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- ETHTrustFund DAO allegedly stole $2M and laundered funds via mixer apps.
- Developer Peng went silent months before the rug pull and deleted all accounts.
- Besides ETHTrustFund, other recent rug pulls in crypto include Gemholic and Ordiz, showing rising fraud risk.
In a troubling development for cryptocurrency investors, the ETHTrustFund DAO, a decentralized autonomous organization (DAO) operating on the Base network, has been accused of conducting a $2 million rug pull.
The allegations, substantiated by recent reports by 0ctoshi, suggest that the project executed a deliberate exit scam.
According to a detailed report by blockchain security firm PeckShield, ETHTrustFund transferred its entire treasury to a new wallet on July 20, 2024.
The funds were subsequently moved through mixer applications, such as Tornado Cash and Railgun, in an apparent attempt to obfuscate the trail and launder the stolen assets.
#PeckShieldAlert #rugpull @0ctoshi reported that @ethtrustfund_ rugged ~$2m worth of cryptos on #Base.
The scammers have already bridged the stolen funds to #Ethereum & laundered them via #Tornadocash & #Railgun https://t.co/jmKVgiQb8C pic.twitter.com/MzJsvQ1pyV— PeckShieldAlert (@PeckShieldAlert) July 22, 2024
The rise and fall of ETHTrustFund
ETHTrustFund, which had modeled itself after successful projects like Olympus and Wonderland, initially attracted investors with promises of a unique rebase mechanism.
The project was designed to offer blockchain-based bonds and issue new ETF tokens to users who staked their holdings.
Unlike traditional rebaseDAOs that continually inflate their token supply, ETHTrustFund aimed to eventually debase its tokens to increase the value of the remaining supply, generating yield for its investors.
However, the project’s trajectory took a dramatic turn when lead developer Peng reportedly ceased communication with the community in April.
According to Octoshi, Peng’s inactivity, coupled with the sudden disappearance of ETHTrustFund’s online presence, including its website and social media accounts, pointed towards a potential exit scam.
Octoshi first highlighted the issue on July 21, 2024, reporting that the project had moved over $2 million from its treasury to a fresh wallet, and was draining the funds via Railgun Project.
The project’s official Telegram and social media accounts, previously managed by Peng, were deleted.
In the wake of these revelations, Octoshi urged the community to report the scam on Chainabuse, a platform dedicated to documenting and combating fraudulent activities in the crypto space.
The Chainabuse report, created by user @cryptogle, confirmed the allegations and emphasized the project’s abrupt disappearance.
The wake of exit scams in crypto
ETHTrustFund’s incident follows a series of similar scams in the crypto industry.
In June, the Gemholic protocol faced accusations of a $3.5 million exit scam, while March saw the Ordiz bridge admin accounts executing a $1.4 million fraud.
These cases highlight the persistent risk of rug pulls in the rapidly evolving cryptocurrency landscape, underscoring the need for vigilance and thorough due diligence among investors.