GM.

Welcome to Bitcoin Therapy. You know that fresh smell of a new car? Reading us is better than that.

First, happy and relaxing Sunday to 1,921 of you reading today.

It's 3:51 am here. Just me and my cup of not-so-hot herbal tea. I’m finishing up my research (trying to find a perfect meme).

Is this good enough? I don’t know. My back hurts. I’m sending this.

Here’s what we got for you this week:

• PayPal launches a sketchy stablecoin

• Asia's largest exchange might be secretly insolvent

• World’s richest rapper admits to hacking Bitfinex

Estimated read time: 4 minutes and 12 seconds

PAYPAL LAUNCHES A “STABLECOIN”

PayPal, PayPal, PayPal…. are you addicted to bad press?

This week they announced their new Stablecoin - PYUSD.

PayPal calls it ‘stablecoin,’ but it’s just a PayPal-branded stablecoin by Paxos, another stablecoin provider (with a less sexy and recognized brand).

The crypto heads had about 30 seconds to celebrate mAsS aDopTiOn until someone noticed a few issues in the PYUSD’s code:

• 🤡 Written in an extremely old version of Solidity (way behind best practices)

• 🤡Allows Paypal to pause all transfers

• 🤡 Allows increasing the total supply at will

• 🤡 Allows freezing addresses

Remember when PayPal announced they would steal $2,500 from people for spreading “misinformation.”? Well, they just made it easier!

Now, I gotta give credit where credit is due: PYUSD is centralized af, but at least very transparent about it.

But the rug pull-enabling code is not the only issue.

Here are 2 other red flags:

1/ They plan to offer yield on customer deposits

We all know how that usually goes *cough celsius cough blockfi cough*.

2/ It’s built on Ethereum lol.

Or, as our friend Saidefean calls it, “the mother asshole from which shitcoins spring”. Bellissimo!

And PYUSD is 100% toilet-clogging material.

But honestly, this is all part of the design: PayPal wants to control you.

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Self custody.

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ASIA’S LARGEST EXCHANGE IS INSOLVENT?

Another week, another potential exchange insolvency. This time it’s Huobi - a Chinese-founded and Hong Kong-listed crypto casino owned by Justin Sun.

And let me tell you, it’s not looking too good.

Here are all the juicy details:

1. Huobi's Merkle Tree Audit (auditing practice exchanges use) has not been updated since July 1st

2. 3 Huobi executives were taken into Chinese police custody (uh-oh)

3. Other Huobi employees were given an emergency notice and asked to leave the country (*speculation intensifies*)

And how does Justin Sun respond? “It’s just FUD bro”

Despite Justin’s reassuring response, Huobi saw a ~$70 million net outflow last weekend (hint: that’s a lot). So yeah, you could say their users are not confident in the exchange’s future.

But wait, it gets worse: USDT (Tether) is massively being sold on Huobi because of the insolvency rumors.

You might remember how it was with FTX: rumors spread like wildfire until everyone and their mom tried to withdraw, resulting in the exchange running out of money.

Here’s what people are worried about:

1. Huobi may only hold $90M USDT, and NOT the $631M USDT that they claim (~7x less)

2. Binance-funded accounts are allegedly mass selling USDT because of their insider knowledge (they are very well-connected)

3. Justin Sun was caught withdrawing $60M from Huobi to Binance during the employee investigations

The last one is especially bad: Justin telling users not to worry while getting his money out. Smh.

Polymarket, the world's largest prediction market, is placing a 34% chance of Huobi being insolvent.

What do YOU think? Is Huobi secretly insolvent? Let me know by replying to this email. I reply to everyone :)

RECLAIM YOUR PRIVACY

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THE WORLD’S RICHEST “RAPPER” ADMITS TO HACKING BITFINEX

The world’s richest rapper has pleaded guilty to one of the biggest hacks in Bitcoin’s history - the 2016 Bitfinex hack.

I’m talking about Razzlekhan aka Heather Morgan, and her hubby Ilya Lichtenstein.

What? You don’t know about Razzlekhan and the Bitfinex hack?? No worries, this is why you read Bitcoin Therapy.

Year 2016. A beautiful August day. The last summer's rays are shining through the blinders. The crypto winter is finally coming to an end. Hope is in the air.

But then it all changed - Bitfinex announced they’d been hacked for 119,756 BTC (worth $72 million at the time).

There was panic in the market. Everyone and their dog were trying to figure out what happened at Bitfinex on that sunny August day. But the identities of the hackers remained a mystery for 6 years.

That is, until 2022 when the government seized approximately 95,000 of those stolen BTC from cryptocurrency wallets under Razzlekhan’s and Ilya’s control.

Here’s how the couple laundered the stolen money:

• Split up the BTC into tiny amounts and transferred it to different wallets

• Mixed stolen funds on the darknet marketplace Alphabay

• Purchased and buried gold coins

• Setut up a bunch of shell companies to legitimize the stolen funds

They did this for years before being caught. How did they get caught? Walmart gift cards…

The police were able to track the gift cards back to some of the proceeds of the Bitfinex hack, which then opened up further investigation. Lol.

In total, our girl Razzle and her husband laundered $4.5bn worth of Bitcoin. And this, ladies and genteleplebs, is what makes her the world’s richest rapper.

Now the dynamic duo is facing jail time. 20 years for Lichtenstein as the mastermind, and 10 years for Razzlekhan for being an accomplice and making trash music.

Also, I watched one of her music videos, so now you have to (!CRINGE ALERT!).

But many are skeptical if the couple is actually behind the hack. Many believe they’re too ‘dumb’ to commit a crime of this caliber.

“Ilya is a f***ing idiot. If you look at how he was trying to launder money, he was doing absolutely everything wrong.” says former U.S. “Most Wanted” hacker Brett Johnson, who questions their confession.

Who knows what really happened. This story is crazy and absurd, even as is.

On the bright side, Netflix and Forbes announced they’d make documentaries just days after the arrest. Your fame continues for a bit more, Razzlekhan…

THIS WEEK IN A MEME 📅

FROM THE ARCHIVE 📁

Yes, Christian, you are (if you held).

PATIENT REVIEW 🧠

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See you next Sunday,

Bitcoin Therapy Team

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