Bittensor’s (alleged) $10M rug pull (feat. Mark Jeffrey) | E2275

April 13, 2026

AI Summary

5 min read

When a $10 Million Rug Pull Shook BitTensor

In early April 2026, Sam Dare—creator of Templar, one of the most prominent subnets on the BitTensor network—dumped 37,000 Tau tokens on his own subnet holders, worth roughly $10 million. Then he walked away. The subnet he abandoned, Covenant AI, had been operating a 70-billion-parameter model that had helped drive mainstream attention to the Tau ecosystem. Within hours, the price of Tau dropped about 25 percent. The community was left asking whether this was a calculated theft or an act of protest against a system Sam claimed had become insufficiently decentralized.

The Incentive Engine That Worked Too Well

BitTensor is a decentralized network where participants run "subnets"—specialized AI projects that compete for rewards. Subnet owners recruit miners who contribute compute, data, or algorithms, and validators who check that the work was done properly. The system is designed around what Mark Jeffrey, a longtime crypto OG and partner at Stillcore Capital, calls "contests within contests within contests." Only the most excellent miners earn tokens, and the subnet owner collects a significant emission of those tokens directly into their wallet as payment for running the operation.

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What you'll learn

1 Bittensor’s (alleged) $10M rug pull (feat. Mark Jeffrey) | E2275
2 (00:00) **Alleged Rug Pull Setup** - Mark Jeffrey states he does not believe Sam's decentralization justification and explains how a subnet owner can abuse their power
3 (02:31) **Why BitTensor Attracted Serious Attention** - Jason and Mark explain why this project stands out from typical crypto
4 (08:04) **How Subnets Work and Investment Criteria** - Mark explains the fund he partners in and what they look for in subnet investments
5 (12:27) **The Templar Subnet Rug Pull Explained** - Mark and Jason detail the specific incident involving Sam Dare and Covenant AI
6 (16:00) **The Backstory: Kanst and Sam's Relationship** - Mark reveals the history between the BitTensor founder and the subnet operator
7 (18:46) **Is This Just Greed or Legitimate Grievance?** - The hosts debate Sam's stated motivations versus the on-chain evidence

+ Full timestamped outline available in the app

Show Notes

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Today’s show:

*TAO just had its worst week since launch. One of Bittensor’s most prominent subnet operators allegedly dumped $10 million in tokens and walked away. We’re digging into what we know, how this could change the Bittensor community… and why dedicated builders still believe in this ecosystem.

Jason and Lon are joined by Stillcore Capital Partner Mark Jeffrey to break down the Covenant AI and Templar controversy in real time. Then they’re joined by three prominent subnet founders: Ken Miyachi of BitMind (Subnet 34) and Will Squires of Steffen Cruz of MacroCosmos (which owns Subnets 1, 9, and 13). Together, they’re investigating how Bittensor incentives work, how real products are still emerging from the TAO ecosystem, and what governance fixes could arise to prevent the next (alleged) rug pull.

Timestamps:

0:00 Mark Jeffrey joins the show! https://x.com/markjeffrey

2:18 How Mark Jeffrey learned about Bittensor. https://bittensor.com/

6:17 Plaud: If your work depends on conversations — interviews, meetings, calls — you need a Plaud NotePin. You can check it out at https://Plaud.ai/twist and use code TWIST for 10% off!

7:22 Mark Jeffrey's Bittensor investments. https://stillcorecapital.com/

9:25 Check out our discussion with Nova: https://youtu.be/gjRt4eUyiYc?si=HopdmmSarxECark1

10:16 Sentry - New users can get $240 in free credits when they go to https://sentry.io/twist and use the code TWIST

10:41 Check out Ridges! https://www.ridges.ai/

11:53 How trading alpha tokens works on Bittensor

12:44 Subnet drama: what happened? https://x.com/covenant_ai/status/2042380152831951300

16:01 Do subnet owners have too much power?

18:33 Check out our conversation with Sam Dare (2268): https://youtu.be/TN2RmNuX4-k?si=c58Byh7Fsw1ttnAY

19:10 How Sam Dare should've handled walking away (per Mark Jeffrey)

20:02 Deel - Founders scale faster on Deel. Set up payroll for any country in minutes, hire anyone anywhere, get visas handled fast, and get back to building. Visit https://deel.com/twist to learn more.

23:29 Who should subnets be owned by?

24:02 Ken Miyachi from BitMind joins the show https://x.com/kenmiyachi

30:56 Netsuite - Get the free business guide Demystifying AI at https://www.netsuite.com/twist

31:06 Ken's $3M raise & investors (Arch, Canonical, Mechanism)

33:18 Token vs. equity: how to think about a subnet investment.

41:57 Will Squires and Stefan Kruse of MacroCosmos join the show https://x.com/willsquires https://x.com/sczsteffencruz

56:29 Stefan on the Covenant drama: "disappointing, but solvable"

1:02:11 Off-duty with J-Cal, Mark J