Another Stablecoin Tanks

Acala’s Stablecoin Falls 99% After Hackers Issue 1.3B Tokens

Polkadot-based decentralized finance (DeFi) platform Acala’s native stablecoin, aUSD, depegged on Sunday, plummeting 99% after hackers exploited a bug in a newly deployed liquidity pool to mint 1.28 billion tokens.

Acala developers said the bug was caused by a misconfiguration of the iBTC/aUSD liquidity pool shortly after it went live on Sunday. A liquidity pool is a digital pile of cryptocurrency locked in a smart contract, which results in creating liquidity for faster transactions on decentralized exchanges (DEXs) and DeFi protocols.

WeWork Founder Adam Neumann’s New Start-Up Is Backed By Andreessen Horowitz

Adam Neumann is back.

The founder of WeWork, whose spectacular rise and fall has been chronicled in books, documentaries and a scripted television series, has a new venture — and a surprising backer.

Mr. Neumann is starting a new company called Flow, focused on the residential real estate market, the DealBook newsletter reports. Notably, it has the financial support of Andreessen Horowitz, the prominent Silicon Valley venture capital firm that was an early investor in everything from Facebook to Airbnb.

Hedge Fund Lawsuit Financing Poised for SEC Enforcement Scrutiny

The US Securities and Exchange Commission Aug. 10 proposed requiring private funds to report confidentially to the agency about their spending on litigation finance . The funding, which litigants and law firms use to cover their costs, has reached billions of dollars.

The potential reporting is part of a broader hedge fund transparency push by SEC Chair Gary Gensler, who said his agency is trying to better protect investors and monitor systemic risk to the US economy. The SEC can bring cases against hedge funds for false or misleading disclosures.

Crypto Regulation Crackdown Looms for Stablecoin Market

Lawmakers in the US, the EU, the UK, Japan and others are considering rules that would overhaul the $150 billion sector. Several of these proposed restrictions are intended to bring issuers of the tokens — which are cryptoassets designed to keep a one-to-one peg with a less volatile currency like the US dollar — under the same financial regimes as payment providers.

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“It’s a case of do or die for stablecoin issuers,” said Hirander Misra, chairman of market infrastructure body GMEX Group. “They will have to prove they have proper reserves and be transparent in terms of being audited, or else will be ultimately forced to cease to exist.”

SPAC Unable to Find Merger Target Caught Up in Pre-Liquidation Litigation

…With hundreds of SPACs facing the end of their search period in this and the next two quarters, there are likely to be many other SPACs that choose to liquidate in the coming months.

One question I have had about this likelihood is whether or not there is a risk of litigation as SPACs redeem investors’ shares. On the one hand, litigation seemingly should be unlikely as investors are getting their money back. Where’s the harm? On the other hand, in our litigious society, the possibility of litigation always seems to be lurking whenever things don’t work out as planned. While the circumstances involved are very case-specific, a lawsuit filed last week in the Delaware Chancery Court, provides of an example of the kind of end-game squabble that could arise as more SPACs liquidate in the coming months.

Crypto Reddit Mobilizes After Being Pummeled by Bankruptcies

A few months ago, Celsius Network LLC’s nearly 47,000-strong Reddit group was filled with talk about how much everyone was earning by lending their coins through the platform. After the company filed for bankruptcy, members began using the forum, among others, to fight for the return of their funds.

Reddit, Telegram and Twitter helped drive the meme-stock craze, and now users on the sites are channeling that same energy into campaigning courtside on several crypto bankruptcy cases, including Celsius and Voyager Digital Ltd. They are tapping into the huge social media communities that already exist for both platforms, urging users to write letters to the judge overseeing Celsius’s case, pooling funds for legal representation as well as sharing news and advice.

Crypto Plunge: Pharma Bro Shkreli’s Coin Drops More Than 90%

Martin Shkreli’s new crypto token appears to have been dumped.

Martin Shkreli Inu, a token worth fractions of a penny that was launched by the notorious “Pharma Bro” last month, plunged more than 90% at one point Friday, Binance data shows. The drop came after an unidentified wallet that appears to belong to Shkreli sold a massive stake in the coin.

Asked about the plunge on the social media site Discord, an account believed to be run by Shrkeli responded: “I got hacked.” A representative for Shkreli declined to comment.

 Ponzi Perspectives: 2022 Midyear RoundupMcGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021. Since that time, our focus is to track key cases and decisions that have the potential to influence controlling law on Ponzi-related issues. The blog also offers analysis on practical considerations when defending Ponzi litigation. This 2022 mid-year round up summarizes the new cases and opinions analyzed throughout the first half of the year and highlights the trends that may serve as “coming attractions” of what to expect in the latter half of 2022.