Behind the Scenes of a Rug Pull: Exclusive Interview
The RelyFund DeFi project rug-pulled in mid-January, with the developers taking millions of customer funds. The project was advertised as a crypto trading bot, where users would deposit USDC crypto, and would receive 2% daily rewards, generated by a complex trading bot run by the developers. The project sold NFTs, which would provide access to a future feature of individualized trading bots on which users could control key settings. I mid-January, the platform disappeared, the developers vanished, and investors lost millions of dollars. In an all-too-common story, the project was “rugged”. In this article, we will hear some of the inside story, from a moderator in the developer-run Telegram chat that had access to some information that public hasn’t been able to hear.
Throughout the project, brief as it was, an active telegram community was moderated by motivated investors, and it gave them access to the development team throughout the process. I was fortunate enough to get some answers from a moderator, and I am sharing them here.
IMPORTANT! This moderator has agreed to share his first name, but he is NOT a developer. He was (and still is) a representative of the USER, not the developers. He was gracious enough to share this, and I thank him. In between some of the interview, I’m interjecting some information, in italics.
RelyFund was an ROI platform that advertised a trading bot that had been backtested for 18 months, and was producing over 2% return daily, on average.
Me: How did you find out about RelyFund? Stephen: I found out about RelyFund through a YouTube AMA.
Me: What made you want to invest? Stephen: I waited to see the first weeks proof of trades until I invested. Which at the time they seemed so genuine and 100% real.
RelyFund devs posted videos of their trade bot results, showing percentages of trades, based on type of trade:
Me: Did you see any signs that the project was suspect or in danger prior to the collapse? Stephen: No none whatsoever the day before they all disappeared it was business as normal, ‘Brandon’ was a bit quiet but then they told us he had a car accident. Which I didn’t believe given it was the same day he was supposed to doxx to everybody.
Brandon was the “CEO” of the operation. After weeks of investors asking the developers to “doxx” themselves (making their identities known and verified), Brandon announced on Telegram that he would doxx himself. The very day he was going to do this, he mysteriously vanished. More on that later…
Me. How did you become a moderator? Were you contacted directly, and by whom? Stephen: I DM’d ‘Brandon’ and asked if I could become a mod, I was in the chat all the time helping people out so he agreed ‘Matthew’ was the community manager who dealt with us mods.
Me. While a moderator, what was the level of communication like with the devs? I assume there was a private chat? Stephen: The communication was disgraceful. If we had an issue we were waiting sometimes days for a response on that issue while they kept posting about NFTs etc. in hindsight this was a huge red flag, we were pleading with them to communicate with us more so we could help out people. To no avail. Yes there was a private chat, ‘Matthew’ deleted it when they rugged.
The RelyFund project sold NFTs, which were advertised to provide individual access to personalized bot contracts. It seems that the devs were focused heavily on that project while ignoring some issues that came up.
Me. When the site went down, did you receive any notification from the devs? Stephen: No we received no notification from the devs at all, the first time when they were getting DDoS attacked yes they were active in the chat telling us what to relay to people but when the site went down before they rugged there was no communication to us at all until maybe 3 days later then ‘Matthew’ came into the mid chat and asked why we were fudding the project when I was telling people how to claim from the contract and telling them we contacted InterFi in case they had rugged.
Early in the project, a few days before the NFTs were first going to be sold, there was a DDos (Distributed Denial of Service) attack that took the website down. After this, the devs (mostly Brandon) spoke on the Telegram chat of increased security that would be going up on the website.
Then the website went down about 2 weeks later, with no immediate explanation.
A dev identifying himself as “Matthew” posted in the Telegram group that the site was down, and would be back up soon.
Investors in the chat hit the panic button (rightly so) and made many accusations of rug pull and fraud. Matthew closed the chat to all messages besides admins. Stephen was still able to post, and, when he created a new Telegram group (designed to provide a community if/when the Telegram group was totally locked), Stephen announced the link to the new group. “Matthew” asked Stephen why they were fudding the project.
Me. After the site when down, what did the devs tell the mods about the future of the project? Stephen: The only thing that was relayed to us was that the funds were still SAFU in the CEX accounts and the project was going to continue they were just getting no response from the ‘lead dev Samuel’ who had access to those funds. Although it was ‘Brandon’ who made the trading log videos every week.
Every week, “Brandon” was the one who made the videos showing all the trades. There was a lead dev “Samuel” who apparently ran the bots. “Brandon”, however, was said to own the patents.
Me. When the devs started to leave, was there any information posted to the private chat that you’re willing to share? (i.e. when Brandon “left” the project and when Matthew posted his final message). Stephen: We never had any contact whatsoever with actual ‘devs’ the only people we could talk to was ‘Brandon’ and ‘Matthew’ neither of which were devs Brandon was the face of RF and Matthew was the community manager. And when Brandon left we found out the same time as everybody else when Matthew posted that message and the same for when matthew posted the final message. All mods were muted in the TG chat and in the mid chat matthew wasn’t getting back to us at all.
At this point, things had clearly fallen apart. The contract was still allowing weekly claims, and people were doing so. But, the RelyBot was still making withdrawals of $150K, and $50K.
At this point in the alternate Telegram chat, Stephen posted this message from “Matthew”, who had sent him some funds in BNB:
Me. You posted a screenshot after Matthew sent you some BNB. Was there any communication right before that, and has there been any communication since? Stephen: Yes matthew said he was going to refund us mods from his own pocket. Which was a lie he refunded me 50% of what I put in and I’m not sure how much he refunded MoneyMaker (other mod who was revealing information to alternate Telegram group), the ‘refund’ came from the same CEX account that all the funds are being held in so they do have access to it. They obviously didn’t think we would track it down or attempt to at least. there’s been no communication with Matthew since but I have spoken to Brandon some times asking him if he’s enjoying his millions. He keeps protesting his innocents and saying that he personally still doesn’t know what’s going on. Which is an obvious lie.
Me. In your opinion, what really happened? Stephen: My honest opinion, there was some trading going on in the background I think the trading logs were genuine. But I think they knew from the beginning what they were going to do, given they have funnelled funds into some ‘clean’ wallets here and there.
The NFTs that were supposed to allow individual access to the bots sold out within 2 minutes in the phase 1 “presale”, where 100 were minted. However, phase 2 was a dud, as less than 50 were actually sold.
Me. Did you get any sense as to dev frustration once the NFTs stopped selling? Stephen: No they didn’t seem to care when the NFTs stopped selling I did tell the numerous times they wouldn’t sell out completely because they weren’t doxxed. People didn’t trust them and any time people asked about doxxing it just got flat out ignored.
END OF INTERVIEW
Special Thanks to Stephen, for being willing to discuss this with me.
This project, like so many others in the DeFi space these days, disappeared overnight. It was heartbreaking to experience this from the investor standpoint, and it has been quite enlightening to hear Stephen’s side of the story.
It’s important to reiterate that the moderators on the Telegram channel have gone out of their way to encourage investors to claim their weekly claims, up to the point where the contract was completely drained. I want to thank them for their transparency and help to the community.
If you were a victim of this scam, please read this article on WHAT TO DO AFTER A RUG to protect yourself. It also contains some tips about how to protect yourself in the future. There will also be a “next opportunity”. We have to learn not to rush into a “seems-to-good-to-be-true” platform.
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