- ETH Trust Fund DAO Accused Of $2 Million Rug Pull; Funds Transferred To A New Wallet Via Developers.
- Scammers Utilized Mixer Apps To Conceal Their Trails, Laundering Stolen Funds Through Ethereum And Tornado Cash.
The Ethereum Trust Fund (DAO), a decentralized autonomous organization operating on the Ethereum network, has been implicated in a $2 million scam, leaving investors and the broader cryptocurrency community in shock. This incident underscores the increasing vulnerability within the digital asset space to fraudulent schemes.
Details of the ETH Trust Fund Scam
The scam unfolded when developers allegedly transferred $2 million from the fund’s treasury to an unknown wallet, subsequently shutting down the project’s website and erasing their social media presence.
Reports from the crypto community on X highlighted the abrupt disappearance of the ETH Trust Fund’s online activities, raising immediate alarms about the legitimacy of the operation.
RUG ALERT 🚨
Yesterday, the project known as ETHTrustFund (@ethtrustfund_ now deleted) sent +$2M from the treasury to a new wallet, after months of intentional inactivity by the dev, it seems that he has decided to steal the funds 👇 pic.twitter.com/YcswifyHmQ
— Octoshi.eth (@0ctoshi) July 21, 2024
Modus Operandi of the Scam
Security firm PeckShield detailed the transaction process, revealing that the developers utilized cryptocurrency mixing services to obfuscate the trail of the stolen funds. These services, such as Tornado Cash and Railgun, are often used to enhance privacy but can also be exploited to conceal illicit activities.
According to PeckShield, the funds were converted to Ethereum and laundered through these platforms shortly after the transfer.
#PeckShieldAlert #rugpull @0ctoshi reported that @ethtrustfund_ rugged ~$2m worth of cryptos on #Base.
The scammers have already bridged the stolen funds to #Ethereum & laundered them via #Tornadocash & #Railgun https://t.co/jmKVgiQb8C pic.twitter.com/MzJsvQ1pyV— PeckShieldAlert (@PeckShieldAlert) July 22, 2024
Background and Operation
The ETH Trust Fund was marketed to potential investors as an innovative investment platform, akin to an OHM fork utilizing blockchain technology for issuing and managing ETF tokens.
Investors were enticed with promises of profit from rebasing activities that ostensibly would increase the value of tokens in circulation. However, the project had been inactive for several months, leading to suspicions that culminated in the recent fraudulent event.
The Broader Impact on the Crypto Community
This latest scandal adds to a series of unsettling fraud cases within the cryptocurrency sector, including a recent $230 million theft from the Indian crypto exchange WazirX. The repetitive nature of these incidents highlights critical security issues within the industry and calls for enhanced regulatory and security measures to protect investors from similar scams in the future.
