This Week on Crypto Twitter: Avalanche Exposed by Self-Proclaimed Crypto Whistleblower, Ted Cruz Visits Crypto Mine

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Illustration by Mitchell Preffer for Decrypt

Crypto prices this week were again underwhelming across the board. Despite signs of growing adoption and regulation, and slight progress in crypto lenders Celsius and Holdnauts ongoing insolvency issues, it was another excruciatingly slow week, though relatively short on losses.

However, over on crypto Twitter things were a lot more outrageous. A self-proclaimed crypto whistleblowing site called Crypto Leaks last weekend published a lengthy and damning expos of a lawyer employed by Avalanche called Kyle Roche.

The report includes clips from undercover videos of Roche at two separate meetings, in which he confesses to having deep vested interests in Avalanche, through owning both a percentage of the token supply and significant shares.

Roche confessed to regularly suing Avalanches competitors because, through a quirk in the American legal system, litigation opens up a process called discovery where Roche, the suer, can get access to the target companys confidential accounts, commercial data, email, Slack, social media communications, and much more, while financially hobbling the defendants and diverting their attention and resources away from positive blockchain projects.

Immediately after the leak, Roche pulled out of lawsuits against Binance, Tether, and many other crypto companies. By the start of the weekend, the price of Avalanche dropped 10% in seven days; today its still the weeks biggest loser among the top 60 cryptocurrencies.

Ari Paul, CIO of crypto investment firm Blocktower, was not surprised by the allegations.

I assume this is accurate and that it’s as bad as it looks. Fits with everything I’ve seen previously from both Sirer and Roche. From a lawyer friend on Roche a few weeks ago: “dumb version of mob lawyers. Bottom of bottom of the barrel.” https://t.co/H5eDpvY4Ng

Ari Paul (@AriDavidPaul) August 29, 2022

Binance CEO Changpeng “CZ” Zhao shared Avalanche CEO Emin Gn Sirers official response to the allegations. CZ also wrote some tweets referencing the leak that he later deleted.

Sirers official statement downplays the extent of Roches actual involvement in Avalanche. Sirer also claims that Roches lawsuits were filed without Avalanches knowledge, and that Roches firm, Roche Freedman, is one of more than a dozen law firms we employ for matters relating to tax, corporate, regulatory, and human resources.

That same day, Roche himself tweeted a Medium post dismissing the Crypto Leaks article as numerous unsourced false statements and illegally obtained, highly edited video clips that are not presented with accurate context.

Finally, when Decrypt broke the news later in the week that Roche had pulled out of a lawsuit against Binance, CZ was upset to see his exchange dragged into the dispute.

Speechless… Should we thank somebody? Is this how the world works now? Why were we dragged in? Anyway… That’s that!

Back to Building.

Crypto Lawyer Kyle Roche Pulls Out of Lawsuits Against Tether, Binance and Others – Decrypt https://t.co/0Nikp5HbfY

CZ Binance (@cz_binance) September 1, 2022

In other lawsuit news, Washington DC Attorney Karl Racine announced he was suing Bitcoin whale Michael Saylor and his cloud software company MicroStrategy for allegedly evading state income taxes by claiming he was a Florida resident (which doesnt have income tax), despite spending most of the year in Washington.

NEW: Today, were suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.

AG Karl A. Racine (@AGKarlRacine) August 31, 2022

NFT Twitter

Bored Ape Yacht Club made its worldwide TV debut Sunday night at the MTV Video Music Awards in a metaverse-hosted performance by rap icons Eminem and Snoop Dogg of their song, From the D 2 the LBC. It was widely panned by NFT critics.

Eminem-loving/NFT-hating Redditors were equally unimpressed.

Kofi Kufuor (@0xKofi), a partner at crypto investment firm 1confirmation, did some number crunching and reported back with insights into the NFT industry, including the extent of Twitters influence.

1/ Twitter reigns supreme as the best marketing channel in the NFT space.

Most of the traffic that is driven to NFT markets by social networks comes from Twitter. pic.twitter.com/vsdEeO8jus

Kofi (@0xKofi) August 30, 2022

On Thursday, crypto sleuth ZachXBT posted the second part of his investigation into over 600 compromised Discord servers and more than a dozen hacked Twitter accounts in the NFT space. It turns out a notorious fraudster named Cameron Redman sold Twitter panel access to a con artist, who then phished people and used the purloined funds to purchase an Audemars Piguet. The address he paid for the watch with is tied to many Discord server hacks.

1/ Since Dec 2021 weve seen 600+ Discord servers compromised & 12+ NFT related Twitter accounts hacked as well. This has resulted in millions of dollars being stolen.

Welcome to part 2 of tracking down the people responsible. https://t.co/F5uoQsCwCc

ZachXBT (@zachxbt) September 1, 2022

Otherside, the upcoming Bored Apes Yacht Club-themed metaverse game, posted a new trailer on Saturday.

Elsewhere

FTX CEO Sam Bankman-Fried shot down rumors that his exchange is planning to acquire Huobi.

Just to be explicit because apparently a lot of people are saying this:

No, we are not planning to acquire Huobi.

SBF (@SBF_FTX) August 29, 2022

Finally, Texas senator Ted Cruz wants you to know he’s still a man of the (Bitcoin) people.

Today I had the pleasure of touring the largest #Bitcoin mining facility in North America in Rockdale!

I am proud to lead the fight for the crypto industry in the Senate.

Texas will continue to be the center for crypto innovation! pic.twitter.com/28BYfEhJzQ

Senator Ted Cruz (@SenTedCruz) August 30, 2022

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