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U.S. hit hackers with regulation & they retaliated like this...

Tornado Cash banned, Vitalik's stealth address idea, and these busted 18 yr olds

Author

Lili (QueenBao)
August 10, 2022

GM Baos.

Today's news sparks some controversy. Do you believe in a free, open & trustless blockchain for all? And in this system, what level of privacy is fit for the ecosystem to thrive?

Today we cover:

  • Tornado Cash is banned ❌

  • Vitalik’s stealth address idea 😱

  • 18 yr old scammers in Paris 😭

Tornado Cash banned in US

Tornado Cash (TC) is on the news frequently for bad reasons. Namely the $7b worth of crypto its been used to launder 😅

Order of Events:

  1. The U.S. Treasury sanctions TC, making it illegal for U.S. citizens to use it to send or receive funds. They also blacklisted 40+ addresses relating to the TC team.

  2. Circle, the project behind USDC (2nd largest stablecoin with $55b market cap), also blacklisted these 40 odd addresses.

  3. TC’s website and GitHub (their open source code) are down. So is their founder’s GitHub. Here’s a bunch more:

People are angry.

Unfortunately you can’t stop receiving transactions from TC, so an individual (or team) has sent 0.1 ETH to a bunch of KOLs wallets who are now all technically breaking the law.

This is a prickly situation, and very divisive on Crypto Twitter.

On one hand, people believe in having financial privacy. On the other, the platform facilitated $7b worth of scams & hacks.

The fact that centralised entities can ban wallets and web2 infrastructure at this scale is concerning, and it also sends a warning to the crypto community that law enforcement is not afraid to crack down on bad actors.

What do you think?

ETH King's latest idea 💡

Vitalik’s latest idea is to allow stealth addresses for ERC721s.

The ERC721 is the most commonly used contract standard for NFT drops with unique art.

Here’s how it would work:

  1. Sender creates a random, one-time address on behalf of the recipient (me)

  2. Send an NFT via the address to queenbao.eth

  3. No one (except me) will be able to see who now owns the NFT

Ultimately, different payments made to the same payee will be unlinkable.

Ironically, this comes right after Tornado Cash was banned by the U.S. If this was executed – it would grant us some trade privacy while also ensuring scams and hacks will be virtually untraceable.

~$2.5mil+ Scammers in Paris

Let’s go on a little journey together. zachxbt uncovered this $2.5m hack and broke it down on Medium.

It start in December 2021. Dilly Dilly was phished for a BAYC by a verified BAYC member. Others also fell victim in Jan 2022, known as El Mono AND Tumolo, because of a transaction on a website that “animates your BAYC”.

And it didn't stop there.

This continued in March 2022, April 2022 - totalling at 5 BAYC victims thus far since December 2021, totalling at $1.7mil lost.

Then zachxbt finds the trail – mathys.eth

He finds traces of them on Twitter, Instagram, and Telegram that continues to point that this person is in fact the scammer, finding multiple tweets which he broadcasts selling crypto for cash in Paris (assuming stolen funds).

And of course, Mathys was not alone. His comrade, Camille, also broadcasted which NFTs he owned - leading zachxbt to find more wallets. It looks like Zach has found 4 more addresses with 497 $ETH+ ($891K) worth of crypto assets, suspecting more phishing from Azuki, Sudoswap, and Doodles.

This has obviously started a little wild fire and the community hunt was on. Welp, it looks like they’ve definitely shook some trees as the Computer Science school, 42, has commented on this and are escalating it internally.

What will happen to these 18 years olds? Justice, I hope.

Bite-sized news

Crypto Alpha with Quirinus

You like graphs & stats? Say less.

We opened a channel called #quirinus-crypto-alpha in FFC.

You can now learn how our Community Manager, Quirinus, sets up his trades with different risk levels and risk to reward ratios!

Remember, he doesn’t just show all the wins. The losses are just as important 😆

Things that made us laugh

Most noticeable, people will start to see another side of you. Even YOU didn’t know this side of you until you started reading about NFTs.

Congrats on being part of the statistics 👏

Who else is feeling some type of way with the current market and projects coming out? It can’t be just me right?

Shoutout to @NFTHawks for these fantastic memes!

Web3 Jobs

Cheers, see you on Friday for some more juicy Dumplings.

–Lili