Author: OneKey Chinese
The projects in the crypto that have run away are like the people crossing the river, bustling and endless.
According to Immunefi, the losses caused by various hacking and absconding incidents in the first half of the year alone reached US$473 million.
This time we review the three classic runaway events in 2024. From star projects, star exchanges to star memes, they are representative runaway "scripts" that are necessary in almost every cycle.
Each one is textbook level.
🏴☠️ ZKasino’s $33 million: The gambling spree of a young team born in the 2000s
You want the interest and tokens distributed by the project party, and the project party wants your principal.
ZKasino was reported to be valued at $350 million at the time, and was considered a star project touted by everyone in the Zksync ecosystem, attracting a large number of investors. At first, they were a decentralized betting and gambling platform based on blockchain. Later, in order to open up the narrative ceiling, they announced the launch of Superchain to become the infrastructure of Gamefi. Then they organized a staking event, where users used ZKasino bridge to participate and received ZKAS token rewards, and the popular new user rebate caused KOL viral spread. But in fact, the design of the smart contract was intended to deceive investors from the beginning (non-automatic refund).
The operations carried out by the ZKasino team afterwards were extremely outrageous.
After the staking activity ended, many community users found that ETH had not been refunded, and everyone began to doubt whether there was a problem with ZKasino. Later, someone discovered through the Wayback Machine that ZKasino had quietly deleted the sentence "Ethereum will be returned and can be bridged back" mentioned on the Bridge funds page of the official website a few days ago. This move caused widespread concern and accusations. As the accusations fermented, ZKasino's official communication channels were gradually closed, the project Twitter even stopped activities, and then deposited the money in Lido to earn profits... This further aroused people's doubts about its escape. Major exchanges such as MEXC also canceled the listing plan of $ZKAS. However, they have always insisted that the project will be launched as usual and ETH will be forced to be converted into a platform currency.
The Binance investigation team identified the identities of the project Binance account holders through on-chain tracking and other means and reported them to law enforcement agencies. Although Binance has been criticized by major KOLs for listing VC coins and falling prices this year, they will really investigate with Rug! Finally, with the joint efforts of the community and law enforcement agencies, a 26-year-old suspect was finally arrested in the Netherlands, and assets worth more than 11 million euros were seized, including real estate, luxury cars and various cryptocurrencies. The project creator's Twitter Derivatives Monke also stopped at May 28th - the announcement of a 1:1 refund. But some people questioned that the refund window was too short (3 days),
This is a rare happy ending in which the escape attempt fails and retail investors win.
🏴☠️ BitForex’s $57 million: Waterloo of Hong Kong’s Web3-friendly policy
This "wild chicken" exchange may not be well known to mainland friends, as it is more targeted at Hong Kong and overseas users. Before BitForex, there was already a precedent of Atom Asset (AAX), which was once one of the largest crypto exchage in Hong Kong. It ran away with $29.41 million, and the founder is still on the run with user funds.
It is reported that as early as around 2019, BitForex began to inflate the platform's liquidity through self-buying and self-selling with multiple accounts, cross-platform transactions, capital circulation, etc. It even claims to be one of the world's leading cryptocurrency exchanges by market value. According to data from Chainalysis, a third-party crypto asset crime research platform, BitForex's real transaction data in 2019 was only 800th of its public data. Despite this, BitForex is still able to continue to attract a large number of retail investors by listing various small currencies and using false liquidity.
BitForex's escape can be said to be without any nonsense or trickery. The process was like a carefully planned harvesting show, fast and precise.
Just two days before running away, BitForex's trading volume dropped sharply, as if all the activity on the platform disappeared overnight. On February 23, 2024, BitForex quickly closed its website after withdrawing $57 million, and its customer service disappeared without a trace, so users could no longer log in to access their accounts. According to ZachXBT's report, the funds included $54 million in TRB, $1 million in ETH, and $250,000 in USDC. More than a week after running away, the Hong Kong Securities and Futures Commission belatedly issued a statement warning.
It was not until 5 months later that BitForex suddenly (yes, it was sudden without any news in between) announced on Twitter that withdrawals could be made again. They explained that their team was detained by the domestic police, which led to the inability to withdraw assets, but they did not explain the reason for the abnormal outflow of $56 million from the hot wallet.
Two days ago, they said on Twitter that they had completed some withdrawals. Due to the huge workload and the need to thoroughly verify account KYC and assets, they will continue to process withdrawals "in batches." But in fact, looking at the comments section, you can see that there are still many users who said they cannot withdraw their assets and don't know when they can be processed.
🏴☠️ VT’s $17 million: a pump-and-dump turned into a death plunge
This is truly a case of "heroes being made by the times". If it weren't for the trend of Bome making payments and issuing coins, few people would be able to single-handedly raise funds for a large project.
On March 17, using his fame in the Rats community and the trend of raising funds to launch meme coins led by Bome at the time, user VT_BNB launched a project called $Ents and successfully raised 30,000 BNB. He invested 3,000 BNB into the initial liquidity, and claimed that the rest of the funds would be used to maintain market stability - obviously completely different from those memes that are fully invested in liquidity.
The project launched the slogan "Rebuilding the glory of BSC on the chain", which attracted the attention of a large number of community members. In the past, various KOLs promoted that the price had risen to a certain extent, giving many retail investors hope of making money. By the afternoon of the 25th,
@VT_BNB announced that it would use 10,000 BNB to "pull up the price", continuously posted screenshots of purchases, and conducted a Twitter Space that night, attracting more than 60,000 people to watch.
As a result, retail investors were greeted with a death plunge, a -75% drop ruined the dream of those who believed in it to get rich. He then made up various excuses, saying that the OKX intermediary cheated him, his ex-wife stole his wallet, etc., and finally even cleared his Twitter account. Because he is overseas, a large number of Chinese users in China cannot protect their rights. Recently, he even made a comeback and continued to release projects, which is rampant.
Looking back now, this may be the final straw that broke the camel's back for the Chinese meme community, and even further exacerbated the Chinese community's distrust of Chinese memes.
✨ Last
Crypto never sleeps and is full of endless possibilities.
Despite this, the degree of involution of retail investors’ money-making has increased visibly in this cycle, and the number of Rugpull projects has increased exponentially. In the launch site of meme coins, retail investors even have to complete PVP to make money before the team’s quick dump. In addition to these Rugpull “programs” that are necessary in each cycle, the continuous decline of various “VC” coins in the name of value is no different from soft running. The opposite of decentralization is the unregulated black forest where there are more hunters than prey.
In each cycle, people are discussing the direction of value investment in the crypto and the running of the closed loop of the crypto value. We are still exploring in the ups and downs. I would like to use these three representative runaway incidents to warn all investors and make cautious moves.
