- More than 30% of the newly-launched EDEL token was acquired by wallets tied to the project shortly after its launch.
- A co-founder acknowledged these transactions as planned but did not clarify the use of complex token movements.
- Analysis shows the tokens were moved through numerous wallets and liquidity positions, a method often used to obscure transactions.
- The project’s tokenomics do not mention placing 60% of tokens in a vesting contract, despite statements from the co-founder.
- Edel Finance is a platform aiming to provide lending for tokenised stocks and has ties to notable financial and crypto industry professionals.
Edel Finance, a platform offering tokenised stocks, recently launched its EDEL token on November 12. The project described this launch as “fair,” noting that only 12.7% of the one billion tokens were allocated to team members. However, an onchain investigation by Bubblemaps showed that 60 wallets linked to Edel Finance controlled over 30% of the tokens immediately after launch, equivalent to approximately $11 million at current prices.
James Sherborne, a co-founder, acknowledged the token acquisition on social media but described it as a strategy to allocate 60% of the total token supply into a vesting contract. A vesting contract is a smart contract that releases tokens over time based on a predefined schedule. Sherborne’s explanation did not address why the tokens were first acquired through what is known as token sniping, where bots purchase tokens instantly upon release to gain an advantage.
This incident drew further scrutiny because the sniped tokens were transferred through multiple intermediary wallets and used to enter and exit liquidity positions on Uniswap. While not illegal, such complex transaction flows are commonly employed to hide the origin or destination of tokens. Cybercriminal groups, such as the sanctioned North Korean Lazarus Group, use similar techniques to launder stolen crypto assets, according to reports from Elliptic, a blockchain security firm.
Neither the team’s public communications nor the tokenomics documentation mention plans for placing a majority of tokens in a vesting contract before launch. When questioned by Bubblemaps about these inconsistencies and the transaction complexity, Sherborne did not offer further clarification. Additional requests for comments to Sherborne and Edel Finance have not been answered.
Edel Finance was founded within the last year and promotes itself as a global lending network for tokenised stocks, aiming to build infrastructure that is transparent, efficient, and scalable. The project highlights the professional backgrounds of its co-founders and advisers, which include former employees of Bank of America, JPMorgan, BlockFi, Uber, and Binance’s U.S. division. One co-founder, Giles Colwell, was previously an executive at BlockFi, which filed for bankruptcy in 2022 during his tenure.
Recent months have seen other crypto projects face similar controversies. Another startup, Apriori, attracted criticism after reports showed that a clustered group of wallets claimed about 80% of its token airdrop, raising questions about token distribution fairness.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent.
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