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ZachXBT, a prominent figure in the blockchain and crypto security circle, has once again flagged Gotbit, a cryptocurrency market maker whose founder previously admitted that the business is "not entirely ethical." Bybit/flickr.com

KEY POINTS

  • $CP and $YE developers disappeared last week and their social media accounts have been deleted
  • ZachXBT said there may be no "bigger red flag" for projects than Gotbit partnerships
  • The crypto security researcher previously flagged Gotbit's "highly questionable services"

A well-known cryptocurrency security researcher has warned the crypto community of taking caution when looking into projects that chose crypto market maker Gotbit as their partner, noting how there were two rug pull incidents in projects under the hedge fund.

"Not sure if there is a bigger red flag for a project than 'partnered with @gotbit_io,'" ZachXBT wrote on X (formerly Twitter) Monday. He noted that "just in the past week alone two of their partnered projects exit scammed."

The projects in question were ChainPulse ($CP), and YeOnSolana ($YE), both of which have since deleted their X accounts. ZachXBT went on to reveal that he found "so many rugs" that partnered with Gotbit, with at least three to four detected so far in March.

A rug pull is a type of exit scam wherein a crypto developer or team raises money by selling tokens, only to suddenly vanish after taking the funds, leaving hopeful investors with worthless tokens.

Gotbit has since responded to ZachXBT in an X thread, saying the hedge fund "lost money" on $CP and $YE" and it has lost money in 50 other meme coins, but its strategy was "to spray and pray." It also said ZachXBT had no proof of his claims that Gotbit was "dumping on everyone."

ZachXBT, who is prominent in the industry for uncovering crypto scams and suspicious on-chain activity, reiterated that he can name more scams that partnered with Gotbit such as $MACHO and $SOMBRERO. "You are proven bad actors to the space and provide absolutely zero value to the space," he responded to the crypto market maker.

This is not the first time ZachXBT flagged Gotbit. In September, he noted that the company has "highly questionable services." He revealed a screenshot of Gotbit's promises wherein it says it can pump a token's price "to create FOMO (fear of missing out) so as to reach "extreme Xs and sell maximum tokens on the subsequent spike." The market maker did not make an official statement following ZachXBT's September revelation.

In 2019, Gotbit co-founder Alexey Andryunin admitted that the company's "business is not entirely ethical," which is why it is not registered in any jurisdiction. He also revealed that at least only three of the 30 projects Gotbit was working with at the time were "really creating some value."

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