Blockchain scam alert: Over $20M lost in rug pulls

Blockchain scam alert: Over $20M lost in rug pulls is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• ZachXBT, a pseudonymous blockchain investigator, warned about a group of scammers targeting victims with a new fraud involving millions of stolen funds.
• The group, behind scams like Magnate, Kokomo, and Solfire, is now linked to Leaper Finance, a lending protocol based on Blast, and has launched scams across various blockchain networks.
• Losses attributed to the group exceed $20 million, with their latest scam involving funding a Leaper Finance address with nearly $1 million laundered from previous scams.

The scam group has been linked to several rug pulls, among them Magnate, Kokomo, Solfire, and Lendora.

Crypto sleuth warns of scammers behind DeFi protocol

Pseudonymous blockchain investigator ZachXBT warned about a group of scammers attempting to entrap more victims in a new fraud using millions of stolen funds.

ZachXBT’s investigation uncovered a series of rug pulls linked to Leaper Finance, a lending protocol operating on the Blast network. Victims of previous scams, including Magnate, Kokomo, and Solfire, have reportedly lost millions, with losses attributed to the group exceeding $20 million.

“In the past they let the total value locked (TVL) grow to 7 figures before stealing all of the users’ funds deposited to the protocol and falsifying KYC documents + using low-tier audit firms. They now have launched scams on Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, Avalanche, etc,” noted ZachXBT.

Also read: Pavlovsky exits DeFi platform Marginfi due to policy disputes

Rampant fraud in the blockchain ecosystem

In a disturbing turn of events, the group responded to ZachXBT’s revelations with harassment, hinting at connections to the notorious North Korean hacker group, Lazarus. Such brazen behaviour only serves to highlight the audacity of these scammers.

Furthermore, the involvement of Glori Finance, Hash DAO, and ZebraDAO in these scams underscores the interconnected nature of the blockchain ecosystem. As these incidents continue to unfold, regulators and industry players must collaborate to implement robust security measures and hold bad actors accountable.

The staggering figure of over $200 million lost to hacks and rug pulls in just the first two months of 2024, as reported by blockchain security firm Immunefi, serves as a stark reminder of the risks inherent in the burgeoning cryptocurrency market.