Unexplainable LENX protocol transfers raise concerns.
Unidentified withdrawals from the treasury of LENX have sparked concerns regarding a gradual, ongoing rug drag on the protocol.
Social media platforms are rife with rumors of a sluggish rug pull involving the liquidity protocol LENX as the community speculates on the whereabouts of token transfers valued in the millions of dollars.
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AstroBoy, an anonymous X user, made allegations, and Etherscan data revealed that John Kim and Paul, the proprietors of LENX Finance, unjustifiably transferred treasury assets worth more than $10 million to a Binance account, depleting LENX wallets in the process.
Since the transactions were initially identified on March 26, users have lodged complaints on the protocol’s Discord server regarding the absence of communication, consistent transfers to Binance, and the removal of messages regarding the suspicious withdrawals.
The stated intention of introducing the protocol in January 2024 was to enable yield generation or borrowing against native Bitcoin. Early in January, CoinGecko valued LENX XD (XD), the native token of LENX, at $0.26, an increase from $0.02 at the time of writing. The Frax Finance lending protocol supports LENX.
Cointelegraph attempted to contact both co-founders of LENX Finance, but received no response at this time. The Frax Finance group declined to provide a statement.
Reportedly, media company Flywheel DeFi engaged in a conversation with co-founder Kim, who declined to comment. “I apologize, but I am currently at a loss for words,” Kim wrote. Paul announced an investigation into the withdrawals in his final Discord post on March 26. “I am currently conducting an investigation.”
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The LENX team reportedly succeeded in freezing the Binance account that received the funds, safeguarding the remaining $3 million, as reported on Discord. Reportedly, an investigation into Kim’s activities is ongoing, whereas Paul is assisting with legal efforts.
A rug pull is a fraudulent activity in which developers abruptly withdraw all funds from a project or liquidity pool, leaving investors with worthless tokens or assets.
The United States Federal Bureau of Investigation documented a substantial surge in crypto-related investment fraud in 2023, attributing the increase in losses from $2.57 billion in 2022 to an estimated $3.94 billion, a 53% growth.
