FinSoul Gaming Project Accused of $1.6 Million Exit Scam, Alongside Previous Fintoch Allegations
Summary:
The team behind the gaming project FinSoul allegedly conducted an exit scam, fraudulently procuring $1.6 million from investors, based on a report from blockchain security service CertiK. The team purportedly employed paid actors to pose as executives and raised funds for a supposed gaming platform. Instead, the funds were laundered through cryptocurrency mixer Tornado Cash. Additionally, similarities between FinSoul and an earlier project, Fintoch, have raised suspicion, as the team behind Fintoch were accused of stealing $31.6 million in a similar scam. Despite the alleged scams, the rebranded team, now known as Standard Cross Finance, has reportedly managed to draw investors to invest in the relaunched FinSoul product.
The creators of FinSoul, a proposed gaming project, allegedly executed an exit scam on October 10, reportedly draining $1.6 million from investor funds through market trickery. This finding comes from a recent investigation by blockchain security service, CertiK, as communicated to Cointelegraph. Supposedly, the developers behind FinSoul employed actors to pose as company executives, and proceeded to extract funds under the pretense of developing a gaming platform. Blockchain records suggest that rather than using the $1.6 million in converted Tether (USDT) for this purpose, the funds were funneled back to the team. Cryptocurrency mixer Tornado Cash was reportedly used to launder the money.
This isn't the first time misconduct has been associated with the creators of FinSoul. Back in May 23, decentralized finance endeavor Fintoch announced it was incorporating cutting-edge technology to fashion the U.S.-based FinSoul metaverse platform and was now active. The announcement highlighted their use of sophisticated tech like Unreal Engine 5 and Cocos 2D for the development of a range of gaming experiences. However, on that same day, blockchain investigator ZachXBT stated that Fintoch had orchestrated an exit scam, apparently stealing $31.6 million which was then shifted to the Tron blockchain in an attempt to cleanse the funds.
In response to this, CertiK maintains that the original team rebranded in August, altering its name to Standard Cross Finance (SCF) and modifying its social media presence. CertiK released an image demonstrating that the key executives of both Fintoch and SCF appear to be the same individuals. CertiK reports that upon verification, the people listed as the company's main executives are actually paid actors from the entertainment world. This was further proven by the project's technology chief's appearance on promotional materials for an entertainment firm, suggesting that he too is a paid actor. The identities of two other alleged “executives” could not be ascertained.
Following the rebranding, the team of "Standard Cross Finance" continued marketing FinSoul on platforms such as YouTube and Telegram. Among their promotional materials were videos of an alleged Research & Development Headquarters, and of a promotional event in Vietnam.
If current blockchain data is to be believed, the project's token was introduced to the BNB Smart Chain network on Oct. 10. 100 million FinSoul (FSL) tokens were created and transferred to the deployer account. The deployer then distributed 3 million FSL to various accounts in multiple transactions. One of those transactions, involving 210,000 FSL, was directed to an address that subsequently used those tokens to set up a liquidity pool for FSL on PancakeSwap, which then became the trading platform for FSL.
Price data from DEX Screener reveals that the initial cost per FSL token was $0.3911 on Oct. 10 at 6:30 am UCT. The price reached a peak of $17.5774 before stabilizing around $5. However, there was a sudden drop around 4:30 pm to 5:00 pm UTC, from $5 to nearly zero.
According to the findings by CertiK, the team behind Standard Cross Finance succeeded in luring investors again despite two previous exit scams and has now relaunched FSL under a new token contract. Current data from DEX Screener places the new FSL token value at $1.29 per coin.
Despite reaching out, Cointelegraph received no response from the Standard Cross Finance team. The story of FinSoul serves as a stark reminder to crypto investors to thoroughly vet new projects before committing funds.
Rug pulls or exit scams, have been a recurrent issue across decentralized finance. Over the summer, the Arbitrum-based protocol Xirtam was reported to have taken away more than $3 million via a token sale. In this particular case, Binance was able to halt the funds and return them to users through a smart contract initiation on Sept. 6. Still, not all victims of these scams experience such preferred outcomes. In June, DeFi venture Chibi Finance reportedly siphoned over $1 million from user funds through the "panic" function, and these funds still remain unrecovered. An exit scam by PopcornSwap in 2021 led to investor losses exceeding $11 million, engendering ongoing critique towards the BNB Chain development team.
Published At
10/20/2023 2:00:00 PM
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