According to KookCapitalLLC, a DeFi application reportedly rugged its Echo seed investors just a day before the token generation event (TGE), raising serious concerns among crypto traders and Echo platform participants (source: twitter.com/KookCapitalLLC). The incident has sparked fears about the enforceability of Echo's legally binding investment terms, which many believed would protect early backers. While KookCapitalLLC personally has not been affected, the case sets a negative precedent for investor protection in DeFi, potentially shaking confidence in Echo and similar platforms. This development underscores the importance of due diligence for crypto investors and may increase volatility as trust in seed investment mechanisms comes under scrutiny.