Scroll Stablecoin CHI Plummet by 98% in 24hour, Allegedly Rugpulled

Scroll stablecoin CHI has plummeted by over 92% in the past 24 hours, leaving investors reeling. The alleged rugpull of Essence Finance, a stablecoin project, has rocked the Scroll ecosystem. Estimates suggest that over $20 million in collateral was withdrawn.

The situation unfolded rapidly, with the price of CHI crashing from its previous stablecoin peg to a mere $0.077. This dramatic drop, culminating in a current price of $0.01363, represents a staggering 98.64% loss for investors.

Further fueling concerns is the lack of communication from Essence Finance. The project’s last tweet, posted on September 11th, offered no indication of the impending collapse. This silence and the sudden price drop have led many to suspect a malicious exit strategy.

Adding to the unsettling picture is the revelation that Essence Finance’s audit report originated from the FEI Protocol V2. External auditors are reviewing the project, and concerns are raised about the assessment’s validity and thoroughness.

Scroll Community Reaction and Investigation

The crypto space has responded with a mix of disbelief and outrage. An X user expressed concern for those affected by the alleged rugpull, stating, “I feel bad for the users getting rugged by sloppy audit and greedy devs.” Although people should get their funds off the @Scroll_ZKP sinking ship quickly.”

The inherent risks within the decentralized finance (DeFi) landscape. While DeFi offers attractive opportunities for innovation and financial inclusion, it also presents vulnerabilities to manipulation and fraud. The rapid rise and fall of Essence Finance serves as a stark reminder of the importance of due diligence, transparent communication, and robust risk management within the DeFi space.

Authorities are investigating the collapse of Essence Finance and it is unclear if they will pursue action against the project developers. However, the consequences of this alleged rug pull are already evident.

Crypto Millionaire Lost $49 Million

James Fickel, a self-made crypto millionaire, has experienced a dramatic reversal of fortune, amassing losses exceeding $43 million since January. This staggering figure stems from a series of unsuccessful bets on the price of Ether (ETH) against Bitcoin (BTC), a gamble that backfired spectacularly amidst market volatility.

Fickle, a prominent figure in the crypto world, is the founder of the Amaranth Foundation, a non-profit organization dedicated to advancing longevity research. His philanthropic endeavors, fueled by his crypto wealth, underscore the potential for this nascent industry to drive positive societal impact. However, his recent financial misfortunes serve as a cautionary tale, highlighting the double-edged sword of the crypto market.

Beyond the initial $43 million in losses, Fickel’s financial woes extend further. He currently owes a staggering 1,308.8 Wrapped Bitcoin (WBTC) on the decentralized lending protocol Aave, translating to an outstanding debt of approximately $78.8 million.