Atom Protocol (not to be confused with the Atom token from Cosmos Protocol) has rugpulled investors in the most polite way possible …
‘We Have to Close the Project, Sorry’
Atom Protocol is an Avalanche-based DeFi (decentralised finance) protocol that was shut down this week within a day of launch. At first, the protocol was receiving a lot of hype from the Avalanche community as more participants joined the network and created new nodes:
But all turned out for the worst. Within a day of launch, the developers of the Atom Protocol had left a message on Twitter saying: “There’s a problem/mistake in contracts, we can’t do anything. We have to close the project, sorry.”
Avalanche Community Blames Assure
The Atom Protocol went through a KYC (Know Your Customer) process, which basically verifies the identification of the responsible party behind a financial entity, such as banks. But a KYC is just a way to verify that the entity isn’t managed by malicious actors – it doesn’t prevent them from scamming investors.
The Avalanche community is blaming Assure DeFi, the protocol responsible for Atom Protocol’s KYC process. Assure responded by stating the community was “misunderstanding the role of KYC/verification”:
Assure went on to encourage affected users to complete a scam report, which will help it to further investigate the matter.
‘Just Be Polite About It’
This is probably the most blatant rugpull in DeFi history. So much so that some people decided to just laugh at the absurdity of the event:
Always Do Your Own Research
Neither KYC nor audits guarantee that a DeFi project is 100 percent legitimate, so the best way to proceed is to always DYOR (Do Your Own Research), and always invest only what you can afford to lose.
An audit is, however, much more reliable than a mere KYC process. On January 7, blockchain security firm CertiK identified Arbix Finance as a potential rugpull, warning users to stay away from it and its ARBX token.
The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.