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North Korean Hackers Suspected in $100 Million Harmony Heist
June 29, 2022
Suspected North Korean hackers known as the Lazarus Group are believed to be behind the recent $100 million heist on California blockchain Harmony, a firm that tracks stolen cryptocurrency said Wednesday.
Harmony confirmed that its Horizon Bridge, a seamless layer which allows cryptocurrency to move across different blockchains, had been hacked last week.
The blockchain forensics company Elliptic Enterprises Ltd., which has been tracking Harmony’s stolen cryptocurrency to identify who is moving it around the web, said it believes the Lazarus Group was responsible because the laundering method bears their hallmarks. In April, the US Department of Homeland Security issued an alert saying the group was sponsored by the North Korean government, and that it has targeted crypto firms since 2020.
In this case, the hackers targeted username and password credentials of Harmony workers in Asia Pacific to break into the bridge, Elliptic said. While using automated laundering services, hackers moved the funds during Asia Pacific night time hours. All of these are signatures of Lazarus’ attack methods, Elliptic added.
As of Wednesday, the hacker has already sent 41% of the $100 million to a Tornado Cash mixer, according to Elliptic, a reference to the service used to hide the transaction trail.
The hack bore similarities to the recent $600 million Ronin Bridge attack, which was attributed to Lazarus by the US Treasury Department, Elliptic said.
While remarkable for the sheer amount of stolen cryptocurrency, the Horizon attack highlighted a vulnerability in so-called cryptocurrency bridges, which have been seen as a solution to clunky inoperability of some blockchains and virtual currencies.
However recent hacks suggest bridges are more exposed to breaches as the technology running them is complex, making them a prime target for hackers.
Major crypto broker Voyager Digital suspends all trading, deposits, and withdrawals
Fri, Jul 1 2022
Digital asset brokerage Voyager Digital has paused all customer trading, deposits, withdrawals and loyalty rewards, according to a statement released Friday afternoon.
“This was a tremendously difficult decision, but we believe it is the right one given current market conditions,” said Stephen Ehrlich, CEO of lending company Voyager.
Erlich went on to say that the decision is designed to give the firm additional time to continue “exploring strategic alternatives with various interested parties” and that they will provide additional information at “the appropriate time.”
Voyager’s announcement comes amid a raft of margin calls and defaults across the sector, making the digital broker the latest collateral damage of the broad market selloff in cryptocurrency. The two most widely traded cryptocurrencies, bitcoin and ether, are down more than 70% from their peaks last November, and the May collapse of the UST stablecoin sent shockwaves through an already tumultuous market.
The news comes a few days after one of Voyager’s customers failed to make payments on a loan worth hundreds of millions of dollars, fueling growing concerns of an insolvency contagion effect across the industry.
On Monday, the broker issued a notice that prominent crypto hedge fund Three Arrows Capital (3AC) had defaulted on a loan worth more than $670 million. At the time, Voyager said that it intended to pursue recovery from 3AC, and in the interim, said it would continue to operate and fulfill customer orders and withdrawals.
As of June 24, Voyager said it had approximately $137 million in U.S. dollars and owned crypto assets. The company also noted that it has access to a $200 million credit line in cash and USDC stablecoins, as well as a 15,000 bitcoin ($318 million) revolving credit line from Alameda Ventures, which is FTX founder Sam Bankman-Fried’s quantitative trading firm.
Last week, Alameda committed $500 million in financing to Voyager, and the firm has already pulled $75 million from that line of credit, but it appears that wasn’t enough to keep business running as usual.
Voyager is a competitor to crypto lending firm BlockFi, which has also been caught in the crosshairs of the sector’s recent liquidity crunch. FTX has just struck a $680 million credit deal to acquire BlockFi, according to The Block.
Voyager’s decision tracks that of popular crypto staking and lending platform, Celsius, which similarly paused all withdrawals, swaps, and transfers between accounts due to “extreme market conditions” on June 13. Celsius has yet to announce tangible guidance on next steps.
I'm happy I have under $1k in Voyager. I had toyed with the idea of tossing more at USDC for the 9% return but glad I dragged my feet. It's not a sustainable business model.
Fingers crossed that they eventually allow everyone to withdraw - I know some people that put thousands into them for the rewards.
When I log in and I get a "We need a moment" screen, saying they are in maintenance mode.
And yeah, under $1k. If I lose it, not a big deal - I knew what I was getting into. I just feel bad for those that may have been lured in by the rewards and put a good chunk of their savings into it.
Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals
July 4, 2022
A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners.
The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the collapse of two cryptocurrencies in May has spooked traders and caused knock-on effects in the digital asset world.
Crypto broker Voyager Digital temporarily suspended trading, deposits, withdrawals and loyalty rewards Friday. Major crypto lender Celsius Network LLC has paused withdrawals and has tapped advisers to prepare for a possible bankruptcy, The Wall Street Journal previously reported. Crypto hedge fund Three Arrows Capital Ltd. has been ordered to liquidate.
Singapore-based Vauld said it has engaged financial and legal advisers to explore and analyze all possible options, including potential restructuring. In June, Vauld said it would lay off 30% of its staff, slow down hiring and halve executive compensation.
“We are confident that, with the advice of our financial and legal advisers, we will be able to reach a solution that will best protect the interests of Vauld’s customers and stakeholders,” Vauld Chief Executive Darshan Bathija said.
Vauld raised $25 million in Series A funding last summer, attracting funds from Valar Ventures, which was founded by Mr. Thiel, as well as Pantera Capital and Coinbase Ventures, a unit of the publicly listed U.S. crypto exchange.
Voyager Seeks Bankruptcy as Crypto Mogul’s Lifeline Fails
(Bloomberg) -- Crypto broker Voyager Digital Ltd. filed for Chapter 11 bankruptcy protection just weeks after getting a lifeline from billionaire Sam Bankman-Fried’s Alameda Research, citing market volatility and the collapse of a hedge fund it had lent money to.The firm and two affiliates, Voyager Digital LLC and Voyager Digital Holdings, took the step in the Southern District of New York, a filing showed on Wednesday.
Voyager, which secured a credit line worth about $485 million from Alameda in mid-June, is among a growing list of casualties of a market collapse that’s seen about $2 trillion wiped off the value of cryptocurrencies. Its filing listed Alameda as the biggest single creditor, with a $75 million unsecured loan.
“We strongly believe in the future of the industry but the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action,” Chief Executive Officer Stephen Ehrlich said on Twitter, referring to the crypto hedge fund that defaulted on a $675 million loan from Voyager.
Voyager listed assets and liabilities of between $1 billion and $10 billion, respectively, in its Chapter 11 filing.
The company has about $1.3 billion of crypto assets on its platform and $350 million in a so-called For Benefit of Customers account at Metropolitan Commercial Bank, in addition to its claims against Three Arrows, according to a separate statement. It also has more than $110 million in cash and “owned crypto assets” on hand.
...Besides trading and lending, Voyager also offers staking -- a way of earning rewards for holding certain cryptocurrencies -- and yield products. Firms in that space including Celsius Network, Babel Finance and Vauld have suspended withdrawals since early June as liquidity dried up. Singapore-based Vauld is in discussions to be acquired by rival Nexo, the companies said on Tuesday.
“Voyager’s bankruptcy filing basically confirms that the crypto lender did use its customers’ funds as a source of dollar liquidity and lent them to entities like 3AC as a leveraged trade of sorts while it would constantly borrow money itself to meet current withdrawal requests,” said Mikkel Morch, executive director at crypto hedge fund ARK36, using the acronym for Three Arrows Capital.
...
.... “Voyager’s bankruptcy filing basically confirms that the crypto lender did use its customers’ funds as a source of dollar liquidity and lent them to entities like 3AC as a leveraged trade of sorts while it would constantly borrow money itself to meet current withdrawal requests,” said Mikkel Morch, executive director at crypto hedge fund ARK36, using the acronym for Three Arrows Capital. ....
It's this kind of 'other peoples money' bullshit that Glass-Steagall prevented. May not have been specifically applicable here, but the point is 'banks' taking the deposits of 'average Joe', speculating with them. Then, when they go broke, it's 'average Joe' that loses his meager savings.
Earlier today, we began a restructuring process aimed at strengthening Voyager Digital’s financial position. To accomplish this goal, the company and its main operating subsidiaries voluntarily filed for Chapter 11 protection.
Given the confidence you placed in Voyager when you joined the platform, we know this may be disconcerting news. To that end, we want you to know that we made these decisions specifically to protect and maximize the value of the assets on the platform for all stakeholders, including you, our customers, who remain our focus.
To be clear: This does NOT mean Voyager is going out of business. The restructuring process is intended to help companies stay in business, which is exactly what we intend to do. Being able to continue operations is a key benefit of a restructuring, a well-established legal process through which companies reorganize their financial obligations. In the meantime, we are continuing discussions with various parties regarding the company’s go-forward strategy.
Voyager was created with the idea that investors deserve a platform that provides access to crypto assets with simplicity, speed, liquidity, and transparency. While we strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (“3AC”) on a loan from Voyager, made this course of action necessary. Through this process, we intend to create an efficient path to resume account access and return value to customers. We are also pursuing all available remedies for recovery from 3AC, including through the court-supervised processes in the British Virgin Islands and New York.
The proposed Plan of Reorganization (“Plan”) would, upon implementation, resume account access and return value to customers. Under this Plan, which is subject to change given ongoing discussions with other parties, and requires Court approval, customers with crypto in their account(s) will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized Company, and Voyager tokens. The plan contemplates an opportunity for customers to elect the proportion of common equity and crypto they will receive, subject to certain maximum thresholds.
Customers with USD deposits in their account(s) will receive access to those funds after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank. The Company continues to evaluate all strategic alternatives to maximize value for stakeholders.
We understand this unexpected news may create both concern and uncertainty. Additional information about our path forward can be found in our press release and blog post.
Information on the restructuring, including relevant court filings, is available at https://cases.stretto.com/Voyager, or by calling +1 (855) 473-8665 (U.S. toll-free) or +1 (949) 271-6507 (international).
'Cryptoqueen' Ruja Ignatova added to FBI most-wanted list over OneCoin scheme
Anyone HODLing OneCoin? Well...got news for you, you better hodl it forever. And pass it to your next of kin to hodl more. Cuz, it may not recover for awhile...
Last Friday, Voyager presented what are referred to as “First Day Motions” as part of our Chapter 11 filing to the U.S Bankruptcy Court. We were granted the relief requested. This was the first step in the restructuring process, which is intended to address the company’s financial circumstances and allow us to resume normal operations.
We know you have many questions, and we are moving swiftly to give you answers. Below and in this more detailed blog post, we’ve tried to respond to your most pressing inquiries.
How does the reorganization process impact my cash?
We are working to restore access to USD deposits. Customer USD belongs to customers and will return to those same customers, subject to a reconciliation and fraud prevention process.
Is the USD in my account FDIC insured?
Yes. USD in your Voyager cash account is held at Metropolitan Commercial Bank of New York (“MCB”) and is FDIC insured. That means you are covered in the event of MCB’s failure, up to a maximum of $250,000 per Voyager customer. FDIC insurance does not protect against the failure of Voyager, but to be clear: Voyager does not hold customer cash, that cash is held at MCB.
What will happen to the crypto in my account?
Voyager currently has approximately $1.3 billion of crypto assets on its platform, plus claims against Three Arrows Capital ("3AC") of more than $650 million (it fluctuates due to the exchange rate between Bitcoin and USD).
Under Voyager’s proposed reorganization plan, which is subject to change and requires Court approval, customers will receive a combination of the following, with the ability to select the proportion of crypto and common equity they receive, subject to certain maximum thresholds:
Pro-rata share of crypto;
Pro-rata share of proceeds from the 3AC recovery;
Pro-rata share of common shares in the newly reorganized Company; and
Pro-rata share of existing Voyager tokens.
Can you tell me how much of my crypto I’ll get back?
At this stage, we are proposing that customers will receive their crypto as described above. However, the exact numbers will depend on what happens in the restructuring process and the recovery of 3AC assets. We understand how important this issue is and will provide updates as soon as possible.
What’s next?
Our next Court hearing is on August 4, 2022, where we will seek further relief to stabilize operations and further advance the restructuring. As the restructuring continues, you may receive notices with updates on additional legal and procedural milestones. This includes a Notice of Commencement, a required, customary legal document indicating that Voyager and its subsidiaries have filed voluntary petitions for Chapter 11 reorganization. This notice requires no action on your part.
Further details on the restructuring, including relevant court filings, is available at https://cases.stretto.com/Voyager, or by calling +1 (855) 473-8665 (U.S. toll-free) or +1 (949) 271-6507 (international).
We can’t thank you enough for your continued support. We’ve worked hard to share everything we can at this point; you have our continued commitment that we will keep you updated. We are moving through this process as quickly as we can.
Founders of bankrupt crypto hedge fund 3AC go missing, as investors try to recoup assets
Tue, Jul 12 2022
The co-founders of failed crypto hedge fund Three Arrows Capital appear to be on the run from creditors, according to court documents recently filed in New York.
Lawyers representing the creditors say the physical whereabouts of Zhu Su and Kyle Davies, who started Three Arrows in 2012, are “currently unknown,” ahead of a hearing that is scheduled for 9 a.m. ET on Tuesday to discuss next steps in the liquidation process. The documents, filed Friday evening, also allege that the founders have not yet begun to cooperate with the liquidation process “in any meaningful manner.”
Three Arrows, also known as 3AC, managed about $10 billion in assets as recently as March. On July 1, the firm filed for Chapter 15 bankruptcy protection from U.S. creditors in the Southern District of New York, after a plunge in cryptocurrencies and the collapse of the terraUSD (UST) stablecoin project wiped out its assets.
Prior to the bankruptcy filing, a court in the British Virgin Islands ordered the beleaguered fund to liquidate in order to pay back its debts.
Now, 3AC is in bankruptcy court, facing angry lenders who want their money back. Global advisory firm Teneo was hired to help manage the liquidation, starting with trying to determine what was left.
According to Friday’s court filing, Zhu and Davies, both former traders for Credit Suisse, participated in an introductory Zoom call last week to discuss basic steps to preserve their assets. Neither founder turned on his video, and both remained muted for the duration, with all dialogue conducted through counsel. Their lawyers said at the time that they “intended to cooperate.”
During the meeting, representatives helping to facilitate the liquidation requested immediate access to 3AC’s offices and to information related to their bank accounts and digital wallets. As of Friday, that access had not been granted, the filing says.
When the fund’s liquidators previously arrived at 3AC’s Singapore office in late June in an attempt to meet with the founders, “the offices appeared vacant except for a number of inactive computer screens.”
Teneo’s Russell Crumpler, who was tasked with helping to facilitate the bankruptcy process, said in a sworn statement that there is a “real risk” that 3AC’s assets would disappear “absent immediate authority to pursue discovery.”
“That risk is heightened because a substantial portion of the Debtor’s assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable,” Crumpler said in his statement.
There are reasons for such concern. One of 3AC’s NFTs was transferred to another crypto wallet, according to a well-known NFT collector and investor.
In Friday’s filing, creditors requested that the court suspend 3AC’s right to transfer or dispose of any assets. Attorneys are also asking that the court subpoena the founders or others who may have information about 3AC’s assets. That could include banks, crypto exchanges and counterparties.
3AC’s insolvency has already had a major impact on the broader crypto market, because so many institutions had money wrapped up with the firm.
Digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy protection after 3AC couldn’t pay back the roughly $670 million it had borrowed from the company. U.S.-based crypto lenders Genesis and BlockFi, crypto derivatives platform BitMEX and crypto exchange FTX are also being hit with losses.
06-30-2022, 05:27 AM
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