Magnate Finance initially removed its X account and Telegram channel and then took down the website before discontinuing its TVL.
Magnate Finance is a borrowing and lending platform on Coinbase’s layer-2 protocol that has scammed users of $6.5 million. This has happened hours following on-chain detectives, for instance, ZachXBT, cautioning about the likelihood of an exit scam because of various actions linked to the project’s founders.
Magnate Platform Erases Telegram Group as Website Goes Offline
On August 25, the protocol erased its Telegram group and took its website offline. These actions raised concerns among users concerning a likely exit scam. Further, Magnate Finance erased its X account and eliminated all likely social media presence. ZachXBT had claimed that the platform’s deployer address was directly associated with the 4.8-million-dollar exit scam by Sollfire.
Hours following the Telegram group’s deletion and the website’s taking down, the project developers distorted the protocol’s price oracle. They took down all assets, resulting in the fall of the $6.4 million total value locked (TVL).
PeckShield Analysis Links Wallets Dai Tokens with Magnate Finance Defrauders
PeckShield, a blockchain analytic company, warned that the scammers linked to the project moved Dai tokens worth $1.34 million to another address beginning from 0x0664 and afterward linked $1 million of the taken funds to the BNB Smart Chain. Further, the firm traced five wallets associated with the Magnate Finance defrauders.
The scammer linked to the scam has linked most of the profits to Arbitrum and Optimism, both Ethereum L2 platforms. It has also linked them to the BNB Smart Chain via Stargate. An estimated 295 Ether and 1.3 million DAI are on the Base Chain.
Scammers have embraced rug pulls and exit scams as part of their tactics, particularly in the decentralized finance (DeFi) ecosystem, because of the additional decentralization convenience. This is obvious because, in the first half of 2023, the overall value of lost cryptocurrencies via hacks and exit scams was $656 million.
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