• The scammer printed 3 million new tokens and sold them on KuCoin for an estimated ~300,000 USD
• The only person with the power to print new tokens was ‘Bruno Block’, the anonymous founder of the project
• Other members of the Oyster Pearl project appear to have been taken by surprise as well

An alarm swept through the crypto sections of social media today, telling users to cease all trading of Oyster (PRL). It now appears the founder of the project, an anonymous developer known as Bruno Block, has exitscammed.

Chaos on Social Media

The alarm was sounded on crypto channels on social media today, even channels completely unrelated to Oyster. On the Telegram channel for the project itself, admins were circulating this message:

“We can confirm someone has taken control of the Smart Contract. Do NOT BUY ANYTHING. We are waiting for more information and also trying out best to close KuCoin’s trading right now!”

The crime appears to have been timed specifically to go down when most of KuCoin’s employees were asleep, as it is the largest exchange on which Pearl has been trading.

Anonymity of Bruno Block

The project, which ultimately purported to become something like a stablecoin by offering storage on IOTA’s tangle, has an anonymous founder, known only s ‘Bruno Block’. Bruno defended his anonymity in January, saying:

“Because I invented the protocol and that might have political repercussions in the distant future, considering the protocol is the first to enable truly guaranteed storage privacy”

Obviously, it now appears his true motivations were far more sinister.

The anonymity also goes some way toward explaining the timing. KuCoin, again the main exchange for trading the token, is set to implement new KYC restrictions on November 1st. After that date, anonymous traders will only be able to withdraw up to 2BTC per day. With this exitscam, Bruno was able to dump newly minted tokens and cash out around $300,000.

Thrice Audited

As platform security goes, Oyster was rated quite highly. An update from the official telegram channel has this to offer:

“No smart contract bugs in Oyster Pearl have been found and the contract passed 3 separate audits. Directorship of the contract had to remain open so that peg could be adjusted. Earlier this morning directorship was transferred by the original Ethereum addressed controlled by Bruno Block, allowing new director to mint 3 mil new PRL.”

The claim that the directorship of the contract had to remain open seemed plausible enough – the purpose of the token is to be the means of exchange allowing users to purchase storage space. As the price of storage goes down over time, so the amount of storage per coin would have needed adjusting. However the directorship also allowed Bruno to reopen the ICO function and mint himself millions of new tokens for his exitscam.

Other members of the team have publicly addressed the disaster, and claim to have been shocked by Bruno’s betrayal as well. They are asking for anyone with knowledge of Bruno’s whereabouts to come forward. They also collectively hold some 5% of the total supply of PRL tokens, which may now be worthless, if the project cannot be saved.

Whether the project is dead at this time, and whether or not a hardfork is incoming if it does survive, is not clear at this time. We will follow this story closely.