• The Breakdown
  • Posts
  • FBI Uses Fake Memecoin to Catch Market Makers in Manipulation Scheme

FBI Uses Fake Memecoin to Catch Market Makers in Manipulation Scheme

Plus Trumpfi Moves Closer to Launch with Aave Integration on Ethereum

Author

Nathaniel Whittemore
October 10, 2024

The Breakdown First Five - Thursday, October 10, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

FBI Uses Fake Memecoin to Catch Market Makers in Manipulation Scheme

5. VanEck Ventures

VanEck has launched a venture fund to complement their ETFs and liquid token funds. The fund will be operated by Wyatt Lonergan and Juan Lopez, previously of Circle ventures. The $30M fund will deploy into early stage startups across crypto, fintech and AI. The fund’s key goal is to catch the wave of stablecoin payments and the apps that push them into the mainstream. 

4. Gensler Grilled

Gary Gensler faced a tough crowd at NYU as he attempted to justify his regulatory theory. He argued that Howey is simply the law of the land and he has a duty to carry it out. More interestingly, he was questioned about the value of Bitcoin in a regulated environment. He responded “it's unlikely this stuff is going to be a currency” and cited Gresham’s law. It seemed implicit that Genlser was trying to stop the bad money from driving out the good. 

3. Bitfinex The Only Victim

The Government has weighed in on the Bitfinex hack, claiming that the exchange is the only plausible victim. Erring on the side of caution, they have set up a website for customers to make their arguments to be heard. For now this only impacts the ability to lodge victim statements during the hackers’ sentencing. It could also have major implications in how the $7B in recovered Bitcoin is distributed. Nothing is settled, but Bitfinex have now been acknowledged.

2. Trumpfi Details

World Liberty Financial is one step closer to launch with a new governance proposal for Aave integration. This is formal confirmation the protocol will be an Aave instance on Ethereum mainnet, although the team plan to expand onto L2 Scroll in the future. The protocol will support ETH, WBTC, USDC and USDT for borrowing and lending. AaveDAO is set to receive a 20% cut of fees and 7% of WLFI token supply for incentives. No firm release date, many more steps. 

1. FBI On Chain

The DOJ has unsealed sweeping criminal charges against four market making firms and five individual memecoin promoters. The allegations feature some pretty damning quotes faking volume and pumping the price. The craziest part was that the FBI launched a fake memecoin on Ethereum in order to engage the market makers. They all took the bait, driving inflated volume to the coin over the summer. Charges include fraud and market manipulation.