when i signed up with Metamask...i did it drunk do i don't remember all i did
