Scroll Ecosystem’s Stablecoin Project Faces Major Crisis Amid Rugpull Concerns

The cryptocurrency market was rattled Saturday as Scroll ecosystem’s stablecoin project Essence Finance came under intense scrutiny following suspected rugpull activity. The project’s stablecoin, CHI, experienced a devastating 98% price crash, while reports emerged of millions in collateral being withdrawn, leading to widespread speculation of fraudulent activity.

Market Shock as CHI Stablecoin Plummets

According to latest market data from GeckoTerminal, the CHI token’s value has plunged to $0.01643, marking a staggering 98% decline. The stablecoin also recorded a sharp 33% drop within a single hour, intensifying bearish sentiment among investors and traders.

Adding to market concerns, crypto reporter Wu Blockchain revealed that over $20 million worth of collateral was allegedly removed from the project. Further raising red flags, Essence Finance’s social media presence has been notably quiet, with their X (formerly Twitter) account showing no original posts since September 11.

Current trading metrics show CHI’s volume at $45,934,800, with a relatively small holder base of 133 addresses.

Scroll Ecosystem Faces Reputation Challenge

The suspected rugpull has dealt a significant blow to the zero-knowledge rollup protocol Scroll (SCR), coming at a particularly unfortunate time following recent positive developments. The project had recently achieved significant milestones with listings on major exchanges including Binance and Bybit, while Coinbase had introduced perpetual trading for the token.

The fallout has impacted SCR’s price performance, with the token dropping approximately 8% in the past 24 hours to $0.8274, fluctuating between $0.7844 and $0.9105. This incident has triggered increased scrutiny from the global crypto community, potentially affecting investor confidence in the broader Scroll ecosystem.

Market participants are advised to exercise caution and conduct thorough research before making investment decisions. The cryptocurrency market inherently carries risks, and this situation serves as a reminder of the importance of due diligence in the digital asset space.