Hackernoon logoCrypto Exit-Scams Are Nothing New. Let's Call Them Out Before More People Get Scammed by@krisma

Crypto Exit-Scams Are Nothing New. Let's Call Them Out Before More People Get Scammed

Krisma Hacker Noon profile picture

@krismaKrisma

I do things with cryptocurrency economics models and blockchain fintech

Santadao $HOHO — whatever the F this is, rugpulled, which isn’t a surprise. $200K has been stolen. Many influencers were posting about this one, casually, as they’d about any other.

This pattern has been shaping up itself for the past few months, made millions in losses, once again proved the cryptocurrency world isn’t ready for casual retail investors.

There, there — we are not here to judge and call out but to talk, sit down and put down that torch ffs.

🤬What triggers us

I want to ask anybody involved in any of those shilled rugpulls — if you “invest” in it 1, 2, or 5 ETH — is it really worth the risk? At the time of writing this, 1 ETH = $390.

Another thing, if this rugpull project, any of them literally, can gather $200K up to $1M — do you even have any basic understanding of how much money is this? It just makes my mind melt like ice cream.

Just some fair ICO examples that are out there:

Stafi $FIS — 1,015,000 USD

EasyFi $EASY — 300,000 USD

xDAI $STAKE — 950,000 USD

📊Further statistics — rugpulls

All of the presented below amounts have been gathered in ETH at the time of their token sales.

HatchDAO $HATCH — $760,000

SantaDAO $HOHO — $200,000 (26.10.2020)

Uniswipe — $375,000 / 1000 ETH (21.08.2020)

YMO — $100,000

Yearn Gold $YAU — $28,000 USD

Now we get a sum of 1,463,000 USD — some legit projects could really use those numbers, not to mention ETH Hackaton devs that can literally build whatever with <$50,000.

Those are a few examples — over the past few hours I have been given at least 20 more. Here are some tickers of other rug-pulled scams

$HOHO $ORNG $BIO $FYF $BREE $STEAM $ETNX $YAU $HATCH $HOTDOG $YEVO $TWEE $YBREE $ELON (thanks throw;)

What else can you do with $200K? A 101 explanation.

McLaren GT costs about $210,000 Source

*If you think some of the data is incorrect — post us correct KrismaChat

There is a shed of light, some hope

Three projects that I know did anonymous/semi-anonymous token sales and so far they’ve been delivering solutions that have been proposed during sales:

Bounce Finance $BOT

CHADSVC $CHADS

Xiotri $XIOT

No rug pull, constant delivery, not all of those sales are bad. Those two are definitely exceptions, but if they’re exceptions among an ocean of scams — this only proves the point made so far.

How rugpull or “exit scam” looks like? What are the implications?

“Small” <500 ETH won't do much damage unless all of the selling from let's say 10 of rugpulls will occur at the same time, then we have 5,000 ETH ~$1,95M of selling pressure which could cause a wick down on some of the exchanges, but a chance for that kind of event is really small unless one entity is behind few of those ponzi “rug pull project” schemes.

Typical rugpull — chart provided by devchartWhat are the implications when some bigger project tries to exit scam? Oh boy.

One word comes to my mind.

Sushiswap has started as Uniswap’s fork. Later on, gathered enough traction and allowed to successfully accumulate about $1.3 billion worth of digital assets locked up in the SUSHI/ETH pair liquidity pool.

Short story:

SushiSwap’s co-founder, Chef Nomi, had a change of mind, and following Charlie Lee’s decision to make Litecoin more independent from its creator — Nomi has cashed out his tokens — worth some $14 million in Ethereum

$14,000,000, that’s enough to make an actual move on the major token, downwards in this case, and as further on — case seems to be solved by now, Chef Nomi has refunded the total amount, Sushiswap has changed its owner ever since, but that’s another story.

However, people were shaken out during the event in a series of multiple micro-events, by selling other crypto assets. Since during this event alone Ethereum’s price dumped from $476 to $320, we are talking here about millions of dollars in liquidations, to say the least. This won’t be anyhow refunded up to this date to some of the market participants that got harmed in the process, which is worth a mention.

📚You could literally, make your own DECENT project

Get money for it through the same way that those scams are getting funded —but do something good instead, even outsource it if you can’t code, but still, possibilities are there, waiting for you.

😥Another much sadder take is

Because of this, legit projects can’t gather enough money to deliver whatever they are about to create, so instead of old-school fair ICO, you get a shitload of VCs dumping on your poor ass now, get used to this VC-rapperoni festival, you earned it.

The real problem

Okay, so let’s face the real issue now, there are few.

😔Some people will never come back to crypto because they just lost money in a dumb way. Some will

📉Thieves that did a rugpull will dump the underlying asset for money — they won't care, they got it for almost free, and we are talking here about thousands of Ethereum to be dumped.

🤢By allowing those scams to get funded — you are not only allowing them to scam you out but also it means you are agreeing untested, unaudited BS to get at your doors and you’ll be thankful that it came up to steal from you. Would you treat the burglar the same way IRL?

💔Like any kind of KOL, influencer, you get reputational damage, part of the audience will never come back to you

✨Solution?

I’m too lazy for now to give you one, but God damn, I just might one day really soon once you won't make me write these posts anymore*

*— so I will just stick to writing these posts

The finishing touches — conclusion time

I could go on with new scams, new “projects” with no audit or audit so badly done — it's just useless (wink, wink harvest finance). The lesson is here — don’t act greedy, or simply speaking don’t play dumb games or you will earn stupid prizes.

Stay safe,

next time I see you shilling a rug-pull coin, I will call you out, 
as understanding, I can be here, I won't hesitate next time I see it happening. There has to be a red line to all this insanity.

Twitter: https://twitter.com/KRMA_0

Telegram channel: https://t.me/krismacrypto

Telegram group: https://t.me/krismachat

All the best,
Krisma

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