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Finance chief Paul Chan said in a blog post that despite recent volatility in crypto, now is the time to push forward Web3 technologies.

The goal of the proposal is to let Euler users redeem their funds as soon as possible.

What’s $30 million to a company that owes its customers billions? 

Bankrupt crypto exchange FTX racked up more than $30 million in monthly fees from lawyers and advisers in February, according to new compensation reports filed in bankruptcy court. 

The business of bankruptcy is expensive. Lawyers, financial advisers, investment bankers and consultants billed FTX approximately $29.7 million for compensation and another $407,000 in reimbursement costs during the shortest month of the year.

FTX racked up legal bills from a half-dozen firms in February. The exchange used the law firms Sullivan & Cromwell and Landis Rath & Cobb, management consulting firm AlixPartners, financial services company Perella Weinberg Partners, consulting firm Alvarez & Marsal North America and FTX CEO John Ray III’s Owl Hill Advisory. 

Overall, the six firms logged more than 35,400 hours of work in February, according to their disclosures. 

Legal fees are a major cost for bankrupt companies. Enron, the energy giant that Ray steered through bankruptcy, paid lawyers $700 million over the course of its unraveling, for example. FTX’s $30 million February tab is slightly smaller than its January bill. Lawyers and advisers charged the crypto exchange $38 million in January, court documents show. 

It’s complicated 

Sullivan & Cromwell had the largest February bill, charging FTX $13.5 million for 12,127 hours of work. The firm listed another $82,000 in expenses.

“The services performed by S&C during the fee period represent one of the most complicated, multi-disciplinary exercises by any law firm in any area of law,” Sullivan & Cromwell wrote in its February compensation report, which was filed on Tuesday. 

The law firm said it investigated the scope and nature of customer entitlements in the bankruptcy case, collected and organized corporate records and responded to law enforcement investigating former CEO Sam Bankman-Fried and other executives, among other activities. Sullivan & Cromwell lawyers even appeared in other crypto bankruptcy cases, including Voyager Digital and Celsius Networks, to represent FTX. 

Sullivan & Cromwell partners charge as much as $2,165 per hour, while special counsel, associates and paralegals have lower hourly rates. Brian Glueckstein, a Sullivan & Cromwell partner, billed FTX for $526,200 for his work in February. 

More bills

Not far behind, Alvarez and Marsal billed FTX $12 million for 17,000 hours of work and listed $229,000 in expenses.

Landis Rath and Cobb, which logged 874 hours of work, billed FTX for $583,000 in compensation and $11,000 in reimbursements. Perella Weinberg charged the exchange its $450,000 monthly fee, along with $78,000 in expenses. And AlixPartners charged FTX $3 million for 3,796 hours of work, along with $5,000 in expenses.

Ray billed FTX $308,000 in fees and expenses. He logged nearly 240 hours of work in February. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

South Korea-based cryptocurrency exchange GDAC reported that it had suffered a security breach, resulting in the theft of approximately $13 million worth of digital assets from its hot wallet.

The incident occurred on April 9, and the exchange has since suspended deposits and withdrawals while authorities investigate the matter.

According to GDAC’s announcement, an unknown entity hacked its hot wallet and illegally transferred 10 million Wemix tokens ($10.7 million), 60.80 bitcoin ($1.7 million), 350 ether ($647,000), and 220,000 USDT stablecoin to a third-party wallet. The stolen assets represented roughly 23% of GDAC’s total value of customer assets on the platform, it claimed.

In response to the breach, GDAC immediately suspended its wallet systems, including deposits and withdrawals, and shut down related servers to mitigate further losses. The exchange has informed the local police and the Korea Internet & Security Agency (KISA) of the incident and is cooperating in the ongoing investigation.

The firm, however, did not disclose the security issues that may have allowed the incident to take place.

GDAC has not provided a timeline for when deposits and withdrawals will resume, citing the need to thoroughly investigate and address the security issues that led to the breach.

Centralized cryptocurrency exchanges like GDAC typically use a combination of hot and cold wallets to manage user funds. Hot wallets, which are connected to the internet, allow for fast deposits and withdrawals but are more vulnerable to hacks. Cold wallets, on the other hand, are offline storage solutions that offer greater security against cyber attacks.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Episode 34 of Season 5 of The Scoop was recorded with The Block’s Frank Chaparro and Sky Mavis Co-Founder & Growth Head Jeffrey Zirlin.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Feedback and revision requests can be sent to podcast@theblockcrypto.com.

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Jeffrey Zirlin is Co-Founder & Growth Lead at Sky Mavis — the studio behind the popular blockchain game, Axie Infinity.

In this episode, Zirlin explains why the first wave of game studios building on Ethereum’s Ronin sidechain have easy access to a “golden cohort” of initial users, and how a recent network upgrade puts Ronin’s destiny in the hands of gamers worldwide. 

During this episode, Chaparro and Zirlin also discuss:

• Web3 gaming and the Metaverse
• Blockchain as a medium
• Mobile gaming in the developing world

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This episode is brought to you by our sponsors Circle and CleanSpark.

About Circle

Circle is a global financial technology company helping money move at internet speed. Our mission is to raise global economic prosperity through the frictionless exchange of value. Visit circle.com/Scoop to learn more.

About CleanSpark

CleanSpark (NASDAQ: CLSK) is America’s Bitcoin Miner™. Visit cleanspark.com/theblock to learn more about the CleanSpark way.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

CryptoGPT, a zero-knowledge layer 2 blockchain network attempting to leverage the success of artificial intelligence, announced raising $10 million in a Series A funding round from DWF Labs at a $250 million token valuation.

But only $420,000 of the total amount has thus far been invested by DWF Labs, CryptoGPT co-founder and CTO Dejan Erja told The Block. DWF Labs began investing last week and the rest of the amount will be invested over 285 days, Erja said.

“DWF Labs follows the vesting schedule that’s outlined in our tokenomics. The investment is done over a 285-day period, aligning with the vesting of those tokens,” he added.

As part of the deal, DWF Labs, a web3 investment firm that is also a market maker, will also make market for CryptoGPT’s GPT token “The deal is mainly for them to become an active market maker in our books,” Erja said.

The GPT token was launched last month and its current fully diluted valuation stands at around $210 million, lower than what DWF invested, according to data from CoinGecko.

CryptoGPT was founded in July 2022, according to Erja. Jamila Jelani was named as founder and CEO of the project as recently as last month on some social media accounts and in news articles. But her current title on the CryptoGPT website is marketing personnel. Jelani said “3rd party sources quoted me as CEO as I’ve been told, but I’m handling marketing. It is sloppy work on their end.” Erja is the founder and CTO of CryptoGPT, she said, although he’s named as a co-founder in today’s press release. 

CryptoGPT grabbed headlines last month around its token launch and the rapid rise of AI bots like OpenAI’s ChatGPT. CryptoGPT claims to help users own and monetize their data via its Layer 2 blockchain network that is under development.

“Use our apps in fitness, dating, games and education. CryptoGPT captures and packages data. Own your data and earn from selling it,” Erja said. CryptoGPT’s mainnet is expected to go live in the third quarter of this year, he added.

With DWF’s investment, CryptoGPT aims to grow its developer team from the current 22 people and grow in Asia, according to Erja. 

CryptoGPT previously raised $3 million in a token round through a public sale via DAO Maker last month, according to Erja. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

‘White hat’ hackers are working to recover more of the stolen funds as of Monday.

The latest price moves in bitcoin (BTC) and crypto markets in context for April 10, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets.

The exchange said on Sunday hackers transferred the crypto assets from a hot wallet to an unidentified wallet.