Today in Crypto: Durbin, Warren Question Fidelity on Retirement Funds’ Crypto Exposure; Game Maker Sky Mavis CEO Moved Game Tokens Prior to Announcing Hack

Solana-based yield protocol Nirvana Finance has been hit by a $3.5 million exploit which used flash loans to manipulate and drain liquidity.

Flash loans are a popular way for attackers to get funds to do exploits on decentralized finance (DeFi) systems. The price of the native ANA token dropped more than 80% in the hours after the attack, according to a CoinDesk report Thursday (July 28).

Additionally, the NIRV stablecoin lost its peg to the U.S. dollar, dropping to 8 cents at the time, per CoinGecko data. Nirvana allowed users to earn annual yields of more than 100% of locked assets by creating and destroying tokens based on user demand.

There was reportedly more than $3.5 million in ANA locked on the protocol before the attack.

Meanwhile, liquidators supervising the closure of Three Arrows Capital might be considering making the founders clean up the whole fiasco, Bloomberg reported.

So far, the founders have only given “rather selective and piecemeal disclosures” about the fund’s assets. However, lawyers want to compel them to turn over more information.

“The founders have not made themselves available for any discussions or interviews with the liquidators whether formal or informal,” attorney Adam Goldberg told Bankruptcy Judge Martin Glenn in a hearing held remotely Thursday. “They do continue to conceal their whereabouts.”

In other news, U.S. Senate Majority Whip Dick Durbin (D-Ill.) and U.S. Sens. Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) are examining a decision from Fidelity Investments to let 401(k) plan sponsors offer plan participants exposure to bitcoin.

Fidelity is one of the biggest 401(k) providers, according to a Tuesday (July 26) press release. The senators are looking into why Fidelity would allow exposure to bitcoin, as it seemed “ill advised for one of the leading names in the world of finance to endorse the use of such a volatile, illiquid, and speculative asset in 401(k) plans-which are supposed to be retirement savings vehicles defined by consistent contributions and steady returns over time.”

Finally, Bloomberg reported that Trung Nguyen, CEO of the game Axie Infinity, reportedly moved a large amount of tokens before a widely-publicized hack earlier in the year.

Axie’s operations relied mostly on players’ ability to trade and earn crypto tokens which had financial value — players had stashes that represented big savings.

Per the report, a digital wallet belonging to Nguyen made a “large transaction” of around $3 million of the AXS token Axie Infinity boasted, moving it to Binance instead. Parent company Sky Mavis confirmed that Nguyen controlled the wallet.

The reason, according to a spokeswoman, was that Nguyen was working on shoring up company finances during the crisis, trying to do it in a way not obvious to the wider market.

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