Azuki Founder's Rug Pull History: What Happened and What It Means

In May 2022, Azuki was an anime-styled NFT collection on Ethereum and one of the most talked-about launches of that market cycle. Its pseudonymous founder, who goes by Zagabond, published a blog post disclosing that he had been involved in earlier NFT projects that were later abandoned. Press coverage at the time named three of them: CryptoPhunks, Tendies and CryptoZunks.

The reaction was fast. Crypto Twitter declared the collection finished, and coverage reported that the floor price dropped sharply. One report put the fall at 63%. Holders who had paid high prices were suddenly asking whether the team behind the project could be trusted to keep building.

The key points of the episode are:

• The disclosure came from the founder himself, not from an outside investigation.
• The earlier projects were described as abandoned, not as one-off thefts, and that distinction became the centre of the argument.
• Azuki's own collection was not accused of being abandoned at that point.
• The community split between people who valued the honesty and people who felt a past pattern of walking away made the founder a risk.

The episode is still a standard case study in NFT due diligence. It shows how quickly sentiment can collapse when a team's history surfaces, and it shows why a track record matters as much as artwork or a roadmap.

Zagabond is the pseudonym used by Azuki's founder, whose studio is known as Chiru Labs. The name carried some reputation before the disclosure, because the founder had built an audience around Azuki's art, storytelling and community plans. What the community did not know was that the same person had been involved in other collections shortly before.

According to coverage from May 2022, the earlier projects were:

• CryptoPhunks: a collection that borrowed heavily from the CryptoPunks look and was removed from a major marketplace after a copyright complaint.
• Tendies: an NFT project that did not continue after its initial sale.
• CryptoZunks: another CryptoPunks-inspired collection that was not carried forward.

Press summaries said the founder had left these projects within a short period, roughly a year. The blog post presented them as lessons and stated that he intended to stay with Azuki. Readers who want exact wording should read the original post and the contemporaneous reporting rather than relying on summaries, since details of who did what in each project were debated.

Two things are worth separating. First, derivative collections that mimic well-known art are a legal and ethical grey area. Second, walking away from a project after selling it is a business-conduct issue. Many buyers treated both as red flags, while others argued that a founder who comes clean and keeps building deserves a second chance.

The word rug pull is used loosely, and that is part of why this story became confusing. In the strict sense, a rug pull is when a team raises money, then removes liquidity, drains funds or disappears, leaving buyers with worthless assets. Azuki did not fit that description at the time of the disclosure. The collection existed, the team was still operating, and the founder was publicly answering questions.

The accusation was different. Critics said the founder had a history of launching projects and leaving them, which they called a pattern of soft rugs. Supporters said the earlier projects were small, quick experiments, and the founder had been honest about them.

Some later articles pushed the label harder. One headline from 2023 used the phrase rug pull and referred to losses above $100 million, and another commentary piece claimed tens of millions had been drained from the community. Those are characterisations, and public reporting we reviewed do not show a proven theft from Azuki holders. Dollar figures like these often mix falling market value with money actually stolen, and the two are not the same.

A fair summary is this: Azuki was not shown to be a classic rug pull, but the disclosure raised legitimate questions about the founder's history. Holders were right to ask those questions, and wrong to treat every price decline as proof of theft.

The market responded within days. Coverage dated May 9 to May 12, 2022 described the collection's floor price plummeting, with one outlet reporting a 63% decline. Social media posts called the project dead. Other commentators called the episode a case study in how to damage a Web3 brand, citing poor communication and the loss of trust.

The community reaction showed several patterns that recur in NFT controversies:

• Fast repricing. NFT markets are thin. A small number of sellers can move the floor a long way, and sentiment can overwhelm fundamentals.
• Split loyalties. Some holders sold and left. Others stayed and defended the founder, saying he was upfront and the art and community were still intact.
• Demands for accountability. Holders asked for details on how mint proceeds were being used, what the team planned to deliver and who else was involved.
• Opportunistic noise. Videos and threads speculating about rug pulls multiplied, and not all of them were accurate.

It is worth remembering that floor price is only the cheapest listing. It does not capture the value of rarer items, and it can be distorted by panic selling. Anyone studying the event should look at sales history, holder counts and team statements over several weeks, not at a single headline number. Because market data changes constantly, check a live marketplace or analytics tool for current figures.

Not every failed crypto project is a rug pull, and not every rug pull looks the same. Knowing the categories helps you judge what the Azuki disclosure did and did not show.

Type	What happens	Typical warning signs
Hard rug pull	Team drains liquidity or funds and vanishes	Unlocked liquidity, owner-controlled contract functions, deleted social accounts
Soft rug	Team stops working and sells holdings gradually	Missed roadmap, silence, large wallets selling
Abandoned project	Team loses interest or runs out of funds	Slowing updates, no clear plan, quiet community
Mint-and-leave	Team sells the collection and does not deliver promised utility	Vague roadmap, no deliverables, anonymous team
Impersonation scam	Fake site or account copies a real project	Unsolicited links, urgent mint offers, lookalike domains

In the Azuki case, the controversy sat mainly in the abandoned-project and soft-rug categories, and only as a question about the founder's earlier work. That is why careful writers avoided calling Azuki itself a rug pull.

Security firms regularly publish monthly tallies of losses from rug pulls and scams. One firm reported tens of millions of dollars lost in a single month in 2022. Those numbers change every period and use different methods, so treat any single total as a snapshot and check the latest report from the firm that published it.

Pseudonymous founders are common in crypto, and many are honest. Anonymity itself is not proof of bad intent. The problem is that it removes the most basic form of accountability: you cannot check a person's past work, and they face no reputational cost for leaving.

The Azuki episode shows the other side too. Even after the founder explained his history, many buyers felt they should have known before paying. That is the core lesson. A team's past is part of the product you are buying.

When a founder is pseudonymous, you can still look for evidence of reliability:

• Prior work. Has the person or studio shipped earlier projects, and what happened to those holders?
• Consistency. Do public statements match on-chain behaviour, such as treasury moves and wallet sales?
• Third-party verification. Have reputable auditors, marketplaces or partners dealt with the team under their real names?
• Disclosure habits. A team that volunteers uncomfortable facts early is safer than one that waits to be exposed.

A disclosure after you have bought is a different thing from a disclosure before. If a founder reveals problems only when pressed, or only after a sale, it is reasonable to ask what else has not been shared. At the same time, honesty late is better than denial, and it is fair to judge what a team does next.

No checklist removes risk, but a structured review catches many of the common problems. Before buying into any NFT collection, work through these steps.

1. Research the team. Search for the founder's or studio's earlier projects. Look at what happened to holders of each one.
2. Read the contract. Check on a block explorer whether the owner can change supply, pause transfers or withdraw funds. Look for a verified contract and, if possible, a third-party audit.
3. Trace the money. Look at where mint proceeds went and whether team wallets are selling. Public wallet trackers make this visible.
4. Test the roadmap. Compare promises with what has been delivered. A roadmap with no dates or measurable items is a weak signal.
5. Check holder distribution. If a few wallets hold a large share, a coordinated sale can crash the floor.
6. Use official channels only. Confirm links through the project's verified accounts. Copycat sites and fake mint pages are a leading source of theft.
7. Size the position. Assume you may lose everything. NFTs can be illiquid, and a floor price is not a guaranteed exit.

For fungible tokens, a liquidity lock service such as Team Finance lets projects lock liquidity and team tokens so they cannot be pulled instantly. A lock is useful evidence, but check its length and terms, because a short lock only delays a problem.

Years after the event, public reporting still mix accurate reporting with sensational headlines. Some pages describe an Azuki rug pull and cite losses above $100 million. Others describe tens of millions drained from the community. Videos ask whether Azuki is a rug pull in the thumbnail itself. None of these should be taken at face value.

Here is how to assess such claims:

• Check the date. Articles from May 2022 concern the founder's disclosure. Later articles may be about different events, such as later launches or price drops, even if the headline reuses the same project name.
• Separate loss of value from theft. A falling floor price means holders' paper value dropped. It does not show that anyone took the money.
• Look for named sources and on-chain evidence. A claim of drained funds should point to transactions or a statement from a security firm.
• Watch for engagement bait. Titles built around a question mark, such as a rug pull or not, are written to attract clicks.
• Compare several outlets. If only one page makes a dramatic claim, it is more likely to be wrong or exaggerated.

This habit applies beyond Azuki. In any controversy, the first headline is usually the least careful one, and the most useful reporting tends to come days later with context, corrections and primary documents.

The Azuki controversy of 2022 did not end the project. The collection continued, and the team kept releasing products and expanding the brand. Details of its later history, ownership, new collections and price levels change over time, so check the project's official channels and a live marketplace for the current position rather than relying on old articles.

If you hold an NFT from a collection facing a trust crisis, these defensive steps are sensible:

• Avoid panic decisions. Prices move fast on rumour. Read primary sources before selling or buying.
• Re-check approvals. Review which contracts have permission to move your NFTs and tokens, and revoke any you do not need.
• Separate wallets. Keep valuable items in a wallet that does not connect to every new mint site.
• Beware recovery scams. After a controversy, fake support accounts and fake compensation pages appear. A real team will not ask for your seed phrase.
• Diversify. Do not let a single collection dominate your holdings.

If you trade tokens connected to NFT ecosystems, use established venues and understand how they work. Decentralised exchanges such as Uniswap V3 and Uniswap V4 let you swap from your own wallet, but they do not vet the tokens listed, so any token can be traded regardless of quality.

Nothing here is financial advice. NFTs and crypto assets are volatile, and you can lose all of the money you put in. Check the rules that apply where you live before trading.