The discussion reignited some concerns in the crypto community about the risks of meme coins, which some people label as predatory. Meanwhile, LEGO’s website was recently hacked, after which the attackers promoted a fake cryptocurrency called ”LEGO Coin.” EigenLayer also reported the theft of $5.7 million worth of EIGEN tokens due to a compromised email thread. Despite these incidents, law enforcement is still fighting hard against crypto crime. The Department of Homeland Security (DHS) revealed that it has blocked more than 500 ransomware attacks since 2021, and prevented billions in extortion payments.
Meme Coins Spark Heated Debate Between ZachXBT and Influencer
Blockchain sleuth Zachary Wolk, who is known in the crypto community as ZachXBT, accused crypto influencer Zion “Ansem” Thomas of facilitating a series of meme coin “pump and dump” schemes. A heated exchange took place on Oct. 5 on X, which centered around Wolk’s allegations that Thomas was promoting numerous low-cap Solana-based meme coins to his more than 507,000 followers, which could lead many to suffer financial losses.
Wolk’s accusations were made after his remarks on Murad Mahmudov’s “Meme coin Supercycle” speech at the Token 2049 event last month. Mahmudov was formerly the CIO of Adaptive Capital, a crypto hedge fund that collapsed in March 2020. He has since gained a big following for his strong advocacy of meme coins.
Wolk criticized both Mahmudov and Thomas, and even claimed that their promotion of low-cap coins indicates they lack genuine market expertise and instead exploit their followers for personal gain.
Thomas defended his actions by arguing that discussing low-cap tokens was not inherently deceptive. He specifically referred to his promotion of the now very popular meme coin Dogwifhat (WIF), which soared from a $100,000 market cap to a peak value of $4.8 billion earlier this year. He also pointed out that certain utility tokens like Chainlink (LINK) saw a 90% decline against Bitcoin in 2023.
Wolk pushed back, and accused Thomas of promoting “hundreds” of low-cap coins, including BODEN, HOBBES, ZEUS, and WYNN, as well as celebrity-endorsed meme coins from people like Jason Derulo and Davido. Many of these tokens have since plummeted in value, with some being down almost 99% from their all-time highs.
Price chart of Jeo Boden BODEN (Source: CoinMarketCap)
The debate shed some new light on the growing rift in the crypto community over meme coins. Some people argue that these tokens have delivered better returns than utility-based tokens. Others view meme coins as predatory as they make it possible for insiders to make massive profits at the expense of retail investors before abandoning the projects once the profits have been made.
LEGO Coin Scam Removed
Low cap meme coins and pump and dumps are not the only threats to investors in the crypto space. LEGO Group fell victim to a hack on Oct. 5. The attackers then ended up promoting a scam cryptocurrency called ”LEGO Coin” on its homepage.
The scam promised “secret rewards” to buyers of the fictional LEGO Coin, and was first spotted by X user and LEGO enthusiast ”ZTBricks.” Screenshots from X show the message encouraging users to buy the coin, with a “Buy Now” button that redirected visitors to a phishing site.
LEGO did not publicly comment on the incident, but the scam message and link were very quickly removed from its homepage. According to a statement given to consumer tech platform Engadget, the company reassured users that no accounts were compromised during the incident, and they confirmed that the issue was resolved. LEGO also stated that they identified the cause and were implementing measures to prevent similar incidents in the future.
The LEGO Coin scam reportedly appeared on LEGO’s website at 1:00am UTC and was removed 75 minutes later. The incident took place in the early morning hours in Billund, Denmark, where LEGO’s headquarters are based.
This is not the first time LEGO has been linked to cryptocurrency or blockchain technology. In March of 2021, the company’s X account briefly hinted at a potential move into the NFT space, but the post was also quickly deleted. Additionally, in April of 2022, LEGO Group’s holding company, KIRKBI, invested $1 billion in Epic Games to support its Metaverse ambitions.
The incident was just one of many cryptocurrency scams. According to blockchain security firm Scam Sniffer, scammers stole $127 million from victims in Q3 of 2024. About $46 million was lost in September alone.
DHS Blocks Hundreds of Ransomware Attacks
Meanwhile, Department of Homeland Security (DHS) investigators successfully stopped hundreds of ransomware attacks and seized billions of dollars in extorted cryptocurrency since 2021. According to Mike Prado, deputy assistant director of Homeland Security Investigations (HSI) Cyber Crimes Center, US government agencies have been the primary targets, and represented 21% of the disrupted attacks. This is more than any other sector.
Since its formation in 2021, the division disrupted 537 ransomware attacks and traced $4.3 billion worth of crypto stolen through extortion payments. HSI takes a more proactive approach to cybersecurity by monitoring internet traffic and software vulnerabilities to detect signs of malicious activity. This allows them to prevent some attacks before they even happen.
Prado stated that while this proactive approach is effective, it can still make building a case against hackers more challenging when attacks are disrupted. In the event of an attack, HSI notifies potential victims, including government agencies and companies, about the imminent threats and coordinates with federal agencies and field offices across the US.
Unfortunately, ransomware attacks have been on the rise. Chainalysis’ Crypto Crime Mid-year Update reported a 2% increase in ransomware inflows in 2024, totaling $459.8 million.
Maximum ransom payment by year (Source: Chainalysis)
The size of ransomware payments also surged dramatically, with median payments rising from under $200,000 in early 2023 to $1.5 million by mid-2024. In July, the largest single ransomware payment was recorded after the Dark Angels group received $75 million from a victim.
$5.7M EIGEN Tokens Stolen
EigenLayer, the Ethereum restaking protocol, assured its community that its platform is still secure after an incident where close to $6 million in tokens were stolen from an investor. On Oct. 4, EigenLayer reported that it was investigating “unapproved selling activity” involving a wallet that sold 1.6 million EIGEN tokens, which was worth about $5.7 million. The address involved was quickly flagged for investigation on Etherscan after the announcement.
In a community update on Oct. 5, EigenLayer revealed that the unapproved sale was the result of a hack. The attacker compromised an email thread related to the transfer of the investor’s tokens into custody. This allowed them to steal the investor’s tokens, which were then sold on a decentralized exchange. The proceeds for the sale were then moved to centralized platforms. EigenLayer reported that they are working with these platforms and law enforcement, and part of the stolen funds have already been frozen.
EigenLayer also reassured the community that the hack was an isolated incident and did not affect the protocol’s security or functionality. They also pointed out that there are no vulnerabilities in the protocol or token contracts, and the incident was unrelated to any on-chain operations. The team is still busy with its investigation and will share updates as more information becomes available.
This article was originally Posted on Coinpaper.com
