SushiSwap Founder Withdrawal

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SushiSwap

ChefNomi was an anonymous developer who created the Sushi Swap protocol.

At one point, after there was criticism in the community, he decided to withdraw the development fund, and convert it to ethereum. He felt that he was entitled to this, as he had launched the project.

However, many individuals using the platform disagreed with this assessment. Some days later, he returned the funds to the treasury. It's not clear if he received any funds back for his role in launching the project.

This is a global/international case not involving a specific country.

About SushiSwap

"Sushi is a DeFi protocol that is completely community-driven, serving up delicious interest for your held crypto assets." "On Sushi, you can take advantage of passive-income providing DeFi tools such as liquidity providing, yield farming and staking. Furthermore, due to the decentralized nature of being an AMM (Automated Market Maker), Sushi has fewer hurdles to execute your cryptocurrency trades and all fees are paid to the users who provided liquidity, just as it should be!"

“… we have designed SushiSwap as the next step forward in the Uniswap protocol design. Taking Uniswap’s elegant core design, we’ve added community-oriented features that we believe help improve the design of the protocol, as well as provide further benefits to the actors involved.”

"This coin followed in the footsteps of other YFI clones with its low supply and yield farming. When it was listed on Uniswap on August 26, it started at a high of $128 before finding a bottom at $0.69. In less than a week of its launch, it had been listed on Binance peaking at $15.96. On CoinMarketCap, it hit rank 74."

"As reported Monday by CoinDesk’s Will Foxley, a pseudonymous developer who goes by “Chef Nomi” launched the SushiSwap protocol in late August, and it was quickly cast as a “vampire protocol” because its inherent design intended to siphon away liquidity from a competing trading platform, Uniswap."

"The project quickly attracted more than $1 billion of collateral with a technique known as “zombie mining,” The market value of the associated SUSHI tokens surged roughly 500-fold in a matter of days to more than $300 million."

"In somewhat of a prophecy, a Twitter poster going by the name of Sasa pointed out [just prior] that Chef Nomi had $27 million worth of SUSHI “ready to be dumped on the SUSHI/ETH pool.”"

"SushiSwap was the victim of the classic “rug pull” attack when its founder Chef Nomi removed roughly 37,400 ETH from the project’s development fund and sent it to his personal wallet." "[O]n Saturday, SUSHI investors learned that Chef Nomi had unexpectedly cashed out of tokens in exchange for 37,400 ether (ETH) worth about $13 million. SUSHI prices crashed before recovering somewhat after Sam Bankman-Fried, CEO of the cryptocurrency exchange FTX, reportedly took control of the project."

"The anonymous creator removing a large chunk of liquidity is what many have come to meme a ‘rug pull’. The dev share contract held more than 2.5M SUSHI along with 20k ETH. After removing nearly half the liquidity from the SUSHI/ETH pool, 2.5M SUSHI was sold for 18k ETH, amounting to roughly $6M of profits at the time of sale and a $7M stash from the other half of the devshare liquidity. In total, Chef Nomi made off with roughly $13M."

"Tired of the non-stop complaints about SUSHI from the community, Chef Nomi decided to remove his liquidity from the SUSHI/ETH pool by converting 5.02 million tokens to Ether, worth $14 million at the time."

"Chef Nomi tried to justify the move by comparing it to what Litecoin founder, Charlie Lee, did when he sold his tokens at the peak of the 2017 bull market." "As anyone could have guessed, the community is now up and arms, claiming that the entire project is now toast due to a loss of trust. Still, Chef Nomi is chugging on, deploying the contracts for the forthcoming SushiSwap migration set to take place tomorrow."

“I wrote the migration code. I did all the audits. I coordinated the largest LP pools ever. I created a large community. I sprung up 100s of LP scam projects. All in 1 week.”

"While things seemed bleak, FTX’s founder Sam Bankman-Fried (SBF), decided to step in. After receiving control of Nomi’s project, nine prominent members of the community were selected to be the holders of a multi-sig wallet that controls the project’s funds."

"Since that point, SushiSwap has been working without any glitches or controversies."

"After Sushi token investors were advised to lawyer up, Chef Nomi returned all of the stolen funds." "I have returned all the $14M worth of ETH back to the treasury. And I will let the community decide how much I deserve as the original creator of SushiSwap. In any currency (ETH/SUSHI/etc). With any lockup schedule you wish."

"The most recent development surrounding SushiSwap is Coinbase’s decision to list SUSHI. Coinbase announced that SUSHI deposits are open, but trading will begin on Thursday, March 11, at 17:00 GMT, only if liquidity requirements are met."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - SushiSwap Founder Withdrawal

Date	Event	Description
September 5th, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $13,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

This type of dispute is easily solved/prevented with a multi-signature wallet.

It prevents any founder or developer from independently declaring that they should receive all funds in the treasury.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.