Rug pulls are becoming excessively common in the cryptocurrency industry and Whale Farm was just another booby trap for unsuspecting investors. The DeFi project with pseudonymous founders has stripped its investors of more than $2 million. The stolen funds account for close to 100 percent of DeFi’s market cap.
Whale Farm was launched into the DeFi space earlier in June and pooled investors by pledging unrealistic returns on investments. Investors were convinced to stake on digital assets like Bitcoin, BUSD, ETH, LINK, ADA, or DOT to earn up to 7,217,848% APY. This move saw the platform thrive as well as its native token.
True to the nature of fake DeFi pools, Whale Farm struck hard at their investors and made away with the lump sum. The intentional capitulation occurred in minutes and left investors with no time to pull out. Popular crypto commenter Mr. Whale tweeted that the signs of a scam were obvious.
Within the same time frame, the platform took down its Twitter account and deleted its Telegram group. The platform’s native token, the Whale now trades at $0.20 after the scam.
Rug Pulls in the DeFi Space
Rug pulls occur when platform developers who hold a significant stake in crypto dump their holds suddenly, thereby making away with investor funds.
In the DeFi space, the occurrences of rug pulls are not new. The Binance Smart Chain ecosystem alone sees such happenings frequently. For instance, Meerkat Finance, a relatively new DeFi protocol on BSC, was rug pulled off over $30 million.
Equally, Uranium Finance was allegedly rug pulled with investors losing a total of $50 million. Earlier in May, during the surge of dog-themed tokens, the co-founder of Ethereum Vitalik Buterin was accused of rug pulling Shiba Inu. In retaliation, the accusers created a token called Rug Ethereum to pull down the cryptocurrency.