Community Exposes Major Scandal in Polygon: Executives Manipulating Meme Coins to Exploit Investors?
The Polygon team attempted to absolve themselves by releasing a photo of Sandeep's "pet elephant," which turned out to be a ridiculous hoax
Source: Polygon Intern X Account
Original Author: Rahul | Polygon Intern (@Rahul__Ghangas)
Translated by: BlockBeats
Editor's Note:
On May 21, community member Rahul | Polygon Intern (@Rahul__Ghangas) published a lengthy post on social media accusing Polygon's top executives and insiders of manipulating a meme coin called $ELE. The post included numerous screenshots as evidence. Besides Polygon executives, the evidence also implicated projects and their leaders from Symbolic Capital, Multibit, BounceBit, GeekCartel, and Salus Security. BlockBeats notes that these claims have not been verified and will continue to monitor the situation.
This incident has sparked considerable discussion within the crypto community. Crypto researcher @nake13 summarized the "evidence" as follows:
Polygon's top executives and insiders orchestrated the launch of a meme coin called $ELE, misleading and exploiting developers and community members, ultimately leading to the project's collapse. Key figures involved include Symbolic Capital partner and Polygon advisor Kenzi Wang, Multibit and BounceBit co-founder Jack Lu, Polygon Labs head of strategy Sanket Shah, and GeekCartel GP and Salus Security co-founder Jiayi Li.
The incident began on January 3, 2024, when a group of KOLs was gathered in a Telegram group to promote the $ELE meme coin. However, the token generation event had secretly taken place in December 2023, with most of the supply controlled by insiders. Developers and KOLs were promised USDC compensation, but there were many warning signs from the start, such as payment delays and out-of-pocket expenses.
The entire project revolved around a story about Polygon co-founder Sandeep having a pet elephant, which was merely a publicity stunt. Insiders continuously sold off tokens while developers and KOLs worked tirelessly to promote the project, hoping to eventually get paid. After months of effort and deception, the project collapsed, plummeting from $17 million to $2 million, with early wallets selling off in a frenzy. Developers and KOLs were furious as they never received the promised compensation.
The Polygon team tried to distance themselves by releasing photos of Sandeep's "pet elephant," which turned out to be a ridiculous scam. Ultimately, the on-chain traces of Shawn Chong and Jiayi Li were exposed. They argued that internal conflicts led to the sell-off, but the truth was that they used their positions to commit fraud.
Details of the "Manipulation" Exposed
@Rahul__Ghangas pointed out how Polygon's top executives and other insiders misled and exploited developers over several months, using the meme coin as an excuse to slowly undermine the community. If proven true, this would imply that many memes are created through funding from top projects, high control, and KOL promotion. BlockBeats has translated the original text as follows:
Involved Personnel
Before I reveal what happened with $ELE (@elecoinxyz), I will present evidence of most of the people involved in its creation and eventual rug pull.
1. @0xkenzi Kenzi Wang: Partner at Symbolic Capital (psst, Google team), Polygon advisor;
2. @jack_venture Jack Lu: Co-founder of Multibit and BounceBit, partner at @NGC_Ventures;
3. @sourcex44 Sanket Shah: Head of Strategy at Polygon Labs
4. Others not shown in the picture
5. Who is the tg name "Rainflower Kuku"?
6. @0xsachi Sachi Kamiya: Founding team of Polygon Ventures, part-time venture partner at Symbolic, and dating Kenzi. Kenzi and Sachi co-host @0xbeaconpodcast
7. @mscryptojiayi Jiayi Li: GP at GeekCartel and co-founder of Salus Security
8. @shawnc0825 Shawn Chong: COO of Salus Security and investor in BounceBit
These people seem to be all mixed together.
Timeline
On January 3, 2024, a group of KOLs gathered in a Telegram group to launch a meme coin on Polygon. However, the token generation event had secretly occurred at the end of December, with most of the supply captured by insiders. All developers and KOLs were promised compensation (in USDC) for their work.
The premise of the whole story was that Polygon founder @sandeepnailwal had a pet elephant, and they hoped to create buzz for Elecoin by eventually releasing photos of Sandeep with his pet. Sounds ridiculous, right? But people are willing to buy any strange thing during a bull market.
Clearly, this had the support of Polygon's "top" people, who would comment approvingly or disapprovingly on every move.
Soon after, the team began aggressively pushing marketing, posting on X, tg chats, announcement channels, memes, and the whole shebang. The goal was to reach 5,000 followers as quickly as possible.
There were warning signs from day one, with small payments not being made and developers paying out of pocket. Marketers paid for tg sentiment due to promises of later payment.
My involvement came a bit later and was on a smaller scale. A friend contacted me asking if I could complete their website. I wasn't paid, but I agreed to help, as it's always good to have some goodies in your pocket.
The person who authorized me to access the domain was none other than Kenzi Wan
g myself. Now I am skeptical, so for my friend, I contacted some VC friends to confirm that the tg account indeed belongs to Kenzi from Symbolic Capital (glad to have at least some good news).
Here are a few back-and-forth conversations.
I got involved after the website was published, but I was not removed from the group. Over the next three months, what I observed was a long-drawn-out story. The wealthy exploiting others' time and money. Non-payment, constant selling, gas manipulation, outright fraud.
Within days, as the team pushed the narrative and worked on the project, some large early wallets began to slowly sell. Thousands of dollars daily, with constant assurances that the project was reliable, involving only early snipers or hunters.
Next came Sandeep's tag. It was a set of well-orchestrated steps, "approved by the Polygon team," constantly releasing Sandeep's tag to eventually get him involved and develop the community.
The team was promised that Sandeep and other Polygon personnel would actively participate in the team's work. Look, they did it. From the first interaction to the first reply, to turning his PFP into an elephant meme, the timing was impeccable.
It was all pre-designed (at least it seemed so). Promises, team instructions, how to make it look reasonable, and how to get involved. Everything operated as promised, with some forwarded messages hiding users' accounts, like Voldemort (yes, that Voldemort).
All the while, the selling continued, with early wallets constantly selling, while the developers and KOL team pushed the narrative day after day. Twitter spaces, airdrop events, raids, community engagement...
I observed how a memecoin gained critical mass
When the initially hired tg modification team didn't succeed, some people paid out of their own pockets to join a better team, believing they would get paid anyway.
Meanwhile, the constant selling continued. For nearly three months, the team worked on it like a full-time job, with promises of payment and the hope of catching a big project.
The situation persisted, with constant selling from super early buyers, but no one could blame insiders because all these wallets were new funds obtained from CEX before purchasing.
Then one night, someone broke the resistance, and everything spiraled out of control, the whole situation plummeted. In less than two weeks, the market cap dropped from $17 million to below $2 million. After that, all early wallet holders started selling, and the situation was chaotic. As expected, all the team members who worked without pay were furious.
The Polygon team tried to shirk all responsibility by sending Sandeep's "elephant photo," indicating that it was a pretty bad scam from the start. This "pet elephant" was actually a rescued elephant, and Sandeep just made a small donation for its welfare (haha).
But like every Gooner, someone left traces on the chain. None other than Shawn Chong and Jiayi Li. Seriously, how do these guys run a security company?
In response, Jiayi became super conservative, claiming that insiders sold because they had internal conflicts. Now, I don't want to spread any rumors, but these people really need to tone it down.
After selling $5 to these developers, she continued to offer a $100 marketing budget, how generous!
After all this, @0xkenzi still had the courage to propose raising funds for the meem coin fund. By the way, he has currently raised millions of dollars for a Crypto x AI project @sentient_agi, with Sandeep as part of the team, which might eventually be sold in retail.
I want to remind you that @zachxbt has already posted about Kenzi and his former fund, where they threatened and abused founders. Now he leads @symbolicvc, with his partner and co-founder @sandeepnailwal.
And Jack Lu, who keeps launching junk projects, from the ordinal multi-signature bridge project @multibit_bridge, to the scam launch platform @bounce_finance, to a centralized "BTC re-pledge" platform @bounce_bit.
This is my short story, I witnessed a memecoin
The rise and fall, driven by greed, misinformation, exploitation, and destruction, as well as a certain degree of desire. The only reason I can publish this content is that developers and KOLs are still angry that they were never paid!
It is frustrating to see influential executives and venture capitalists using their positions to exploit earnest developers and community members.
If bad actors can mislead and defraud without consequence, the web3 ecosystem will not realize its transformative potential. We need to foster a culture of transparency, integrity, and respect. When powerful participants abuse their positions, they must be held accountable.
Exploiting others for personal gain goes against the spirit on which this industry was built.
As a community, we must do better. When we see misconduct, we must first speak out, just as the brave individuals here have done in exposing this fraud. But it cannot end there.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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