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Coinbase Detaches Cryptocurrency Links After 'rug pull' Warnings

By Dr.Dang March 22, 2022, 7:16 p.m.
Coinbase Detaches Cryptocurrency Links After 'rug pull' Warnings

The year 2022 is still fresh and Coinbase is already at it. The company, known as Coinbase Global has reportedly removed 'how to buy' instructions for some crypto tokens. These said tokens have been the subject of 'rug pull' warnings that investors may lose their money.

Coinbase Detaches Cryptocurrency Links

Through their spokesperson Jacklyn Sales, Coinbase confirmed the withdrawal of the links. She said the links were removed from the website after Reuters brought such information to their attention. Also, she said the website was undergoing an upgrade in safeguards on its auto-created webpages.

Nasdaq, listed Coinbase features pages offering tips on investing in the tokens. The pages in question however were just informational. They were not therefore available for trading on either the app or wallet.

Sales added that the pages were created automatically from information carried by data website CoinMarketCap. They also contained a disclaimer that the information was not investment advice and that the exchange was not liable for "errors and delays",

When responding to the allegations, CoinMarketCap said it was not aware of the Coinbase pages. And its vice-president of growth and operations Shaun Heng said there was not a partnership with Coinbase. It was still however not clear on whether Coinbase ran checks on the coins whose information pages it removed.

Coinbase would "build a more robust disclaimer for the pages which are being auto-created," the exchange told Reuters. Coinbase is also set to "build a process to take down any other pages which CoinMarketCap has flagged as potentially being scams," it said, adding that "assets which relate to known scams were not tradeable on the exchange".

The removed pages

One of the pages removed by Coinbase featured DeFi100. Users of this page were told to  check CoinMarketCap to find out where else it could be bought.

However, at the time of production of writing this article, a DeFi100 page on CoinMarketCap warns: "We have received multiple reports that this project has exited as a scam. Please exercise caution."

CoinMarketCap, which does not sell cryptocurrencies on its site, added that DeFi100's tokens have not recorded any daily trading volumes since last year Nov. 14. DeFi100's website https://defi100.org and Medium blog page https://wrapp3d.medium.com are also offline. It last made a tweet in May last year.

About DeFi100 or its warning, CoinMarketCap didn't respond to requests for comments. In May, some Twitter users alleged that DeFi100 had performed a "rug pull". In this scenario, investors deposit money in phoney projects before a coin's developers make off with the funds.

DeFi100 denies allegations

In a Twitter post dated May 23, 2021, the site acknowledged that investors had suffered losses. It however said that it's doing everything possible to bring the project back on it's feet.

Coinbase also took down a page featuring a token called Mercenary. Just like DeFi100, it was not available on Coinbase's app or wallet. Mercenary reportedly launched in January and hit a high of almost $20. But on Jan. 26 it fell within minutes from just over $8 to a fraction of a cent. Ever since, its price has never recovered, CoinMarketCap data shows.

Blockchain security firm PeckShield tweeted

on Jan. 26 that Mercenary had been hit by a rug pull and warned buyers off it. Mercenary's Twitter and Website are offline at the moment.

Coinbase has also taken down a page on a token named after Squid Game which crashed to almost zero in November in what cyber security experts said was another rug pull. It also was not available on Coinbase's app or wallet.

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