Hold onto your hats, crypto enthusiasts, because we’ve got another wild tale from the cryptoverse! Magnate Finance, a lending project that operated on the Ethereum Layer 2 network Base, has pulled a Houdini, seemingly vanishing with a whopping $6.4 million. And the crypto community is buzzing with questions, speculations, and a whole lot of “I told you so’s.”
So, what’s the scoop? Security firm PeckShield has labeled this incident as a ‘rug pull’. For those new to the term, it’s when crypto developers deceitfully run off with user-deposited funds. And boy, did Magnate Finance pull a big one! PeckShield’s investigation revealed that the Magnate Finance team manually tweaked the price oracle used by their lending protocol. This sneaky move allowed them to drain all user deposits. Talk about a grand heist!
But wait, there’s more drama to this story. After their grand escape, the Magnate Finance team went full ghost mode. Their digital footprints? Erased! Social media accounts on platforms like Twitter and Telegram? Deleted! And if you try to access their official website, you’ll be met with the digital equivalent of tumbleweeds. It’s like they never existed.
Now, here’s where things get even juicier. The exit scam was brought to light by on-chain analyst ZachXBT. And guess what? This wasn’t a sudden revelation. ZachXBT had sounded the alarm bells earlier, warning that Magnate Finance might be plotting an exit scam. The analyst’s suspicions arose after finding a direct link between Magnate Finance’s deployer address and a previous exit scam involving a project named Solfire, which had defrauded users of $4.8 million. Talk about déjà vu!
August hasn’t been kind to Base, the Ethereum Layer 2 network where Magnate Finance operated. This incident marks the second rug pull this month. Earlier in August, SwirlLend, another project on Base, disappeared with $460,000 in a similar exit scam. It seems like Base is becoming a hotspot for such dubious activities.
The Magnate Finance saga is a stark reminder of the risks inherent in the crypto world. While the allure of high returns is tempting, it’s crucial to tread with caution. Always do your research, stay informed, and remember: if something seems too good to be true, it probably is!
