- DeFi project WhaleFarm fell by 99% after a rug pull.
- The project was only a month old and offers over 7 million in APY.
- Also, there has been a marked increase in calls for DeFi regulation
DeFi project WhaleFarm has allegedly scammed investors out of about $2.3 million. The project’s anonymous team apparently did a rug pull leading the project’s native token tumbling by 99% within minutes.
WhaleFarm Token is the most recent scam to pull the rug on investors. It’s estimated they stole over $2.3 million.
– Fully anonymous team
– Promised 7.2 million % in returns
– The token is now down -99.99%
– Twitter page deactivated
– Telegram group deleted pic.twitter.com/Ye6CZ9HgUt
— Mr. Whale (@CryptoWhale) June 30, 2021
Notably, the DeFi project only launched about a month ago. Of note, WhaleFarm offered staking for multiple cryptos including BTC, ETH, ADA, DOT, LINK, BNB, BUSD, and USD. Staking so many coins was clearly a red flag. Another red flag is that the project was offering an incredible 7,217,848% annual percentage yield (APY).
To clarify, a rug pull occurs when crypto developers abandon a project and run away with investors’ funds. These scams are particularly popular in DeFi. This is because decentralized finance (DeFi) has less regulated compared to other crypto markets.
In fact, DeFi refers to financial services built on top of existing networks. As such, DeFi projects have no central intermediaries. Also, the sector makes it easy for scammers to use smart contracts to hide or launder money.
Notably, DeFi market cap is $1,461,414,743,407 with about 8289 coins and 479 exchanges.
At the time of writing, DeFi also has a current total value locked (TVL) of $89,795,409,401.
Typical of a rug pull, the WhaleFarm team has deactivated the project’s social media accounts. For example, WhaleFarm deactivated its Twitter account and deleted its Telegram account.
One investor claims that they knew something was wrong when the projected took out all the BNB to mint 50,000 tokens. The investor also claims to have posted a message on the Launch Zone Telegram group. However, the investor added,
The lack of DeFi regulation has become increasingly problematic. In fact, billionaire investor Mark Cuban called for DeFi regulation. Cuban made the call after he lost his investment in DeFi project Iron Finance. Iron Finance’s TITAN token fell from $64 to almost zero in a matter of days. Although the collapse was not triggered by a rug pull, the incident did shake the DeFi community.
Cuban is not alone in his calls for DeFi regulation as other crypto experts like Ethereum co-founder Anthony Di Iorio compared it to the wild west.