Ren Protocol, which rose to popularity in crypto’s 2021 bull run, has announced that all assets and shares will be sent to cold wallets controlled by FTX debtors for safeguarding in case it shuts down.
The DeFi protocol was acquired just over a year ago by Sam Bankman-Fried’s crypto trading firm, Alameda Research. The move was intended to “expedite the decentralisation of its technologies,” according to its chief exec Tailing Zhang. However, the DeFi protocol soon became entrenched in the financial woes of FTX and Alameda that unfolded in November. It advised users to remove tokens from its Ren 1.0 network in December due to the bankruptcy of its parent firm, and said it sought external, additional funding in an attempt to safeguard its development of Ren 2.0.
According to a statement posted by Ren Protocol via Twitter on Wednesday morning, FTX “authorised and directed” Ren to move its assets “in advance of possible shutdowns of infrastructure and systems.” The announcement also explained that the cold wallets in which the assets will be held are separate from those used for other FTX debtors:
“The cryptocurrency assets will be transferred to distinct segregated wallets designated for these assets transferred by Ren, separate from the other Debtor cold storage wallets,” the statement read.
It remains unclear if Ren will shut down, but a portion of its community has assumed the worse. The announcement sparked concern and disbelief on Twitter, with some saying Ren was getting “legally rug pulled.”
Ren’s token sharply dipped in price directly after the protocol’s statement was made, falling as much as 11% in the past 24 hours. At press time, REN trades for $0.099, down 7.5% since yesterday.