ETHTrustFund DAO Transfers $2M Treasury in Apparent Rug Pull

ETHTrustFund DAO, a Base network protocol, transfers $2 million from its treasury to mixer apps in an apparent exit scam, causing security experts to label it a rug pull.

Points

• ETHTrustFund DAO transfers $2 million from its treasury to Tornado Cash and Railgun mixer apps.
• The project deleted its websites and social media accounts, raising suspicions of a rug pull.
• The incident was first reported by crypto investor Octoshi on July 21.
• Blockchain security platform PeckShield confirmed the fund transfers to mixer apps.

ETHTrustFund （ETF）, a protocol on the Base network, has caused a stir in the crypto community by transferring $2 million from its treasury to Tornado Cash and Railgun mixer apps, prompting security experts to conclude that the project was a “rug pull” or exit scam.

Cointelegraph

The incident was first brought to light by crypto investor and X user Octoshi on July 21. According to Octoshi, the project’s treasury funds were moved to a new address the previous day. Blockchain security platform PeckShield later confirmed the transfers, noting that the ETHTrustFund developers had sent the funds to mixer apps in an attempt to launder them.

The ETHTrustFund developers also deleted all of the project’s websites and social media accounts, further raising suspicions of a rug pull. According to an archived version of the project’s developer documents, ETHTrustFund was conceived as a decentralized autonomous organization （DAO） with features similar to Olympus and Wonderland. The fund issued blockchain-based bonds and sold them to investors in exchange for cryptocurrency, promising yield generation and token appreciation over time.

The project’s lead developer, Peng, reportedly stopped responding to messages in April before finally executing the rug pull on July 20. This incident adds to the growing list of rug pulls in the crypto space, highlighting the risks associated with investing in decentralized finance （DeFi） projects.

In June, the Gemholic protocol was accused of conducting a $3.5 million exit scam after allegedly promising refunds to investors before transferring the funds to its own team. Similarly, in March, investors lost $1.4 million when admin accounts associated with the Ordiz bridge deleted their socials and transferred all remaining funds to new accounts, leaving users unable to withdraw from the bridge.

解説

• The ETHTrustFund incident underscores the ongoing risks and vulnerabilities in the decentralized finance （DeFi） space, particularly with projects that lack transparency and accountability.
• Rug pulls, where project developers abscond with investors’ funds, continue to be a significant concern in the crypto community, eroding trust in DeFi projects.
• The use of mixer apps like Tornado Cash and Railgun to launder stolen funds complicates efforts to trace and recover the assets, highlighting the need for enhanced security measures and regulatory oversight.
• Investors should exercise caution and conduct thorough due diligence before investing in DeFi projects, prioritizing those with transparent operations, reputable teams, and robust security protocols.
• The ETHTrustFund case serves as a reminder of the importance of vigilance and skepticism in the rapidly evolving and often speculative world of cryptocurrency investments.