Magnate Finance, the lending and borrowing platform, has executed a rug-pull, leaving its users stunned and deprived of $6.5 million. This maneuver had been anticipated by vigilant on-chain investigators, including ZachXBT. They had forewarned about the ominous signs pointing toward a potential exit scam orchestrated by the project’s founders.
Suspicious Actions Unveiled
On the 25th of August, the Magnate Finance protocol took its initial steps towards deception. Its Telegram group was unceremoniously deleted. Further, its website plunged into darkness, raising alarm bells among users who sensed the looming danger of an exit scam.
The gravity of the situation was further magnified when the platform’s X account vanished without a trace. Therefore, erasing all vestiges of its existence from the realm of social media.
Startling revelations by ZachXBT unveiled a damning link between the Magnate Finance deployer address and the Solfire exit scam, which had infamously plundered $4.8 million. The web of deceit was tightening, and the on-chain investigators were spot on in their predictions.
Collapse of Trust and The Trail of Stolen Funds
In a matter of hours following the Telegram group’s deletion and website blackout, the project’s developers manipulated the protocol’s price oracle. They mercilessly liquidated all assets and triggered a cataclysmic downfall. A staggering $6.4 million of the total value locked (TVL) in the protocol was obliterated. This left investors reeling from the impact of this calculated betrayal.
Subsequently, Blockchain analytics firm PeckShield closely tracked the movements of the scammers. An eye-watering $1.34 million worth of Dai tokens were stealthily transferred to a new address, originating from 0x0664.
This illicit journey further continued as $1 million of the stolen funds found its way onto the BNB Smart Chain through intricate bridging maneuvers. A sinister constellation of five wallets was unraveled, all intricately connected to the Magnate Finance scammers.
Elaborate Escape Routes
The cunning mastermind behind the rug-pull exhibited a shrewd escape plan. Profits were skillfully funneled to Ethereum Layer-2 platforms Arbitrum and Optimism, and the BNB Smart Chain through the enigmatic Stargate. Presently, a stash of approximately 295 Ether and 1.3 million DAI remains ensnared on the Base chain, a testament to the audacity of the scammer’s escapade.
A Recurring Menace
The prevalence of exit scams and rug-pulls has marred the decentralized finance ecosystem, further exploiting the added convenience of decentralization to carry out their nefarious schemes. Moreover, the numbers speak for themselves – during the first half of 2023 alone, the collective losses inflicted by exit scams and hacks ballooned to a staggering $656 million.
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