Over the past few months, the crypto world has taken off with a helping hand from the DeFi market. The yield farming craze has seen blockchains like Compound, Balancer, etc. take off in a massive way, as investors chase the crazy annual yields these DeFi platforms offer. However, a report from Korea points to a DeFi exit scam conducted by a well-known person in the Korean crypto community – Jongchan Jang.
Jongchan Jang, CEO of Asuka token, a Yearn Finance (YFI)-fork token, is said to have exit scammed the project just two days after launch, on August 3. This was revealed by Korean media outlets. Jang also shut down the project’s website and social pages, causing the price of the ASUKA token to collapse from $1600 early on Monday GMT to about $18 per token at 1 PM GMT.
The last word he shared after dumping all of his holding was “쪽팔려서 튑니다”, which means “I feel ashamed so I will runaway now”
— Doo (@DooWanNam) August 3, 2020
According to the Asuka.Finance website (now closed), the ASUKA token, once dubbed the Dogecoin of DeFi, has a limited supply and distribution like YFI, with only about 21,000 tokens ever to be produced. More details on the token reveal that the “YFI clone” aimed at ‘farming’ nearly half of the tokens.
To stake Asuka tokens, users had to buy the Maker stablecoin – DAI – and place the tokens in a Balancer liquidity pool. Once in the pool, the deposit earns a certain “BPT” token, which is then farmed (staked back) into the protocol. Almost 10 billion Won was staked in the liquidity pool fund, but Jang could not access this amount as he burned the key to the pool.
Binance set to Trace Jang
According to some sources, the DAI exit scam was made clear to Binance leaders, and now the exchange is looking into the matter to freeze these accounts. In a statement released to one of the crypto news outlets, Binance stated,
“We have identified the relevant account(s). Binance will assist Korean law enforcement in their investigation once we receive a request from them. As always, we will continue to strive for heightened security both on our platform and for the greater crypto space.”