Speculations of a gradual rug pull involving LENX, a liquidity protocol, are spreading like wildfire on social media platforms. Rumors started circulating after it was discovered that the founders, John Kim and Paul, had transferred more than $10 million in treasury assets to a Binance account without any clear explanation, resulting in the depletion of LENX wallets.
Users on the protocol’s Discord server have expressed their frustration over the lack of communication since the transactions were first detected on March 26. Additionally, consistent transfers to Binance and messages discussing the suspicious withdrawals have been deleted. 
LENX Finance, which was launched in January 2024, had promised to support native Bitcoin for yield generation and borrowing. According to CoinGecko, LENX’s native token, LENX XD (XD), had a value of $0.26 in early January, but it currently stands at $0.02. The lending protocol FRAX Finance backs LENX.
Cointelegraph attempted to contact both co-founders of LENX Finance but did not receive an immediate response. The FRAX Finance team was also unavailable for comment. 
0xg4m813, a member of the community, has pointed out concerns surrounding the protocol amidst debates about fund transfers. Media company Flywheel DeFi reportedly had a conversation with Kim, but he declined to comment, stating that he had nothing to say at the moment. Paul’s last activity on Discord was on March 26, where he announced his ongoing investigation into the withdrawals.
According to reports on Discord, the LENX team managed to freeze the Binance account that received the funds, safeguarding $3 million. Ongoing investigations are said to be underway regarding Kim’s actions, while Paul is cooperating with legal endeavors.
A rug pull is a scam tactic where developers suddenly withdraw all funds from a project or liquidity pool, leaving investors with worthless tokens or assets.
In 2023, the Federal Bureau of Investigation (FBI) reported a significant increase in crypto-related investment fraud in the United States, with losses rising from $2.57 billion in 2022 to approximately $3.94 billion, marking a 53% increase.
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