ETHTrustFund: The $2.1 Million Rug Pull Exposed

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TL;DR

ETHTrustFund, a project on Base, executed a rug pull, leading to $2.1 million in losses. Initially promoted with promises of high returns and a rebasing mechanism, the project quickly disappeared after moving funds from its treasury. Base's reputation suffers as it faces increasing scrutiny for scams amidst rising competition in the Layer 2 space.

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Yet another rug pull has struck, this time targeting Coinbase's Base Network.

The scam, named ETHTrustFund, resulted in $2.1 million in investor losses.

Using "ETH" and "Fund" in the project title was a deliberate attempt to inspire trust, but the project proved to be far from trustworthy.

Investors unknowingly deposited their ETH directly into the project's treasury, funding what turned out to be an exit scam.

The developer, known only as Peng, spent months building trust and raising capital before disappearing for three months and then pulling the rug.

It appears this project was more like a personal trust fund for the developer.

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ETHTrustFund (ETF), positioned as an OHM fork on Base, had a well-funded treasury of over $2 million.

Investors were convinced the founder was a seasoned developer committed to building a legitimate project on the new chain.

To outsiders, the token appeared to have experienced a pump and dump in March. After a brief surge post-launch, its value plummeted by over 90% within a week.

Following months of inactivity and stagnant prices, the inevitable occurred.

Crypto crime fighter Ogle from glue.net called out the project for rugging over the past weekend and reported it to Chainabuse.

The fraudulent project suddenly transferred funds from its treasury to a new wallet.

Crypto community figure Octoshi revealed a series of suspicious fund transfers and noted the project's sudden inactivity.

The founder, Peng, deleted his Telegram and Twitter accounts, as well as the project's official Telegram, and ignored all messages and DMs.

Tracing the stolen funds:

All $BRETT tokens were swapped to $ETH and transferred from the treasury on Base to a new wallet on Ethereum.

• ETHTrustFund deployer address: 0xF259F01C40C211D63Ab75A6d2B108B364EFaB780

• Treasury address: 0xbfDB66a6783a6Dc757f539139c68BED75EB491c8

• Bad actor’s address: 0x374f4BD39aD211e67e0f8Cb8Ebf1b4F6Ac3059aD

Theft Transactions:

1. 3.2 million BRETT ($453k stolen on July 20): Theft Transaction 1

   9.5 hours later...

2. 477 ETH ($1.65 million stolen on July 21): Theft Transaction 2

The bad actor’s address moved 200 ETH to Railgun:

• Railgun Address: 0x77fd5bba5ab71c7d79d5eb852a44c37213d6684d37f249efd4719aab6b5944c0

Shortly after, this address transferred another 200 ETH to Tornado Cash in two separate transactions:

• Tornado Cash Transaction 1: 0xfabb100940c9dc35f0393c895e068904fb6ed0f5955e04380f6edcc44f0fd0c2

• Tornado Cash Transaction 2: 0x15d8d620334eae734e2f1891005616802506940b38ede85cb628133dd9027edc

An additional 56.9 ETH was then funneled back to Railgun:

• Railgun Address: 0xa9087c7458c66b0334c1dcc991503d70a0662f7043f8b95217e7cf75ec14369f

As the situation became clear, users started seeking someone to blame, but "Peng" had already vanished into the crypto world...

Social media accounts were deleted, the website was down, and even the project documents were removed.

All signs pointed to a classic rug pull/exit scam, with Base being the unintentional stage for this scheme.

ETHTrustFund presented itself as a DAO with rebasing features, following the OHM model.

They issued blockchain-based bonds and implemented a "rebasing" mechanism for stakers.

They boasted of being the "Highest Return Yielding ETF On Earth."

The fund promised to eventually "debase" or destroy its own ETF tokens, claiming this would increase the value of the remaining tokens. All invested assets were supposedly generating yield for token holders.

However, this proved to be a smokescreen, with the developer likely being the only one to profit from this complex Ponzi scheme.

Octoshi encourages those affected to reach out to him on X. His DMs are open, and all information and assistance are welcome.

Shortly after Base's launch, the BALD project executed a rug pull, siphoning off $23 million. Just three weeks later, Magnate Finance followed suit, absconding with $6.5 million.

As Base continues to attract new projects and capital, the Layer 2 network appears to be rapidly cycling through classic crypto scams.

Can Base overcome its growing reputation as a haven for rug pulls?

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While Coinbase promotes Base as the future of DeFi, the network appears to be more notable for the spread of scams than for innovation.

From BALD to ETHTrustFund, Base is quickly earning a reputation as a safe haven for digital con artists.

As investors nurse their losses and Peng likely enjoys the spoils in some tropical paradise, it's a stark reminder that in crypto, trust can be as volatile as the markets.

With the competition among Layer 2 solutions intensifying, it seems Base is willing to let its users bear the brunt of the battle for adoption.

In the quest to identify the next major Layer 2 solution, have we overlooked the fact that genuine innovation should not compromise user security, or is this just a steep price to pay for the future of finance?

With crypto crime fighter Ogle and others actively pursuing them, scammers now have a clear target on their backs.

One can only hope these fraudsters will corner themselves and face justice.

In this high-stakes cat-and-mouse game, with scammers continuously emerging, is it becoming an expensive game of whack-a-mole?

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