Blockchain fraud group strikes again, launches fresh scheme on Blast network

by

A notoriously deceitful group, previously involved in fraudulent blockchain deals, is said to have initiated a new questionable project on the Blast platform.

Based on the findings of ZachXBT, a well-known investigator of blockchain transactions, it is estimated that the group transferred around $1 million in illicitly gained funds to Base with the intention of using it for their latest fraudulent scheme.

Warning to the Community: A notorious gang of scammers, including Magnate, Kokomo, Lendora, Solfire, and others, has resurfaced on Blast @Leaperfinance. Recently, they successfully raised approximately $1 million from tainted funds following their earlier rug pulls. Now, they are busy adding liquidity to their new project.

— ZachXBT (@zachxbt) April 14, 2024

At first, the funds were moved from an Ethereum (ETH) account with a shady past, connected to earlier scams. Later, these funds ended up in another account on the Polygon network.

After being accused of fraud, the suspects exchanged their assets for wETH and transferred it across various blockchain platforms with the help of intermediaries like Orbiter and Bungee.

Through their approach, they discovered the Blast network, which is reportedly where they financed a suspect address linked to Leaper Finance – a decentralized platform for over-collateralized loans.

ZachXBT describes these transactions as an unexpected influx of funds intended to attract unwitting people.

At the same time, a well-known blockchain investigator who has exposed several scams in the cryptocurrency sphere highlighted his suspicion that the same people are involved in ZebraLending, a Base project with approximately $311,000 in total value locked.

Update: Same scammers are also likely behind @ZebraLending on Base which is currently live with $311K TVLWithdraw your assets immediately if you have funds deposited in this protocol.Tracing: 1) 0x085 transfers 30 wETH to 0x9f8 on Base… — ZachXBT (@zachxbt) April 14, 2024

ZachXBT asserts that this organization has a history of initiating projects that draw large amounts of Total Value Locked (TVL), but subsequently vanish with the funds. The investigator reveals that these fraudsters fabricate Know-Your-Customer (KYC) documents and team up with questionable security auditing companies to give an illusion of legitimacy.

History of scamming

The group has expanded its reach to other blockchain networks such as Avalanche (AVAX), Ethereum, Arbitrum (ARB), and Solana (SOL), demonstrating their flexibility and broad influence in the decentralized technology landscape.

Based on ZachXBT’s findings, scammers tend to expand their honeypot schemes to reach seven-figure worth before carrying out a rug pull and stealing investors’ funds. Previously, this same group was responsible for creating projects such as Solfire Finance on the Solana network, Lendora Protocol on Scroll, and Magnate Finance on Base.

In the Magnate Finance case, the suspects allegedly took over $6.5 million from the fund after security specialists like ZachXBT warned about potential issues. The Solfire swindle netted them around $3 million.

More recently, Blast, a network developed by Tieshun Roquerre, the founder of Blur, has experienced several instances of fraud, vulnerabilities, and exit scams. In February alone, over 500 Ether were taken from users in a rug pull incident involving a project on the platform called RiskOnBlast.

In March, the blockchain game Super Sushi Samurai, which is indigenous to its network, experienced a token exploit right before its official launch. The team acknowledged an exploitation causing a loss of $4.6 million due to a flaw in the smart contract, as confirmed by the on-chain security company CertiK.

At SSS_HQ on Blast, an incident occurred involving a contract. The contract address is 0xdfDCdbC789b56F99B0d0692d14DBC61906D9Deed. In the aftermath, approximately $4.6 million was impacted.

— CertiK Alert (@CertiKAlert) March 21, 2024

The Super Sushi team alleges that an attacker deceitfully manipulated the game’s smart contract, allowing for inflated token balances and excessive selling into the liquidity pool.

During the same month, another NFT game based on Blast technology, named Munchables, experienced a significant security incident resulting in a loss of $62 million. The team behind Munchables acknowledged the breach and announced their intention to trace the culprit’s actions and halt any ongoing transactions.

Read More

2024-04-15 04:14