Web3 is Going Just Great

September 4, 2023

Nima Capital accused of rug pull

"Even VCs are rugging now", remarked someone on Twitter as Nima Capital was observed selling 9 million $SYN (priced at ~$3.7 million before the sudden sale caused the token price to drop) and removing all stablecoin liquidity from the Synapse decentralized blockchain bridge. In April 2023, Nima had entered into a deal with Synapse to lock $40 million of liquidity in the project in exchange for the $SYN tokens, with an agreement to not sell the tokens for twelve months. However, it appears they've just dumped their tokens seven months early. Not only that, Nima Capital took their website offline and made their Twitter account private in typical rug-pull fashion.

Synapse posted on Twitter that they were "investigating unusual activity" on the wallets of one of their liquidity providers, and were "working to get in touch with them".

The $SYN token plummeted almost 25% after the sell-off, later recovering somewhat.

"Nima Capital goes dark after dumping 9M SYN tokens, community calls it VC rug", CoinTelegraph
"Synapse confirms investigation into liquidity provider's 'unusual activity'", Blockworks

August 25, 2023

Magnate Finance rug pulls for over $5.2 million

(attribution)

Magnate Finance, a lending protocol built on the new Base layer-2 blockchain, rug pulled within hours of a warning from crypto sleuth zachxbt. Zachxbt had discovered that a wallet address used by Magnate Finance was directly linked to Solfire Finance, a project that rug pulled for almost $5 million in January 2022. He warned his followers in a tweet that the project "will likely exit scam in the near future."

Sure enough, within an hour of zachxbt's tweet, the project drained $5.2 million from the protocol and deleted its website and Telegram group.

According to zachxbt, the project also shared on-chain links to the March 2023 Kokomo Finance rug pull, which saw its perpetrators profit around $4.5 million.

August 16, 2023

SwirlLend rug pulls for around $460,000

(attribution)

Despite the fact that Coinbase's Base blockchain was only officially launched a week ago, and a relatively small amount of funds are locked on the chain, it's already racking up its own tally of scams and hacks.

SwirlLend was a lending protocol operating on both Base and the similarly newborn Linea chain. Shortly after its launch, the project drained a combined $460,000 from the two chains, then deleted its social media accounts.

Tweet thread by PeckShield

August 12, 2023

Uniswap developer fired over FrensTech rug pull

(attribution)

After pulling off a rug pull that only netted 14 ETH (~$25,900), Allen Lin (known as AzFlin) lost his day job for the company that maintains the Uniswap DEX. Hope it was worth it.

Lin had created a project called "FrensTech", which aimed to capitalize on the popularity of a product called "friends.tech", and which ultimately accumulated the 14 ETH in fees before he decided to drain liquidity. Lin had not tried to conceal his identity. After the rug pull, Uniswap founder Hayden Adams wrote on Twitter: "Wanted to let people know this person is no longer with the company. Not behavior we support or condone."

Lin was unapologetic, tweeting: "got fired from uniswap, but gained 600 new followers and [crypto Twitter] villain status. net neutral tbh".

July 31, 2023

BALD memecoin plunges after $25.6 million rug pull

A memecoin called $BALD, built on the Coinbase Base test network, appears to have rug pulled for at least $25.6 million. Although the Base network is meant to be used for developer testing, some people have tried to trade on the network before its official launch.

A pseudonymous crypto user called "Bald" announced that they would be selling $BALD tokens on the Base network, and the token — apparently named after the hairless Coinbase CEO Brian Armstrong — quickly skyrocketed in price. However, the token deployer emptied tokens priced at around $25.6 million from the liquidity pool two days after launch in apparent rug pull. The token price quickly plunged by around 90%.

Conspiracy theories emerged that the Bald account was in fact operated by Sam Bankman-Fried, the former CEO of FTX who is on house arrest under strict supervision and without access to most websites as he awaits trial later this year.

"BALD Meme Coin on Coinbase Layer-2 Goes to Zero as Dev Pulls Liquidity", Decrypt

July 29, 2023

Kannagi Finance rug pulls for over $2 million

(attribution)

The defi yield aggregator project Kannagi Finance rug pulled on July 29 as its creators drained the $2.13 million total value locked. Kannagi Finance deleted its website and social media accounts following the exit scam.

Blockchain security firm SolidProof had audited Kannagi in June.

"Kannagi Finance's TVL drops to $0.17 in apparent rug pull", The Block

July 27, 2023

DeFiLabs rug pulls for $1.6 million

(attribution)

A defi project called DeFiLabs was able to rug pull for $1.6 million thanks to a backdoor written into the smart contract. After traders bought into the project, its creator was able to call the withdrawFunds function to make off with the project's assets.

DeFiLabs claimed on Twitter that the platform "encountered an unexpected issue" while "undergoing maintenance and updates".

DeFiLabs had been audited by blockchain security firm CertiK.

"DeFiLabs", Rekt

July 22, 2023

IEGT token rug pulls for $1.14 million

The IEGT token was created on Binance Smart Chain on July 13. However, its creators "covertly minted a large amount of tokens, primed for a rug pull", as blockchain security firm SlowMist described it. Although the project reportedly had only 5 million tokens in supply, this allowed the team to sell 1 billion tokens, cashing out approximately $1.14 million in the USDT stablecoin.

"Beware of Covert Rug Pulls, Exit Scams Driven by Contract Storage Manipulation", SlowMist

July 18, 2023

GMETA rug pulls for $3.6 million

The GMETA project on BNB Chain saw its price plummet to near zero as the project creators drained the funds from the project. The contract creator was able to transfer large amounts of the token and swap them for the Tether stablecoin, cashing out a total of around $3.6 million.

Tweet thread by Beosin Alert

July 10, 2023

Multichain drained of another $107 million days after previous theft

(attribution)

Only five days after $130 million was emptied from the Multichain blockchain bridge, another $107 million in a wide range of assets has been taken. After the first theft, Multichain urged users to stop using the project and revoke contract approvals, but a large quantity of assets remained on the service.

People are becoming increasingly suspicious that the Multichain thefts may be an inside job, not least because Multichain's CEO suddenly disappeared in late May and hasn't been located since.