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Sushi-Inspired Cryptocurrency Surged 331% In 1 Week Of Launch — Then, The Founder Cashed Out

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Sushi-Inspired Cryptocurrency Surged 331% In 1 Week Of Launch — Then, The Founder Cashed Out

"DeFi," an acronym for Decentralized Finance, is the latest craze in the cryptocurrency community.

Bitcoin (BTC) set out to provide a decentralized alternative to the world's currencies in early 2009. Now, the DeFi promoters say every aspect of finance, including loans, insurance, and trading platforms, should be built over decentralized ledgers.

What Happened: One such DeFi protocol set out to revolutionize the finance world is SushiSwap, with its associated governance token "SUSHI."

The governance token launched on Aug. 28, opening for trading at $2.59, according to data from CoinGecko.

As of Sept. 1, the cryptocurrency surged 331.3% at $11.17 in intra-day trading, and the protocol amassed more than $1 billion in total locked value.

Why It Matters: This weekend, on Sept. 5 11:57 AM UTC, the protocol's pseudonymous founder Chef Nomi liquidated 2.5 million of their SUSHI tokens, worth about $6 million, to the more established cryptocurrency Ethereum (ETH), as earlier reported by Decrypt.

Chef Nomi further removed 20,000 ETH, worth about $7 million at the time, from the pool.

The founder of the project cashing out the asset sent SUSHI's market price tumbling, as Chef Nomi faced accusations of "exit scamming."

Exit scams in the industry refer to founders of a cryptocurrency project disappearing with investor funds, or exiting a project after liquidating their own assets followed by a surge in the value of the said cryptocurrency.

SUSHI tanked to as much as $1.2 after the founder cashed out the assets, eroding up to 89.2% of the value from the record height hit a few days earlier. The trading price represented a wipe out of 53.67% value from the launch price.

What's Next: Nevertheless, Chef Nomi didn't go anywhere. "The fact that I sold some [SUSHI] devshare does not make Sushi more scam or less scam," they said. "The fact is on the code."

"I'm not sure why everyone thinks I am a scammer now. I did not steal anyone's money," Chef Nomi added.

The backlash from other Sushiswap backers didn't stop with Chef Nomi's explanation, who said the founder hurt the project with his actions.

To rebuild that trust in the project, Chef Nomi said he was transferring the control over the project to FTX CEO Sam Bankman-Fried, who in turn claimed, Sushiswap will finally be under community control.

As of press time, Sushi is back up 3.3%, trading at $2.85.

 

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