Crypto scams are widespread, a fact well-known to many. However, some of these scams are notably more severe than others. Certain scammers repeatedly execute the same type of rug pull, and their misdeeds sometimes extend beyond mere financial theft.

Recently, someone reached out to share their story with the public. Below is an account detailing a notorious crypto scammer along with a distressing testimony by a victim of his schemes.

Alleged Crypto Scammer Jeremy Cahen, Aka Pauly0x

The online pseudonym Pauly0x belongs to an individual with a troubling history of alleged crypto fraud. Hackernoon reveals that Jeremy Cahen, among others, faced a lawsuit by Yuga Labs in June 2022. The lawsuit accused Cahen, along with the controversial artist Ryder Ripps, of selling NFTs that infringed upon trademarks belonging to Yuga Labs as well as those of the Bored Ape Yacht Club, defrauding buyers of millions.

In February 2024, Cointelegraph reported that a judge sided with Yuga Labs, mandating that the defendants pay over $9 million in damages collectively. Although the original post on Reddit about Pauly0x allegedly stealing $286k in under an hour has been deleted, users on X (formerly Twitter) have publicly denounced Pauly0x for his fraudulent activities.

Opinions On Pauly0x

It is pertinent to understand the thoughts of former collaborators of Pauly0x, such as OG_Kenobi_Hello, on the long-term impact of what Pauly0x has done. Kenobi believes that this is just the tip of the iceberg regarding the accusations against Pauly0x.

Jeremy Cahen, also known as Pauly0x, seems to be notorious for executing a classic pump-and-dump crypto scam repeatedly. This method is familiar to many within the crypto community and follows a predictable pattern:

1. Launch a token.
2. Promote the token extensively on social media.
3. Either sell the tokens immediately after people invest or steal funds directly via a DeFi platform.

While variations exist, the core strategy remains consistent. The token may be hyped through mainstream social media like Twitter or through private channels on Discord or Telegram. Once investors purchase the tokens, their funds often become irretrievable, either through loss in value or outright theft.

A Cautionary Tale

Evidence shows that Cahen used a Solidity contract to enable users to provide millions in liquidity to Uniswap in exchange for a negligible amount of a scam token called PNDX. This token allowed others to transfer funds via wallets without the consent of the users.

Shortly after, the liquidity provided by users was siphoned off. Three hours post-launch, when the liquidity was already drained, Pauly0x finally warned against using Uniswap for PNDX purchases, but by then, the funds had already disappeared.

The ETH wallet ending in 6faf initiated the mining contract, a multi-signature wallet, and added liquidity to Uniswap just 30 minutes before Pauly0x shared the contract address. The developer exploited this contract and then sold through Uniswap. This information, publicly accessible through breadcrumbs and ETH scan, mirrors the outcome of another Pauly0x scheme, yougetnothing.eth, detailed in this Reddit thread: https://www.reddit.com/r/CryptoCurrency/comments/14f4drl/twitter_user_pauly0x_had_told_people_to_send_him/, where contributors to Pauly0x received nothing in return.

Fractal Bitcoin, a highly awaited scaling solution for Bitcoin (BTC) supported by the wallet provider Unisat, has officially launched its mainnet today. This new scaling approach is integrated directly into the Bitcoin Core codebase.

Setting Itself Apart

The mainnet launch follows a trial phase on a testnet that started in July 2024. Fractal Bitcoin distinguishes itself as the sole scaling solution utilizing the core Bitcoin code, which helps distinguish it compared to various other Bitcoin sidechains and alleged Layer 2 solutions by concentrating on Bitcoin-native features rather than Ethereum Virtual Machine (EVM) compatibility. Additionally, it enhances overall capabilities by integrating the OP_CAT opcode.

The network boasts block confirmation times of under 30 seconds and a 20-fold increase in capacity per layer through recursive layering. Fractal Bitcoin supports Bitcoin protocols such as BRC-20, Runes, and Ordinals. It will also feature a decentralized exchange named PizzaSwap on the mainnet.

A New Mining Model

The project has introduced a new mining model called Cadence Mining, which merges permissionless mining with Bitcoin to bolster network security. Unisat and blockchain investment and development firm Block Space Force are leading the project as primary contributors.

With the mainnet launch, Fractal Bitcoin has also unveiled its native token, ticker FB, with a total supply of 210 million tokens. Half of these tokens are designated for PoW (Proof-of-Work) mining, while the other half has been pre-mined for various uses, including allocations for core contributors, investors, the ecosystem treasury, and community grants.

Charles Hoskinson, the founder of Cardano (ADA), has praised Snek.Fun, a meme coin launchpad, for boosting network activity. On September 6th, 2024, Snek reported that Cardano reached a record daily transaction volume, marking the highest 24-hour DEX trading activity in its history.

This surge followed the September 5th launch of Snek.Fun, created by SNEK and Splash, a decentralized exchange on Cardano. The platform lets users create tokens for a fee of 25 ADA, which is the native token of the platform. In December 2023 and January 2024, Cardano processed over 4 million transactions, demonstrating a noteworthy uptick in on-chain activity.

Effective Management

A bonding curve activates when 75% of the overall supply of any token is sold and the market capitalization hits 42,069 ADA, adding 25% of the supply to a liquidity pool on Splash DEX and burning LP tokens to prevent liquidity withdrawal.

This approach attracted 20,000 users within 10 seconds of launch, causing network congestion due to high demand and an unoptimized script. Snek acknowledged the issues and took responsibility, optimizing the platform quickly. Within 24 hours, over 2,000 tokens were created, and trading volume exceeded 5 million ADA.

Embracing Meme Coins

Analysts believe Snek.Fun could popularize meme coins on Cardano, similar to how other platforms have boosted engagement on Solana (SOL) which is one of its main rivals alongside Ethereum (ETH). TapTools noted that Snek.Fun lowers entry barriers and encourages experimentation, potentially serving as a model for future Cardano initiatives.

However, analyst Store Optimal raised concerns about long-term success, citing the need for features like creator royalties and potential issues with botting. Meme coins are also, generally speaking, not meant to last very long and their highest profits usually operate on a first come, first serve basis.

The token for the crypto social media platform known as friend.tech has significantly declined after its team transferred the administration and ownership of its smart contracts to a null Ethereum (ETH) address, effectively surrendering all control.

This transfer occurred on September 8th, with friend.tech stating on X that it was done to prevent any changes to their fees or functionality in the future. Following the transfer, the aforementioned token, $FRIEND, fell nearly 26% in the past 24 hours to $0.067, as reported by CoinGecko.

The main reason why this is so surprising is because many crypto-focused companies would usually go above and beyond to always maintain control of their smart contracts, as was the case with Cardano (ADA) in 2023.

An Unexpected Turn Of Events

The null address serves as a burn address designed to permanently destroy tokens, making any assets sent to it irretrievable. Serpin Taxt, associated with the blockchain reputation protocol Ethos, remarked on X that the transfer marked the end of an era and expressed surprise at how events unfolded.

This update comes three months after friend.tech announced plans to develop its own blockchain, Friendchain, a move that left many in the community uncertain about the future of the protocol. Confusion increased when their official X account deleted its announcement post.

Growing Pains

Tensions between the team and users grew when numerous issues arose with the much-anticipated $FRIEND airdrop in early May. Initially, the token reached a market cap of $233.6 million within the first four days of its launch, but it has now dropped to $6.3 million.

The total value locked (TVL) on friend.tech has also decreased dramatically. After experiencing an all-time high of $52 million in early October 2023. It recently fell to under $3.5 million, according to DefiLlama. Since August 2023, both daily fees earned by the protocol and FRIEND trading volume have also consistently been below $1,000.

Vanilla Finance raised an undisclosed amount in Strategic funding with support by HTX Ventures. Vanilla Finance is a decentralized trading platform focused on transforming the cryptocurrency trading experience.

Dropnest secured an undisclosed amount in Strategic funding with help by Manta Network (MANTA). Dropnest aims to become the biggest protocol for ethical airdrop hunting. The project aims to partner up with new and upcoming protocols going forward. Lastly, as all airdrop accounts will be out in public, protocols will have complete transparency.

onocoy generated $940K in a Private Token Sale with assistance by Smart Island / Smart Island Capital. onocoy is focused on building a GNSS reference station network by leveraging Web3 technology to provide reference stations at a scale and density only possible through a community-driven approach.

UXLINK secured an undisclosed amount with help by Animoca Brands. UXLINK is a Web3 social platform designed for broad adoption, offering social asset creation and cryptocurrency trading features.

Puffpaw raised $6M in Seed funding with assistance by Lemniscap. Puffpaw is a project on Berachain aiming to bring vaping activities on-chain to incentivize quitting smoking. It is developing a unique vape device that tracks smoking habits and transforms the experience into a gamified platform.

Hypernative obtained $16M in Series A funding with support by Quantstamp, Inc. Hypernative changes the way security and risks are prevented in Web3. With ML and real-time proactive monitoring, the project is able to security, economic, governance, and community risks before they occur.

IDA secured $6M in Seed funding with help by Hashed Fund. IDA is a digital asset technology company focused on spearheading the widespread adoption of blockchain finance while also empowering businesses to bridge the gap between Web2 and Web3.

Kredete raised $2.25M in Seed funding with assistance by Blockchain Founders Fund. Kredete is a financial platform focused on empowering African immigrants by enabling them to build credit and send money home with low fees.

DRiP secured $8M in Seed funding with support by Coinbase Ventures. DRiP is a creator platform on Solana that allows artists and creators to distribute digital works, such as art and music, to their followers.

Bitcoin (BTC) has really struggled over the past week, with the flagship cryptocurrency plunging to below $53,000 in a matter of hours. Unsurprisingly, the bearish trend extends to altcoins as well. Ethereum (ETH), for instance, has seen a more than 4% drop, now struggling around $2,250. Elsewhere, BNB has lost 3%, XRP is down by 3%, and SOL has decreased by 2.5%.

DOGE has been hit hardest among the larger-cap altcoins, with a significant 5% drop, pushing its price below $0.1. Other cryptocurrencies, including TON, BCH, SHIB, LTC, OKB, and XMR, are also experiencing significant losses.

Persistent Troubles

Last week, Bitcoin fell below the crucial $60,000 threshold, and the downward trend has continued. After a brief attempt to rebound on September 3rd, bearish forces have largely taken control, leading to the latest drop.

Before this recent decline, Bitcoin faced multiple rejections and saw lower daily highs. A temporary boost came on Friday when the US job report for August revealed a slight decrease in unemployment rates. This led to a surge for BTC as it rose to $57,000. However, this increase turned out to be short-lived as almost immediately afterward, the price plummeted to $54,000, and further bearish momentum drove it to a monthly low of $52,700 on Bitstamp.

Although Bitcoin has recovered slightly to just above $54,000, it remains down 4% for the day and over 8% for the past week. Its market cap has fallen to $1.070 trillion, and its dominance over altcoins has slipped to 53.5%.

Other Markets

In a dramatic move, Donald Trump has pledged to impose a hefty 100% tariff on any country that distances itself when it comes to the US dollar, making such a shift incredibly costly. Meanwhile, the European Central Bank is expected to cut interest rates again, setting the stage for similar actions by the Federal Reserve. The Singaporean oil sector is also grappling with falling prices while CLO equity holders are restructuring deals at a record pace.

On the global stage, President Biden is engaging with Iraqi Prime Minister Mohammed Shyaa Al-Sudani as Iraq begins ambitious projects to add 614MW of power. In Houston, residents face an extended blackout due to extreme heat. In Asia, as Hong Kong and Shenzhen debate the future of China, investors grow impatient with the sluggish stock market recovery. Lastly, numerous Chinese state-owned banks are facing substantial potential losses.

Hackers are increasingly targeting cryptocurrencies with more aggressive tactics. Since January, they have stolen over $1.2 billion in crypto, with many incidents linked to the DPRK. On September 3rd, the FBI issued a public service announcement warning the crypto industry about what kinds of malicious software is being used nowadays.

Warning For Android Users

McAfee, a software security firm, has detected an Android malware named SpyAgent. This malware utilizes Optical Character Recognition (OCR) to scan phone storage for images, including screenshots containing private keys. Remember, decentralized wallet providers advise against taking screenshots of your keys, instead, write them down on paper for security.

McAfee Labs notes that this malware is spread through malicious links sent via text messages. These links often lead to fake banking apps that request full access to your phone, including photos and media. If users receive a message claiming their banking app is outdated and prompting them to click a link to update, exercise caution. Clicking the link might open a website resembling an official bank website, but downloading and installing the application could expose your data to hackers.

The FBI has also warned the crypto community about highly specialized social engineering attacks. Such malware can be disguised not only as banking apps but also as government applications or games.

Malware Threats On MacOS

MacOS users might think they are immune to such threats, but that is not the case. In August, a malware called Cthulhu Stealer was discovered targeting MacOS. Like other malware, it masquerades as legitimate software. Once installed, it can steal private information, including all types of passwords and wallet credentials like MetaMask, as well as IP addresses.

In August, North Korean hackers exploited a vulnerability in Google Chrome. They created fake websites that mimicked legitimate crypto trading platforms to trick users into downloading a malicious crypto wallet or trading app.

As hackers become more focused on cryptocurrencies, these malware tactics are escalating. To protect yourself, always download applications directly via their official sources and verify website URLs. Crypto users should also avoid saving seed phrases as images or storing them on digital devices.

Telegram has updated its policy to allow users to report illegal and illicit content in private chats for moderation review, as indicated in a recent update to its frequently asked questions (FAQ) section. Toncoin ($TON) will still act as the native cryptocurrency of the TON blockchain, which was originally developed by Telegram. It is used within the ecosystem for transactions, smart contracts, and various decentralized applications (dApps).

Changing With The Times

The new policy introduces the ability for users to flag content in private chats, a shift compared to the previous stance of not moderating such conversations. This change might impact Telegram and its overall image, which has previously been linked to facilitating illegal activities such as money laundering and illicit crypto-related transactions.

The FAQ previously stated that all Telegram chats and group chats are private between their participants, and that the company does and will not process any requests related to them. The anonymity associated with Telegram made it one of the most popular messaging platforms worldwide.

A Necessary Change

The update followed Pavel Durov being arrested in France in late August. The arrest was part of a larger investigation into the messaging platform, with French authorities alleging that Telegram has been used for illegal activities.

Durov was released after four days in custody. He is under judicial supervision and faces preliminary charges that could have significant legal repercussions if he is convicted. In his first public statement on Thursday, the Telegram CEO acknowledged that the rapid expansion of the platform had made it vulnerable to misuse by criminals. He denied claims that Telegram is an anarchic paradise for illegal activities and emphasized that the platform actively works to remove harmful content.

EigenLayer has announced the second season of its airdrop, distributing 86 million EIGEN tokens to stakers, node operators, ecosystem partners, and community members. This airdrop targets those active between March 15th and August 15th, with distribution set to begin on or before September 17th, 2024.

Token Distribution

The 86 million tokens represent 5% of the total supply of 1.67 billion. Of this, 70 million tokens are allocated to stakers and operators based on their share of staked ETH, while up to 10 million tokens are reserved for AVSs and other contributors. About 6 million tokens will go to community members, who must verify their social identity by September 11th. 2024, to claim their share.

At any rate, this second season stakedrop arrives as EigenLayer has faced net outflows recently, leading to a reduction in its total value locked (TVL). The TVL has dropped to $11.5 billion after reaching an all-time high of $20.1 billion in June.

Competition Heats Up

In contrast, Symbiotic, a competitor that has not yet launched a token, has seen its TVL grow to over $1.5 billion. Additionally, the EigenLayer tokens are not tradable yet but are valued at approximately $2.7 each in pre-markets, suggesting a fully diluted valuation of $4.5 billion.

Similar trends are evident across the liquid restaking sector, with platforms like Renzo, Puffer, Kelp, and Swell also reporting significant TVL declines. This downturn might be attributed to the conclusion of airdrop campaigns related to the launch of major restaking protocol tokens, such as REZ and EIGEN.

Binance CEO Richard Teng is demanding the immediate release of executive Tigran Gambaryan due to inhumane treatment and worsening health in Nigerian detention. Gambaryan, whose condition has deteriorated since contracting malaria in May, is reportedly being denied proper medical care.

Richard was hired by Binance in 2021 to improve its worldwide compliance operations. He was anointed the new CEO after succeeding Changpeng Zhao (CZ).

Hard To Watch

A recent video shows Gambaryan in a weakened state, struggling with crutches and being ignored by guards, which Teng condemned as inhumane. The video reveals Gambaryan being in visible pain and frustration, as he claims he is being denied help despite his serious condition.

The Binance community has rallied in support, condemning the treatment and questioning the motives behind why Gambaryan is being detained, with some suggesting it might be a strategic tactic against Binance.

Bad To Worse

To make matters worse, Gambaryan has seen his health worsen significantly since his collapse in court on May 23rd. Despite a judge ordering for him to be hospitalized, reports indicate he has not received adequate care. US representatives visiting in June found him in critical condition with double pneumonia and significant weight loss, prompting calls for his immediate release.

As the Gambaryan trial resumed on September 2nd, 2024, his legal team requested bail on medical grounds, citing his need for surgery. The EFCC has opposed this request, claiming his condition is manageable. A bail hearing is scheduled for September 4th. His health and treatment remain a major concern for his family, the Binance community, and international advocates.

The fine announced on Wednesday was determined based on various restrictions imposed by Robinhood between 2018 and 2022, during which the platform did not allow users to withdraw their purchased cryptocurrencies. The company is now expected to demonstrate genuine transparency and ensure that customers have control over their cryptocurrencies.

An Ongoing Investigation

The investigation by California regulators classified the traded cryptocurrencies on Robinhood as commodities. It discovered that Robinhood Crypto allowed customers to purchase digital assets but did not provide them with custody, violating state regulations.

Attorney General Rob Bonta stated that the ongoing investigation and resolution with Robinhood should convey a clear message, which is that whether anyone operates a physical store or a cryptocurrency business, compliance with local consumer and investor protection laws is absolutely mandatory.

Revising Crypto Practices

Despite Robinhood Crypto lifting the withdrawal ban last year, the company is now held accountable for past actions. As part of the settlement, Robinhood must ensure that customers can withdraw their cryptocurrencies and update its information regarding asset custody.

Robinhood has also disclosed receiving subpoenas by the California Attorney General related to its business practices, trading operations, and asset custody. The settlement includes an independent review by the SEC to examine possible breaches of federal securities laws, without Robinhood admitting to any wrongdoing.

World Liberty Financial has had connections with the Trump family and has reportedly received their endorsement, although recent developments suggest a shift in this relationship. Recent incidents involved hackers posting blockchain addresses and asserting that the token was part of a crypto project associated with the Trump family.

Hackers Prevail

Specifically, Lara Trump claims her account was compromised after it disseminated a message claiming that the governance token of the project on the Solana blockchain would support their DeFi lending protocol. These posts were later identified as fraudulent and removed.

Eric Trump subsequently confirmed on X that both profiles had been hacked and advised followers to avoid interacting with the scam addresses. In response, World Liberty Financial released a statement urging people to disregard any links or transactions regarding the compromised accounts.

Another Fraud

This episode marks at least the third instance where a cryptocurrency token, seemingly connected to the Trump family and their crypto project, has surfaced. Previous examples include the contentious DJT token and the Restore the Republic token, which experienced a brief surge in value before collapsing.

For several weeks, the Trump family has been promoting World Liberty Financial, with speculation suggesting that the project will be hosted on the Ethereum (ETH) blockchain alongside Aave and their decentralized finance platform. The anticipated Trump family crypto project is expected to feature a credit account system with a token named WLFI.