Source: Polygon Intern X Account
Original Author: Rahul | Polygon Intern (@Rahul__Ghangas)
Translation: BlockBeats
Editor's Note:
On May 21, community member Rahul | Polygon Intern (@Rahul__Ghangas) posted a lengthy article on social media platform link accusing senior executives and internal personnel at Polygon of manipulating a meme coin called $ELE. The tweet included numerous screenshots as evidence, implicating not only Polygon executives but also individuals from Symbolic Capital, Multibit, BounceBit, GeekCartel, and Salus Security, among others. BlockBeats notes that these claims have not been confirmed and will continue to monitor the situation.
This incident has sparked considerable discussion in the crypto community, and crypto researcher @nake13 has summarized the "evidence" as follows:
Polygon's senior management and internal personnel planned the launch of a meme coin called $ELE, misleading and exploiting developers and community members, ultimately leading to the project's collapse. Key individuals involved include Kenzi Wang, partner at Symbolic Capital and advisor to Polygon; Jack Lu, co-founder of Multibit and BounceBit, and partner at @NGC_Ventures; Sanket Shah, strategic lead at Polygon Labs; as well as Jiayi Li, co-founder of GeekCartel GP and Salus Security.
The event began on January 3, 2024, when a group of KOLs gathered in a Telegram group to promote the $ELE meme coin. However, the token generation event had actually taken place secretly in December 2023, with most of the supply controlled by insiders. Developers and KOLs were promised USDC rewards, but from the outset, there were many warning signs, such as payment delays and out-of-pocket expenses.
The entire project revolved around the story of Sandeep, co-founder of Polygon, raising a pet elephant, which turned out to be a mere publicity stunt. Insiders continued to sell tokens, while developers and KOLs worked day and night to promote the project, hoping to eventually receive compensation. After months of effort and deception, the project ultimately collapsed from $17 million to $2 million, with early wallets frantically selling off. Developers and KOLs were furious as they never received the promised compensation.
The Polygon team attempted to absolve themselves of responsibility by releasing a photo of Sandeep's "pet elephant," which ultimately proved to be a ridiculous scam. Finally, the on-chain traces of Shawn Chong and Jiayi Li were exposed, with their claims of internal strife leading to the sell-off being debunked, as they had actually engaged in fraud.
"Manipulation" Details Revealed
@Rahul__Ghangas pointed out how Polygon's senior management and other internal personnel misled and exploited developers over several months, using a meme coin as an excuse to gradually undermine the community. If these allegations are proven true, it would mean that many memes are likely created through the funds of top projects, extensive control, and KOL endorsements. BlockBeats has translated the original text as follows:
Individuals Involved
Before I reveal what happened with $ELE (@elecoinxyz), I will present evidence of the involvement of most of the people who created it and eventually rug pulled it.
@0xkenziKenzi Wang: Partner at Symbolic Capital (psst, Google team), advisor to Polygon;
@jack_ventureJack Lu: Co-founder of Multibit, BounceBit, partner at @NGC_Ventures;
@sourcex44Sanket Shah: Strategic lead at Polygon Labs
Other individuals not shown in the image
Who is the Telegram user "雨花库库"?
@0xsachiSachi Kamiya: Founding team of Polygon Ventures, part-time venture partner at Symbolic, and dating Kenzi. Kenzi and Sachi are co-hosts of @0xbeaconpodcast.
@mscryptojiayiJiayi Li: GP at GeekCartel and co-founder of Salus Security
@shawnc0825 Shawn Chong: COO of Salus Security and investor at BounceBit
It seems like all these people are intertwined.
Timeline
On January 3, 2024, a group of KOLs gathered in a Telegram group to launch a meme coin on Polygon. However, the token generation event had already occurred secretly at the end of December, with most of the supply already captured by insiders. All developers and KOLs were promised compensation for their work (in USDC form).
The entire premise of the story is that Polygon co-founder @sandeepnailwal has a pet elephant, and they hoped to generate buzz around Elecoin by eventually showcasing a photo of Sandeep with his pet. Sounds absurd, right? But people are willing to buy anything strange during a bull market.
Clearly, this received support from Polygon's "top" individuals, who would comment on and approve or disapprove of every move.
Shortly after, the team began actively promoting marketing on X, Telegram chats, announcement channels, memes, and the whole shebang. The goal was to quickly reach 5,000 followers.
From the very first day, there were warning signs, with no small payments made and developers paying expenses out of pocket. Due to promises of payment later, the marketing team bore the brunt of the emotional burden in the Telegram group.
My involvement came a bit later, and on a small scale. A friend contacted me, asking if I could complete their website. I didn't receive any compensation, but I agreed to help, as having some good things in your pocket is always nice.
The person who authorized me to access the domain was none other than Kenzi Wang himself. Now I was skeptical, so for my friend's sake, I reached out to some VC friends to confirm that the Telegram account did indeed belong to Kenzi from Symbolic Capital (glad to have at least some good news).
There are a few more back-and-forth conversations here.
I participated after the website was launched, but I wasn't removed from the group. Over the next three months, what I observed was a long-brewing story. The wealthy used others' time and money. No payments, constant selling, gas manipulation, outright fraud.
Within a few days, as the team pushed the narrative and worked hard on the project, some large early wallets began slowly selling off. Thousands of dollars every day, and constantly assuring that the project was reliable, but this only involved early snipers or hunters.
Next is Sandeep's tag. This was a carefully planned series of steps, "approved by the Polygon team," continuously posting Sandeep's tag eventually got him involved and expanded the community.
The team received assurances that Sandeep and other Polygon personnel would actively participate in the team's work. And look, they did. From the first interaction, to the first reply, to changing his PFP to the elephant meme, the timing was impeccable.
All of this was pre-designed (at least it looks that way). Promises, team instructions, how to make it look reasonable, and how to get involved. Everything operated as promised, with some forwarded messages hiding users' accounts, just like Voldemort (you know, that Voldemort).
Selling has been ongoing all along, with early wallets continuously selling off, while the developer and KOL teams pushed the narrative day after day. Twitter spaces, airdrop events, raids, community engagement…
I observed how meme coins gain critical mass.
When the initially hired Telegram makeover team didn't succeed, some people joined a better team out of their own pockets, believing they would be compensated regardless.
Meanwhile, the constant selling continued. Over the past three months, the team has been involved as if it were a full-time job, with promises of compensation and the hope of catching a big project.
The situation has persisted, with continuous selling from super early buyers, but no one can blame it on insiders, as all these wallets received new funds from CEX before purchasing.
Then one night, someone broke through the resistance, and everything spiraled out of control. In less than two weeks, the market cap plummeted from $17 million to below $2 million. After that, all early wallet holders began selling off, and chaos ensued. As expected, all the team members who worked for free were angry.
The Polygon team attempted to absolve themselves of all responsibility by sending Sandeep's "elephant photo," indicating that this was a rather bad scam from the start. This "pet elephant" was actually a rescued elephant, and Sandeep just made a small donation for its well-being (haha).
But like every Gooner, someone left a trace on the chain. It was none other than Shawn Chong and Jiayi Li. Honestly, how are these guys running a security company?
In response, Jiayi became super conservative and claimed that the reason insiders were selling was due to internal strife. Now I don't want to spread any rumors, but these people really need to rein it in.
After selling out the developers for $5, she continued to offer a $100 marketing budget, how generous!
After all this, @0xkenzi still had the courage to propose raising funds for the meem coin fund. By the way, he has already raised millions of dollars for a Crypto x AI project @sentient_agi, with Sandeep being a part of that team, which may eventually be sold in the retail sector.
I want to remind everyone that @zachxbt has posted about Kenzi and his former fund, threatening and abusing the founders. Now he leads @symbolicvc, whose partners and co-founders include @sandeepnailwal.
And then there's Jack Lu, the guy who keeps launching garbage projects, from the MultiBit Bridge project @multibit_bridge, to the scam launch platform @bounce_finance, to a centralized "BTC re-staking" platform @bounce_bit.
This is my brief story, witnessing the rise and fall of a memecoin, driven by greed, deception, exploitation, and destruction, and to some extent, desire. The only reason I can post this content is because the developers and KOLs are still angry about not getting paid!
It's disheartening to see influential executives and venture capitalists using their positions to exploit earnest developers and community members.
If bad actors can deceive and defraud without consequences, the web3 ecosystem will not be able to fulfill its transformative potential. We need to cultivate a culture of transparency, integrity, and respect. When powerful participants abuse their positions, they must be held accountable.
Exploiting others for personal gain goes against the spirit on which this industry was built.
As a community, we must do better. When we see misconduct, we must first speak out, as brave individuals have done here in exposing this fraud. But it cannot end there.
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