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A crypto educational project, XIRTAM, recently conducted a rug pull, with the project team pulling nearly 2000 ETH out of the raised funds on the 3rd of May.
The XIRTAM Rug Pull
Details about the rug pull were shared by crypto journalist Wu Blockchain, who shared details on their Twitter handle.
“XIRTAM rug pulled, an educational project that raised 2,000 ETH recently. The project was previously funded by CultDAO. AscendEX exchange also announced the launch of XIRTAM spot trading. Binance has frozen the funds transferred to Binance by the project. Investors need to be careful about meme coin security.”
XIRTAM is a reputation-building platform that does not require KYC. Instead, the platform advocates users building their digital reputation through the XIRTAM ecosystem in an anonymous and decentralized manner. As users build their reputation, they become eligible to earn rewards by participating in activities in the XIRTAM ecosystem.
After the project team orchestrated the rug pull, they did not take the typical route of adding the funds to a crypto-mixing service. Instead, the team deposited the rug pull funds directly on Binance. Exasperated users reached out to Binance, with the crypto exchange responding to appeals from XIRTAM users, stating,
“So far, we have received multiple feedbacks on the XIRTAM incident. We understand the seriousness of this issue and have launched an investigation into the incident as soon as possible. Currently, the funds transferred to the Binance account address suspected of fraud have been frozen. If necessary, we will fully cooperate with law enforcement agencies in the investigation. In the meantime, we strongly recommend that you contact the law enforcement agency in your jurisdiction and report this incident, as they can handle such situations and provide any additional assistance that may be needed.”
Cult DAO Clarifies Position
Cult DAO previously funded XIRTAM, while AscendEX had also announced the launch of XIRTAM spot trading services. In an update shared by Cult DAO, the protocol stated that it was extremely disappointed with how the XIRTAM team had conducted its affairs. Cult DAO stated that it had made a 13 ETH investment into the project. Cult DAO stated that it believed the project to be genuine, with the team behind the project answering all questions and clarifications about the project.
Cult DAO also stated that the decision to invest in XIRTAM was made after the proposal received a whopping 84% votes in favor. The protocol added that XIRTAM overpromised and underdelivered, having liquidity of 24 ETH at the time of launch, despite its valuation being around $40 million. With the founding team maintaining radio silence, Cult DAO faces a dilemma about whether it should sell off its investment in the protocol or wait until the issues are addressed.
Alarm Bells Around Meme Coins
XIRTAM is the latest example of the hype the digital currency ecosystem is facing when it comes to new, unproven, and highly volatile meme coins. With meme coins such as PEPE and several others driving the surge, user interest is at an all-time high. Meme coins do hold promise, giving early investors staggering profits. However, most end up buying when the token price is high and end up making losses when the eventual price correction sets in.
However, the popularity of meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) indicates that the meme coin hype is not going away anytime soon. However, crypto experts have appealed to users to exercise caution when dealing with newer, unproven meme coins, lest they also orchestrate a rug pull.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.