Avalanche-Based Atom Protocol Rug Pulls Users Less than 48 Hours after Launching
The Atom Protocol, an otherwise promising DeFi protocol—and a Universe fork–on Avalanche, has rugged its community less than 48 hours after launching.
The Atom Protocol Rug Pull
Victims took to Reddit to express their disappointment after Atom Protocol admins politely notified them of a “problem in their smart contracts” and their inability to salvage the situation before switching off their social media channels, including Twitter and Discord.
As a result of their action, the ATM price, paired versus DAI, plunged by over 95 percent, flat-lining near-zero, moments after the announcement. It was a sucker-punch for investors and project believers who have now lost a fortune as a result.
Rug pulls happen when a crypto project developer(s) abandons the project, taking investor funds with them. When this type of “hard” rug pull happens, token price tanks, and the project is formally declared dead. The resulting illiquidity makes it hard for investors to recoup their funds, causing irreversible financial damage.
The Atom Protocol rug pull came at the backdrop of impressive statistics. For instance, after launching, their node count had doubled.
The Assure DeFi Response
What’s more? Atom Protocol developers could defraud its users despite being KYC-verified by Assure DeFi—a blockchain agnostic protocol that claims to be a verification gold standard for crypto projects and who allegedly want to build trust in the space. In their defense, Assure DeFi responded that most crypto investors misunderstand the role of KYC and profile verification. Per their stand, the role of account verification is deterrence and not scam prevention.
“We believe that many people are still misunderstanding the role of KYC/verification. KYC is a deterrent and not a scam prevention, and if anyone says otherwise, they are misleading you. The real value of KYC has a validated real-world identity behind a project. So that if a scam/rug pull occurs, an accountability path exists, allowing for criminal pursuit. Remember, without the KYC process we provide, there would be little to no accountability, and those affected would not have a chance of fund recovery/justice.”
The true value proposition of KYC is to link the real-world identities of developers so that in case of a rug pull, there is an accountability path allowing for criminal pursuit. They nonetheless added that they are in a tireless pursuit of creating deeper accountability for project leaders and the course for real-world consequences for bad actors in the space.
“Assure has one of the strongest back-end processes in the space, and it’s one we are currently in the process of improving massively. We want to see justice served to scammers as badly as everyone else. Assure was founded on the principle of creating deeper accountability for project leaders and a clearer path to real-world consequences for bad actors.”
Assure DeFi has since released a Scam Reporting Form for victims to fill. These details will help them in their back-end process and investigation. At the same time, data collected will be used for aggregation for affected parties.
