In an alleged rug pull scam over the holiday weekend, a project called MetaDAO made off with almost 800 ETH, or $3.2 million. Investors in a startup called MetaDAO were the victims of a $3.2 million rug pull scam just before New Year’s Eve.
PeckShield, a blockchain security firm, published a notice early this morning claiming that MetaDAO had made off with 800 ETH, valued at over $3.2 million at press time, in an apparent rug pull fraud. The stolen monies were subsequently transferred to Tornado Cash, a privacy protocol that allows users to mask their Ethereum transactions, allowing for greater anonymity in theory.
A “rug pull” is a popular sort of crypto market fraud in which a project’s developers solicit large amounts of money from investors before quitting the business and keeping—some would argue “stealing”—the proceeds.
Due to a suspension, MetaDAO’s website is now inaccessible.
MetaDAO claims to be “the DAO of DAOs” in a Medium post from December, adding that the initiative would “create a new universe.” One piece goes on to detail the narrative behind the project’s development, citing WallStreetBets legend Keith Gill as the project’s motivation, as well as the GameStop short squeeze that occurred earlier this year.
Rug pulls account for less money lost to scammers in the crypto industry than hacks, but they nonetheless happen with alarming frequency. PeckShield only reported another probable rug pull event last night, in which MetaSwapMGAS took 1,100 BNB (worth over $600,000 at press time). The stolen monies in the MetaSwapMGAS fraud were moved to Tornado Cash, as was the case with today’s MetaDAO rug pull, disguising their subsequent destinations.
Last month, the Binance Smart Chain project SQUID token, which was purportedly based on the blockbuster Netflix comedy Squid Game, flopped after buyers realized the token was not linked with the show. The coin quickly collapsed by 99.99 percent, but not before the project’s creators made over $12 million.