Liquidity protocol LENX has been hit by new rumors of a potential scam, confusing the entire altcoin community. According to recent reports from user named AstroBoy and data from Etherscan, a series of transfers have occurred involving LENX Finance founders John Kim and another person named Paul.
LENX transferred $10 million to Binance wallet
According to various reports, approximately $10 million was allegedly withdrawn from the LENX wallet and transferred to a wallet linked to the Binance account. The empty wallet caused concern. Thus, it caused serious alarm bells to ring among investors and market participants. The situation has been further exacerbated by the lack of communication from the LENX team since the transaction was reported on March 26.
Members of the protocol’s server on Discord also expressed their disappointment about the transfers. He also shared the team’s lack of oversight to address this issue. The LENX admin is also removing messages inquiring about withdrawals on Discord. The lack of clarity has led to speculation, with members asking questions about the stability and integrity of the protocol.
Altcoin price lost value
Users also questioned the team’s failure to follow through on its goals of supporting Bitcoin functions for yield and borrowing purposes. Data from CoinGecko also showed the impact of the issues on the platform’s native token. In January, the protocol’s native token, LENX XD (XD), sold for $0.26. But since then the value has dropped drastically to $0.02. This drastic drop triggered many users in the community.
Attempts by various organizations to get to the root of the problems have been somewhat unsuccessful. In the case of media firm Flywheel DeFi, a conversation with co-founder John Kim was met with an unsatisfactory response. According to the company, Kim refrains from commenting on the issue. However, he noted that there is nothing to say about this at the moment.
What really happened?
Meanwhile, the other co-founder, Paul, is investigating the withdrawals. In his last message to the Discord server, he said that investigations into the incident were continuing. To address concerns, the team decided to freeze the account to which the funds were transferred and recovered $3 million. As the co-founder scrambled to recover the funds, questions arose about the purpose of the transfer. There are also questions regarding the credibility of the protocol. Meanwhile, this incident also revealed some risks associated with the crypto industry.
This issue with LENX Finance also comes at a time when crypto scams are on the rise. cryptokoin.com As we reported, a recent report by the US Federal Bureau of Investigation revealed that crypto scams are on the rise. In its report, the FBI attributed more than $2.5 billion in losses in 2022 and approximately $3.9 billion in losses in 2023 to crypto scams. This rapid jump marks a 53% increase in losses from crypto scams.
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