Web3 social media platform Friend.tech is embroiled in controversy after the project’s team relinquished control of its smart contracts and sold a significant amount of its token. These actions have sparked accusations of a “rug pull” from the community, who fear the platform is abandoning them.
On September 8th, the Friend.tech team announced that they had permanently set the admin and ownership parameters of the project’s smart contracts to Ethereum’s null address. While the team claims this prevents future changes to fees or functions, users interpret it as a way to abscond with investor funds.
This move coincided with a 26% drop in the FRIEND token price within 24 hours. Crypto analyst Waleswoosh, known for their pseudonymity on platform X, called Friend.tech a “Ponzi” scheme. They pointed out the platform’s evolution from a social finance (SocialFi) app to advanced trading, along with promises of “wild things” from creators during its peak. These creators, according to Waleswoosh, also benefited from the project alongside the team, who allegedly sold over $60 million in fees.
Blockchain analytics platform Lookonchain reveals that the Friend.tech team sold 19,477 Ether (ETH), worth roughly $52 million, between December 2nd, 2023, and June 11th, 2024. Furthermore, the platform’s token price has reportedly plummeted 95% since its launch.
Initial hopes of Friend.tech becoming the “next Instagram” faded as interest dwindled. Waleswoosh believes the much-anticipated airdrop prompted many holders to sell their tokens and leave, rendering their remaining holdings potentially “worthless” due to the recent announcement.
While accusations fly, the Friend.tech team attempted to address concerns on September 10th. They claim no intention of shutting down the website application and reiterated that their actions only ensure no new fees on the platform’s layer-2 solution, Base.
The team maintains that core functionality remains unaffected, though skepticism lingers within the community.
Also Read: Friend.Tech Abruptly Shuts Down, Crypto Social Media Platform Burns Smart Contracts
Friend.tech’s situation highlights the inherent risks of investing in unproven crypto projects, particularly those with anonymous teams or unclear long-term plans. As the investigation continues, it remains to be seen if Friend.tech can weather this storm or if the allegations hold merit.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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