LENX Treasury Drained, Funds Sent to Founder John Kim's Binance Address

Samuel McCulloch
Samuel McCulloch
March 28, 2024
LENX Treasury Drained, Funds Sent to Founder John Kim's Binance Address

Today we found reporting from X user AstroBoy that LENX Founder John Kim had moved $10m worth of treasury assets to a Binance account without any preceding comments.

Since the end of the LBP, John moved thousands of ETH from the treasury to his personal address fraxx.eth and his Binance account.

The team has claimed that Binance had frozen the account the funds were sent to. It's unclear if the funds are still there or had been moved. At this point it looks like a potential theft has allegedly taken place and John and his co-developer Paul who are on the 2/2 keys for the treasury multi-sig are responsible.

We reached out to John for comment, but he declined to say anything.

After the transfer of funds was discovered, the team claimed today contacted Binance and had the account frozen.

Apparently, all of LENX's remaining funds have now been moved back into a new multi-sig treasury.

However, when we asked the discord, about the multi-sig, we were told that both john and Paul control it.

A few minutes before we published this article, a person claiming to be the CTO came into the frax chat and said that they had secured $3 million from the treasury and that Paul was fully cooperating. He further said that an ongoing investigation was being conducted into John’s actions.

What is LENX

We've covered LENX here on Flywheel before, conducting an interview with John and writing about the project while they were raising funds for their LBP.

How LENX is Shaping the Future of Bitcoin on Fraxchain
Get the latest DeFi podcasts, newsletters, hackathons & IRL events straight to your inbox.

We wrote then:

LENX calls itself an “Omnichain Bitcoin Liquidity Protocol” which means they are building a new decentralized wrapper for native Bitcoin, called xBTC, to be used on Ethereum and other L2s, notably Fraxchain. They also are building other DeFi products to support xBTC, an Omnichain swap, a new BAMM gauge, and a Bitcoin backed CDP. 

Public History of the Alleged Theft

On March 21, 2024, user Samy posted a picture of the team multi-sig showing that it had only 3m in funds. This was $10m less than the project raised.

Over the next week, liquidity was also removed for the XD pair from their Uniswap v3 contract.

With the community starting to raise question, XD team member Paul said that "lawyers" are getting involved and they would provide more details soon.

At this point, people were spooked. Liquidity for trading had evaporated, John was missing with $10m in treasury assets and no one really knew what was happening.

Twitter erupted with claims of previous malfeasance on the part of John, saying he's a serial scammer and had stolen money before and escaped to the US from Korea to escape prosecution.

John popped back in the chat today and shared that the "team knows where I'm at."

We'll be updating this as we discover more information.

More from Flywheel

View More

Subscribe and join the Flywheel family

Always Free. Never Spam.

Harness the power of the flywheel.

Not financial advice. Flywheel content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.

Flywheel and affiliates are not liable for any investment losses or damages resulting from your reliance on any information provided.

2023 ©️ Flywheelpod Inc. All rights reserved.