Exit scams are not new in the cryptocurrency space. The crypto boom of late 2017 saw the proliferation of ICOs – a lot of which were scam projects. Similarly, the decentralized finance (DeFi) boom of 2020 has ushered in yet another wave of rug pulls and exit scams. As a matter of fact, these scams have become so rampant that they are hard to keep up with.
In the latest possible exit scam, an Ethereum DeFi project has left users hanging. The founders of DistX, a DeFi token sale platform, recently announced that they were exiting the project. This immediately sent its community into a panic, forcing the market cap of the token to $15,000 from around $1.5 million within 24 hours.
DistX lured investors in with the promise that they will have access to tokens launched on the platform, as well as a 2% share from sales. However, on Sunday, December 13, the project’s founder, Adrian Daluz, announced that they’d be closing now following a failed fourth token sale. He added:
If all you care about is this, know that we aren’t removing liquidity and with the remaining company funds (95k USD) we will be buying DistX from Uniswap and burning it to help you guys cash out at a higher amount.
Daluz’s words did not mean much as investors quickly saw a sinking ship. Immediately after the announcement, several transfers of over 192 Ether swept the liquidity from Uniswap.
To make matters worse, DistX has exhibited all the signs of an exit scam. As of press time, both the founder and the project have deleted its social media account. Comments on its Telegram group have also been muted.
The lesson here is quite a simple and recurring one. The cryptocurrency space is still maturing and loosely regulated. Whilst there are genuine projects out there, if an offer seems too good to be true, then it is probably a scam. Finally, time and time again, investors have been advised to invest only what they can afford to lose.