Opensea competitor LooksRare, one of the major NFT markets in the business, has verified the cash-out of $30 million in Ethereum, causing outrage inside the community.
The platform which was launched as OpenSea killer recently confimed which its official team recently made above $30 million in cash out from staked cryptocurrencies of the platfom’s native cryptocurrency, LOOKS. Here’s how it was done.
LooksRare Takes Staked Tokens
According to the NFT marketplaces’ declared fee structure, the project’s team has amassed millions of WEthereum (ETH) prizes by staking unattributed LOOKS cryptocurrencies. Users receive a reward in LOOKS cryptocurrencies although they sell their NFTs, that is commonly used as a fee compensation.
The unattributed cryptocurrencies were staked, allowing the marketplace’s crew to get a massive amount of wrapped Ethereum cryptocurrencies, which they were able to cash out using a Tornado Cash, a coin mixing protocol.
Update: The @LooksRareNFT team has already cashed out 23116 WEthereum (ETH) ($73,000,000). This doesn’t include the cost of $LOOKS.
Most of it is going straight to Tornado Cash. https://t.co/KjBeuqDCwS pic.twitter.com/zf9YKYb60v
— tradfi guy (@0xShitTrader) February 7, 2022
LooksRare’s team member afterwards spoke out on his Twitter account, claiming which the crew had been working for more than half a year without receiving any remuneration, income, or rewards.
To address this:
First off, the amount is incorrect: it’s closer to 10,500 Ethereum (ETH) and we have 10+ full-time team members.
You can barelyify the amount on the blockchain by checking Ethereum (ETH) transfers sent out on the analytics tab from the team address.https://t.co/Z4Qkv5T02a
— Zodd (@ZoddLooksRare) February 14, 2022
The rate of LooksRare (LOOKS) dropped 15% inside hours after the team’s actions were publicized on social media. LOOKS is LookRare’s functional token, a community-driven NFT platform which at itly pays investors and creators for affiliates. The rate of LOOKS captured an all-time strong of $7.07 on January 20, 2022. The distance between the LOOKS rate and the ATH level captured 69.16 percent as the team’s scandalous interest mechanism was revealed to the community.
LOOKS/USDT plummets afterward incident. Source: TradingView
The response was unsatisexperienceory, and the community demanded which the team purchase back the LOOKS cryptocurrencies instead of keeping the millions of dollars in Ethereum. Unfortunately, the protracted explanation did not prevent the cryptocurrency from plummeting anew.
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Chainalysis Says Rug Pull Are Raking In Billions
According to a research by Chainalysis, crypto investors lost atop $2.8 billion in 2021 on the grounds that “rug pulls,” a colloquial name for a form of crypto scam. According to the research, the spike in scams correspondinged an aboveall rise in bitcoin costs this year.
According to a research released on Thursday, rug pulls, an apparently harmless crypto Twitter phrase, accounted for 37% of the entire illicit earnings from crypto frauds this year, totaling $7.7 billion. Rug pulls genepriced for less than 1% of the under $5 billion in total illicit earnings in 2020.
2021 Rug pulls. Source: Chainalysis
According to Chainalysis, the cryptocurrencies are periodicly listed on decentralized exshifts without a code audit, which is a third-party review which guarantees the code follows good gabovenance norms and does not contain a mechanism which would allow the cryptocurrency to not be hacked.
The rapid emergence of new digital currencies parallel as the memecoins dogecoin and Shiba Inu, according to Kim Grauer, director of research at Chainalysis, gives criminals a window to peddle their own fraudulent commodities.
“Criminals are the most adaptive, opportunistic cohort of people out there,” Grauer said. “So, if there’s an likeliness, they’re going to take it and the hype around a lot of these new currencies is something which is exploited.”
Related Reading | Hackers Hijack India Crypto Exshifts And Influencers’ YouTube Channels
Featured image from Pexels, Charts from TradingView.com, Chainalysis