Ethereum’s DeFi Space Went Through An Exit Scam And Here’s How

Ethereum’s DeFi space went through an exit scam recently and in our latest Ethereum news, we will see what exactly happened.

The growth in ETH Decentralized finance space has been one of the biggest events in the crypto space this year and there are now many coins that pertain to enter the DeFi sector as this part of the cryptocurrency has been dubbed reliable and therefore went parabolic. There have also been high yields/interest rates offered on a few Defi products as well. The profits made in Defi have attracted fraudulent actions as well. Reports came recently suggesting that there was a notable Defi exit scam that went down over the past weekend.

Doo Wan Nam, an Asia business development partner from the MakerDAO team, revealed that there was an exit scam in Ethereum’s Defi space. According to a thread, he cited local South Korean media and the programmer behind Asuka.Finance exited with about $64,000 worth of cryptocurrency. The programmer under the name “Jongchan” lured in victims by touting high investment yields by Asuka on KakaoTalk, Discord, and Telegram. After managing to draw in millions of dollars in liquidity that boosted the Asuka price, he emptied $64,000 worth of cryptocurrency from a decentralized ETH liquidity pool.

Alright so @asukafinance , #YFI @iearnfinance fork made by a Korean guy exit scammed this morning. Here's what the Korean blockchain community knows so far 🤔 pic.twitter.com/UzAx24ylBa

— Doo (@DooWanNam) August 3, 2020

Jongchan left many millions in the pool because he burned a lot of his keys including the ability to mint more and drain the pool once he lured the victims. DeFi could face a few setbacks like getting exit-scammed or hacked but it’s a trend that many expect to continue to grow. There were $4.21 billion worth of value locked in the blockchain-based finance applications and the metric grew from the $1 billion reading taken three months ago. The head of DTC Capital Spencer Noon, expected this trend to continue:

 “My read on #DeFi after speaking with instl investors, fund mgrs, OTC desks, and FOs over the last few wks: The herd is coming. They’re excited about DeFi but new to it, so they’re buying $ETH first. Once positions are set, I expect them to move up the risk spectrum to protocols.”

Also as per the recent reports, the crypto-centric fund Electric Capital raised a $110 million fund focusing on DeFi.