Crypto investor says he lost 6 digits on dog-inspired DeFi project

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Brian Nguyen says he “woke up unexpectedly” on Friday to see that he had lost nearly $ 470,000 that he had invested in a crypto project, he told CNBC Make It.

It’s “quite painful,” says Nguyen.

Nguyen admits that he did not thoroughly investigate the project before investing. “We in crypto tend to have a ‘buy first, research later’ mentality,” he says.

It is currently not known exactly what happened with the project in which Nguyen invested.

It appears that the project, called AnubisDAO, raised $ 60 million with the sale of its token, ANKH.

(A DAO is a decentralized, autonomous organization that runs on blockchain technology. Simply put, “a DAO is an Internet community with a shared bank account,” Cooper Turley, an investor and builder of multiple DAOs, previously told CNBC. popular. Anubis has identified himself as a DAO, project details and purpose are unclear.)

According to Nguyen and others who say they have invested in AnubisDAO, all of the $ 60 million in funds have been transferred and disappeared.

Some believe it could be a phishing attack, where attackers typically send emails with links asking for the holder’s private keys. Others believe it could be a “rug pull”, a common type of crypto scam where developers abandon a project and walk away with investor funds – although there is currently no concrete proof of this.

AnubisDAO did not immediately respond to CNBC’s Make It request for comment.

The token sale began on Thursday and ended on Friday, during which Nguyen invested six figures of ether, he said. (CNBC Make It could not independently confirm that the investment is associated with Nguyen’s name.)

Although he was not involved in the development of the project and had little information about it, he says AnubisDAO attracted him because it marketed itself in the same way as other crypto Coins inspired by dogs like dogecoin or shiba inu, which have gained popularity in recent times. .

The sale on Copper Launch, a well-known crowdfunding mechanism, also added some legitimacy, Nguyen says.

And Nguyen says he heard that AnubisDAO has the backing of a pseudonymous crypto influencer called 0xSisyphus, whom Nguyen respects, he says.

“So I had some conviction about the purchase.”

0xSisyphus had tweeted about AnubisDAO and the token sale prior to this incident, but 0xSisyphus tweeted on Friday that the namesake of the 0xSisyphus account “is clearly compromised”, suggesting that 0xSisyphus had no part in the AnubisDAO situation .

0xSisyphus has also since tweeted about issuing a 1,000 ethers (or roughly $ 4 million) bounty to help track down any lost funds.

0xSisyphus did not immediately respond to CNBC’s Make It request for comment.

After people started tweeting and talking about losing their money on Reddit, the AnubisDAO tweeted that the incident was the result of an “unforeseen error with Copper [Launch]. “

In response, Copper Launch said it had not been compromised, “but the Anubis team appears to have compromised their administration keys,” or a string of letters and numbers similar to a password used to unlock access to a holder’s cryptocurrency.

Copper Launch tweeted that any entity can use its crowdfunding mechanism, explaining that a launch on its platform is not approval of the project. “That being said, mistakes happen even with great projects and teams. Making money on the internet isn’t always easy. We wish the @AnubisDAO team and community all the best,” Copper wrote. .

Unfortunately, losing money in such crypto investments is not uncommon. If it is a scam or phishing attack, the funds are unlikely to be returned, although it is not impossible.

This is partly why experts generally view cryptocurrency as a risky, volatile, and speculative investment. When it comes to investing in decentralized finance, or DeFi, apps or tokens, experts recommend investing only what you can afford to lose.

“I think every DeFi protocol and every DeFi project has a different level of risk and level of reward,” Meltem Demirors, chief strategy officer for CoinShares, told CNBC Make It. But, “It’s important to understand why the reward is high is because the risk is higher. The reason we see high return is because there is risk here.”

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