The case concerns a token known as 0XENCRYPT and the project that backs it, Encryption AI. A recent Reddit post alarmed community members about the events after the token crashed from $2.05 to trading at only $0.02, according to several price monitoring websites.
Encryption AI Developer Admits to Spending Project Money on Gambling
In other words, the token’s capitalization went from $2 million to only $20,000 in a matter of minutes, the post said. This happened during a capital migration event. The reason why this happened is the developer’s struggles with problem gambling. The anonymous developer’s self-confessed problem with gambling prompted him to tap into user funds and fuel his habit further.
A screenshot from a social media platform, most likely Telegram, shared on Twitter showed Encryption AI Dev writing a long post in which he explained that he had lost $300,000 to gambling in the space of a couple of months. He argued that it had never been his intention to scam people and that he had been “genuinely passionate” about coding things.
Regardless, this apology fell on deaf ears as community members stepped forward and called out the apology, saying it was a rug pull. The only difference this time around was that the developer had stuck around to issue an apology that did not sit well with any of the recipients of the project. Crypto Daddi, the online handle of a trader who had invested in the project, said that he ended up losing $30,000 on Encryption AI.
Encryption AI Dev’s post revealed a purported long-time fight and struggle with gambling addiction which made the person play at online casinos and burn huge sums of money that were only available as part of the blockchain project at the time when they needed the funds. The developer said that he was not sure about the future of the project either and argued that he was going to try and “be a better person” moving forward.