Scam crypto projects using stolen funds for liquidity disappear

Three cryptocurrency initiatives vanished from the web shortly after blockchain analyst ZachXBT identified their liquidity as being linked to stolen funds from prior hacking incidents.

On the 14th of April, ZachXBT discovered a wallet containing ill-gotten gains, which was supplying liquidity to three emerging crypto projects: Leaper Finance on Blast with a following of 1,800, Zebra DAO on Base boasting 3,200 supporters, and Glori Finance on Arbitrum, also boasting a community of 3,200 members.

Additional explorations uncovered that this wallet had a past involvement in a “rug pull” scheme and now contributes liquidity to various initiatives on different blockchain networks such as Base, Solana, Scroll, Optimism, Arbitrum, Ethereum, and Avalanche.

Scam crypto projects using stolen funds for liquidity disappear

After being exposed on X, the websites and social media channels for the project suddenly disappeared and have not been active since. The individual managing the Leaper Finance social media account admitted to ZachXBT’s skill in uncovering fraudulent schemes.

Scam crypto projects using stolen funds for liquidity disappear

Just as they were about to erase the account, they expressed, “Great job! My colleagues at Lazarus are both intimidated and impressed by you!” in conjunction with proposing a collaboration on a fresh swindle cryptocurrency project.

Scam crypto projects using stolen funds for liquidity disappear

Based on ZachXBT’s report, these fraudsters have managed to swindle millions of dollars in cryptocurrency from various projects including Magnate Finance, Kokomo Finance, Lendora, and Solfire, amongst others.

Based on current developments, it appears that the pilfered funds may be utilized to establish fraudulent cryptocurrency initiatives, designed to execute “rug pulls” or “exit scams” against unsuspecting investors.

It’s important for investors to carefully examine crypto projects before making an investment. This means conducting in-depth research, such as looking into the backgrounds of the project’s founders and team members, and ensuring that the audit reports are trustworthy.

In March, there was a significant surge: a nearly 19-times hike, as per Scam Sniffer’s data from the anti-scam blockchain platform. This increase in activity on Ethereum layer-2 protocol Base resulted in an estimated $3.35 million being taken from phishing scammers during this month.

Scam crypto projects using stolen funds for liquidity disappear

According to Scam Sniffer’s prediction, there will likely be a surge in phishing attempts on the Base platform in April due to its growing user base and asset count.

There’s been an increase in Base phishing attacks lately, coinciding with the recent hype surrounding memecoins on the Coinbase-supported blockchain. As reported by L2Beat, this buzz has helped boost Base’s total value locked, which now exceeds $3.2 billion – representing a remarkable 370% growth in 2024.

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2024-04-15 12:00