- Nima Capital has dumped over $2 million worth of Synapse tokens (SYN) and pulled down its website
- The firm had received the tokens from the Synapse project to help enhance the token’s inflation rate and liquidity
- Synapse Labs said that they’re investigating the issue but maintained the project hasn’t been hacked
Nima Capital has removed liquidity from the Synapse cross-chain protocol dumping Synapse tokens (SNY) worth over $2 million, deactivating its website and limiting access to its X (formerly Twitter) page along the way. The family office with an interest in investing in private and public blockchain projects had received nine million tokens to help enhance the token’s inflation rate and liquidity. Synapse Labs disclosed that they’re investigating the “unusual activity” but maintained that the project hasn’t been compromised, raising questions about whether Synapse Labs knew about the token sale before it happened.
Nima Capital Set for Legal Battle?
The token dump happened in two transactions a few minutes apart and has affected SNY’s price causing it to drop by 17% as of the time of writing.
— Wazz (@WazzCrypto) September 4, 2023
According to the arrangement between the two firms, Nima Capital received the token stash after agreeing to provide liquidity on Synapse for 12 months starting March this year.
Proposal pushed through on 19th March 2023, they still have another 7 months they’re meant to be providing liquidity for!?
— DeFiyst (@DeFiyst) September 4, 2023
The occurrence has attracted comments from the crypto community with some noting that Synapse Labs can sue Nima Capital if “there’s an off-chain contract.” Others questioned the wording of the contract which states that the stablecoin liquidity, and not the grant tokens, will be “locked for 12 months.”
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>Would love to see how the contract with them is structured because it’s not even clear who would enforce it. An individual? Is the DAO a registered legal entity? Some fascinating legal Qs</p>— Teddy (@TeddyRoosevalt) <a href=”https://twitter.com/TeddyRoosevalt/status/1698830110986519015?ref_src=twsrc%5Etfw”>September 4, 2023</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>
Common with Developers but Not Investors
Nima Capital’s actions are a rare occurrence among crypto project investors with most of such behavior often associated with project developers across the web3 space. For example, creators of Teddydoge rugged users pocketing $5 million.
With Nima Capital yet to give its side of the story, it’s to be seen how Synapse Labs will handle the situation to prevent more token sell-offs from users.