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Hello, dear readers! We’re excited to bring you today’s weekly recap of all things crypto. Grab your coffee, get comfortable, settle in — and let us tell you all about what’s going on in Web3 right now.
On today’s agenda:
Elon Musk Accused of Insider Trading
Atomic Wallet Loses Users $35M+
Gate.io Fed Up with Insolvency Rumors
AI Is Being Used to Track Crypto
How JPMorgan Is Using Blockchain
A group of Dogecoin (DOGE) investors has intensified its ongoing legal action against Elon Musk by accusing him of market manipulation and insider trading. The class action lawsuit was first initiated in June 2022, with the complaint now featuring claims of Musk exploiting his influential status to manipulate DOGE prices for personal gain.
JUST IN: Elon Musk sued over #Dogecoin Twitter logo, alleging insider trading.
— Watcher.Guru (@WatcherGuru)
Jun 1, 2023
According to the revised lawsuit filed on May 31, 2023, in the Southern District Court of New York, the plaintiffs argue that Musk strategically used his considerable Twitter following and high-profile public events, like his hosting gig on NBC's Saturday Night Live in May 2021, to engage in clear market manipulation of the cryptocurrency market.
The lawsuit cites numerous instances, including one in May 2021, when Musk tweeted a meme from the film The Matrix. The meme insinuated the potential of Dogecoin to generate substantial wealth, prompting market movement:
— Elon Musk (@elonmusk)
Jul 25, 2021
Another notable claim is Musk replacing the Twitter blue bird logo with the Dogecoin Shiba Inu logo in April earlier this year, allegedly driving a 30% increase in DOGE's price.
The complainants, a collective of DOGE investors, argue that Musk, self-styled as the "Dogefather" and "Dogecoin CEO," was unjustly enriched by billions through concealed Dogecoin sales based on insider information.
Simultaneously, the plaintiffs continue to assert that Dogecoin should be classified as a security under the U.S. Securities and Exchange Commission's guidelines. They’re saying that Musk exploited Dogecoin, a rising cultural trend, for self-promotion and financial gain, leading to financial losses among diverse investors, including war veterans, blue-collar workers, and the elderly.
Elon Musk is accused of inflating the price of #DOGE by 30% when he changed Twitter's blue bird logo "to the #Dogecoin Shiba Inu logo."
— Bitcoin News (@BTCTN)
Jun 2, 2023
This lawsuit, which initially demanded $258 billion in damages, has undergone two amendments since its original filing. Musk's legal team sought to dismiss the case in March of this year, deeming the accusations as fantasy. They refuted the claim that Dogecoin is a security and defended Musk's right to express support for a cryptocurrency that holds a nearly $10 billion market cap. Keep an eye on your inbox — we’ll keep you posted on any updates moving forward.
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Noncustodial decentralized wallet, Atomic Wallet, has reportedly been exploited, resulting in losses for users amounting to over $35 million since June 2. However, with some users alleging the loss of their entire crypto portfolios, the total value of assets stolen could potentially exceed $50 million, according to on-chain sleuth ZachXBT.
NEWS: Over $35M in #cryptocurrency was stolen from Atomic Wallet, a self-custodial platform. One user suffered an $8M loss in $USDT.
— CoinGecko (@coingecko)
Jun 5, 2023
Following initial reports of wallet compromises, Atomic Wallet's team began an investigation. Users' complaints include lost tokens, erased transaction histories, and the disappearance of entire portfolios. Among the victims, the largest reported loss is $7.95 million in Tether (USDT). It is currently unclear how the breach was carried out.
One of the victims, a cybersecurity expert named Emre, expressed his shock and disappointment at losing nearly $1 million in crypto assets he had earned from bug bounty programs. The incident has raised concerns about the safety of storing crypto assets in web-based cryptocurrency wallets in general.
As a decentralized wallet, Atomic Wallet puts users in charge of their assets, with its terms of service indicating a maximum liability of $50 for damages arising from its services. As of now, the platform's support team is collecting data from victims, liaising with major exchanges, and blockchain analytics companies to trace and block the stolen funds.
Seems like Atomic Wallet had a malicious update that sends your private keys to an attacker once you open the app.
The absolutely terrible response from the AW team leads me to believe this is a rug pull. Peoples are still being rugged right now and there's zero communication.
— Joko ⚡️ (@jokoono)
Jun 4, 2023
The exploit has drawn speculation from community channels, with some users suggesting an outdated dependency package could be the attack vector, or that this could be an intentional rug pull by the Atomic Wallet team themselves.
This incident adds to a growing list of crypto hacks, further underscoring the vulnerabilities of decentralized finance protocols. Last year, crypto hackers reportedly stole an estimated $3.8 billion, with recent exploits including Jimbos Protocol and Tornado Cash. As far as this latest hack goes, we hope to see a swift and redemptive solution for Atomic Wallet users worldwide.
Which cryptocurrency is known as “the silver to Bitcoin’s gold”?
Scroll down to the bottom to see if you're right!
⚡ Lightning Round: Weekly Updates
Crypto exchange Gate.io has threatened legal action against those spreading insolvency rumors tied to the platform's alleged connection with troubled cross-chain protocol, Multichain. Multichain has been experiencing technical issues since May 24, which spurred speculations of its leaders being arrested and over $1.5 billion of smart contract funds seized by Chinese authorities. Gate.io had significant inflows of Multichain tokens (MULTI) around the same time, inciting bankruptcy speculations. Gate.io, however, has denied any liquidity problems, asserting that operations are running smoothly.
Crypto analytics company Elliptic is adopting AI to enhance its blockchain transaction tracking and risk detection capabilities. Utilizing OpenAI's ChatGPT chatbot, Elliptic aims to streamline data organization, though it has clarified it won't use the AI to create or modify data or monitor transactions. Established in 2013, Elliptic supports institutions and law enforcement with blockchain analytics for tracking cybercrime and ensuring regulatory compliance in relation to cryptocurrency. Incorporating ChatGPT is expected to improve the accuracy and scalability of the company's human-led data collection and organization processes.
Global financial firm JPMorgan is integrating blockchain technology for interbank settlement of US dollar transactions in India, partnering with six major Indian banks, including HDFC Bank and ICICI Bank. This move aims to provide instantaneous, round-the-clock transaction processing, overcoming limitations of the current system that may take hours and is not available on weekends or public holidays. The pilot project will operate on JPMorgan's Onyx blockchain platform following approval from the International Financial Services Center Authority.
❓ Trivia Answer
Litecoin, introduced in 2011 by Google software engineer Charlie Lee, seeks to resolve Bitcoin's limitations, such as its slow transaction speed and scalability issues. By reducing block time to 2.5 minutes and increasing transaction capability to 56 transactions per second, Litecoin aims to function as a practical payment tool, unlike Bitcoin's evolution towards a store of value — thus, the silver to Bitcoin’s gold.
Web3 Resource of the Day
Is China About To Start The Bull Market? | Video from Bankless
This week’s wrap-up from Bankless covers a lot of hot topic news — including the fact that Beijing has created its own whitepaper for “Web3 innovation and development.” Is China positioning itself as a main player in the unfolding landscape of Web3? As always, hosts David Hoffman and Ryan Sean Adams take an analytical and grounded approach to what’s happening in the world of crypto, explaining the facts and offering their own opinions and views along the way. Don’t miss this guided tour through the past week in Web3!
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.