A crypto project called Encryption AI has experienced a rug pull. The developer has stolen about $2 million and users are unlikely to obtain recompense.
Crypto project Encryption AI (0XENCRYPT) has crashed by 99% as the developer behind it executed a rug pull. The total sum lost is $2 million, and the developer posted a message referring to his online gambling addiction.
Rug pulls are one of the notorious scams plaguing the crypto market. Check out our deep dive on this type of scams to learn how you can safeguard yourself from such fraudulent schemes: What Is a Rug Pull? A Guide to the Web3 Scam
Encryption AI Crashes From $2M Marketcap to $20,000
Several reports have emerged on social media relating to the rug pull. This includes a message from the developer himself, who stated that he had “fallen into a severe addiction to online gambling and casinos.” He said that he had lost nearly $300,000 in the last two months. He went on to say that cannot guarantee if and when he can make amends and relaunch the project.
There is little information about the developer. The project claimed to offer a secure and efficient way to launch new tokens, with different bots helping users find and assess token launches.
The price of the 0XENCRYPT token has fallen from $2.06 to $0.02. It’s unlikely that the token will recover or that the project will relaunch. The incidents add to the growing list of projects utilizing AI as a means to lure investors.
TOOLS Token Another Victim
The rug pull of Encryption AI happened alongside the rug pull of TOOLS. The latter is a BSC-based DeFi dashboard that claims to supercharge trading experiences on BSC. There was no verification of the developer’s identities, which is usually a pretty solid sign of risk.
The token is currently priced at $0.00006, down from $0.006 at the start of July. As is the case with Encryption AI, there isn’t much information available so far, but the crypto community is in a furor over another rug pull.
Several Rug Pulls Already in 2023
Rug pulls and hacks have plagued the crypto market in 2023, with numerous incidents taking place this year. It’s a rough start for the market, though, in general, several measures have been put in place. This has led to a slowing down of bad actors in 2023.
Morgan DF Fintoch executed one of the biggest rug pulls this year, stealing $32 million. It claimed to be backed by Morgan Stanley. More recently, Chibi finance users lost over $1 million after developers rug pulled,
Such incidents have led to the U.S. Commodity Futures Trading Commission (CFTC) warning users about hacking. CFTC Commissioner Christy Goldsmith Romero said that hackers were more coordinated and innovative in 2023.
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