- There was a new exit scam involving Magnate Finance, a lending protocol.
- The scam happened on Coinbase’s Base, leading to a loss of over $6.4 million.
Since 2023 started, crypto scams are getting very rampant. The latest of them involved Base and Magnate Finance, a lending protocol. Apparently, this new scam will prove very concerning to the new layer 2 blockchain. They launched a few weeks ago, and they need to protect their reputation from a negative trend.
Base Lending Protocol Suffer Exit Scam
- Base is a new layer 2 blockchain spearheaded by Coinbase. Apparently, this layer 2 protocol is getting to new levels with many crypto projects trying to build on it.
- One of them is Magnate Finance, a lending protocol. So, this protocol becomes the latest crypto project on Base suffering from a security breach. Previously, Bald Deployer siphoned off $23 million in liquidity from the project. But in this case, it was an exit scam, also known as a rug pull scam.
- The results of this crypto scam are quite staggering. Furthermore, it brings a lot of concern about the type of crypto projects building on the network. As a new layer 2 blockchain, Base has to maintain a good reputation if it wants to last long in the scene.
- Apparently, the new exit scam in the layer 2 protocol resulted in many losses. The scan wiped off over $6.4 million from Magnate Finance, a lending protocol. Moreover, the details regarding the new hack are quite shocking. It gives many insights into how many crypto scams happen in the industry.
How The Exit Scam Happened on Base
- After this scam happened, it made the Total Value Locked (TVL) of Magnate Finance reduce from $6.4 million to about $107,000. This is quite disturbing because of the amount of money lost to scams. Apparently, the cybercriminals altered the source of the price oracle and removed all assets from the protocol.
- Onchain detective @zachxbt alerted the crypto community about what is happening on Twitter (now X). So, the wallet address of the cybercriminals has links with Solfire’s $4.8 million exit scam.
- After this scam, the perpetrators took down the Magnate Finance website and went offline. Furthermore, the cybercriminals deleted the project’s Twitter and Telegram profiles. Apparently, this proves that those behind this scam were among the project developers. There were also connections between this exit scam and the Kokomo Finance exit scam.
- After on-chain detective @zachxbt released the details of the scam, something happened. So, a suspected Twitter user made cryptic comments under the post, saying, “We stick to the plan? 50-50?”
Conclusion
There was an occurrence of a crypto scam on the new layer 2 blockchain, Base. Apparently, it is an exit scam involving Magnate Finance, a lending protocol. This scam led to a massive loss of money, running into $6.4 million. Furthermore, for a crypto project that is as new as Base, this is quite a tough start to their objectives.
