Exit scam

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An exit scam is a form of fraud in crypto where developers, mostly anonymous, leave the project they created after previously collecting funds from investors.

The project is typically designed to appear promising. The large number of investors who buy this crypto asset drives up the asset’s value. And then, at a certain price point, the scammers sell that asset either in stages or all at once. The scammers then abandoned the project they created after destroying the price of those asset.

An exit scam case once happened to the Ethereum-based decentralized exchange (DEX), Sushiswap. One of its developers, Chef Nomi, exchanged SUSHI token for ETH worth USD 14 million on September 2020 after SUSHI token was launched. This scam caused the value of SUSHI token to drop by 75%. But several days later, he returned the assets.

Read also: What is Crypto Scam and How Do You Avoid it?

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