Crypto developer commits $2M rug pull fraud to fuel gambling addiction

According to a Reddit post, a developer has posted an unusual farewell note, apologizing and blaming his online gambling woes after leaving a project in shambles, turning a $2 million valuation into $20,000 within minutes. 

Several investors in the Encryption AI (0xEncrypt) project have reported that its developer performed a rug pull during a liquidity migration event. As a result, the project’s token called 0xEncrypt went from trading at around $2.05 to an all-time low of $0.02. Token data aggregator CoinGecko recorded the massive price drop around July 2. 

Unlike other rug pulls, the developer decided to leave a letter to the project’s community, apologizing for his actions, and blaming his gambling addiction for the move before disappearing and deleting all the social media platforms of the project.

Various investors shared a screenshot of the developer’s message on social media. Within the post, the developer shared his struggles with gambling and highlighted that he lost $300,000 in online casinos. In addition, though the developer was unable to guarantee that he would make amends or relaunch the project, he promised to “make every effort to become a better person.”

Related: How to spot a rug pull in DeFi: 6 tips from Cointelegraph

Members of the community were outraged by the rug pull, with some wishing karma upon the developer and others describing the move as the worst birthday present and a weird ending to a rug pull.

This one hurts bad. #0xEncrypt dev just rugged hard on the migration.

Twitter also been deleted.

Played us all the way.

I feel sick.

Karma is coming for you, scumbag. pic.twitter.com/o2axnvFZFN

— GEMINHIGH (@Geminhighi) July 2, 2023

Trader Crypto Daddi lamented that the rug pull happened right on his birthday. The Twitter user claimed that he lost around $30,000 after trusting the developers and investing in the project. On Reddit, a community member described the developer’s action of leaving a long note as a “weird way to rug,” as developers often just disappear without a trace after performing such actions. 

Meanwhile, Binance’s chief security officer Jimmy Su has recently spoken with Cointelegraph about how bad actors on the darknet are working to steal from crypto users. According to Su, hackers have a well-established ecosystem, and it’s comprised of intelligence gatherers, data refiners, hackers and money launders.

Magazine: Should crypto projects ever negotiate with hackers? Probably