Crypto prices this week were again underwhelming across the board. Despite signs of growing adoption and regulation, and slight progress in crypto lenders Celsius and Holdnaut’s ongoing insolvency issues, it was another excruciatingly slow week, though relatively short on losses.
However, over on crypto Twitter things were a lot more scandalous. A self-proclaimed crypto whistleblowing site called Crypto Leaks last weekend published a lengthy and damning exposé of a lawyer employed by Avalanche called Kyle Roche.
The report includes clips from undercover videos of Roche at two separate meetings, in which he confesses to having deep vested interests in Avalanche, through owning both a percentage of the token supply and significant shares.
Roche confessed to regularly suing Avalanche’s competitors because, through a quirk in the American legal system, litigation opens up a process called “discovery” where Roche, the suer, can get access to the target company’s confidential accounts, commercial data, email, Slack, social media communications, and much more, while financially hobbling the defendants and diverting their attention and resources away from positive blockchain projects.
Immediately after the leak, Roche pulled out of lawsuits against Binance, Tether, and many other crypto companies. By the start of the weekend, the price of Avalanche dropped 10% in seven days; today it’s still the week’s biggest loser among the top 60 cryptocurrencies.
Ari Paul, CIO of crypto investment firm Blocktower, was not surprised by the allegations.
I assume this is accurate and that it’s as bad as it looks. Fits with everything I’ve seen previously from both Sirer and Roche. From a lawyer friend on Roche a few weeks ago: “dumb version of mob lawyers. Bottom of bottom of the barrel.” https://t.co/H5eDpvY4Ng
— Ari Paul ⛓️ (@AriDavidPaul) August 29, 2022
Binance CEO Changpeng “CZ” Zhao shared Avalanche CEO Emin Gün Sirer’s official response to the allegations. CZ also wrote some tweets referencing the leak that he later deleted.
Sirer’s official statement downplays the extent of Roche’s actual involvement in Avalanche. Sirer also claims that Roche’s lawsuits were filed without Avalanche’s knowledge, and that Roche’s firm, Roche Freedman, “is one of more than a dozen law firms we employ for matters relating to tax, corporate, regulatory, and human resources.”
That same day, Roche himself tweeted a Medium post dismissing the Crypto Leaks article as “numerous unsourced false statements and illegally obtained, highly edited video clips that are not presented with accurate context.”
Finally, when Decrypt broke the news later in the week that Roche had pulled out of a lawsuit against Binance, CZ was upset to see his exchange dragged into the dispute.
Speechless… Should we thank somebody? Is this how the world works now? Why were we dragged in? Anyway… That’s that!
Back to Building. 😆
» Crypto Lawyer Kyle Roche Pulls Out of Lawsuits Against Tether, Binance and Others – Decrypt https://t.co/0Nikp5HbfY
— CZ 🔶 Binance (@cz_binance) September 1, 2022
In other lawsuit news, Washington DC Attorney Karl Racine announced he was suing Bitcoin whale Michael Saylor and his cloud software company MicroStrategy for allegedly evading state income taxes by claiming he was a Florida resident (which doesn’t have income tax), despite spending most of the year in Washington.
NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.
— AG Karl A. Racine (@AGKarlRacine) August 31, 2022
Bored Ape Yacht Club made its worldwide TV debut Sunday night at the MTV Video Music Awards in a metaverse-hosted performance by rap icons Eminem and Snoop Dogg of their song, “From the D 2 the LBC.” It was widely panned by NFT critics.
Eminem-loving/NFT-hating Redditors were equally unimpressed.
Kofi Kufuor (@0xKofi), a partner at crypto investment firm 1confirmation, did some number crunching and reported back with insights into the NFT industry, including the extent of Twitter’s influence.
1/ Twitter reigns supreme as the best marketing channel in the NFT space.
Most of the traffic that is driven to NFT markets by social networks comes from Twitter. pic.twitter.com/vsdEeO8jus
— Kofi (@0xKofi) August 30, 2022
On Thursday, crypto sleuth ZachXBT posted the second part of his investigation into over 600 compromised Discord servers and more than a dozen hacked Twitter accounts in the NFT space. It turns out a notorious fraudster named Cameron Redman sold Twitter panel access to a con artist, who then phished people and used the purloined funds to purchase an Audemars Piguet. The address he paid for the watch with is tied to many Discord server hacks.
1/ Since Dec 2021 we’ve seen 600+ Discord servers compromised & 12+ NFT related Twitter accounts hacked as well. This has resulted in millions of dollars being stolen.
Welcome to part 2 of tracking down the people responsible. https://t.co/F5uoQsCwCc
— ZachXBT (@zachxbt) September 1, 2022
Otherside, the upcoming Bored Apes Yacht Club-themed metaverse game, posted a new trailer on Saturday.
FTX CEO Sam Bankman-Fried shot down rumors that his exchange is planning to acquire Huobi.
Just to be explicit because apparently a lot of people are saying this:
No, we are not planning to acquire Huobi.
— SBF (@SBF_FTX) August 29, 2022
Finally, Texas senator Ted Cruz wants you to know he’s still a man of the (Bitcoin) people.
Today I had the pleasure of touring the largest #Bitcoin mining facility in North America in Rockdale!
I am proud to lead the fight for the crypto industry in the Senate.
Texas will continue to be the center for crypto innovation! pic.twitter.com/28BYfEhJzQ
— Senator Ted Cruz (@SenTedCruz) August 30, 2022
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