3AC Liquidators Pursue $1.3 Billion from Founders

Legal Process Continues Following Crypto.com Transfer MishapJatinder Singh, a customer of Singapore-headquartered Crypto.com is expected to face a plea trial next month in the wake of an errant transfer that occurred on the platform over two years ago.In 2021, Crypto.com inadvertently transferred over $10 million into Thevamanogari Manivel’s Commonwealth Bank account in Australia. Remarkably, this substantial error went unnoticed by Crypto.com for seven months until it was uncovered during an audit.Photo by Tingey Injury Law Firm on Unsplash18-month sentenceManivel, a 41-year-old disability support worker, was arrested at Melbourne airport while attempting to board a plane to Malaysia in March 2022. She was holding a one-way ticket and nearly $11,000 in cash. Her recent sentencing, following her guilty plea for recklessly dealing with the proceeds of the crime, has garnered significant attention.The court imposed an 18-month community corrections order, including six months of intensive compliance and unpaid community work. This punishment was in addition to the 209 days Manivel had already spent in custody.Embarrassing errorCrypto.com’s multimillion-dollar mistake made headlines globally when it came to light during legal proceedings aimed at freezing Manivel’s assets. This incident occurred during a period of heightened uncertainty in the cryptocurrency market, mere months before the highly publicized collapse of rival FTX.In 2018, Manivel met Jatinder Singh, who became her partner and shared her interest in cryptocurrency investments. Singh attempted to make a payment using Manivel’s bank account on Crypto.com but encountered a rejection due to a name mismatch. A processing error, however, led to a massive transfer of $10.47 million into Manivel’s account.Realizing the overpayment, Singh advised Manivel to move the funds to a joint Westpac account. Between the transfer and Manivel’s arrest, the money was used to purchase four houses, vehicles, art, and furniture, and $4 million was sent to an overseas account.Crypto.com discovered the error during an audit in December 2021 and initiated efforts to reclaim the funds from Commonwealth Bank. In January 2022, the bank contacted Manivel multiple times, seeking the return of the money. Manivel, initially regarding these communications as scam attempts, remained unaware of the gravity of the situation. She later informed the police that Singh had claimed to win the money in a Crypto.com competition.Theft chargesWith Manivel having been dealt with by the courts, attention now turns to Singh, who faces charges of theft and is scheduled for a plea hearing on October 23.In response to this incident, Crypto.com highlighted its commitment to enhancing internal processes to ensure security and compliance in financial services. This includes updates to their refund and withdrawal systems to prevent such occurrences in the future.The wayward transfer may have left Crypto.com with egg on its face, but the firm has been redeeming itself via other endeavors, including the roll-out of the use of AI on its platform. On the regulatory front, the company has been working diligently towards compliance in the Spanish market, having already acquired trading licenses in Dubai and its home market of Singapore.This case serves as a cautionary tale of the unexpected consequences that can arise in crypto. Such elementary mistakes will not provide confidence to service users. The saga lays down a marker for a need for greater professionalism in the sector.

Carrieverse, a South Korean blockchain gaming project based in the Metaverse, launched its global version on March 28. Since then, the game has reportedly seen over 100,000 daily active users (DAU) every day, hitting 150,000 DAUs on its first day of release. The DAU index and related infographics were released by Carrieverse on April 1, according to the local media outlet Kyunghyang Games.  A joint venture between Carriesoft and Mantisco, this blockchain-enabled metaverse platform provides users with various content centered around the life of the game's main character, "Carrie," and her friends. At the heart of the project lies the “Play, earn, and own” model. Aside from the content backed by the "Carrie and Friends" intellectual property (IP), the project has expanded its footprint by launching the Cling Wallet, the NFT project "Kola from the Space" and the crypto game "Superkola Tactics."Photo by GuerrillaBuzz on UnsplashUsers from Southeast Asia and Latin AmericaAccording to data provided by Carrieverse, a significant portion of its users come from Southeast Asian and Latin American countries. Notably, in Indonesia and Vietnam, Carrieverse ranked second and third respectively in the newly released game section of their Google Play Store. The game generated the 15th-largest revenues of all games played in the Philippines and the 16th-largest revenues in Thailand. Carrieverse is reportedly on the top 100 casual games on Google Play Store across 86 countries.  The game also topped the trending chart on the global blockchain ranking site "PlayToEarn" on the day of its global launch, securing second place as of the following Sunday.  Building a robust IP-based metaverse platform The CEO of Carrieverse, David Yoon, said that Carrieverse strives to lead the Korean blockchain gaming industry and contribute to Korea's reputation as a Web3 powerhouse. Yoon said, "A sound ecosystem is being created due to the increase in on-chain data such as wallet generation and conversion of the governance token $CVTX, as well as the increased incineration of Celeb, which can be exchanged for $CVTX. The value of the game and $CVTX will continue to rise further." Carrieverse has also announced plans for various large-scale IP collaborations with other companies, intending to become an IP-based metaverse platform with high DAUs.  

Linear Finance Dealing With LUSD ExploitLinear Finance, the Hong Kong-based DeFi protocol, made an announcement by way of a blog post published to the project’s website on Thursday, suggesting that the project’s native stablecoin, LUSD, has come under attack.Photo by Markus Spiske on UnsplashTaking precautionary actionThis security breach has prompted the team to take immediate action to safeguard user accounts and the project’s integrity. The project team is actively investigating the exploit attack on LUSD. It has issued a stern warning to its users, advising them against buying or trading LUSD until the team can confirm the situation’s status.This measure is aimed at preventing further complications and ensuring the community’s interests remain protected. Furthermore, the project has temporarily suspended liquidations to secure users’ accounts. This step has been taken to mitigate immediate concerns and ensure that no user faces undue losses as a result of the exploit.Assets disposed on PancakeSwap & AscendexAmid the ongoing investigation, Linear Finance’s team has pledged to provide timely updates as soon as more information becomes available. In explaining away the nature of the attack, the project team clarified:”The attacker was able to mint an unlimited supply of LAAVE and subsequently traded the liquid asset to LUSD on the Linear Exchange, prior to selling it on PancakeSwap and Ascendex.”Project responseIn its efforts to deal with the issue, the Linear Finance project team has engaged an on-chain data specialist to track down the attackers. The Linear bridge contract has been disabled relative to LUSD. All protocol contracts that allow tokens to be minted, exchanged, or burnt have been paused. Meanwhile, wallets identified as having been involved in the protocol exploit have been shared with the authorities and major cryptocurrency exchanges.Synthetic asset protocolLinear Finance creates synthetic assets with the protocol design enabling unlimited liquidity. The network has been built on top of the Ethereum blockchain. As a consequence of activity surrounding the exploit, trading of LUSD over the course of the past 24 hours has proven to be out of the ordinary. At the time of writing volume over the past 24-hour period had increased by 8412%. The current market price of the stablecoin stands at $0.9874.Protocol and network hacks and exploits have been coming in thick and fast in recent days. Hong Kong crypto exchange CoinEx has been trying to recover from a $70 million hack on the platform over recent days. Meanwhile, Seychelles-headquartered peer-to-peer crypto platform Remitano suffered a $2.7 million hack late last week.On Wednesday, the project team behind DeFi protocol Balancer warned network users that the Balancer front-end user interface was under attack. The Ethereum-based DeFi network fell victim to another exploit last month, resulting in losses in the region of $900,000.In the dynamic crypto sector, unforeseen events like potential exploits can disrupt the market and sow uncertainty. The issue remains a major challenge both for centralized exchange platforms and DeFi protocols.