Lending Platform Magnate Finance Engages in $6.5 Million Exit Scam on Coinbase's Base Protocol
Summary:
Lending platform Magnate Finance on Coinbase's Base protocol has defrauded users of $6.5 million in an exit scam. After suspicions were raised, the project deleted their Telegram group and website while also disconnecting from social media. The scammers manipulated the protocol's price oracle and emptied all assets, resulting in a collapse of $6.4 million in total value locked. Funds were transferred to different addresses, including Ethereum L2 platforms and the BNB Smart Chain. Exit scams are increasingly common in decentralized finance, leading to significant losses for investors.
Lending and borrowing platform Magnate Finance, built on Coinbase's Base protocol, has defrauded its users of $6.5 million, following suspicions of an exit scam raised by on-chain investigators. The project's Telegram group was deleted and the website taken offline, intensifying concerns. Notably, Magnate Finance had also erased its X account and vanished from social media. Renowned investigator ZachXBT had previously connected the project's deployment address to the Solfire $4.8-million exit scam. Shortly after the protocol's collapse, the developers tampered with the price oracle and confiscated all assets, resulting in a loss of the $6.4 million total value locked in the protocol. The scammers transferred $1.34 million worth of Dai tokens to a new address, as PeckShield, a blockchain analytics firm, uncovered. Additionally, $1 million of the stolen funds was transferred to the BNB Smart Chain. PeckShield traced the scammers' activities through five different wallets tied to Magnate Finance. The culprits sent the majority of the profits to Ethereum L2 platforms Arbitrum and Optimism, as well as the BNB Smart Chain via Stargate. Nevertheless, approximately 295 Ether and 1.3 million DAI remain on the Base chain. Exit scams and rug pulls have become all too common in the decentralized finance landscape, resulting in a staggering $656 million loss to such scams and hacks in the first half of 2023.
Published At
8/25/2023 1:03:37 PM
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