Examining Binance's Complacency In The SUSHI Scam
A few weeks ago, the anonymous founder of Sushiswap, Chef Nomi, masterminded what many within the cryptospace described as an exit scam that saw him cash out about $14m worth of Ethereum. His unethical actions resulted to about 73% crash in the price of the SUSHI token, a ripple effect that was suffered by other DeFi related tokens.
Although report has it that Chef Nomi has eventually returned his spoil, the consequences of his actions were far too great to redeem the atmosphere of distrust and panic now hovering around SUSHI.
Before I examine the complacency of Binance in the SUSHI scam, it is pertinent to mention that Chef Nomi's actions led to the loss of millions of dollars belonging to innocent investors who traded SUSHI within the period.
Of course, crypto is very volatile and quite a risky endeavour too, one that could result to massive losses when the chips are down, investors should not lost money from the greedy actions of the founder of a crypto project.
Therefore, the complacence of Binance lies in its inability to do due diligence, its recklessness and blind eagerness at listing SUSHI token less than a week after it was launched. One finds it even more puzzling, and shocking if you like, on the realization that Binance does not know, or pretends to be ignorant of, the true identity of Chef Nomi.
To even imagine that Binance, the largest crypto exchange in the world, that makes a-do-or-die affair out of KYC would not even make attempt to do the same for founders of projects proposing to have their tokens listed on its platform, is to say the least sickening.
The above tweet of CZ, Binance's CEO, to the effect that he does not know the founder of SUSHI and merely listed the token as a way of having his company (Binance) stay relevant in the crypto market for as long as possible is most unfortunate. Is CZ saying that it is okay for investors to lose money as long as his company stay relevant in the game? Is CZ saying that it is okay to do KYC for customers but not for the founder of projects?
The complacence of Binance in the SUSHI scam cannot be overemphasized. While it is true that we cannot honestly absolve investors from the responsibility of doing their own due diligence before investing in crypto projects, Binance has a greater responsibility, being a gatekeeper or the delivery man, to ascertain the safety of what is being delivered to the public.
If Binance continues to bury its head in the sand, it is only a matter of time before regulatory clampdowns come hard on it or, in a likely scenario, before it is replaced by other exchanges that would have investors sleep with both eyes shut.
Cryptocurrencies are born to bring freedom by defying classic finance and regulations, and yet if the oldest trick happens - someone ran with the money - I hear calling for "regulatory clampdown". Except, they don't exist for crypto.
Dear @gandhibaba
I've heard about SUSHI token several weeks ago from my friend @cryptoeater and I did consider jumping "on board of this train" with small amount of money. Luckily, I didn't do that.
To tell you the truth, I'm not really sure what Chef Nomi actually did. You mind telling me?
I wasn't aware that they do not require KYC from founders of tokens, which Binance is listing. That is absolutely wrong on so many levels :/
Quoted explanation by CZ sounds so ridicolous and it's only showing, that Binance doesn't put any effort into maitanining trust of their customers. Greed seem to be CZ main motivation :/ Absolutely awful. That's going to bite them in their ass really hard.
Yours, Piotr
To tell you the truth, I'm not really sure what Chef Nomi actually did. You mind telling me?
He is the founder of Sushiswap who sold all his stake, almost 50% of the token's circulating supply, resulting to a sharp decline in price. I concur with your assertions about CZ. Cheers!
@tipu curate
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Good post. I am of two minds on this one. It was a bit questionable, but cryptocurrency is so wild right now that it can be easy to be swept up in the hype.
many moves by binance is fishy and if examined we'll find them in their worst images, but who cares? everyone is busy chasing their personal gains
Interesting info 💯
Good article, that's the story of the never ending projects when they have the huge profits of the investors prefer to swindle the investors than to continue with the projects.
First, it is not the responsibility of an exchange to check if a project will succeed or not. The fact that a project is listed on Binance doesn’t mean it is a good investment, binance has its terms of service and we all know that with cryptocurrency, investors can loss part or all of their investment.
The points above is valid, sure. The only question is do you think it is ethnically right for Binance to conceal or, put more appropriately, claim ignorance of the identity of Chef Nomi?