Trove team secretly sold tokens! ICO participants suffered significant losses, with the maximum trading FDV plummeting 95%

Trove plummeted 95% within 4 hours of launch, with FDV dropping from $20 million to $950,000. The ICO raised $11.5 million, with $9.4 million reserved. The founder of The Block condemns it as a scam. Controversies include repeated insider trading in the ICO, abandoning Hyperliquid for Solana, and dumping 500,000 HYPE tokens. Polymarket predictions of a failed launch have come true.

ICO Raises $11.5 Million, FDV Drops 95%

(Source: Trove)

On January 20, the Perp DEX Trove launched TROVE token trading just 4 hours ago, opening at a fully diluted valuation (FDV) of $20 million. Currently, FDV has fallen to about $950,000. Such a catastrophic opening is extremely rare in ICO history, representing a 95.25% loss in market value from $20 million to $950,000.

Last week, after raising $11.5 million via ICO, Trove claimed it would retain $9,397,403 for continued development of the Perp DEX on Solana. This has sparked strong dissatisfaction within the community, with ICO participants suffering significant losses and accusing the team of Rug Pull. Mike Dudas, founder of The Block, stated: “After raising funds from the public under false pretenses, Trove still retains $9.4 million of ICO funds. Any service providers, advisors, KOLs, or others involved in collecting these funds should be exposed and condemned.”

The losses for ICO participants are severe. For example, if an investor invested $10,000 at a $20 million valuation during the ICO, their post-launch value would be only about $475, a loss of 95.25%. Even more infuriating, the team kept the $9.4 million raised, while investors face almost total losses. This unfair distribution of funds has raised questions about the project’s legitimacy.

Key Data on Trove ICO

Funds Raised: $11.5 million (4.6x oversubscription)

Opening FDV: $20 million

Current FDV: about $950,000 (down 95.25%)

Team Reserve: $9.4 million

Investor Loss Rate: Over 95%

This level of fund retention has sparked controversy. Typically, ICO funds should be used for project development, marketing, and operations. But Trove retained up to 82% of the raised funds ($9.4 million out of $11.5 million), far above industry averages. Normally, project teams start using ICO funds for development before token launch, not holding large cash reserves after.

Repeated ICO Rules and Insider Trading on Polymarket

(Source: Polymarket)

Earlier reports indicated Trove has faced ongoing controversy, with community feedback pointing to “paid promotion to KOLs, with funds flowing to entertainment platform deposit addresses,” and “ICO deadline repeatedly shifting.” Less than two hours before the ICO deadline, the prediction market on Polymarket for “Trove ICO total funds raised exceeding $20 million” was nearly zero in probability.

Then the drama unfolded. The team suddenly broke the rules, announcing a 5-day extension to ensure fair distribution. The “YES” option on Polymarket shot from near zero to nearly 60%. Insider traders clearly acted ahead of the announcement, with on-chain data showing specific wallets placing precise bets before the announcement and quickly cashing out after the price surged.

Perhaps believing the liquidity of the prediction market was insufficient, amidst community doubts, Trove’s team backtracked, canceling the extension and ending the ICO as originally planned. Following this announcement, the corresponding market was settled at zero. Data from Polymarket shows related wallets had placed accurate bets before the news and continued to profit from the reversal.

The evidence of manipulation is very clear. Before internal team decisions were publicly announced, certain wallets had already heavily bet on Polymarket. Minutes after the announcement, they cashed out profitably, timing precise to alarming levels. Such insider trading is clearly illegal in traditional financial markets, but in crypto, due to lack of regulation, project teams and related parties can manipulate prediction markets for profit without consequence.

Abandon Hyperliquid Suddenly, Shift to Solana, Team Dumps HYPE

On January 17, Trove suddenly announced abandoning Hyperliquid and shifting to issuing tokens on Solana. For an ICO project that had been fundraising under the Hyperliquid ecosystem banner, this is equivalent to pulling the rug. Moreover, the plan abruptly changed course, abandoning Hyperliquid to rebuild the entire Perp DEX on Solana. Simultaneously, Trove’s operations began dumping HYPE tokens.

On-chain detective MLM detected Trove’s team using timed sell functions to try to offload half of their HYPE tokens within 40 minutes. Choosing to sell millions worth of tokens over a weekend with minimal liquidity in just 40 minutes shows they are truly desperate. Facing community outrage, the official explanation was that LPs decided to close out 500,000 HYPE positions due to “recent negative sentiment,” changing their original plan.

This behavior has thoroughly shattered community trust. Trove, which originally promoted “Perp for everything” with its collection of perpetual contracts DEX, has in just ten days staged a series of chaos: ICO rule reversals, insider trading on Polymarket, sudden abandonment of Hyperliquid, and shifting to Solana.

KOL Marketing Scandal and Low-Price Share Exposure

ZachXBT, a well-known on-chain detective, revealed that Trove paid @TJRTrades up to $45,000 in marketing fees, directly transferred to the KOL’s gambling site deposit address. This suspicious fund flow suggests Trove’s marketing budget may have been diverted for non-project purposes.

KOL @hrithikk stated that Trove’s team not only paid generous marketing fees but also privately offered ICO allocations at a valuation as low as $8.5 million, a 60% discount, with huge airdrop rewards. Trove is still selling shares at low prices, and has asked him more than five times whether he could invest.

This double standard is extremely unfair. Ordinary ICO participants buy tokens at a $20 million valuation, while KOLs and insiders can acquire shares at $8.5 million (a 57.5% discount). When tokens plummet after listing, ordinary investors suffer heavy losses, while insiders holding low-cost shares can still profit if they sell at current prices.

The good news is that this chaos may not end with a simple “Soft Rug.” Trove previously claimed on its website to comply with EU MiCA regulations. Now, facing false advertising and potential fraud allegations, angry investors have every reason to initiate civil lawsuits under MiCA provisions.