- SushiSwap has a new owner less than 24 hours after the creator sold the development fund
- Chef Nomi emptied the fund wallet for $13 million worth of ETH on Saturday
- The token price crashed, but the project has been taken over by FTX founder Sam Bankman-Fried
The CEO of crypto derivatives exchange FTX has taken over the SushiSwap project after the founder absconded with $13 million in development funds. In the most egregious example yet that the current DeFi boom is attracting the same kind of scammers that ruined the ICO phenomenon in 2017, SushiSwap founder Chef Nomi claimed that he swapped the fund for ETH so he could “stop caring about price”, an action which many saw as an exit scam. The project itself seems to have been saved however after FTX founder Sam Bankman-Fried took it over yesterday.
Nomi Sells the Development Fund
The weekend of DeFi drama began on Saturday when it was revealed that SushiSwap founder Nomi had converted a portion of the project’s development funds, worth some $13 million at the time, into Ethereum tokens. At the time of the transfer, the SushiSwap token was trading at $2.25, but the revelation precipitated a swift collapse in the price – it fell 54% to $1.30 in the space of three hours, not helped by the market-wide crash that occurred at the same time.
As talk of an exit scam proliferated around the crypto community, Nomi was pressed for his reasoning for selling the SushiSwap development fund, reasons which weren’t long in coming:
I did the recent move because I care about the community. I’m taking IL for you. But all I received was blaming and FUDing.
Here’s what happened. The devshare part of me. I converted them to $ETH. I stop caring about price and I will focus on the technicality of the migration.
— Chef Nomi #SushiSwap (@NomiChef) September 5, 2020
Nomi however seemed unrepentant at his actions, wondering why “everyone thinks I’m a scammer now”, claiming that he hadn’t exit scammed and that he wanted to stay on and “drive the project forward”. He even considered 37,400 ETH that he created out of thin air for himself as “deserved”:
Maybe you don’t think I deserved that $ETH? I think my contributions justified that. I wrote the migration code. I did all the audits. I coordinated the largest LP pools ever. I created a large community. I sprung up 100s of LP scam projects. All in 1 week.
— Chef Nomi #SushiSwap (@NomiChef) September 5, 2020
SushiSwap Gets a Reprieve
Once the anger and disbelief had subsided and the community digested yet another huge DeFi disaster just days after two other food-based projects, Pizza and Hotdog, crashed, discussions moved to rescuing the project. A plan soon emerged to resurrect the project through Sam Bankman-Fried, the founder and CEO of popular exchange FTX, which had the potential of saving the portfolios of SushiSwap token holders.
1) A way forward for Sushi, and a way further back.
— SBF (@SBF_Alameda) September 6, 2020
Semi-public negotiations took place on Sunday, with one of the stipulations being that Nomi would no longer be part of the project. Nomi agreed and handed the keys to the SushiSwap wallets over to Bankman-Fried, who then auditioned for multi-sig holders through Twitter. The positive news around the project was reflected in the price of the SUSHI token, which jumped from a bottom of $1.136 to a high of $3.20 in the space of three hours.
FTX Gets Down with DeFi
It seems that the SushiSwap project will live to fight another day and could well prove to be a useful DeFi arm of the FTX family. In a Twitter thread describing the potential takeover of the protocol, Bankman-Fried criticized Nomi as a “piece of shit”, saying that he “hurt his project, his future potential, and his followers”.
That may be true, but he will look at his ETH wallet and probably feel pretty good about things right now.
