Originally published on: September 11, 2024
Friend.tech, a Web3 social media platform, is in hot water after the team made a controversial decision to permanently give up control of the project’s smart contracts, sparking rug pull allegations.
The team made headlines on Sept. 8 by setting the admin and ownership parameters to Ethereum’s null address, effectively preventing any future changes to fees or functions. However, this move caused the platform’s FRIEND token to plummet by 26% in just 24 hours.
Pseudonymous crypto analyst Waleswoosh called out Friend.tech, labeling it as a “Ponzi” scheme that promised holders extravagant rewards which never materialized. The project’s evolution from a social finance app to advanced trading raised suspicions among investors.
According to Waleswoosh, the team profited immensely from the project, with over $60 million made in fees. The team sold a whopping 19,477 Ether, equivalent to $52 million, between December and June. Unfortunately, the token’s price has since dropped by 95%.
Despite early comparisons to Instagram, interest in Friend.tech dwindled after the highly-anticipated airdrop failed to meet expectations. Consequently, many holders quickly offloaded their tokens.
In response to the backlash, the Friend.tech team released a statement emphasizing that the project will continue as planned. They reassured users that the recent changes are solely aimed at preventing future fees and do not impact the platform’s functionality.
As allegations continue to swirl, the future of Friend.tech remains uncertain. Stay tuned for updates on this developing story.