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Near Protocol recently caused some curiosity and concern after very mysterious posts were shared on its X account. This led to speculation about a possible security breach, and came after major layoffs where Near let go of a chunk of its employees. Meanwhile the return of stolen crypto to ZKasino’s wallet after a suspected exit scam has sparked hopes that investors could get at least some of their money back soon.
Near Protocol's X Account Sends Cryptic Messages
Near Protocol recently raised quite a few eyebrows across the crypto community when several very strange posts appeared on its official X account. On May 8, the account released a Morse code video hinting at impending "darkness," followed by a string of cryptic tweets in a gothic font.
Some of the messages included phrases like "the sun rises in the east," "take back your thoughts," "darkness," and "reclaim your sovereignty." To make things even weirder, the account's name and description were also changed to match the theme.
Naturally, these very strange posts caused some speculation about a potential security breach. Some people drew parallels to an incident that happened in January when the X account of CoinGecko was hacked to conduct a phishing scam. Despite these concerns, there has been no official confirmation from Near Protocol about the status of their account.
Interestingly, the Near Foundation recently made some major company changes by letting go of almost 40% of its workforce. The layoffs affected 35 employees across marketing, business development, and community teams. Near Protocol explained that it made the decision in an effort to streamline its operations and push towards greater decentralization in its ecosystem.
Now, there is a mix of concern and anticipation in the crypto space as people wait to see what the strange posts are all about. While some believe Near Protocol’s account was hacked, others are more optimistic and believe it could be a prelude to a major announcement or project in the Near ecosystem.
What is Near Protocol?
NEAR Protocol is a decentralized platform that is designed to incentivize a network of computers to support developers in creating and launching decentralized applications (dApps). It incorporates a sharding process to distribute the workload among various segments of the network, allowing each node, or computer, to manage only a portion of the network's transactions. This helps to improve the efficiency of data retrieval and improves the scalability of the platform.
With functionally similar to centralized data storage systems like Amazon Web Services (AWS), NEAR Protocol serves as a foundational layer for applications. However, unlike AWS, which is controlled by a single entity, NEAR operates on a distributed network of computers. This setup gives developers the infrastructure that is necessary to deploy applications without the need to build their own.
NEAR Protocol was founded by Alex Skidanov and Illia Polosukhin. Skidanov previously served as a director of engineering at MemSQL, and Polosukhin worked at Google.
Stolen Crypto Returns to Wallet
Heads are also turning in the direction of ZKasino after almost $21 million worth of wrapped Lido staking ETH (wstETH) was returned to the wallet of the blockchain-based gambling project nearly three weeks after it was accused of being an exit scam.
This has sparked some hope among investors that they might soon receive their funds back as originally promised.
ZKasino launched on Apr. 20, and offered an airdrop in its native token ZKAS to users who bridged their Ethereum to the platform. The project promised to return the bridged ETH to users, but instead, it transferred around $33 million worth of Ethereum to the staking protocol Lido Finance. This caused more than 10,000 participants to speculate that ZKasino was an exit scam.
Authorities acted very quickly, and arrested a 26-year-old man on Apr. 29 who is suspected to be a key figure behind the scam. The man operates under the pseudonym "Derivatives Monke."
Additionally, the authorities were also able to seize $12.2 million worth of cryptocurrencies, real estate, and luxury cars from the suspect. The Binance on-chain investigations team was instrumental in helping law enforcement with the arrest, and Binance also assisted by freezing millions in stolen crypto after receiving a seizure warrant.
Despite the successful arrest, the fact that there are still funds moving around suggests that there are still culprits at large. Nonetheless, the recent return of stolen assets to ZKasino's wallet offers a glimmer of hope for restitution.
What Exactly is an Exit Scam?
A crypto exit scam happens when the developers of a project abruptly withdraw their funds and abandon the project, essentially leaving investors with worthless assets. These scams can happen at any stage of a cryptocurrency's development, but it mostly comes after a pattern of heavy marketing to lure investors with promises of big returns. This includes using social media and influencers to create a buzz around the new crypto. Once the investments pour in, the developers vanish with the funds, causing the cryptocurrency’s value to plummet and investors to lose their money.
These scams were commonly associated with Initial Coin Offerings (ICOs), especially during the 2017 ICO boom. Here, developers would announce a new project, build excitement, and then conduct an ICO, collecting funds in cryptocurrency. Since these transactions are irreversible, once the ICO was finished, the scammers could disappear without a trace.
More recently, "rug pulls" have become prevalent, especially in decentralized finance (DeFi). In these scams, developers list a new token on a decentralized exchange and pull out their funds after inflating the token’s value.
To spot potential crypto exit scams, investors have to keep an eye out for several red flags. These include a lack of recent independent code audits, anonymity of project developers, over-the-top marketing strategies, and extravagant profit claims.
Additionally, low quality websites or whitepapers, and uneven token distribution where developers hold a big portion of the supply, can also indicate a high risk of a scam.
Phishing Scam Claims Pricey NFTs
Another person fell victim to a crypto scam after three very high-value Bored Ape Yacht Club nonfungible tokens (NFTs) were stolen from their digital wallet. The NFTs are collectively worth about 56 Ether or $167,500, and were transferred from a wallet named "tatis.eth" to a wallet that Etherscan revealed is associated with phishing attacks.
Exactly how the person was able to get away with the NFTs is not clear just yet, but the implicated wallet is known to use a service called Pink Drainer.
Phishing attacks in the crypto space often involve fake accounts and websites pretending to be legitimate entities, like the Bored Ape creator Yuga Labs. These sites lure users with the promise of rewards and encourage them to connect their wallets. Once their wallets are connected, the attacker can steal assets like cryptocurrencies and NFTs.
In this case, Bored Apes #7531, #6736, and #2100 were stolen. They are known for their rare traits: white fur present in only 4% of Apes, a small grin found in 3%, and a "Bored Pizza" trait, which is extremely rare and found in only 0.5% of the collection.
