30s Summary

Humpy the Whale, a crypto operator, is facing a lawsuit filed by FTX’s estate for allegedly manipulating the crypto exchange. The lawsuit accuses Humpy of buying obscure tokens, inflating their price and then using them as collateral to take out large loans from FTX, which they then defaulted on, costing FTX and Alameda Research around $1 billion. Among Humpy’s tactics, was the acquisition of half of all BTMX tokens causing its value to soar by 10,000%. They also manipulated the MOB token and other tokens to scam an estimated $200 million from FTX.

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A crypto genius known as Humpy the Whale, who was involved in a governance exploit at Compound DAO, got caught in the crosshairs of a lawsuit filed by FTX’s estate. According to the lawsuit, they had a pretty shady operation running between 2021 and 2022. They would buy huge amounts of not-so-popular tokens, sending their price through the roof, and then use them as collateral to take out massive loans at the crypto exchange. And then they left FTX high and dry, not repaying a dime of those loans.

The lawsuit claims that this scheme, which made the most of a loophole in FTX’s rules around margin trading, hit FTX and Alameda Research hard, causing them to lose around $1 billion. And according to the lawsuit, back in 2021, Humpy started buying an underground token called BTMX. In just three months, they managed to own about half of all BTMX tokens, causing its value to skyrocket by an insane 10,000%. They then used these tokens to secure loans amounting to millions of dollars.

But the plan was doomed from the start. They knew full well that the danger was always lurking. If their price manipulation were to stop, BTMX’s price would crash, leaving them having to return all the tokens they had borrowed. But from the start, they had no intention of playing by FTX’s rules.

This fiasco ended with Humpy still managing to walk away with over $450 million from BTMX, FTX’s internal team tried covering it up by transferring their losses to another company, Alameda Research.

In another trick up their sleeve, Humpy built a massive short position in the MOB token. Alameda decided to offset the short position by buying a significant amount of the token, causing its price to shoot up by 750%. But as soon as Alameda pulled back, MOB’s prices fell dramatically. All said and done, Alameda estimated losing $1 billion thanks to Humpy’s sneaky tactics.

According to FTX, Humpy replicated the whole fiasco with different obscure tokens, BAO, TOMO, and SXP, before FTX could sniff them out, scamming almost $200 million in the process. They tried to go for gold with another token called KNC but were caught in the act.

But that’s not all. Known as Nawaaz Mohammad Meerun, a Mauritius citizen in real life, Humpy managed to execute an attack on the lending platform Compound Finance by manipulating its COMP token. They used this token, which gives its holders the right to vote on decisions made by the Compound DAO, to try to pilfer more than $20 million from other users of the protocol.