eosBlack, the venture capital fund built on top of the EOS blockchain, was rumored to have pulled off an exit scam this weekend after the value of the coin plummeted by over 80%. The token, which has been traded since mid-September, had been stable around $0.25 for around a month before mysteriously jumping to $0.41 Sunday, then immediately crashing down to $0.06 only an hour and a half later. It eventually stabilized at $0.11, resulting in a 73% loss for those who bought at the top price of $0.41, while the eosBlack communication channels cried foul.
Twitter User Investigates
The situation was first brought to light by a Twitter user who was initially not surprised at the price dump, stating that the coin “had a $400m market cap with absolutely nothing to show” before realizing it had fallen victim to a pump and dump scheme. After doing some digging, he went on to offer a deeper insight into what happened:
I should probably add some people came into EOSPrice telegram stating a “pump group” was going to take it to 0.5. Gave gullible speculators enough time to take positions and then slammed the price down 80%.
— rektkid (@rektkid_) November 25, 2018
He then traced the funds from the dumped tokens via a network of collaborating users to a Korean exchange called Cashierest, where the funds were cashed out into Korean won, clearly showing where the scam originated.
Not Their First Rodeo
eosBlack is no stranger to pump and dump schemes. Just days after the coin launched on exchanges in September it rocketed 363% in less than thirty minutes, before tanking back to half its previous value just hours later. What made the recent situation worse was that none of the eosBlack team was monitoring the communication channels at the time of the volatility, allowing panic to ensue and members of the Telegram group to throw out accusations of an exit scam, which seem to be untrue. eosBlack eventually responded by claiming that the price drop was due to “the release of a large amount of money in a short period of time due to incitement by malicious rumors (Chirashi) distributed to the initial investors”, which is as confusing as it is insufficient.
The EOS family doesn’t have a great record when it comes to nefarious activity that’s for sure, with EOSBet hacked in October for the second time in two months, generating the kind of publicity EOS could probably do without.