Scam crypto projects using stolen funds for liquidity disappear

Arijit Sarkar15 minutes agoScam crypto projects using stolen funds for liquidity disappearBlockchain investigator ZachXBT identified scammers providing liquidity funds to several fake projects across multiple blockchains, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum and Avalanche.144 Total viewsListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThree crypto projects disappeared from the internet hours after blockchain investigator ZachXBT traced their liquidity to funds looted from previous hacks.

On April 14, ZachXBT identified a wallet address holding stolen funds that were providing liquidity to three new crypto projects: lending protocol Leaper Finance on Blast (1,800 followers on X), Zebra DAO on Base (3,200 followers) and Glori Finance on Arbitrum (3,200 followers).

Further investigations found that the wallet was previously used to fund a rug pull project and is currently providing liquidity funds to several projects across multiple blockchains, including Base, Solana, Scroll, Optimism, Arbitrum, Ethereum and Avalanche.Source:ZachXBT

Shortly after being called out on X, the projects’ websites and social media accounts were deleted and remain inactive. However, the scammer running the Leaper Finance social media account acknowledged ZachXBT’s ability to trace fake projects.The scam crypto projects deleted the social media accounts. Source: X

Right before deleting the account, they said, “Nice work! My comrades here at Lazarus fear you yet admire you!” while offering a partnership for a new scam token launch.Source: ZachXBT

According to ZachXBT, the scammers in question are responsible for stealing millions of dollars worth of crypto from projects such as Magnate Finance, Kokomo Finance, Lendora, and Solfire, among others.

The trend suggests that the stolen funds are being repurposed to create scam crypto projects primed for pulling off rug pull or exit scams on unwary investors.

Investors are advised to conduct thorough research on crypto projects before investing, including doing background checks on the founders and team and confirming the legitimacy of the audit report.

Related:New crypto scam drains users" wallets without transaction approval

Ethereum layer-2 protocol Base saw an 18-fold increase in cryptocurrency funds stolen from phishing scams in March compared to January. According to blockchain anti-scam platform Scam Sniffer, approximately $3.35 million was stolen from phishing scammers on Base in March alone.Source: Scam Sniffer

Scam Sniffer told Cointelegraph it expects even more phishing attacks on Base in April as the number of assets and active users on the chain continues to increase.

The rise in Base phishing scams comes amid a recent memecoin craze on the Coinbase-backed chain which, according to L2Beat, has helped push Base’s total value locked above $3.2 billion — marking a 370% increase so far in 2024.

Magazine:Altseason on the horizon, SEC targets Uniswap, and BTC halving news: Hodler’s Digest, April 7-13# Twitter# Altcoin# Hackers# Scams# Hacks# Investigation# DeFiAdd reaction