SushiSwap Founder Cashed Out For $13 Million Over The Weekend, Transfers Control Over To FTX CEO
The creator of the booming automated market maker and Uniswap fork, SushiSwap, abruptly cashed out of the project for $13 million worth of Ether over the weekend, as first reported by The Block.
The leader of SushiSwap who goes by Chef Nomi elevated the automated market maker crypto trend by introducing a liquidity token native to the platform. For SushiSwap this token was SUSHI and extra tokens were given to users who provided liquidity to the ETH/sushi pool on Uniswap. The platform quickly gained popularity within the DeFi space and at the time of writing has $1.25 billion worth of contracts locked.
On Saturday, September 5, Chef Nomi sold all of his SUSHI tokens in a move which caused a flurry of panic as investors lamented over what was eerily resemblant of an exit scam. The sell off by Chef Nomi wrecked the token’s price and sent its value plummeting 73%, traveling from $4.44 to $1.20 over only a few hours.
Crypto Twitter quickly turned on Chef Nomi for bailing on his own project. He lost investors’ trust and many in the community commented that he should give over control of the project so it could move forward without him. After hours of back and forth over Twitter, Chef Nomi handed over his keys to CEO of cryptocurrency derivatives exchange FTX, Sam Bankman Fried (SBF). Before Chef Nomi’s departure plans were in place to migrate the liquidity created on UniSwap through token dispersals to SushiSwap. Bankman Fried promptly canceled the migration because it used Chef Nomi’s key.
After the transfer Chef Nomi defended his decision to leave the project in a tweet emphasizing that his intention was not to scam anyone and that no tokens were lost to his departure.
Bankman Fried announced that his priority from the time of acquiring the keys would be transferring them to a multisig so that the project could become decentralized. In an interview with Forbes, Fried highlighted what he thinks is a key takeaway from the Sushi upheaval.
“Anonymous founding teams that have a lot of power, is a pretty scary quadrant to be in,” he said. “To the extend that trust is necessary, you want them to be people that you trust and that have a track record. And if you are going with new or anonymous founders, you want to make sure that protocol is designed so they don’t have the ability renege.”
By Emily Mason