Rekt News’ recently deleted investigation on Fantom Foundation found several clues to the lack of transparency at the DeFi platform. The article had called it “an elaborate scheme,” but apparently failed to approach the subject with enough accuracy.
Rekt deleted the article within two hours and then tweeted an apology. You can find the archive of the original investigation here.
Rekt’s answer was not understood by the readers. Why didn’t they publicly clarify their mistake? Many users pointed out the importance of crypto journalism fact-checking allegations, as they may have an effect on the market.
But, readers who discredited the investigation provided important data. They also indicated that Fantom may still have gaps that require further research.
An Instant Summation
Rekt looked into farm YFI’s first wallet (wallet 0x431) after the departures of Anton Nell and Andre Cronje from the DeFi space and the crypto-space. They had already begun to look at it.
“We found that 0x431 had an unmatched level of power over the entire network, all in the hands of one EOA wallet.”
Seemingly, the 0x431 wallet had made huge transfers in FTM over the last 5 months ($750M in FTM) “using another address as a buffer before sending to Binance.” This and many other details found by Rekt suggested a “centralised money-making scheme” and “gross mismanagement of their foundation funds.”
Rekt interviewed Fantom, but the answers –or lack of them– did not clear up their many assumptions and raised more concerns, which led the investigation to believe that “basic operational security measures are simply not being met”
“Either the foundation is lying, or this is a gross mismanagement issue from the Fantom Foundation.”
Inaccuracies
One Twitter user shed some light and debunkedEach claim in the article is being corrected by overseen data. They also stated that the kind of investigations conducted by Rekt are crucial for the crypto and DeFi environment, but this time they “missed to spot the shady practices.”
The user explained that “The wallet in question [0x431]FTM ERC20 tokens were sent to Binance ETH, and the funds were then transferred to Fantom. Why? To fuel the bridge with Fantom native tokens.”
It was verifiedZhaojun is the CEO at Multichain
“I can confirm fantom guys use 0x431e81 account to reblance the Multichain bridge’s fantom liquidity.
1. FTM-erc20 Deposit to Binance
2. Deposit to Bridge and withdraw native FTM ftmscan.com/tx/0xa16cc05cc
3. Repeat steps.”
The Fantom Foundation claimed that the other wallet, 0x579 was a bridge.
The user added that “it appears not ALL FTM which entered Binance on Ethereum reappeared on Fantom. Yes, the majority did, but further investigation in exact numbers would be useful.”
Rekt had noted that the wallets in question made huge moves during a period of increased FTM FOMO, but the quoted user finds that this makes sense since “in this time A LOT of people wanted to enter Fantom Network via the bridge. So the team put more effort into fueling it with native FTM.”
Rekt still has questions that need to be answered, including why are the foundation’s funds not being stored on a multisig?
Foundation also stated that funds from wallet number 0x57900 had been used in part for an incentive program that was announced August. The cited user also considers it important to know “how & to whom (and why) incentives are distributed.”
NewsBTC reached the Rekt Team with questions concerning the investigation of the article. They did not respond to our request for comments.
Some people claim that they are responsible for any losses.
The Fantom Foundation released a statement alleging that Rekt had made “many false claims about the Foundation” and seemingly attempted to calm the investors’ concerns over Andre Cronje’s departure. Rekt does not appear to be under any legal threat.
Fantom price
FTM has seen a decrease in trading volume following the departures of Anton Nell (DeFi) and Andre Cronje (FTM). FTM is also following the trend in crypto markets and has fallen 5.12% within the last 24 hour.
