Altcoins Talks - Cryptocurrency Forum

Learning & News => News related to Crypto => Topic started by: sirty143 on June 09, 2024, 07:44:10 AM

Title: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: sirty143 on June 09, 2024, 07:44:10 AM
Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previously Locked ETH

On June 7, the team behind the Zksync project Gemholic withdrew 921 previously locked ethereum tokens in a suspected rug-pulling incident. The Gemholic team executed the theft despite reportedly completing the blockchain security firm Solidproof’s Know Your Customer (KYC) process. See more for yourself here (https://news.bitcoin.com/allegations-of-rug-pull-arise-after-gemholic-team-withdraws-3-5m-in-previously-locked-eth/).

Your opinion is greatly appreciated.
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: ABCbits on June 09, 2024, 01:15:09 PM
Such rug pull attempt is common, although it should also make people question decentralization of their L2. And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: Zed0X on June 09, 2024, 03:47:16 PM
Moving funds + deleting online presence, what else to expect?

Quote from: ABCbits on June 09, 2024, 01:15:09 PM
~ And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.
What happened questions the integrity of the SolidProof's method on smart contract verification but maybe they have a valid excuse. They probably finished the security checks and issued the proof of compliance before the funds were locked and unfrozen by zksync devs.
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: NotATether on June 09, 2024, 07:55:50 PM
Quote from: ABCbits on June 09, 2024, 01:15:09 PM
Such rug pull attempt is common, although it should also make people question decentralization of their L2. And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.

No, not exactly. If I'm understanding correctly then the service provider has everyone's ID and so they can just place them on an FBI most wanted list or on INTERPOL. That's why you don't do malicious things after you've been ID'd.
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: robelneo on June 09, 2024, 08:19:18 PM
Quote from: NotATether on June 09, 2024, 07:55:50 PM
Quote from: ABCbits on June 09, 2024, 01:15:09 PM
Such rug pull attempt is common, although it should also make people question decentralization of their L2. And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.

No, not exactly. If I'm understanding correctly then the service provider has everyone's ID and so they can just place them on an FBI most wanted list or on INTERPOL. That's why you don't do malicious things after you've been ID'd.

The ball is on the KYC provider to expose the identity of these fraudsters to the authorities  since they have the vital information, they will held accountable if they do not, not a good move from the fraudster scamming people after doing a KYC I expect the authorities to go after these scammers
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: ABCbits on June 10, 2024, 11:35:29 AM
Quote from: NotATether on June 09, 2024, 07:55:50 PM
Quote from: ABCbits on June 09, 2024, 01:15:09 PM
Such rug pull attempt is common, although it should also make people question decentralization of their L2. And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.

No, not exactly. If I'm understanding correctly then the service provider has everyone's ID and so they can just place them on an FBI most wanted list or on INTERPOL. That's why you don't do malicious things after you've been ID'd.

And Gemholic team did malicious thing anyway, which means they either managed to fool SolidProof, collude with SolidProof or already prepare to evade chase due to listed on wanted list. And looking at https://solidproof.io/blogposts (https://solidproof.io/blogposts), SolidProof haven't release statement regarding Gemholic team so far.
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: Stompix on June 10, 2024, 04:23:27 PM
Quote from: NotATether on June 09, 2024, 07:55:50 PM
If I'm understanding correctly then the service provider has everyone's ID and so they can just place them on an FBI most wanted list or on INTERPOL. That's why you don't do malicious things after you've been ID'd.

If those are their IDs at all.
All KYC does is make sure that there is a guy named XY with a valid ID that poses as XY, and nothing else, but at no point can they make sure that it's not somebody else using the account and that XY hasn't been paid 100$ in a parking lot to do that KYC.
Plus it would not be the first time when the team was the one fully legit but the guy in charge was someone who nobody knew personally and stayed always in the shadows.

Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: Captain Corporate on June 10, 2024, 11:20:29 PM
It is quite interesting to do something like this, even after giving KYC information. This means two things, either they are at a place where it would be very hard to find them and sue them, some places do not have law agreements with other nations, so only the citizens of that nation could sue you (or just people who live there) so maybe they trusted that? I have no idea to be fair. Or they just feel like they will not get in trouble at all, like maybe used someone else's info they found online, or they just did something else. In any case, they must feel like they have a thing in their hands that protects them, otherwise its silly to have all your information and ID all over internet and be ok wit hit just for 3.5 million dollars. Sure that is a lot of money, but what good does money can do when you are in jail?
Title: Re: Allegations of ‘Rug Pull’ Arise After Gemholic Team Withdraws $3.5M in Previousl
Post by: TomPluz on June 11, 2024, 03:16:13 AM
Quote from: Zed0X on June 09, 2024, 03:47:16 PM
Moving funds + deleting online presence, what else to expect?

Quote from: ABCbits on June 09, 2024, 01:15:09 PM
~ And assuming Gemholic team doesn't collude with SolidProof, it's another proof that KYC is useless when facing serious criminal activity.
What happened questions the integrity of the SolidProof's method on smart contract verification but maybe they have a valid excuse. They probably finished the security checks and issued the proof of compliance before the funds were locked and unfrozen by zksync devs.

When a project has done something bad, they usually delete their online presence maybe to avoid some sure backlash most especially coming from the people who trusted and supported them since Day 1. This is another sad day for cryptocurrency and now we can say that Gemholic is now part of the scam and rugpull statistics which is, of course, very upsetting just to think about it. What is interesting here is that this happened right after Gemholic got its KYC clearance from SolidProof - definitely a big irony that should never have happened and is putting some questions and concerns on this KYC certification entity and for me they should come up with a feasible explanation for Gemholic victims. Unfortunately, as I am saying all along, this is not going to be the last riugpull story in an industry that is very much riddled with scammers and fraudsters. Abd my condolence to the victims of this latest charade.