Friend.tech Faces Rug Pull Scam Accusations, Liquidated $52 Million in ETH

Friend.tech is accused of rug-pulling its users as it has liquidated $52 million worth of ETH.

The team bringing the Friend.tech protocol, which once was slated to be the next big social platform, is now accused of rug-pulling its projects’ stakeholders. Other accusations include the team running a Ponzi scheme.

Pseudonymous crypto analyst @waleswoosh posted elaborately on X to highlight Friend.tech team’s actions over the months to back their accusations, starting by saying, “Friendtech rugged.” They called it a Ponzi scheme, referencing how it evolved from a Web3 social media platform to an “advanced trading” protocol. They also mentioned how Friend.tech changed the terminology of their ‘shares’ concept to ‘keys.’ A Forbes article covered this, stating how the protocol decided to do so due to ‘regulatory uncertainty surrounding crypto.’ The keys—or shares—represent parts of user profiles that other users buy to message them. These keys earn profits via trading fees.

As the popularity of Friends.tech reached virality, creators got on board and made tremendous profits. Simultaneously, the team gained over “$60M USD in total fees.” @waleswoosh claimed that the team promised key holders “wild things,” like promising to divide half the airdrop amount between them.

While this happened when Friends.tech surged in popularity, users eventually lost interest. Now, its native asset FRIENDS, and the platform’s keys have declined tremendously in value.

In the meantime, the platform’s team has continuously liquidated about 19,477 ETH, amounting to $52 million, between December 2, 2023, and June 11, 2024.

Friend.Tech Responds

Friend.tech responded to the accusations to reassure its user base, saying, “We have no plans to shutter or discontinue the friend.tech web app.” It also mentioned that no further changes can be made to its contracts, which a previous announcement mentioned. That announcement elaborated that Friend.tech’s team has changed its ownership parameters to the Ethereum null address.

Nevertheless, Friend.tech’s X account mentioned, “Everything you know and use remains the same.”