QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$800 000 USD
DECEMBER 2020
GLOBAL
DETRADE
DESCRIPTION OF EVENTS
"DeTrade is building a platform where token holders own a fund which grows from arbitrage, frontrunning and trading opportunities in the cryptocurrency markets. DeTrade intends to do this by creating an arbitrage and frontrunning bot, which is currently in development. Initially, 50% profits generated from this bot after launch will be distributed among the holders of DeTrade token in ETH." "DeTrade.Fund is all set to release its centralized exchange arbitrage bots this month, shortly after conducting the crowdfunding in the upcoming weeks, necessary to kickstart first of its kind, a community-driven arbitrage and frontrunning fund."
"DeTrade Fund can certainly become one of the most profitable arbitrage companies in the industry, given our experience and knowledge in this space," said Mark Jensen, CEO of the company. "DeTrade Fund allows anyone to get exposure and benefit from arbitrage and front-running opportunities in the cryptocurrency market. Opportunities were previously exploited only by large players of the space. This is a fund for the people, by the people."
"DeTrade Fund, which would purportedly allow any Ethereum user to participate in arbitrage (a trading method often relegated to advanced funds), raised 1,450 ETH in a pre-sale." "It garnered traction within some segments of the Ethereum community because the company was registered in the U.K., was audited by a reputable Ethereum auditor, and seemingly had a “doxxed” team." "Its address, 36 Ballards Lane, London, United Kingdom, N3 1XW is a mall. The company is registered by Mark Jensen, whose address is 94 Holborn Viaduct, London England EC1A 2BN."
"It seemed safe. [One investor] had investigated the coin's development team on LinkedIn, and watched a video of its CEO laying out a roadmap for the coin's future. A newswire piece published on Yahoo touted DeTrade's technology as advanced enough to disrupt cryptocurrency."
The project "vanished with 1450ETH a few hours before listing." "The team deleted their social media profiles and ran away with the money."
"The touted technology behind it wasn't real. Nothing about the project was. The LinkedIn profiles were fake, and the video of its CEO was a deepfake created with AI. It was a scam. Those behind it, operating in the unregulated world of crypto, vanished."
"Look at the video of the “CEO” of DeTrade Fund which just rugged.. the audio is a little delayed because of screen record but you can tell that the video is glitchy and hes an AI. This needs to be shared to everybody so we can be more careful in the future."
"The team appeared to be non-anonymous, with public Linkedin profiles, a publicly registered company, a Twitch profile and a video where the “CEO” Mark Jensen, spoke to the community. The video has quickly become famous on crypto Twitter with the community suspecting it was a deep-fake used by crypto hackers. Another theory circulating around the community is that the hackers hired an actor to impersonate the CEO."
"Several hours later and probably because someone was able to trace the misappropriated funds, 70% of the stolen $ETH was sent back to investors via internal transactions."
A fake video from a purported CEO, an audited smart contract, a business registration, and news articles published through Yahoo Finance, all gave this the appearance of legitimacy.
In reality, the hacker immediately took the funds and disappeared.
HOW COULD THIS HAVE BEEN PREVENTED?
This is an illustration of the importance of having a framework that's reasonable for entrepreneurs to bring forth ideas under the oversight of regulators.
While in this case, it was an investment, similar means could be used to launch trading platforms and therefore oversight to make sure that individuals launching platforms are real people is highly necessary.
How (Not) To Get Rekt – DeFi Hacks Explained – Finematics (May 21)
@DefiZeus Twitter (May 24)
Rekt - Deepfake - A Scam so Surreal (May 24)
Beyond Bitcoin: Inside the insane world of altcoin cryptocurrencies - CNET (May 27)
DeTrade Fund - New Cryptocurrency Fund, Threatening Current Market Leaders (May 27)
In one day, a total of $1.2 million worth of Ethereum was stolen in three DeFi "rug pulls" | CryptoSlate (May 27)
Weaponised Deep Fakes (May 30)
Newsletter #17: Bitcoin markets choose between good and bad news (May 30)
DeTrade Audit - Solidity Finance (May 30)
@SolidityFinance Twitter (May 30)
Ciberestafa: CEO creado por IA se robó más de USD3 millones (May 30)
DeTrade Fund - New Cryptocurrency Fund Threatening Current Market Leaders (May 30)
DeTrade Fund - LinkedIn (May 31)
DeTrade Fund exit scams, runs away with 1438 Ether - Cryptocoindaddy.com (May 31)
Happy ending: Investors track down "rug pull" scammers, some Ethereum returned | CryptoSlate (Jun 13)
Worldwide crypto & NFT rug pulls and scams tracker - Comparitech (Dec 15)
