scammers behind the DeFi protocol are warned by Crypto Sleuth

A group of scammers has been connected to several instances of rug pulls, including ones called Magnate, Kokomo, Solfire, and Lendora. An investigator named ZachXBT, who keeps their identity secret, warned that these scammers are trying to trap more people in a new fraud using millions of stolen funds. 

ZachXBT shared their investigation results on a platform called X about Leaper Finance, a lending system based on Blast. The investigation showed that the same group behind the previous rug pulls is also responsible for stealing from users of Leaper Finance, including taking $6.5 million from Magnate users, $4 million from Kokomo users, $4.8 million from Solfire users, and unspecified amounts from Lendora users.

 “Previously, they let the TVL reach seven figures before taking all of the user funds that deposited into the protocol, fabricating KYC documents, and working with inferior audit firms. ZachXBT said, “They have now started scams on Ethereum, Avalanche, Base, Solana, Scroll, Optimism, Arbitrum, etc.

Previous Scams and Estimated Losses Caused by Scammers

The group is considering scams on ZebraDAO, Glori Finance, and Hash DAO as well. The estimated losses attributable to the group exceed $20 million.

A rug pull occurs when the developers of a blockchain-based protocol abruptly withdraw all of their cash from a liquidity pool or project wallet, therefore draining the funds that invested by others. Usually, there is no prior notice, leaving investors with worthless assets or tokens.

The group allegedly used roughly $1 million that had laundered from earlier scams to establish a Leaper Finance address on the Blast network as part of their most recent scam attempt, adding more liquidity to entice victims.

Soon after it discovered that Leaper Finance had participated in the scams, the organization harassed ZachXBT and announced a “token launch” in their reply. 

 Well done! Regarding the North Korean hacking collective Lazarus, they declared, “My comrades here at Lazarus fear you yet admire you!” The websites for Leaper Finance and Glori Finance have taken down, and their X accounts have canceled.

In the first two months of 2024, 32 individual incidents involving over $200 million worth of bitcoin lost due to hacks and rug pull, according to a study report released on February 29 by blockchain security company Immunefi.