The abrupt termination of Magnate Finance online presence on the Base platform has ignited concerns. Users are apprehensive about a possible exit scam, which could entail $6.4 million. This action comes in the wake of the project’s Telegram group removal, further amplifying worries.
The project’s associations with prior financial exit scams have deepened the unease. Magnate Finance possesses assets totaling $6.4 million in Total Locked Value and is linked to other illicit financial operations.
A notable figure, blockchain analyst ZachXBT, has sounded an alert regarding a potential exit scam involving Magnate Finance. He highlighted that the address of the deployer is directly linked to the Solfire exit scam, which encompassed $4.8 million.
Furthermore, ZachXBT revealed that Magnate Finance is connected on-chain to the Kokomo Finance exit scam. The native token of Magnate Finance (MAG) has undergone a steep drop of about 88% in value since the project’s website went offline. In the past 24 hours alone, the token’s value has plunged by more than 90%, as per CoinGecko data.
In response to ZachXBT’s warnings regarding a potential exit scam, Finance Magnate, the official account, replied with the question, “Shall we adhere to the established plan? 50-50?”. Moreover, they altered their bio on platform X (previously known as Twitter) to indicate a breach of contract by Zach.
Cryptocurrency Challenges: Exit Scams, Exploits, and Regulatory Pressures
Interestingly, following Zach’s alert about the potential exit scam, a number of users were able to withdraw their funds in time. Another blockchain analyst from Peckshield verified that the developer of the lending protocol on the Base platform had manipulated the price oracle provider and removed all associated assets.
The cryptocurrency sector has been grappling with an ongoing issue of scams, particularly in relation to Web3 and DeFi platforms. ZachXBT’s recent data highlights over $13.3 million in losses from SIM swap attacks in the last four months. Additionally, DeFi bridge exploits caused a $207 million loss in the firat half of this year.
On June 30, 2023, Beosin’s report revealed $656 million in crypto losses from exit scams and hacks in the first half of the year.
The continuous rise in crypto scams damages the industry’s reputation. It also offers regulators more grounds to enforce stringent rules on the wider crypto sector.
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