On Nov. 28th, 2018, MonitorChain detected a potential scam: RusGas (RGS) is minting billions of tokens, diluting the value of investor’s tokens and driving the price down to near-nothing.
RusGas is a project using blockchain to “transform the gas industry.” According to ICO Bench, the company raised $2.2 million during its ICO.
On Nov. 28th, MonitorChain detected the first incident of suspicious token minting. Initially, RusGas ICOed with a 10 billion token supply, as stated in the company’s whitepaper.
So far token minting has accelerated, and within the last eight days a total of 850 billion additional RGS tokens were created—86 times the original supply. These tokens were dumped on Crex24, with 220 billion in sell orders currently outstanding. The massive influx of supply drove the price down to the lowest possible trading price on the exchange, with each token trading for one one-billionth of a Bitcoin.
What Experts Have to Say
CryptoSlate reached out to Seth Hornby, the Zenchain Inc. CEO and co-founder of the Canadian security and development company that runs MonitorChain.com, to better understand the circumstances surrounding the dumping.
Hornby first explained that MonitorChain immediately caught wind of a potential exit scam when the system detected such a large number of RGS tokens got minted. Hornby and his team traced these tokens to where they were getting dumped, the exchange Crex24.
“At a glance, it was either a third-party hack or an insider exit scam.