ICYMI - Last week in crypto: The Merge is Comingā”š«
Are you ready for ethereum's big event? Oh, and Rugpullers are rugpulling again.
Last week, the crypto community caught a rave of excitement as the date for the long-anticipated Ethereum Merge was released. Also, Voyager got the greenlight to pay $1.9m to staff by a judge, while fellow Insolvent crypto lender Celsius launched a legal attack on former partnerāKeyFi. Meanwhile, Ava labs CEO denied links to CryptoLeaks allegations and SudoRare team scammed users of a whopping sum of $820,000 in rugpull project.Ā
Ethereum Merge Confirmed for September
The Ethereum Foundation has revealed new information about the impending upgrade to Proof-of-Stake. The long-anticipated event, known as "The Merge," is now slated to complete in September.
The long-awaited merge will be completed between September 10 and September 20, according to the Foundation. This suggests that the historic conversion of a proof-of-work blockchain to a proof-of-stake blockchain may occur a few days sooner than initially anticipated.
This announcement follows a string of repeated delays, and it's essential to keep in mind that this milestone was supposed to be reached in 2019. Due to all of this, people who staked Ether in order to operate a validator node had to wait a long time while their cryptocurrency was locked up in the deposit contract.
According to a blog post by the Ethereum Foundation, there will be a two-step upgrade necessary for the transition. The Beacon Chain's first upgrade, dubbed Bellatrix, is slated for epoch 144896 on September 6. After that, sometime between September 10 and 20 will see the start of a second upgrade called Paris when a specific Total Difficulty threshold is reached. The two chains will be combined during this second upgrade. To successfully transition to the new ecosystem, node operators must update their clients at both the consensus layer and execution layer.Ā
The term "The Merge" refers to a future upgrade to the Ethereum ecosystem in which the Proof-of-Work chain of the network, also known as the "Ethereum Historic State," will "merge" with the Proof-of-Stake Beacon Chain, which currently coexists with the main Ethereum Chain. Following the Merge, the Beacon Chain, also referred to as the "consensus layer," will verify blocks on the network. It is anticipated that the upgrade will lower Ethereum's energy consumption by over 99% in addition to other benefits.
The Merge has been years in the making, and excitement for the frequently postponed event has reached a fever pitch in 2022. The Goerli testnet merge, considered to be the final "dress rehearsal" for the Merge, was successfully carried out earlier this month, alerting the cryptosphere to the impending arrival of the rumored upgrade. As a result, the price of ETH increased for the majority of August before declining last week. JP Morgan even asserted that the enthusiasm surrounding the upgrade had caused the cryptocurrency market to "find a floor."
Celsius Counter-Sues KeyFi for Tens of Millions
KeyFi is being sued by Celsius, who claims that the DeFi strategy company is to blame for the company's loss of tens of millions of dollars. Celsius claims that KeyFi stole a significant amount of money from the cryptocurrency lender and was "unable of deploying coins profitably." However, KeyFi asserts that Celsius, not the other way around, was the one who defrauded it.
Claiming that KeyFi's "incompetence, deceit, and conversion" caused Celsius to lose millions of dollars during their previous partnership, the struggling crypto lending company filed a lawsuit today against the DeFi strategy company and its CEO Jason Stone. The lawsuit was filed one month after KeyFi charged Celsius with defrauding the company.
In court documents, Celsius claimed that KeyFi stole tens of millions of dollars' worth of cryptocurrencies from its wallets, used those funds to purchase a large number of NFTs as well as "numerous blockchain-related businesses," and then used Tornado Cash to conceal the theft.
The crypto lender went on to say that while Stone had presented himself as a "pioneer" in DeFi instruments at the start of the two companies' collaboration, he had since shown himself to be "incapable of deploying coins profitably," which had led to additional losses for the company of "many tens of millions of dollars."
Addressing the lawsuit, a legal representative for Stone on Twitter, claimed that "the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Celsius's CEO Alexander Mashinsky" and that the lawsuit was a "attempt to rewrite history and use KeyFi and Mr. Stone as a scapegoat for [Celsius'] organizational incompetence."
The lawsuit was addressed by a legal representative for Stone on Twitter, who claimed that the suit was an attempt to "rewrite history" and "use KeyFi and Mr. Stone as a scapegoat for [Celsius'] organizational incompetence," and that "the compensation that KeyFi received (including in the form of NFTs) was expressly authorized by Celsius's CEO Alexander Mashinsky."
Celsius, formerly a market leader in crypto lending, halted customer fund withdrawals on June 13 due to "extreme market conditions" and subsequently filed for bankruptcy. According to recent reports, Mashinsky allegedly used customer funds to trade Bitcoin valued at hundreds of millions of dollars, bypassing senior traders with decades of experience, and took a $50 million trading loss in just the month of January 2022.
NFT Exchange SudoRare Goes Dark After $820,000 Rug Pull
Reports from last Tuesday revealed that āSudoRareā, a fork of the well-known NFT exchanges SudoSwap and LooksRare created by an anonymous team has defrauded users of about $820,000 in various crypto tokens. SudoRare was live for only six hours before executing the rug pull and taking down its website and all affiliated social media accounts.
The anonymous team behind the decentralized NFT exchange executed the SudoRare rugpull after numerous alerts that it might be a scam circulated on Crypto Twitter. Users were defrauded of about $820,000 worth of ETH and other crypto tokens as a result of the theft.
On-chain data indicates that the incident happened early on Tuesday, just six hours after SudoRare went live. The exchange, which was created by an unidentified team as a fork of the NFT marketplaces LooksRare and Sudoswap, was designed to let users build liquidity pools for NFT collections and earn fees by staking the project's native token SR. But shortly after going live, the team "pulled the rug," which is slang for robbing users of their money and disappearing. The website and Twitter account for the platform vanished shortly after making off with the $820,000.
Before exchanging the tokens for ETH and moving the money to three Ethereum wallets, the malicious team withdrew from the exchange about $315,700 in WETH, $200,000 in XMON, and $314,700 worth of LOOKS tokens. The attacker was located by blockchain security company PeckShield in a wallet funded by the centralized exchange Kraken. The company today posted on Twitter, "The actor behind SudoRare rugpull seems to be a @krakenfx user," and provided on-chain proof of the relationship.
Due to "Know Your Customer" regulations that require all of its customers to submit to mandatory identification checks, Kraken is a regulated U.S.-based exchange. That implies that at least one person connected to the attack may have been familiar with the exchange.
Despite numerous cautions on Crypto Twitter that SudoRare might be a scam, the theft still took place.
"Sudo rare is live, but people are committing to an upgradeable contract that points to a master chef fork... I don't see any need for an upgradeable version of Masterchef because it has already been put to the test. Stay safe as it might be a scam,ā a user using the handle Adam earlier noted on Twitter. A few hours later, the team pulled the rug on the project.Ā
Voyager Allowed to Pay $1.6M Bonus to 34 Staff by Judge, as Thousands Remain Locked Out of Accounts
Following the struggling company's agreement with creditors, a court decision on Wednesday authorized Voyager Digital's request to pay $1.6 million in incentives to 34 "important" employees.
The failed cryptocurrency lender has faced criticism after suggesting that 38 staff split $1.9 million, a move made to keep them from quitting.
However, a group that represents clients who are still unable to access their money objected in writing and questioned the need for such financial inducement.
It is now official that each employee would earn a total of 22.5% of their annual income, with 55% being paid out right away and the rest coming up to a year from now. That is a tiny bit less than the 25% that was initially proposed.
Voyager has also promised to start implementing cost-cutting strategies right away, which will help the company save about $4.6 million.
Disgruntled consumers questioned Voyager about why "already well-compensated personnel" were eligible for incentives while thousands of users who had been locked out of their cryptocurrency savings for almost two months were having trouble making ends meet.
However, the business has long claimed that each employee is crucial because they possess "invaluable" institutional knowledge; if they left, operations may be affected, making it more difficult to unfreeze withdrawals.
Voyager also disclosed in court documents that 19 employees have left the company since Chapter 11 bankruptcy proceedings began. According to the company, it would be more expensive to hire new employees than to give bonuses.
Judge Michael Wiles sided with Voyager during a hearing on Wednesday and said he would approve the modified plan. He believes that if conversations with prospective buyers proceed, it will be able to optimize its valuation, which might then help with unfreezing withdrawals.
Even while these arguments may be strong, it's possible that consumers who are still unable to access their cryptocurrency funds will be disappointed by this move. Users of Voyager can currently only withdraw cash sums that are residing in their accounts.
As all of this drama continues, every tweet that Voyager Digital sends is accompanied by devastating replies from those who face prolonged uncertainty about the future. One user wrote:
"Please Voyager give us our crypto back. My kids college fund is completely locked up. I donāt know how to tell him he is not going to be able to attend his dream school this fall."
Ā CEO of Ava Labs denies CryptoLeaks' claims as 'conspiracy theory nonsense'
The CEO of Ava Labs has hit back against a CryptoLeaks blog post alleging that Ava Labs had a "secret pact" with a U.S. law firm to sue competitors in exchange for AVAX tokens and equity.
CEO of Ava Labs Emin GĆ¼n Sirer denounced as "conspiracy theory gibberish" dramatic claims made by CryptoLeaks that his business utilized legal action to "hurt" rivals and deceive regulators.
In an Aug. 28 tweet to his 280,500 followers, Sirer made the remarks in reference to a CryptoLeaks report from Aug. 26 that claimed the corporation had struck a "secret deal" with American law firm Roche Freedman to use the legal system "gangster manner" to "target and ruin crypto organizations."
On Friday, CryptoLeaks published a series of candid videos from an unknown source purportedly showing U.S. Attorney Kyle Roche of Roche Freedman LLP detailing his partnership and relationship with Emin GĆ¼n Sirer and Kevin Sekniqi, the respective CEO and COO of Ava Labs.
According to CryptoLeaks, Roche Freedman and Kyle Roche have an agreement to provide Ava Labs with legal services in exchange for AVAX tokens and Ava Labs equity, and would also use "litigation as a tool" to disrupt competitors and mislead regulators such as the Securities Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) (CFTC).
According to the publication, the recordings of Roche show a close friendship between Roche and Sirer that began in academia, and that they also moved into a co-working space together in August 2019, around the time the arrangement was formed for him to give legal services in exchange for token supply. However, Roche stated:Ā
āGĆ¼n [Sirer] ā¦ we did a deal, where I agreed to provide legal services in exchange for a certain percentage of the token supply.ā
Another video also shows Roche saying that they āused [litigation services] as a strategic instrument to support Ava Labs.ā
āI sue half the companies in this space, I know where this market is going, I believe [I am] one of the top 10 [crypto experts] in this worldā¦ Iāve seen the insides of every single crypto company,ā according to the video.
Roche said in one video that he āmakes sure that the SEC and CFTC have other magnets [Avalanche competitors] to go after,ā adding that ālitigation can be a tool to competition.ā
Ava Labs CEO Emin GĆ¼n Sirer fiercely refuted the article's charges, calling them "conspiracy theory drivel" and asserting that Ava Labs would "never engage in criminal, unethical, or just plain wrong action."
According to the website of Roche Freedman LLP, the firm employs at least 24 attorneys and has offices in New York City, Boston, and Miami. Roche studied law at North Western University and co-wrote "Why Bitcoin is Booming" in the Wall Street Journal in July 2017.
On July 1, 2022, Roche Freedman LLP was involved in a high-profile lawsuit against Solana Labs, Solana Foundation, and Solana co-founder Anatoly Yakovenko, claiming that Solana violated U.S. Federal Securities laws by offering unregistered securities to U.S. investors.
About two weeks earlier, on June 15, Roche Freedman LLP filed a lawsuit against Binance, alleging that the crypto exchange unlawfully sold UST to investors.
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