As the ESPORTS token, the virtual asset of YooldoGames (Yooldo), developed by domestic game company Catze Labs, has plunged more than 90%, attention is focusing on Catze Labs' past conduct. Catze Labs says it is a separate development company unrelated to Yooldo and has nothing to do with the issuance, operation, distribution, selling, or price-related actions of the ESPORTS token, but past posts suggest it is closely connected.
According to a compilation of reporting by ChosunBiz on the 5th, the English website of Catze Labs, led by CEO Shin Do-heon, describes Yooldo as "our flagship platform that connects existing games and the Web3 world." In Oct. 2024, a post introducing Yooldo appeared on the website of the virtual asset wallet MetaMask, and the author's name was "Shin Do-heon." A major investor in Yooldo, the ESPORTS issuer, said the head of Yooldo is "CEO Shin."
Yooldo and Catze Labs employees are known to work together in an office in Gangnam District, Seoul. On job sites, Catze Labs also introduces Trouble Punk, Yooldo's flagship game, as its own flagship game.
From 6 p.m. to 10 p.m. on the 25th of last month, 197.8 million tokens—43% of the total circulating supply—were sold in ESPORTS, sending the price down more than 90% from $0.70 to $0.05. The ESPORTS tokens sold were exchanged for 20,401 BNB coins. That is about $13.65 million (about 20.5 billion won).
In the industry, suspicions are emerging that this may have been a rug pull (investment withdrawal scam) by an insider. A rug pull refers to a practice in which project operators or early holders sell a large amount of virtual assets, retrieve the funds, and abandon the project.
Ash Crypto, a virtual asset analyst with 2.18 million followers on X (formerly Twitter), said, "There are allegations that most of ESPORTS' circulating supply was controlled by the project team. Sixty million tokens were secretly unlocked from a team-managed multi-sig (multi-signature) wallet, and a connected wallet dumped an amount equal to 43% of the total circulating supply on the market," adding, "A massive sell-off bomb drained all buy-side liquidity, leaving only retail investors holding tokens that have become virtually worthless."
Yooldo, the ESPORTS issuer, posted on X on the 25th, "We are aware of the volatility of the ESPORTS token. We are actively investigating the cause of the plunge and the details, and will make an announcement as soon as the investigation is completed." Since the ESPORTS plunge, Yooldo has gone nearly 10 days without posting additional updates on X.
Catze Labs said, "Yooldo is an overseas game platform, and Catze Labs is a development company that carried out platform-related development and game service support work in Korea as outsourced tasks," adding, "We have absolutely nothing to do with the sharp drop in the ESPORTS token price, selling, price fluctuations, or suspicions of insider price rigging."