Synapse

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 <p class="is-style-lead">Nima Capital, a family office involved in crypto investments, is facing accusations of initiating a rug pull with the grant <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>s of their partner, the cross-chain bridge platform Synapse.</p> 
 <p>On Sept. 5, the decentralized finance (DeFi) cross-chain bridge Synapse witnessed a sharp decline in the value of its native <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a> (SYN) following the sudden removal of nearly 9 million SYN <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>s and the withdrawal of all stablecoin liquidity from the bridge by an unidentified liquidity provider.</p> 
 <p>Synapse’s official X account swiftly responded to the incident, confirming the liquidity rug but reassuring users that there had been no security breach on the Synapse bridge. The focus soon shifted to identifying the unknown liquidity provider responsible for this drastic action.</p> 
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    <p lang="en" dir="ltr">A Synapse liquidity provider sold their SYN <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>s and removed liquidity today. We're investigating unusual activity on their wallets and are working to get in touch with them. Will update once there is more info.<br><br>There was no security breach of the protocol or bridge.<br><br>4</p>— Synapse Labs (@SynapseProtocol) September 5, 2023 
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 <p>Investigations revealed that the liquidity provider in question was linked to Nima Capital, a long-standing capital partner of Synapse. The venture capital firm had previously agreed with Synapse, securing a grant from the project in exchange for providing $40 million in liquidity in SYN tokens.</p> 
 <p>According to data from Etherscan, the liquidity provider who dumped the SYN <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>s had received a substantial amount of 10 million SYN (equivalent to $3.4 million) from the “Synapse: Executor 2” wallet on April 5. Notably, the wallet currently has a zero balance of SYN <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a>s.</p> 
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 <p>This incident has raised eyebrows as Nima Capital allegedly violated the terms of the governance proposal agreed upon, which was supposed to last for eight more months. Adding fuel to the fire, the venture capital firm’s website became inaccessible, and their X account (formerly known on Twitter) was locked, effectively disappearing from the online sphere.</p> 
 <p>This series of events has led many to label it as a “VC rug,” a term commonly used to describe scams in the DeFi sector where project creators or developers abruptly withdraw their support, often after the project’s native <a rel="noopener noreferrer nofollow" title="token" href="https://thebittimes.com/tag/token.html">token</a> achieves a specific price point. It is worth noting that such actions are typically not associated with venture capital firms, making this case particularly unusual.</p> 
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    <p lang="en" dir="ltr">Even VCs are rugging now @NimaCapital dumped 9M $SYN and removed all stablecoin liquidity 8 months before the agreed gov proposal<br><br>Their site went offline and twitter protected too https://t.co/ShlYcZhFbz pic.twitter.com/1ncxP13XYV</p>— Wazz (@WazzCrypto) September 4, 2023 
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 <p>The repercussions of this event were felt strongly in the market, with SYN’s price plunging by over 20%, hitting a multi-week low of $0.30. However, it rebounded slightly, stabilizing above $0.35 later in the day.</p> 
 <p>This incident serves as a reminder of the vulnerabilities within DeFi bridges, which, despite facilitating easier interoperability between various protocols, have become a favored target for exploiters.</p> 
 <p>Unfortunately, this is not an isolated incident, as numerous significant DeFi hacks have occurred on these cross-chain bridge protocols.</p> 
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/nima-capital-s-9m-syn-token-dump-ignites-vc-rug-pull-fears-tbt61740.html">https://thebittimes.com/nima-capital-s-9m-syn-token-dump-ignites-vc-rug-pull-fears-tbt61740.html</a></p>

Nima Capital’s 9m SYN token dump ignites VC rug pull fears

TheBitTimes

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