Nima Capital Rugpulls Synapse Protocol for $3.5M
Nima Capital abruptly exits Synapse project, dumping 9M SYN tokens. Concerns rise as website goes offline and social media accounts close.
Nima Capital, a long-term financing partner of the Synapse cross-chain bridge, abruptly exited the project and dumped over 9 million SYN tokens.
Based on data from Crunchbase, Nima Capital has been involved in 31 funding rounds within the crypto and DeFi sectors. The firm's latest financial backing occurred in April, supporting Teahouse Finance with a $5 million investment. In the past year, the venture capital firm has also put money into various companies, including NFT creator Flow, Fordefi, Eversify Labs, OneOf, and Morpho Labs.
Nima Capital's sudden exit from the Synapse project was marked by a series of alarming actions. According to Etherscan records, the "Synapse: Executor 2" wallet transferred 10 million SYN tokens to an unnamed entity on April 5. These tokens, worth $3.45 million at current prices, were then dumped on the market, causing the token's value to plummet by 20%, hitting a multi-week low of $0.30.
Adding to the concern, Nima Capital's website went offline, and its social media accounts were closed. These actions signaled a clear break from its commitment to the Synapse project, especially considering that the firm had previously agreed to invest $40 million in SYN tokens and had received a grant from the project in return.
Synapse X, the official account of the project, confirmed the liquidity rug but clarified that the network itself was uncompromised. Despite the setback, the token recovered slightly later in the day, settling above $0.35. The project continues to operate, and its network remains secure.
In the DeFi ecosystem, rugpulls are not uncommon. However, they usually occur when a project's founders or developers alter the code or shut down the project after the token price reaches a certain level. What makes this incident unique and particularly concerning is that it's rare for a venture capital firm to engage in such practices.
The Synapse bridge allows for cross-chain transactions and is part of the wide DeFi ecosystem. While exploiters often target these bridges, the Synapse bridge remains secure, as confirmed by the project's official account.