New Crypto Exit Scam Sees Oyster Pearl Developer Create More PRL Tokens to Sell Immediately
Oyster Pearl Developer Creates New PRL Tokens and Sells Them Immediately
According to some rumors that expanded on Reddit a few hours ago, an Oyster Pearl developer has called a function that allowed him to create new PRL tokens. However, after creating these tokens, he decided to sell them immediately on the cryptocurrency exchange KuCoin.
According to CoinMarketCap the price of this virtual currency moved from $0.23 dollars on October 29 to $0.0746 dollars today, October 30. This represents are 68% decrease in just a few hours.
Some reports show that an internal member of the team had the possibility to create several tokens. William Cordes, CEO of Oyster, said that the new director was able to re-open the ICO for PRL and re-issue new tokens. Immediately after, he sold these tokens on KuCoin. Although the exchange was able to shut down trading and withdrawals on KUCoin, the responsible individual was able to extract $300,000 in funds.
On Twitter, KuCoin informed its users that PRL deposits, withdrawals and trading were temporarily closed. Oyster Protocol on Twitter has also announced that trading activities at the exchange were suspended.
PRL Deposits, Withdrawals and Trading Temporarily Closed
— KuCoin Updates (@KuCoinUpdates) October 29, 2018
Trading of Oyster PRL on @kucoincom has been suspended for the time being.
— Oyster Protocol (@OysterProtocol) October 29, 2018
KuCoin decided to suspend these services to PRL users after a special request from the Oyster Pearl project team. Some users on Twitter were asking what happened to the funds and whether the funds are safe on their respective wallets.
What happened? I hold Oyster, are funds safe?
— CRYPTOINFO2017🚀🎯 (@crypto_info2014) October 29, 2018
According to the official report, all the PRL users are holding are safe. At the moment, the team is evaluating different options on how to improve the network. Apparently, the team will be executing a contract swap on the block just prior to this happening. As Oyster’s CEO wrote, all 98.5 million PRL prior to the contract vulnerability will be exchanged on 1:1 ratio to PEARL.
The team behind Oyster believes that Bruno Block, the founder and chief architect of the project was responsible for this issue. Block explained that the directorship of the contract had to remain open in order for the peg to be adjusted over time. However, this was a trapdoor mechanism and the contract was exploited.
Bruno Block wrote this specific contract when he was the only member of the team and before the initial coin offering. And because of this, Bruno was the only one who had the ability to transfer directorship within the PRL smart contract.
The CEO wrote on the matter:
“After our initial review, we are inclined to believe that these were solely the actions of Bruno Block and that he did this now to avoid detection from KuCoin KYC procedures (that will be implemented on November 1st).”
The KYC procedures that are going to be implemented by KuCoin would allow users to withdrawal no more than 2 BTC per day. If he would have wanted to do that after the implementation of this KYC procedure, he would not have been able to withdraw this amount of funds without being detected by the exchange.
The team explains that they have been working during the last months in order to build this project and that they will not let Bruno undermine all the effort they have done for Oyster Pearl.
At the moment, the team is investigating funds movements from these addresses:
The team behind Oyster Pearl is asking the community to help find and obtain any information about Bruno’s identity. Bruno has always remained anonymous and since William Cordes took over as CEO of the company, Bruno’s activity dropped. Those interested in helping the team can send information via the different contacting channels available.
Additionally, the team will also be working so as to remedy the situation. About the future of the project, Cordes said:
“While I still take full responsibility for this all transpiring, I had no reason to believe Bruno would do something like this to harm the project and much of the work that he had a significant role in creating. We will not let his selfish actions today damage the long-term viability of the project.”
However, not everything is as clear as expected. There are some users in Reddit that say that everything was a scam since the beginning. For example, the Reddit user recession time, said that developers have been dumping on users since the very beginning. He said that Bruno might not even exist and that everything could have been planned by the developing team.
Some users are wondering whether this situation is the end of Oyster as a blockchain and cryptocurrency project. Compared to other similar situations in the market, Mt Gox and DAO hack or BitConnect, all these projects died over time.
At the same time, there are users that are asking the Oyster team to put a bounty on Burno’s true identity. Nevertheless, other Oyster users are complaining about the situation and that investing in these kinds of projects is similar to gambling.
It is difficult to think what will happen in the future with this project, and what will happen to Bruno and the PRL tokens that were dumped. The community is currently in a shocking situation and they are trying to get as many answers as possible in the short term.
KuCoin did not resume trading activities, at least until the time of writing. Oyster (PRL) is being traded close to $0.074 dollars and has a market capitalization of $6.3 million dollars. At the beginning of the year, each coin was worth close to $4.3 dollars. From that moment, the virtual currency has lost more than 98% of its price.