The 22-year-old developer behind Encryption Al, a cryptocurrency project, has pulls the rug Users of nearly $2 million before migrating liquidity to the platform. In a screenshot shared on July 3 and posted on Twitter, the developer apologized, saying that while he “deeply regrets his actions and the impact on users, he was battling a crypto gambling addiction that saw him lose over $300,000 in the past few months.”
It appears that the decision to withdraw users’ money and win $2 million was a way to compensate for crypto gambling losses.
OxEncrypt’s price crashes after the rug is pulled
Accordingly data From DEXTools, OxEncrypt’s prices have fallen more than 95% after this decision, dropping from $3.25 to $0.02 by the time the screenshot was shared. The token was only available for trading on Uniswap, the world’s largest decentralized cryptocurrency exchange.
OxEncrypt was the original token of Encryption Al, a cryptocurrency project that claimed to be building an “arsenal of tools to empower traders and developers.”
Among some of the tools, the platform Permissible Creating a Telegram bot which the developer said would instead allow the owner to trade decentralized finance (DeFi) instruments more efficiently.
The team added that their bots use different algorithms to encrypt smart contract addresses so that they cannot be detected by “sniper bots and Telegram bots.” Among these tools is a portfolio analysis tool that provides a detailed portfolio balance report; and Fresh Wallet Detective for selecting the first 100 contract buyers.
Cryptography AI steals user funds before migration
In a Twitter post, the platform was supposed to move on July 3 but has added an additional 48-hour extension for users to migrate via DEXTools. The migration was intended, among other improvements, to improve platform functionality and address other concerns raised by community members.
Judging by the timing of the rug pull, it appears that the developer has taken advantage of increasing tokens locked in project liquidity pools on Uniswap to steal users’ funds. Hard rug dragging by a developer usually means that the project is effectively abandoned unless it is revived by a community that saw value in the platform.
On the other hand, investors who committed to the project were left with worthless OxEncrypt tokens. Moreover, unless the developer is sued, the victims have no recourse. This reality examines the trustless, global, and immutable nature of Ethereum smart contracts that enable token locking and trading on Uniswap.
Featured image from Canva, chart from TradingView