LENX Faces Rumors of Slow Rug Pull, Unexplained Million-Dollar Transactions
Summary:
Rumors are circulating about a slow rug pull involving liquidity protocol LENX due to unexplained token transfers worth millions. LENX Finance's founders, John Kim and an individual named Paul, reportedly transferred over $10 million of treasury assets to a Binance account without clear reason. Discord users have complained about the lack of clarity and communication about these transactions. While an investigation is ongoing and the remaining funds are secured, the incident underscores the increase in crypto investment fraud, which saw U.S losses rise 53% to $3.94 billion in 2023, according to the FBI.
Social media is abuzz with whispers of a gradual rug pull connected to the liquidity protocol LENX, with the community trying to make sense of mystery-infused token transfers valued at millions. Anonymous user AstroBoy and Etherscan data have highlighted unexplained transactions by LENX Finance founders, John Kim and an individual only known as Paul. These transfers, exceeding $10 million in treasury assets to a Binance account, have resulted in the depletion of LENX wallets, based on AstroBoy's reports.
Several protocol users have been vocal about the poor communication since the dubious transactions were first detected on March 26 on LENX's Discord server. There have been ongoing discussions about the consistent monetary transfers to Binance and the deletion of messages questioning the suspicious withdrawals.
Established in January 2024, LENX pledged to utilize native Bitcoin for earning yields or as collateral for loans. CoinGecko data shows that the protocol's native token, LENX XD (XD), was priced $0.26 in early January, a figure that reduced to $0.02 at the current time. Lending protocol FRAX Finance backs LENX. LENX Finance's co-founders did not immediately respond, and FRAX Finance declined to comment when contacted by Cointelegraph.
User 0xg4m813 on LENX's Discord server sheds light on the problematic issues facing the protocol as debates over the questionable fund transfers continue. Media organization Flywheel DeFi reportedly reached out to Kim, but he refused to give any information, stating, "Sorry, I don’t have much to say at the moment." Paul's most recent contribution to the Discord conversation was on March 26, declaring his intent to examine the withdrawals.
It is reported on Discord that the LENX team managed to put the recipient Binance account on hold, securing the remaining $3 million in the process. Simultaneously, an investigation is ongoing regarding Kim's actions, while Paul is said to be assisting legal measures. A rug pull refers to a fraudulent practice where developers suddenly extract all resources from a project or liquidity pool, leaving investors with valueless tokens or assets.
The Federal Bureau of Investigation (FBI) reported that in 2023, the number of fraudulent crypto investment cases escalated significantly in the US, with losses up from $2.57 billion in 2022 to around $3.94 billion— a 53% increment. DeFi’s billion-dollar secret: The insiders responsible for hacks is the highlight of the magazine.
Published At
3/30/2024 12:01:06 AM
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