Crypto Investment Firm Accuses ICHI Protocol Founders of Orchestrating $16M Rug Pull
On Wednesday, April 9, 2025, Law.com reported that Hash Asset Management Ltd. has filed a lawsuit in Delaware state court against the founders of the ICHI cryptocurrency protocol, alleging that they orchestrated a fraudulent scheme that resulted in a loss of over $16 million for investors. The lawsuit claims that the defendants engaged in a pump-and-dump scheme that caused the collapse of a yield-earning cryptocurrency pool.
The legal representation for Hash Asset Management includes Daniel A. Griffith, co-chair of the litigation department at Whiteford, Taylor & Preston, and George Benaur, of counsel at Belgravia Law in New York. The defendants named in the lawsuit are DMA Labs Inc., its officers Bryan Gross and Nick Poore, the ICHI Foundation, associate Tyler Pinter, and business manager Julian Brand.
Benaur emphasized that this case is fundamentally about fraud, despite being centered on cryptocurrency. He stated, “This was a fraud case where the crypto platform was used to commit a fraud and cause losses of over $16 million.” He further indicated that the lawsuit aims to hold the individuals accountable, asserting that using corporate structures to perpetrate fraud will have consequences.
ICHI, launched in early 2021, operates on the Ethereum blockchain and is designed to create project-specific stablecoins referred to as “oneTokens,” which were intended to be backed by deposits of stablecoins like USD Coin. Investors were promised the ability to mint and redeem oneTokens on a 1:1 basis while earning yields by contributing liquidity to a specific pool known as Rari Pool 136. However, the lawsuit claims that this pool was set up with excessively high leverage, allowing borrowers to use the volatile ICHI token as collateral to secure stablecoins.
According to the complaint, the defendants allegedly utilized this structure to artificially inflate the price of the ICHI token. They reportedly borrowed against their own tokens to acquire more of the asset, thereby driving up its value and leveraging that increased value to extract additional stablecoins. The lawsuit contends that Gross and his co-defendants secretly depleted millions from the “community treasury” without any consensus or vote from investors.
The complaint details instances where this treasury, supposedly protected by smart contracts and user consent, was unilaterally accessed to support the ICHI token or to fund the liquidity pool, thereby leaving investors at risk. Following a surge in the value of the ICHI token from $79 to $139 in early April 2022, insiders allegedly began selling their holdings. This selling pressure triggered a rapid decline in the token’s value and a series of liquidations that ultimately led to the pool’s collapse. The redemption mechanisms failed during this period, leaving investors with worthless assets while the defendants profited significantly.
Hash Asset Management has filed multiple claims in the Delaware Court of Chancery, including allegations of fraud, selling unregistered securities, market manipulation, breach of contract, and conversion. Eugene Uporov, general counsel for Hash, noted that the lawsuit raises important concerns regarding governance and investor protection within the decentralized finance (DeFi) sector.
DeFi refers to a peer-to-peer financial ecosystem that leverages blockchain technology to eliminate traditional financial intermediaries, thereby aiming to provide accessible financial services through cryptocurrencies. Uporov highlighted that this case underscores critical issues within the digital asset industry, particularly concerning the misuse of investment pool structures that are presented as decentralized. He remarked that the reality of the situation contradicted the advertised principles of decentralization, which threatens the trust of participants in the ecosystem.
Source: Law.com
