A previous article on Crypto.IQ discussed how the Founder of SushiSwap, Chef Nomi, abruptly dumped the entire SushiSwap dev fund over the weekend and profited $14 million of Ethereum (ETH). This caused the SushiSwap market to collapse from a price of $10.37 down to $1.41, causing widespread damage to investors, resulting in mass rage against Chef Nomi.
Chef Nomi said that it was his right to cash out the entire dev fund, since it was his share for founding the project, but his argument was quite tenuous, since technically the dev fund is supposed to be used for developing. Indeed, draining out an organization’s dev fund is equivalent to embezzlement.
In a sudden turn of events, Chef Nomi has just returned the $14 million of Ethereum (ETH) he drained from the dev fund, in addition to issuing a public apology, where he admits that his actions were greedy and wrong.
It is obvious that Chef Nomi was probably doxxed, i.e. some of the people damaged by his actions discovered his true identity, and he was probably threatened with legal action. This is just speculation, but it is certainly out of the usual for someone to return $14 million after they essentially stole it, and this sort of thing can only come through coercion.
In any case, even though it is a positive step that the dev fund has been returned, this does not reverse the damage that Chef Nomi caused. Indeed, the SUSHI token is trading at $2.70 currently, which is over 70% lower than its peak of $10.37. Further, SUSHI probably would have rallied much more than it did if Chef Nomi didn’t dump the dev fund.
Thus, although Chef Nomi returned the dev fund, he is still responsible for widespread investor losses he caused when he crashed the market this past weekend by dumping the dev fund all at once. The reality is that Chef Nomi taking the dev fund is legally equivalent to embezzlement, and it is completely improper for anyone to drain the dev fund of a governance protocol like SushiSwap without a vote.
Therefore, Chef Nomi remains in hot water, and a legal case could be brought against him in the coming weeks.