Trove faces class action calls amid rug pull allegations

Investors and crypto traders are calling for a class action lawsuit against the new project Trove. This comes after the project’s token collapsed by more than 10% in under 15 minutes. Allegations of a rug pull and misuse of investor funds grow louder. 

Just a week after Trove Markets completed its presale, the project’s developers made an abrupt decision to abandon HyperEVM in favor of launching on Solana. According to netizens, the migration blindsided contributors and is likely a ploy to rug the token’s market.

The so-called collectibles-perpetual decentralized exchange initially built its community and fundraising campaign around Hyperliquid. The team set out to raise $2.5 million but ended up collecting more than $11 million from investors who believed the token would launch on the same ecosystem.

On Monday, Trove announced it would migrate the product to Solana, prompting the community to accuse insiders and devs of creating exit liquidity.

Trove markets’ fully diluted volume dropped to $1 million

Hyperliquid community members are accusing Trove of deliberately delaying refunds while preparing a Solana-based launch that would allow them to retain all funds raised during the ICO. 

Its project backers tried to build credibility on Hyperliquid by acquiring 500,000 HYPE tokens and promising to use HIP-3. However, per blockchain data from Hyperscan, they began dumping the coins on Monday ahead of Trove’s launch on Solana.

When the TROVE token went live on Solana about 30 minutes before this publication, its fully diluted volume plunged from $20 million to a meagre $1 million. According to traders tracking the launch, the blockchain switch prevented Hyperliquid investors who had suspected a rug pull from pulling out any of their funds. 

“My $20,000 investment with 9+ mil committed should have resulted in $14k USDC back and $6k in $TROVE. Due to the token GIGA nuking, they gave me in total….$600 back,” complained one investor.

Moreover, there were allegations that Trove secretly paid crypto influencers to promote the ICO, who did not publicly disclose that they had been hired for the promotion. The Hyperliquid Daily X account specifically mentioned user @waleswoosh supposedly received $8,000 to promote the Trove ICO, citing blockchain investigator ZachXBT. 

Other influencers who were part of a Trove X space during the ICO, seen in a screenshot shared by 0xFinance, had purportedly placed the TROVE logo in their usernames in exchange for monthly payments of $5,000. This is, along with the privilege of purchasing tokens at half the price offered to the public.

Responding to Trove Market’s post about its move to Solana, ZachXBT asked the social media account about his findings showing funds being diverted to platforms.

“Want to explain to the community why your team bridged $45K from the Trove Angel Round raise on Jan 11 and deposited it directly into a casino deposit address?” the investigator asked.

He included transaction details listing the source and destination addresses for a casino deposit. In response, the Trove team reportedly suggested that the casino transfers might have been carried out by @_TJRTrades, a crypto personality known for gambling-related content. 

Naysayers rejected the explanation, noting that the same account had previously posted an overt promotion encouraging followers to buy the TROVE token.

“What’s really messed up is that this KOL didn’t even add an ad tag or warn users. Taking ads isn’t wrong, but if you don’t disclose it, it’s easy to overhype and cause the community to lose money. Especially investing in projects like TROVE,” wrote the Hyperliquid News account.

Crypto influencer pleads innocence, says Trove broke its promises

Meteversejoji, the username of one of the influencers seen on 0xFinance’s snapshot, posted a statement describing how he got in bed with Trove months before launch. He claimed that his team had invested in the project in October, and none of the advisors he was in communication with were informed about the change to Solana.

According to Joji, when he requested a refund days before launch, he was told he would be made whole at the token generation event, even though the team had already spent much of the raised capital.

“I honestly didn’t DD this enough, as I saw a board of big guys and just thought that would be enough + investing in this while on vacation and not really giving a f*** about who was behind it was pretty retarded. I’m sorry if I made you buy this, at least know I got scammed too,” Joji concluded.

The smartest crypto minds already read our newsletter. Want in? Join them.