Crash of the Chi USD Stablecoin

The Chi USD (CHI) stablecoin from the startup Essence Finance has devalued by over 99% in just a few hours. On October 26, its value disconnected from $1 and fell to $0.0088.

The crash began when the value of the assets backing the token decreased by $20 million. According to Chi Protocol, only $222,884 in reserves remain, while the market capitalization of the stablecoin is $151,590. This indicates that most of the collateral has vanished.

The creators of Chi USD have been inactive on social media platform X since October 14, raising suspicions of fraud. It is likely they withdrew the reserves themselves, causing the price collapse.

Furthermore, it is now impossible to exchange Chi USD for USD Coin (USDC) at a 1:1 ratio. When attempting to make the exchange, the system reports that CHI is too expensive, despite it being listed on the Essence Finance portal at only $0.009.