Lending Platform Magnate Finance Rugs-Pulls Users of $6.5 Million in Exit Scam
Summary:
Magnate Finance, a lending platform on Coinbase's Base protocol, defrauded its users of $6.5 million in a rug-pull exit scam. The project deleted its Telegram group and website, raising concerns among users. The scammers manipulated the protocol's price oracle and liquidated all the assets, resulting in the collapse of $6.4 million total value locked. They transferred stolen funds to different addresses and bridged some to the BNB chain. The majority of the profits were moved to Ethereum L2 platforms. Exit scams and rug pulls continue to plague the decentralized finance ecosystem, with millions lost in 2023 alone.
Lending and borrowing platform Magnate Finance, which operates on Coinbase's layer 2 protocol Base, has deceived its users by absconding with $6.5 million. This comes after concerns were raised by on-chain investigators about a potential exit scam following suspicious actions by the project's founders. The protocol's Telegram group and website were swiftly deleted, amplifying worries of deceit. Furthermore, Magnate Finance erased their X account and vanished from social media. ZachXBT warned that the deployer address of Magnate Finance is connected to the infamous Solfire $4.8 million exit scam. Shortly after the Telegram group was disbanded and the website taken offline, the project developers manipulated the protocol's price oracle and liquidated all the assets, causing the total value locked in the protocol, which amounted to $6.4 million, to plummet. Scammers related to Magnate Finance transferred $1.34 million worth of DAI tokens to a new address, beginning with 0x0664, and bridged $1 million of the stolen funds to the BNB chain. Blockchain analytics firm Peckshield traced the scammers to five different wallets associated with Magnate Finance. The majority of the scammers' profits have been transferred to Ethereum L2 platforms, Arbitrum, and Optimism, as well as the Binance chain through Stargate. Nonetheless, approximately 295 ETH and 1.3M DAI still remain on the Base Chain. Unfortunately, exit scams and rug pulls have become all too common in the decentralized finance ecosystem, as scammers exploit the convenience of decentralization. In fact, during the first half of 2023, a total of $656 million in cryptocurrencies were lost due to exit scams and hacks.
Published At
8/25/2023 1:03:37 PM
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