DeFi investors have been hit by another exit scam, this time by Magnate Finance, a lending and borrowing platform on the Base layer-two network, leaving them with nothing but losses. Magnate Finance has exited with $6.5 million worth of crypto assets, according to CertiK Alerts, a platform that monitors crypto hacks and scams.
Another Rug Pull on Coinbase’s Base Network
CertiK Alerts reported on Twitter that it detected an 89% slippage on Magnate Finance, indicating a sudden drop in liquidity. The platform also noted that the project’s website was down and its Telegram account was deleted. The scammer had removed 247 WETH, $1.3 million DAI, and $2 million USDbC from the liquidity pool by manipulating the price oracle.
We are seeing a #slippage on Magnate Finance of 89%
247 WETH, ~$1.3m DAI and ~$2m USDbC was removed from liquidity and the project's website is down.
See more on Skynet 👇https://t.co/vt3CeltCqh
— CertiK Alert (@CertiKAlert) August 25, 2023
The exit scam was predicted by ZachXBT, an on-chain detective, who warned the community about the suspicious links between Magnate Finance and previous exit scams such as Solfire and Kokomo. ZachXBT posted a screenshot showing that the deployer’s address of Magnate Finance was directly connected to the Solfire’s $4.8 million exit scam.
Community Alert: Magnate Finance on Base will likely exit scam in the near future currently with over $6.4M TVL.
The deployers address is directly linked to the Solfire $4.8M exit scam. pic.twitter.com/mBDUy3D66j
— ZachXBT (@zachxbt) August 25, 2023
After the rug pull, PeckShieldAlert, a blockchain security platform, tracked the movements of the stolen funds. The platform reported that the scammer had transferred about 1.34 million DAI to a specific wallet and bridged about $1 million to the BNBChain.
Magnate Finance is the second DeFi project on Base to exit scam in recent weeks. Earlier this month, Bald Finance ran away with $23 million in liquidity from its investors. A crypto community member claimed that he received funds from an address linked to the Bald deployer, raising questions about the identity and motives of the scammer.
The DeFi space has been plagued by numerous exit scams and hacks, exposing the risks and challenges of decentralized finance. Investors are advised to do their own research and due diligence before putting their money into any DeFi project.