Dragoma, a Web3 lifestyle sports application built on Polygon, was rug pulled in the latest example of such an event in the crypto community.
According to blockchain intelligence and security firm, PeckShield, the native token of the project – DMA – lost over 99% of its value following the incident.
DMA pumped to an all-time high on August 8 after the Singapore-based crypto exchange, MEXC, announced the listing of the token in the Assessment Zone and open trading for the DMA/USDT trading pair.
DMA then crashed to essentially zero after the team behind the fraudulent app pulled the rug.
Dragoma’s official website is currently down and the developers have deleted all the social media accounts.
PeckShield’s findings further revealed that the stolen funds appear to have been deposited into centralized exchanges.
Many experts consider rug pulls to be a less sophisticated but rampant crime in the crypto industry.
Last month, a Dogecoin rip-off called “TeddyDoge” pulled the rug on its users after pumping and dumping its native token, TEDDY.
In a bid to tackle the growing cases of rug pulls and other frauds related to virtual token distribution, misuse of private keys as well as hidden interests in crypto projects, New York State Senator Kevin Thomas introduced Senate Bill S8839 earlier this year.
The new bill calls for a law amendment that aims to impose rug pull charges on developers that sell over 10% of such tokens within five years from the date of the last sale of such tokens.