The Next ‘FTX’ Crypto Moment Incoming?

One story keeps popping up but is consistently lost amidst all the Bitcoin ETF excitement. It’s a growing story, report(s), and allegations that Ethereum may be a bad egg. 🍳

Let’s take a quick trip down memory lane:

It was June 2016, and $ETH was making waves in still untamed waters of cryptocurrencies. Enter the DAO, a Decentralized Autonomous Organization, a groundbreaking venture capital fund built on the Ethereum platform.

It was designed to revolutionize funding, all through the power of smart contracts. Investors, driven by a gold rush mentality, poured in a staggering $150 million in $ETH.

But there was a glitch in the matrix. The DAO’s code had vulnerabilities. Like a digital Achilles’ heel, it lay exposed, unnoticed, until it wasn’t. In the shadows lurked an adversary, identity or identities unknown, with dark intentions.

The hackers launched an attack and began draining $ETH from the DAO. $50 million worth of $ETH vanished into the ether (pun intended). The crypto community watched in disbelief, a collective gasp echoing through the digital corridors.

Ethereum, its developers, and hodlers faced a dilemma: keep things as they are or ‘fix’ the issue with a new fork.

To Fork Or Not To Fork 🍴

As with any argument, sides developed: Team Hard Fork on one side and The Purists on the other. 

Team Hard Fork

Team Hard Fork was led by none other than one of Ethereum’s co-founders, Vitalik Buterin. This camp was hell-bent on undoing the wrong. They argued that the DAO attack was a significant blow to the Ethereum community’s trust and finances.

Their solution? Perform a hard fork to reverse the theft, making the DAO debacle nothing more than a bad dream. 

The Purists 

Then, there were the Purists, the blockchain traditionalists who could give any constitutional originalist a run for their money. Ideological beliefs rather than specific individuals led them. One of the principles of The Purists was another co-founder of Ethereum:

Charles Hoskinson. The same Charles Hoskinson who founded Cardano ($ADA).

The Purists were like the stoic guardians of blockchain principles. Their mantra? “Code is Law.” According to them, the immutability of the blockchain was its sacred core, something not to be tampered with, even if it meant losing millions.

They believed any intervention, even to correct a massive wrong like the DAO attack, was a slippery slope. To them, a hard fork was akin to rewriting history because you didn’t like how it played out.

The Result 🔪

The hard fork eventually happened, leading to the birth of Ethereum Classic ($ETC) – the original Ethereum chain that continued on its path, untampered and unaltered, carrying the DAO’s scars as a badge of its unwavering principles.

Meanwhile, the new Ethereum ($ETH) moved forward on a rewritten path, erasing the DAO incident from its ledger.

And yes, you read that right. Contrary to what normally happens after a fork, the original Ethereum blockchain is Ethereum Classic, which many people assume is the hard fork, but it isn’t. 

Claim: The Hack Was An Inside Job 😱

If you want a really deep read into this debacle, the fine folks over at Protos did an amazing rundown of this potentially blackest of black swan events. But here’s a summary:

Steven Nerayoff: A Complex Figure in the Ethereum Saga

  • Nerayoff’s past role as a legal advisor to the Ethereum Foundation adds credibility to his claims.

  • Despite the complexity of his allegations, they are considered significant due to his insider knowledge.

Vitalik Buterin’s Alleged Request for Ethereum Foundation Rescue

  • Nerayoff claims Buterin sought his help for a rescue plan for the Ethereum Foundation.

  • His involvement raises questions about the early challenges faced by the Ethereum Foundation.

The DAO Hack Under Scrutiny by Nerayoff and TruthLabs

  • Allegations suggest the Ethereum Foundation and others were involved in The DAO hack.

  • Raises concerns about the integrity of operations within the Ethereum ecosystem.

Ex-SEC Director Bill Hinman Called Out

  • Nerayoff and TruthLabs accuse Hinman of having a conflict of interest related to Ethereum.

  • Suggests Hinman’s interests may have influenced his decisions at the SEC.

Questions Over Gary Gensler’s MIT Course Content

  • TruthLabs challenges the accuracy of Gensler’s teachings about the history of Ethereum at MIT.

  • Suggests possible misinformation about Ethereum’s financial origins and backers.

Revisiting Ethereum’s Ties to China

  • Highlights the early involvement of Chinese entities in Ethereum’s development.

  • Suggests deeper financial ties to China than previously acknowledged.

Fast Forward To Today 🏎️

TruthLabs is out again, and posted this on X:

Is this all just a conspiracy? Who knows – but we’ll keep you updated as things develop. 👩‍🏭

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