Most cryptocurrency experts advise new investors to put in great detail of research work before investing in a project. New projects are being launched at an alarmingly fast rate and since the space is not completely regulated, unethical maneuvers, such as rug pulls, continue to rear their ugly head.
Recently, Atom Protocol was trending for all the wrong reasons. Several Twitter handles pointed out that the project was rugged moments after its official launch, despite receiving a KYC certificate from auditors Assure DeFi.
Atom Protocol’s Background
Although the official accounts on Twitter and discord handles are now deleted, Twitter handle @AvalanchEdwin revealed that Atom Protocol, launched on the Avalanche blockchain, was a hard fork of Universe- a Defi-as-a-service (DaaS) crypto protocol functioning on Avalanche. In the same thread, xx suggested that Atom Protocol was a direct fork of Universe “with nominal changes to attempt to create more sustainable tokenomics”
While the initial hours of trading may have gotten off to a sailing start, several users were taken aback when selling was put to an abrupt halt. To their horror, Atom Protocol responded to queries with “there is a problem/mistake with contracts we can’t do anything…we have to close the project, sorry”, just hours before deleting official accounts on all social media platforms.
Attention immediately shifted to Assure DeFi, who was responsible for granting Atom Protocol with a KYC (know-your-customer) certificate. On the back foot, Assure DeFi defended its stance by stating that a KYC “is not a scam prevention, but rather a validated real-world identity behind a project”.
Assure DeFi in the wrong?
While many directed their irritation towards Assure DeFi, anonymous Twitter handle @CryptoAttorney1 gave his two cents on the situation, stating that KYC is not a guarantee that projects will not rug. The thread explained “KYC is a process by which independent and disinterested parties verify the identities of otherwise anonymous developers… think of KYC companies as a storage database of identities. They provide a missing link for authorities who are seeking the developers of a project who KYC’d.”
Twitter Handle @jiraiyaReal fashioned similar statements, saying that “KYC is an extra step that a project can go through whereby private data of one, or multiple team members is collected…It’s worth noting that KYC doesn’t mean the project & investors are 100% safe.”
What Next?
Meanwhile, some users asked for the identity of Atom Protocol’s owners to be publicly revealed. However, Assure DeFi was clear in its stance, stating that the ‘solution’ would create more problems.
At the time, it’s unknown as to how much funds had been poured into Atom Protocol prior to the rug pull. However, Watcher.Guru is closely following the developments and will update the space once new information is brought to light.